OVERSEAS FILMGROUP INC
8-K, 2000-05-10
MOTION PICTURE & VIDEO TAPE PRODUCTION
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                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 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) May 3, 2000
                                                           ------------


                            Overseas Filmgroup, Inc.
- --------------------------------------------------------------------------------
               (Exact Name of Registrant as Specified in Charter)




     Delaware                       0-25308                   13-3751702
- ----------------------------    ----------------      ------------------------
(State or Other Jurisdiction    (Commission File       (IRS Employer
of Incorporation)                  Number)             Identification No.)



8800 Sunset Boulevard, Third Floor, Los Angeles, California         90069
- -----------------------------------------------------------     -----------
(Address of Principal Executive Offices)                         (Zip Code)


Registrant's telephone number, including area code  (310) 855-1199
                                                 -------------------


                                       N/A
           -------------------------------------------------------------
          (Former Name or Former Address, if Changed Since Last Report)






<PAGE>



Item 5. Other Events

     On May 3, 2000, Overseas Filmgroup, Inc. ("Issuer") entered into a
Securities Purchase Agreement (the "Purchase Agreement") with Rosemary Street
Productions, LLC ("Purchaser"), pursuant to which the Issuer agreed to sell to
Purchaser (i) 5,097,413 shares of common stock ("Common Stock"), (ii) 904,971
shares of Series A Preferred Stock ("Preferred Stock"), each share of which is
convertible into two shares of Common Stock and (iii) five-year warrants
("Warrants") to purchase up to 2,313,810 shares of Common Stock of Issuer at an
exercise price of $3.40 per share (collectively, the "Securities") for a cash
purchase price of $17,000,000 (the "Securities Purchase"). Since the Preferred
Stock votes with the Common Stock on an as-converted basis, the Purchaser will
own approximately 59.5% of the Issuer's voting securities after consummation of
the Securities Purchase.

     The Securities Purchase is expected to be consummated in the second quarter
of 2000 after the satisfaction of certain closing conditions described under
"Conditions to Closing" below, including the closing of a $30 million five-year
secured revolving credit facility with Chase Securities, Inc.  The Issuer has
received a commitment letter from Chase Securities to arrange and syndicate such
a facility.

Purchase Price

     Under the terms of the Purchase Agreement, upon consummation of the
Securities Purchase, Purchaser will purchase the Securities for an aggregate
purchase price of $17,000,000. Purchaser also has an option to purchase up to an
additional 1,625,260 shares of Common Stock for an aggregate purchase price of
$4,000,000. This option will be exercisable for a period of 90 days after the
closing date.

     The Issuer currently owns 17,454 shares of common stock of Yahoo! Inc.
("Yahoo Shares"). The Purchase Agreement provides that if the average daily
closing bid price of the common stock of Yahoo! Inc. listed on Nasdaq for the 20
trading days commencing on the first day that the Issuer can sell the Yahoo
Shares free of the Issuer's "lock-up" agreement with Yahoo! Inc. is $110 or
less, then the Issuer will issue to Purchaser 650,729 shares of Common Stock and
115,527 shares of Preferred Stock at no additional cost to the Purchaser.

     The Purchase Price is subject to certain other adjustments which the Issuer
does not expect to be material.

Series A Preferred Stock

     Conversion

     Each holder of shares of Preferred Stock will have the right, at any time
prior to October 15, 2001, at such holder's option, to convert each outstanding
share of Preferred Stock, in whole or in part, into two shares of Common Stock
("Conversion Shares"). If on October 15, 2001 any of the Preferred Stock is
outstanding, each share of outstanding Preferred Stock will automatically
convert into two Conversion Shares.



                                        2


<PAGE>

     Liquidation, Dissolution or Winding up

     In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Issuer, before any payment or distribution of the Issuer's
assets are made to the holders of Junior Securities (as defined below), holders
of Preferred Stock will be entitled to receive an amount per share equal to the
greater of (i) amount that would have been payable on a number of shares of
Common Stock equal to the number of Conversion Shares into which a share of
Preferred Stock was convertible immediately prior to such date and (ii) two
times the volume-weighted average trading price per share of Common Stock on
Nasdaq for the 20 consecutive trading days immediately prior to the closing
date. Holders of Preferred Stock will not be entitled to any further payment. If
the assets of the Issuer distributable among the holders of Preferred Stock are
insufficient to pay in full the preferential amount and liquidating payments on
any Parity Securities (as defined below), then such assets will be distributed
among the holders of Preferred Stock and any such Parity Securities ratably in
accordance with the respective amounts that would be payable if all amounts
payable thereon were paid in full.

     Ranking

     With respect to dividend rights and rights on liquidation, dissolution and
winding up, the Preferred Stock will rank (i) senior to the Common Stock and
each other class or series of capital stock established in the future by the
Issuer's board of directors, the terms of which do not expressly provide that it
ranks senior to, or on a parity with, the Preferred Stock (collectively, the
"Junior Securities") and (ii) on a parity with each other class or series of
capital stock established in the future by the Issuer's board of directors, the
terms of which expressly provide that such class or series will rank on a parity
with the Preferred Stock (collectively, the "Parity Securities"). The Issuer may
not issue any securities that are senior to the Preferred Stock without the
consent of the holders of the Preferred Stock.

     Redemption

     The Preferred Stock will not be subject to any right of redemption by the
Issuer or any holder of the Preferred Stock.

     Voting Rights

     Each holder of Preferred Stock will be entitled to vote on all matters and
will be entitled to that number of votes equal to the number of Conversion
Shares into which such holder's shares of Preferred Stock could be converted on
the record date for the determination of stockholders entitled to vote on such
matter or, if no such record date is established, on the date such vote is taken
or any written consent of stockholders is solicited. In addition, so long as any
of the Preferred Stock is outstanding, the affirmative vote of the holders of a
majority of the outstanding shares of Preferred Stock, voting together as a
single class, will be necessary to: (i) amend, alter or repeal any provision of
the Issuer's Certificate of Incorporation or By-laws so as to adversely affect
the Preferred Stock, (ii) issue any additional Preferred Stock or create,
authorize or issue any capital stock that ranks prior (whether with respect to
dividends or upon liquidation, dissolution, winding up or otherwise) to the


                                        3


<PAGE>

Preferred Stock or (iii) redeem for cash any Junior Securities, subject to
certain exemptions.

     Preemptive Rights

     If the Issuer proposes to sell shares of Common Stock, or securities
convertible into or exercisable for shares of Common Stock, excluding shares of
Common Stock to be issued under certain limited circumstances ("New Issuances"),
the holders of the Preferred Stock will have the preemptive right, on the same
terms and conditions for the New Issuances, to purchase that number of shares
(or other securities) sufficient to permit the holders of the shares of
Preferred Stock to maintain their proportionate economic interest in the Issuer.

Warrants

     On the closing date, the Issuer will issue to Purchaser Warrants to
purchase an aggregate of 2,313,810 shares of Common Stock at an exercise price
of $3.40 per share. The Warrants will be immediately exercisable and will expire
on the fifth anniversary of the closing date. The holders of the Warrants will
have certain "piggyback" registration rights for the shares of Common Stock
issuable upon exercise of the Warrants.

Restrictions on Sale of Securities

     After the closing date, Purchaser has agreed that it will not offer, sell,
contract to sell, pledge, gift or otherwise dispose of, directly or indirectly,
the Securities or any of the voting or dispositive rights to any of the
Securities to any person, except in accordance with Rule 144 under the
Securities Act and any applicable state securities laws, subject to certain
exceptions.

     For a period of two years after the closing date, Purchaser (for itself or
for any transferee of the Securities or underlying Common Stock to the
Securities) has agreed that it will not take any direct or indirect action to
cause the Issuer to register any of the Securities or underlying Common Stock to
the Securities for any public sale or distribution pursuant to the Securities
Act or any applicable state securities laws, unless the Purchaser or its
transferees have obtained the written consent of Robert Little and Ellen Little
(collectively, the "Littles") (which may be withheld in their discretion), or if
the Littles do not beneficially own 5% or more of the outstanding Common Stock
of the Issuer at the time the Purchaser or its transferees desire to publicly
sell any of its Securities, then upon the unanimous consent of the board of
directors of the Issuer.

     The Littles have agreed that, without the prior written consent of two
officers of the Issuer and subject to certain exceptions, they will not offer,
sell, contract to sell, pledge, gift or otherwise dispose of, directly or
indirectly, any shares of Common Stock, any securities convertible into or
exercisable or exchangeable for shares of Common Stock, or any warrants,
options, or other rights to purchase, subscribe for, or otherwise acquire any
shares of Common Stock for a period of one year commencing on the closing date
and ending on the first anniversary of the closing date.


                                        4


<PAGE>

Debt Contribution and Forgiveness

     Immediately prior to the closing of the Securities Purchase, the Issuer and
the Littles will enter into a Note and Debt Contribution Agreement, pursuant to
which the Littles will (i) forgive an aggregate of approximately $1,997,810 of
obligations and indebtedness owed to them by the Issuer and (ii) contribute
$130,000 in cash to the capital of Issuer. Pursuant to the Note and Debt
Contribution Agreement, the Issuer will pay to the Littles an aggregate of
approximately $1,430,000 of other obligations and indebtedness owed to them.  In
addition, the Littles will contribute 1,588,812 of their shares of Common Stock
to the capital of the Issuer.

Management

     The following persons will be the executive officers of the Issuer after
the consummation of the Securities Purchase:

Name                              Title

Christopher Cooney                Co-Chairman of the Board and Chief Executive
                                  Officer

Robert Little                     Co-Chairman of the Board and President

William F. Lischak                Chief Operating Officer and Chief Financial
                                  Officer

Jeffrey Cooney                    Executive Vice President--Creative Affairs

Robert Little, Ellen Little, William Lischak, Stephen Bannon, Scot Vorse, Gary
Stein and Alessandro Fracassi are currently executive officers and/or directors
of the Issuer. Immediately prior to the closing date, (i) the size of the board
of directors will be increased to nine, (ii) Ellen Little, Gary Stein and
Alessandro Fracassi will resign from their positions and (iii) Christopher
Cooney, Jeffrey Cooney, Barry Minsky, Joseph Linehan and Nicholas Bavaro will be
appointed as directors by the existing members of the board to fill the
vacancies created by the resignations of the other existing directors and the
two new board positions.

     Simultaneously with the closing, the Issuer, Purchaser, the Littles, MRCo.,
Inc., a member of the Purchaser ("MRCo."), Christopher Cooney and Jeffrey Cooney
will enter into a voting agreement. Under the voting agreement, so long as
Robert Little is employed as President of the Issuer or the Littles own no less
than 5% of the issued and outstanding voting securities of Issuer, Purchaser
will nominate and vote for Robert Little to serve as a member of the board of
directors of the Issuer. So long as Christopher Cooney and Jeffrey Cooney own,
in the aggregate, directly or indirectly, no less than 5% of the issued and
outstanding voting securities of the Issuer, the Littles and other members of
the Purchaser will vote for Christopher Cooney and Jeffrey Cooney to serve as
members of the board of directors of the Issuer. So long as MRCo. owns no less
than 5% of the issued and outstanding voting securities of the Issuer, the
Littles and other members of Purchaser will vote for Joseph Linehan to serve as
a member of the board of directors of the Issuer.


                                       5

<PAGE>

     Upon the closing of the Securities Purchase, the Issuer will enter into
amended and restated employment agreements with each of Robert Little and
William Lischak, and new employment agreements with each of Christopher Cooney
and Jeffrey Cooney.

The Amended and Restated Employment Agreement between the Issuer and Robert
Little will provide for Mr. Little to serve as Co-Chairman of the Board of
Directors and President of the Issuer for a three-year term to commence on the
closing date. Mr. Little will receive an initial base salary of $300,000 and a
guaranteed bonus of $50,000, which will be increased by $25,000 on a cumulative
basis for each year of the employment term in which the pre-tax profits of the
Issuer exceed $500,000. Mr. Little also will be entitled to an additional bonus,
if any, as may be established by the Issuer's board of directors at the
beginning of each year of the employment term based on the Issuer achieving
certain profit targets. If the Issuer's pre-tax profits in any two of the three
years of the initial employment term exceed $500,000 or the average pre-tax
profits of Issuer over the three-year employment term exceed $500,000 ("Profits
Target"), Mr. Little's employment agreement will be automatically renewed on the
same terms for an additional two- year term. Regardless of whether the Issuer
has achieved the Profits Target, the Issuer may give Mr. Little written notice
at least six months prior to the expiration of the initial employment term that
it elects to extend the initial term for an additional two years. If the initial
term is not renewed, then Mr. Little will be entitled to receive $400,000 in
cash, payable in six equal monthly installments of $66,666, with the first
payment to be made within 30 days after termination of the initial term.

     The Amended and Restated Employment Agreement between the Issuer and
William Lischak will provide for Mr. Lischak to continue to serve as Chief
Operating Officer and Chief Financial Officer of the Issuer for a three-year
term to commence on the closing date. Mr. Lischak will receive an initial base
salary of $225,000 and a guaranteed bonus of $50,000, which will be increased by
$15,000 on a cumulative basis for each year of the employment term in which the
pre-tax profits of the Issuer exceed $500,000. Mr. Lischak also will be entitled
to an additional bonus, if any, as may be established by the Issuer's board of
directors at the beginning of each year of the employment term based on the
Issuer achieving certain profit targets. If the Issuer achieves its Profits
Target, Mr. Lischak's employment agreement will be automatically renewed on the
same terms for an additional two-year term. Regardless of whether the Issuer has
achieved the Profits Target, the Issuer may give Mr. Lischak written notice at
least six months prior to the expiration of the initial employment term that it
elects to extend the initial term for an additional two years. If the initial
term is not renewed, then Mr. Lischak will be entitled to receive $300,000 in
cash, payable in six equal monthly installments of $50,000, with the first
payment to be made within 30 days after termination of the initial term.

     The Employment Agreement between the Issuer and Christopher Cooney will
provide for Mr. Cooney to serve as Co-Chairman of the Board of Directors and
Chief Executive Officer of the Issuer for a one-year term to commence on the
closing date. Mr. Cooney will receive an initial base salary of $200,000 and a
bonus of $25,000 if the pre-tax profits of the Issuer exceed $500,000 during the
term. Mr. Cooney also will be entitled to an additional bonus, if any, as may be
established by the Issuer's board of directors at the beginning of the
employment term based on the Issuer achieving certain profit targets.

                                       6


<PAGE>

     The Employment Agreement between the Issuer and Jeffrey Cooney will provide
for Mr. Cooney to serve as Executive Vice President --Creative Affairs of the
Issuer for a three-year term to commence on the closing date. Mr. Cooney will
receive an initial base salary of $60,000 and a bonus of $25,000 for each year
of the employment term in which the pre-tax profits of the Issuer exceed
$500,000. Mr. Cooney also will be entitled to an additional bonus, if any, as
may be established by the Issuer's board of directors at the beginning of each
year of the employment term based on the Issuer achieving certain profit
targets. If the Issuer achieves its Profits Target, Mr. Cooney's employment
agreement will be automatically renewed on the same terms for an additional
two-year term. Regardless of whether the Issuer has achieved the Profits Target,
the Issuer may give Mr. Cooney written notice at least six months prior to the
expiration of the initial employment term that it elects to extend the initial
term for an additional two years. If the initial term is not renewed, then Mr.
Cooney will be entitled to receive $100,000 in cash, payable in six equal
monthly installments of $16,666.67, with the first payment to be made within 30
days after termination of the initial term.

     Upon the closing of the Securities Purchase, the Issuer will enter into a
First Look Agreement with The Little Film Company, Inc. ("Lender") and Ellen
Little. The agreement will provide for a three-year term to commence on the
closing date. Lender will receive (i) a $100,000 annual advance against producer
fees otherwise payable under the terms of the agreement, (ii) a discretionary
revolving development fund of $100,000 for Lender's use in option/acquisition of
literary properties, engagement of writers and other customary development costs
and (iii) customary overhead, including office space, staff, telephone and
reasonable travel costs. Lender also will be compensated on a project-by-project
basis. The Issuer will have an exclusive "first look" on any project that Lender
owns or controls or which Lender has the right to submit to the Issuer or any
project that Lender has the right to acquire or may wish to acquire to
development and/or production.

     Upon the closing of the Securities Purchase, the Issuer will enter into an
Amended and Restated Stock Option Plan and Agreement with Robert and Ellen
Little, pursuant to which the Issuer will cancel the Littles existing options to
purchase an aggregate of (i) 1,075,000 shares of Common Stock at an exercise
price of $5.00 per share and (ii) 1,125,000 shares of Common Stock at an
exercise price of $8.50 per share and will grant the Littles an option to
purchase an aggregate of 500,000 shares of Common Stock at an exercise price of
$3.40 per share. The option will become exercisable on the closing date and will
expire on the fifth anniversary of the closing date.

     Upon the closing of the Securities Purchase, the Issuer will grant to
William Lischak an option under the Issuer's 1996 Basic Stock Option and Stock
Appreciation Rights Plan to purchase an aggregate of 75,000 shares of common
stock at an exercise price of $3.40 per share. The option will be exercisable as
follows: 2,095 options will become exercisable on May 1, 2000; thereafter, 2,083
options will become exercisable on the last day of each of the next 35
consecutive months in 35 monthly installments.


                                       7

<PAGE>

Conditions to Closing

     The Securities Purchase is subject to a number of conditions, including:

o    the closing by Issuer of a $30 million senior secured credit facility with
     Chase Securities on terms acceptable to the Purchaser;

o    delivery by Issuer of Issuer's unaudited balance sheet as of March 31, 2000
     and the related unaudited consolidated statement of income and cash flows
     for the quarter ended March 31, 2000, which shall not show a material
     adverse change in the financial condition of Issuer and its subsidiaries
     from the Issuer's audited financial statements for the year ended December
     31, 1999, except in certain limited circumstances;

o    the requirement that an information statement be prepared by the Issuer and
     distributed to the stockholders of the Issuer not less than ten days prior
     to the closing in compliance with the requirements of Section 14(f) of the
     Exchange Act; and

o    that the Issuer receive an opinion from Houlihan Lokey Howard & Zukin that
     the transaction is fair to the stockholders of the Issuer from a financial
     point of view.

In addition, a Certificate of Designations establishing the Preferred Stock must
be filed with the Secretary of State of Delaware. There are a number of other
usual and customary conditions that must be satisfied before the Securities
Purchase can be consummated.

Exclusivity

     Under the terms of the Purchase Agreement, the Issuer and Purchaser cannot,
except in the limited circumstances described below, (i) solicit or encourage,
directly or indirectly, any inquiries, discussions or proposals for, (ii)
continue, propose or enter into any negotiations or discussions looking toward
or (iii) enter into any agreement or understanding providing for, any
acquisition of any of its capital stock or assets ("Another Transaction"). The
Purchase Agreement also provides that the Issuer will not provide any
information to any person for the purpose of evaluating or determining whether
to make or pursue any such inquiries or proposals with respect to Another
Transaction.

     Notwithstanding the foregoing, in the event that the Issuer receives an
unsolicited proposal for entering into Another Transaction, the Issuer may
furnish to such party public and nonpublic information requested by such party
and the Issuer may negotiate with such party if (i) the board of directors of
the Issuer determines, in good faith, that such business combination proposal
may, if consummated, result in a transaction that is more favorable to the
Issuer's stockholders and (ii) prior to furnishing such information to or
entering into negotiations with such third party, the Issuer provides prompt
notice within 24 hours of receipt of Another Transaction proposal to Purchaser,
keeps the Purchaser informed of the status of any such proposal and gives
Purchaser five days' notice of any agreement to be entered into with or any
information to be supplied to any person making such proposal.

                                       8


<PAGE>

Indemnity

     Pursuant to the terms of the Purchase Agreement, the Issuer, on the one
hand, and the Purchaser, on the other hand (each of the Issuer and Purchaser
being referred to herein as an "Indemnitor"), have agreed to indemnify the other
for breach of the representations, warranties and covenants under the Purchase
Agreement. No indemnity payment will be made unless, after the resolution of all
claims for indemnity, the aggregate of all amounts for which indemnity would
otherwise be owed by such Indemnitor exceeds $110,000, and then, the Indemnitor
will be liable for the entire amount, including the first $110,000. An
Indemnitor is required to pay its indemnity obligations initially by the payment
of up to an aggregate of $1 million in cash and then by delivery of shares of
Common Stock. The maximum amount that any Indemnitor shall pay the other is
$17,000,000.

Termination

     The transactions contemplated by the Securities Purchase may be terminated
under the following limited circumstances:

     1. By mutual written agreement of Issuer and Purchaser;

     2. By Issuer or Purchaser if the Securities Purchase is not consummated on
or before June 30, 2000; provided, however, that if the closing has not been
consummated on or before June 30, 2000 because the Issuer has been involved in
negotiations regarding Another Transaction, then the date on which Issuer shall
be permitted to terminate the Purchase Agreement will be extended for a number
of days equal to the number of days between the date that Issuer gives notice to
Purchaser of the receipt of the proposal relating to Another Transaction and the
date that negotiations regarding Another Transaction are terminated or Issuer
enters into any letter of intent, agreement in principle, acquisition agreement,
merger agreement or other similar agreement related to Another Transaction;

     3. By Issuer or Purchaser (if the terminating party is not then in material
breach of its obligations under the Purchase Agreement) if (i) a material
default or breach is made by the other party with respect to the due and timely
performance of any of its covenants and agreements contained under the Purchase
Agreement and such default cannot be cured within 30 days, or (ii) if any of the
other party's representations and warranties (a) made without any materiality
standard, are not true and correct in all material respects as of the date the
Purchase Agreement was executed and as of the closing date or (b) made with any
materiality standard, are not true and correct in all respects as of the date
the Purchase Agreement was executed and as of the closing date;

     4. By Issuer or Purchaser is there is any law or regulation that makes
consummation of the transactions contemplated by the Purchase Agreement illegal
or otherwise prohibited or if consummation of the transactions contemplated by
the Purchase Agreement would violate any nonappealable, final order, decree or
judgment of any court or governmental body having competent jurisdiction; or


                                       9
<PAGE>

     5. By Issuer or Purchaser (a) if Issuer enters into any letter of intent,
agreement in principle, acquisition agreement, merger agreement or other similar
agreement related to Another Transaction, (b) if Issuer is the subject of a
tender or exchange offer by a person other than the Purchaser ("Other Tender
Offer") or (c) prior to the closing, any person or group (as defined under
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) will have
become the beneficial owner of more than 35% of the outstanding shares of Common
Stock ("Change of Control").

     If the Purchase Agreement is terminated because there has been a material
default or breach by one of the parties with respect to the due and timely
performance of any of its obligations which cannot be cured within 30 days, or
there has been any breach of any representation or warranty in a material
respect, then the non-terminating party shall be liable for all damages incurred
or suffered by the terminating party as a result of such failure or breach.

     If the Purchase Agreement is terminated because (i) Issuer enters into any
letter of intent, agreement in principle, acquisition agreement, merger
agreement or other similar agreement related to Another Transaction, (ii) Issuer
is subject to an Other Tender Offer or (iii) prior to the closing, there is a
Change of Control, Issuer will pay Purchaser a sum of $850,000 ("Termination
Fee"). The Termination Fee will be payable as follows: (A) in the event of a
termination by reason of (i), above, Issuer will pay Purchaser $200,000 of the
Termination Fee upon the signing of any letter of intent, agreement in
principle, acquisition agreement, merger agreement or other similar agreement
related to Another Transaction and $650,000 on the earlier of the consummation
of Another Transaction or July 31, 2000; or (B) in the event of a termination by
reason of an Other Tender Offer or Change of Control, Issuer will pay Purchaser
the entire Termination Fee on the consummation of an Other Tender Offer or
Change of Control if the Other Tender Offer or Change of Control occurs within
twelve months of such termination.

Warrants to be Issued to Third Parties

     Upon the closing of the Securities Purchase, Perry Scheer, Arthur Reynolds,
Peter Miller and Robert Whitehouse will receive Warrants to purchase an
aggregate of 600,000 shares of Common Stock in consideration for their services
rendered in connection with the transactions contemplated by the Purchase
Agreement. In addition, Jon Kilik will receive Warrants to purchase 75,000
shares of Common Stock in consideration for consenting to the assignment by
Purchaser to Issuer of a certain first look agreement. All of these Warrants
will be identical to the Warrants to be issued to the Purchaser in connection
with the Securities Purchase.



                                       10


<PAGE>



Item 7. Financial Statements, Pro Forma Financial Statements and Exhibits

         (c)      Exhibits

        Exhibit Number        Description

          3.3            Certificate of Designations for Series A Preferred
                         Stock*

          4.8            Form of Warrant*

         10.35           Securities Purchase Agreement, dated May 3, 2000,
                         between the Issuer and the Purchaser*

         10.36           Assignment and Assumption Agreement between the Issuer
                         and Purchaser*

         10.37           Amended and Restated 1996 Special Stock Option Plan and
                         Agreement among Robert Little, Ellen Little and the
                         Issuer*

         10.38           Stock Option Agreement between the Issuer and William
                         Lischak*

         10.39           Amended and Restated Employment Agreement between
                         Robert Little and the Issuer*

         10.40           Amended and Restated Employment Agreement between
                         William Lischak and the Issuer*

         10.41           Employment Agreement between Christopher Cooney and the
                         Issuer*

         10.42           Employment Agreement between Jeffrey Cooney and the
                         Issuer*

         10.43           First Look Agreement between The Little Film Company,
                         Inc. and the Issuer*

         10.44           Note and Debt Contribution Agreement among Robert
                         Little, Ellen Little and the Issuer*

         10.45           Management Letter between each of Robert Little and
                         Ellen Little and the Issuer*

         10.46           Voting Agreement among the Issuer, Purchaser, Robert
                         Little, Ellen Little, MRCo., Inc., Christopher Cooney
                         and Jeffrey Cooney*

         99.1            Press release of the Issuer dated May 5, 2000


- -----------------------

*        To be filed by amendment.


                                       11


<PAGE>



                                   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.

Dated:  May 9, 2000                     OVERSEAS FILMGROUP, INC.

                                             /s/ William F. Lischak
                                        By: ______________________________
                                            William F. Lischak
                                            Chief Operating Officer and Chief
                                            Financial Officer


                                       12


<PAGE>



                                  EXHIBIT INDEX

       Exhibit Number        Description
       --------------        -----------

          3.3            Certificate of Designations for Series A Preferred
                         Stock*

          4.8            Form of Warrant*

         10.35           Securities Purchase Agreement, dated May 3, 2000,
                         between the Issuer and the Purchaser*

         10.36           Assignment and Assumption Agreement between the Issuer
                         and Purchaser*

         10.37           Amended and Restated 1996 Special Stock Option Plan and
                         Agreement among Robert Little, Ellen Little and the
                         Issuer*

         10.38           Stock Option Agreement between the Issuer and William
                         Lischak*

         10.39           Amended and Restated Employment Agreement between
                         Robert Little and the Issuer*

         10.40           Amended and Restated Employment Agreement between
                         William Lischak and the Issuer*

         10.41           Employment Agreement between Christopher Cooney and the
                         Issuer*

         10.42           Employment Agreement between Jeffrey Cooney and the
                         Issuer*

         10.43           First Look Agreement between The Little Film Company,
                         Inc. and the Issuer*

         10.44           Note and Debt Contribution Agreement among Robert
                         Little, Ellen Little and the Issuer*

         10.45           Management Letter between each of Robert Little and
                         Ellen Little and the Issuer*

         10.46           Voting Agreement among the Issuer, Purchaser, Robert
                         Little, Ellen Little, MRCo., Inc., Christopher Cooney
                         and Jeffrey Cooney*

         99.1            Press release of the Issuer dated May 5, 2000



- -----------------------

* To be filed by amendment.

                                       13





                                                           EXHIBIT 99.1

FOR IMMEDIATE RELEASE

CONTACT:

Robert L. Rinderman, David C. Collins
Jaffoni & Collins
212-835-8500 / [email protected]

             OVERSEAS FILMGROUP ARRANGES $47 MILLION IN NEW CAPITAL

         - $17 Million Equity Investment From New York Investor Group -

 - $30 Million Five-year Credit Facility Being Syndicated by Chase Securities -

Los Angeles, CA and New York, NY (May 5, 2000) - Worldwide independent film
distributor Overseas Filmgroup, Inc. (OTC BB: OSFG, http:\\www.ofg.com)
announced today that is has signed a definitive agreement with New York investor
group, Rosemary Street Productions, LLC, under which Rosemary Street will make a
$17 million equity investment in the Company. The Company also announced it has
secured a commitment from Chase Securities, Inc. to arrange and syndicate a $30
million five-year, secured revolving credit facility. The Chase facility will
primarily be utilized to refinance indebtedness under an existing credit
facility; to finance the production and/or acquisition of theatrical, video and
television motion pictures; for working capital; and for other general corporate
purposes. The transactions are subject to customary closing conditions.

Rosemary Street Productions will own 59.5% of the outstanding voting shares of
Overseas Filmgroup through an investment consisting of 5,097,413 shares of
common stock and 904,971 shares of preferred stock (each preferred share is
convertible into two shares of common stock). Rosemary Street will also receive
warrants to purchase an additional 2,313,810 shares of common stock at a price
of $3.40 per share. The Rosemary Street investment was facilitated by Wharton
Capital, a New York based financial consulting and investment banking firm.

Christopher Cooney, President of Rosemary Street Productions, will be appointed
Co-Chairman (sharing that role with Robert Little) and Chief Executive Officer
of Overseas Filmgroup. As co- owner of EUE Screen Gems Ltd., one of the largest
commercial production operations on the east coast, Mr. Cooney has overseen all
of its operations, which include its highly successful television commercial
division, the former DeLaurentiis Studios in Wilmington, North Carolina and
studio facilities in New York City which are home to the long running daytime
drama, "The Guiding Light." Jeffrey Cooney, Creative Director of Rosemary Street
and an accomplished commercial director, will also join Overseas as Executive
Vice President of Creative Affairs. Given the expertise of the Cooneys, Overseas
plans to launch a new commercial production division.

Christopher Cooney, commented, "Jeff and I are very excited about the
opportunities ahead. We see Overseas Filmgroup as the ideal platform for growth



<PAGE>


with its unmatched expertise in the international distribution arena. We are
privileged to join forces with experienced industry professionals like Ellen and
Robbie Little. Together, we intend to build on the existing library by creating
and acquiring quality feature films, further expanding into new media including
the Internet, and broadening the existing distribution infrastructure."

Current co-Chairmen Robbie and Ellen Little commented: "The equity infusion from
Rosemary Street and the credit arrangement with Chase are great developments for
Overseas Filmgroup and our shareholders. Over the past few months we have come
to know and respect Chris and Jeff and believe that their investment and future
management contributions will greatly enhance the Company's potential. Their
addition to the senior management team will allow us to focus our efforts more
fully on opportunities in the acquisition, development, sales and marketing side
of the business."

William Lischak, who initiated and negotiated both the investment and the credit
facility on behalf of the Company, will remain in his present dual role of Chief
Operating Officer and Chief Financial Officer. Barry Minsky, of Wharton Capital,
will join Christopher and Jeffrey Cooney on the new Board of Directors, which
will be increased to nine members from seven with Rosemary Street naming five of
the nine board members. Bannon Vorse & Co. represented Overseas Filmgroup in the
transaction. Robbie Little, Bill Lischak, Steve Bannon and Scot Vorse will each
remain as directors of the Company.

Overseas Filmgroup expanded its new media capabilities through an Internet
distribution arrangement with broadcast.com in July 1999. The agreement included
the acquisition of a 9% equity stake in Overseas by broadcast.com (now Yahoo!,
Inc.). The Company is one of the few truly independent worldwide film
distribution companies specializing in the acquisition, financing, packaging and
distribution of independently produced feature films of all genre. Overseas
Filmgroup films include Titus (directed by Julie Taymor and starring Anthony
Hopkins and Jessica Lange); A Map of the World (starring Sigourney Weaver and
Julianne Moore, and produced by Kathleen Kennedy and Frank Marshall), Waking Ned
Devine (which grossed over $25 million in the U.S. box office ); Antonia's Line
(Academy Award winner for Best Foreign Language Film of 1995); The Prophecy
(starring Christopher Walken and achieving $17 million in U.S. box office);
Guncrazy (directed by Tamra Davis, and starring Drew Barrymore); and The Secret
of Roan Inish (released by First Look Pictures, the film was directed by John
Sayles). The Company's First Look Pictures division specializes in the
theatrical and video release of films in the U.S., and is focused on exploiting
non-theatrical rights and new distribution opportunities.

This press release includes forward-looking statements that involve risks and
uncertainties. Certain factors may cause actual results to differ materially
from those contained in the forward looking statements, including, but not
limited to, quarterly and annual fluctuations in results of operations, the
unpredictability of audience acceptance of any particular motion pictures, the
highly speculative and inherently risky and competitive nature of the motion
picture industry, and other risks detailed from time to time in the Company's
reports filed with the Securities and Exchange Commission including, but not
limited to, its Annual Report on Form 10-K for the year ended December 31, 1999.
As the motion picture business and the Company's operations are subject to
numerous uncertainties, including, among other things in addition to the
forgoing factors, the financing requirements of various film projects,





<PAGE>

competition from companies within the motion picture industry and in other
entertainment media (many of which have significantly greater financial and
other resources than the Company), and the release schedule of competing films,
no assurance can be given that the Company's acquisition, production, financing
and distribution goals and strategies (including as described herein) will be
achieved. Actual results may differ materially from management expectations
expressed in any forward-looking statements.

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