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 - October 12, 2000
(Date of Earliest Event Reported)
JACKPOT ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)
Commission File No. 1-9728
Nevada 88-0169922
________________________ ____________________________________
(State of Incorporation) (I.R.S. Employer Identification No.)
1110 Palms Airport Drive
Las Vegas, Nevada 89119
________________________ __________
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code: (702) 263-5555
N/A
_____________________________________________________________
(Former name or former address, if changed since last report)
Item 5. Other Events
____________
Proposed Acquisition of InterWorld Corporation
______________________________________________
On October 12, 2000, Jackpot Enterprises, Inc. ("Jackpot") and
InterWorld Corporation ("InterWorld") entered into a definitive
Securities Purchase Agreement (the "Purchase Agreement"), which provides
that Jackpot will purchase up to $20 million in aggregate principal
amount of Series A Preferred Stock of InterWorld (the "Series A
Preferred Stock"). Each share of Series A Preferred Stock is initially
convertible into shares of Common Stock of InterWorld (the "Common
Stock") at a conversion price of $6.25 per share (the "Conversion
Price"), subject to adjustment on the six month anniversary of the date
of issue, to 90% of the average daily closing price of Common Stock for
such six-month period, 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 InterWorld to redeem the Series A Preferred
Stock for cash at 150% of the purchase price; provided that such right
will expire if InterWorld consummates a change of control transaction
with Jackpot on or prior to such date. The transaction is subject to
certain closing conditions.
In connection with the issuance of the Series A Preferred Stock,
InterWorld shall issue to Jackpot warrants to purchase shares of Common
Stock at an exercise price of $7.25 per share, subject to adjustment,
exercisable at any time until October 12, 2005, equal to 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.
In connection with the transaction Jackpot will agree that until
April 12, 2001 without the prior consent of the Board of Directors of
InterWorld (excluding any member appointed by the holders of the Series
A Preferred Stock), it will 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 InterWorld; (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
InterWorld'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 InterWorld'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 InterWorld's
Board of Directors or call or seek to have called any meeting of
InterWorld's stockholders of the other party or seek to advise or
influence in any manner whatever any person or entity with respect to
InterWorld; (iii) make any short sales, enter into any hedging,
derivative or similar transactions regarding InterWorld'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 InterWorld,
pursuant to which Jackpot purchased from Salomon Smith Barney ("SSB") a
loan from SSB to Mr. Donahue in the amount of approximately $12,445,500.
The loan is secured by 4,270,406 shares of Common Stock. In connection
therewith Jackpot entered into a Call/Participation Agreement with Mr.
Donahue whereby he 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. Notwithstanding, Mr. Donahue
has agreed that for so long as the loan is outstanding, he would, prior
to any vote of the stockholders of InterWorld, 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 InterWorld 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.
Item 7. Financial Statements, Pro Forma Financial Information and
_________________________________________________________
Exhibits.
_________
(c) Exhibits.
1. Securities Purchase Agreement dated October 12, 2000 by and
among Jackpot Enterprises, Inc. and InterWorld Corporation.
2. Loan Assumption and Forbearance Agreement dated October 12,
2000 by and between Michael Donahue and Jackpot
Enterprises, Inc.
3. Call/Profit Participation Agreement dated October 12, 2000
by and between Michael Donahue and Jackpot Enterprises,
Inc.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
JACKPOT ENTERPRISES, INC.
By /s/ Mark W. Hobbs
________________________
Name: Mark W. Hobbs
Title: President
Dated: October 25, 2000
EXHIBIT INDEX
Exhibit No. Description
___________ ___________
1. Securities Purchase Agreement dated October 12, 2000 by
and among Jackpot Enterprises, Inc. and InterWorld
Corporation.
2. Loan Assumption and Forbearance Agreement dated October
12, 2000 by and between Michael Donahue and Jackpot
Enterprises, Inc.
3. Call/Profit Participation Agreement dated October 12,
2000 by and between Michael Donahue and Jackpot
Enterprises, Inc.
