-----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, MD+Z34XRKzJFxE88g4zt9XRon42fr4S4A2szUUvyoMdJFlvjZtxU/lpokVGrXSx+ HwmZsyYSCC/2/AO6G5p06A== 0001094891-01-000030.txt : 20010123 0001094891-01-000030.hdr.sgml : 20010123 ACCESSION NUMBER: 0001094891-01-000030 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20010122 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20010119 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WORLDS COM 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: 8-K SEC ACT: SEC FILE NUMBER: 000-24115 FILM NUMBER: 1511944 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: WORLDS INC DATE OF NAME CHANGE: 19980213 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 8-K 1 0001.txt FORM 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) January 2, 2001 ---------------- WORLDS.COM INC. --------------- (Exact Name of Registrant as Specified in Charter) New Jersey 000-24115 22-1848316 - ----------------------------- ---------------- ------------------- (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) 15 Union Wharf, Boston, Massachusetts 02019 - ------------------------------------- ------------ (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code (617) 725-8900 -------------- Not Applicable ------------------------------------------------------------------------ (Former Name or Former Address, if Changed Since Last Report) Item 5. Other Events In January 2001, Worlds.com Inc. ("Company") completed important financing activities which significantly improve the Company's short-term financial position. The timing and terms of the transactions described below were based on numerous factors. These factors included the Company's nominal cash position and significant negative working capital immediately prior to the consummation of the transactions. A. Private Placement On January 2, 2001, the Company consummated the initial closing ("Initial Closing") of a private placement ("Private Placement") of 21.9 units ("Units"), each Unit consisting of a $50,000 principal amount 6% Convertible Promissory Note ("Note") and warrant ("Warrant") to purchase 50,000 shares of its common stock, $.01 par value ("Common Stock"), pursuant to Regulation D promulgated under the Securities Act of 1933, as amended ("Act"). On January 17, the Company consummated the final closing of the Private Placement in which the Company sold an additional 15.7 Units. In the Private Placement, the Company sold an aggregate of 37.6 Units, representing an aggregate of $1,880,000 in Notes and Warrants to purchase an aggregate of 1,880,000 shares of Common Stock, for aggregate proceeds of $1,880,000, of which $1,345,000 was invested in cash and $535,000 was invested through the conversion of existing outstanding obligations of the Company. If the full amount of Notes and Warrants sold by the Company in the Private Placement are converted and exercised pursuant to their respective terms as described below, the Company will be required to issue an additional 19,844,644 shares of Common Stock. This would, after conversion and exercise, represent approximately 51% of the issued and outstanding Common Stock of the Company, assuming no other currently outstanding options and warrants are exercised, and 45% of the issued and outstanding Common Stock if all such options and warrants are exercised. The Company intends to use the proceeds of the Private Placement for working capital and general purposes for its business. Terms of the Notes The Notes are unsecured obligations of the Company. Each Note shall bear interest at the rate of 6% per annum. The principal and interest due on the Notes will be payable on July 2, 2002, subject to the mandatory prepayment and conversion rights described below. Prepayment The Company must prepay the principal and interest of the outstanding Notes by making monthly payments to each holder of the Notes in an amount equal to (a) the original principal amount of such holder's Note divided by $1,880,000 (the total principal amount of the Notes actually sold in the Private Placement), multiplied by (b) 50% of all revenues the Company receives through the sale of products (excluding shipping, handling, discounts and taxes and not including revenues received from advertising or services) through its online services during a month, as reduced by any returns of products sold in previous months ("Prepayments"). The first Prepayment shall be made on March 20, 2001 with respect to revenues received, if any, in February 2001. Thereafter, Prepayments shall be made monthly with respect to revenues received in the prior 2 month and shall continue until all Notes have either been paid in full or converted. Any Prepayments made by the Company will be applied first to accrued interest and then to principal. Holders will be notified of the amount of each Prepayment to be made in each month at least 10 days prior to the date of such Prepayment. Conversion The principal and interest on the Notes are convertible, in whole, but not in part, at any time, at the election of the holder, into that number of shares of Common Stock determined by dividing the principal and interest owing on the Notes at the time of conversion by the "conversion price". The "conversion price" is $0.10465, representing 115% of the average last sale price of a share of Common Stock as reported by the OTC Bulletin Board for the five consecutive trading days immediately prior to the date of the Initial Closing. Terms of the Warrants The Warrants entitle the holder to purchase shares of Common Stock at a per-share exercise price of $0.10465. The Warrants are exercisable for three years, commencing on July 2, 2001. Redemption The Company may call the Warrants for redemption at a price of $.01 per Warrant if the average last sale price of a share of Common Stock exceeds $2.00 for a period of not less than ten consecutive trading days ("Redemption Pricing Period"). Any such redemption shall only be effective if the Company has sent notice of such redemption to each investor within five days of the Redemption Pricing Period and there is an effective registration statement covering the resale of the shares of Common Stock issuable upon exercise of the Warrants (as described below). Registration Rights The Company is obligated, on or before April 2, 2001, to file a registration statement under the Act with the Securities and Exchange Commission ("SEC") registering for resale the shares of Common Stock underlying the Notes and Warrants purchased in the Private Placement, or include such shares in a registration statement already filed by the Company but not yet declared effective under the Act. The Company will use its best efforts to have the registration statement declared effective by the SEC and to be kept current and effective until all the Common Stock covered by the registration statement are sold or can be sold freely under an appropriate exemption without limitation. Insider Participation Steven G. Chrust, Chairman of the Board of Directors of the Company, purchased 13.1 Units in the Private Placement, of which $255,000 was invested in cash and $400,000 was invested through the conversion of existing outstanding obligations of the Company owed to Mr. Chrust, including $250,000 pursuant to the terms of a Convertible Negotiable Promissory Note evidencing Mr. Chrust's prior loan to the Company on November 8, 2000 ("Chrust Note"). Pursuant to the 3 Chrust Note, the Company and Mr. Chrust were required to convert all of the unpaid principal amount then due into securities being sold in the Company's next offering grossing net proceeds of at least $500,000. In addition, Mr. Chrust agreed to forfeit warrants to purchase 375,000 shares of the Company's Common Stock which were issued to him in connection with the Chrust Note. Other officers, directors and employees of the Company ("Insiders") purchased an additional 4.4 Units, of which $205,000 was invested in cash and $15,000 was invested through the conversion of existing outstanding obligations of the Company. Of the 19,844,644 shares of Common Stock issuable upon conversion of the Notes and exercise of the Warrants, 6,913,958 shares would be issued to Mr. Chrust and an aggregate of 2,322,246 would be issued to the Insiders. B. Extension of Outstanding Indebtedness As previously reported in the Company's Form 10-QSB for the quarter ended September 30, 2000, the Company had reached agreements in principal to extend the maturity dates of outstanding notes in an aggregate amount of $2,023,771.60 (representing principal of $1,635,000 and accrued interest of $388,771.60) which were due and payable in December 2000. The Company has been in the process of negotiating definitive agreements to finalize the extension of these notes. The Company and final creditor executed the last of these agreements on January 12, 2001. The Company has issued new notes in an aggregate principal amount of $1,391,821.60 maturing in January 2002 and given a credit toward future services to be provided by the Company in the amount of $631,950 to replace the existing notes. In connection with the extension of these notes, the Company granted options to purchase an aggregate of 150,000 shares of Common Stock. Item 7. Financial Statement, Pro Forma Financial Information and Exhibits (c) Exhibits Exhibit Number Description 4.1 Form of Subscription Agreement used in the Private Placement 4.2 Form of Note issued in the Private Placement 4.3 Form of Warrant issued in the Private Placement 99.1 Press Release, dated January 3, 2001 99.2 Press Release, dated January 18, 2001 4 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. WORLDS.COM INC. /s/ Thomas Kidrin _______________________________ Name: Thomas Kidrin Title: Chief Executive Officer Date: January 18, 2001 5 EXHIBIT INDEX Exhibit Number Description 4.1 Form of Subscription Agreement used in the Private Placement 4.2 Form of Note issued in the Private Placement 4.3 Form of Warrant issued in the Private Placement 99.1 Press Release, dated January 3, 2001 99.2 Press Release, dated January 18, 2001 6 EX-4.1 2 0002.txt FORM OF SUBSCRIPTION AGREEMENT WORLDS.COM INC. --------------------------- SUBSCRIPTION AGREEMENT --------------------------- INSTRUCTIONS IMPORTANT: PLEASE READ CAREFULLY BEFORE SIGNING. SIGNIFICANT REPRESENTATIONS ARE CONTAINED IN THIS DOCUMENT. THERE ARE TWO AGREEMENTS ATTACHED. BOTH AGREEMENTS NEED TO BE COMPLETED AND EXECUTED AS FOLLOWS: 1. Fill in the missing information on Page 1 (immediately following this page). 2. Individual Investors must complete Question 7.7 and sign the signature page on Pages 4 and 8. 3. Entity Investors must complete Question 7.8 (certain persons affiliated with the entity may be required to complete Question 7.7 and sign on Page 4) and sign the signature page on Page 9. DELIVER THE EXECUTED AGREEMENTS TO: WORLDS.COM INC. 1786 BEDFORD STREET STAMFORD, CT 06905 ATTENTION: NOEL KIMMEL TOGETHER WITH PAYMENT FOR THE UNITS SUBSCRIBED FOR. Print Name of Subscriber ________________________ SUBSCRIPTION AGREEMENT IMPORTANT: Please refer to Schedule 1 commencing on page 10 when reviewing this document. The Schedule is incorporated herein and made a part hereof. Worlds.com Inc. ("Worlds" or "Company") and the Investor hereby agree as follows: 1. Subscription for Units. I (sometimes referred to herein as the "Investor") hereby subscribe for and agree to purchase $__________ of the units ("Units") being offered by the Company described in the Company's Confidential Private Placement Memorandum, dated December 28, 2000 ("Memorandum") upon the terms and conditions of the offering ("Offering") described in this Agreement, the Memorandum and Schedule 1. 2. Offering Period. The Units are currently being offered by the Company through the date set forth on Schedule 1 ("Offering Termination Date"). 3. Investor Delivery of Documents and Payment. I hereby tender to the Company (i) the full purchase price by check or wire in accordance with the instructions set forth on Schedule 1 and (ii) two manually executed copies of this Subscription Agreement. Prior to the earlier of a Closing (as defined in Section 5 hereof) on my Units or the Offering Termination Date, my check or wire transfer will be held by the Company. If the Company does not have a Closing on my Units as set forth on Schedule 1 by the Offering Termination Date, my payment will be returned to me without interest or deduction. 4. Acceptance or Rejection of Subscription. The Company has the right to reject this subscription for Units, in whole or in part for any reason and at any time prior to the Closing, notwithstanding prior receipt by me of notice of acceptance of my subscription. In the event of the rejection of this subscription, my payment will be returned promptly to me without interest or deduction and this Subscription Agreement will have no force or effect. The Notes and Warrants comprising the Units subscribed for herein will not be deemed issued to or owned by me until two copies of this Subscription Agreement have been executed by me and countersigned by the Company and the Closing with respect to my subscription has occurred. 5. Closing and Delivery of Securities. The initial closing of the Offering ("Initial Closing" and such Initial Closing or any subsequent closing, a "Closing") may occur at the Company's offices at any time prior to the Offering Termination Date and after the receipt by the Company of subscriptions for at least 13 Units from Insiders (as described on Schedule 1) and good funds in payment thereof, as determined by the Company. Thereafter, the Company may hold additional Closings on one or more additional subscriptions. In the event my subscription is accepted and there is a Closing, my payment will be released to the Company and the certificates representing the Notes and Warrants will be delivered promptly to me, along with a fully executed version of this Agreement. 6. Offering to Accredited Investors. This Offering is limited to accredited investors as defined in Section 2(15) of the Securities Act of 1933, as amended ("Securities Act"), and Rule 501 promulgated thereunder, and is being made without registration under the Securities Act in reliance upon the exemptions contained in Sections 3(b), 4(2) and/or 4(6) of the Securities Act and applicable state securities laws. As indicated by my responses on page 4 or 5 hereof, the Investor is an "accredited investor" within the meaning of Section 2(15) of the Securities Act and Rule 501 promulgated thereunder. 7. Investor Representations and Warranties. I acknowledge, represent and warrant to the Company as follows: 7.1 Obligations of the Company and the Investor. The Company has no obligation to me other than as set forth in this Agreement, including but not limited to the obligations described in Section 7.1 of Schedule 1. I have read and agree to the restrictions set forth in Section 7.1 of Schedule 1. I am aware that, except for any rescission rights that may be provided under applicable laws, I am not entitled to cancel, terminate or revoke this subscription, and any agreements made in connection herewith will survive my death or disability. In order to induce the Company to issue and sell the Notes and Warrants to me, I represent and warrant that the information relating to me stated herein is true and complete as of the date hereof and will be true and complete as of the date on which my purchase of Notes and Warrants becomes effective. If, prior to the final consummation of the offer and sale of the Notes and Warrants, there should be any change in such information or any of such information becomes incorrect or incomplete, I agree to notify the Company and supply the Company promptly with corrective information. 7.2 Information About the Company. (a) I have read the Memorandum and all exhibits listed therein and fully understand the Memorandum, including the Section entitled "Risk Factors" and its exhibits. I have been given access to full and complete information regarding the Company and have utilized such access to my satisfaction for the purpose of verifying the information included in the Memorandum and exhibits thereto, and I have either met with or been given reasonable opportunity to meet with officers of the Company for the purpose of asking reasonable questions of such officers concerning the terms and conditions of the offering of the Notes and Warrants and the business and operations of the Company and all such questions have been answered to my full satisfaction. I have also been given an opportunity to obtain any additional relevant information to the extent reasonably available to the Company. I have received all information and materials regarding the Company that I have reasonably requested. After my reading of the materials about the Company, I understand that there is no assurance as to the future performance of the Company. I have not relied on information other than what can be found in the Memorandum in making my decision to invest in the Notes and Warrants. (b) I have received no representation or warranty from the Company or any of its respective officers, directors, employees or agents in respect of my investment in the Company. I am not participating in the offer as a result of or subsequent to: (i) any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television, radio or the Internet or (ii) any seminar or meeting whose attendees have been invited by any general solicitation or general advertising. 7.3 Speculative Investment. I am aware that the Notes and Warrants are a speculative investment that involves a high degree of risk including, but not limited to, the risk of losses from operations of the Company and the total loss of my investment. I have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Notes and Warrants and have obtained, in my judgment, sufficient information from the Company to evaluate the merits and risks of an investment in the Company. I have not utilized any person as my purchaser representative (as defined in Regulation D) in connection with evaluating such merits and risks and have relied solely upon my own investigation in making a decision to invest in the Company. I have been urged to seek independent advice from my professional advisors relating to the suitability of an investment in the Company in view of my overall financial needs and with respect to the legal and tax implications of such investment. I believe that the investment in the Notes and Warrants is suitable for me based upon my investment objectives and financial needs, and I have adequate means for providing for my current financial needs and contingencies and have no need for liquidity with respect to my investment in the Company. The investment in the Company does not constitute all or substantially all of my investment portfolio. 2 7.4 Restrictions on Transfer. I understand that (i) neither the Notes or Warrants nor the shares of common stock underlying the Notes or Warrants have been registered under the Securities Act or the securities laws of certain states in reliance on specific exemptions from registration, (ii) no securities administrator of any state or the federal government has recommended or endorsed this Offering or made any finding or determination relating to the fairness of an investment in the Company, and (iii) the Company is relying on my representations and agreements for the purpose of determining whether this transaction meets the requirements of the exemptions afforded by the Securities Act and certain state securities laws. Although the Company has agreed to file a Registration Statement covering the resale by me of the shares underlying the Notes and Warrants, I acknowledge that there is no assurance that the Company will do so, that such Registration Statement, if filed, will be declared effective or, if declared effective, that the Company will be able to keep it effective until I effect the resale of securities registered thereby. 7.5 Limited Market for Notes; No Market for Warrants. I am purchasing the securities for my own account for investment and not with a view to, or for sale in connection with, any subsequent distribution of the Notes or Warrants, or the shares underlying them, nor with any present intention of selling or otherwise disposing of all or any part of the securities. I understand that there is no market for the Notes or Warrants, and that there is a limited market at present (and there may not be any market in the future) for the shares of the Company's common stock. I agree that (i) the purchase of the Notes and Warrants is a long-term investment, (ii) I may have to bear the economic risk of investment for an indefinite period of time because the Notes and Warrants have not been registered under the Securities Act and neither the Notes or Warrants nor the shares of Common Stock underlying the Notes or Warrants may be resold, pledged, assigned, or otherwise disposed of unless they are subsequently registered under the Securities Act and under applicable securities laws of certain states or an exemption from such registration is available. I understand that the Company is under no obligation to register the Notes or Warrants or the shares underlying them, except as set forth in Section 7.1 of Schedule 1, or to assist me in complying with any exemption from such registration under the Securities Act or any state securities laws. I hereby authorize the Company to place a legend denoting the restrictions on the certificates representing the Notes and Warrants. 7.6 Entity Authority. If the Investor is a corporation, partnership, company, trust, employee benefit plan, individual retirement account, Keogh Plan, or other tax-exempt entity, it is authorized and qualified to become an investor in the Company and the person signing this Subscription Agreement on behalf of such entity has been duly authorized by such entity to do so. 3 7.7 Accredited Investor Status For Individuals. (INVESTORS THAT ARE CORPORATIONS, LIMITED LIABILITY COMPANIES, PARTNERSHIPS, REVOCABLE TRUSTS, IRREVOCABLE TRUSTS, EMPLOYEE BENEFIT PLAN TRUSTS AND INDIVIDUAL RETIREMENT ACCOUNTS SHOULD IGNORE THE FOLLOWING QUESTIONS AND PROCEED TO SECTION 7.8). (a) I am an accredited investor within the meaning of Section 2(15) of the Securities Act and Rule 501 promulgated thereunder because (check any boxes that apply): |_| My individual annual income during each of the two most recent years exceeded $200,000 and I expect my annual income during the current year will exceed $200,000. |_| If I am married, my joint annual income with my spouse during each of the two most recent years exceeded $300,000 and I expect my joint annual income with my spouse during the current year will exceed $300,000. |_| My individual or joint (together with my spouse) net worth (including my home, home furnishings and automobiles) exceeds $1,000,000. (b) The aggregate value of my assets is approximately $______. (c) My aggregate liabilities are approximately $___________. (d) My current and expected income is: YEAR INCOME ---- ------ 2000 (estimated) $ 1999 (Actual) $ 1998 (Actual) $ Individual Investors may skip to Section 7.9 on page 5. Each person associated with an Entity Investor who is required under Section 7.8 to separately complete the questions in this Section 7.7 must sign the below confirmation: I hereby confirm the answers to Section 7.7 are true and correct in all respects as of the date hereof and will be on the date of the purchase of Units. Executed this ____ day of ________, 200__. Signature: __________________________________________ Print Name: __________________________________________ 4 7.8 Accredited Investor Status for Entities. (INVESTORS WHO ARE INDIVIDUALS SHOULD IGNORE THESE QUESTIONS.) (a) The entity is a (check applicable box): |_| Corporation |_| Limited Liability Company |_| Partnership |_| Revocable Trust |_| Irrevocable Trust (if the Investor is an Irrevocable Trust, a supplemental questionnaire must be completed by the person directing the decision for the trust. Please contact Brian L. Ross, Esq. at (212) 818-8610 for a copy of such supplemental questionnaire.) |_| Employee Benefit Plan Trust |_| Individual Retirement Account (If you are an IRA, skip (b)) (b) Check all boxes which apply: |_| The Entity was not formed for the specific purpose of investing in the Company |_| The Entity has total assets in excess of $5 million dollars |_| For Employee Benefit Plan Trusts Only: The decision to invest in the Company was made by a plan fiduciary, as defined in Section 3(21) of ERISA, who is either a bank, insurance company or registered investment advisor. (c) If you did not check the first two of the three boxes in Question (b) or if the Entity is an Individual Retirement Account, a Self-directed Employee Benefit Plan Trust or an Irrevocable Trust, list the name of each person who: (i) owns an equity interest in the Entity (i.e., each shareholder if the Entity is a corporation, each member if the Entity is a limited liability company and each partner if the Entity is a partnership); or (ii) is a grantor for the revocable trust or Individual Retirement Account; or (iii) is the person making the investment decision for a self-directed Employee Benefit Plan Trust; or (iv) is the person making the investment decisions for an Irrevocable Trust. ____________________________ _______________________ ____________________________ _______________________ EACH PERSON LISTED ABOVE MUST SEPARATELY COMPLETE AND SUBMIT TO THE COMPANY THE ANSWERS TO QUESTION 7.7 AND SIGN THE WRITTEN CONFIRMATION AT THE END OF SECTION 7.7. 5 7.9 No Offer Until Determination of Suitability. I acknowledge that any delivery to me of the documents relating to the Offering prior to the determination by the Company of my suitability will not constitute an offer of the Notes or Warrants until such determination of suitability is made. 7.10 For Florida Residents. The Notes and Warrants have not been registered under the Securities Act of 1933, as amended, or the Florida Securities and Investor Protection Act ("Florida Securities Act"), by reason of specific exemptions thereunder relating to the limited availability of the Offering. The Notes and Warrants cannot be sold, transferred, or otherwise disposed of to any person or entity unless subsequently registered under the Securities Act of 1933, as amended, or the Florida Securities Act, if such registration is required. Pursuant to Section 517.061(11) of the Florida Securities Act, when sales are made to five (5) or more persons in Florida, any sale made pursuant to Subsection 517.061(11) of the Florida Securities Act will be voidable by such Florida purchaser either within three days after the first tender of consideration is made by the purchaser to the issuer, an agent of the issuer, or an escrow agent, or within three days after the availability of the privilege is communicated to such purchaser, whichever occurs later. In addition, as required by Section 517.061(11)(a)(3), Florida Statutes and by Rule 3-500.05(a) thereunder, if I am a Florida resident I may have, at the offices of the Company, at any reasonable hour, after reasonable notice, access to the materials set forth in the Rule that the Company can obtain without unreasonable effort or expense. 8. Indemnification. I hereby agree to indemnify and hold harmless the Company and its officers, directors, stockholders, employees, agents, and attorneys against any and all losses, claims, demands, liabilities, and expenses (including reasonable legal or other expenses incurred by each such person in connection with defending or investigating any such claims or liabilities, whether or not resulting in any liability to such person or whether incurred by the indemnified party in any action or proceeding between the indemnitor and indemnified party or between the indemnified party and any third party) to which any such indemnified party may become subject, insofar as such losses, claims, demands, liabilities and expenses (a) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact made by me and contained herein, or (b) arise out of or are based upon any breach by me of any representation, warranty, or agreement made by me contained herein. 9. Severability; Remedies. In the event any parts of this Subscription Agreement are found to be void, the remaining provisions of this Subscription Agreement are nevertheless binding with the same effect as though the void parts were deleted. 10. Governing Law and Jurisdiction. This Subscription Agreement will be deemed to have been made and delivered in New York City and will be governed as to validity, interpretation, construction, effect and in all other respects by the internal laws of the State of New York. Each of the Company and the Investor hereby (i) agrees that any legal suit, action or proceeding arising out of or relating to this Subscription Agreement will 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 for such suit, action or proceeding, (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, (iv) agrees to accept and acknowledge service of any and all process that may be served in any such suit, action or proceeding in New York State Supreme Court, County of New York or in the United States District Court for the Southern District of New York and (v) agrees that service of process upon it mailed by certified mail to its address set forth on my signature page will be deemed in every respect effective service of process upon it in any suit, action or proceeding. 11. Counterparts. This Subscription Agreement may be executed in one or more counterparts, each of which will be deemed an original but all of which together will constitute one and the same instrument. The execution of this Subscription Agreement may be by actual or facsimile signature. 12. Benefit. This Subscription Agreement is binding upon and inures to the benefit of the parties hereto and their respective heirs, executors, personal representatives, successors and assigns. 6 13. Notices. All notices, offers, acceptance and any other acts under this Subscription Agreement (except payment) must be in writing, and is sufficiently given if delivered to the addressees in person, by overnight courier service, or, if mailed, postage prepaid, by certified mail (return receipt requested), and will be effective three days after being placed in the mail if mailed, or upon receipt or refusal of receipt, if delivered personally or by courier or confirmed telecopy, in each case addressed to a party. All communications to me should be sent to my preferred address on the signature page hereto. All communications to the Company should be sent to the addresses set forth on Schedule 1. Each party may designate another address by notice to the other parties. 14. Oral Evidence. This Subscription Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior oral and written agreements between the parties hereto with respect to the subject matter hereof. This Subscription Agreement may not be changed, waived, discharged, or terminated orally, but rather, only by a statement in writing signed by the party or parties against which enforcement or the change, waiver, discharge or termination is sought. 15. Section Headings. Section headings herein have been inserted for reference only and will not bedeemed to limit or otherwise affect, in any matter, or be deemed to interpret in whole or in part, any of the terms or provisions of this Subscription Agreement. 16. Survival of Representations, Warranties and Agreements. The representations, warranties and agreements contained herein will survive the delivery of, and the payment for, the Units. 17. Acceptance of Subscription. The Company may accept this Subscription Agreement at any time for all or any portion of the Units subscribed for by executing a copy hereof as provided and notifying me within a reasonable time thereafter. 7 SIGNATURE PAGE FOR INDIVIDUAL INVESTORS - COMPLETE ALL INFORMATION Name: ________________________ Name of Joint Investor (if any): ___________ Residence Address: __________________________________________________________ Telephone: (H) ___________________ (W) ____________________ Fax ______________ Occupation: ____________________________ Employer: __________________________ Business Address: _____________________________________________________________ Send communications to: |_| Home |_| Office |_| E-Mail: E-mail address: _________________________________________________ Age: _______________ Social Security Number: ____________________ Check manner in which Notes and Warrants are to be held: |_| Individual |_| Tenants in |_| Joint Tenants with Ownership Common Right of Survivorship (both parties must sign) |_| Community Property |_| Other (please indicate) _______________________ ALL INVESTORS MUST SIGN AND PRINT The foregoing subscription is NAME BELOW: accepted and the Company hereby Signature: ______________________________ agrees to be bound by its terms. Print Name: ______________________________ WORLDS.COM INC. Signature: ______________________________ By:__________________________ Print Name:_______________________________ Name: Title: Date: 8 SIGNATURE PAGE FOR ENTITY INVESTORS - COMPLETE ALL INFORMATION Name of Entity: _______________________________________________________________ Address of Principal Office: _________________________________________________ Telephone: ________________________ Fax: ____________________________ Taxpayer Identification Number: ________________________________ Check type of Entity: |_| Employee Benefit |_| Limited |_| General |_| Individual Plan Trust Partnership Partnership Retirement Account |_| Limited Liability |_| Trust |_| Corporation |_| Other (please Company indicate) __________________ Date of Formation or incorporation: ___________ State of Formation or incorporation: __________ Describe the business of the Entity: __________________________________________ _______________________________________________________________________________ List the names and positions of the executive officers, managing members, partners or trustees authorized to act with respect to investments by the Entity generally and specify who has the authority to act with respect to this investment. Name Position Authority for this investment (yes or no) - ---------------------- ---------------------- ------------------------------- - ---------------------- ---------------------- ------------------------------- - ---------------------- ---------------------- ------------------------------- - ---------------------- ---------------------- ------------------------------- ALL INVESTORS MUST SIGN AND PRINT The foregoing subscription is accepted and NAME BELOW: the Company hereby agrees to be bound by its terms. WORLDS.COM INC. - ---------------------------------- Signature of Authorized Signatory: Name: Title: By:_______________________________________ Name: Title: Date: 9 SCHEDULE 1 1. Subscription. The Company is offering Units, each consisting of a $50,000 principal amount 6% convertible promissory note ("Note") and warrants ("Warrants") to purchase 50,000 shares of the common stock of the Company ("Common Stock"). Each Unit shall be sold for $50,000. The Company reserves the right to sell fractional Units in its sole discretion. 2. Offering Period. The Company will sell up to 30 Units ($1,500,000) only to accredited investors during the period beginning on December 28, 2000 and ending on January 31, 2001 unless such ending date is extended without notice to the investor, by the Company to a date not later than an additional thirty (30) days thereafter ("Offering Termination Date"). The Company reserves the right to sell additional Units in the event this Offering is over-subscribed. Certain officers, directors and affiliates of the Company (collectively, the "Insiders") have agreed to purchase an aggregate of at least thirteen Units in this offering ($650,000) and reserve the right to purchase more. All or a portion of the purchases made by the Insiders may be funded through the conversion of up to $500,000 of indebtedness and other obligations owed by the Company to such Insiders. The Company will not receive any cash in connection with any purchase of Units made in the foregoing manner. 3. Purchase. If you are tendering a check, please make it payable to "Worlds.com Inc." If you are paying by wire transfer, please instruct your bank to wire funds to: The Bank of New York New York, NY 10286 ABA Routing Number: 021000018 DDA Number: 8900275847 Attn: BNY Hamilton Money Fund, Hamilton Shares Ref: (59-8316, Worlds.com, Inc., 22-1848316) All wires should stipulate the name of the subscriber, including those sent by brokers or other agents. Prior to wiring funds, investors should contact Noel Kimmel at (203) 409-2100 and give him the following information: (1) when the money will be wired; (2) the name and address of the bank from which the money is being wired; and (3) the exact dollar amount being wired. 4.-5. Not applicable 6. Closings. As soon as practicable after the Company receives subscriptions, together with all necessary paperwork and funds (or conversions), for at least 13 Units, the Company shall hold an initial closing ("Initial Closing"). Thereafter, the Company shall hold additional closings from time to time on subscriptions received and accepted after the Initial Closing and on or prior to the Offering Termination Date. 7. Obligations of Worlds.com and the Investor A. Registration Rights. (1) Our Obligation to Register. Within 90 days after the date of the Initial Closing, the Company shall file a Registration Statement, or include the Registrable Securities (as defined below) in a registration statement already filed by the Company but not yet 10 declared effective (in either case, "Registration Statement") under the Securities Act of 1933 ("Securities Act") with the Securities and Exchange Commission ("SEC") registering for resale the shares of Common Stock issuable upon conversion of the Notes and upon exercise of the Warrants ("Registrable Securities") purchased in the Offering. The Company shall use its best efforts to have the Registration Statement declared effective by the SEC and be kept current and effective until all the Registrable Securities are sold or can be sold freely under an appropriate exemption, without limitation. (2) Fees and Expenses. In any registration statement in which Registrable Securities are included pursuant to this Section, the Company shall bear all expenses and pay all fees incurred in connection therewith, excluding underwriting discounts and commissions payable with respect to the Registrable Securities and the fees and expenses of any professionals engaged by holders of the Registrable Securities ("Holders"), but including the expenses of providing a reasonable number of copies of the prospectus contained therein to the Holders. (3) Indemnification by Company. (a) The Company shall indemnify the Holder of the Registrable Securities to be sold pursuant to any registration statement hereunder and any underwriter or person deemed to be an underwriter under the Act and each person, if any, who controls such Holder or underwriters or persons deemed to be underwriters within the meaning of Section 15 of the Act or Section 20(a) of the Securities Exchange Act of 1934, as amended ("Exchange Act"), against all loss, claim, damage, expense or liability (including all reasonable attorneys' fees and other expenses reasonably incurred in investigating, preparing or defending against any claim whatsoever) to which the Holder may become subject under the Act, the Exchange Act or otherwise, arising from such registration statement. The Holder of the Registrable Securities to be sold pursuant to such registration statement, and their successors and assigns, shall indemnify the Company, against all loss, claim, damage, expense or liability (including all reasonable attorneys' fees and other expenses reasonably incurred in investigating, preparing or defending against any claim whatsoever) to which the Company may become subject under the Act, the Exchange Act or otherwise, arising from information furnished by or on behalf of the Holder, in writing, for specific inclusion in such registration statement. (b) If any action is brought against a party hereto, ("Indemnified Party") in respect of which indemnity may be sought against the other party ("Indemnifying Party"), such Indemnified Party shall promptly notify Indemnifying Party in writing of the institution of such action and Indemnifying Party shall assume the defense of such action, including the employment and fees of counsel reasonably satisfactory to the Indemnified Party. Such Indemnified Party shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless (i) the employment of such counsel shall have been authorized in writing by Indemnifying Party in connection with the defense of such action, or (ii) Indemnifying Party shall not have employed counsel to defend such action, or (iii) such Indemnified Party shall have been advised by counsel that there may be one or more legal defenses available to it which may result in a conflict between the Indemnified Party and Indemnifying Party (in which case Indemnifying Party shall not have the right to direct the defense of such action on behalf of the Indemnified Party), in any of which events, the reasonable fees and expenses of not more than one additional firm of attorneys designated in writing by the Indemnified Party shall be borne by Indemnifying Party. Notwithstanding anything to the contrary contained herein, if Indemnified Party shall assume the defense of such action as provided above, Indemnifying Party shall not be liable for any settlement of any such action effected without its written consent. 11 (c) If the indemnification or reimbursement provided for hereunder is finally judicially determined by a court of competent jurisdiction to be unavailable to an Indemnified Party (other than as a consequence of a final judicial determination of willful misconduct, bad faith or gross negligence of such Indemnified Party), then Indemnifying Party agrees, in lieu of indemnifying such Indemnified Party, to contribute to the amount paid or payable by such Indemnified Party (i) in such proportion as is appropriate to reflect the relative benefits received, or sought to be received, by Indemnifying Party on the one hand and by such Indemnified Party on the other or (ii) if (but only if) the allocation provided in clause (i) of this sentence is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in such clause (i) but also the relative fault of Indemnifying Party and of such Indemnified Party; provided, however, that in no event shall the aggregate amount contributed by the Holder exceed the profit, if any, earned by the Holder as a result of the exercise by him of the Warrants and the sale by him of the underlying shares of Common Stock. (d) The rights accorded to Indemnified Parties hereunder shall be in addition to any rights that any Indemnified Party may have at common law, by separate agreement or otherwise. (4) Elimination of Registration Rights. Notwithstanding anything to the contrary in Sections 1 and 2 above, no Holder of Registrable Securities shall be entitled to have such securities registered under the Securities Act in accordance with the provisions of such Sections if, (a) in the opinion of our counsel, they may be sold without restriction pursuant to Rule 144(k) promulgated under the Securities Act and any restrictive legends under the Securities Act are removed from the certificates representing such securities and any stop transfer order for such certificates is removed; or (b) the Holder has not complied with the Company's request for information typically included in registration statements with respect to the sellers of securities and their ownership of securities. (5) Successors and Assigns. The registration and other rights granted to the Investors in this Section shall inure to the benefit of the Investor's successors, heirs, pledges, assignees, transferees and purchasers of the Notes, Warrants and Registrable Securities. 8.-12. Not applicable. 13. Notices. All communications to us should be sent to: Worlds.com Inc. 1786 Bedford Street Stamford, CT 06905 Attention: Noel Kimmel Tel: (203) 409-2100 Fax: (203) 409-2110 with copies to: Graubard Mollen & Miller 600 Third Avenue New York, New York 10016 Attention: David Alan Miller, Esq. Tel: (212) 818-8661 Fax: (212) 818-8881 14.-17. Not applicable. 12 EX-4.2 3 0003.txt FORM OF PROMISSORY NOTE WORLDS.COM INC. 6% CONVERTIBLE PROMISSORY NOTE THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("ACT"), OR APPLICABLE STATE LAW. THIS NOTE AND THE SHARES UNDERLYING THIS NOTE MAY NOT BE PLEDGED, SOLD, ASSIGNED OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT THERETO UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAW, OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED. $__________ ___________, 2001 FOR VALUE RECEIVED, WORLDS.COM, INC., a New Jersey corporation ("Company"), with its principal office at 1455 East Putnam Avenue, Old Greenwich, CT 06870, promises to pay to the order of ______________________ ("Holder"), residing at _____________________________________, or registered assigns, on ______________ [eighteen months after Initial Closing], subject to earlier prepayment or conversion as provided herein (in any event, and as such date may be accelerated under Section 1 hereof, the "Maturity Date"), the principal amount of ____________________________________ ($________), in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public or private debts, together with interest on the unpaid balance of said principal amount from time to time outstanding at the rate of six (6%) percent per annum. Payments of principal and interest are to be made at the address of the Holder designated above or at such other place as the Holder shall have notified the Company in writing at least five days before such payment is due. This Note is being issued together with other Notes of like tenor and warrants to purchase the Company's common stock ("Common Stock") in a private offering ("Offering"). 1. Events of Default. 1.1 Upon the occurrence of any of the following events (herein called "Events of Default"): (a) The Company shall fail to pay the principal of or interest on this Note on the Maturity Date; (b) (1) The Company shall commence any proceeding or other action relating to it in bankruptcy or seek reorganization, arrangement, readjustment of its debts, receivership, dissolution, liquidation, winding-up, composition or any other relief under any bankruptcy law, or under any other insolvency, reorganization, liquidation, dissolution, arrangement, composition, readjustment of debt or any other similar act or law, of any jurisdiction, domestic or foreign, now or hereafter existing; or (2) the Company shall admit the material allegations of any petition or pleading in connection with any such proceeding; or (3) the Company shall apply for, or consent or acquiesce to, the appointment of a receiver, conservator, trustee or similar officer for it or for all or a substantial part of its property; or (4) the Company shall make a general assignment for the benefit of creditors; (c) (1) The commencement of any proceedings or the taking of any other action against the Company in bankruptcy or seeking reorganization, arrangement, readjustment of its debts, liquidation, dissolution, arrangement, composition, or any other relief under any bankruptcy law or any other similar act or law of any jurisdiction, domestic or foreign, now or hereafter existing and the continuance of any of such events for sixty (60) days undismissed, unbonded or undischarged; or (2) the appointment of a receiver, conservator, trustee or similar officer for the Company for any of its property and the continuance of any of such events for sixty (60) days undismissed, unbonded or undischarged; or (3) the issuance of a warrant of attachment, execution or similar process against any of the property of the Company and the continuance of such event for sixty (60) days undismissed, unbonded and undischarged; (d) The Company shall fail to comply with any of its obligations under this Note; provided, however, that (1) with respect to a failure to comply with any of the provisions of Sections 2.2(a) and (c) of this Note, only if such failure is not remedied within thirty (30) days after the Company's receipt of written notice of same, and (2) with respect to a failure to comply with any of the provisions of Section 4 of this Note, only if such failure is not remedied within five (5) days after the Company's receipt of written notice of same; (e) The Company shall default with respect to any indebtedness of $50,000 or more for borrowed money (other than under this Note) if either (1) the effect of such default is to accelerate the maturity of such indebtedness (giving effect to any applicable grace periods) or (2) the holder of such indebtedness declares the Company to be in default (giving effect to any applicable grace periods); or (f) Any judgment or judgments against the Company or any attachment, levy or execution against any of its properties for any amount in excess of $50,000 in the aggregate shall remain unpaid, or shall not be released, discharged, dismissed, stayed or fully bonded for a period of forty-five (45) days or more after its entry, issue or levy, as the case may be; then, and in any such event, the Holder, at its option and with written notice to the Company, may declare the entire principal amount of this Note then outstanding together with accrued unpaid interest thereon immediately due and payable, and the same shall forthwith become immediately due and payable without presentment, demand, protest, or other notice of any kind, all of which are expressly waived. The Events of Default listed herein are solely for the purpose of protecting the interests of the Holder of this Note. If the Note is not paid in full upon acceleration, as required above, interest shall accrue on the outstanding principal of and interest on this Note from the date of the Event of Default up to and including the date of payment at a rate equal to the lesser of fifteen percent (15%) per annum or the maximum interest rate permitted by applicable law. 1.2 Non-Waiver and Other Remedies. No course of dealing or delay on the part of the Holder of this Note in exercising any right hereunder shall operate as a waiver or otherwise prejudice the right of the Holder of this Note. No remedy conferred hereby shall be exclusive of any other remedy referred to herein or now or hereafter available at law, in equity, by statute or otherwise. 1.3 Collection Costs; Attorney's Fees. In the event this Note is turned over to an attorney for collection or Holder otherwise seeks advice of an attorney in connection with the exercise of its rights hereunder upon the occurrence of an Event of Default, the Company agrees to pay all reasonable costs of collection, including reasonable attorney's fees and expenses and all out of pocket expenses incurred in connection with such collection efforts, which amounts may, at the Holder's option, be added to the principal hereof. 2. Unconditional Obligation; Covenants. 2.1 Unconditional Obligation. No provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Note at the place, at the respective times, at the rates, and in the currency herein prescribed. 2 2.2 Affirmative Covenants. The Company covenants and agrees that, while this Note is outstanding, it shall: (a) Pay and discharge all taxes, assessments and governmental charges or levies imposed upon it or upon its income and profits, or upon any properties belonging to it before the same shall be in default; provided, however, that the Company shall not be required to pay any such tax, assessment, charge or levy that is being contested in good faith by proper proceedings and adequate reserves for the accrual of same are maintained if required by generally accepted accounting principles; (b) Preserve its corporate existence and continue to engage in business of the same general type as conducted as of the date hereof; (c) Comply in all respects with all statutes, laws, ordinances, orders, judgments, decrees, injunctions, rules, regulations, permits, licenses, authorizations and requirements ("Requirement(s)") of all governmental bodies, departments, commissions, boards, companies or associations insuring the premises, courts, authorities, officials, or officers, that are applicable to the Company; except where the failure to comply would not have a material adverse effect on the Company; provided that nothing contained herein shall prevent the Company from contesting the validity or the application of any Requirements. 3. Conversion. 3.1 Conversion. The principal and interest outstanding on the Note are convertible, in whole, but not in part, at any time, at the election of the Holder, into that number of shares of the Company's Common Stock determined by dividing the principal and interest owing on the Notes at the time of conversion by $___________ [115% of the average last sale price of a share of common stock as reported by the OTC Bulletin Board for the five consecutive trading days immediately prior to the date of the Initial Closing] (the "Conversion Price"). 3.2 Mechanics and Effect of Conversion. In connection with any conversion under Section 3.1, Holder shall surrender this Note, together with Holder's written instructions to convert the Note pursuant to Section 3.1, to the Company at its principal executive office. The Company shall, as soon as practicable, but not later than ten (10) business days after receipt of the Note and conversion instructions, issue and deliver to a location in the United States designated by the Holder certificates representing the securities to which the Holder shall be entitled as aforesaid. 3.3 Fractional Shares. The Company shall not be required to issue fractions of shares of Common Stock upon conversion. If any fractions of a share would, but for this Section 3.4, be issuable upon any conversion, in lieu of such fractional share the Company shall round up or down to the nearest whole number of shares. 3.4 Reservation of Shares. The Company shall reserve and shall at all times have reserved out of its authorized but unissued shares of Common Stock sufficient shares of Common Stock to permit the conversion of the unpaid principal amount and interest pursuant to this Section 3. All shares of Common Stock that may be issued upon conversion shall be validly issued, fully paid and nonassessable. 4. Prepayment. (a) The Company shall prepay the principal and interest of the outstanding Notes by making monthly payments to each Holder of the Notes in an amount equal to (a) the original principal amount of such Holder's Note, divided 3 by the total principal amount of the Notes actually sold in the offering, multiplied by (b) 50% of all revenues the Company receives through the sale of products (excluding shipping, handling, discounts and taxes and not including revenues received from advertising or services) through our online services during a month ("Prepayments"), as reduced by any returns of products sold in previous months. (b) Prepayments to Holders shall commence on the 20th of the month after the first full month following the Initial Closing and shall continue monthly thereafter until all Notes have either been paid in full or converted (e.g., if the Initial Closing takes place on January 5, 2001, the first Prepayment shall be made on March 20, 2001). The first Prepayment shall be with respect to revenues received in the first full month following the Initial Closing. Thereafter, Prepayments shall be with respect to revenues received in the month prior to a Prepayment. Any Prepayments made by the Company will first be applied to interest due on the Note and then principal due. (c) The Company shall notify each Holder in writing of each Prepayment at least ten days prior to the date of such Prepayment. 5. Registration Rights. The Company has agreed to file a registration statement with the Securities and Exchange Commission ("Commission") or include the shares of Common Stock which may be issued upon conversion of this Note on a registration statement already filed with the Commission, but not yet declared effective, as set forth in full on Schedule 1 of the Subscription Agreement signed by the original Holder of this Note. These registration rights shall inure to the benefit of the transferees of this Warrant and the shares underlying it. 6. Miscellaneous. 6.1 Required Consent. The Company may not modify any of the terms of this Note without the prior written consent of the Holder. 6.2 Lost Documents. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Note or any Note exchanged for it, and (in the case of loss, theft or destruction) of indemnity satisfactory to it, and upon reimbursement to the Company of all reasonable expenses incidental thereto, and upon surrender and cancellation of such Note, if mutilated, the Company will make and deliver in lieu of such Note a new Note of like tenor and unpaid principal amount and dated as of the original date of the Note. 6.3 Benefit. This Note shall be binding upon and inure to the benefit of the parties hereto and their legal representatives, successors and assigns. 6.4 Notices. All notices, requests, consents and other communications under this Note must be in writing and is sufficiently given if delivered to the addressees in person, by overnight courier service, or, if mailed, postage prepaid, by certified mail (return receipt requested), and will be effective three days after being placed in the mail if mailed, or upon receipt or refusal of receipt, if delivered personally or by courier or confirmed telecopy, in each case addressed as follows: Holder: At the address designated on page 1 of this Note. The Company: Worlds.com Inc. 1786 Bedford Street Stamford, Connecticut 06905 Attention: Thomas Kidrin, President 4 In either case, with a copy to: Graubard Mollen & Miller 600 Third Avenue New York, New York 10016-2097 Attn: David Alan Miller, Esq. or to such other address as any of them, by notice to the others, may designate from time to time. 6.5 Governing Law and Jurisdiction. This Note will be deemed to have been made and delivered in New York City and will be governed as to validity, interpretation, construction, effect and in all other respects by the internal laws of the State of New York. Each of the Company and the Holder hereby (i) agrees that any legal suit, action or proceeding arising out of or relating to this Note will 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 for such suit, action or proceeding, (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, (iv) agrees to accept and acknowledge service of any and all process that may be served in any such suit, action or proceeding in New York State Supreme Court, County of New York or in the United States District Court for the Southern District of New York and (v) agrees that service of process upon it mailed by certified mail to its address set forth on my signature page will be deemed in every respect effective service of process upon it in any suit, action or proceeding. 6.6 Section Headings. Section headings herein have been inserted for reference only and shall not be deemed to limit or otherwise affect, in any matter, or be deemed to interpret in whole or in part any of the terms or provisions of this Note. 6.7 Survival of Agreements. The agreements contained herein shall survive the delivery of this Note. IN WITNESS WHEREOF, this Note has been executed and delivered on the date specified above by the duly authorized representative of the Company. WORLDS.COM INC. By: _________________________________ Thomas Kidrin, President 5 ASSIGNMENT (To be executed by the Holder to Effect a Transfer of the Attached Note) FOR VALUE RECEIVED, the undersigned does hereby sell, assign and transfer unto ___________________________________________________________, with an address of ___________________________________________________________, all right, title and interest of the undersigned in the attached Note of Worlds.com Inc. ("Company") and does hereby authorize the Company to transfer such right on the books of the Company. Dated: ___________________ _____________________________________ Name of Entity, if any* _____________________________________ Signature* Its_____________________________________ Title, if applicable ______________________________________ Print name ____________________________ * Must conform in all respects to name of holder as specified on the face of the Note. 6 EX-4.3 4 0004.txt FORM OF WARRANT THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("ACT"), OR APPLICABLE STATE LAW. THIS WARRANT AND THE SHARES UNDERLYING IT MAY NOT BE PLEDGED, SOLD, ASSIGNED OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT THERETO UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAW, OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED. VOID AFTER 5:00 P.M. EASTERN TIME, ______________, 2004 WARRANT For the Purchase of __________ Shares of Common Stock of WORLDS.COM, INC. 1. Warrant. THIS CERTIFIES THAT, in consideration of $10.00 and other good and valuable consideration, duly paid by or on behalf of _______________ ("Holder"), as registered owner of this Warrant, to Worlds.com, Inc. ("Company"), Holder is entitled, at any time or from time to time at or after __________, 2001 [six months after Initial Closing] ("Commencement Date"), and at or before 5:00 p.m., Eastern Time ___________, 2004 [three years six months after Initial Closing] ("Expiration Date"), but not thereafter, to subscribe for, purchase and receive, in whole or in part, up to _____________________________ (_________) shares of Common Stock of the Company ("Common Stock"). If the Expiration Date is a day on which banking institutions are authorized by law to close, then this Warrant may be exercised on the next succeeding day which is not such a day in accordance with the terms herein. During the period ending on the Expiration Date, the Company agrees not to take any action that would terminate the Warrant. This Warrant is initially exercisable at $______ per share of Common Stock purchased; provided, however, that upon the occurrence of any of the events specified in Section 6 hereof, the rights granted by this Warrant, including the exercise price and the number of shares of Common Stock to be received upon such exercise, shall be adjusted as therein specified. The term "Exercise Price" shall mean the initial exercise price or the adjusted exercise price, depending on the context, of a share of Common Stock. This Warrant is being issued together with warrants of like tenor and promissory notes in an offering of Units by the Company ("Offering"). 2. Exercise. 2.1 Exercise Form. In order to exercise this Warrant, the exercise form attached hereto must be duly executed and completed and delivered to the Company, together with this Warrant and payment of the Exercise Price for the shares being purchased. If the subscription rights represented hereby shall not be exercised at or before 5:00 p.m., Eastern time, on the Expiration Date, this Warrant shall become and be void without further force or effect, and all rights represented hereby shall cease and expire. 2.2 Legend. Each certificate for shares of Common Stock purchased under this Warrant shall bear a legend as follows, unless the issuance of such shares of Common Stock have been registered under the Securities Act of 1933, as amended ("Act"): "The shares represented by this certificate have not been registered under the Securities Act of 1933, as amended ("Act") or applicable state law. The shares may not be pledged, sold, assigned or transferred in the absence of an effective registration statement with respect thereto under the Act and any applicable state securities law, or unless the Company receives an opinion of counsel, satisfactory to the Company, that such registration is not required." 3. Transfer. 3.1 General Restrictions. The registered Holder of this Warrant, by its acceptance hereof, agrees that it will not sell, transfer or assign or hypothecate this Warrant to anyone except upon compliance with, or pursuant to exemptions from, applicable securities laws. In order to make any permitted assignment, the Holder must deliver to the Company the assignment form attached hereto duly executed and completed, together with this Warrant and payment of all transfer taxes, if any, payable in connection therewith. The Company shall promptly transfer this Warrant on the books of the Company and shall execute and deliver a new Warrant or Warrants of like tenor to the appropriate assignee(s) expressly evidencing the right to purchase the aggregate number of shares of Common Stock purchasable hereunder or such portion of such number as shall be contemplated by any such assignment. 3.2 Restrictions Imposed by the Securities Act. This Warrant and the shares of Common Stock underlying this Warrant shall not be transferred unless and until (i) the Company has received the opinion of counsel for the Holder that such securities may be sold pursuant to an exemption from registration under the Act, and applicable state law, the availability of which is established to the reasonable satisfaction of the Company, or (ii) a registration statement relating to such securities has been filed by the Company and declared effective by the Securities and Exchange Commission ("Commission") and compliance with applicable state law. 4. New Warrants to be Issued. 4.1 Partial Exercise or Transfer. Subject to the restrictions in Section 3 hereof, this Warrant may be exercised or assigned in whole or in part. In the event of the exercise or assignment hereof in part only, upon surrender of this Warrant for cancellation, together with the duly executed exercise or assignment form and funds (or conversion equivalent) sufficient to pay any Exercise Price and/or transfer tax, the Company shall cause to be delivered to the Holder without charge a new Warrant of like tenor to this Warrant in the name of the Holder evidencing the right of the Holder to purchase the aggregate number of shares of Common Stock as to which this Warrant has not then been exercised or assigned. 4.2 Lost Certificate. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Warrant and of reasonably satisfactory indemnification, the Company shall execute and deliver a new Warrant of like tenor and date. Any such new Warrant executed and delivered as a result of such loss, theft, mutilation or destruction shall constitute a substitute contractual obligation on the part of the Company. 2 5. Registration Rights. The Company has agreed to file a registration statement with the Commission or include the shares of Common Stock purchasable under this Warrant on a registration statement already filed with the Commission, but not declared effective, as set forth in full on Schedule 1 of the Subscription Agreement signed by the original Holder of this Warrant. These registration rights shall inure to the benefit of the transferees of this Warrant and the shares underlying it. 6. Adjustments. 6.1 Adjustments to Exercise Price and Number of Shares. The Exercise Price and the number of shares of Common Stock underlying this Warrant shall be subject to adjustment from time to time as hereinafter set forth: 6.1.1 Stock Dividends - Recapitalization, Reclassification, Split-Ups. If, after the date hereof, and subject to the provisions of Section 6.2 below, the number of outstanding shares of Common Stock is increased by a stock dividend on the Common Stock payable in shares of Common Stock or by a split-up, recapitalization or reclassification of shares of Common Stock or other similar event, then, on the effective date thereof, the number of shares of Common Stock issuable on exercise of this Warrant shall be increased in proportion to such increase in outstanding shares. 6.1.2 Aggregation of Shares. If after the date hereof, and subject to the provisions of Section 6.3, the number of outstanding shares of Common Stock is decreased by a consolidation, combination or reclassification of shares of Common Stock or other similar event, then, upon the effective date thereof, the number of shares of Common Stock issuable on exercise of this Warrant shall be decreased in proportion to such decrease in outstanding shares. 6.1.3 Adjustments in Exercise Price. Whenever the number of shares of Common Stock purchasable upon the exercise of this Warrant is adjusted, as provided in this Section 6.1, the Exercise Price shall be adjusted (to the nearest cent) by multiplying such Exercise Price immediately prior to such adjustment by a fraction (x) the numerator of which shall be the number of shares of Common Stock purchasable upon the exercise of this Warrant immediately prior to such adjustment, and (y) the denominator of which shall be the number of shares of Common Stock so purchasable immediately thereafter. 6.1.4 Replacement of Shares upon Reorganization, etc. In case of any reclassification or reorganization of the outstanding shares of Common Stock other than a change covered by Section 6.1.1 hereof or which solely affects the par value of such shares of Common Stock, or in the case of any merger or consolidation of the Company with or into another corporation (other than a consolidation or merger in which the Company is the continuing corporation and which does not result in any reclassification or reorganization of the outstanding shares of Common Stock), or in the case of any sale or conveyance to another corporation or entity of the property of the Company as an entirety or substantially as an entirety in connection with which the Company is dissolved, the Holder of this Warrant shall have the right thereafter (until the expiration of the right of exercise of this Warrant) to receive upon the exercise hereof, for the same aggregate Exercise Price payable hereunder immediately prior to such event, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such reclassification, reorganization, 3 merger or consolidation, or upon a dissolution following any such sale or other transfer, by a Holder of the number of shares of Common Stock of the Company obtainable upon exercise of this Warrant immediately prior to such event; and if any reclassification also results in a change in shares of Common Stock covered by Sections 6.1.1 or 6.1.2, then such adjustment shall be made pursuant to Sections 6.1.1, 6.1.2, 6.1.3 and this Section 6.1.4. The provisions of this Section 6.1.4 shall similarly apply to successive reclassifications, reorganizations, mergers or consolidations, sales or other transfers. 6.1.5 Changes in Form of Warrant. This form of Warrant need not be changed because of any change pursuant to this Section, and Warrants issued after such change may state the same Exercise Price and the same number of shares of Common Stock and Warrants as are stated in the Warrants initially issued pursuant to this Agreement. The acceptance by the Holder of the issuance of new Warrants reflecting a required or permissive change shall not be deemed to waive any rights to a prior adjustment or the computation thereof. 6.2 Elimination of Fractional Interests. The Company shall not be required to issue certificates representing fractions of shares of Common Stock upon the exercise of this Warrant, nor shall it be required to issue scrip or pay cash in lieu of any fractional interests, it being the intent of the parties that all fractional interests shall be eliminated by rounding any fraction up to the nearest whole number of shares of Common Stock or other securities, properties or rights. 7. Redemption. 7.1 Redemption Rights. The Company may redeem all (but not less than all) of the Warrants at any time when the registration statement ("Registration Statement") is effective, at the price of $.01 per Warrant, upon notice referred to in Section 7.2, provided that (i) the shares underlying the Warrant have been registered for resale by means of the Registration Statement or any other registration statement; (ii) the Registration Statement is current and effective at the time the aforementioned notice is sent and through the redemption period; and (iii) the closing sales price of a share of Common Stock exceeds $2.00 for a period of not less than ten consecutive trading days ("Redemption Pricing Period"). 7.2 Date Fixed for Redemption; Notice of Redemption. In the event the Company shall elect to redeem all of the Warrants, the Company must mail a notice of redemption by first class mail, postage prepaid, within 5 days of any Redemption Pricing Period to the Holders of the Warrants at their last address as they shall appear on the registration books. Any notice mailed in the manner herein provided shall be conclusively presumed to have been duly given whether or not the registered Holder received such notice. Such notice shall set forth a date for redemption no less than 20 days from the mailing of the notice. 7.3 Exercise After Notice of Redemption. The Warrants may be exercised in accordance with Section 2 of this Agreement within 20 days after notice of redemption shall have been mailed by the Company pursuant to Section 7.2 hereof and prior to the time and date fixed for redemption. On and after the redemption date, the Holder of the Warrants shall have no further rights except to receive, upon surrender of the Warrants, the redemption price. 8. Reservation and Listing. The Company shall at all times reserve and keep available out of its authorized shares of Common Stock, solely for the purpose of issuance upon exercise of this Warrant, such number of shares of Common Stock or other securities, properties or rights as shall be issuable upon the exercise thereof. The Company covenants and agrees that, upon exercise of the Warrants 4 and payment of the Exercise Price therefor, all shares of Common Stock and other securities issuable upon such exercise shall be duly and validly issued, fully paid and non-assessable and not subject to preemptive rights of any stockholder. As long as the Warrants shall be outstanding, the Company shall use its best efforts to cause all shares of Common Stock issuable upon exercise of the Warrants to be listed (subject to official notice of issuance) on all securities exchanges (or, if applicable on Nasdaq) on which the Common Stock is then listed and/or quoted. 9. Certain Notice Requirements. 9.1 Holder's Right to Receive Notice. Nothing herein shall be construed as conferring upon the Holder the right to vote or consent or to receive notice as a stockholder for the election of directors or any other matter, or as having any rights whatsoever as a stockholder of the Company. If, however, at any time prior to the expiration of the Warrants and their exercise, any of the events described in Section 9.2 shall occur, then, in one or more of said events, the Company shall use its best efforts to give written notice of such event at least fifteen days prior to the date fixed as a record date or the date of closing the transfer books for the determination of the stockholders entitled to such dividend, rights offering, merger or reorganization, or entitled to vote on such proposed dissolution, liquidation, winding up or sale. Such notice shall specify such record date or the date of the closing of the transfer books, as the case may be. 9.2 Events Requiring Notice. The Company shall be required to give the notice described in this Section 9 upon one or more of the following events: (i) if the Company shall take a record of the holders of its shares of Common Stock for the purpose of entitling them to receive a dividend or distribution, (ii) the Company shall offer to all the holders of its Common Stock any additional shares of capital stock of the Company or securities convertible into or exchangeable for shares of capital stock of the Company, or any option, right or warrant to subscribe therefor, (iii) a merger or reorganization in which the Company is not the surviving party or (iv) a dissolution, liquidation or winding up of the Company (other than in connection with a consolidation or merger) or a sale of all or substantially all of its property, assets and business shall be proposed. 9.3 Notice of Change in Exercise Price. The Company shall, promptly after an event requiring a change in the Exercise Price pursuant to Section 6 hereof, send notice to the Holder of such event and change ("Price Notice"). The Price Notice shall describe the event causing the change and the method of calculating same and shall be certified as being true and accurate by the Company's President and Chief Financial Officer. 9.4 Transmittal of Notices. All notices, requests, consents and other communications under this Warrant must be in writing and is sufficiently given if delivered to the addressees in person, by overnight courier service, or, if mailed, postage prepaid, by certified mail (return receipt requested), and will be effective three days after being placed in the mail if mailed, or upon receipt or refusal of receipt, if delivered personally or by courier or confirmed telecopy, in each case addressed as follows: (i) if to the registered Holder of this Warrant, to the address of such Holder as shown on the books of the Company, or (ii) if to the Company, to its principal executive office. 5 10. Miscellaneous. 10.1 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 Warrant. 10.2 Entire Agreement. This Warrant (together with the other agreements and documents being delivered pursuant to or in connection with this Warrant) constitutes the entire agreement of the parties hereto with respect to the subject matter hereof, and supersedes all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof. 10.3 Binding Effect. This Warrant shall inure solely to the benefit of and shall be binding upon, the Holder and the Company and their respective successors, legal representatives and assigns, and no other person shall have or be construed to have any legal or equitable right, remedy or claim under or in respect of or by virtue of this Warrant or any provisions herein contained. 10.4 Governing Law; Submission to Jurisdiction. This Warrant will be deemed to have been made and delivered in New York City and will be governed as to validity, interpretation, construction, effect and in all other respects by the internal laws of the State of New York. Each of the Company and the Holder hereby (i) agrees that any legal suit, action or proceeding arising out of or relating to this Warrant will 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 for such suit, action or proceeding, (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, (iv) agrees to accept and acknowledge service of any and all process that may be served in any such suit, action or proceeding in New York State Supreme Court, County of New York or in the United States District Court for the Southern District of New York and (v) agrees that service of process upon it mailed by certified mail to its address set forth on my signature page will be deemed in every respect effective service of process upon it in any suit, action or proceeding. 10.5 Waiver, Etc. The failure of the Company or the Holder to at any time enforce any of the provisions of this Warrant shall not be deemed or construed to be a waiver of any such provision, nor to in any way affect the validity of this Warrant or any provision hereof or the right of the Company or any Holder to thereafter enforce each and every provision of this Warrant. No waiver of any breach, non-compliance or non-fulfillment of any of the provisions of this Warrant shall be effective unless set forth in a written instrument executed by the party or parties against whom or which enforcement of such waiver is sought; and no waiver of any such breach, non-compliance or non-fulfillment shall be construed or deemed to be a waiver of any other or subsequent breach, non-compliance or non-fulfillment. IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly authorized officer as of the _____ day of _______________, 2001. WORLDS.COM, INC. By:__________________________________ Name: Title: Form to be used to exercise Warrant: ____________________________________ ____________________________________ ____________________________________ Date: _____________________, 200___ The undersigned hereby elects irrevocably to exercise the within Warrant and to purchase ________ shares of Common Stock of Worlds.com, Inc. and hereby makes payment of $____________ (at the rate of $_________ per share of Common Stock) in payment of the Exercise Price pursuant thereto. Please issue the Common Stock as to which this Warrant is exercised in accordance with the instructions given below. -------------------------------------- Signature - --------------------------- Signature Guaranteed NOTICE: The signature to this form must correspond with the name as written upon the face of the within Warrant in every particular without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank, other than a savings bank, or by a trust company or by a firm having membership on a registered national securities exchange. INSTRUCTIONS FOR REGISTRATION OF SECURITIES Name ________________________________________________________ (Print in Block Letters) Address ________________________________________________________ 7 Form to be used to assign Warrant: ASSIGNMENT (To be executed by the registered Holder to effect a transfer of the within Warrant): FOR VALUE RECEIVED, ________________________________ does hereby sell, assign and transfer unto _________________________________ the right to purchase _____________________ shares of Common Stock of Worlds.com, Inc. ("Company") evidenced by the within Warrant and does hereby authorize the Company to transfer such right on the books of the Company. Dated:____________________, 200___ -------------------------------------- Signature NOTICE: The signature to this form must correspond with the name as written upon the face of the within Warrant in every particular without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank, other than a savings bank, or by a trust company or by a firm having membership on a registered national securities exchange. 8 EX-99.1 5 0005.txt PRESS RELEASE Contact: Steven G. Chrust Worlds.com Chairman 203-409-2105 schrust@worlds.com - ------------------ WORLDS.COM INC. RAISES $1,095,000 AT INITIAL CLOSING OF PRIVATE OFFERING Stamford, Connecticut, January 3, 2001: Worlds.com Inc. (OTCBB: WDDD) (Company) announced today that it has consummated the sale of 21.9 Units, each Unit consisting of a $50,000 principal amount 6% Convertible Promissory Note and Warrants to purchase 50,000 shares of common stock at a price of $50,000.00 per Unit. The Units were sold in the initial closing of a $1,500,000 private offering being made to accredited investors and institutions. The Notes are unsecured obligations of the Company and are due and payable 18 months from the Closing, subject to certain mandatory prepayments. The per-share conversion price of the Notes and exercise price of the Warrants is $0.104, representing 115% of the average last sale price of a share of common stock as reported by the OTC Bulletin Board for the five consecutive trading days immediately prior to the date of the initial closing. Aggregate gross proceeds from the initial closing were $1,095,000, of which $625,000 was invested cash and $470,000 was through conversion of certain of the Company's existing, outstanding obligations owed to the investors. The Company intends to use the proceeds of the offering for working capital and general purposes for its business. The Notes and Warrants issued in the offering and the shares of common stock underlying them have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Worlds.com Inc. is a 3D entertainment and e-commerce portal which leverages its proprietary technology to offer visitors a network of virtual, multi-user environments which it calls worlds. Worlds are visually engaging online communities where people can come together and, by navigating through the website, shop, interact with others, attend events and be entertained. Except for any historical information contained herein, the matters discussed in this press release contain forward-looking statements that involve risks and uncertainties which are described in the Company's SEC reports, including the Company's Annual Report on Form 10-K for the year ended December 31, 1999 (as amended) and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2000, June 30, 2000 and September 30, 2000 (as amended). # # # EX-99.2 6 0006.txt PRESS RELEASE Contact: Steven G. Chrust Worlds.com Chairman 203-409-2105 schrust@worlds.com WORLDS.COM INC. RAISES $1,880,000 IN PRIVATE OFFERING; RENEGOTIATES CERTAIN INDEBTEDNESS Old Greenwich, CT, January 18, 2001--Worlds.com Inc. (OTC/BB: WDDD), a provider of three-dimensional (3D) and virtual reality services on the Internet, today announced that it has consummated the final closing of a previously announced private placement and extended the maturity dates on certain of its outstanding indebtedness. In the private placement, the Company sold 37.6 Units, each Unit consisting of a $50,000 principal amount 6% Convertible Promissory Note and Warrants to purchase 50,000 shares of common stock at a price of $50,000.00 per Unit. Aggregate gross proceeds from the private offering were $1,880,000 of which $1,345,000 was invested cash and $535,000 was through conversion of certain of the Company's existing, outstanding obligations owed to the investors. The Company intends to use the proceeds of the offering for working capital and general business purposes for its operations. The Company had previously reached agreements in principal to extend the maturity dates of outstanding notes in an aggregate amount of $2,023,771.60 (representing principal of $1,635,000 and accrued interest of $388,771.60), which were due and payable December 2000. The Company has been in the process of negotiating definitive agreements to finalize the extension of these notes. The Company and final creditor executed the last of these agreements on January 12, 2001. The Company has issued new notes in an aggregate principal amount of $1,391,821.60 maturing in January 2002 and given credit toward future services to be provided by the Company in the amount of $631,950 to replace the existing notes. About Worlds.com Worlds.com leverages its proprietary 3D, virtual reality technology to offer visitors a network of virtual, multi-user environments that have rich media graphics, text chat, voice-to-voice chat, streaming video and e-commerce. The environments are focused around entertainment interests and targeted communities such as music, sports, and general entertainment environments. In the Worlds' Avatar Gallery, visitors select an avatar (3D character), and customize it into a personal virtual representation of themselves. The avatar is used to travel in and through the various virtual environments and participate in interactive activities involving entertainment, promotions, or e- commerce. Avatars can chat with one another, dance in a nightclub, e-shop, watch video clips and participate in other activities. Worlds.com is headquartered in Old Greenwich, CT. For more information on Worlds.com, please contact Gary P. Tobin at 203-409-2107. # # # Except for any historical information contained herein, the matters discussed in this press release contain forward-looking statements that involve risks and uncertainties which are described in the Compan's SEC reports, including the Company's Annual Report on Form 10-K for the year ended December 31, 1999 (as amended) and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2000, June 30, 2000 and September 30, 2000 (as amended). -----END PRIVACY-ENHANCED MESSAGE-----