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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
(Amendment No. )(1)
INTERWORLD CORPORATION
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(Name of Issuer)
Common Stock, $.01 Par Value
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(Title of Class of Securities)
46114Q108
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(CUSIP Number)
Mark W. Hobbs
Jackpot Enterprises, Inc.
8750 North Central Expressway, Suite 600
Dallas, Texas 75231
(214) 696-8830
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
October 12, 2000
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(Date of Event which Requires Filing of This Statement)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition that is the subject of this
Schedule 13D, and is filing this schedule because of Rule
13d-1(e), 13d-1(f) or 13d-1(g), check the following box [_].
Note: Schedules filed in paper format shall include a signed
original and five copies of the schedule, including all exhibits.
See Rule 13d-7(b) for other parties to whom copies are to be sent.
----------
(1) The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to the
subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in a
prior cover page.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18 of
the Securities Exchange Act of 1934 or otherwise subject to the
liabilities of that section of the Act but shall be subject to all
other provisions of the Act (however, see the Notes).
_____________________________________________________________________
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Jackpot Enterprises, Inc.
88-0169922
_____________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [X]
_____________________________________________________________________
3 SEC USE ONLY
_____________________________________________________________________
4 SOURCE OF FUNDS*
WC
_____________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
_____________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
State of Nevada
_____________________________________________________________________
7 SOLE VOTING POWER
NUMBER OF 5,866,905 shares (includes shares issuable under
warrants exercisable through October 12, 2005)
SHARES (see Item 5)
BENEFICIALLY ___________________________________________________
8 SHARED VOTING POWER
OWNED BY
None
EACH ___________________________________________________
9 SOLE DISPOSITIVE POWER
REPORTING 5,866,905 shares (includes shares issuable under
warrants exercisable through October 12, 2005)
(see Item 5)
PERSON
___________________________________________________
10 SHARED DISPOSITIVE POWER
WITH
None
_____________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,866,905 shares (includes certain shares issuable under warrants
exercisable through October 12, 2005) (see Item 5)
_____________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
(see Item 5) [X]
_____________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.666%
_____________________________________________________________________
14 TYPE OF REPORTING PERSON*
CO
_____________________________________________________________________
*SEE INSTRUCTIONS BEFORE FILLING OUT!
_____________________________________________________________________
Item 1. Security and Issuer.
This Schedule 13D relates to the common stock, par value $.01 per
share (the "Common Stock"), of InterWorld Corporation (the "Issuer").
The Issuer is a Delaware corporation with its principal executive
offices located at 395 Hudson Street, 6th Floor, New York, New York
10014-3669.
_____________________________________________________________________
Item 2. Identity and Background.
The name of the person filing this statement is Jackpot
Enterprises, Inc., a Nevada corporation ("Jackpot" or the "Filing
Person"). The address of the principal executive offices of Jackpot
is located at 8750 North Central Expressway, Suite 600, Dallas, Texas
75231.
The current principal business of Jackpot is to provide internet
infrastructure services and manage technology funds. Jackpot is in
the process of completing the sale of its gaming machine route
operations in Nevada. Schedule A sets forth the name, citizenship,
business or residence address and present principal occupation or
employment, as well as the name and address of any corporation or
other organization in which such occupation or employment is
conducted, of each of the directors and executive officers of Jackpot
as of the date hereof.
During the last five years, neither the Filing Person, nor, to
the knowledge of the Filing Person, any person named in Schedule A,
has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or has been a party to a civil
proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state
securities laws or finding any violation with respect to such laws.
During the last five years, neither the Filing Person, nor, to
the knowledge of the Filing Person, any person named in Schedule A,
was a party to a civil proceeding of a judicial or administrative body
of competent jurisdiction and as a result of such proceeding was or is
subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to,
federal or state securities laws or finding any violation with respect
to such laws.
______________________________________________________________________
Item 3. Source and Amount of Funds or Other Consideration.
This Schedule 13D relates to the purchase of 3,200,000 shares of
8% PIK Series A Convertible Preferred Stock (the "Series A Preferred
Stock") that is convertible into shares of Common Stock at an initial
conversion price of $6.25 per share. The conversion price is subject
to adjustment under certain circumstances as further discussed in Item
4. In addition, Jackpot acquired a warrant to acquire a number of
shares of Common Stock equal to 5,866,905 less the number of shares
issuable upon conversion of the Series A Preferred Stock at an initial
exercise price of $7.25 per share. The exercise price is subject to
adjustment under certain circumstances. The Series A Preferred Stock
was purchased with working capital, as described in Item 4 below.
_____________________________________________________________________
Item 4. Purpose of Transaction.
On October 12, 2000, Jackpot and Issuer entered into a Securities
Purchase Agreement (the "Purchase Agreement"), which provides that
Jackpot, on the date of the First Closing, will purchase $14.9 million
in aggregate principal amount of Series A Preferred Stock. The
Purchase Agreement further specified that Jackpot would purchase an
additional $5.1 million in aggregate principal amount of Series A
Preferred Stock not later than ten days following approval under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "Second
Closing"). Each share of Series A Preferred Stock is initially
convertible into shares of Common Stock at a conversion price of $6.25
per share (the "Conversion Price"), and is subject to adjustment. On
the six month anniversary of the date of the First Closing, the
Conversion Price shall be adjusted, if lower, to 90% of the average
daily closing price of the Issuer's Common Stock for the six-month
period from the date of issuance, but in no event less than $2.00 per
share. Furthermore, on April 12, 2001, Jackpot, at its sole
discretion, shall have the option to require Issuer to redeem the
Series A Preferred Stock for cash at 150% of the purchase price;
provided that such right will expire if the Issuer consummates a
change of control transaction with Jackpot on or prior to such date.
In connection with the issuance of the Series A Preferred Stock,
Issuer has issued to Jackpot warrants to purchase shares of Common
Stock to equal 19.999% of the current outstanding shares of Common
Stock less the amount of shares issuable upon the conversion of the
Series A Preferred Stock. The exercise price of the warrants shall be
$7.25 per share, payable, at the option of Jackpot, in cash or warrant
shares; provided such payment shall only be payable in cash to the
extent that the Issuer shall have in effect a valid registration
statement. The exercise price is subject to adjustment under certain
circumstances. The warrants shall be exercisable at any time until
October 12, 2005.
Jackpot intends to discuss a possible second step transaction
with the Issuer; the nature, form and scope of which has not been
presently determined and which may range from Jackpot increasing its
investment in the Issuer in an undetermined amount to proposing a
merger transaction with the Issuer. No assurance can be given that
Jackpot will ever make such a proposal and Jackpot reserves the right
to sell, assign and otherwise dispose of its interest in the
securities of the Issuer. In connection with the transaction Jackpot
agreed that until April 12, 2001 without the prior consent of the
Board of Directors of the Issuer (excluding any member appointed by
the holders of the Series A Preferred Stock), it would not, alone or
through or with any other person or entity, in any manner: (i) acquire
any additional direct or indirect interest in any securities of the
Issuer; (ii) solicit, make, or in any way participate in, directly or
indirectly, any "solicitation" of "proxies" (as such terms are used in
the proxy rules of the U.S. Securities Exchange Act of 1934, as
amended (the "Exchange Act")) from the Issuer's stockholders, become a
"participant" in any "election contest" (as such terms are defined or
used in Rule 14A-11 under the Exchange Act) with respect to the
Issuer's Board of Directors, solicit or execute any written consent in
lieu of a meeting of holders of voting securities except to support
the nominees for directors of the Issuer's Board of Directors or call
or seek to have called any meeting of the Issuer's stockholders of the
other party or seek to advise or influence in any manner whatever any
person or entity with respect to the Issuer; (iii) make any short
sales, enter into any hedging, derivative or similar transactions
regarding the Issuer's securities; or (iv) publicly announce an
intention to do any of the actions restricted or prohibited under
clauses (i) through (iii) above.
In addition, on October 12, 2000 Jackpot entered into a Loan and
Forbearance Agreement with Michael Donahue, Chairman of the Issuer,
pursuant to which Jackpot agreed to purchase from Salomon Smith Barney
("SSB") a loan from SSB to Mr. Donahue. The loan is secured by
4,270,406 shares of Common Stock. Pursuant to a Call/Participation
Agreement Donahue agreed that Jackpot would share in the profit on a
portion of the stock securing the loan once certain conditions,
including the repayment of the loan, were met. Mr. Donahue has sole
power to vote and dispose of such shares. However, Mr Donahue has
agreed that for so long as the loan is outstanding, given the highly
leveraged nature of the loan, he would, prior to any vote of the
stockholders of Issuer, consult with Jackpot and obtain Jackpot's view
with respect to such vote. He also agreed that in the event the Board
of Directors of Issuer approves a merger of Jackpot with InterWorld
Corporation on or before April 10, 2001, Mr. Donahue will execute an
appropriate voting agreement pursuant to which he will agree to vote
his stock in favor of such merger.
Except as set forth above or in this Item 4, and Item 5 below,
Jackpot has not formulated any plans or proposals which would result
in: (i) the acquisition by any person of additional securities of the
Issuer or the disposition of securities of the Issuer, (ii) an
extraordinary corporate transaction involving the Issuer or any of its
subsidiaries, (iii) a sale or transfer of a material amount of the
assets of the Issuer or any of its subsidiaries, (iv) any change in
the present board of directors (other than the designation of two
additional board members by Jackpot as a result of its purchase of the
Series A Preferred Stock) or management of the Issuer, (v) any
material change in the Issuer's capitalization or dividend policy,
(vi) any other material change in the Issuer's business or corporate
structure, (vii) any change in the Issuer's charter or bylaws or other
instrument corresponding thereto or other action which may impede the
acquisition of control of the Issuer by any person, (viii) causing a
class of the Issuer's securities to be deregistered or delisted, (ix)
a class of equity securities of the Issuer becoming eligible for
termination of registration or (x) any action similar to any of those
enumerated above.
_____________________________________________________________________
Item 5. Interest in Securities of the Issuer.
To the knowledge of the Filing Person, except as discussed in
Item 4 above, neither the Filing Person nor any affiliate of the
Filing Person beneficially owns or has acquired or disposed of any
shares of Common Stock during the past 60 days.
_____________________________________________________________________
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
Except as otherwise noted, there are no contracts, arrangements,
understandings or relationships (legal or otherwise) between Jackpot
and any other person with respect to any securities of the Issuer,
including but not limited to transfer or voting of any securities,
finder's fees, joint ventures, loan or option arrangements, put or
calls, guarantees of profits, division of profits or loss, or the
giving or withholding of proxies.
_____________________________________________________________________
Item 7. Material to be Filed as Exhibits.
Exhibit 99.1 - Securities Purchase Agreement dated October 12,
2000
Exhibit 99.2 - Form of Warrant
Exhibit 99.3 - Loan Assumption and Forbearance Agreement dated
October 12, 2000 and related documents
Exhibit 99.4 - Call/Profit Participation Agreement, dated October
12, 2000
Exhibit 99.5 - Form of Certificate of Designations
_____________________________________________________________________
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement
is true, complete and correct.
Dated: October 16, 2000
JACKPOT ENTERPRISES, INC.
By: /s/ Mark W. Hobbs
______________________________
Name: Mark W. Hobbs
Title: President
Schedule A
DIRECTORS OF JACKPOT ENTERPRISES, INC.
The name, present business address and present principal
occupation or employment of each director of Jackpot Enterprises,
Inc. are set forth below. Each person listed below is a citizen
of the United States of America.
Name Present Principal Present Business
Occupation/Employment Address
___________________ _____________________ ____________________
Allan R. Tessler Chairman and Chief 4020 West Lake Creek
Executive Officer Drive, #100
Wilson, WY 83014
Alan J. Hirschfield Vice Chairman 3490 Clubhouse Drive
I-2
Wilson, WY 83014
David R. Markin Chairman of the Board, 2016 North Pitcher
Chief Executive Street
Officer and President Kalamazoo, MI 49007
of Checker Motors
Robert L. McDonald, Senior Partner in the 241 Ridge Street
Sr. law firm McDonald Reno, Nevada 89505
Carano Wilson McCune
Bergin Frankovich &
Hicks LLP
EXECUTIVE OFFICERS OF JACKPOT ENTERPRISES, INC.
The name, present business address and present principal
occupation or employment of each executive officer of Jackpot
Enterprises, Inc. are set forth below. Each person listed below
is a citizen of the United States of America.
Name Present Principal Present Business
Occupation/Employment Address
___________________ _____________________ ____________________
Mark W. Hobbs President 8750 North Central
Expressway, Suite #600
Dallas, Texas 75231
Steven L. Korby Chief Financial 8750 North Central
Officer Expressway, Suite #600
Dallas, Texas 75231
Dallas, Texas 75231
Robert Torkar Senior Vice President- 1110 Palms Airport
Finance, Treasurer & Drive
Chief Accounting Las Vegas, Nevada
Officer 89119
George Congdon Senior Vice President- 1110 Palms Airport
Operations Drive
Las Vegas, Nevada
89119
