In a large bowl, combine the egg, 1/3 cup spaghetti sauce, bread crumbs, salt and pepper. Crumble beef over mixture and mix well.
On a piece of heavy-duty foil, pat beef mixture into a 12-in. x 8-in. rectangle. Sprinkle 1 cup cheese and parsley to within 1 in. of edges. Roll up jelly-roll style, starting with a long side and peeling foil away while rolling. Seal seam and ends. Place seam side down in a greased 13-in. x 9-in. baking dish.
Bake, uncovered, at 350° for 1 hour; drain. Unroll crescent dough; seal seams and perforations. Drape dough over meat loaf to cover the top, sides and ends; seal ends. Bake for 14-18 minutes or until a thermometer reads 160° and crust is golden brown. Sprinkle with remaining cheese; bake 1 minute longer. Let stand for 5 minutes.
Using two large spatulas, carefully transfer meat loaf to a serving platter. Serve with remaining spaghetti sauce. Yield: 8 servings.