UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS TO BE FILED PURSUANT
TO RULE 13D-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13D-2(a)
(Amendment No. )*
OVERSEAS FILMGROUP, INC.
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(Name of Issuer)
Common Stock, par value $.001 per share
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(Title of Class of Securities)
690337 10 0
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(CUSIP Number)
Barry R. Minsky
Wharton Capital Partners Ltd.
545 Madison Avenue
New York, New York 10022
Telephone: (212) 765-6777
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(Name, Address and Telephone Number of Persons Authorized
to Receive Notices and Communications)
July 27, 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 which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box |_|
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7 for other parties
to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information that 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).
<PAGE>
CUSIP No. 690337 10 0 13D Page 2 of 8 Pages
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1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Barry R. Minsky
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a) |_|
(b) |_|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS (SEE INSTRUCTIONS)
NOT APPLICABLE - See Item 3
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5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e)
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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7 SOLE VOTING POWER
985,735 Shares
NUMBER OF ---------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY -0-
EACH ---------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH 985,735 Shares
---------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
985,735 Shares
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12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(SEE INSTRUCTIONS)
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.8%
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14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
IN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
CUSIP No. 690337 10 0 13D Page 3 of 8 Pages
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1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Wharton Capital Partners Ltd.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a) |_|
(b) |_|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS (SEE INSTRUCTIONS)
OO - See Item 3
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5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e)
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
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7 SOLE VOTING POWER
690,735 Shares
---------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY -0-
OWNED BY ---------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 690,735 Shares
WITH ---------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
690,735 Shares
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12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(SEE INSTRUCTIONS)
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.0%
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14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
CUSIP No. 690337 10 0 13D Page 4 of 8 Pages
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Item 1. Securities and Issuer
The class of equity securities to which this statement relates is the
Common Stock, par value $.001 per share, of Overseas Filmgroup, Inc. ("Issuer"),
a Delaware corporation, whose principal executive offices are located at 8800
Sunset Boulevard, Third Floor, Los Angeles, California 90069.
The percentage of beneficial ownership reflected in this Schedule 13D
is based upon 9,803,906 shares of Common Stock outstanding on November 20, 2000,
as set forth in the Issuer's Quarterly Report on Form 10-Q for the quarter ended
September 30, 2000.
Item 2. Identity and Background
This statement is filed on behalf of Barry R. Minsky ("Minsky") and
Wharton Capital Partners Ltd. ("Wharton Capital"). Minsky and Wharton Capital
are collectively referred to as the "Reporting Persons."
Minsky is the Chief Executive Officer of, and owns a 50% interest in,
Wharton Capital. Wharton Capital is a New York-based investment banking firm
which, along with its partners, facilitates financing for public companies and
institutional clients. Minsky's and Wharton Capital's business address is 545
Madison Avenue, New York, New York 10022.
Minsky is a citizen of the United States. Wharton Capital is a
corporation organized and existing under the laws of the State of New York.
Minsky is a director of the Issuer. Minsky became a director on June
20, 2000 pursuant to the terms of a securities purchase agreement, dated May 3,
2000, between the Issuer and Rosemary Street Productions, LLC ("Rosemary
Street").
None of the Reporting Persons has been convicted in any criminal
proceeding (excluding traffic violations or similar misdemeanors) during the
last five years.
None of the Reporting Persons has been a party to any civil proceeding
of a judicial or administrative body of competent jurisdiction resulting in any
judgment, decree or final order enjoining it from engaging in future violations
of, or prohibiting or mandating activities subject to, federal or state
securities laws or finding any violation with respect to such laws during the
last five years.
Item 3. Source and Amount of Funds or Other Consideration
On July 27, 2000, Wharton Capital entered into an agreement
("Agreement") with Rosemary Street, EUE/Screen Gems, Ltd. ("EUE") and MRCo.,
Inc. ("MRCo."), pursuant to which Rosemary Street agreed to redeem Wharton
Capital's 10% Membership Interest (as such term is defined in a Limited
Liability Company Operating Agreement, dated August 20, 1999, among Rosemary
Street, Wharton Capital, EUE and MRCo.) in Rosemary Street. In exchange for this
redemption, Rosemary Street transferred 690,735 of its shares of the Issuer's
Common Stock to Wharton Capital. Upon this redemption, Wharton Capital's
Membership Interest in Rosemary Street was reduced from 10% to 0%.
Minsky did not acquire or dispose of any securities of the Issuer and
is only being reported in this Schedule 13D for his beneficial ownership in
Wharton Capital's interest.
<PAGE>
CUSIP No. 690337 10 0 13D Page 5 of 8 Pages
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Item 4. Purpose of Transactions
Wharton Capital acquired the securities specified in Item 5(c) of this
Schedule 13D in consideration for the redemption of Wharton Capital's Membership
Interest in Rosemary Street as described in Item 3 above. The Reporting Persons
may undertake one or more of the actions set forth below.
(a) Each of the Reporting Persons may acquire additional securities
from time to time in the market or in private transactions. Minsky owns warrants
to purchase an additional 200,000 shares of the Issuer's Common Stock and
Minsky's spouse owns warrants to purchase an additional 95,000 shares of the
Issuer's Common Stock (collectively, the "Warrants"). The Warrants are
immediately exercisable at an initial exercise price of $3.40 per share and
expire on June 19, 2005.
In October 2000, the Issuer entered into a consulting agreement with
Wharton Capital. The agreement provides for the Issuer to pay Wharton Capital an
initial fee of $100,000 upon signing the agreement and $4,166 per month for a
twenty-four month period. If Wharton Capital introduces the Issuer to a
financing source and the Issuer consummates any public or private equity and/or
debt financing with the source during the term of the consulting agreement or
during the two-year period following the expiration of the agreement, then the
Issuer also will pay Wharton Capital an amount equal to (i) 5% of all funds
received by the Issuer from any public or private equity financing and (ii) 3%
of all funds received by the Issuer from any public or private debt financing.
Additionally, upon completion of an equity based financing, the Issuer will
issue to Wharton Capital warrants to purchase shares of the Issuer's Common
Stock equal to 5% of the amount of financing at an exercise price equal to 120%
of the five-day average closing bid price prior to closing. The warrants will be
exercisable on a cashless basis and will have registration rights.
Other than the agreement described above and except that Minsky in the
future may be issued options to purchase additional shares of the Issuer's
Common Stock under the Issuer's 1996 Basic Stock Option and Stock Appreciation
Rights Plan for serving as a non-employee director of the Issuer, none of the
Reporting Persons has any agreements to acquire any additional Common Stock at
this time.
(b) The Reporting Persons and the directors of the Issuer designated
by the Reporting Persons may cause the Issuer to pursue a business objective of
identifying one or more operating businesses for acquisition and completing one
or more mergers or other business combinations with such business or businesses.
The Reporting Persons have not identified at this time any business for
acquisition and have no agreements or arrangements for a merger or other
business combination.
(c) The Reporting Persons and the directors of the Issuer designated
by the Reporting Persons may cause the Issuer to engage in offerings of its
securities for the purpose of raising additional working capital.
(d) In connection with the transfer of the shares of Common Stock
reported in this Schedule 13D from Rosemary Street to Wharton Capital, Wharton
Capital and the Issuer entered into an agreement pursuant to which Wharton
Capital acknowledged and agreed to be subject to the terms of a Voting Agreement
described in Item 6 below. Wharton Capital also accepted the obligations of the
Voting Agreement as they relate to the shares of Common Stock and will have the
same rights under the Voting Agreement that Rosemary Street had with respect to
the shares as to any nominations and appointments of directors.
<PAGE>
CUSIP No. 690337 10 0 13D Page 6 of 8 Pages
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As a director of the Issuer, Minsky is involved in making material
business decisions regarding the Issuer's policies and practices.
Notwithstanding the foregoing, except as discussed above and in the ordinary
course as a director of the Issuer, the Reporting Persons do not have any plans
or proposals to effect any material change in the present capitalization or
dividend policy of the Issuer, cause any other material change in the Issuer's
business or corporate structure, cause any changes in the Issuer's charter or
bylaws or other actions that may impede the acquisition of control of the Issuer
by any person, cause a class of securities of the Issuer to be delisted from a
national securities exchange or to cease to be authorized to be quoted on an
inter-dealer quotation system of a registered national securities association,
cause a class of equity securities of the Issuer to become eligible for
termination of registration pursuant to Section 12(g)(4) of the Securities
Exchange Act of 1934, or take any other action similar to any of those
enumerated above.
Item 5. Interest in Securities of the Issuer
(a) - (b)Minsky is the beneficial owner of 985,735 shares of Common
Stock of the Issuer. This amount represents 690,735 shares of Common Stock owned
by Wharton Capital, of which Minsky is the Chief Executive Officer and owns a
50% interest, 200,000 shares of Common Stock issuable upon exercise of currently
exercisable warrants held by Minsky and 95,000 shares of Common Stock issuable
upon exercise of currently exercisable warrants held by Minsky's spouse.
Minsky's beneficial ownership excludes options not yet exercisable for 5,000
shares of Common Stock. Minsky in the future may be issued options to purchase
additional shares of the Issuer's Common Stock under the Issuer's 1996 Basic
Stock Option and Stock Appreciation Rights Plan for serving as a non-employee
director of the Issuer. Minsky has sole voting and dispositive power over the
985,735 shares. Minsky is the beneficial owner of 9.8% of the Issuer's
outstanding shares of Common Stock.
Wharton Capital is the beneficial owner of 690,735 shares of Common
Stock of the Issuer. Wharton Capital has sole voting and dispositive
power over such shares. Wharton Capital beneficially owns 7.0% of the Issuer's
outstanding shares of Common Stock.
(c) On July 27, 2000, Wharton Capital entered into an Agreement with
Rosemary Street, EUE and MRCo., pursuant to which Rosemary Street agreed to
redeem Wharton Capital's 10% Membership Interest in Rosemary Street. In exchange
for this redemption, Rosemary Street transferred 690,735 shares of the Issuer's
Common Stock to Wharton Capital. Upon this redemption, Wharton Capital's
Membership Interest in Rosemary Street was reduced from 10% to 0%.
Item 6. Contracts, Arrangements, Understandings or Relationships
with Respect to the Securities of the Issuer
On July 27, 2000, Wharton Capital entered into the agreements referred
to in Items 4(d) and 5(c) above. Pursuant to these agreements, Wharton Capital
accepted the obligations of a voting agreement ("Voting Agreement"), dated as of
June 20, 2000, by and among the Issuer, Rosemary Street, Robert Little, Ellen
Little (together with Robert Little, referred to as the "Littles"), MRCo.,
Christopher J. Cooney ("C. Cooney") and Jeffrey Cooney ("J. Cooney"), as they
relate to the shares of Common Stock and shall have the same rights under the
Voting Agreement that Rosemary Street had with respect to the shares as to any
nominations and appointment of directors. The Voting Agreement provides that:
(i) so long as Robert Little is employed as President of the Issuer or the
Littles own no less than 5% of the Issuer's issued and outstanding voting
securities, Rosemary Street will nominate and vote for Mr. Little to serve as a
<PAGE>
CUSIP No. 690337 10 0 13D Page 7 of 8 Pages
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member of the Issuer's board of directors; (ii) so long as C. Cooney and J.
Cooney own, in the aggregate, directly or indirectly, no less than 5% of the
Issuer's issued and outstanding voting securities, the Littles and other members
of Rosemary Street will vote for C. Cooney and J. Cooney to serve as members of
the Issuer's board of directors; and (iii) so long as MRCo. owns no less than 5%
of the Issuer's issued and outstanding voting securities, the Littles and other
members of Rosemary Street will vote for Joseph Linehan to serve as a member of
the Issuer's board of directors. The Voting Agreement further provides that if
the size of the Issuer's board of directors is increased from nine members to
eleven members prior to June 20, 2002, Rosemary Street has the right to nominate
for election or appoint as directors the two persons to fill the vacancies
created by the increase. The Littles have agreed to vote all of their voting
securities of the Issuer for the election of Rosemary Street's two nominees in
this situation.
On October 1, 2000, the Issuer entered into a financial consulting
agreement with Wharton Capital described in Item 4(a) above.
Item 7. Material to be Filed as Exhibits
1. Joint Filing Agreement
2. Agreement, dated July 27, 2000, by and among Wharton Capital
Partners Ltd., Rosemary Street Productions, LLC, EUE/Screen
Gems, Ltd. and MRCo., Inc.
3. Letter Agreement, dated as of July 27, 2000, between the
Issuer and Wharton Capital Partners Ltd.
4. Voting Agreement among the Issuer, Rosemary Street, Robert
Little, Ellen Little, MRCo., Inc., C. Cooney and J. Cooney
(incorporated by reference from Exhibit 10.46 of the
Issuer's Current Report on Form 8-K/A filed on June 29,
2000).
5. Form of Consulting Agreement, dated October 1, 2000, between
the Issuer and Wharton Capital Partners Ltd.
<PAGE>
CUSIP No. 690337 10 0 13D Page 8 of 8 Pages
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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: November 15, 2000
WHARTON CAPITAL PARTNERS LTD.
By: /s/ Barry R. Minsky
-----------------------------------------
Name: Barry R. Minsky
Title: Chief Executive Officer
/s/ Barry R. Minsky
---------------------------------------------
Barry R. Minsky
<PAGE>
EXHIBIT 1
JOINT FILING AGREEMENT
AGREEMENT dated as of November 15, 2000, among Wharton Capital
Partners Ltd. and Barry R. Minsky (collectively, the "Parties").
Each of the Parties hereto represents to the other Parties that it is
eligible to use Schedule 13D to report its beneficial interest in shares of
common stock, par value $.001 per share, of Overseas Filmgroup, Inc. ("Schedule
13D") and it will file the Schedule 13D on behalf of itself.
Each of the Parties agrees to be responsible for the timely filing of
the Schedule 13D and any and all amendments thereto and for the completeness and
accuracy of the information concerning itself contained in the Schedule 13D, and
the other Parties to the extent it knows or has reason to believe that any
information about the other Parties is inaccurate.
WHARTON CAPITAL PARTNERS LTD.
By: /s/ Barry R. Minsky
-----------------------------------------
Name: Barry R. Minsky
Title: Chief Executive Officer
/s/ Barry R. Minsky
---------------------------------------------
Barry R. Minsky
<PAGE>
EXHIBIT 2
ROSEMARY STREET PRODUCTIONS, LLC
222 East 44th Street
New York, NY 10017
July 27, 2000
Wharton Capital Partners Ltd.
545 Madison Avenue
New York, NY 10022
Attention: Barry Minsky
Dear Barry:
Reference is made to that certain Limited Liability Company Operating
Agreement (as amended, the "Operating Agreement") dated August 20, 1999 by and
among Rosemary Street Productions, LLC ("RSP"), Wharton Capital Partners Ltd.
("Wharton"), EUE/Screen Gems, Ltd. and MRCo., Inc. RSP hereby agrees to redeem
Wharton's Membership Interest (as defined in the Operating Agreement) in RSP,
effective immediately (the "Redemption").
Upon the Redemption, Wharton's Membership Interest in RSP shall
entitle it to receive 690,735 shares of common stock of Overseas Filmgroup, Inc.
(the "Shares"), which are held by RSP. Upon Wharton's receipt of the Shares,
Wharton's Membership Interest shall be reduced from 10% to 0%.
Due to alterations in Exhibit C to the Operating Agreement because of
the Redemption, the attached new Exhibit C reflects the current Membership
Interests in RSP.
Very truly yours,
ROSEMARY STREET PRODUCTIONS, LLC
By:/s/ Christopher Cooney
----------------------------------
Christopher Cooney, Manager
Accepted and Agreed:
WHARTON CAPITAL PARTNERS LTD.
By: /s/ Barry R. Minsky, C.E.O.
--------------------------------
Name: Barry R. Minsky
Title: Chief Executive Officer
EUE/SCREEN GEMS, LTD.
By: /s/ Christopher J. Cooney
----------------------------------------------------
Name: Christopher J. Cooney
Title: Senior Vice President
MRCO., INC.
By: /s/ Joseph R. Linehan
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Name: Joseph R. Linehan
Title:
<PAGE>
Members and Capital Contribution
Initial Units of
Capital Membership
Member Contribution Interest
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Name: EUE/Screen Gems, Ltd.
Address: 222 East 44th Street $6,000,000 79.62778%
New York, NY 10017
Attention: Christopher Cooney
Name: MRCo., Inc.
Address: 111 Massachusetts Avenue, N.W. $11,000,000 20.3722%
Washington, D.C. 20001
Attention: Michael Stead
Total: $17,000,000 100%
<PAGE>
EXHIBIT 3
OVERSEAS FILMGROUP, INC.
8800 Sunset Boulevard, Third Floor
Los Angeles, California 90069
As of July 27, 2000
Wharton Capital Partners Ltd.
545 Madison Avenue
New York, New York 10022
Ladies and Gentlemen:
Reference is made to Section 2 of the Voting Agreement, dated as of
June 20, 2000, by and among Overseas Filmgroup, Inc. ("Company"), Rosemary
Street Productions, LLC ("Rosemary Street"), Robert Little, Ellen Little, MRCo.,
Inc., Christopher J. Cooney and Jeffrey Cooney ("Voting Agreement"). Capitalized
terms used herein and not otherwise defined shall have the same meaning as set
forth in the Voting Agreement.
In consideration for the Company agreeing to effect the transfer on
its books and records from Rosemary Street to Wharton Capital Partners Ltd.
("Wharton Capital") of 690,735 shares of the Company's common stock ("Shares")
in connection with the redemption of Wharton Capital's membership interest in
Rosemary Street, Wharton Capital hereby acknowledges and agrees to be subject to
the terms of the Voting Agreement as if it were Rosemary Street. Accordingly,
Wharton Capital hereby accepts the obligations of the Voting Agreement as they
relate to the Shares and shall have the same rights under the Voting Agreement
that Rosemary Street had with respect to the Shares as to any nominations or
appointments of directors.
OVERSEAS FILMGROUP, INC.
By: /s/ William F. Lischak
-----------------------------------
Name: William F. Lischak
Title: Chief Financial Officer and
Chief Operating Officer
AGREED AND ACCEPTED:
WHARTON CAPITAL PARTNERS, LTD.
By: /s/ Barry R. Minsky
------------------------------
Name: Barry R. Minsky
Title: Chief Executive Officer
<PAGE>
EXHIBIT 5
October 1, 2000
Mr. Chris Cooney
Chief Executive Officer
Overseas Filmgroup, Inc.
222 E. 44th Street
New York, NY 10017
Dear Chris:
We are pleased to set forth the terms of the retention of Wharton Capital
Partners Ltd. ("Wharton") by Overseas Filmgroup, Inc. (collectively with its
subsidiaries and affiliates the "Company").
1. Wharton will assist the Company as a non-exclusive financial
consultant in connection with the following types of transactions that
it introduces to the Company:
Equity and debt financings, private placements and secondary public
offerings both in the United States and outside the United States
("Covered Transactions").
2. In connection with Wharton's activities on the Company's behalf, the
Company will cooperate with Wharton and will furnish Wharton all
information and data concerning the Company, the Company's financing
requirements, financing strategies and to extent available, access to
the Company's officers, directors, employees independent accountants
and legal counsel. The Company represents and warrants that it will
use its best efforts to ensure that all information made available to
Wharton will at all times during the period of engagement by Wharton
hereunder be complete and correct in all material respects and will
not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein not
misleading or fail to state any facts or circumstances of a material
nature and will notify Wharton in writing of any changes or
developments which might render any information previously made
available to Wharton by the Company not correct in any material
respect.
The Company acknowledges and agrees that in rendering its services
hereunder, Wharton will be using and relying on the information
provided by the Company without independently verifying the accuracy,
completeness or veracity of same.
Page 1 of 5
<PAGE>
3. This agreement shall be effective for a period of twenty-four months
commencing on the date hereof. Any fees payable to Wharton under
Paragraph 4(b) and 4(c) hereof shall apply to any Covered Transaction
that is consummated by the Company either during the term of this
agreement or during the two-year period following the expiration of
this agreement with any party that was introduced to the Company by
Wharton during the term of the agreement. A party shall be deemed
"introduced" to the Company by Wharton if Wharton has arranged a
meeting (whether in person or by telephone) between the Company and
such party.
4. In consideration for the services rendered by Wharton to the Company
pursuant to this agreement (and in addition to the expenses provided
for in paragraph 5 hereunder) the Company shall compensate Wharton as
follows:
a) A non-refundable initial fee of $100,000 will be payable upon
signing this agreement and a monthly fee of $4,166 per month
thereafter (payable on the first business day of each month) for
the twenty-four (24) month term.
b) (i) Five percent (5%) of all funds received by the Company from
any equity financing (whether public or private), which fee will
be paid at closing.
(ii) Three percent (3%) of all funds received by the Company from
any debt financing (whether public or private), which fee will be
paid at closing.
c) Additionally, upon completion of an equity financing, Wharton
shall receive cashless warrants to purchase fully registered
shares of stock of the Company equal to 5% of the amount of
financing at a strike price equal to 120% of the five day average
closing bid price prior to closing.
5. In addition to the fees payable hereunder, the Company shall reimburse
Wharton for all reasonable fees and disbursements of Wharton including
business class travel and out-of-pocket expenses incurred in
connection with the services performed by Wharton pursuant to this
Agreement, including hotel, food and associated expenses. If expenses
exceed $2,500 Wharton must receive Company approval.
6. (a) The Company acknowledges that all opinions and consulting
assistance (written or oral) given by Wharton to the Company in
connection with Wharton's engagement are intended solely for the
benefit and use of the Company in considering the transaction to which
they relate, and the Company agrees not to divulge such opinions to
others and that no person or entity other than the Company shall be
entitled to make use of or rely upon the assistance of Wharton to be
given hereunder.
(b) The Company acknowledges that Wharton has not made and makes no
commitment or guarantees whatsoever relating to company
transactions.
Page 2 of 5
<PAGE>
7. (a) The Company acknowledges that the relationships between Wharton
and the persons and/or entities to be introduced to the Company for
the purposes contemplated by this agreement are proprietary to Wharton
and essential to its business. Accordingly, the Company agrees, to
keep the names of investors introduced to the Company by Wharton
confidential, except for SEC reporting purposes or if legally
required. In addition, during the term of this Agreement and for a
three-year period thereafter, neither the Company, nor any of its
officers directors or other representatives, will contact, either
directly or indirectly, any sources introduced to the Company by
Wharton hereunder for the purpose of arranging any future financing
for the Company or any of its affiliates, without the express written
consent of Wharton and without compensation to Wharton as per the
terms of this agreement. The Company also agrees not to issue any
press releases relating to such financings without the prior review of
Wharton.
Not with standing the foregoing paragraph but subject,
nevertheless, to the provisions of paragraph 3 and 4 above, if the
Company has already closed a financing with a source introduced by
Wharton they may contact the source directly without written consent.
The Company may disclose to its representative and advisors the names
of the investors introduced to the Company by Wharton as long as they
agree to be bound by the confidentiality provisions herein and to the
terms of paragraph 7(a) of this agreement. The Company may also
disclose to third parties the names of any names party that was
introduced to the Company by Wharton that has been made public;
otherwise, only if such third party agrees to be by bound by the
confidentiality provisions herein and the terms of paragraph 7(a) of
this agreement, or upon the consent of Wharton, which consent shall
not be unreasonably withheld.
(b) The Company acknowledges that Wharton or its affiliates
are in the business of providing consulting services and
consulting with others, and Wharton agrees that it will use
its reasonable efforts not to engage in any conflicting
arrangements with any competitors of the Company or its
affiliates (which have been specified by the Company prior
hereto) during the term of its engagement with the Company.
8. The Company agrees to indemnify and hold harmless Wharton, its
affiliates, officers, directors, members, partners, agents,
controlling persona and employees (collectively, " Wharton
Affiliates") from and against any and all losses, claims, expenses,
damages or liabilities, including expenses and legal fees
(collectively, "Losses") suffered or incurred by Wharton or by Wharton
Affiliates, as a result of the breach or default by the Company of any
of its obligations under this agreement. The Company further agrees,
in consideration of Wharton's consulting services as set forth above,
that the Company will indemnify and hold harmless Wharton, and Wharton
Affiliates from any Losses suffered or incurred by Wharton or by
Wharton Affiliates in connection with or as a result of either its
engagement hereunder or any matter referred to in this engagement
letter (except to the extent that any such Losses result from the
gross negligence or bad faith of Wharton performing the services that
are the subject of this letter). The Company agrees that it will
Page 3 of 5
<PAGE>
reimburse Wharton and such other indemnified parties listed above for
its and their legal and other expenses as they are incurred. This
Agreement is being entered into in reliance on the indemnity set forth
herein. Wharton agrees to indemnify the Company for Losses incurred as
a result of gross negligence by Wharton in performing its services in
connection with this agreement.
9. Wharton shall perform its services hereunder as an independent
contractor and not as an employee of the Company or an affiliate
thereof. It is expressly understood and agreed by the parties hereto
that Wharton shall have no authority to act for, represent or bind the
Company or any affiliate thereof in any manner, except as may be
agreed to expressly by the Company in writing from time to time.
10. a) This agreement shall constitute the entire agreement and
understanding of the parties hereto, and supersedes any and all
previous agreements and understandings, whether oral or written,
between the parties with respect to the matters set forth herein.
b) Any notice or communication permitted or required hereunder shall
be in writing and shall be deemed sufficiently given if
hand-delivered or sent (i) postage prepaid by registered mail,
return receipt requested, or (ii) by facsimile, to the respective
parties as set forth below, or to such other address as either
party may notify the other of in writing:
If to the Company, to: Overseas Filmgroup, Inc.
222 E. 44th Street
New York, NY 10016
Attn: Mr. Chris Cooney
Chief Executive Officer
If to Wharton, to: Wharton Capital Partners Ltd.
545 Madison Avenue
New York, NY 10022
Attn: Barry R. Minsky
Chief Executive Officer
c) This Agreement shall be binding upon and inure to the benefit of
each of the parties hereto and their respective successors, legal
representatives and permitted assigns. Neither party will assign
this Agreement without the approval of the other provided,
however, that the Company may assign this agreement and the
benefits and burdens hereunder to any entity acquiring all or the
assets or stock of the Company provided such assignee expressly
agrees in writing to be bound by all of the terms and conditions
hereunder applicable to the Company.
Page 4 of 5
<PAGE>
d) This Agreement may be executed in any number of counterparts, all
of which together shall constitute one and the same original
document.
e) No provision of this Agreement may be amended, modified or
waived, except in writing signed by all of the parties hereto.
f) This Agreement shall be construed in accordance with and governed
by the laws of the State of New York without respect to
principles of conflicts of laws. Each party hereto hereby
irrevocably submits to the exclusive jurisdiction of the courts
of New York located in the borough of Manhattan with respect to
any matters arising hereunder and waive any claim that such forum
is an inconvenient forum.
If the foregoing correctly sets forth the understanding between Wharton and the
Company with respect to the foregoing, please so indicate your agreement by
signing in the place provided below, at which time this letter shall become a
binding contract.
Wharton Capital Partners Ltd.
Agreed and Accepted:
Overseas Filmgroup, Inc.
By: ___________________________
By: ___________________________
Authorized Signature
------------------------
Name & Title
-------------------------
Date
