-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, V3zUPK2vlyCD5dREZyzPZ2Pir4ccgfT5KUPU7egUTkqxgVUcBDg6ktWcQAIbj+3Q IaY2TeqQMuf/pqUHGXpaKA== 0001094891-00-000207.txt : 20000322 0001094891-00-000207.hdr.sgml : 20000322 ACCESSION NUMBER: 0001094891-00-000207 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20000321 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: WORLDS INC CENTRAL INDEX KEY: 0000001961 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 221848316 STATE OF INCORPORATION: NJ FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-56133 FILM NUMBER: 574829 BUSINESS ADDRESS: STREET 1: 15 UNION WHARF CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 6177258900 MAIL ADDRESS: STREET 1: 15 UNION WHARF CITY: BOSTON STATE: MA ZIP: 02109 FORMER COMPANY: FORMER CONFORMED NAME: ACADEMIC COMPUTER SYSTEMS INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: COMPUTER INDUSTRIES LTD DATE OF NAME CHANGE: 19690318 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: CHRUST STEVEN CENTRAL INDEX KEY: 0001084366 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: C/O SGC ADVISORY SERVICES INC STREET 2: 1786 BEDFORD STREET CITY: STANFORD STATE: CT ZIP: 06905 MAIL ADDRESS: STREET 1: C/O SGC ADVISORY SERVICES INC STREET 2: 1786 BEDFORD STREET CITY: STANFORD STATE: CT ZIP: 06905 SC 13D/A 1 AMENDMENT NO. 1 TO FORM 13D ---------------------------- OMB APPROVAL ---------------------------- OMB Number: 3235-0145 UNITED STATES Expires: August 31, 1999 SECURITIES AND EXCHANGE COMMISSION Estimated average burden Washington, D.C. 20549 hours per form.......14.90 ------------------------------------ SCHEDULE 13D/A Under the Securities Exchange Act of 1934 (Amendment No. 1)* Worlds.com Inc. (formerly Worlds Inc.) - ------------------------------------------------------------------------------- (Name of Issuer) Common Stock, $.001 par value - ------------------------------------------------------------------------------- (Title Class of Securities) 981918105 ----------------------------------------------------------------------- (CUSIP Number) Steven G. Chrust c/o David Alan Miller Graubard Mollen & Miller 600 Third Avenue, 31st Floor New York, New York 10016 ------------------------------------------------------------------------------ (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) March 10, 2000 ------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box |_|. Note: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. * The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). Page 1 of 9 SCHEDULE 13D CUSIP No. 981918105 Page 2 of 9 Pages - -------------------------- ------------------------------- 1 NAME OF REPORTING PERSONS S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (entities only) SGC Advisory Services, Inc. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)* (a)|_| (b)|_| - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS*(See Instructions) OO - Other - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |_| - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Connecticut - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 1,000,000 ---------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY ---------------------------------------------------- OWNED BY 9 SOLE DISPOSITIVE POWER EACH REPORTING 1,000,000 PERSON ---------------------------------------------------- WITH 10 SHARED DISPOSITIVE POWER - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,000,000 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.4% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* CO - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. SCHEDULE 13D CUSIP No. 981918105 Page 3 of 9 Pages - ----------------------------- --------------------------- 1 NAME OF REPORTING PERSONS S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (entities only) Steven G. Chrust - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)* (a)|_| (b)|_| - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS*(See Instructions) PF - Personal Funds - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |_| - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 1,927,113 ---------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 1,000,000 OWNED BY ---------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON 1,927,113 WITH ---------------------------------------------------- 10 SHARED DISPOSITIVE POWER 1,000,000 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,927,113 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 14.6% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. Item 1. Securities and Issuer The class of equity securities to which this statement relates is the Common Stock, $.001 par value, of Worlds.com Inc. (formerly Worlds Inc.) ("Company"), a New Jersey corporation, whose principal executive offices are located at 15 Union Wharf, Boston, Massachusetts 02109. This is Amendment No. 1 to a Schedule 13D filed on April 16, 1999. Item 2. Identity and Background This statement is filed on behalf of SGC Advisory Services, Inc., a corporation organized and existing under the laws of the State of Connecticut ("SGC") and Steven Chrust. SGC is in the business of consulting and financial advice. SGC's business address is 1786 Bedford Street, Stamford, Connecticut 06905. Steven G. Chrust is the president and sole shareholder of SGC. Mr. Chrust's business address is 1786 Bedford Street, Stamford, Connecticut 06905. Mr. Chrust is the President of SGC. Mr. Chrust is a United States citizen. Neither SGC nor Mr. Chrust has been convicted in any criminal proceeding (excluding traffic violations or similar misdemeanors) during the last five years. Neither SGC nor Mr. Chrust has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction resulting in a judgment, decree or final order enjoining it from engaging in future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws during the last five years. Item 3. Source and Amount of Funds or Other Consideration SGC acquired warrants to purchase 1,000,000 shares of Common Stock of the Company on April 13, 1999, as consideration for consulting services which SGC is rendering to the Company described in Item 6. Mr. Chrust beneficially owns 2,927,113 shares of Common Stock, which includes: (i) 1,000,000 shares of Common Stock, issuable upon the exercise of presently exercisable warrants granted to SGC as consideration for consulting services; (ii) 11,000 shares of Common Stock held of record jointly by Steven and Sharon Chrust, acquired at a price per share of $1.00 on October 21, 1997, purchased directly from the Company; (iii) 60,000 shares of Common Stock held of record by Bear Stearns Securities Corp., as custodian for Mr. Chrust's self-directed Individual Retirement Account, acquired at a price per share of $1.00 on October 21, 1997, purchased directly from the Company; (iv) 15,000 shares of Common Stock held of record by Steven Chrust BSSC Master Def Contribution Profit Sharing Account, acquired at a price per share of $1.6125 on December 7, 1998, purchased in an open market transaction through the OTC Page 4 of 9 Pages Bulletin Board; (v) 1,000 shares of Common Stock held of record by Steven Chrust BSSC Master Def Contribution Profit Sharing Account, acquired at a price per share of $1.545 on December 7, 1998, purchased in an open market transaction through the OTC Bulletin Board; (vi) 15,000 shares of Common Stock held of record by Eve Chrust, Mr. Chrust's daughter which she acquired by gift from Mr. Chrust; (vii) 15,000 shares of Common Stock held of record by Liza Chrust, Mr. Chrust's other daughter which she acquired by gift from Mr. Chrust; (viii) 30,000 shares of Common Stock, held of record jointly by Steven and Sharon Chrust, acquired at a per share price of $1.00 on June 28, 1999, directly from the Company, (ix) 15,000 shares of Common Stock, issuable upon the exercise of presently exercisable warrants held by Steven and Sharon Chrust, jointly, purchased on June 28, 1999, directly from the Company; (x) 302,939 shares of Common Stock held of record by Mr. Chrust, purchased on March 10, 2000 in a private transaction from Steven A. Greenberg at a purchase price of $3.301 per share; (xi) 1,363,342 shares of Common Stock, issuable upon the exercise of presently exercisable options, purchased on March 10, 2000 in a private transaction from Steven A. Greenberg at a purchase price of $.007335 per share; and (xii) an aggregate of 287,500 shares of Common Stock, issuable upon the exercise of options granted to Mr. Chrust in his capacity as a director of the Company, of which 98,832 shares are currently purchasable. Each of the above cash purchases of securities was made using personal funds of Mr. Chrust. Item 4. Purpose of Transactions Mr. Chrust holds his shares of Common Stock and any shares of Common Stock he may acquire upon exercise of the warrants for investment. Steven G. Chrust is a member and Chairman of the Board of Directors of the Company. Although Mr. Chrust, in his capacity as a member and Chairman of the Board of Directors of the Company, may be involved in the consideration of various proposals considered by the Board of Directors of the Company, neither Mr. Chrust nor SGC has current plans which relate to or would result in: an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Company or any of its subsidiaries; a sale or transfer of a material amount of assets of the Company or any of its subsidiaries; any change in the current board of directors or management of the Company, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board of directors of the Company; any material change in the present capitalization or dividend policy of the Company; any other material change in the Company's business or corporate structure; changes in the Company's charter, by-laws or instruments corresponding thereto or other actions which may impede the acquisition of control of the Company by any person; causing a class of securities of the Company to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; causing a class of equity securities of the Company becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities and Exchange Act of 1934; or any action similar to the above. Page 5 of 9 Pages Item 5. Interest in Securities of the Issuer SGC holds warrants to purchase 1,000,000 shares of Common Stock. Accordingly, SGC is the beneficial owner of 1,000,000 shares of Common Stock. This represents a beneficial ownership equal to 5.4% of the outstanding Common Stock of the Company. Mr. Chrust, as President of SGC, has sole power to exercise the warrants and, upon issuance of the Common Stock, to vote and dispose of the shares of Common Stock. On March 10, 2000, Mr. Chrust purchased 302,939 shares of Common Stock at a purchase price of $3.301 per share in a private transaction from Steven A. Greenberg and purchased an option for $.007335 per share to purchase an aggregate of 1,363,342 additional shares of Common Stock owned by Mr. Greenberg at $3.301 per share. On March 17, 2000, Mr. Chrust, in connection with his being a director of the Company, was granted options to purchase an aggregate of 287,500 shares of Common Stock of the Company. The options are immediately vested as to one-third of the shares and the balance vest in equal amounts on March 17, 2001 and March 17, 2002. The options expire on March 17, 2005. The first option is exercisable at $5.68 per share for 187,500 shares; the second option is exercisable at $6.00 per share for 50,000 shares; and the third option is exercisable at $9.00 per share for 50,000 shares. In addition, Mr. Chrust beneficially owns 1,162,000 shares of Common Stock which includes: (i) 1,000,000 shares of Common Stock issuable upon exercise the warrants held by SGC; (ii) 41,000 shares of Common Stock held of record by Steven and Sharon Chrust jointly; (iii) 60,000 shares of Common Stock held of record by Bear Stearns Securities Corp., as custodian for Mr. Chrust's Individual Retirement Account; (iv) 16,000 shares of Common Stock held of record by Steven Chrust BSSC Master Def Contribution Profit Sharing Account; (v) 15,000 shares of Common Stock held of record by Eve Chrust, Mr. Chrust's daughter; and (vi) 15,000 shares of Common Stock held of record by Liza Chrust, Mr. Chrust's other daughter; (vii) 15,000 shares of Common Stock, issuable upon the exercise of presently exercisable warrants granted to Steven and Sharon Chrust, jointly. Accordingly, Mr. Chrust is the beneficial owner of 2,927,113 shares of Common Stock. This represents a beneficial ownership equal to 14.6% of the outstanding Common Stock of the Company. Mr. Chrust has the direct and indirect power to vote and dispose of the above shares of Common Stock, subject to the voting agreement as to 302,939 shares of Common Stock described in Item 6. Item 6. Contracts, Agreements, Understandings or Relationship with Respect to Securities of Issuer On March 23, 1999, SGC entered into a Financial Advisory and Consulting Agreement with the Company ("Consulting Agreement") pursuant to which the Company engaged SGC to render consulting advice for a period of 36 months from April 13, 1999, and SGC was granted warrants to purchase 1,000,000 shares of the Company's Common Stock. In addition, Mr. Chrust was appointed as a member and Chairman of the Board of Directors of the Company. On April 13, 1999, Michael Scharf and Thomas Kidrin, directors and shareholders of the Company, and Steven Greenberg, a shareholder of the Company, Page 6 of 9 Pages agreed to contribute to the capital of the Company for cancellation 318,750, 300,000 and 881,250 shares respectively. Each of them also agreed that during the term of the Consulting Agreement, they will vote any shares of stock of the Company which they own or subsequently acquire, or over which they have voting control, for the election of Mr. Chrust as a director of the Company at any meeting of the Company held for the purpose of electing directors and will sign any written consent to elect Mr. Chrust as a director if such written consent is provided in lieu of a meeting. On April 13, 1999, the Company issued to SGC warrants to purchase 1,000,000 shares of the Company's Common Stock as consideration for consulting services SGC is rendering to the Company. The warrants are immediately exercisable at an exercise price of $.50 per share and expire on April 13, 2006. The warrants are fully earned by SGC and may not be terminated by the Company for any reason. The warrant and the securities underlying the warrant cannot be transferred unless applicable securities laws are complied with. The warrant also provides for demand and "piggy-back" registration rights, indemnification of SGC under the Securities Exchange Act of 1934, as amended, anti-dilution provisions, a requirement by the Company to reserve the number of shares of Common Stock issuable upon the exercise of the warrant and preemptive rights. Pursuant to a Purchase and Option Agreement, dated March 10, 2000 (the "Purchase Agreement"), Steven G. Chrust purchased from Steven A. Greenberg 302,939 shares of Common Stock for $1,000,001.64. Mr. Greenberg retains the right to vote such shares until the earlier of (i) September 10, 2001, or (ii) the date on which the Option (as defined below) is exercised with respect to at least 605,877 shares of Common Stock. Pursuant to the Purchase and Option Agreement, Mr. Greenberg sold to Mr. Chrust an option (the "Option") at $.007335 per share to purchase 1,363,342 shares of Common Stock at an exercise price of $3.301 per share. The Option will expire on June 4, 2000, unless exercised with respect to 75,735 shares by such date, in which case the Option will expire on July 4, 2000. The Option is not exercisable for less than an aggregate of 605,877 shares of Common Stock, except as set forth in the preceding sentence in connection with the extension of the Option. In connection with the options granted by the Company to Mr. Chrust, the Company will enter into option agreements for each grant reflecting the terms stated in this Schedule 13D and such other terms as are ordinarily set forth in similar options of the Company. Item 7. Materials to be Filed as Exhibits (10.1) Joint Filing Agreement dated as of April 14, 1999 (Previously Filed).* (10.2) Financial Advisory and Consulting Agreement, dated March 23, 1999, between the Company and SGC Advisory Services, Inc. (Previously Filed).* (10.3) Warrant to purchase 1,000,000 shares of the Company's Common Stock issued to SGC Advisory Services, Inc., dated April 13, 1999 (Previously Filed).* Page 7 of 9 Pages (10.4) Contribution/Voting Agreement, dated April 13, 1999 among Messrs. Scharf, Kidrin and Greenberg (Previously Filed).* (10.5) Purchase and Option Agreement, dated March 10, 2000, between Steven A. Greenberg and Steven G. Chrust (Filed Herewith). (10.6) Consent letter from Steven A. Greenberg to Worlds.com Inc., dated March 10, 2000 (Filed Herewith). * Previously filed with Schedule 13D filed on April 16, 2000. Page 8 of 9 Pages SIGNATURES After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: March 17, 2000 SGC Advisory Services, Inc. /s/ Steven G. Chrust By:____________________________ Steven G. Chrust, President /s/ Steven G. Chrust _____________________________ Steven G. Chrust Page 8 of 8 Pages EX-10.5 2 PURCHASE AND OPTION AGREEMENT PURCHASE AND OPTION AGREEMENT PURCHASE AND OPTION AGREEMENT, dated March 10, 2000, by and between STEVEN A. GREENBERG ("Greenberg") and STEVEN G. CHRUST ("Chrust"). WHEREAS, Chrust desires to purchase concurrently with the execution of this Agreement certain shares of the common stock ("Common Stock") of Worlds.com Inc. ("Company") owned by Greenberg and Greenberg desires to sell to Chrust such shares; and WHEREAS, Greenberg also desires to grant Chrust an option to purchase certain additional shares of the Common Stock owned by Greenberg and Chrust desires to acquire the option on the terms and conditions set forth in this Agreement. IT IS AGREED: 1. Stock Purchase. Chrust hereby purchases from Greenberg and Greenberg hereby sells to Chrust 302,939 shares of the Common Stock owned by Greenberg ("Purchased Shares") at a price of $3.301 per share. Accordingly, concurrently with the execution of this Agreement, Chrust is wiring to an account designated by Greenberg the sum of $1,000,001.64 in immediately available funds in consideration for the Purchased Shares, and Greenberg is causing certificates representing the Purchased Shares, together with stock powers, with signatures guaranteed, to be delivered to Graubard Mollen & Miller ("GMM"). Promptly thereafter, GMM shall arrange to have the Purchased Shares transferred into Chrust's name and certificates representing such shares to be delivered to Chrust. 2. Grant of Stock Option. Greenberg hereby grants to Chrust the right and option ("Option ") to purchase up to an aggregate of 1,363,342 additional shares of the Common Stock owned by Greenberg ("Option Shares"), all on the terms and conditions set forth herein. 3. Exercise Price. The exercise price ("Exercise Price") of the Option shall be $3.301 per share, subject to adjustment as hereinafter provided. 4. Exercisability. The Option shall be exercisable from time to time, in whole or in part, during the "Option Period," which shall be the period commencing on the date of this Agreement and ending on June 4, 2000, unless extended until July 4, 2000 in accordance with Section 5(ii) hereof. The last day of the Option Period, as it may be extended, is referred to as the "Termination Date." Notwithstanding the foregoing, except as set forth in Section 5(ii) hereof, the Option may not be exercised for less than an aggregate of 605,877 Option Shares (inclusive of the 75,735 Option Shares which may be purchased under Section 5(ii), below) (the "Minimum Option Exercise"). 5. Consideration for the Option. (i) Simultaneously with the execution of this Agreement, Chrust is wiring to the account designated by Greenberg pursuant to Section 1 above the sum of $10,000 ("Option Purchase Price") as payment for the grant of the Option by Greenberg to Chrust. (ii) If Chrust desires to extend the Option Period beyond June 4, 2000, then on or prior to the close of business on June 4, 2000, Chrust must wire, or have wired, an additional $250,001.24 ("Extension Payment") to the account designated pursuant to Section 5(i) in order to exercise the Option with respect to 75,735 Option Shares ("Extension Exercise"). If the Extension Exercise is made on or prior to June 4, 2000, the Termination Date shall be extended to July 4, 2000, and (ii) the Escrow Agent shall deliver a certificate for such 75,735 Option Shares as directed by Chrust. (iii) If the Option is exercised in accordance with the terms hereof and of the Escrow Agreement (as defined in Section 7 below), then the Option Purchase Price (less $1) will be applied as a credit against the aggregate amount payable to Greenberg upon satisfaction of the Minimum Option Exercise. If the Option is not so exercised, Greenberg will be entitled to retain the full amount of the Option Purchase Price. 6. Adjustments. In the event of any change in the number of outstanding shares of the Common Stock occurring as the result of a stock split, reverse stock split or stock dividend, combination or reclassification of the outstanding Common Stock, or similar event after the date hereof, the number of Option Shares and the Exercise Price of the Option shall each be proportionately adjusted. Any right to acquire a fractional Option Share resulting from adjustments will be rounded to the nearest whole Option Share. 2 7. Method of Exercise. The Option may be exercised in whole or in part (subject to the Minimum Option Exercise described in Section 4, above, and/or the Extension Exercise described in Section 5(ii), above) by written notice directed to Greenberg and the Escrow Agent in accordance with the terms of the Escrow Agreement among Greenberg, Chrust and Continental Stock Transfer & Trust Company ("Escrow Agent"), executed simultaneously herewith ("Escrow Agreement"). 8. Voting Rights. Chrust hereby acknowledges and agrees that during the Voting Proxy Period (as defined in this paragraph 8), Greenberg shall have the right to vote all of the Purchased Shares with respect to any matter put to a vote of the stockholders of the Company. The "Voting Proxy Period" shall be the period commencing on the date hereof and ending on the earlier of (i) September 10, 2001 or (ii) the date the Minimum Option Exercise is made. Notwithstanding anything contained herein to the contrary, the foregoing shall not in any way limit or otherwise modify Greenberg's obligations to vote his shares, including the Purchased Shares, in accordance with the terms of the Consent (defined in Section 11, below) and the letter, dated April 13, 1999, from Greenberg, Michael Scharf and Thomas Kidrin to Chrust and the Company. 9. Greenberg's Representations. Greenberg represents and warrants to Chrust that: (i) he owns the Purchased Shares and the Option Shares (together, the "Shares") free of any lien, restriction or encumbrance of any kind, and he has owned all of the Shares since December 31, 1997; (ii) the sale by him of the Purchased Shares is, and the sale by him of the Option Shares upon exercise of the Option will be, exempt from the registration requirements of the Securities Act of 1933, as amended ("1933 Act"); (iii) he has not granted anyone an option, warrant, subscription or other right with respect to the Shares or any right to vote the Shares; (iv) his execution, delivery and performance of this Agreement and the Escrow Agreement does not and will not conflict with or violate any law, statute, ordinance, rule, regulation, order, judgment or decree applicable to him, result in any breach of or constitute a default (or an event which with notice or lapse of time or both would become a default) under, any 3 note, bond, mortgage, indenture, contract, agreement or other instrument or obligation to which he is a party or by which he is bound. (v) he has received a copy of all reports and documents filed by the Company with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended, within the last 24 months and all reports issued by the Company to its stockholders; and (vi) he has had both the opportunity to ask questions and receive answers from the officers and directors of the Company and persons acting on its behalf concerning the Company's operations and to obtain any additional information he requested. 10. Chrust's Representations. Chrust represents and warrants to Greenberg that: (i) he understands that he must bear the economic risk of the investment in the Shares, which cannot be sold by him unless they are registered under the 1933 Act or an exemption therefrom is available thereunder; and (ii) he is aware that the Company shall place stop transfer orders with its transfer agent against the transfer of the Shares in the absence of registration under the 1933 Act or an exemption therefrom as provided herein; (iii) he understands that the certificates evidencing the Shares shall bear the following legend: "The shares represented by this certificate have not been registered under the Securities Act of 1933, as amended, or under the securities laws of any State. The shares may not be sold, transferred or otherwise disposed of in the absence of such registration or an exemption therefrom under said Act." (iv) he understands that, during the Voting Proxy Period the Purchased Shares shall bear the following additional legend: 4 "The shares represented by this certificate are subject to certain voting rights granted to a person other than the registered holder hereof, in accordance with a certain Purchase and Option Agreement, dated March 10, 2000, a copy of which is on file at the principal offices of the Company." (v) as Chairman of the Company's board of directors, he is aware of all information regarding the Company's operations, including the Company's proposed plans and business risks. (vi) his execution, delivery and performance of this Agreement and the Escrow Agreement does not and will not conflict with or violate any law, statute, ordinance, rule, regulation, order, judgment or decree applicable to him, result in any breach of or constitute a default (or an event which with notice or lapse of time or both would become a default) under, any note, bond, mortgage, indenture, contract, agreement or other instrument or obligation to which he is a party or by which he is bound. 11. Releases; Consent. Simultaneously herewith, (i) each of Greenberg and the Company are executing mutual general releases in the other's favor ("Releases"), and (ii) Greenberg is executing a shareholder consent with respect to certain matters ("Consent"). 12. Miscellaneous. 12.1 Notices. All notices, requests, deliveries, payments, demands and other communications which are required or permitted to be given under this Agreement shall be deemed given if given in writing, by hand, or delivered by nationally recognized overnight courier, or by telecopier and confirmed by mail (registered or certified mail, postage prepaid, return receipt requested) at their respective addresses set forth herein, or to such other address as either shall have specified by notice in writing to the other. 12.2 Survival of Representations. The representations and warranties made by the parties shall survive the delivery of the Purchased Shares and the partial, full or non-exercise of the Option (and the delivery of the Option Shares). 12.3 Waiver. The waiver by any party hereto of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any other or subsequent breach. 5 12.4 Entire Agreement. This Agreement, the Escrow Agreement, the Releases and the Consent constitute the entire agreement between the parties with respect to the subject matter hereof. This Agreement may not be amended except by writing executed by Greenberg and Chrust. 12.5 Binding Effect; Successors. Chrust shall be entitled to designate persons to purchase Option Shares along with him and such persons shall be deemed to be assignees of his rights hereunder. If a portion of the Option is exercised by such a designee, such designee must deliver to Greenberg simultaneously with such exercise a certificate containing representations and warranties substantially similar to the representations and warranties made by Chrust in Section 10 above. This Agreement shall inure to the benefit of and be binding upon the parties hereto and, to the extent not prohibited herein, their respective heirs, successors, assigns and representatives. Nothing in this Agreement, expressed or implied, is intended to confer any rights, remedies, obligations or liabilities on any person other than the parties hereto and as provided above, their respective heirs, successors, assigns and representatives. 12.6 Governing Law; Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of New York (without regard to choice of law provisions). Each party (i) agrees that any legal suit, action or proceeding arising out of or relating to this Agreement shall be instituted exclusively in New York State Supreme Court, County of New York, or in the United States District Court for the Southern District of New York, (ii) waives any objection to the venue of any such suit, action or proceeding and the right to assert that such forum is not a convenient forum, and (iii) irrevocably consents to the jurisdiction of the New York State Supreme Court, County of New York, and the United States District Court for the Southern District of New York in any such suit, action or proceeding. Each party further agrees to accept and acknowledge service of any and all process which may be served in any such suit, action or proceeding in the New York State Supreme Court, County of New York, or in the United States District Court for the Southern District of New York and agrees that service of process upon him mailed by registered mail to his address shall be deemed in every respect effective service of process upon him in any such suit, action or proceeding. 12.7 Enforcement. The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or 6 injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, this being in addition to any other remedy to which they are entitled at law or in equity. In addition, each of the parties hereto waives any right to trial by jury with respect to any claim or proceeding related to or arising out of this Agreement or any of the transactions contemplated hereby. 12.8 Headings. The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or affect the meaning or interpretation of any of the terms or provisions of this Agreement. 12.9 SEC Filings. Each party agrees to provide the other with copies of any filings they make with the Securities and Exchange Commission to reflect the sale of the Purchased Shares and the grant and exercise of the Option prior to the time the filing is required to be made and to give the other party reasonable opportunity to comment on same. 12.10 Severability. The invalidity or unenforceability of any term or provision of this Agreement in any situation or jurisdiction shall not affect the validity or enforceability of the other terms or provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction and the remaining terms and provisions shall remain in full force and effect, unless doing so would result in an interpretation of this Agreement which is manifestly unjust. 12.11 Fees and Expenses. Except as otherwise expressly set forth herein or in the Escrow Agreement, all costs and expenses (including, without limitation, legal and financial advisory fees and expenses) incurred in connection with, or in anticipation of, this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expenses. 12.12 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original instrument and all of which together shall constitute a single agreement. 7 IN WITNESS WHEREOF, the parties hereto have signed this Agreement on the day and year first above: Address: 693 Fifth Avenue-- 19th Floor New York, New York 10022 Telecopier No.: 212-246-1007 /s/ Steven A. Greenberg - -------------------------- STEVEN A. GREENBERG Address: SGC Advisory Services, Inc. 1786 Bedford Street Stamford, CT 06905 Telecopier No.: 203-316-3929 /s/ Steven G. Chrust - ----------------------------- STEVEN G. CHRUST 8 EX-10.6 3 GREENBER LETTER AGREEMENT STEVEN A. GREENBERG 693 FIFTH AVENUE-- 19TH FLOOR NEW YORK, NEW YORK 10022 March 10, 2000 Worlds.com Inc. 15 Union Wharf Boston, Massachusetts 02109 Gentlemen: This letter is being delivered to you simultaneously with the execution of and delivery of the purchase and option agreement ("Agreement"), dated March 10, 2000, between the undersigned ("Greenberg") and Steven G. Chrust ("Chrust"). I hereby consent, with respect to all of the shares of common stock of Worlds.com Inc. ("Company") which I own or have the right to vote (including the "Purchased Shares," as defined in the Agreement), to the authorization and creation of a series or class of preferred stock ("Preferred Stock") with the following terms and any amendment to the certificate of incorporation of the Company required in connection therewith: o stated value of up to a maximum of $5,000,000; o convertible into the Company's common stock (or an equivalent thereof) at a conversion price of 80% or more of the "Fair Market Value" (determined in customary fashion, based on a number of days prior to closing on the sale of the Preferred Stock); o either dividend bearing or non-dividend bearing; provided, however, that if dividends are to accrue or be paid, the annual dividend rate shall be 10% or less and the Company must have the option to pay dividends either in kind or in common stock of the Company; o senior liquidation preference in the amount of the stated value; o voting rights as required by law and on an as-converted basis with the common stock, together with the right, as a class, to elect no more than two directors to the Company's board of directors; and o such other rights and preferences as are either customary or not materially adverse to the Company. This letter shall constitute Greenberg's consent as a shareholder of the Company, as well as his irrevocable proxy to the Company to vote his shares of common stock, as well as any other shares over which he has voting power, in favor of the authorization and creation of the Preferred Stock if such matter is put to a vote of stockholders prior to July 4, 2000. Upon the reasonable request of the Company, I will execute a "written consent of Majority Shareholders" or other similar document to implement the consent granted hereby. Notwithstanding the foregoing, this letter and the consent and proxy hereby granted (i) shall become null and void and be of no force or effect if the Preferred Stock is not issued by July 4, 2000 and (ii) shall not permit the Company to authorize the Preferred Stock if shares of the Preferred Stock are not issued by July 4, 2000. As of the date of this letter, I own 3,818,750 shares of the Company's common stock, inclusive of the Purchased Shares. Very truly yours, /s/ Steven Greenberg --------------------- Steven Greenberg -----END PRIVACY-ENHANCED MESSAGE-----