EUROPEAN MICRO HOLDINGS INC
<DOCUMENT>
<TYPE>EX-10.39
<SEQUENCE>20
<FILENAME>0020.txt
<TEXT>


                                  EXHIBIT 10.39
                                  -------------

                         EUROPEAN MICRO HOLDINGS, INC..
                            PLACEMENT AGENT AGREEMENT



                                                    Dated as of: August 24, 2000


May Davis Group, Inc.
One World Trade Center - Suite 8735
New York, New York, 10048

Ladies and Gentlemen:

           The  undersigned,  European Micro Holdings,  Inc.,  (the  "Company"),
hereby agrees with May Davis Group, Inc. ("May Davis") as follows:

           1.     OFFERING.  The Company  hereby engages May Davis to act as its
exclusive  placement agent in connection  with the Credit  Agreement (as defined
herein)  for the  issuance  and  sale by the  Company  (the  "Offering")  of the
Company's  Common Stock,  $0.01 par value per share (the "Common  Stock"),  at a
price per share  equal to the  Purchase  Price,  as that term is  defined in the
Equity Line of Credit  Agreement  dated the date hereof  between the Company and
the investor named therein ( the "Credit Agreement"),  for an aggregate price of
$20,000,000.  All capitalized  terms used herein and not otherwise defined shall
have the same meaning ascribed to them as in the Credit Agreement.  The Investor
will be granted certain  registration rights with respect to the Common Stock as
more fully set forth in the Registration  Rights  Agreement  between the Company
and the  Investor  dated the date hereof,  and May Davis will be granted  common
stock purchase warrants and certain registration rights as described herein. The
documents  to be  executed  and  delivered  in  connection  with  the  Offering,
including  but  not  limited  to  this  Agreement,  the  Credit  Agreement,  the
Registration  Rights  Agreement,  the Escrow  Agreement,  the Placement  Agent's
Warrants (as hereinafter  defined) and the Placement Agent's Registration Rights
Agreement  (as  hereinafter  defined)  are  referred  to  sometimes  hereinafter
collectively  as the "Offering  Materials."  The Company's  Common Stock and the
Placement Agent's Warrants are sometimes referred to hereinafter collectively as
the  "Securities."  May Davis shall not be obligated to sell any  Securities and
this Offering by May Davis shall be solely on a "best efforts basis."

           2.     INFORMATION.
                  ------------
           A.     Upon the  occurrence  of each Closing,  the funds  received in
respect  of the  shares  of  Common  Stock  purchased  by the  Investor  will be
disbursed in accordance with the terms of the Credit  Agreement,  net of (i) the
commission  payable  to May  Davis,  equal to seven  percent  (7%) of the  gross
proceeds from the sale of Common Stock,  and (ii) legal fees and other  expenses
related thereto due to May Davis's counsel and the Escrow Agent.


                                      A-1
<PAGE>


           B.     In addition to the foregoing  compensation,  the Company shall
issue to May Davis upon the execution of the Credit Agreement the following: (i)
a warrant in substantially the form annexed hereto to purchase 500,000 shares of
Common Stock at an exercise price per share of $7.00,  exercisable in part or in
whole at any time by May  Davis at its  discretion  for a period  of sixty  (60)
months from the date of issuance (the "Class A Warrant"),  and (ii) a warrant in
substantially  the same form annexed hereto to purchase 500,000 shares of Common
Stock at an exercise price equal of $10.00, exercisable pro rata on the basis of
the number of shares of Common Stock  issuable on each Advance Date for a period
of sixty months from the date of issuance (the "Class B Warrant"),  (the Class A
Warrant and the Class B Warrant are referred to  collectively  as the "Placement
Agent's  Warrants").  The  Placement  Agent's  Warrants  shall be  issued to the
individuals  and in the  amounts set forth on Schedule A. The Company may redeem
the "A" Warrants at a redemption  price of $.01 per share  provided that the Bid
Price for the Common Stock equals $10.00 or higher per share for a period of ten
(10)  consecutive  Trading Days, as described in the Placement  Agent's Warrants
and redeem the "B"  Warrants at a  redemption  price of $.01 per share  provided
that the Bid Price for the Common Stock equals  $15.00 or higher per share for a
period of ten (10)  consecutive  Trading  Days,  as described  in the  Placement
Agent's  Warrants.  May Davis shall be entitled to certain  demand  registration
rights with respect to the shares of Common Stock  issuable upon exercise of the
Warrants  pursuant to a registration  rights agreement in substantially the same
form annexed hereto (the "Placement Agent's Registration Rights Agreement").

           3.        REPRESENTATIONS, WARRANTIES AND COVENANTS OF MAY DAVIS.
                     ------------------------------------------------------
           A.        May Davis represents, warrants and covenants as follows:
                     (i)       May Davis has the  necessary  power to enter into
this  Agreement,   the  Placement  Agent's   Warrants,   the  Placement  Agent's
Registration  Rights Agreement and to consummate the  transactions  contemplated
hereby  and  thereby.

                     (ii)      The  execution  and delivery by May Davis of this
Agreement,  the Placement Agent's Warrants,  the Placement Agent's  Registration
Rights Agreement and the consummation of the  transactions  contemplated  herein
and therein  will not result in any  violation  of, or be in conflict  with,  or
constitute a default under,  any agreement or instrument to which May Davis is a
party or by which  May  Davis or its  properties  are  bound,  or any  judgment,
decree,  order or, to May Davis's  knowledge,  any statute,  rule or  regulation
applicable to May Davis. This Agreement,  the Placement Agent's Warrants and the
Placement Agent's  Registration  Rights Agreement when executed and delivered by
May Davis,  will  constitute  the legal,  valid and binding  obligations  of May
Davis,  enforceable in accordance  with their  respective  terms,  except to the
extent  that  (a)  the  enforceability  hereof  or  thereof  may be  limited  by
bankruptcy, insolvency, reorganization,  moratorium or similar laws from time to
time in  effect  and  affecting  the  rights  of  creditors  generally,  (b) the
enforceability  hereof or thereof is subject to general principles of equity, or
(c) the indemnification  provisions hereof or thereof may be held to be vilative
of public policy.

                     (iii)     Upon receipt of an executed Credit  Agreement,  a
Registration  Rights  Agreement and Escrow  Agreement and the documents  related
thereto,  May Davis will,  through the Escrow Agent,  promptly forward copies of
the Credit Agreement, Registration Rights Agreement and Escrow Agreement and the
documents related thereto to the Company or its counsel.



                                      A-2
<PAGE>

                     (iv)      May Davis will not deliver any documents  related
to the Offering to any person it does not reasonably believe to be an Accredited
Investor.

                     (v)       May Davis will not intentionally  take any action
that it reasonably  believes  would cause the Offering to violate the provisions
of the 1933 Act, the 1934 Act, the respective rules and regulations  promulgated
there under (the "Rules and  Regulations")  or applicable "Blue Sky" laws of any
state or jurisdiction.

                     (vi)      May Davis  shall use all  reasonable  efforts  to
determine  (a) whether the Investor is an  Accredited  Investor and (b) that any
information furnished by the Investor is true and accurate. May Davis shall have
no  obligation  to insure  that (x) any  check,  note,  draft or other  means of
payment for the Common Stock will be honored,  paid or  enforceable  against the
Investor in accordance  with its terms, or (y) subject to the performance of May
Davis's  obligations  and  the  accuracy  of  May  Davis's  representations  and
warranties  hereunder,   (1)  the  Offering  is  exempt  from  the  registration
requirements  of the 1933 Act or any applicable  state "Blue Sky" law or (2) the
Investor is an Accredited Investor.

                     (vii)     May Davis is a member of the National Association
of Securities Dealers, Inc., and is a broker-dealer registered as such under the
1934 Act and under the  securities  laws of the  states in which the  Securities
will be  offered  or sold by May  Davis,  unless  an  exemption  for such  state
registration  is available  to May Davis.  May Davis is in  compliance  with all
material rules and regulations  applicable to May Davis generally and applicable
to May Davis's participation in the Offering.

           4.        REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
                     ---------------------------------------------
           A.        The Company represents and warrants as follows:
                     (i)       The execution,  delivery and  performance of each
of this Agreement,  the Credit Agreement,  the Escrow  Agreement,  the Placement
Agent's  Registration Rights Agreements,  the Placement Agent's Warrants and the
Investor's  Registration  Rights  Agreement has been or will be duly and validly
authorized by the Company and is, or with respect to this Agreement,  the Credit
Agreement,  the Escrow  Agreement,  the Placement  Agent's  Registration  Rights
Agreements,  the  Placement  Agent's  Warrants and the  Investor's  Registration
Rights  Agreement  will  be,  a valid  and  binding  agreement  of the  Company,
enforceable in accordance with its respective  terms,  except to the extent that
(a)  the  enforceability  hereof  or  thereof  may  be  limited  by  bankruptcy,
insolvency,  reorganization,  moratorium  or  similar  laws from time to time in
effect and affecting the rights of creditors  generally,  (b) the enforceability
hereof  or  thereof  is  subject  to  general  principles  of  equity or (c) the
indemnification  provisions  hereof or thereof  may be held to be  violative  of
public  policy.  The  Securities  to be  issued  pursuant  to  the  transactions
contemplated by this Agreement,  the Credit Agreement and the Placement  Agent's
Warrants have been duly  authorized  and, when issued and paid for in accordance
with (x) this Agreement, the Credit Agreement and the Placement Agent's Warrants
and the certificates/instruments representing such Securities, (y) will be valid
and binding  obligations of the Company,  enforceable  in accordance  with their
respective terms,  except to the extent that (1) the enforceability  thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
from time to time in effect and affecting the rights of creditors generally, and
(2) the  enforceability  thereof is subject to general principles of equity. All
corporate action required to be taken for the  authorization,  issuance and sale
of the Securities has been duly and validly taken by the Company.


                                      A-3
<PAGE>


                     (ii)      The  Company  has a duly  authorized,  issued and
outstanding  capitalization as set forth in the Credit Agreement. The Company is
not a party to or  bound  by any  instrument,  agreement  or  other  arrangement
providing for it to issue any capital stock, rights, warrants,  options or other
securities, except for this Agreement and the agreements described herein and as
described in the Credit Agreement.  All issued and outstanding securities of the
Company,  have been duly  authorized  and validly  issued and are fully paid and
non-assessable;  the holders  thereof have no rights of rescission or preemptive
rights with respect thereto and are not subject to personal  liability solely by
reason of being  security  holders;  and none of such  securities  was issued in
violation  of the  preemptive  rights  of any  holders  of any  security  of the
Company. The Company has 20,000,000 shares of authorized Common Stock, 4,933,900
of which will be issued and outstanding as of the date hereof.

                     (iii)     The Common Stock to be issued in accordance  with
Credit  Agreement  has been  duly  authorized  and when  issued  and paid for in
accordance with the this Agreement,  the Credit Agreement, the Placement Agent's
Warrants and the  certificates/instruments  representing such Common Stock, will
be validly issued,  fully-paid and non-assessable;  the holders thereof will not
be subject to personal  liability  solely by reason of being such holders;  such
securities  are not and will not be  subject  to the  preemptive  rights  of any
holder of any security of the Company.

                     (iv)      The Company has good and marketable  title to, or
valid and  enforceable  leasehold  estates  in,  all items of real and  personal
property  necessary to conduct its business  (including,  without limitation any
real or personal property stated in the Offering Materials to be owned or leased
by the Company),  free and clear of all liens,  encumbrances,  claims,  security
interests and defects of any material  nature  whatsoever,  other than those set
forth in the Offering Materials and liens for taxes not yet due and payable.

                     (v)       There is no litigation or governmental proceeding
pending  or, to the best of the  Company's  knowledge,  threatened  against,  or
involving the properties or business of the Company,  except as set forth in the
Offering Materials.

                     (vi)      The  Company  has  been  duly  organized  and  is
validly  existing as a corporation  in good standing under the laws of the State
of Nevada.  Except as set forth in the Offering Materials,  the Company does not
own or control,  directly or indirectly,  an interest in any other  corporation,
partnership,  trust, joint venture or other business entity. The Company is duly
qualified  or licensed  and in good  standing as a foreign  corporation  in each
jurisdiction   in  which  the   character  of  its   operations   requires  such
qualification or licensing and where failure to so qualify would have a material
adverse effect on the Company. The Company has all requisite corporate power and
authority,  and all material and necessary  authorizations,  approvals,  orders,
licenses,  certificates  and  permits  of and from all  governmental  regulatory
officials  and bodies  (domestic  and  foreign) to conduct its  businesses  (and
proposed  business) as described in the Offering  Materials.  Any disclosures in
the Offering  Materials  concerning the effects of foreign,  federal,  state and
local  regulation  on the  Company's  businesses  as currently  conducted and as
contemplated  are correct in all  material  respects  and do not omit to state a
material fact.  The Company has all corporate  power and authority to enter into
this Agreement,  the Credit Agreement,  the Registration  Rights Agreement,  the
Escrow  Agreement,  the Placement  Agent's  Warrants and the  Placement  Agent's
Registration  Rights Agreement to carry out the provisions and conditions hereof
and thereof, and all consents, authorizations,  approvals and orders required in
connection herewith and therewith have been obtained. No consent,  authorization


                                      A-4
<PAGE>
or order of, and no filing with, any court,  government  agency or other body is
required by the Company for the  issuance of the  Securities  or  execution  and
delivery of the Credit  Agreement,  Registration  Rights  Agreement,  the Escrow
Agreement, the Placement Agent's Warrants and the Placement Agent's Registration
Rights  Agreement  except for applicable  federal and state securities laws. The
Company, since its inception, has not incurred any liability arising under or as
a result of the  application  of any of the provisions of the 1933 Act, the 1934
Act or the Rules and Regulations.

                     (vii)     There has been no material  adverse change in the
condition or prospects of the Company,  financial or otherwise,  from the latest
dates as of which such  condition or prospects,  respectively,  are set forth in
the Offering Materials,  and the outstanding debt, the property and the business
of the Company  conform in all  material  respects to the  descriptions  thereof
contained in the Offering Materials.

                     (viii)    Except  as set forth in the  Offering  Materials,
the Company is not in breach of, or in default  under,  any term or provision of
any material  indenture,  mortgage,  deed of trust,  lease, note, loan or credit
agreement or any other material agreement or instrument evidencing an obligation
for borrowed money, or any other material agreement or instrument to which it is
a party or by which it or any of its  properties  may be bound or affected.  The
Company is not in  violation  of any  provision  of its charter or by-laws or in
violation of any franchise,  license, permit,  judgment,  decree or order, or in
violation of any material statute, rule or regulation. Neither the execution and
delivery  of this  Agreement,  the Credit  Agreement,  the  Registration  Rights
Agreement,  the Escrow Agreement,  the Placement Agent's Warrants, the Placement
Agent's  Registration  Rights Agreement nor the issuance and sale or delivery of
the Securities,  nor the  consummation of any of the  transactions  contemplated
herein or in the Credit Agreement, the Registration Rights Agreement, the Escrow
Agreement, the Placement Agent's Warrants, or the Placement Agent's Registration
Rights  Agreement,  nor  the  compliance  by the  Company  with  the  terms  and
provisions hereof or thereof,  has conflicted with or will conflict with, or has
resulted in or will result in a breach of, any of the terms and  provisions  of,
or has  constituted or will  constitute a default  under,  or has resulted in or
will result in the creation or  imposition  of any lien,  charge or  encumbrance
upon any  property  or assets of the  Company  or  pursuant  to the terms of any
indenture,  mortgage, deed of trust, note, loan or credit agreement or any other
agreement or  instrument  evidencing an obligation  for borrowed  money,  or any
other  agreement or instrument to which the Company may be bound or to which any
of the  property  or assets of the  Company  is  subject  except  (a) where such
default, lien, charge or encumbrance would not have a material adverse effect on
the Company and (b) as described in the Offering Materials; nor will such action
result in any  violation of the  provisions of the charter or the by-laws of the
Company  or,  assuming  the due  performance  by May  Davis  of its  obligations
hereunder,  any  material  statute or any  material  order,  rule or  regulation
applicable  to the  Company of any court or of any  foreign,  federal,  state or
other regulatory authority or other government body having jurisdiction over the
Company.

                     (ix)      Subsequent  to the dates as of which  information
is given in the Offering Materials,  and except as may otherwise be indicated or
contemplated herein or therein, the Company has not (a) issued any securities or
incurred any liability or obligation,  direct or contingent, for borrowed money,
or (b)  entered  into any  transaction  other  than in the  ordinary  course  of
business, or (c) declared or paid any dividend or made any other distribution on
or in  respect  of its  capital  stock.  Except  as  described  in the  Offering




                                      A-5
<PAGE>

Materials, the Company has no outstanding obligations to any officer or director
of the Company.

                     (x)       There are no claims for services in the nature of
a finder's or  origination  fee with  respect to the sale of the Common Stock or
any other arrangements, agreements or understandings that may affect May Davis's
compensation,  as determined by the National  Association of Securities Dealers,
Inc.

                     (xi)      The Company owns or possesses,  free and clear of
all liens or  encumbrances  and rights thereto or therein by third parties,  the
requisite  licenses  or  other  rights  to use all  trademarks,  service  marks,
copyrights,  service  names,  trade  names,  patents,  patent  applications  and
licenses necessary to conduct its business (including,  without limitation,  any
such  licenses or rights  described in the Offering  Materials as being owned or
possessed by the Company)  and,  except as set forth in the Offering  Materials,
there is no claim or action by any person pertaining to, or proceeding,  pending
or threatened, which challenges the exclusive rights of the Company with respect
to any  trademarks,  service  marks,  copyrights,  service  names,  trade names,
patents,  patent  applications and licenses used in the conduct of the Company's
businesses (including, without limitation, any such licenses or rights described
in the Offering Materials as being owned or possessed by the Company) except any
claim or action that would not have a material  adverse  effect on the  Company;
the Company's  current  products,  services or processes do not infringe or will
not infringe on the patents currently held by any third party.

                     (xii)     Except as described  in the  Offering  Materials,
the Company is not under any  obligation  to pay  royalties  or fees of any kind
whatsoever  to any third party with respect to any  trademarks,  service  marks,
copyrights,  service names, trade names, patents, patent applications,  licenses
or technology it has developed, uses, employs or intends to use or employ, other
than to their respective licensors.

                     (xiii)    Subject  to the  performance  by May Davis of its
obligations  hereunder,  the  Credit  Agreement  and the  offer  and sale of the
Securities  comply, and will continue to comply, up to the Commitment Period (as
defined in the Credit  Agreement) in all material respects with the requirements
of Rule 506 of Regulation D promulgated  by the SEC pursuant to the 1933 Act and
any other applicable  federal and state laws,  rules,  regulations and executive
orders.  Neither the Offering  Materials nor any amendment or supplement thereto
nor any documents  prepared by the Company in connection  with the Offering will
contain any untrue  statement  of a material  fact or omit to state any material
fact required to be stated therein or necessary to make the statements  therein,
in light of the  circumstances  under which they were made, not misleading.  All
statements of material  facts in the Offering  Materials are true and correct as
of the date of the Offering  Materials  and will be true and correct on the date
of the Closing.

                     (xiv)     All material taxes which are due and payable from
the Company have been paid in full or adequate  provision has been made for such
taxes on the books of the Company  except for those taxes disputed in good faith
the Company does not have any tax  deficiency or claim  outstanding  assessed or
proposed against it.

                     (xv)      None  of the  Company  nor  any of its  officers,
directors,  employees or agents,  nor any other  person  acting on behalf of the
Company, has, directly or indirectly, given or agreed to give any money, gift or
similar benefit (other than legal price concessions to customers in the ordinary
course of business) to any customer,  supplier,  employee or agent of a customer
or   supplier,   or  official  or  employee  of  any   governmental   agency  or


                                      A-6
<PAGE>

instrumentality  of any government  (domestic or foreign) or any political party
or candidate  for office  (domestic or foreign) or other person who is or may be
in a position  to help or hinder the  business  of the  Company (or assist it in
connection with any actual or proposed  transaction) which (A) might subject the
Company  to any  damage  or  penalty  in any  civil,  criminal  or  governmental
litigation  or  proceeding,  or (B) if not given in the past,  might  have had a
materially  adverse effect on the assets,  business or operations of the Company
as  reflected  in any of the  financial  statements  contained  in the  Offering
Materials,  or (C) if not continued in the future,  might  adversely  affect the
assets, business, operations or prospects of the Company in the future.

           5.        CERTAIN COVENANTS AND AGREEMENTS OF THE COMPANY.
                     -----------------------------------------------
           The  Company  covenants  and agrees at its  expense  and  without any
expense to May Davis as follows:
           A.        To advise May Davis of any material  adverse  change in the
Company's  financial  condition,  prospects  or business  or of any  development
materially  affecting the Company or rendering untrue or misleading any material
statement in the Offering  Materials  occurring at any time prior to any Advance
Date as soon as the Company is either informed or becomes aware thereof.
           B.        To use its best efforts to cause the Common Stock  issuable
in  connection  with the Credit  Agreement  and upon  exercise of the  Placement
Agent's Warrants to be qualified or registered for sale on terms consistent with
those stated in the Investor's  Registration  Rights Agreement and the Placement
Agent's  Registration Rights Agreement,  respectively,  and under the securities
laws of such  jurisdictions  as May  Davis  and the  Investor  shall  reasonably
request,  provided that such states and jurisdictions do not require the Company
to qualify as a foreign corporation.  Qualification,  registration and exemption
charges and fees shall be at the sole cost and expense of the Company.
           C.        Upon  written  request,  to provide and continue to provide
the to each holder of Securities,  copies of all quarterly financial  statements
and audited annual financial statements prepared by or on behalf of the Company,
other reports prepared by or on behalf of the Company for public  disclosure and
all documents delivered to the Company's stockholders.
           D.        To deliver,  during the  Commitment  Period,  to May Davis,
upon May  Davis's  request,  in the manner  provided  in  Section  10(B) of this
Agreement,  within forty five (45) days after the end of each of the first three
quarters of each fiscal year of the Company,  commencing  with the first quarter
ending  after the  Commitment  Period,  a statement  of its income for each such
quarterly  period,  and  its  balance  sheet  and  a  statement  of  changes  in
stockholders'  equity as of the end of such quarterly period,  all in reasonable
detail,  certified by its principal financial or accounting officer; (ii) within
ninety (90) days after the close of each fiscal  year,  its balance  sheet as of
the close of such fiscal year,  together with a statement of income, a statement
of changes in stockholders'  equity and a statement of cash flow for such fiscal
year,  such  balance  sheet,  statement  of  income,  statement  of  changes  in
stockholders'  equity and statement of cash flow to be in reasonable  detail and
accompanied  by a copy of the  certificate  or  report  thereon  of  independent
auditors if audited financial  statements are prepared;  and (iii) a copy of all
documents,  reports and  information  furnished to its  stockholders at the time
that such documents, reports and information are furnished to its stockholders.
           E.        To  comply  with the  terms of the  Credit  Agreement,  the
Registration  Rights  Agreement,  the Escrow  Agreement,  the Placement  Agent's
Warrants and the Placement Agent's  Registration  Rights  Agreement.



                                      A-7
<PAGE>

           F.        To keep available out of its authorized Common Stock solely
for the purpose of issuance upon the exercise of the Placement  Agent's Warrant,
such  number  of  shares  of Common  Stock as shall  then be  issuable  upon the
exercise or conversion thereof.
           G.        To issue to May Davis,  or May Davis's  designee,  upon the
execution of the Credit  Agreement,  the  Placement  Agent  Warrants to purchase
1,000,000 shares of Common Stock in the form substantially as annexed hereto.
           H. To ensure that any transactions  between or among the Company,  or
any of its officers,  directors and affiliates be on terms and  conditions  that
are no less favorable to the Company,  than the terms and conditions  that would
be available in an "arm's length" transaction with an independent third party.

           6.        INDEMNIFICATION.
                     ---------------
           A.        The Company  hereby agrees that it will  indemnify and hold
May Davis and each officer, director, shareholder, employee or representative of
May Davis,  and each person  controlling,  controlled by or under common control
with May Davis within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act or the SEC's  rules and  regulations  promulgated  there under (the
"Rules and  Regulations"),  harmless  from and against any and all loss,  claim,
damage,  liability,  cost or expense whatsoever (including,  but not limited to,
any and all reasonable legal fees and other expenses and disbursements  incurred
in connection with  investigating,  preparing to defend or defending any action,
suit or  proceeding,  including  any  inquiry  or  investigation,  commenced  or
threatened,  or any claim whatsoever or in appearing or preparing for appearance
as a  witness  in  any  action,  suit  or  proceeding,  including  any  inquiry,
investigation or pretrial proceeding such as a deposition) to which May Davis or
such indemnified  person of May Davis may become subject under the 1933 Act, the
1934 Act,  the  Rules and  Regulations,  or any  other  federal  or state law or
regulation, common law or otherwise, arising out of or based upon (i) any untrue
statement  or alleged  untrue  statement  of a material  fact  contained  in (a)
Section 4 of this Agreement,  (b) the Offering  Materials  (except those written
statements  relating to May Davis given by an  indemnified  person for inclusion
therein),  (c) any  application  or  other  document  or  written  communication
executed  by the  Company or based upon  written  information  furnished  by the
Company filed in any jurisdiction in order to qualify the Common Stock under the
securities laws thereof, or any state securities  commission or agency; (ii) the
omission or alleged omission from documents described in clauses (a), (b) or (c)
above of a material fact required to be stated  therein or necessary to make the
statements  therein not misleading;  or (iii) the breach of any  representation,
warranty,  covenant  or  agreement  made by the Company in this  Agreement.  The
Company further agrees that upon demand by an indemnified person, at any time or
from time to time, it will promptly  reimburse such  indemnified  person for any
loss, claim, damage,  liability, cost or expense actually and reasonably paid by
the  indemnified  person as to which the  Company  has  indemnified  such person
pursuant  hereto.  Notwithstanding  the foregoing  provisions of this  Paragraph
6(A),  any such  payment or  reimbursement  by the Company of fees,  expenses or
disbursements  incurred by an  indemnified  person in any  proceeding in which a
final  judgment by a court of competent  jurisdiction  (after all appeals or the
expiration of time to appeal) is entered  against May Davis or such  indemnified
person as a direct  result of May Davis or such  person's  gross  negligence  or
willful misfeasance will be promptly repaid to the Company.




                                      A-8
<PAGE>


           B.        May Davis hereby agrees that it will indemnify and hold the
Company and each officer, director,  shareholder,  employee or representative of
the Company, and each person controlling,  controlled by or under common control
with the Company  within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act or the Rules and Regulations,  harmless from and against any and
all loss, claim, damage, liability,  cost or expense whatsoever (including,  but
not  limited  to,  any and all  reasonable  legal  fees and other  expenses  and
disbursements incurred in connection with investigating,  preparing to defend or
defending   any  action,   suit  or   proceeding,   including   any  inquiry  or
investigation,  commenced or threatened, or any claim whatsoever or in appearing
or preparing  for  appearance  as a witness in any action,  suit or  proceeding,
including  any  inquiry,   investigation  or  pretrial   proceeding  such  as  a
deposition) to which the Company or such  indemnified  person of the Company may
become subject under the 1933 Act, the 1934 Act, the Rules and  Regulations,  or
any other federal or state law or regulation,  common law or otherwise,  arising
out of or based upon (i) the conduct of May Davis or its officers,  employees or
representatives  in its acting as  Placement  Agent for the Offering or (ii) the
breach of any representation,  warranty, covenant or agreement made by May Davis
in this  Agreement  (iii) any false or  misleading  information  provided to the
Company by one of the May Davis indemnified  persons.  C. Promptly after receipt
by an  indemnified  party of notice of  commencement  of any  action  covered by
Section  6(A) or  6(B),  the  party to be  indemnified  shall,  within  five (5)
business days, notify the indemnifying  party of the commencement  thereof;  the
omission by one indemnified party to so notify the indemnifying  party shall not
relieve  the  indemnifying  party  of its  obligation  to  indemnify  any  other
indemnified  party  that has  given  such  notice  and  shall  not  relieve  the
indemnifying  party of any  liability  outside  of this  indemnification  if not
materially  prejudiced  thereby. In the event that any action is brought against
the indemnified  party, the  indemnifying  party will be entitled to participate
therein  and,  to the extent it may  desire,  to assume and  control the defense
thereof  with  counsel  chosen  by it  which  is  reasonably  acceptable  to the
indemnified  party. After notice from the indemnifying party to such indemnified
party of its election to so assume the defense thereof,  the indemnifying  party
will not be liable to such indemnified party under such Section 6(A) or 6(B) for
any legal or other expenses  subsequently  incurred by such indemnified party in
connection with the defense thereof,  but the indemnified  party may, at its own
expense,  participate in such defense by counsel chosen by it, without, however,
impairing  the  indemnifying  party's  control  of the  defense.  Subject to the
proviso of this sentence and notwithstanding any other statement to the contrary
contained  herein,  the  indemnified  party or  parties  shall have the right to
choose its or their own counsel  and  control the defense of any action,  all at
the expense of the  indemnifying  party if, (i) the  employment  of such counsel
shall have been  authorized in writing by the  indemnifying  party in connection
with the  defense of such action at the expense of the  indemnifying  party,  or
(ii)  the  indemnifying   party  shall  not  have  employed  counsel  reasonably
satisfactory  to such  indemnified  party to have  charge of the defense of such
action within a reasonable time after notice of  commencement of the action,  or
(iii) such  indemnified  party or parties shall have  reasonably  concluded that
there  may be  defenses  available  to it or them  which are  different  from or
additional  to those  available  to one or all of the  indemnifying  parties (in
which  case the  indemnifying  parties  shall not have the  right to direct  the
defense of such action on behalf of the indemnified party or parties), in any of
which events such fees and expenses of one additional  counsel shall be borne by
the indemnifying  party;  provided,  however,  that the indemnifying party shall
not, in connection with any one action or separate but substantially  similar or
related


                                      A-9
<PAGE>

actions in the same jurisdiction  arising out of the same general allegations or
circumstance,  be liable for the  reasonable  fees and expenses of more than one
separate  firm of attorneys  at any time for all such  indemnified  parties.  No
settlement of any action or  proceeding  against an  indemnified  party shall be
made without the consent of the indemnifying party.
           D.        In order to provide for just and equitable  contribution in
circumstances in which the indemnification  provided for in Section 6(A) or 6(B)
is due in accordance  with its terms but is for any reason held by a court to be
unavailable  on grounds of policy or otherwise,  the Company and May Davis shall
contribute to the aggregate losses,  claims,  damages and liabilities (including
legal or other expenses reasonably incurred in connection with the investigation
or defense  of same)  which the other may incur in such  proportion  so that May
Davis shall be  responsible  for such  percent of the  aggregate of such losses,
claims,  damages  and  liabilities  as shall equal the  percentage  of the gross
proceeds paid to May Davis and the Company shall be responsible for the balance;
provided, however, that no person guilty of fraudulent  misrepresentation within
the meaning of Section  11(f) of the 1933 Act shall be entitled to  contribution
from any  person who was not guilty of such  fraudulent  misrepresentation.  For
purposes of this Section 6(D),  any person  controlling,  controlled by or under
common  control with May Davis,  or any partner,  director,  officer,  employee,
representative  or any  agent of any  thereof,  shall  have the same  rights  to
contribution  as May Davis and each person  controlling,  controlled by or under
common control with the Company within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act and each officer of the Company and each  director
of the Company shall have the same rights to  contribution  as the Company.  Any
party  entitled  to  contribution  will,  promptly  after  receipt  of notice of
commencement of any action,  suit or proceeding against such party in respect of
which a claim for  contribution  may be made  against the other party under this
Section 6(D),  notify such party from whom  contribution may be sought,  but the
omission  to so  notify  such  party  shall  not  relieve  the  party  from whom
contribution  may be  sought  from any  obligation  they may have  hereunder  or
otherwise if the party from whom  contribution  may be sought is not  materially
prejudiced thereby. The indemnity and contribution  agreements contained in this
Section 6 shall remain operative and in full force and effect  regardless of any
investigation  made by or on behalf of any indemnified person or any termination
of this Agreement.

           7.        PAYMENT OF EXPENSES.
                     -------------------
           The Company  hereby  agrees to bear all of the expenses in connection
with the Offering,  including,  but not limited to the  following:  filing fees,
printing and duplicating  costs,  advertisements,  postage and mailing  expenses
with respect to the transmission of Offering  Materials,  registrar and transfer
agent fees,  Escrow Agent fees and expenses,  fees of the Company's  counsel and
accountants,  issue and  transfer  taxes,  if any, and counsel fees and expenses
(such counsel fees not to exceed $25,000 plus out of pocket expenses).

           8.        CONDITIONS OF EACH CLOSING
                     --------------------------
           Each  Closing  shall  be  held at the  offices  of May  Davis  or its
counsel.  The  obligations  of May  Davis  hereunder  shall  be  subject  to the
continuing  accuracy of the representations and warranties of the Company herein
as of the date hereof and as of each Advance Date with respect to the Company as


                                      A-10
<PAGE>

if it had been made on and as of such  Advance  Date;  the accuracy on and as of
each Advance Date of the statements of the officers of the Company made pursuant
to the provisions  hereof;  and the performance by the Company on and as of each
Closing of its covenants and obligations  hereunder and to the following further
conditions:
           A.        At each  Closing,  May Davis  shall  receive the opinion of
Kirkpatrick  &  Lockhart_,  dated as of the date of the Closing,  which  opinion
shall be in form and substance reasonably satisfactory to counsel for May Davis.
           B.        At or prior to each  Closing,  counsel  for May Davis shall
have been  furnished  such  documents,  certificates  and  opinions  as they may
reasonably  require for the purpose of enabling  them to review or pass upon the
matters referred to in this Agreement and the Offering Materials, or in order to
evidence   the   accuracy,   completeness   or   satisfaction   of  any  of  the
representations, warranties or conditions herein contained.
           C.        At and prior to each Closing,  (i) there shall have been no
material  adverse change nor development  involving a prospective  change in the
condition or prospects or the business  activities,  financial or otherwise,  of
the Company from the latest dates as of which such condition is set forth in the
Offering  Materials;  (ii)  there  shall  have been no  transaction,  not in the
ordinary  course of  business,  entered  into by the Company  which has not been
disclosed in the Offering Materials or to May Davis in writing;  (iii) except as
set forth in the Offering  Materials,  the Company shall not be in default under
any provision of any instrument  relating to any  outstanding  indebtedness  for
which a waiver or extension has not been otherwise received;  (iv) except as set
forth  in the  Offering  Materials,  the  Company  shall  not  have  issued  any
securities (other than those to be issued as provided in the Offering Materials)
or declared or paid any dividend or made any  distribution  of its capital stock
of any class and there shall not have been any change in the indebtedness  (long
or short term) or  liabilities  or  obligations  of the Company  (contingent  or
otherwise);  (v) no material amount of the assets of the Company shall have been
pledged or mortgaged,  except as indicated in the Offering Materials; and (v) no
action,  suit  or  proceeding,  at law or in  equity,  against  the  Company  or
affecting any of its  properties  or  businesses  shall be pending or threatened
before  or by  any  court  or  federal  or  state  commission,  board  or  other
administrative  agency,  domestic or foreign,  wherein an unfavorable  decision,
ruling or finding could materially adversely affect the businesses, prospects or
financial  condition  or  income  of the  Company,  except  as set  forth in the
Offering Materials.
           D.        At  each   Closing,   May  Davis  shall  have   received  a
certificate  of the Company signed by an executive  officer and chief  financial
officer,  dated  as of the  applicable  Advance  Date,  to the  effect  that the
conditions set forth in subparagraph  (C) above have been satisfied and that, as
of the  applicable  Advance  Date,  the  representations  and  warranties of the
Company set forth herein are true and correct.
           E.        At  the  initial  Closing,  the  Company  shall  have  duly
executed and delivered to May Davis,  or its  designees,  the Placement  Agent's
Warrants, in the names and denominations specified by May Davis.

           9.        TERMINATION.
                     -----------
           This Agreement shall be co-terminus with, and terminate upon the same
terms and conditions as those set forth in, the Credit Agreement.  The rights of
the Investor and the  obligations of the Company under the  Registration  Rights
Agreement,  and the rights of May Davis and the obligations of the Company under
the Placement  Agent's Warrants and the Placement  Agent's  Registration  Rights
Agreement shall survive the termination of this Agreement unabridged.



                                      A-11
<PAGE>

           10.       MISCELLANEOUS.
                     -------------
           A.        This   Agreement   may  be   executed   in  any  number  of
counterparts,  each of which  shall be deemed to be an  original,  but all which
shall be deemed to be one and the same instrument.
           B.        Any notice  required  or  permitted  to be given  hereunder
shall be given in writing and shall be deemed  effective  when  deposited in the
United States mail, postage prepaid, or when received if personally delivered or
faxed ( upon  confirmation of receipt received by the sending party),  addressed
as follows:

           To May Davis:
                     May Davis Group, Inc.
                     One World Trade Center - Suite 8735
                     New York, New York  10048
                     Attention: Michael Jacobs

           with a copy to:
                     Butler Gonzalez LLP
                     1000 Stuyvesant Avenue
                     Suite #6
                     Union, NJ  07083
                     Fax: (908) 810-0973
                     Attention: David Gonzalez, Esq.

           To the Company:
                     European Micro Holdings, Inc.
                     6073 N.W. 167th Street
                     Unit C-25
                     Miami, Fl  33015
                     Attention: John B. Gallagher

           with copy to:
                     Kirkpatrick & Lockhart
                     201 Biscayne Blvd.
                     Suite 2000
                     Miami, Fl  33131
                     Attention: Clayton Parker, Esq.

or to such other address of which written notice is given to the others.
           C.        This  Agreement  shall be governed by and  construed in all
respects  under  the laws of the  State of New York,  without  reference  to its
conflict of laws rules or principles. Any suit, action, proceeding or litigation
arising out of or relating to this Agreement  shall be brought and prosecuted in
such  federal or state court or courts  located  within the State of New York as
provided by law. The parties hereby irrevocably and  unconditionally  consent to
the  jurisdiction  of each such court or courts  located within the State of New
York and to service of process by registered or certified  mail,  return receipt


                                      A-12
<PAGE>

requested,  or by any other  manner  provided  by  applicable  law,  and  hereby
irrevocably and unconditionally  waive any right to claim that any suit, action,
proceeding  or litigation  so commenced  has been  commenced in an  inconvenient
forum.
           D.        This Agreement and the other agreements  referenced  herein
contain  the entire  understanding  between  the  parties  hereto and may not be
modified or amended  except by a writing  duly signed by the party  against whom
enforcement of the modification or amendment is sought.

           E.        If any  provision  of this  Agreement  shall  be held to be
invalid or unenforceable,  such invalidity or unenforceability  shall not affect
any other provision of this Agreement.



                           [SIGNATURE PAGE TO FOLLOW]



                                      A-13
<PAGE>

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

                                            EUROPEAN MICRO HOLDINGS, INC.

                                            By:  /s/ John B. Gallagher
                                                -------------------------------
                                                    Name: John B. Gallagher
                                                    Title:  Co-President

                                            MAY DAVIS GROUP, INC.

                                            By:  /s/ Michael Jacobs
                                                -------------------------------
                                                      Name: Michael Jacobs
                                                      Title:ManagingDirector



                                      A-14
<PAGE>

                                   SCHEDULE A

CLASS A WARRANTS
----------------

NAME                                                          AMOUNT
----                                                          ------

Mark Angelo                                                   113,000
Hunter Singer                                                 113,000
Joseph Donahue                                                113,000
Robert Farrell                                                113,000
Persia Consulting                                              48,000


CLASS B WARRANTS
----------------

NAME                                                          AMOUNT
----                                                          ------

Mark Angelo                                                   113,000
Hunter Singer                                                 113,000
Joseph Donahue                                                113,000
Robert Farrell                                                113,000
Persia Consulting                                              48,000




                                      A-15
</TEXT>
</DOCUMENT>
