TELESPECTRUM WORLDWIDE INC, S-1/A, 1996-07-01

TELESPECTRUM WORLDWIDE INC
S-1/A, 1996-07-01
BUSINESS SERVICES, NEC

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE , 1996

FILE NO. 333-04349
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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

AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

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

TELESPECTRUM WORLDWIDE INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE 7389 23-2845501
(STATE OR OTHER (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
JURISDICTION OF CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
INCORPORATION OR
ORGANIZATION)

443 SOUTH GULPH ROAD
KING OF PRUSSIA, PA 19406
(610) 962-5140
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

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

J. BRIAN O'NEILL
Chairman of the Board and Chief Executive Officer
TeleSpectrum Worldwide Inc.
443 South Gulph Road
King of Prussia, PA 19406
(610) 962-5140
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)

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

Copies to:

THOMAS J. SHARBAUGH BARRY M. ABELSON
DAVID A. GERSON BRIAN M. KATZ
Morgan, Lewis & Bockius LLP Pepper, Hamilton & Scheetz
2000 One Logan Square 3000 Two Logan Square
Philadelphia, Pennsylvania 19103-6993 18th & Arch Streets
(215) 963-5000 Philadelphia, Pennsylvania 19103-2799
(215) 981-4000

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after this registration statement becomes effective.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_] ___________________

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_] __________________

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]

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

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
================================================================================

<PAGE>

CROSS-REFERENCE SHEET

LOCATION IN PROSPECTUS
OF INFORMATION REQUIRED BY PART I
OF FORM S-1

<TABLE>
<CAPTION>
ITEM NO. CAPTION LOCATION IN PROSPECTUS
-------- ------- ----------------------
<C> <S> <C>
1. Forepart of the Registration
Statement and Outside Front
Cover Page of Prospectus... Outside Front Cover Page
2. Inside Front and Outside
Back Cover Pages of
Prospectus................. Inside Front and Outside Back Cover
3. Summary Information, Risk Pages
Factors and Ratio of
Earnings to Fixed Charges.. Prospectus Summary; Risk Factors; The
Company
4. Use of Proceeds............. Prospectus Summary; Use of Proceeds
5. Determination of Offering
Price...................... Underwriting
6. Dilution.................... Dilution
7. Selling Security Holders.... Principal and Selling Stockholders
8. Plan of Distribution........ Outside Front Cover Page; Underwriting
9. Description of Securities to
be Registered.............. Description of Capital Stock
10. Interests of Named Experts
and Counsel................ Not applicable
11. Information with Respect to
the Registrant............. Prospectus Summary; Risk Factors;
Dividend Policy; Capitalization;
Selected Pro Forma Combined Financial
Data; Selected Financial Data of
Operating Businesses; Management's
Discussion and Analysis of Financial
Condition and Results of Operations;
Business; Management; Shares Eligible
for Future Sale; Index to Financial
Statements
12. Disclosure of Commission
Position on Indemnification
for Securities Act
Liabilities................ Not applicable
</TABLE>
<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PROSPECTUS Subject to Completion

Dated June , 1996

10,607,714 Shares
TELESPECTRUM WORLDWIDE INC.
Common Stock
(par value $.01 per share)

Of the 10,607,714 shares of Common Stock, par value $.01 per share ("Common
Stock"), offered hereby, 10,286,000 shares are being sold by TeleSpectrum
Worldwide Inc., a Delaware corporation (the "Company"), and 321,714 shares are
being sold by the Selling Stockholders. See "Principal and Selling
Stockholders." The Company will not receive any of the proceeds from the sale
of Common Stock by the Selling Stockholders. Of the proceeds from the sale of
Common Stock by the Company, an aggregate of $ will benefit certain
persons who are to become officers, directors or five-percent stockholders of
the Company upon the consummation of the Offering.

Prior to the Offering, there has been no public market for the Common Stock of
the Company. It is currently anticipated that the initial public offering price
will be between and per share. See "Underwriting" for information
relating to the factors to be considered in determining the initial public
offering price of the Common Stock.

The Company has applied to have the Common Stock approved for quotation and
trading on The Nasdaq National Market under the proposed symbol "TLSP."

THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" COMMENCING ON PAGE 9 FOR CERTAIN INFORMATION THAT SHOULD BE CONSIDERED
BY PROSPECTIVE INVESTORS.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROCEEDS PROCEEDS TO
PRICE TO UNDERWRITING TO SELLING
PUBLIC DISCOUNT(1) COMPANY(2) STOCKHOLDERS
- --------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share $ $ $ $
- --------------------------------------------------------
Total(3) $ $ $ $
- --------------------------------------------------------
</TABLE>
(1) The Company and the Selling Stockholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. See "Underwriting."
(2) Before deducting expenses of the Offering payable by the Company, estimated
at $2,100,000.

(3) The Company has granted the Underwriters an option to purchase up to an
additional 1,591,157 shares of Common Stock, on the same terms as set forth
above, solely to cover over-allotments, if any. If such option is exercised in
full, the total Price to Public, Underwriting Discount and Proceeds to Company
will be $ , $ and $ , respectively. See "Underwriting."

The shares of Common Stock being offered by this Prospectus are offered by the
Underwriters, subject to prior sale, when, as and if delivered to and accepted
by the Underwriters, and subject to approval of certain legal matters by
Pepper, Hamilton & Scheetz, counsel for the Underwriters. It is expected that
delivery of such shares will be made against payment therefor on or about ,
1996 at the offices of J.P. Morgan Securities Inc., 60 Wall Street, New York,
New York.

J.P. MORGAN & CO.
DILLON, READ & CO. INC.
LEGG MASON WOOD WALKER
INCORPORATED
THE ROBINSON-HUMPHREY COMPANY, INC.
, 1996
<PAGE>

The inside front cover art depicts the TeleSpectrum Worldwide Inc. logo
and includes photographs of call center representatives, a direct mail
production line, the planet Earth, an integrated circuit and a satellite disk.
The inside cover art also includes the following text:

TeleSpectrum Worldwide Inc.

Single Source Solution

Outbound Telesales

Inbound Customer Service & Care

TeleSpectrum Worldwide Inc.

. 20 Call Centers in 7 States
. More than 4000 Associates
. More than 600 Licensed Insurance Agents
. More than 1500 Computerized Workstations
. 24 hours-a-day inbound call operations

The one - source out source.
Research Services
Direct Mail; Fulfillment
Database Management
Consulting Services
Complete Call Center Management
<PAGE>

[INSIDE COVER ART]

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET OR OTHERWISE. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

2
<PAGE>

No person has been authorized to give any information or to make any
representations not contained in this Prospectus and, if given or made, such
information or representations must not be relied upon as having been
authorized by the Company or any Underwriters. This Prospectus does not
constitute an offer to sell, or a solicitation of an offer to buy, the Common
Stock in any jurisdiction to any person to whom it is unlawful to make such
offer or solicitation.

No action has been or will be taken in any jurisdiction by the Company, the
Selling Stockholders or any Underwriter that would permit a public offering of
the Common Stock or possession or distribution of this Prospectus in any
jurisdiction where action for that purpose is required, other than in the
United States. Persons into whose possession this Prospectus comes are required
by the Company and the Underwriters to inform themselves about and to observe
any restrictions as to the offering of the Common Stock and the distribution of
this Prospectus.

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
<S> <C>
Prospectus Summary.................. 4
Risk Factors........................ 9
Use of Proceeds..................... 16
Dividend Policy..................... 16
Capitalization...................... 17
Dilution............................ 18
Selected Pro Forma Combined
Financial Data..................... 19
Management's Discussion and Analysis
of Financial Condition and
Results of Operations ............. 20
Selected Financial Data of the
Operating Businesses............... 23
</TABLE>
<TABLE>
<CAPTION>
Page
<S> <C>
Business........................... 43
Management......................... 52
Certain Relationships and Related
Party Transactions................ 59
Principal and Selling
Stockholders...................... 65
Description of Capital Stock....... 67
Shares Eligible for Future Sale.... 68
Underwriting....................... 69
Legal Matters...................... 70
Experts............................ 70
Additional Information............. 71
Index to Financial Statements...... F-1
</TABLE>

UNTIL , 1996 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS
EFFECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT PARTICIPATING IN
THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION
TO THE OBLIGATIONS OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS
UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

The Company intends to furnish to its stockholders annual reports containing
consolidated financial statements audited by its independent public accountants
and quarterly reports containing unaudited consolidated financial statements
for each of the first three quarters of each fiscal year.

3
<PAGE>

PROSPECTUS SUMMARY

Simultaneously with the closing of the offering made by this Prospectus (the
"Offering"), TeleSpectrum Worldwide Inc. will acquire, in separate transactions
(the "Acquisitions"), a number of telemarketing, market research and direct
mail and fulfillment businesses (collectively, the "Operating Businesses") for
an aggregate consideration of $90.9 million in cash, 4,403,863 shares of Common
Stock and the grant of warrants to purchase an aggregate of 593,400 shares of
Common Stock. See "Certain Relationships and Related Party Transactions--The
Acquisitions." Unless otherwise indicated, all references herein to the
"Company" include the Operating Businesses after the effectiveness of the
Acquisitions, and references herein to "TeleSpectrum Worldwide" shall mean
TeleSpectrum Worldwide Inc. prior to the effectiveness of the Acquisitions.

The following summary is qualified in its entirety by, and should be read in
conjunction with, the more detailed information and the financial statements,
including the notes thereto, appearing elsewhere in this Prospectus. Unless
otherwise indicated, all share, per share and financial information set forth
herein: (i) has been adjusted to give effect to the Acquisitions and a
8.510137-for-1 stock split to be effected through a stock dividend prior to the
consummation of the Offering; (ii) assumes an initial public offering price of
$17.50 per share; and (iii) assumes no exercise of the Underwriters' over-
allotment option. In addition, all references to years, unless otherwise noted,
refer to the Company's fiscal year, which ends on December 31.

This Prospectus contains forward-looking statements that involve risks and
uncertainties. The Company's actual results could differ materially from those
anticipated in these forward-looking statements as a result of certain factors,
including those set forth under "Risk Factors" and elsewhere in this
Prospectus.

THE COMPANY

TeleSpectrum Worldwide was founded in April 1996 to create a national provider
of integrated teleservices solutions. With the capabilities of the Operating
Businesses, the Company can offer its clients complete direct marketing
solutions that build upon a foundation of outbound and inbound telemarketing
and include inbound customer service, market research, direct mail and
fulfillment and other direct marketing services. The Company operates over
1,500 "workstations" (each of which consists of a telephone- and computer-
equipped work area designed to accommodate one employee) in 20 call centers
located primarily in the eastern United States. The Company focuses on
providing teleservices to major clients in the telecommunications, insurance,
financial services, pharmaceuticals and healthcare, consumer products and high
technology industries. The Company's 1995 pro forma revenues were $88.0 million
(of which the substantial majority was derived from outbound telemarketing) and
its 1995 pro forma net income was $3.5 million.

The teleservices industry facilitates the direct communication of marketing
information to and from current and prospective customers by telephone. Direct
marketing methods, such as telemarketing and direct mail, employ a "one-to-one"
approach to deliver a marketing message directly to a specific current or
prospective customer and to elicit immediate customer response. As businesses
seek greater returns from their investments in marketing activities, they are
increasingly coupling traditional indirect marketing methods such as
advertising with direct marketing methods such as telemarketing. Advances in
computer and telecommunications technology are helping telemarketers to more
accurately identify and contact prospective customers, and are providing call
center representatives ("CCRs") with more complete on-line guidance and
support. Improvements in the scale and speed of computer and telecommunications
networking capabilities allow teleservices providers to implement larger and
more complex programs for their clients. As the trend toward outsourcing
continues, the Company believes, based upon management's experience in the
teleservices industry and in other industries which provide or use outsourced
services, that businesses will increasingly seek to reduce the number of
vendors they utilize, and may prefer single-source providers of integrated
solutions drawing upon a variety of related teleservices capabilities.
Moreover, the Company believes that further opportunities may emerge for an
integrated teleservices provider that can assemble and offer other value-added
teleservices, such as inbound customer service, market research, direct mail
and fulfillment, training, consulting, call center management and electronic
order processing. See "Business--Industry Overview" and "--Competition."

4
<PAGE>

The Company's goal is to become the premier national provider of integrated
teleservices solutions. To attain this goal, the Company intends to provide a
single source for complete, integrated solutions to its clients' direct
marketing and customer service needs, establish long-term relationships with
major clients, add new clients in its targeted industries and pursue strategic
acquisitions that will enable the Company to broaden its market reach. See
"Business--Strategy" and "--Sales, Marketing and Clients."

The Company is being formed by the Acquisitions of substantially all of the
assets of the following Operating Businesses from the entities described below
and their affiliates (the "Sellers"):

The SOMAR Business ("SOMAR")--Headquartered in Salisbury, North Carolina,
SOMAR, Inc. operates 686 workstations in seven call centers located in North
Carolina and West Virginia. SOMAR currently focuses on outbound services and
has a diverse portfolio of clients in the insurance, financial services,
telecommunications and retail industries.

The NBG Business ("NBG")--Headquartered in Cambridge, Massachusetts, NBG
Services, Inc. operates 266 workstations in six call centers located in
Massachusetts and Arizona. NBG provides outbound telemarketing services to
clients in the high technology, financial services and telecommunications
industries. NBG also provides market research, database development and account
management services.

The Harris Businesses ("Harris")--Harris Direct Marketing, Inc. ("HDM"),
headquartered in Philadelphia, Pennsylvania, and Harris Fulfillment, Inc.
("HFI"), headquartered in King of Prussia, Pennsylvania, comprise a regional
vertically-integrated direct mail and fulfillment organization. Harris provides
its services primarily to companies in the pharmaceuticals and healthcare,
financial services and insurance industries. In addition, Harris operates an
automated inbound call center to provide fulfillment services to a client in
the pharmaceuticals and healthcare industry.

The Reich Business ("Reich")--Headquartered in Philadelphia, Pennsylvania, The
Reich Group, Inc. and its affiliates comprise a fully-integrated direct
marketing company with expertise in strategic planning, marketing,
telemarketing and database development services. Reich, which operates 320
workstations in three call centers, specializes in providing services to
companies in the financial services, telecommunications and insurance
industries.

The TeleSpectrum Business ("TeleSpectrum")--Headquartered in Annapolis,
Maryland, TeleSpectrum, Inc. provides inbound and outbound telemarketing and
fulfillment services. TeleSpectrum operates 134 workstations in two call
centers and focuses on providing inbound customer services to companies in the
high technology, pharmaceuticals and healthcare and consumer products
industries. In addition, TeleSpectrum's affiliate provides call center
management outsourcing and telemarketing consulting and training services for
businesses.

The Response Center Business ("The Response Center")--Headquartered in Upper
Darby, Pennsylvania, The Response Center, Inc. and its affiliate provide custom
market research, data tabulation, analysis and consulting, principally to
clients in the telecommunications, financial services, utilities and
pharmaceuticals and healthcare industries. The Response Center operates 130
workstations in one call center.

The Company maintains its principal executive offices at 443 South Gulph Road,
King of Prussia, Pennsylvania 19406, and has facilities in Arizona, California,
Delaware, Maryland, Massachusetts, North Carolina, Pennsylvania and West
Virginia. The telephone number of its principal executive offices is (610)-962-
5140. See "Business--TeleSpectrum Worldwide Facilities."

5
<PAGE>

THE OFFERING

COMMON STOCK OFFERED:
<TABLE>
<S> <C>
By the Company....................... 10,286,000 shares
By the Selling Stockholders.......... 321,714 shares
TOTAL OFFERING(1) ..................... 10,607,714 shares
COMMON STOCK OUTSTANDING AFTER THE
OFFERING(2)(3)........................ 23,200,000 shares
USE OF PROCEEDS BY THE COMPANY......... To pay the cash portion of the
purchase price for the Operating
Businesses, to repay indebtedness
assumed in connection with the
Acquisitions, to make certain capital
expenditures and to fund general
corporate purposes, including working
capital and possible acquisitions. See
"Use of Proceeds."
DIVIDEND POLICY........................ The Company intends to retain its
earnings to fund development of its
business and does not anticipate
paying cash dividends in the
foreseeable future. See "Dividend
Policy."
RISK FACTORS........................... For a discussion of certain
considerations relevant to an
investment in the Common Stock, see
"Risk Factors."
PROPOSED NASDAQ NATIONAL MARKET
SYMBOL................................ "TLSP"
</TABLE>
- --------

(1)Assumes that the Underwriters' over-allotment option for up to 1,591,157
shares of Common Stock is not exercised. See "Underwriting."

(2)Includes 4,403,863 shares of Common Stock to be issued in connection with
the closing of the Acquisitions. Excludes additional shares of Common Stock
which may be issued to three of the Sellers pursuant to earn-out arrangements.
See "Certain Relationships and Related Party Transactions--The Acquisitions."

(3)Excludes 1,283,600 shares of Common Stock issuable upon the exercise of
options to be granted on the date of this Prospectus under the TeleSpectrum
Worldwide Inc. 1996 Equity Compensation Plan (the "1996 Stock Incentive Plan")
and 593,400 shares of Common Stock issuable upon the exercise of warrants to be
granted on the date of this Prospectus. All of such options and warrants have a
per share exercise price equal to the initial public offering price. Also
excludes 400,000 shares that would be issuable upon the exercise of options
that the Company is to grant, pursuant to employment agreements with two of its
executive officers, ratably over the course of the next four years. As of the
date of this Prospectus, 1,016,400 additional shares are reserved for future
issuance under the 1996 Stock Incentive Plan (616,400 shares, if all of the
options to be granted to two of its executive officers over the next four years
were to be granted). See "Certain Relationships and Related Party
Transactions--The Acquisitions" and "Management--Employment Agreements" and "--
1996 Stock Incentive Plan."

6
<PAGE>

SUMMARY PRO FORMA COMBINED FINANCIAL DATA

TeleSpectrum Worldwide will acquire, simultaneously with and as a condition to
the consummation of the Offering, the Operating Businesses. These Acquisitions
will be recorded using the purchase method of accounting. The Summary Pro Forma
Combined Financial Data assume the consummation of the Acquisitions and the
consummation of the Offering. See "Certain Relationships and Related Party
Transactions--The Acquisitions," "Pro Forma Combined Financial Statements" and
"Notes to Pro Forma Combined Financial Statements."

<TABLE>
<CAPTION>
--------------------------------------------
PRO FORMA
--------------------------------------------
YEAR ENDED
DECEMBER 31, THREE MONTHS ENDED MARCH 31,
1995 1995 1996
Dollars in thousands, except per share data ------------ -------------- --------------
<S> <C> <C> <C>
PRO FORMA STATEMENT OF INCOME DATA(1):
Revenues $ 87,954 $ 20,391 $ 26,470
Cost of services 59,596 13,004 18,441
Selling, general and
administrative expense(2) 16,921 4,223 4,921
Goodwill amortization(3) 5,504 1,376 1,376
----------- -------------- --------------
Operating income 5,933 1,788 1,732
Interest income 158 15 61
Interest expense(4) (94) (22) (22)
----------- -------------- --------------
Income before income taxes 5,997 1,781 1,771
Income taxes(5) 2,519 748 744
----------- -------------- --------------
Net income $ 3,478 $ 1,033 $ 1,027
----------- -------------- --------------
Net income per share(6) $ 0.15 $ 0.04 $ 0.04
=========== ============== ==============
Shares used in computing pro
forma net income per share (6) 23,200,000 23,200,000 23,200,000
----------- -------------- --------------
</TABLE>

<TABLE>
<CAPTION>
-----------------------
MARCH 31, 1996
PRO FORMA,
AFTER INITIAL PRO FORMA,
CAPITALIZATION(7) AS ADJUSTED(1)
Dollars in thousands ----------------- --------------
<S> <C> <C>
PRO FORMA BALANCE SHEET DATA:
Cash and cash equivalents $ 1,610 $ 60,657
Working capital 2,110 68,959
Goodwill -- 137,609
Total assets 2,110 233,730
Long-term debt, less current maturities -- --
Stockholders' equity 2,110 221,948
</TABLE>
- --------

(1)Assumes that the closings of the Acquisitions and the Offering had occurred
as of January 1, 1995, in the case of the pro forma statement of income data,
and as of March 31, 1996, in the case of the pro forma balance sheet data. The
pro forma combined financial data are based upon preliminary estimates,
available information and certain assumptions that management deems
appropriate. The pro forma combined financial data presented herein are not
necessarily indicative of the results the Company would have obtained had such
events occurred at the beginning of the period or of the future results of the
Company. The pro forma combined financial data should be read in conjunction
with the other financial data and notes thereto included elsewhere in this
Prospectus. The aggregate consideration for the Acquisitions is $90.9 million
in cash, 4,403,863 shares of Common Stock of the Company and warrants to
purchase an aggregate of 593,400 shares of Common Stock.

7
<PAGE>

(2) Includes a pro forma adjustment to reflect reduced officers' compensation
expense of the Operating Businesses based upon employment agreements to be
entered into upon the closing of the Acquisitions. Does not reflect costs
(which will be significant) related to employment arrangements with other
executive officers of TeleSpectrum Worldwide or corporate expenses related to
being a public company. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations," "Management--Executive Compensation" and
"--Employment Agreements" and Note 2 of Notes to Pro Forma Combined Financial
Statements.
(3) Represents a pro forma adjustment to reflect the amortization expense on the
goodwill recorded in connection with the Acquisitions.
(4) Includes a pro forma adjustment to reflect the elimination of interest
expense resulting from the reduction of debt paid from the net proceeds of the
Offering.
(5) Includes a pro forma adjustment to calculate the provision for income taxes
on the pro forma combined results at an effective tax rate of 42.0%.
(6) Computed on a basis described in Note 5 of Notes to Pro Forma Combined
Financial Statements.
(7) Includes a pro forma adjustment to reflect a $2.1 million capital
contribution by CRW Financial, Inc. ("CRW Financial") to TeleSpectrum Worldwide
(of which $1.6 million was contributed in the form of cash and $0.5 million was
contributed in the form of a promissory note from the Seller of the
TeleSpectrum Operating Business held by CRW Financial). This contribution was
made on May 22, 1996 (the "Initial Capitalization"), at which time TeleSpectrum
Worldwide was a wholly owned subsidiary of CRW Financial. See "Certain
Relationships and Related Party Transactions--The Acquisitions" and "--CRW
Transactions--Initial Capitalization."

8
<PAGE>

RISK FACTORS

In addition to the other information in this Prospectus, the following factors
should be considered carefully by prospective investors in evaluating the
Company and its business before purchasing shares of Common Stock offered
hereby.

ABSENCE OF COMBINED OPERATING HISTORY

TeleSpectrum Worldwide was founded in April 1996 and has conducted no
operations to date. TeleSpectrum Worldwide has entered into agreements to
acquire the Operating Businesses simultaneously with the consummation of the
sale of the shares of Common Stock offered hereby. The Operating Businesses
have been operating independently and the Company may not be able to
successfully integrate these businesses and their disparate operations,
employees and management. In connection with the Acquisitions, three of the
Sellers and certain of the executives of the Operating Businesses may receive
earn-outs and bonuses based upon the performance of that Operating Business,
and certain of the Acquisition agreements require the Company to maintain the
separate existence of certain of the Operating Businesses pending completion of
earn-out arrangements. Such provisions may delay the integration by the Company
of the Operating Businesses and therefore may adversely impact the Company's
business, financial condition and results of operations. The Company's
management group has been assembled only recently and the management control
structure is still in its formative stages. Management may not be able to
oversee the combined entity and implement effectively the Company's operating
strategies. See "Certain Relationships and Related Party Transactions--The
Acquisitions," "Business--The Operating Businesses" and "Management."

POTENTIAL INABILITY TO MANAGE GROWTH

The Operating Businesses, particularly those engaged primarily in
telemarketing, have expanded significantly in the past several years and this
expansion will place demands on the Company's administrative, operational and
financial resources. Any continued growth of the Company's client base and its
services could place an additional strain on the capacity, management and
operations of the Company and the Operating Businesses. The Company's future
performance and profitability will depend in part on its ability to
successfully implement improved financial and management systems, to add
capacity as and when needed and to hire qualified personnel to respond to
changes in its business. The failure to implement such systems, add any such
capacity or hire such qualified personnel may have a material adverse effect on
the Company's business, financial condition and results of operations. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

RELIANCE ON MAJOR CLIENTS AND KEY INDUSTRIES

It is anticipated that a significant portion of the Company's revenues will be
derived from relatively few clients. The Company's ten largest clients in 1995
accounted for approximately 56.4% of the Company's 1995 pro forma revenues. In
addition, each of the Company's Operating Businesses is substantially dependent
on one or a limited number of clients. Certain of the clients of the Operating
Businesses compete with one another, and the Company cannot assure that
competing clients will not realign their outsourcing needs after the
Acquisitions so as to avoid potential or perceived conflicts. The Company's
contracts with its clients can generally be canceled by the client upon
relatively short notice. Moreover, the Company does not believe that it is the
sole or primary source for any of the services rendered to those clients which
utilize a number of other teleservices organizations. The loss of one or more
of its major clients could have a material adverse effect on the Company's
business, results of operations and financial condition. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations--
Overview" and "Business--Sales, Marketing and Clients."

In addition, the Company's future prospects are dependent in large part upon
continued demand from the industries primarily served by the Company. A
significant downturn in the demand for teleservices generally, and particularly
from clients in the insurance, financial services, pharmaceuticals and
healthcare, telecommunications, consumer products or high technology
industries, could have a material adverse effect on the Company's business,
financial condition and results of operations. See "Business."

9
<PAGE>

RISKS GENERALLY ASSOCIATED WITH ACQUISITIONS

An element of the Company's strategy is to pursue strategic acquisitions that
either expand or complement the Company's business. The Company may not be able
to identify additional attractive acquisition candidates on terms favorable to
the Company or in a timely manner. Acquisitions involve a number of special
risks, including the diversion of management's attention to the assimilation of
the operations and personnel of the acquired companies, adverse short-term
effects on the Company's operating results and the potential inability to
integrate financial and management reporting systems. A significant portion of
the Company's capital resources, including any remaining balance of the net
proceeds of this Offering, could be used for these acquisitions. The Company
may require additional debt or equity financing for future acquisitions, which
may not be available on terms favorable to the Company, if at all. Moreover,
the Company may not be able to successfully integrate any acquired business
into the Company's business or to operate any acquired business profitably. See
"Business--Strategy--Pursue Strategic Acquisitions" and "Use of Proceeds."

POTENTIAL FLUCTUATIONS IN QUARTERLY OPERATING RESULTS

The Operating Businesses have in the past experienced, and the Company could in
the future experience, quarterly variations in revenues, operating income and
cash flow as a result of many factors, including the timing and magnitude of
clients' marketing campaigns and customer service programs, the opening of new
call centers, the loss of a major client, weather-related interruptions,
additional selling, general and administrative expenses to acquire and support
new business, the timing and magnitude of required capital expenditures and
changes in the revenue mix among the Company's various service offerings or in
the relative contribution of the several Operating Businesses. In connection
with certain contracts, the Company could incur costs in periods prior to
recognizing revenues under those contracts. In addition, the Company must plan
its operating expenditures based on revenue forecasts, and a revenue shortfall
below such forecasts in any quarter would likely adversely affect the Company's
operating results for that quarter. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations."

POSSIBLE DECLINE IN EFFECTIVENESS OF TELEMARKETING

The Company derives its revenues primarily from telemarketing activities.
Although the telemarketing industry has grown significantly in the last ten
years, advances in new forms of direct marketing, such as the development of
interactive commerce through television, computer networks (including the
Internet) and other media, could have an adverse effect on the demand for
teleservices as a form of direct marketing. As the industry continues to grow,
telemarketing's effectiveness as a direct marketing tool may also decrease as a
result of consumer saturation and consumer resistance to telemarketing
generally. Although the Company attempts to monitor industry trends and respond
accordingly, the Company may not be able to anticipate and successfully respond
to such trends in a timely manner.

RELIANCE ON KEY PERSONNEL

The Company's operations are dependent upon the efforts of the senior
management of the Operating Businesses, as well as J. Brian O'Neill, Chairman
of the Board and Chief Executive Officer, Michael C. Boyd, President and Chief
Operating Officer, Richard C. Schwenk, Jr., Senior Vice President and Chief
Financial Officer, and William F. Rhatigan, who is to be President of the
Company's Telemarketing Division following consummation of the Offering.
Although Mr. O'Neill intends to devote the majority of his time to the
Company's business, he is also Chairman of the Board and Chief Executive
Officer of CRW Financial, a principal stockholder of the Company, and is
required to devote a substantial amount of time to those duties. The Company
will likely also be dependent on the senior management of companies that may be
acquired in the future. If any of these executives become unable to continue in
or devote adequate time to their present roles, or if the Company is unable to
attract and retain other skilled management personnel, the Company's business,
results of operations and financial condition could be adversely affected. See
"Management." The Company does not maintain any policies of key person life
insurance on the lives of any of its senior management personnel.

10
<PAGE>

DEPENDENCE ON LABOR FORCE

Teleservices are labor-intensive and often characterized by high personnel
turnover. Unskilled and semi-skilled employees typically work part-time and
receive relatively modest hourly wages; skilled or licensed employees commonly
work full-time and command higher wages. Some of the Company's telemarketing
activities, particularly insurance product sales and inbound customer service,
require highly-trained employees. A high turnover rate among the Company's
employees would increase the Company's recruiting and training costs, and if
the Company were unable to recruit and retain a sufficient number of employees,
it would be forced to limit its growth or possibly curtail its operations. In
certain markets, the Company competes for qualified personnel with other
teleservices providers, and periodically is required to pay premium hourly
wages to attract and retain personnel. The Company may be unable to continue to
hire and retain a sufficient number of qualified personnel, which would have a
material adverse effect on the Company's business, financial condition and
results of operations. See "Business--Personnel and Training."

RELIANCE ON TECHNOLOGY

The Operating Businesses have invested significant resources in sophisticated
telecommunications and computer technology, including universal workstations,
predictive dialers, automated call distributors, digital switches and computer
systems. The Company anticipates that it will be necessary to continue
investing in technology. The Company may not be successful in anticipating
technological changes or in selecting and developing new and enhanced
technology on a timely basis. In addition, the temporary or permanent loss of
telecommunications, computer equipment or software, through casualty or
operating malfunction, could have a material adverse effect on the Company's
business, financial condition and results of operations. See "Business--The
Operating Businesses."

The telecommunications and computer systems of the Operating Businesses contain
certain incompatible software and hardware systems. Accordingly, it may not be
feasible to integrate such systems and any attempt to do so may cause
disruptions which could delay or prevent the Company from realizing any
benefits that might be derived from integration, such as the elimination of
duplicate functions and the facilitation of capacity shifting. Such disruptions
could have a material adverse effect on the Company.

POSSIBLE ADVERSE IMPACT OF GOVERNMENT REGULATION

The telemarketing industry has become subject to an increasing amount of
federal and state regulation during the past five years. The federal Telephone
Consumer Protection Act of 1991 limits the hours during which telemarketers may
call consumers and prohibits the use of automated telephone dialing equipment
to call certain telephone numbers. The federal Telemarketing and Consumer Fraud
and Abuse Prevention Act of 1994 (the "TCFAPA") broadly authorizes the Federal
Trade Commission (the "FTC") to issue regulations prohibiting
misrepresentations in telemarketing sales. The FTC's new telemarketing sales
rules prohibit misrepresentations of the cost, terms, restrictions, performance
or duration of products or services offered by telephone solicitation, prohibit
a telemarketer from calling a consumer when that consumer has instructed the
telemarketer not to contact him or her, prohibit a telemarketer from calling
prior to 8:00 a.m. or after 9:00 p.m. and specifically address other perceived
telemarketing abuses in the offering of prizes and the sale of business
opportunities or investments. Violation of these rules may result in
injunctions or monetary penalties and can give rise to private actions for
damages. While the FTC's new rules have not caused the Operating Businesses to
alter their operating procedures, additional federal or state consumer-oriented
legislation could limit the telemarketing activities of the Company or its
clients or significantly increase the Company's costs of regulatory compliance.

Several of the industries served by the Company, particularly the insurance
industry, are subject to varying degrees of government regulation. Although
compliance with these regulations is generally the responsibility of the
Company's clients, the Company could be subject to a variety of enforcement or
private actions for its failure or the failure of its clients to comply with
such regulations. Employees of the Company who sell insurance products are
required to be licensed by various state insurance commissions and participate
in regular continuing education programs, many of which are currently provided
by the Company. This requires the Company to comply

11
<PAGE>

with the extensive regulations of these state commissions, and changes in these
regulations could materially increase the Company's operating costs. See
"Business--Government Regulation."

COMPETITION

The teleservices industry is extremely competitive and highly fragmented. The
Company competes with numerous independent direct marketing services firms,
some of which are larger than the Company, as well as the in-house
telemarketing, customer service, market research and direct mail and
fulfillment operations of many of its clients or potential clients. The
teleservices industry competes with other marketing tools, such as television,
radio, print and other advertising media, as well as electronic commerce media
such as the Internet. The Company's business, financial condition and results
of operations could be materially and adversely affected if additional
competitors with greater resources than the Company were to enter the industry,
or if the Company's clients were to choose to conduct more of their direct
marketing activities internally. See "Business--Competition."

POSSIBLE NEED FOR ADDITIONAL FINANCING

The Company currently estimates that the net proceeds of the Offering, together
with cash generated from operations, will be sufficient to finance its current
operations, potential obligations relating to the Acquisitions and planned
capital expenditure requirements at least through 1997. There can be no
assurance, however, that the Company will not be required to seek additional
capital at an earlier date. The Company may, from time to time, seek additional
funding through public or private financing, including equity financing. There
can be no assurance that adequate funding will be available as needed or, if
available, on terms acceptable to the Company. If additional funds are raised
by issuing equity securities, existing shareholders may experience dilution.
Insufficient funds may require the Company to scale back or eliminate some or
all of its teleservices offerings. See "Use of Proceeds" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations--
Liquidity and Capital Resources."

AMORTIZATION OF INTANGIBLE ASSETS

Approximately $137.6 million, or 58.9%, of the Company's pro forma total assets
as of March 31, 1996 consists of goodwill arising from the Acquisitions of the
Operating Businesses. Goodwill is an intangible asset that represents the
difference between the aggregate purchase price for the assets acquired and the
amount of such purchase price allocated to such assets for purposes of the
Company's pro forma balance sheet. Goodwill is amortized over a period of time,
with the amount amortized in a particular period constituting an expense that
would reduce the Company's net income in that period. A reduction in net income
resulting from the amortization of goodwill may have an adverse impact upon the
market price of the Company's Common Stock.

PORTIONS OF OFFERING PROCEEDS PAYABLE TO AFFILIATES

Approximately $90.9 million of the net proceeds to the Company from the sale of
the shares of Common Stock offered hereby will be used to pay the cash portion
of the purchase price for the Operating Businesses. Approximately $25.0
million, or 27.5%, of such amount will be paid to SOMAR, Inc., which will
become a greater than 5% stockholder of the Company following consummation of
the Acquisition of the SOMAR Operating Business. Richard W. Virtue, who is
named to become a director of the Company, is the Chairman and a principal
stockholder of SOMAR, Inc., and Gregory M. Alcorn, who is to become Chief
Executive Officer of the Company's SOMAR subsidiary, is the President and a
stockholder of SOMAR, Inc.; Messrs. Virtue and Alcorn will thus benefit
indirectly from amounts to be received by SOMAR, Inc. Approximately $14.1
million, or 15.5%, of the cash portion of the purchase price will be paid to
NBG Services, Inc. William F. Rhatigan, who is named to become a director of
the Company and the President of its Telemarketing Division, is the Chairman
and a principal stockholder of NBG Services, Inc., and Michael J. Gallant, who
is to become President of the Company's NBG subsidiary, is the President and a
principal stockholder of NBG Services, Inc.; Messrs. Rhatigan and Gallant will
thus benefit indirectly from amounts to be received by NBG Services, Inc.
Approximately $12.2 million, or 13.4%, of the cash portion of the purchase
price will be paid to HDM and HFI as the Sellers of the Harris Operating
Business. Edward M. Idzik, who is to become President of the Company's Harris
subsidiary, is

12
<PAGE>

the President and a principal stockholder of both HDM and HFI, and thus will
benefit indirectly from amounts to be received by HDM and HFI. Approximately
$20.0 million, or 22.0%, of the cash portion of the purchase price will be paid
to entities affiliated with The Reich Group, Inc. as the Sellers of the Reich
Operating Business. Morton M. Reich, who is to become President of the
Company's Reich subsidiary, is the President and sole stockholder of the
Sellers of the Reich Operating Business, and thus will benefit indirectly from
amounts to be received by such Sellers. Approximately $8.0 million, or 8.8%, of
the cash portion of the purchase price will be paid to entities affiliated with
TeleSpectrum, Inc. as the Sellers of the TeleSpectrum Operating Business. Karen
E. Schweitzer, who is to become President of the Company's TeleSpectrum
subsidiary, is the President and a principal stockholder of the Sellers of the
TeleSpectrum Operating Business and thus will benefit indirectly from amounts
to be received by such Sellers. Approximately $11.6 million, or 12.8%, of the
cash portion of the purchase price will be paid to entities affiliated with The
Response Center, Inc. as the Sellers of The Response Center Operating Business.
Patrick M. Baldasare, who is to become President of the Company's The Response
Center subsidiary, is the President and a principal stockholder of the Sellers
of The Response Center Operating Business and thus will benefit indirectly from
amounts to be received by such Sellers.

Simultaneously with the consummation of the Acquisitions, the Company will
repay indebtedness of the Operating Businesses of approximately $14.9 million;
Messrs. Virtue, Alcorn, Rhatigan, Gallant, Idzik, Reich and Baldasare and Ms.
Schweitzer, in their respective capacities with the Sellers of the Operating
Businesses, will benefit indirectly from such repayments.

The Company has agreed to pay certain fees and expenses of the Sellers of the
respective Operating Businesses incurred in connection with the Acquisitions;
the maximum amount of such fees and expenses cannot be determined in advance,
but is expected to be approximately $1.0 million. Messrs. Virtue, Alcorn,
Rhatigan, Gallant, Idzik, Reich and Baldasare and Ms. Schweitzer, in their
respective capacities with the Sellers of the Operating Businesses, will
benefit indirectly from such payments.

SOMAR, Inc. and NBG Services, Inc. are the Selling Stockholders in the
Offering. The net proceeds to the Selling Stockholders are expected to be
approximately $5.2 million, of which $0.6 million will be received by SOMAR,
Inc. and $4.6 million will be received by NBG Services Inc. Messrs. Virtue and
Alcorn, in their respective capacities with SOMAR, Inc., and Messrs. Rhatigan
and Gallant, in their respective capacities with NBG Services, Inc., will
benefit indirectly from such net proceeds.

POTENTIAL INFLUENCE OF EXISTING STOCKHOLDERS

After the sale of shares of Common Stock offered hereby, the Company's
executive officers, directors and 5% stockholders will own beneficially an
aggregate of approximately 53.5% of the outstanding shares of Common Stock
(approximately 50.2% if the Underwriters' over-allotment option is exercised in
full). In particular, CRW Financial will own approximately 36.7% of the
outstanding shares of Common Stock (approximately 34.3% if the Underwriters'
over-allotment option is exercised in full). J. Brian O'Neill, Chairman of the
Board and Chief Executive Officer of the Company, is the Chairman of the Board
and Chief Executive Officer of CRW Financial. The Company's officers, directors
and 5% stockholders if acting together would, and CRW Financial may, be able to
control the election of directors and matters requiring the approval of
stockholders of the Company. This concentration of ownership by existing
stockholders may also have the effect of delaying or preventing a change in
control of the Company. See "Principal and Selling Stockholders."

DEPENDENCE ON TELEPHONE AND POSTAL SERVICE

The Company's business is materially dependent upon service provided by various
local and long distance telephone companies and the United States Postal
Service. Rate increases imposed by these organizations will increase the
Company's operating expenses and adversely affect its operating results to the
extent that the Company is unable to pass the increases through to its clients.
Any significant interruption or capacity limitation in either service would
have a material adverse effect on the Company's business, financial condition
and results of operations. See "Business--Services Overview."

13
<PAGE>

SHARES ELIGIBLE FOR FUTURE SALE

The 10,607,714 shares being sold in this Offering will be freely tradeable
unless acquired by affiliates of the Company; an aggregate of 12,592,286
unregistered shares of Common Stock will be outstanding immediately following
consummation of the Offering. The market price of the Common Stock could be
adversely affected by the sale of substantial amounts of Common Stock in the
public market following the Offering.

Simultaneously with the closing of this Offering, the Sellers will receive, in
the aggregate, 4,403,863 shares of Common Stock as a portion of the
consideration for their businesses; except for the 321,714 shares of Common
Stock to be sold by the Selling Stockholders, these shares are not being
offered by this Prospectus. The Company, each of its directors and officers,
and the holders of all of the shares of Common Stock and options or warrants to
purchase shares of Common Stock that are or will be outstanding prior to the
consummation of the Acquisitions have agreed with the Underwriters not to
offer, sell or otherwise dispose of any shares of Common Stock or securities
convertible into or exercisable or exchangeable for such shares for a period of
180 days after the date of this Prospectus without the prior written consent of
J.P. Morgan Securities Inc. The holders of the shares of Common Stock and
warrants issued or to be issued in the Acquisitions have agreed not to offer,
sell or otherwise dispose of any shares of Common Stock or securities
convertible into or exercisable or exchangeable for such shares for a period of
360 days after the date of this Prospectus without the prior written consent of
J.P. Morgan Securities Inc. In connection with the Acquisitions, the Company
has granted certain stockholders the right to include up to 3,946,720 shares of
Common Stock in certain registrations of Common Stock under the Securities Act
of 1933, as amended (the ""Securities Act''), effected following consummation
of the Offering. In addition, certain of such stockholders have the right to
demand or piggyback registration of all or a portion of the shares of Common
Stock that may be issued to them in payment of the earn-out component of the
purchase price for their Operating Businesses. In connection with the CRW
Lender Warrants and the CRW Management Warrants (each as defined in ""Certain
Relationships and Related Party Transactions--CRW Transactions--Initial
Capitalization''), the Company has granted demand and piggyback registration
rights with respect to 2,272,562 shares of Common Stock purchasable from CRW
Financial upon exercise thereof. In addition, the Company intends to file a
registration statement under the Securities Act to register initially the
issuance or, if applicable, resale of an aggregate of 2,300,000 shares of
Common Stock reserved for issuance in connection with the 1996 Stock Incentive
Plan. The issuance of shares upon the exercise of options or warrants could
result in the dilution of the voting power of the shares of Common Stock
purchased in the Offering and could have a dilutive effect on earnings per
share. None of the securities described above was acquired in a transaction
registered under the Securities Act, and, accordingly, such securities may not
be sold except in transactions registered under the Securities Act or pursuant
to an exemption from registration. See ""Certain Relationships and Related
Party Transactions'' and ""Shares Eligible for Future Sale.''

NO PRIOR PUBLIC MARKET; POSSIBLE VOLATILITY OF STOCK PRICE

Prior to the Offering, there has not been a public market for the Common Stock,
and there can be no assurance that an active trading market will develop and
continue after the Offering is completed or that the market price of the Common
Stock will not decline below the initial public offering price. The initial
public offering price will be determined by negotiations between the Company
and the representatives of the Underwriters. See "Underwriting" for a
discussion of the factors to be considered in determining the initial public
offering price. The trading price of the Common Stock could be subject to
significant fluctuations in response to introduction of new products or
services by competitors, variations in quarterly operating results, changes in
government regulations or market conditions affecting the teleservices and
direct marketing industries and other events or factors. In addition, the stock
market in the past has experienced significant price and value fluctuations,
which have not necessarily been related to corporate operating performance. The
volatility of the market could adversely affect the market price of the Common
Stock and the ability of the Company to raise equity in the public markets. See
"Underwriting."

ANTI-TAKEOVER PROVISIONS

Certain provisions of the Company's Bylaws impose certain procedures and
limitations applicable to stockholders' meetings, proposal of business and
nomination of directors that could have the effect of making it more difficult

14
<PAGE>

for a third party to acquire, or discouraging a third party from attempting to
acquire, control of the Company. Such provisions may limit the price that
certain investors may be willing to pay in the future for shares of the Common
Stock. These provisions may also reduce the likelihood of an acquisition of the
Company at a premium price by another person or entity. In addition, under the
Company's Certificate of Incorporation, the Board of Directors has the
authority to fix the rights and preferences of, and issue shares of, preferred
stock without further action of the stockholders. Therefore, preferred stock
could be issued, without stockholder approval, that could have voting,
liquidation and dividend rights superior to that of existing stockholders. The
issuance of preferred stock could adversely affect the voting power of holders
of Common Stock and the likelihood that such holders would receive dividend
payments and payments on liquidation, and could have the effect of delaying,
deferring or preventing a change in control of the Company. The Company has no
present plan to issue any shares of preferred stock. See "Description of
Capital Stock."

DILUTION

After giving effect to the Acquisitions, the purchasers of the shares of Common
Stock offered hereby will experience immediate and substantial dilution of
$13.86 per share in the pro forma as adjusted net tangible book value of their
shares. See "Dilution." In the event the Company issues additional Common Stock
in the future, including shares which may be issued in connection with earn-out
arrangements relating to the Acquisitions or with future acquisitions,
purchasers of Common Stock in this Offering may experience further dilution in
the net tangible book value per share of the Common Stock.

15
<PAGE>

USE OF PROCEEDS

The net proceeds to the Company from the sale of the shares of Common Stock
offered hereby, after deducting estimated underwriting discounts and other
offering expenses, all of which are payable by the Company, are estimated to be
approximately $165.3 million (approximately $191.2 million if the Underwriters'
over-allotment option is exercised in full), assuming an initial public
offering price of $17.50 per share. The Company will not receive any of the net
proceeds from the sale of shares of Common Stock by the Selling Stockholders.
The principal uses of such net proceeds to the Company are described below.

Consummation of Acquisitions
Approximately $90.9 million of the net proceeds will be used to pay the cash
portion of the aggregate purchase price for the Operating Businesses at closing
of the Acquisitions. See "Certain Relationships and Related Party
Transactions--The Acquisitions." In addition, approximately $3.5 million of the
net proceeds will be used to pay fees and expenses incurred in connection with
the negotiation and consummation of the Acquisitions.

Repayment of Indebtedness

An aggregate of approximately $14.9 million of the net proceeds will be used to
repay indebtedness of the Operating Businesses assumed in the Acquisitions. As
of March 31, 1996 the following indebtedness was to be repaid: SOMAR, $9.5
million; NBG, $1.2 million; Harris, $1.8 million; Reich, $0.7 million; and
TeleSpectrum, $1.7 million. See "Certain Relationships and Related Party
Transactions--The Acquisitions."

Capital Expenditures
Approximately $16.0 million of the net proceeds will be used to make certain
anticipated capital expenditures related to telephony equipment, computer
hardware and software and purchases in connection with the opening of new call
center facilities for SOMAR and TeleSpectrum. Of this amount, the Company is
committed to expend up to $14.0 million for the purpose of meeting SOMAR's
capital expenditure requirements. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital Resources"
and "Certain Relationships and Related Party Transactions--The Acquisitions--
SOMAR."

Working Capital and General Corporate Purposes

The balance of the net proceeds, approximately $40.0 million (approximately
$65.9 million if the Underwriters' over-allotment option is exercised in full),
will be added to the Company's working capital and used for general corporate
purposes, including possible acquisitions and capital expenditures associated
with integrating the Operating Businesses. In addition, a portion of the net
proceeds may be used for closing purchase price adjustments in connection with
the Acquisitions and to pay that portion of the purchase price of certain
Acquisitions that is subject to earn-out arrangements. See "Certain
Relationships and Related Party Transactions--The Acquisitions." With the
exception of the Acquisitions, the Company is not currently involved in
negotiations and has no current commitments or agreements with respect to any
acquisitions, and no such acquisitions may ever be consummated.

Pending application of the net proceeds as described above, the Company intends
to invest the net proceeds in short-term investment grade securities.

DIVIDEND POLICY

The Company does not anticipate paying any cash dividends on its Common Stock
in the foreseeable future because it intends to retain its earnings, if any, to
finance the expansion of its business and for general corporate purposes. Any
payment of future dividends will be at the discretion of the Board of Directors
and will depend upon, among other factors, the Company's earnings, financial
condition, capital requirements, level of indebtedness, contractual
restrictions with respect to the payment of dividends and other considerations
that the Company's Board of Directors deems relevant.

16
<PAGE>

CAPITALIZATION

The following table sets forth the capitalization of the Company at March 31,
1996, on a pro forma basis reflecting the Initial Capitalization and on a pro
forma as adjusted basis to reflect (i) the sale of 10,286,000 shares of Common
Stock offered hereby at an assumed initial public offering price of $17.50 per
share and the application of a portion of the estimated net proceeds therefrom
and (ii) the consummation of the Acquisitions and the issuance of 4,403,863
shares of Common Stock in connection therewith. See "Selected Financial Data of
the Operating Businesses" and "Use of Proceeds." This table should be read in
conjunction with the pro forma financial statements and the related notes
thereto included elsewhere in this Prospectus.

<TABLE>
---------------------------------
<CAPTION>
MARCH 31, 1996
PRO FORMA,
AFTER INITIAL PRO FORMA,
ACTUAL(1) CAPITALIZATION AS ADJUSTED(2)
Dollars in thousands ---------- -------------- --------------
<S> <C> <C> <C>
Long-term debt and capital lease
obligations, less current portion $ -- $ -- $ --
---------- ---------- ---------
Stockholders' equity:
Preferred stock, $.01 par value
per share, 5,000,000 shares
authorized, no shares issued and
outstanding -- -- --
Common stock, $.01 par value per
share, 200,000,000 shares
authorized, 8,510,137 shares
issued and outstanding pro
forma, 23,200,000 shares issued
and outstanding pro forma as
adjusted -- 85 232
Additional paid-in capital -- 2,025 221,716
Retained earnings -- -- --
---------- ---------- ---------
Total stockholders' equity -- 2,110 221,948
---------- ---------- ---------
Total capitalization $ -- $ 2,110 $ 233,730
========== ========== =========
</TABLE>
- --------

(1)The Company was incorporated on April 26, 1996; accordingly, there were no
historical results prior to that date.

(2)Excludes additional shares of Common Stock which may be issued to three of
the Sellers pursuant to earn-out arrangements. Also excludes 1,877,000 shares
of Common Stock issuable upon the exercise of options and warrants to be
granted on the date of this Prospectus, with a per share exercise price equal
to the initial public offering price. As of the date of this Prospectus,
1,016,400 additional shares are reserved for future issuance under the 1996
Stock Incentive Plan (616,400 shares, if all of the options to be granted
ratably over the next four years to two executive officers of the Company
pursuant to their employment agreements were to be granted). See "Certain
Relationships and Related Party Transactions--The Acquisitions" and
"Management--1996 Stock Incentive Plan."

17
<PAGE>

DILUTION

The Company had a net tangible book value at March 31, 1996, on a pro forma
basis reflecting the Initial Capitalization, of $2,110,000, or $0.25 per share
of Common Stock. Pro forma net tangible book value per share is determined by
dividing the pro forma net tangible book value of the Company (pro forma
tangible assets less pro forma liabilities) by the pro forma number of shares
of Common Stock outstanding. Adjusting for the Acquisitions and the sale by the
Company of the 10,286,000 shares of Common Stock offered hereby at an assumed
initial public offering price of $17.50 per share, and the application of the
estimated net proceeds therefrom as described under "Use of Proceeds," the pro
forma net tangible book value of the Company, as adjusted, at March 31, 1996
would have been $84,339,000, or $3.64 per share. This amount represents an
immediate dilution to new investors of $13.86 per share and an immediate
increase in pro forma as adjusted net tangible book value per share to existing
stockholders of $3.39 per share. The following table illustrates this per share
dilution to new investors:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share $17.50
Pro forma net tangible book value per share after Initial
Capitalization (1) $0.25
Increase in net tangible book value per share resulting from the
Acquisitions
and the Offering (2) 3.39
-----
Pro forma as adjusted net tangible book value per share after the
Acquisitions
and the Offering 3.64
------
Pro forma as adjusted dilution to new investors(3) $13.86
======
</TABLE>
- --------

(1)The Company was incorporated on April 26, 1996 and, therefore, had no
historical net tangible book value per share as of March 31, 1996.

(2)The increase in net tangible book value per share consists of a decrease of
$3.74 to the net tangible book value per share resulting from the Acquisitions
and an increase of $7.13 to the net tangible book value per share resulting
from the Offering.

(3)Determined by subtracting the pro forma as adjusted net tangible book value
per share after the Offering from the assumed initial public offering price per
share.

If the Underwriters' over-allotment option is exercised in full, the increase
in pro forma net tangible book value per share attributable to the Offering,
pro forma as adjusted net tangible book value per share after the Offering, and
pro forma as adjusted dilution to new investors would be $4.20, $4.45 and
$13.05, respectively.

The following table sets forth at March 31, 1996, after giving effect to the
Acquisitions and the sale of the Common Stock offered by the Company in the
Offering: (i) the number of shares of Common Stock purchased by existing
stockholders from the Company and the total consideration (including the fair
value of the shares of Common Stock issued to the Sellers) and average price
per share paid to the Company for such shares; (ii) the number of shares of
Common Stock purchased by new investors in the Offering from the Company and
the total consideration and the price per share paid by them for such shares;
and (iii) the percentage of shares purchased from the Company by existing
stockholders and the new investors and the percentages of consideration paid to
the Company for such shares by existing stockholders and new investors.

<TABLE>
<CAPTION>
-------------------------------------------------------
SHARES PURCHASED TOTAL CONSIDERATION
AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
---------- ------- ------------ ------- -------------
<S> <C> <C> <C> <C> <C>
Existing stockholders(1) 12,914,000 55.7% $ 55,010,000 23.4% $ 4.26
New investors 10,286,000 44.3 180,005,000 76.6 $17.50
---------- ----- ------------ -----
Total 23,200,000 100.0% $235,015,000 100.0%
========== ===== ============ =====
</TABLE>
- --------

(1)Consists of the Sellers and the stockholders of TeleSpectrum Worldwide prior
to the consummation of the sale of the shares of Common Stock offered hereby.
Sales by the Selling Stockholders in the Offering will reduce the outstanding
number of shares held by existing stockholders to 12,592,286 shares, or
approximately 54.3% of the total number of shares of Common Stock outstanding
after the Offering, and will increase the number of shares to be held by new
stockholders to 10,607,714 shares, or approximately 45.7% of the total number
of shares of Common Stock outstanding after the Offering. See "Principal and
Selling Stockholders."

18
<PAGE>

SELECTED PRO FORMA COMBINED FINANCIAL DATA

TeleSpectrum Worldwide will acquire, simultaneously with and as a condition to
the consummation of the Offering, the Operating Businesses. These Acquisitions
will be recorded using the purchase method of accounting. The Selected Pro
Forma Combined Financial Data assume the consummation of the Acquisitions and
the consummation of the Offering. See "Certain Relationships and Related Party
Transactions--The Acquisitions," "Pro Forma Combined Financial Statements" and
"Notes to Pro Forma Combined Financial Statements."

--------------------------------
<TABLE>
<CAPTION>
Dollars in thousands, except PRO FORMA
per share data --------------------------------------------
YEAR ENDED
DECEMBER 31, THREE MONTHS ENDED MARCH 31,
1995 1995 1996
------------ -------------- --------------
<S> <C> <C> <C>
PRO FORMA STATEMENT OF INCOME
DATA(1):
Revenues $ 87,954 $ 20,391 $ 26,470
Cost of services 59,596 13,004 18,441
Selling, general and adminis-
trative expense(2) 16,921 4,223 4,921
Goodwill amortization(3) 5,504 1,376 1,376
---------- -------------- --------------
Operating income 5,933 1,788 1,732
Interest income 158 15 61
Interest expense(4) (94) (22) (22)
---------- -------------- --------------
Income before income taxes 5,997 1,781 1,771
Income taxes(5) 2,519 748 744
---------- -------------- --------------
Net income $ 3,478 $ 1,033 $ 1,027
---------- -------------- --------------
Net income per share(6) $ 0.15 $ 0.04 $ 0.04
========== ============== ==============
Shares used in computing pro
forma net income
per share(6) 23,200,000 23,200,000 23,200,000
---------- -------------- --------------
</TABLE>

<TABLE>
-------------------------
<CAPTION>
MARCH 31,1996
PRO FORMA
AFTER INITIAL PRO FORMA
CAPITALIZATION(7) AS ADJUSTED(1)
Dollars in thousands ----------------- --------------
<S> <C> <C> <C>
PRO FORMA BALANCE SHEET DATA:
Cash and cash equivalents $ 1,610 $ 60,657
Working capital 2,110 68,959
Goodwill -- 137,609
Total assets 2,110 233,730
Long-term debt, less current matu-
rities -- --
Stockholders' equity 2,110 221,948
</TABLE>
- --------

(1)Assumes that the closings of the Acquisitions and the Offering had occurred
as of January 1, 1995, in the case of the pro forma statement of income data,
and as of March 31, 1996, in the case of the pro forma balance sheet data. The
pro forma combined financial data are based upon preliminary estimates,
available information and certain assumptions that management deems
appropriate. The pro forma combined financial data presented herein are not
necessarily indicative of the results the Company would have obtained had such
events occurred at the beginning of the period, or of the future results of the
Company. The pro forma combined financial data should be read in conjunction
with the other financial data and notes thereto included elsewhere in this
Prospectus. The aggregate consideration for the Acquisitions is $90.9 million
in cash, 4,403,863 shares of Common Stock of the Company and warrants to
purchase an aggregate of 593,400 shares of Common Stock.

19
<PAGE>

(4)Includes a pro forma adjustment to reflect the elimination of interest
expense resulting from the reduction of debt paid from the net proceeds of the
Offering.
(5)Includes a pro forma adjustment to calculate the provision for income taxes
on the pro forma combined results at an effective tax rate of 42.0%.
(6)Computed on a basis described in Note 5 of Notes to Pro Forma Combined
Financial Statements.
(7)Includes a pro forma adjustment to reflect the Initial Capitalization.

20
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF PRO FORMA FINANCIAL CONDITION AND PRO
FORMA RESULTS OF OPERATIONS

GENERAL

The Company was founded in April 1996 to create a national provider of
integrated teleservices solutions that build upon a foundation of outbound and
inbound telemarketing and include inbound customer service, market research,
direct mail and fulfillment and other direct marketing services. The Company
focuses on providing teleservices to major clients in the telecommunications,
insurance, financial services, pharmaceuticals and healthcare, consumer
products and high technology industries.

The Company's revenues are derived primarily from service fees charged to
clients on an hourly or project basis and commissions charged on a per result
basis. A majority of the Company's pro forma 1995 revenues were derived from
service fees. In the aggregate, the revenues of the Operating Businesses have
grown from $23.7 million in 1991 to $88.0 million in 1995. This growth
primarily resulted from the Operating Businesses' ability to meet their
clients' increasing demands to deliver new services as the market required and
to attract new customers with quality service at competitive prices.

The Company's cost of services consists primarily of compensation, telephone
and other call center-related operating and support expenses. Cost of services
as a percentage of revenues has fluctuated during the period 1991 through 1995
as a result of call center start-up costs, offset in certain periods by
efficiencies associated with increased operations. The Company anticipates
continued fluctuations in cost of services as a percentage of revenues.

TeleSpectrum Worldwide, which has conducted no operations to date, has entered
into agreements to acquire the Operating Businesses simultaneously with the
consummation of the sale of the Common Stock offered hereby. The Operating
Businesses have been operating independently. The Company intends to integrate
these businesses, their operations and administrative functions over a period
of time, subject to contractual obligations in the agreements relating to the
Acquisitions. See "Certain Relationships and Related Party Transactions--The
Acquisitions." Such integration may present opportunities to reduce costs
through the elimination of duplicate functions and through economies of scale,
particularly in obtaining greater volume discounts from telecommunications
service providers, but may also necessitate additional costs and expenditures
for corporate management and administration, corporate expenses related to
being a public company, systems integration, employee relocation and severance
and facilities expansion. These various costs and possible cost-savings may
make comparison of future operating results with historical results difficult.
See "Management--Executive Compensation" and "--Employment Agreements."

PRO FORMA RESULTS OF OPERATIONS

The following discussions should be read in conjunction with the Selected Pro
Forma Combined Financial Data, the Selected Financial Data of the Operating
Businesses and the Financial Statements and related notes appearing elsewhere
in this Prospectus.

Three Months Ended March 31, 1996 Compared to Three Months Ended March 31, 1995

Revenues. Revenues increased to $26.5 million in the three months ended March
31, 1996 from $20.4 million in the three months ended March 31, 1995, an
increase of $6.1 million, or 29.8%. The increase in revenues resulted primarily
from increased call volume from existing clients and the addition of new
clients.

Cost of Services. Cost of services increased to $18.4 million in the three
months ended March 31, 1996 from $13.0 million in the three months ended March
31, 1995, an increase of $5.4 million, or 41.8%. As a percentage of revenues,
cost of services increased to 69.7% in the three months ended March 31, 1996
from 63.8% in the three months ended March 31, 1995. This percentage increase
was primarily the result of start-up costs associated with adding new capacity
to support the Operating Businesses' growth and a temporary shift at one of the

21
<PAGE>

Operating Businesses to lower margin services to fill capacity resulting from
an unexpected reduction in demand from a major client.

Selling, General and Administrative. Selling, general and administrative
expenses, excluding goodwill, increased to $4.9 million in the three months
ended March 31, 1996 from $4.2 million in the three months ended March 31,
1995, an increase of $0.7 million, or 16.5%. The increase was primarily the
result of additional administrative, personnel and related corporate expenses
associated with the Operating Businesses' growth. As a percentage of revenues,
selling, general and administrative expenses decreased to 18.6% in the three
months ended March 31, 1996 from 20.7% in the three months ended March 31,
1995, primarily as a result of the spreading of expenses over increased
revenues.

Net Income. Net income of $1.027 million in the three months ended March 31,
1996 declined 0.6%, from $1.033 million in the three months ended March 31,
1995. The decrease resulted principally from higher cost of services relative
to revenues at one of the Operating Businesses (which realized a net loss for
the period) and the effects of lower revenues upon relatively unchanged
expenses at two other Operating Businesses (one of which realized a net loss
for both periods presented). See "Selected Financial Data of the Operating
Businesses."

LIQUIDITY AND CAPITAL RESOURCES

The Company will utilize proceeds from the Offering to repay substantially all
of the Operating Businesses' existing short-term and long-term debt. In
addition, the Company intends to obtain a bank credit facility after the
consummation of the Offering.

In connection with the acquisition of the assets of SOMAR, Inc., the Company
has agreed to expend up to $14.0 million, if necessary, to meet that Operating
Business's capital expenditures requirements, which primarily relate to
potential openings of additional call centers. The Company may also be required
to expend certain amounts in payment of the cash portion of earn-out provisions
and purchase price adjustments related to the Acquisitions. The Company does
not have any other commitments for significant capital expenditures, although
it anticipates expanding and upgrading existing call centers and opening new
call centers in the ordinary course of business.

The Company believes that funds generated from operations, together with the
net proceeds of the Offering, will be sufficient to finance its current
operations, potential obligations relating to the Acquisitions and planned
capital expenditure requirements at least through 1997.

INFLATION

The Company does not believe that inflation has had a material effect on the
operating results of the Operating Businesses. However, there can be no
assurance that the Company's business will not be affected by inflation in the
future.

POTENTIAL FLUCTUATIONS IN QUARTERLY OPERATING RESULTS

22
<PAGE>

SELECTED FINANCIAL DATA OF THE OPERATING BUSINESSES

The selected financial data of the Operating Businesses are derived in part
from the more detailed financial statements and notes thereto of the Operating
Businesses included elsewhere in this Prospectus. The balance sheet data as of
December 31, 1994 and 1995, and the statement of income data for each of the
three years in the period ended December 31, 1995, for SOMAR, Harris and Reich
have been derived from the audited financial statements included elsewhere
herein. The balance sheet data as of December 31, 1991, 1992 and 1993, and the
statement of income data for each of the two years in the period ended December
31, 1992, for SOMAR, Harris and Reich have been derived from unaudited data.
The balance sheet data at September 30, 1994 and 1995 and the statement of
income data for each of the two years in the period ended September 30, 1995
for The Response Center have been derived from the audited financial statements
included elsewhere herein. The balance sheet data as of September 30, 1991,
1992 and 1993 and the statement of income data for each of three years in the
period ended September 30, 1993 for The Response Center have been derived from
unaudited data. The balance sheet data as of December 30, 1994 and December 29,
1995, and the statement of income data for the years ended December 31, 1993,
December 30, 1994 and December 29, 1995, for NBG have been derived from the
audited financial statements included elsewhere herein. The balance sheet data
as of December 27, 1991, December 25, 1992 and December 31, 1993 and the
statement of income data for December 27, 1991 and December 25, 1992, for NBG
have been derived from unaudited data. The balance sheet data at December 31,
1995, and the statement of income data for the year then ended, for
TeleSpectrum have been derived from the audited financial statements included
elsewhere herein. The balance sheet data as of December 31, 1991, 1992, 1993
and 1994, and the statement of income data for each of the four years in the
period ended December 31, 1994, for TeleSpectrum have been derived from
unaudited data.

The selected individual financial data of the Operating Businesses for the
three months ended March 31, 1995 and 1996 have been derived from the unaudited
financial statements included elsewhere herein. Such selected financial data
are not necessarily indicative of the results to be expected for the full year.

In the opinion of the Company, the unaudited financial statements of the
Operating Businesses reflect all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of the financial
position and results of operations of the Operating Businesses for those
periods in accordance with generally accepted accounting principles. Selected
Financial Data of the Operating Businesses should be read in conjunction with
the financial statements and notes thereto and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" included elsewhere
in this Prospectus. All Operating Businesses have fiscal years ending December
31, with the exceptions of The Response Center, whose year end is September 30,
and NBG, which operates on a fifty-two, fifty-three week fiscal year ending on
the last Friday of the calendar year.

23
<PAGE>

<TABLE>
<CAPTION>
----------------------------------------------

THREE MONTHS
ENDED
FISCAL YEAR ENDED MARCH 31,
1991 1992 1993 1994 1995 1995 1996
Dollars in thousands ------ ------- ------- ------- ------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENTS OF INCOME
DATA(1):
SOMAR
Revenues $4,674 $6,594 $10,703 $20,785 $31,900 $6,862 $9,274
Cost of services 2,712 5,194 7,731 15,623 25,048 5,032 7,931
Selling, general and
administrative
expenses 1,712 1,775 2,787 4,115 5,162 1,284 1,554
Operating income
(loss) 250 (375) 185 1,047 1,690 546 (211)
Income (loss) before
income taxes 217 (474) 96 627 979 417 (424)
NBG
Revenues $814 $ 2,875 $ 4,849 $ 5,778 $12,829 $2,695 $3,960
Cost of services 533 1,838 3,200 4,259 8,572 1,766 2,752
Selling, general and
administrative
expenses 169 1,028 1,289 1,443 2,115 508 631
Operating income 112 9 360 76 2,142 421 577
Income (loss) before
income taxes 112 (35) 285 33 2,106 406 562
Harris
Revenues $5,944 $5,734 $ 7,018 $10,115 $12,690 $3,988 $2,617
Cost of services 3,192 3,008 3,834 5,530 6,402 2,078 1,324
Selling, general and
administrative
expenses 2,223 2,273 2,473 2,680 2,986 761 768
Operating income 529 453 711 1,905 3,302 1,149 525
Income before income
taxes 322 281 569 1,719 3,158 1,108 513
Reich
Revenues $5,009 $3,252 $ 4,375 $ 5,424 $12,253 $2,059 $5,465
Cost of services 3,981 2,388 3,172 4,225 7,836 1,327 3,165
Selling, general and
administrative
expenses 1,429 1,019 1,111 976 2,534 297 570
Operating income
(loss) (401) (155) 92 223 1,883 435 1,730
Income (loss) before
income taxes (553) (220) 71 199 1,840 428 1,719
TeleSpectrum
Revenues $4,167 $6,827 $ 9,916 $ 9,386 $11,854 $2,846 $3,725
Cost of services 3,017 4,555 7,429 6,754 8,338 1,920 2,483
Selling, general and
administrative
expenses 1,144 1,622 2,628 2,636 3,072 805 951
Operating income
(loss) 6 650 (141) (4) 444 121 291
Income (loss) before
income taxes (81) 552 (240) (154) 278 117 248
The Response Center
Revenues $3,057 $3,946 $ 6,061 $ 6,183 $ 6,719 $1,941 $1,429
Cost of services 1,360 1,771 2,911 3,426 3,583 881 786
Selling, general and
administrative
expenses 661 972 2,806 2,800 2,717 1,061 875
Operating income
(loss) 1,036 1,203 344 (43) 419 (1) (232)
Income (loss) before
income taxes 1,033 1,208 356 (37) 429 (1) (232)
</TABLE>
- --------
(1)TeleSpectrum Worldwide was incorporated on April 26, 1996; accordingly there
were no historical operating results prior to that date.

24
<PAGE>

-------------------------------------------
AT FISCAL YEAR END AT MARCH 31,
1991 1992 1993 1994 1995 1996
Dollars in thousands ------ ------ ------ ------ ------- ------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA(1):
SOMAR
Cash and cash
equivalents $ 10 $ 1 $ 16 $ 2 $ 25 $ 4
Working capital
(deficit) (147) (280) (149) (242) (1,990) (2,874)
Total assets 1,644 1,694 2,014 5,526 10,792 13,806
Long-term debt,
including capital
lease obligations,
less current
portion 238 786 755 1,145 1,639 3,046
Stockholders' equity
(deficit) 123 (487) (391) 478 771 347
NBG
Cash and cash
equivalents $ 2 $ 14 $ 9 $ -- $ 700 $ 1,988
Working capital
(deficit) 12 (95) (102) (238) 1,270 1,619
Total assets 488 616 1,162 1,483 4,234 5,677
Long-term debt,
including capital
lease obligations,
less current
portion 202 208 265 277 454 824
Stockholders' equity 113 78 363 396 2,254 2,816
Harris
Cash and cash
equivalents $ 232 $ 469 $ 334 $ 975 $ 2,919 $ 2,311
Working capital 529 623 931 2,260 3,741 4,044
Total assets 5,365 5,679 7,101 8,773 10,803 10,049
Long-term debt less
current portion 1,948 2,006 1,818 1,863 1,530 1,451
Stockholders' equity 2,254 2,465 3,007 4,580 6,375 6,640
Reich
Cash and cash
equivalents $ 66 $ 30 $ 28 $ 31 $ 220 $ 676
Working capital
(deficit) (575) (220) (243) (59) 821 1,910
Total assets 1,175 795 827 1,111 4,318 5,994
Long-term debt,
including capital
lease obligations,
less current
portion 26 159 226 273 371 485
Stockholder's equity
(deficit) (637) (541) (470) (272) 1,668 3,387
TeleSpectrum
Cash and cash
equivalents $ 100 $ 330 $ 28 $ 163 $ 15 $ 402
Working capital
(deficit) (296) (97) (85) (241) 37 125
Total assets 2,051 3,217 3,224 3,182 3,549 4,535
Long-term debt,
including capital
lease obligations,
less current
portion 659 293 470 217 57 18
Stockholders' equity 92 765 481 409 687 935
The Response Center
Cash and cash
equivalents $ 293 $ 98 $ 213 $ 72 $ 282 $ 641
Working capital 1,053 1,508 1,179 1,111 1,665 1,449
Total assets 1,369 1,947 2,034 1,863 2,298 2,425
Long-term debt less
current portion -- -- -- -- -- --
Stockholders' equity 1,124 1,569 1,353 1,283 1,812 1,704
</TABLE>
- --------
(1)TeleSpectrum Worldwide was incorporated on April 26, 1996; accordingly,
there were no historical results prior to that date.

25
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the Selected
Financial Data of the Operating Businesses and the Financial Statements and
related notes thereto appearing elsewhere in this Prospectus.

OPERATING BUSINESSES

Each of the Sellers (other than TeleSpectrum Training Services, Inc., an
affiliate of TeleSpectrum, Inc.) has elected to be treated as an "S
corporation" under Subchapter S of the Internal Revenue Code of 1986, as
amended (the "Code"). As a result, no Seller (other than TeleSpectrum Training
Services, Inc.) was subject to federal income taxes.

SOMAR

Results of Operations

The following table sets forth selected financial data and data as a percentage
of revenues for the periods indicated.

<TABLE>
<CAPTION>
-------------------------------------------------------------------------
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
1993 1994 1995 1995 1996
Dollars in thousands ------------- ------------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues $10,703 100.0% $20,785 100.0% $31,900 100.0% $6,862 100.0% $9,274 100.0%
Cost of services 7,731 72.2 15,623 75.2 25,048 78.5 5,032 73.3 7,931 85.5
Selling, general and
administrative
expenses 2,787 26.1 4,115 19.8 5,162 16.2 1,284 18.7 1,554 16.8
------- ------- ------- ------ ------
Total operating
expenses 10,518 98.3 19,738 95.0 30,210 94.7 6,316 92.0 9,485 102.3
Operating income
(loss) 185 1.7 1,047 5.0 1,690 5.3 546 8.0 (211) (2.3)
Interest expense, net 89 0.8 420 2.0 711 2.2 129 1.9 213 2.3
------- ------- ------- ------ ------
Pre-tax income (loss) $ 96 0.9 $ 627 3.0 $ 979 3.1 $ 417 6.1 $ (424) (4.6)
======= ======= ======= ====== ======
</TABLE>

Three Months Ended March 31, 1996 Compared to Three Months Ended March 31, 1995

Revenues. Revenues increased to $9.3 million in the three months ended March
31, 1996 from $6.9 million in the three months ended March 31, 1995, an
increase of $2.4 million, or 35.2%. The increase in revenues resulted primarily
from increased call volume from existing insurance clients and the addition of
new insurance clients.

Cost of Services. Cost of services, which primarily consists of labor,
telephone and other call center-related operating and support expenses,
increased to $7.9 million in the three months ended March 31, 1996 from $5.0
million in the three months ended March 31, 1995, an increase of $2.9 million,
or 57.6%. As a percentage of revenues, cost of services increased to 85.5% in
the three months ended March 31, 1996 from 73.3% in the three months ended
March 31, 1995. This percentage increase was primarily the result of a
temporary shift to lower margin services to fill capacity resulting from an
unexpected reduction in demand from SOMAR's largest client, start-up costs
associated with the opening of the Beckley, West Virginia call center on
February 29, 1996 and costs associated with revenues lost due to inclement
weather. Start-up costs included new management and staff, insurance licensing
and education.

Selling, General and Administrative. Selling, general and administrative
expenses increased to $1.6 million in the three months ended March 31, 1996
from $1.3 million in the three months ended March 31, 1995, an increase of $0.3
million, or 21.0%. The increase was primarily the result of additional
administrative, personnel and related corporate expenses associated with
SOMAR's growth. As a percentage of revenues, selling, general and
administrative expenses decreased to 16.8% in the three months ended March 31,
1996 from 18.7% in the three months ended March 31, 1995, primarily as a result
of the spreading of expenses over increased revenues.

26
<PAGE>

Interest Expense, Net. Interest expense, net, increased to $0.2 million in the
three months ended March 31, 1996 from $0.1 million in the three months ended
March 31, 1995, an increase of $0.1 million, or 65.1%. The increase resulted
from higher average borrowings outstanding during the three months ended March
31, 1996 compared with the three months ended March 31, 1995. The borrowed
funds were used primarily to finance working capital requirements, to open the
Beckley, West Virginia call center and to purchase new equipment. As a
percentage of revenues, interest expense, net, increased to 2.3% in the three
months ended March 31, 1996 from 1.9% in the three months ended March 31, 1995.

Year Ended December 31, 1995 Compared to Year Ended December 31, 1994

Revenues. Revenues increased to $31.9 million in 1995 from $20.8 million in
1994, an increase of $11.1 million, or 53.5%. This increase primarily resulted
from increased call volume from existing insurance clients and the addition of
new insurance clients.

Cost of Services. Cost of services increased to $25.0 million in 1995 from
$15.6 million in 1994, an increase of $9.4 million, or 60.3%. As a percentage
of revenues, cost of services increased to 78.5% in 1995 from 75.2% in 1994.
This increase resulted primarily from start-up costs related to the opening of
two new call centers in Huntington, West Virginia in March and August 1995, and
a delay in anticipated new business. The start-up costs included new management
and staff, insurance licensing and education.

Selling, General and Administrative. Selling, general and administrative
expenses increased to $5.2 million in 1995 from $4.1 million in 1994, an
increase of $1.1 million, or 25.4%. This increase primarily resulted from
additional administrative, personnel and corporate expenses associated with the
growth in existing facilities. As a percentage of revenues, selling, general
and administrative expenses decreased to 16.2% in 1995 from 19.8% in 1994,
primarily as a result of the spreading of expenses over increased revenues.

Interest Expense, Net. Interest expense, net, increased to $0.7 million in 1995
from $0.4 million in 1994, an increase of $0.3 million, or 69.3%. This increase
resulted from higher average borrowings outstanding during 1995 compared to
1994. The borrowed funds were used primarily to finance working capital
requirements, to open the Huntington, West Virginia call centers and to
purchase new equipment. As a percentage of revenues, interest expense, net,
increased to 2.2% in 1995 from 2.0% in 1994.

Year Ended December 31, 1994 Compared to Year Ended December 31, 1993

Revenues. Revenues increased to $20.8 million in 1994 from $10.7 million in
1993, an increase of $10.1 million, or 94.2%. This increase primarily resulted
from increased call volume from existing clients and the addition of new
clients, primarily in the financial services industry.

Cost of Services. Cost of services increased to $15.6 million in 1994 from $7.7
million in 1993, an increase of $7.9 million, or 102.1%. As a percentage of
revenues, cost of services increased to 75.2% in 1994 from 72.2% in 1993. This
increase resulted primarily from start-up costs related to the opening of two
new call centers in Fayetteville, North Carolina and Asheville, North Carolina
in January 1994 and September 1994, respectively. These costs included new
management and staff, insurance licensing and education.

Selling, General and Administrative. Selling, general and administrative
expenses increased to $4.1 million in 1994 from $2.8 million in fiscal 1993, an
increase of $1.3 million, or 47.7%. This increase primarily resulted from
additional administrative, personnel and corporate expenses associated with the
growth in existing facilities. As a percentage of revenues, selling, general
and administrative expenses decreased to 19.8% in 1994 from 26.1% in 1993,
primarily as a result of the spreading of expenses over the increased revenues.

Interest Expense, Net. Interest expense, net, increased to $0.4 million in 1994
from $0.1 million in 1993, an increase of $0.3 million. This increase resulted
from higher average borrowings outstanding during 1994

27
<PAGE>

compared to 1993. The borrowed funds were used primarily to finance working
capital requirements, to open the Asheville and Fayetteville, North Carolina
call centers and to purchase new equipment. As a percentage of revenues,
interest expense, net, increased to 2.0% in 1994 from 0.8% in 1993.

Liquidity and Capital Resources

SOMAR's principal source of liquidity has been available borrowings under
credit facilities. The following table sets forth selected information from
SOMAR's statements of cash flows for the periods indicated:

<TABLE>
----------------------------------------------------
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
1993 1994 1995 1995 1996
Dollars in thousands --------- ------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Net cash provided by
(used in) operating
activities $ 254 $ 57 $ 441 $ (75) $ (313)
Net cash provided by
(used in) investment
activities (444) 346 (2,870) (1,522) (461)
Net cash provided by
(used in) financing
activities 205 (417) 2,452 1,598 753
</TABLE>

From 1993 through the end of 1995, SOMAR generated $0.8 million in net cash
from operating activities. During this period, $3.2 million of cash was
generated primarily from pre-tax income plus non-cash charges, and was reduced
by $2.4 million of cash used to fund increases in working capital resulting
from the increase in revenues over the same period. Net cash used in the three
months ended March 31, 1996 reflects the net loss for the period.

Cash used in investment activities was attributable to equipment and other
capital to support SOMAR's growth, namely through additions to SOMAR's number
of call centers and expenditures for information technology equipment and
through investments in database management, telephone systems and management
information systems. From the beginning of 1993 through March 31, 1996, SOMAR
opened four new call centers, adding approximately 384 workstations. Capital
expenditures during this period of $5.0 million were funded with borrowings and
capitalized leases.

Financing activities have included distributions to shareholders and borrowing
activity. Dividends paid to shareholders from the beginning of 1993 through
March 31, 1996 of $1.4 million were primarily payments to cover shareholder
taxes related to SOMAR's S-corporation status.

On December 29, 1995, SOMAR entered into an agreement with a bank for a one-
year revolving line of credit (the "Credit Facility") which now has a maximum
borrowing limit applicable to SOMAR of $6.5 million and an interest rate equal
to the bank's prime rate plus one percentage point. The Credit Facility is
secured by trade accounts receivable, equipment and other assets of SOMAR. The
agreement terminates on January 1, 1997, and contains certain restrictive
covenants which, among other things, require the maintenance of certain
financial ratios, limit capital expenditures and bonuses and restrict future
indebtedness. As of March 31, 1996, SOMAR was in violation of certain loan
covenants, for which it has obtained a waiver letter from the bank. Outstanding
amounts under the Credit Facility will be paid in connection with the closing
of the Offering.

On December 31, 1995, SOMAR borrowed $1.0 million from a bank on a short-term
basis in connection with the transition of its line of credit from another
lender. This short-term note was repaid on January 3, 1996, with proceeds from
the new Credit Facility.

From 1993 through March 31, 1996, SOMAR financed certain equipment purchases
through term financing agreements and capital leases with various lending
institutions and a government agency. The financing agreements are secured by
the related equipment and other assets of SOMAR. As of March 31, 1996,
outstanding obligations under term financing agreements with the various
lending institutions totaled $2.9 million, with a weighted average interest
rate of 9.9%, and outstanding capital leases were $1.7 million, with a weighted
average

28
<PAGE>

interest rate of 11.5%. The outstanding amounts under these financing
arrangements and leases will be paid in connection with the closing of the
Offering. The West Virginia Economic Development Authority ("WVEDA") has
committed to provide term financing of $0.7 million at 4.0%. This financing
will replace $0.7 million of term financing used to finance SOMAR's Huntington,
West Virginia call centers, which term financing was due on May 21, 1996 and
has been extended through July 1, 1996.

29
<PAGE>

NBG

Founded in 1991, NBG provides outbound telemarketing services to clients in the
financial services, telecommunications and high technology industries. NBG's
revenues are derived primarily from service fees charged to clients on a
performance/results basis, rather than on an hourly basis.

Results of Operations

The following table sets forth selected financial data and data as a percentage
of revenues for the periods indicated.

<TABLE>
<CAPTION>
---------------------------------------------------------------------
YEAR ENDED THIRTEEN WEEKS ENDED
DECEMBER 31, DECEMBER 30, DECEMBER 29, MARCH 31, MARCH 29,
1993 1994 1995 1995 1996
Dollars in thousands ------------ ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues $4,849 100.0% $5,778 100.0% $12,829 100.0% $2,695 100.0% $3,960 100.0%
Cost of services 3,200 66.0 4,259 73.7 8,572 66.8 1,766 65.5 2,752 69.5
Selling, general and
administrative
expenses 1,289 26.6 1,443 25.0 2,115 16.5 508 18.9 631 15.9
------ ------ ------- ------ ------
Total operating
expenses 4,489 92.6 5,702 98.7 10,687 83.3 2,274 84.4 3,383 85.4
Operating income 360 7.4 76 1.3 2,142 16.7 421 15.6 577 14.6
Interest expense, net 75 1.5 43 0.7 36 0.3 15 0.5 15 0.4
------ ------ ------- ------ ------
Pre-tax income $ 285 5.9 $ 33 0.6 $ 2,106 16.4 $ 406 15.1 $ 562 14.2
====== ====== ======= ====== ======
</TABLE>

Thirteen Weeks Ended March 29, 1996 Compared to Thirteen Weeks Ended March 31,
1995

Revenues. Revenues increased to $4.0 million in the thirteen weeks ended March
29, 1996 from $2.7 million in the thirteen weeks ended March 31, 1995, an
increase of $1.3 million, or 46.9%. This increase was primarily a result of an
increase in revenues from two of NBG's most significant clients to $3.7 million
in the thirteen weeks ended March 29, 1996 from $2.5 million in the thirteen
weeks ended March 31, 1995, an increase of $1.2 million, or 48.0%. Revenues
from these clients increased primarily as a result of increased telemarketing
call volume. The remaining increase in revenues was attributable to the
addition of new clients, primarily in the high technology and financial
services industries.

Cost of Services. Cost of services, which primarily consists of labor,
telephone and other call center-related operating and support expenses,
increased to $2.8 million in the thirteen weeks ended March 29, 1996 from $1.8
million in the thirteen weeks ended March 31, 1995, an increase of $1.0
million, or 55.8%. As a percentage of revenues, cost of services increased to
69.5% in the thirteen weeks ended March 29, 1996 from 65.5% in the thirteen
weeks ended March 31, 1995. This increase primarily resulted from the hiring of
new CCRs to support anticipated revenue growth.

Selling, General, and Administrative. Selling, general and administrative
expenses increased to $0.6 million in the thirteen weeks ended March 29, 1996
from $0.5 million in the thirteen weeks ended March 31, 1995, an increase of
$0.1 million, or 24.2%. As a percentage of revenues, selling, general, and
administrative expenses decreased to 15.9% in the thirteen weeks ended March
29, 1996 from 18.9% in the thirteen weeks ended March 31, 1995, primarily as a
result of the spreading of expenses over increased revenues.

Year Ended December 29, 1995 Compared to Year Ended December 30, 1994

Revenues. Revenues increased to $12.8 million in 1995 from $5.8 million in
1994, an increase of $7.0 million, or 122.0%. This increase was primarily a
result of an increase in revenues from two of NBG's most significant clients to
$11.9 million in 1995 from $5.2 million in 1994, an increase of $6.7 million,
or 128.9%. Revenues from these clients increased primarily as a result of
increased telemarketing call volume and in particular, a full year of revenues
in 1995 from one of these clients, compared to approximately four months of
revenues in 1994. The remaining increase was due to the addition of several
clients in the high technology and financial services industries.

30
<PAGE>

Cost of Services. Cost of services increased to $8.6 million in 1995 from $4.3
million in 1994, an increase of $4.3 million, or 101.3%. As a percentage of
revenues, cost of services decreased to 66.8% in 1995 from 73.7% in 1994. This
decrease primarily resulted from the spreading of certain fixed costs over
increased revenues.

Selling, General and Administrative. Selling, general and administrative
expenses increased to $2.1 million in 1995 from $1.4 million in 1994, an
increase of $0.7 million, or 46.6%. This increase primarily resulted from
additional administrative, personnel and related corporate expenses associated
with NBG's growth. As a percentage of revenues, selling, general and
administrative expenses decreased to 16.5% in 1995 from 25.0% in 1994,
primarily as a result of the spreading of expenses over increased revenues.

Year Ended December 30, 1994 Compared to Year Ended December 31, 1993

Revenues. Revenues increased to $5.8 million in 1994 from $4.8 million in 1993,
an increase of $1.0 million, or 19.2%. This increase was primarily a result of
an increase in revenues from two of NBG's most significant clients to $5.2
million in 1994 from $4.6 million in 1993. The remaining increase was a result
of increased telemarketing call volume from other existing clients and the
addition of new clients.

Cost of Services. Cost of services increased to $4.3 million in 1994 from $3.2
million in 1993, an increase of $1.1 million, or 33.1%. As a percentage of
revenues, cost of services increased to 73.7% in 1994 from 66.0% in 1993. This
increase resulted primarily from investments to increase capacity.

Selling, General and Administrative. Selling, general and administrative
expenses increased to $1.4 million in 1994 from $1.3 million in 1993, an
increase of $0.1 million, or 11.9%. This increase resulted primarily from
additional administrative, personnel and related corporate expenses associated
with NBG's growth. As a percentage of revenues, selling, general and
administrative expenses decreased to 25.0% in 1994 from 26.6% in 1993,
primarily as a result of the spreading of expenses over increased revenues.

Liquidity and Capital Resources

NBG's primary sources of liquidity have historically been cash flows from
operating activities and available borrowing capacity under credit facilities.
The following table sets forth selected information from NBG's statements of
cash flows for the period indicated.

From 1993 through the thirteen weeks ended March 29, 1996, NBG generated net
cash of $3.8 million principally from operating activities. This amount was
generated from pre-tax income plus depreciation and amortization. Growth in
accounts receivable has been offset primarily by increases in deferred revenue
and accrued expenses.

Historically, net cash used in investing activities has been expended for
equipment and other capital to support expansion of NBG's call center
operations, including additions to NBG's data management, telephone and
management information systems. Financing activities have included limited
borrowings, and distributions to stockholders. NBG finances the majority of its
equipment purchases with capital leases. Outstanding amounts under capitalized
leases and other outstanding indebtedness will be paid in connection with the
closing of the Offering.

31
<PAGE>

HARRIS

Founded in 1931, Harris is a regional, vertically-integrated direct mail and
fulfillment organization which provides its services primarily to companies in
the pharmaceuticals and healthcare, financial services and insurance
industries. Harris operates two wholly-owned subsidiaries, Harris Direct
Marketing, Inc. ("HDM") and Harris Fulfillment, Inc. ("HFI"). HDM clients and
certain of HFI clients compensate Harris on a per project basis.

Results of Operations

The following table sets forth selected financial data and data as a percentage
of revenues for the periods indicated.

<TABLE>
<CAPTION>
-----------------------------------------------------------------------
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
1993 1994 1995 1995 1996
Dollars in thousands ------------ ------------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues $7,018 100.0% $10,115 100.0% $12,690 100.0% $3,988 100.0% $2,617 100.0%
Cost of services 3,834 54.6 5,530 54.7 6,402 50.5 2,078 52.1 1,324 50.6
Selling, general and
administrative
expenses 2,473 35.3 2,680 26.5 2,986 23.5 761 19.1 768 29.4
------ ------- ------- ------ ------
Total operating
expenses 6,307 89.9 8,210 81.2 9,388 74.0 2,839 71.2 2,092 80.0
Operating income 711 10.1 1,905 18.8 3,302 26.0 1,149 28.8 525 20.0
Interest expense, net 142 2.0 186 1.8 144 1.1 41 1.0 12 0.5
------ ------- ------- ------ ------
Pre-tax income $ 569 8.1 $ 1,719 17.0 $ 3,158 24.9 $1,108 27.8 $ 513 19.5
====== ======= ======= ====== ======
</TABLE>

Three Months Ended March 31, 1996 Compared to Three Months Ended March 31, 1995

Revenues. Revenues decreased to $2.6 million in the three months ended March
31, 1996 from $4.0 million in the three months ended March 31, 1995, a decrease
of $1.4 million, or 34.4%. This decrease resulted from a 32.5% decrease in HFI
revenue and a 37.5% decrease in HDM revenue. The decrease in HFI revenue to
$1.6 million in the three months ended March 31, 1996 from $2.4 million in the
three months ended March 31, 1995 was primarily a result of a $0.6 million
decrease in revenue from a single pharmaceuticals client. The decrease in HDM
revenue to $1.0 million in the three months ended March 31, 1996 from $1.6
million in the three months ended March 31, 1995 was due to a $0.8 million
decrease from two of HDM's most significant clients, which was partially offset
by revenue growth in the remaining HDM client base and revenue generated from
new clients.

Cost of Services. Cost of services, which primarily consists of labor and other
direct mail and fulfillment-related operating and support expenses, decreased
to $1.3 million in the three months ended March 31, 1996 from $2.1 million in
the three months ended March 31, 1995, a decrease of $0.8 million, or 36.3%. As
a percentage of revenues, cost of services remained relatively stable.

Selling, General and Administrative. Selling, general and administrative
expenses were $0.8 million in the three months ended March 31, 1996 and 1995.
As a percentage of revenues, selling, general and administrative expenses
increased to 29.4% in the three months ended March 31, 1996 from 19.1% in the
three months ended March 31, 1995. This increase was primarily a result of a
decrease in revenues at HFI. Selling, general and administrative expenses
remained consistent at HDM as a percentage of HDM revenues for the three months
ended March 31, 1996 compared to the three months ended March 31, 1995, as HDM
was able to reduce its fixed costs at a rate consistent with the decrease in
HDM revenue.

Year Ended December 31, 1995 Compared to Year Ended December 31, 1994

Revenues. Revenues increased to $12.7 million in 1995 from $10.1 million in
1994, an increase of $2.6 million, or 25.5%. This increase primarily resulted
from an increase in HFI revenues to $8.3 million in 1995 from $5.4 million in
1994. The increase in HFI revenues reflected a $2.4 million increase generated
from a single pharmaceuticals client and a 23.5% increase from the remaining
HFI client base. The increase in HFI revenues

32
<PAGE>

was partly offset by a decrease in HDM revenues to $4.6 million in 1995 from
$5.0 million in 1994, primarily as a result of the loss of two significant
direct mail clients, partially offset by revenues from several new clients.

Cost of Services. Cost of services increased to $6.4 million in 1995 from $5.5
million in 1994, an increase of $0.9 million, or 15.8%. As a percentage of
revenues, cost of services decreased to 50.5% in 1995 from 54.7% in 1994. This
decrease primarily resulted from the spreading of certain fixed costs of HFI's
operations over increased revenues. HDM's cost of services as a percentage of
revenues in 1995 remained consistent with that of 1994.

Selling, General and Administrative. Selling, general and administrative
expenses increased to $3.0 million in 1995 from $2.7 million in 1994, an
increase of $0.3 million, or 11.4%. This increase primarily resulted from
additional infrastructure needed to support Harris's growth. As a percentage of
revenues, selling, general and administrative expenses decreased to 23.5% in
1995 from 26.5% in 1994. This decrease was primarily a result of the spreading
of expenses over increased revenues.

Year Ended December 31, 1994 Compared to Year Ended December 31, 1993

Revenues. Revenues increased to $10.1 million in 1994 from $7.0 million in
1993, an increase of $3.1 million, or 44.1%. This increase primarily resulted
from an increase in HFI revenues to $5.4 million in 1994 from $3.2 million in
1993, $2.2 million of which was generated from an HFI pharmaceuticals client.
HDM revenues increased to $5.0 million in 1994 from $4.0 million in 1993. This
increase was primarily a result of an investment made in printing and insertion
equipment which generated an additional $0.8 million in HDM revenues from HDM's
two most significant clients.

Cost of Services. Cost of services increased to $5.5 million in 1994 from $3.8
million in 1993, an increase of $1.7 million, or 44.2%. As a percentage of
revenues, cost of services remained stable.

Selling, General and Administrative. Selling, general and administrative
expenses increased to $2.7 million in 1994 from $2.5 million in 1993, an
increase of $0.2 million, or 8.4%. The increase was primarily due to additional
infrastructure needed to support Harris's growth. As a percentage of revenues,
selling, general and administrative expenses decreased to 26.5% in 1994 from
35.3% in 1993, primarily as a result of the spreading of expenses over
increased revenues.

Liquidity and Capital Resources

Harris's primary sources of liquidity have been cash flows from operating
activities, availability of borrowings on its lines of credit, and bank
financing for equipment purchases. The following table sets forth selected
information from Harris's statements of cash flows for the periods indicated.

<TABLE>
<CAPTION>
---------------------------------------------------
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
1993 1994 1995 1995 1996
Dollars in thousands ---------- ------- -------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net cash provided by (used
in) operating activities $ 230 $ 1,883 $ 4,149 $ (382) $ (210)
Net cash provided by (used
in) investing activities (429) (903) (460) (239) (77)
Net cash provided by (used
in) financing activities 64 (339) (1,745) 159 (321)
</TABLE>

From 1993 through March 31, 1996, Harris generated $6.1 million in net cash
from operating activities. During this period, $8.0 million of cash was
generated from pre-tax income plus non-cash charges, reduced by $1.9 million of
cash used for working capital. Harris's working capital needs have been
supplemented by advances from customers for freight and postage. In the three
months ended March 31, 1996, Harris used net cash in operating activities due
to the timing of its clients' payments.

33
<PAGE>

Net cash used in investing activities has supported HDM equipment purchases and
growth of HFI. Harris has incurred significant capital equipment expenditures
in its HDM operations, including expenditures for printing, insertion and
commingler equipment. In 1993, Harris generated $0.3 million in proceeds from
the sale of certain property and equipment.

Financing activities have included payments on HDM's facility mortgage and
distributions to stockholders. Stockholder distributions totaled $27,000, $0.1
million, $1.4 million and $0.3 million in 1993, 1994, 1995 and the three months
ended March 31, 1996, respectively. Harris's two lines of credit expired in
April 1996 and Harris did not elect to renew them. Harris has secured several
equipment loans from a bank, which are being paid down by cash generated from
operating activities. Outstanding indebtedness will be paid in connection with
the closing of the Offering.

34
<PAGE>

REICH

Founded in 1978, Reich offers telemarketing services to clients in the
financial services, telecommunications and insurance industries. Reich also
offers additional value-added services to its clients, such as marketing
planning, database marketing, creative development, situation analysis, in-
house copy and art services and production management. Reich earns revenue for
telemarketing services on an hourly basis and is compensated for planning and
marketing services on a fee-for-service basis.

Results of Operations

The following table sets forth selected financial data and data as a percentage
of revenues for the periods indicated.

<TABLE>
<CAPTION>
----------------------------------------------------------------------
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
1993 1994 1995 1995 1996
Dollars in thousands ------------ ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues $4,375 100.0% $5,424 100.0% $12,253 100.0% $2,059 100.0% $5,465 100.0%
Cost of services 3,172 72.5 4,225 77.9 7,836 63.9 1,327 64.5 3,165 57.9
Selling, general and
administrative expenses 1,111 25.4 976 18.0 2,534 20.7 297 14.4 570 10.4
------ ------ ------- ------ ------
Total operating
expenses 4,283 97.9 5,201 95.9 10,370 84.6 1,624 78.9 3,735 68.3
Operating income 92 2.1 223 4.1 1,883 15.4 435 21.1 1,730 31.7
Interest expense, net 21 0.5 24 0.4 43 0.4 7 0.3 11 0.2
------ ------ ------- ------ ------
Pre-tax income $ 71 1.6 $ 199 3.7 $ 1,840 15.0 $ 428 20.8 $1,719 31.5
====== ====== ======= ====== ======
</TABLE>

Three Months Ended March 31, 1996 Compared to Three Months Ended March 31, 1995

Revenues. Revenues increased to $5.5 million for the three months ended March
31, 1996 from $2.1 million for the three months ended March 31, 1995, an
increase of $3.4 million, or 165.4%. This increase primarily resulted from
increased telemarketing call volume from existing clients and the addition of
new clients in the telecommunications and financial services industries.
Reich's call center in West Virginia, which opened in May 1995, and the
expansion of its Delaware call center provided the capacity for the increased
call volume.

Cost of Services. Cost of services, which primarily consists of labor,
telephone and other call center-related operating and support expenses,
increased to $3.2 million for the three months ended March 31, 1996 from $1.3
million for the three months ended March 31, 1995. As a percentage of revenues
cost of services decreased from 64.5% to 57.9% for the three months ended March
31, 1995 and 1996, respectively. The decrease in cost of services as a
percentage of revenues is the result of increased utilization of existing
capacity.

Selling, General and Administrative. Selling, general and administrative costs
increased to $0.6 million for the three months ended March 31, 1996 from $0.3
million for the three months ended March 31, 1995, an increase of $0.3 million,
or 91.9%. The increase primarily resulted from salaries and related expenses
attributable to personnel added to the executive management team. The remaining
increase was the result of increases in general and administrative costs
associated with the increased business activity and the relocation and
expansion of the Delaware call center facility.

Year Ended December 31, 1995 Compared to Year Ended December 31, 1994

Revenues. Revenues increased to $12.3 million in 1995 from $5.4 million in
1994, an increase of $6.9 million, or 126.0%. This increase primarily resulted
from increased telemarketing call volume from a financial services client and
the addition of new clients in the telecommunications and financial services
industries. The opening of Reich's call center in West Virginia in May 1995
provided the capacity for the increased call volume. Revenues from non-
telemarketing-related services decreased to $0.9 million in 1995 from $1.3
million in 1994, as Reich focused its attention on telemarketing activities.

35
<PAGE>

Cost of Services. Cost of services increased to $7.8 million in 1995 from $4.2
million in 1994, an increase of $3.6 million, or 85.5%. As a percentage of
revenues, however, cost of services decreased to 63.9% in 1995 from 77.9%. This
decrease primarily resulted from the increased utilization of existing
capacity.

Selling, General and Administrative. Selling, general and administrative
expenses increased to $2.5 million in 1995 from $1.0 million in 1994, an
increase of $1.5 million, or 160.0%. The majority of this increase was due to a
one-time $0.8 million increase in compensation to Reich's president and sole
shareholder to $0.9 million in 1995 from $0.1 million in 1994. The remaining
increase was primarily due to salaries and related expenses attributable to
personnel added to the executive management team in 1995, as well as additional
general and administrative costs associated with the increase in business
activity.

Year Ended December 31, 1994 Compared to Year Ended December 31, 1993
Revenues. Revenues increased to $5.4 million in 1994 from $4.4 million in 1993,
an increase of $1.0 million, or 24.0%. This increase primarily resulted from
increased telemarketing call volume from financial services clients.

Cost of Services. Cost of services increased to $4.2 million in 1994 from $3.2
million in 1993, an increase of $1.0 million, or 33.2%. As a percentage of
revenues, cost of services increased to 77.9% in 1994 from 72.5% in 1993. This
increase primarily resulted from increased costs for additional management and
other infrastructure required to handle the revenue growth. Other
infrastructure costs were primarily attributable to additional account
management, information services and operation management personnel.

Selling, General and Administrative. Selling, general and administrative
expenses decreased to $1.0 million in 1994 from $1.1 million in 1993, a
decrease of $0.1 million, or 12.2%. As a percentage of revenues, selling,
general and administrative expenses decreased to 18.0% in 1994 from 25.4% in
1993. This decrease primarily resulted from enhanced control and management of
expenses, particularly the reduction of administrative and office support
expenses.

Liquidity and Capital Resources

Reich's principal sources of liquidity have been cash flows from operating
activities and available borrowing capacity under credit facilities and capital
leases. The following table sets forth selected information from Reich's
statements of cash flows for the periods indicated.

<TABLE>
<CAPTION>
--------------------------------------------------
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
1993 1994 1995 1995 1996
Dollars in thousands ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net cash provided by
(used in) operating
activities $ (4) $ 219 $ 745 $ (69) $ 1,420
Net cash provided by
(used in) investing
activities (37) (138) (1,212) (14) (559)
Net cash provided by
(used in) financing
activities 39 (78) 656 55 (405)
</TABLE>

From 1993 through March 31, 1996, Reich's net cash provided by operating
activities of $2.4 million was primarily generated from pre-tax income. During
the period, operating cash flow was negatively impacted by increases in working
capital (excluding cash and current maturities on long-term debt). The
additional working capital was principally related to the increase in accounts
receivable which was offset in part by an increase in accounts payable and
accrued expenses that resulted from the growth in the telemarketing business
over the same period.

Net cash used in investing activities was attributable to equipment and other
capital to support the opening of a new call center and expansion of Reich's
existing call centers. The significant increase in 1995 capital

36
<PAGE>

expenditures related to the opening of Reich's new call center operation in
West Virginia. The continued capital expenditures during the three months ended
March 31, 1996 related to the expansion and relocation of the Delaware call
center and the expansion of the West Virginia call center.

Financing activities primarily have included borrowing activities under various
long-term debt arrangements, capital leases and shareholder loans; all such
outstanding amounts will be paid in connection with the closing of the
Offering. In December 1995, Reich received commitments for low interest loans
of up to $0.7 million from the City of Wheeling, West Virginia and the WVEDA.
These loans will be used to relocate and expand Reich's West Virginia call
center and also finance prior purchases funded out of operating cash flows.

37
<PAGE>

TELESPECTRUM

Founded in 1984, TeleSpectrum specializes in providing both inbound and
outbound telemarketing services to the high technology, pharmaceuticals and
healthcare and consumer products industries. TeleSpectrum's revenues primarily
derive from inbound teleservices and call center management services.
TeleSpectrum is typically paid on an hourly basis for telemarketing services
and on a negotiated, project-by-project basis for other services.

Results of Operations

The following table sets forth selected financial data and data as a percentage
of revenues for the period indicated.

<TABLE>
<CAPTION>
------------------------------------------------------------------------
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
1993 1994 1995 1995 1996
Dollars in thousands -------------- ------------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues $ 9,916 100.0% $9,386 100.0% $11,854 100.0% $2,846 100.0% $3,725 100.0%
Cost of services 7,429 74.9 6,754 72.0 8,338 70.2 1,920 67.5 2,483 66.7
Selling, general and
administrative
expenses 2,628 26.5 2,636 28.0 3,072 26.0 805 28.3 951 25.5
------- ------ ------- ------ ------
Total operating
expenses 10,057 101.4 9,390 100.0 11,410 96.2 2,725 95.8 3,434 92.2
Operating income
(loss) (141) (1.4) (4) -- 444 3.8 121 4.2 291 7.8
Interest expense, net 99 1.0 150 1.6 184 1.6 4 0.1 43 1.2
------- ------ ------- ------ ------
Pre-tax income (loss) $ (240) (2.4) $ (154) (1.6) $ 260 2.2 $ 117 4.1 $ 248 6.6
======= ====== ======= ====== ======
</TABLE>

Three Months Ended March 31, 1996 Compared to Three Months Ended March 31, 1995

Revenues. Revenues increased to $3.7 million in the three months ended March
31, 1996 from $2.8 million in the three months ended March 31, 1995, an
increase of $0.9 million, or 30.9%. This increase primarily resulted from
increased call volume from existing clients and the addition of several new
clients.

Cost of Services. Cost of services, which primarily consists of labor,
telephone and other call center-related operating and support expenses,
increased to $2.5 million in the three months ended March 31, 1996 from $1.9
million in the three months ended March 31, 1995, an increase of $0.6 million,
or 29.3%. This increase was primarily the result of increased activity and the
opening of a new call center.

Selling, General and Administrative. Selling, general and administrative
expenses increased to $1.0 million in the three months ended March 31, 1996
from $0.8 million in the three months ended March 31, 1995, an increase of $0.2
million, or 18.1%. This increase was principally the result of additional
administrative, personnel and related corporate expenses associated with
TeleSpectrum's growth. As a percentage of revenues, selling, general and
administrative expenses decreased to 25.5% in 1996 from 28.3% in 1995,
primarily as a result of the spreading of expenses over increased revenues.

Interest Expense, Net. Interest expense, net, increased to $43,000 in the three
months ended March 31, 1996 from $4,000 in the three months ended March 31,
1995. This increase primarily reflected higher average outstanding borrowings
during the three months ended March 31, 1996 compared to borrowings in the
three months ended March 31, 1995. Borrowings were used to finance working
capital needs.

Year Ended December 31, 1995 Compared to Year Ended December 31, 1994

Revenues. Revenues increased to $11.9 million in 1995 from $9.4 million in
1994, an increase of $2.5 million, or 26.3%. This increase primarily resulted
from increased call volume from existing inbound clients and the addition of
new inbound clients, principally in the pharmaceuticals and healthcare
industry.

Cost of Services. Cost of services increased to $8.3 million in 1995 from $6.8
million in 1994, an increase of $1.5 million, or 23.5%. As a percentage of
revenues, cost of services decreased to 70.2% in 1995 from 72.0% in 1994,
primarily as a result of the spreading of fixed costs over increased revenues.

38
<PAGE>

Selling, General and Administrative. Selling, general and administrative
expenses increased to $3.1 million in 1995 from $2.6 million in 1994, an
increase of $0.5 million, or 16.5%. This increase primarily resulted from
additional administrative, personnel and corporate expenses associated with the
growth in revenues. As a percentage of revenues, selling, general and
administrative expenses decreased to 26.0% in 1995 from 28.0% in 1994,
primarily as a result of the spreading of expenses over increased revenues.

Year Ended December 31, 1994 Compared to Year Ended December 31, 1993

Revenues. Revenues decreased to $9.4 million in 1994 from $9.9 million in 1993,
a decrease of $0.5 million, or 5.3%. This decrease was primarily the result of
a loss of revenues of approximately $0.4 million from a pharmaceuticals and
healthcare client.

Cost of Services. Cost of services decreased to $6.7 million in 1994 from $7.4
million in 1993, a decrease of $0.7 million, or 9.1%. As a percentage of
revenues, cost of services decreased to 72.0% in 1994 from 74.9% in 1993,
primarily as a result of the closing of a software products distribution
division.

Selling, General and Administrative. Selling, general and administrative
expenses were $2.6 million in 1993 and 1994. As a percentage of revenues,
selling, general and administrative expenses increased to 28.0% in 1994 from
26.5% in 1993, primarily as a result of the decrease in revenues.

Liquidity and Capital Resources

TeleSpectrum's primary sources of liquidity have been cash flows from operating
activities and available borrowing capacity under credit facilities. The
following sets forth selected information from TeleSpectrum's statement of cash
flows for the periods indicated:

<TABLE>
---------------------------------------------------
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
1993 1994 1995 1995 1996
Dollars in thousands -------- -------- ------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net cash provided by (used
in) operating activities $(412) $(260) $ (4) $(167) $ 491
Net cash provided by (used
in) investing activities (69) 37 (99) (87) (162)
Net cash provided by (used
in) financing activities 179 359 (45) 91 58
</TABLE>

Net cash provided by operating activities from 1993 through March 31, 1996
consisted of pre-tax income plus depreciation and amortization and increases in
deferred revenue and accounts payable and accrued liabilities, less an increase
in accounts receivable. Net cash used in investing activities was expended
primarily for the purchase of telecommunications and computer equipment. Net
cash provided by financing activities included borrowings under TeleSpectrum's
line of credit facility and payments of debt and capital lease obligations.

In May 1996, TeleSpectrum obtained a $4.0 million revolving line of credit with
interest at the bank's prime rate plus 1.5%. This revolving credit facility is
to be used for refinancing of existing debt, working capital purposes and
capital expenditure purposes. This credit facility contains a financial
covenant which requires TeleSpectrum to maintain a prescribed interest coverage
ratio. Outstanding amounts will be paid in connection with the closing of the
Offering.

In connection with the agreement for the Acquisition of the TeleSpectrum
Operating Business, CRW Financial advanced TeleSpectrum $0.5 million, evidenced
by a promissory note due one year from the date the proceeds were received with
interest at 9.0%. The note has been contributed by CRW Financial to
TeleSpectrum Worldwide as part of the Initial Capitalization. Upon the closing
of the Acquisition of the TeleSpectrum Operating Business, TeleSpectrum
Worldwide will pay a portion of the purchase price by cancellation of the
promissory note.

39
<PAGE>

THE RESPONSE CENTER

Results of Operations

The following table sets forth selected financial data and data as a percentage
of revenues for the periods indicated.
<TABLE>
<CAPTION>

---------------------------------------------------------------------------------------------------------
THREE MONTHS ENDED THREE MONTHS ENDED
YEAR ENDED SEPTEMBER 30, DECEMBER 31, MARCH 31,
1993 1994 1995 1994 1995 1995 1996
Dollars in thousands ------------- ------------- ------------- ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues $6,061 100.0% $6,183 100.0% $6,719 100.0% $1,643 100.0% $1,352 100.0% $1,941 100.0% $1,429 100.0%
Cost of services 2,911 48.0 3,426 55.4 3,583 53.3 930 56.6 748 55.3 881 45.4 786 55.0
Selling, general
and
administrative
expenses 2,806 46.3 2,800 45.3 2,717 40.5 490 29.8 435 32.2 1,061 54.7 875 61.2
------ ------ ------ ------ ------ ------ ------
Total
operating
expenses 5,717 94.3 6,226 100.7 6,300 93.8 1,420 86.4 1,183 87.5 1,942 100.1 1,661 116.2
Operating income
(loss) 344 5.7 (43) (0.7) 419 6.2 223 13.6 169 12.5 (1) (0.1) (232) (16.2)
Interest expense
(income), net (12) (0.2) (6) (0.1) (10) (0.2) -- -- -- -- -- -- -- --
------ ------ ------ ------ ------ ------ ------
Pre-tax income
(loss) $ 356 5.9 $ (37) (0.6) $ 429 6.4 $ 223 13.6 $ 169 12.5 $ (1) (0.1) $ (232) (16.2)
====== ====== ====== ====== ====== ====== ======
</TABLE>

Three Months Ended March 31, 1996 Compared to Three Months Ended March 31, 1995

Revenues. Revenues decreased to $1.4 million in the three months ended March
31, 1996 from $1.9 million in the three months ended March 31, 1995, a decrease
of $0.5 million, or 26.4%. This decrease was primarily the result of reduced
revenues from The Response Center's largest client.

Cost of Services. Cost of services, which primarily consists of labor,
telephone and other call center-related operating and support expenses,
decreased to $0.8 million in the three months ended March 31, 1996 from $0.9
million in the three months ended March 31, 1995, a decrease of $0.1 million,
or 10.8%. As a percentage of revenues, cost of services increased to 55.0% in
the three months ended March 31, 1996 from 45.4% in the three months ended
March 31, 1995, as a result of reduced revenues.

Selling, General and Administrative. Selling, general and administrative
expenses were $0.9 million and $1.1 million in the three months ended March 31,
1996 and 1995, respectively, a decrease of $0.2 million, or 17.5%. As a
percentage of revenues, selling, general and administrative expenses increased
to 61.2% in the three months ended March 31, 1996 from 54.7% in the three
months ended March 31, 1995 as a result of the decrease in revenues. Selling,
general and administrative expenses include compensation paid to The Response
Center's officers totaling $0.5 million in the three months ended March 31,
1996 and $0.6 million in the three months ended March 31, 1995.

Three Months Ended December 31, 1995 Compared to Three Months Ended December
31, 1994

Revenues. Revenues decreased to $1.4 million in the three months ended December
31, 1995 from $1.6 million in the three months ended December 31, 1994, a
decrease of $0.2 million, or 17.7%. This decrease was primarily the result of
reduced revenues from The Response Center's largest client and revenues from
tracking surveys related to federal elections performed in the three months
ended December 31, 1994, which were not repeated in the three months ended
December 31, 1995.

Cost of Services. Cost of services decreased to $0.7 million in the three
months ended December 31, 1995 from $0.9 million in the three months ended
December 31, 1994, a decrease of $0.2 million, or 19.6%. As a

40
<PAGE>

percentage of revenues, cost of services decreased to 55.3% in the three months
ended December 31, 1995 from 56.6% in the three months ended December 31, 1994.

Selling, General and Administrative. Selling, general and administrative
expenses were $0.4 million and $0.5 million in the three months ended December
31, 1995 and 1994, respectively. As a percentage of revenues, selling, general
and administrative expenses increased to 32.2% in the three months ended
December 31, 1995 from 29.8% in the three months ended December 31, 1994,
primarily as a result of the decrease in revenues. Selling, general and
administrative expenses include compensation paid to The Response Center's
officers totaling $0.1 million in the three months ended December 31, 1995 and
$0.1 million in the three months ended December 31, 1994.

Year Ended September 30, 1995 Compared to Year Ended September 30, 1994

Revenues. Revenues increased to $6.7 million in 1995 from $6.2 million in 1994,
an increase of $0.5 million, or 8.7%. The Response Center generated
approximately 20.0% of 1995 revenues from new clients. This increase in
revenues was partially offset by a decrease in revenues from an existing
client.

Cost of Services. Cost of services increased to $3.6 million in 1995 from $3.4
million in 1994, an increase of $0.2 million, or 4.6%. As a percentage of
revenues, cost of services decreased to 53.3% in 1995 from 55.4% in 1994. This
decrease primarily resulted from reduced recruitment cost due to more cost
effective agreements with temporary agencies, and reduced telephone expense as
a percentage of revenues, partially offset by increased interviewer payroll
costs as a percentage of revenues. Reduced telephone expense resulted from
lower rates negotiated in a new long distance contract.

Selling, General and Administrative. Selling, general and administrative
expenses decreased to $2.7 million in 1995 from $2.8 million in 1994, a
decrease of $0.1 million, or 3.0%. As a percentage of revenues, selling,
general and administrative expenses decreased to 40.4% in 1995 from 45.3% in
1994, primarily as a result of economies of scale related to increased revenues
despite increased data processing payroll costs. Selling, general and
administrative expenses include compensation paid to The Response Center's
officers totaling $1.5 million in each of 1994 and 1995.

Year Ended September 30, 1994 Compared to Year Ended September 30, 1993

Revenues. Revenues increased to $6.2 million in 1994 from $6.1 million in 1993,
an increase of $0.1 million, or 2.0%. This increase in revenues was due to
increased revenues from new and existing clients, partly offset by a decrease
in revenues from The Response Center's largest client.

Cost of Services. Cost of services increased to $3.4 million in 1994 from $2.9
million in 1993, an increase of $0.5 million, or 17.7%. As a percentage of
revenues, cost of services increased to 55.4% in 1994 from 48.0% in 1993. This
increase was primarily the result of a single, large project in 1993 which was
billed at a higher-than-standard rate.

Selling, General and Administrative. As a percentage of revenues, selling,
general and administrative expenses decreased to 45.3% in 1994 from 46.3% in
1993. Selling, general and administrative expenses include compensation paid to
The Response Center's officers of $1.5 million in 1994 as compared to $1.7
million in 1993.

41
<PAGE>

Liquidity and Capital Resources

The Response Center's principal source of liquidity has historically been cash
flows from operating activities and loans from shareholders. The following
table sets forth selected information from The Response Center's statements of
cash flows for the periods indicated.

<TABLE>
<CAPTION>
---------------------------------------------------------------------------
THREE MONTHS ENDED THREE MONTHS
YEAR ENDED SEPTEMBER 30, DECEMBER 31, ENDED MARCH 31,
1993 1994 1995 1994 1995 1995 1996
Dollars in thousands ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Net cash provided by
(used in) operating
activities $ 368 $ 111 $188 $ 764 $ 975 $ (634) $ (446)
Net cash provided by
(used in) investing
activities 158 (59) 44 (21) (57) 44 (91)
Net cash provided by
(used in) financing
activities (412) (193) (22) (22) (22) -- --
</TABLE>

From fiscal 1993 through March 31, 1996, The Response Center generated $1.2
million in cash from operating activities. During this period, $0.8 million of
cash was generated from pre-tax income plus noncash charges, and $0.4 million
of cash was generated from working capital (excluding cash and current
maturities of long-term debt). Additional working capital changes were
principally related to a decrease in accounts payable and increase in accounts
receivable resulting from the increase in revenues.

Investing activities have included purchases of property and equipment, sales
of short term investments and purchases of short term investments.

Financing activities have included distributions to and borrowing activity from
shareholders.

42
<PAGE>

BUSINESS

TeleSpectrum Worldwide was founded in 1996 to create a national provider of
integrated teleservices solutions. With the capabilities of the Operating
Businesses, the Company can offer its clients complete solutions that build
upon a foundation of outbound and inbound telemarketing and include inbound
customer service, market research, direct mail and fulfillment and other direct
marketing services. The Company operates over 1,500 workstations in 20 call
centers located primarily in the eastern United States. The Company focuses on
providing teleservices to major clients in the telecommunications, insurance,
financial services, pharmaceuticals and healthcare, consumer products and high
technology industries.

ORGANIZATION

Simultaneously with the closing of this Offering, TeleSpectrum Worldwide will
acquire six teleservices and related businesses. The aggregate consideration to
be paid by TeleSpectrum Worldwide for the Operating Businesses consists of
$90.9 million in cash, 4,403,863 shares of Common Stock of the Company and the
grant of warrants to purchase an aggregate of 593,400 shares of Common Stock.
See "Certain Relationships and Related Party Transactions--The Acquisitions."

The consummation of each Acquisition is subject to customary conditions. These
conditions include, among others, the continuing accuracy as of the closing
date of the representations and warranties of the Operating Businesses and of
TeleSpectrum Worldwide, the performance by each of them of all covenants
included in the agreements relating to the Acquisition and the nonexistence of
a material adverse change in the results of operations, financial condition or
business of each Operating Business.

INDUSTRY OVERVIEW

The teleservices industry facilitates the direct communication of marketing
information to and from current and prospective customers by telephone.
Indirect marketing methods, such as radio, television and print advertising,
employ a "one-to-many" approach to convey marketing information that can
position products and services within a broad market context. Direct marketing
methods, such as telemarketing and direct mail, employ a "one-to-one" approach
to deliver a marketing message directly to a specific current or prospective
customer and to elicit immediate customer response. In addition to traditional
outbound and inbound telemarketing, teleservices include inbound telephone-
based customer service and support and related value-added services such as
market research, direct mail and fulfillment, training, consulting, call center
management and electronic order processing.

As businesses seek greater returns from their investments in marketing
activities, they are increasingly coupling traditional indirect marketing
methods such as advertising with direct marketing methods such as
telemarketing. Advances in computer and telecommunications technology are
helping telemarketers to more accurately identify and contact potential
customers, and are providing CCRs with more complete on-line guidance and
support. Improvements in the scale and speed of computer and telecommunications
networking capabilities allow teleservices providers to implement larger and
more complex programs for their clients. As a result, clients in a variety of
industries have the opportunity to increase the breadth and depth of their
telemarketing efforts. Industry sources estimate that companies in the United
States spent approximately $77 billion on telemarketing activities in 1995.

To date, businesses have relied overwhelmingly upon in-house call center
personnel to provide telemarketing and telephone-based customer support
services. However, the Company believes that businesses are increasingly
outsourcing their ancillary needs to third party providers as they focus more
closely upon their core businesses. This trend toward outsourcing may be
reinforced by the rising level of capital expenditures necessary to provide
telemarketing services that can take full advantage of recent advances in
computer and telecommunications technology. Providers of outsourced
teleservices can offer clients economies of scale in sharing the cost of new

43
<PAGE>

technology among a larger base of users than might be possible with in-house
telemarketing, while at the same time better matching available capacity to
fluctuating client demand.

As the trend toward outsourcing continues, the Company believes that businesses
will increasingly seek to reduce the number of vendors they utilize, and may
prefer single-source providers of integrated solutions drawing upon a variety
of related services and capabilities. Such a trend could encourage
consolidation within the currently fragmented teleservices industry. The
Company thus believes that further opportunities may emerge for an integrated
teleservices provider that can assemble and offer other value-added services,
such as inbound customer service, market research, direct mail and fulfillment
and other direct marketing services, which together can create complete
solutions to clients' direct marketing needs.

STRATEGY

The Company's goal is to become the premier national provider of integrated
teleservices solutions. To attain this goal, the Company intends to employ the
following strategies:

Offer a Single Source for Complete, Integrated Solutions
The Company intends to offer its clients a single source for all of their
outsourced teleservices needs. To effect this strategy, the Company is focused
upon assembling the full spectrum of teleservices resources, including outbound
and inbound calling, customer service, market research, direct mail and
fulfillment, training, consulting, call center management and electronic order
processing. In particular, the Company will utilize its expertise and expand
its capacity to provide sophisticated and flexible inbound customer service
solutions for its clients. The Company will seek to craft tailored, value-added
teleservices solutions that are designed to achieve clients' intended marketing
results.

Establish Long-Term Relationships with Major Clients
The Company seeks to establish associations with major clients whose
outsourcing needs foster long-term, significant relationships. As clients
continue to outsource an increasing portion of their direct sales and customer
service activities, the Company will endeavor to capitalize upon its
relationships and past performance to expand the range of services that it
provides to each of its clients.

Add New Clients in Targeted Industries
The Company is focused upon expanding its client base in those industries
currently utilizing teleservices, including telecommunications, insurance,
financial services, pharmaceuticals and healthcare and high technology. The
Company believes that within these industries there are many large corporations
which may employ the services offered by the Company for a substantial portion
of their direct sales and customer service needs. The Company will seek to
provide services to new clients in its existing targeted industries, and to add
clients in new targeted industries where it believes that it can utilize its
capabilities and expertise. In particular, due to increased competition for
local and long-distance telephone customers anticipated to result from recent
deregulation, the Company has identified additional teleservices opportunities
and is targeting new clients in the telecommunications industry.

Pursue Strategic Acquisitions
The Company intends to complement internal growth through aggressive pursuit of
acquisitions to expand the Company's capacity, add new services and products
and extend its market reach. The Company's management team includes individuals
with significant experience in effecting strategic acquisitions and integrating
acquired businesses.

SERVICES OVERVIEW

Simultaneously with the closing of the Offering, TeleSpectrum Worldwide will
acquire, in the Acquisitions, the Operating Businesses. The Operating
Businesses provide the following services:

44
<PAGE>

Outbound Telemarketing

The Company provides both business-to-consumer and business-to-business
outbound telemarketing services, which consist primarily of direct sales
activities initiated by the Company on behalf of clients. These activities are
directed towards client-generated, electronically transmitted lists of
customers who have been selected to match the demographic profile of the
targeted customer for the offered product or service. The Company's
computerized call management systems utilize predictive dialers to
automatically dial telephone numbers, determine if a live connection is made
and present connected calls to a CCR who has been trained for the client's
program. The client or the Company provides a prepared script to assist the CCR
in marketing the product or service to the call recipient. SOMAR, NBG, Reich
and TeleSpectrum provide outbound telemarketing services.

Inbound Teleservices

The Company provides inbound teleservices support for activities such as
customer service, catalog sales, response to customer inquiries and electronic
order processing. Inbound callers typically call toll-free numbers to request
product or service information, place orders for advertised products or obtain
assistance with a previous order or purchase. The Company uses automated call
distributors to direct callers to appropriate CCRs, who have access to on-line
support databases to address customers' needs. TeleSpectrum and Harris provide
inbound teleservices.

Market Research

The Company's market research capabilities include problem conceptualization,
program design, data gathering by telephone, mail and focus groups, data
tabulation and results analysis. Interviewing personnel use advanced data
collection technology to obtain data from a statistically projectable sample of
survey contacts. The Company then tabulates and analyzes fielded data using
multi-variate statistical techniques, and produces detailed reports that can
answer clients' marketing questions and suggest further avenues of inquiry
where appropriate. The Response Center provides market research services.

Direct Mail and Fulfillment

The Company's direct mail services include preparing, addressing, coordinating,
sorting and mailing materials to current and potential customers of the
Company's clients. The Company also provides fulfillment services, which
involve filling orders received through outbound telemarketing, direct mail
solicitation and inbound customer service calls, including automated inbound
call center services. In its direct mail operations, the Company obtains name
and address data from clients, processes the data to eliminate duplicates and
correct errors and addresses pre-printed materials, in some cases with
personalized greetings and messages. Mailings are then coordinated and collated
by automated folding and inserting equipment, sorted by zip code to obtain the
fullest available postal discounts for mass-mailings, and in most instances
mailed from the Company's in-house postal facility. In its fulfillment
operations, the Company maintains warehouse space for storage of client-
supplied products and literature, which are sorted and bar-coded for inventory
control. Harris provides direct mail services; Harris and TeleSpectrum provide
fulfillment services.

Additional Value-Added Services

The Company offers additional value-added services, such as strategic
marketing, planning and consulting services, database marketing and management,
training and call center management, to complement its core teleservices
offerings. Planning and consulting services include product development and
program design. Call center management involves all aspects of recruiting,
staffing, managing operations, providing analysis and reports to clients at
their own on-site telemarketing facilities and providing call center technology
and systems integration for database development. Reich and TeleSpectrum
provide additional value-added services.

45
<PAGE>

THE OPERATING BUSINESSES

The following table sets forth certain information about the Operating
Businesses as of June 26, 1996.

<TABLE>
<CAPTION>
EMPLOYEES CCRS
(FULL- (FULL- INSURANCE
TIME/ TIME/ AGENTS
PART- PART- (FULL-
TIME) TIME) TIME) WORK STATIONS CALL CENTERS
--------- --------- --------- ------------- ------------
<S> <C> <C> <C> <C> <C>
SOMAR................... 1,767/0 1,571/0 517* 686 7
NBG..................... 129/685 58/680 0 266 6
Harris.................. 154/6 0/0 0 0 1
Reich................... 792/0 670/0 72** 320 3
TeleSpectrum............ 280/7 165/7 0 134 2
The Response Center..... 85/100 38/98 0 130 1
--------- --------- --- ----- ---
Total................. 3,207/798 2,502/785 591 1,536 20
</TABLE>
- --------
* Holding an aggregate of 8,000 insurance licenses in 35 states.

** Holding an aggregate of 521 insurance licenses in 46 states.

SOMAR

Founded in 1982, SOMAR is one of the nation's largest providers of outsourced
telephone-based sales, marketing and customer management services, principally
to clients in the insurance industry and also to clients in the financial
services, telecommunications and consumer products industries. SOMAR's three
principal clients in 1995 were in the insurance industry and accounted for
32.7%, 15.7% and 15.0%, of SOMAR's 1995 revenues of $31.9 million. For the
three months ended March 31, 1996, these same clients accounted for 25.8%,
22.9% and 13.3%, of SOMAR's revenues of $9.3 million in that period. As of June
26, 1996, SOMAR's 1,571 CCRs (of whom 517 were licensed insurance agents)
operated 686 workstations in seven call centers located in North Carolina and
West Virginia. These call centers are managed from SOMAR's headquarters
facility in Salisbury, North Carolina through local- and wide-area networking
telecommunications and computer technology.

NBG

Founded in 1991, NBG provides outbound telemarketing services to clients in the
financial services, telecommunications and high technology industries. NBG's
principal clients in 1995 were a financial services industry client and an
outsourcing contractor, which coordinated the provision of services to a
telecommunications industry company and a financial services industry company;
these two principal clients accounted for 52.7% and 40.2%, respectively, of
NBG's 1995 revenues of $12.8 million. For the three months ended March 31,
1996, these same clients accounted for 64.2% and 29.4%, respectively, of NBG's
revenues of $4.0 million in that period. As of June 26, 1996, NBG's 738 CCRs
operated 266 workstations in six call centers located in Massachusetts and
Arizona. These call centers are managed from NBG's headquarters in Cambridge,
Massachusetts.

Harris

Founded in 1931, Harris is a regional, vertically-integrated direct mail and
fulfillment organization which provides its services primarily to companies in
the pharmaceuticals and healthcare, financial services and insurance
industries, principally in the Middle Atlantic states. Harris operates a full
service direct mail organization that provides data processing, lettershop,
printing and bindery and postal services. Utilizing electronic tracking and
automated customer interface technologies, Harris also provides turnkey
fulfillment services including warehousing, inventory management, packing and
shipping. Harris's principal client in 1995 was a pharmaceuticals industry
client, which accounted for 44.7% of Harris's 1995 revenues of $12.7 million.
For the three months ended March 31, 1996, this same client accounted for 42.8%
of Harris's revenues of $2.6 million in that period.

Reich
Founded in 1978, Reich offers telemarketing services to clients in the
financial services, telecommunications and insurance industries. Reich also
offers additional value-added services to its clients, such as marketing
planning, database marketing, creative development, situation analysis, in-
house copy and art services and production management. Reich's principal
clients in 1995 were two financial services industry clients, an insurance
industry

46
<PAGE>

client and a telecommunications industry client, which accounted for 46.2%,
12.3%, 14.7% and 14.7%, respectively, of Reich's 1995 revenues of $12.3
million. For the three months ended March 31, 1996, these same clients
accounted for 44.7%, 0.1%, 11.8% and 34.0%, respectively, of Reich's revenues
of $5.5 million in that period. As of June 26, 1996, Reich's 792 CCRs (of whom
72 were licensed insurance agents) operated 320 workstations in Reich's three
call centers in Pennsylvania, Delaware and West Virginia. These call centers
are managed from Reich's headquarters in Philadelphia, Pennsylvania.

TeleSpectrum

Founded in 1984, TeleSpectrum specializes in providing inbound and outbound
telemarketing and fulfillment services to the high technology, pharmaceuticals
and healthcare and consumer products industries. Based in Annapolis, Maryland,
TeleSpectrum also provides call center management and telephone marketing,
consulting and training services. As of June 26, 1996, TeleSpectrum's 172 CCRs
operated 134 workstations in two call centers located in Maryland.
TeleSpectrum's proprietary training services include both customized and off-
the-shelf solutions. TeleSpectrum's principal client in 1995 was a high
technology industry client, which accounted for 21.7% of TeleSpectrum's 1995
revenues of $11.9 million. For the three months ended March 31, 1996,
TeleSpectrum's principal client was a high technology industry client, which
accounted for 12.6%, respectively, of TeleSpectrum's revenues of $3.7 million
in that period.

The Response Center

Founded in 1987, The Response Center is a full service custom market research
firm which primarily serves clients in the telecommunications, financial
services, utilities, pharmaceuticals and healthcare industries. The Response
Center designs and implements, through the use of customized software, research
programs in areas such as customer satisfaction, advertising tracking, product
positioning, pricing strategies and concept testing. The Response Center then
analyzes the results of its research and presents those results to clients. As
of June 26, 1996, 136 CCRs operated 130 workstations from The Response Center's
call center in Upper Darby, Pennsylvania. The Response Center's principal
client in 1995 was in the telecommunications industry and accounted for 27.5%
of 1995 revenues of $6.7 million. For the three months ended March 31, 1996,
The Response Center's principal client was in the telecommunications industry,
and accounted for 20.8% of The Response Center's revenues of $1.4 million in
that period.

No client referred to above was a significant client of more than one Operating
Business.

COMPETITION

The telemarketing industry is intensely competitive. Industry participants
compete primarily on price, available capacity, range of service offerings,
quality and customer service. The Company competes with numerous independent
telemarketing firms, as well as the in-house telemarketing operations of many
of its clients or potential clients. The Company's competitors include APAC
TeleServices Inc., ICT Group, Inc., ITI Marketing Services, Inc., MATRIXX
Marketing Inc., SITEL Corporation and West Telemarketing Corporation. In
addition, most businesses that are significant consumers of teleservices
utilize more than one telemarketing firm at a time and reallocate work among
various firms from time to time. A significant amount of such work is
contracted on an individual project basis, with the effect that the Company and
other firms seeking such business are required to compete with each other
frequently as individual projects are initiated. Further, the Company believes
that businesses with telemarketing operations will continue to outsource the
management of those operations and that this trend may attract new competitors,
including competitors that are substantially larger and better capitalized than
the Company, into the Company's market. The Company may not be able to compete
effectively against its current competitors, and the Company cannot assure that
additional competitors with greater resources than the Company will not enter
the industry and compete effectively against the Company or that the trend
toward outsourcing telemarketing activity will continue. To the extent that the
Company is unable to compete successfully against its existing and future
competitors, its business, operating results and financial condition could be
materially adversely affected.

SALES, MARKETING AND CLIENTS

The Company's marketing strategy centers around providing tailored solutions to
each client's teleservices needs. Each Operating Business has its own sales
personnel and, as of June 26, 1996, there were a total of 26 sales

47
<PAGE>

personnel employed by all of the Operating Businesses. The Company intends to
enable sales personnel from all of its Operating Businesses to work together to
take advantage of potential cross-selling opportunities. Sales personnel are
compensated by salary and bonuses based on individual performance and overall
profitability.

Sales teams work directly with each client or potential client to develop an
effective solution to the client's teleservices needs. Often, the Company
initially develops a pilot program for a new client to demonstrate the
Company's abilities and the effectiveness of its teleservices offerings. The
Company's sales personnel often communicate results of teleservices programs
and assist clients in modifying programs for future use.

The Company generally operates under short-term contractual relationships with
its clients. Pricing often includes an initial fee, a base service charge and
separate charges for ancillary services. Service charges for telemarketing
services are based upon hourly rates for outbound calls, per minute rates for
inbound calls or a commission or performance payment on successful sales or
results. Charges for other services such as consulting, market research,
training, direct mail and fulfillment may be computed on a fee-for-service or
piecework basis.

Historically, the Operating Businesses have acquired new clients and marketed
their services primarily by attending trade shows, advertising in industry
publications, responding to requests for proposals, pursuing client referrals
and cross-selling to existing clients. The Company targets those companies with
the greatest potential to generate recurring revenues because of their ongoing
direct sales and customer service needs, and also those which have large
customer bases which can benefit from targeted telemarketing programs. Many of
the Company's current clients have sizable in-house telemarketing operations,
and the Company often competes against those in-house operations for the
client's business. During 1995, the Company provided, on a pro forma basis,
services to over 441 clients. Mass Marketing Insurance Group accounted for
approximately 11.9% of the Company's pro forma 1995 revenues. No other client
accounted for more than 10.0% of the Company's pro forma revenues in 1995.

TARGETED INDUSTRIES

The Company targets its teleservices solutions toward clients in the following
industries:

Telecommunications
The Company provides telemarketing programs for major telecommunications
companies for long distance, cellular and cable products and services, as well
as regional telecommunications companies marketing advanced telephone features.
The Company offers its telecommunications industry clients a range of services,
including customer service, sales and survey campaigns.

Insurance

The Company works with large consumer insurance companies and their agents,
complementing its clients' own sales efforts by offering products such as life
and accidental death and dismemberment insurance. On a pro forma combined basis
as of June 26, 1996, the Company employed 591 agents collectively holding 8,521
state insurance licenses from 46 states.

Financial Services
The Company provides banks and other financial services clients with a wide
range of services, which primarily consist of credit cardholder acquisitions
and also include active account generation, account balance transfer, account
retention and customer service.

Pharmaceuticals and Healthcare
The Company provides pharmaceuticals clients with product support, customer
service and fulfillment services. In addition, the Company performs market
research and analysis for clients in the healthcare industry.

Consumer Products
The Company provides its consumer products clients with customer service, order
entry and new customer acquisition services and can support inbound calls 24
hours per day and 365 days per year.

48
<PAGE>

High Technology
The Company provides product support and customer service inbound teleservices
for clients in the computer hardware and software industry. In addition, the
Company provides business-to-business teleservices such as lead generation,
customer qualification and account management, as well as call center
management, for high technology clients.

PERSONNEL AND TRAINING

On a pro forma combined basis as of June 26, 1996, the Company employed 3,207
individuals on a full-time basis and 798 individuals on a part-time basis,
3,287 of whom were CCRs. The Company's ability to hire, train and manage
qualified employees is critical to its ability to provide high quality services
to its clients. The Company's service centers are located in areas that give
the Company access to a capable labor supply. The Company provides training
upon hire, as well as advanced and follow-up training. This training includes
instruction in proper direct marketing and customer service techniques, as well
as instruction in the specific characteristics of the industries which the
Company serves. In addition, the Company has 591 insurance CCRs on a pro forma
combined basis as of June 26, 1996, each of whom is licensed to sell insurance
in one or more states, and collectively are licensed to sell insurance in 46
states.

QUALITY ASSURANCE

The Operating Businesses have consistently emphasized quality service and
extensive employee training. The Company's quality assurance program includes
the selection and training of qualified CCRs, the training and professional
development of call center management personnel, monitoring of calls and sales
verification and editing. Both the Company and its clients are able to perform
real time on-site and remote call monitoring to maintain quality and
efficiency. Sales confirmations may be recorded (with the customer's consent),
and callers may also be monitored by management personnel to verify the
accuracy and authenticity of transactions. Additionally, the Company is able to
provide its clients with current updates on the progress of an ongoing
telemarketing effort. Access to this data allows the Company and its clients to
identify previously unrecognized potential campaign opportunities and to
immediately modify or enhance a telemarketing effort.

GOVERNMENT REGULATION

Telemarketing sales practices are regulated at both the federal and state
level. The federal Telephone Consumer Protection Act of 1991 (the "TCPA"),
enforced by the Federal Communications Commission, imposes restrictions on
unsolicited automated telephone calls to residential telephone subscribers.
Under the TCPA it is unlawful to initiate telephone solicitations to
residential telephone subscribers before 8:00 a.m. or after 9:00 p.m., local
time at the subscriber's location, or to use automated telephone dialing
systems or artificial or prerecorded voices to call certain subscribers.
Additionally, the TCPA requires telemarketing firms to develop a written policy
implementing a "do not call" list, including the training of its telemarketing
personnel to comply with these restrictions. Currently, the Company trains its
service representatives to comply with the regulations of the TCPA and programs
its call management system to prevent initiating telephone calls during
restricted hours or to individuals maintained on the Company's "do not call"
list.

The Federal Trade Commission (the "FTC") regulates both general sales
practices, and telemarketing specifically. Under the Federal Trade Commission
Act (the "FTC Act"), the FTC has broad authority to prohibit a variety of
advertising or marketing practices that may constitute "unfair or deceptive
acts and practices."

The FTC also administers the federal Telemarketing and Consumer Fraud and Abuse
Prevention Act of 1994 (the "TCFAPA"). Under the TCFAPA, the FTC has issued
regulations prohibiting a variety of deceptive, unfair or abusive practices in
telemarketing sales. Generally, these rules prohibit misrepresentations of the
cost, quantity, terms, restrictions, performance or characteristics of products
or services offered by telephone solicitation or of refund, cancellation or
exchange policies. The regulations also regulate the use of prize promotions in
telemarketing to prevent deception and require that a telemarketer identify
promptly and clearly the seller on

49
<PAGE>

whose behalf the telemarketer is calling, the purpose of the call, the nature
of the goods or services offered and, if applicable, that no purchase or
payment is necessary to win a prize. The regulations also require that
telemarketers maintain records on various aspects of their business. The
Company believes that it is in compliance with the TCPA and the regulations
promulgated pursuant to the TCFAPA.

Violation of the rules and regulations applicable to telemarketing practices
may result in injunctions against certain operations or in monetary penalties;
moreover, such violations may give rise to private actions for damages.

From time to time, bills are introduced in Congress which, if enacted, would
regulate the use of credit information. There can be no assurance that any such
legislation, if enacted, will not have an adverse effect on the telemarketing
industry generally or the Company's operations specifically.

Most states have enacted statutes similar to the FTC Act prohibiting unfair or
deceptive acts and practices. A number of states have enacted legislation and
other states are considering enacting legislation to regulate telemarketing.
For example, telephone sales in certain states are not final until a written
contract is delivered to and signed by the buyer, and such a contract often may
be canceled within three business days. At least one state also prohibits
telemarketers from requiring credit card payment, and several other states
require certain telemarketers to obtain licenses, post bonds or submit sales
scripts to the state's attorney general.

The industries served by the Company's Operating Businesses are also subject to
government regulation. Company employees who complete the sale of insurance
products are required to be licensed by various state insurance commissions and
to participate in regular continuing education programs, which currently are
provided by the Company.

50
<PAGE>

TELESPECTRUM WORLDWIDE FACILITIES

The Company's corporate headquarters are located in 3,000 square feet of leased
space in King of Prussia, Pennsylvania, where it shares office space with CRW
Financial, a principal stockholder of the Company. See "Certain Relationships
and Related Party Transactions--Headquarters Lease." In addition, as of June
26, 1996 the Company maintained the following material facilities:

<TABLE>
<CAPTION>
OPERATING DATE
BUSINESS LOCATION OPENED WORKSTATIONS
- --------- ------------------- -------------- ------------
<S> <C> <C> <C>
SOMAR Salisbury, NC February 1991 96
Winston-Salem, NC December 1992 84
Fayetteville, NC January 1994 104
Asheville, NC September 1994 81
Huntington, WV March 1995 103
Huntington, WV August 1995 103
Beckley, WV March 1996 115
NBG Cambridge, MA November 1991 32
Andover, MA November 1994 48
Westborough, MA June 1995 40
Burlington, MA December 1995 40
Phoenix, AZ December 1995 66
Cambridge, MA January 1996 40
Harris Philadelphia, PA February 1976 *
King of Prussia, PA May 1987 **
Reich Philadelphia, PA February 1989 64
Wilmington, DE January 1996 60
Wheeling, WV April 1996 196
TeleSpectrum Annapolis, MD June 1989 117
San Francisco, CA June 1989 ***
Annapolis, MD September 1992 **
Linthicum, MD June 1993 17
The Response Center Upper Darby, PA April 1996 130
-----
1,536
=====
</TABLE>
- --------
* Direct mail services.
** Fulfillment services.
*** Consulting and training services.

All of the Company's material facilities are leased, with the exception of the
Harris facility in Philadelphia, which is owned.

In addition to the call center capacity described above, TeleSpectrum
anticipates adding 40 workstations to its Annapolis, Maryland facility in July
1996.

The Company believes that its existing and planned facilities are adequate for
the Company's current and near-term anticipated operations.

LEGAL PROCEEDINGS

The Company is not currently engaged in any legal proceedings that are
expected, individually or in the aggregate, to have a material adverse effect
on the business, results of operation or financial condition of the Company.

51
<PAGE>

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The following table sets forth certain information concerning each of the
executive officers and directors of the Company following the consummation of
this Offering:

<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
<S> <C> <C>
J. Brian O'Neill 36 Chairman of the Board and Chief Executive Officer
Michael C. Boyd 55 President, Chief Operating Officer and Director
Richard C. Schwenk, Jr. 46 Senior Vice President and Chief Financial Officer
William F. Rhatigan 51 President of the Company's Telemarketing Division and Person
Named to Become a Director
Mark J. DeNino 42 Director
Richard W. Virtue 51 Person Named to Become a Director
Gregory M. Alcorn 38 Chief Executive Officer of the Company's SOMAR subsidiary
Patrick M. Baldasare 40 President of the Company's Response Center subsidiary
Michael J. Gallant 54 President of the Company's NBG subsidiary
Edward M. Idzik 54 President of the Company's Harris subsidiary
Morton M. Reich 56 President of the Company's Reich subsidiary
Karen E. Schweitzer 53 President of the Company's TeleSpectrum subsidiary
</TABLE>

J. BRIAN O'NEILL has been Chairman of the Board and Chief Executive Officer
since the formation of TeleSpectrum Worldwide in April 1996. Mr. O'Neill is
also Chairman of the Board of Directors and Chief Executive Officer of CRW
Financial, a receivables management company which was spun off from Casino and
Credit Services, Inc., a casino credit database and collection service
provider, in May 1995. Although Mr. O'Neill intends to devote the majority of
his time to the Company's business, he is also required to devote a substantial
amount of his time to his duties at CRW Financial. From July 1992 to May 1995,
Mr. O'Neill was Chairman and CEO of Casino and Credit Services, Inc. From May
1988 to July 1992, Mr. O'Neill was Chairman of O'Neill Properties, Inc., a real
estate development company.

MICHAEL C. BOYD has been President and Chief Operating Officer of TeleSpectrum
Worldwide since its formation in April 1996 and a director since May 1996. Mr.
Boyd was a co-founder of QVC Network, Inc., a home shopping television company,
in 1986, and served as President and Chief Operating Officer until 1994. From
1994 to 1996, Mr. Boyd was an independent consultant.

RICHARD C. SCHWENK, JR. has served as Senior Vice President and Chief Financial
Officer of TeleSpectrum Worldwide since May 1996. Mr. Schwenk served as Chief
Financial Officer and Executive Vice President of Electronic Payment Services,
Inc., a provider of automated teller machine and point-of-sale transaction
processing services, from November 1992 to January 1996. From January 1991 to
July 1992, Mr. Schwenk was the Chief Financial Officer and Vice President of
Finance for Harris Adacom Corporation, a manufacturer and distributor of data
communication and computer peripheral equipment.

WILLIAM F. RHATIGAN will serve as President of the Company's Telemarketing
Division and will become a director upon consummation of the Offering. Mr.
Rhatigan was Chairman and Chief Executive Officer of NBG Services, Inc. from
1991 until the consummation of the Offering.

MARK J. DENINO has served as a director of TeleSpectrum Worldwide since May
1996. Mr. DeNino has been a managing director of Technology Leaders Management,
Inc., the general partner of Technology Leaders II L.P., which is a venture
capital firm and significant shareholder of CRW Financial, since 1994. For more
than three years prior to that, Mr. DeNino was President of Crossroads Capital,
Inc., an investment banking firm.

RICHARD W. VIRTUE has served as Chief Executive Officer of SOMAR, Inc. since
1982, and will relinquish that post upon consummation of the Offering at which
time he will become a director of the Company. Mr. Virtue has

52
<PAGE>

entered into a consulting agreement under which he will render consulting
services to the Company following the Offering. See "Certain Relationships and
Related Party Transactions--The Acquisitions--SOMAR."

Upon consummation of the Acquisitions, the Company will form separate wholly-
owned subsidiaries which will hold the assets of the respective Operating
Businesses. The following individuals will hold the positions indicated with
such wholly-owned subsidiaries. See "Certain Transactions."

GREGORY M. ALCORN will become Chief Executive Officer of the Company's SOMAR
subsidiary upon consummation of the Offering. Mr. Alcorn served as President of
SOMAR, Inc. from 1982 until the consummation of the Offering.

PATRICK M. BALDASARE will serve as President of the Company's The Response
Center subsidiary upon consummation of the Offering. Mr. Baldasare was
President of The Response Center, Inc. from 1987 until the consummation of the
Offering.

MICHAEL J. GALLANT will serve as President of the Company's NBG subsidiary upon
consummation of the Offering. Mr. Gallant was President of NBG Services, Inc.
from 1991 until the consummation of the Offering.

EDWARD M. IDZIK will serve as President of the Company's Harris subsidiary upon
consummation of the Offering. Mr. Idzik was President of HDM and HFI from 1979
until the consummation of the Offering.

MORTON M. REICH will serve as President of the Company's Reich subsidiary upon
consummation of the Offering. Mr. Reich was President of The Reich Group, Inc.
from 1978 until the consummation of the Offering.

KAREN E. SCHWEITZER will serve as President of the Company's TeleSpectrum
subsidiary upon consummation of the Offering. Ms. Schweitzer co-founded
TeleSpectrum, Inc. and was its President from 1984 until the consummation of
the Offering.

The Company intends to elect another independent, unaffiliated director (in
addition to Mr. DeNino) to the Company's Board of Directors as promptly as
practicable.

COMMITTEES OF THE BOARD OF DIRECTORS

The Company's Board of Directors has established two committees: an Audit
Committee and a Compensation Committee.

The responsibilities of the Audit Committee include recommending to the Board
of Directors the independent public accountants to be selected to conduct the
annual audit of the books and records of the Company, reviewing the proposed
scope of such audit and approving the audit fees to be paid, accounting and
financial controls of the Company with the independent public accountants and
the Company's financial and accounting staff and reviewing and approving
transactions between the Company and its directors, officers and affiliates.
Mr. DeNino is the sole member of the Audit Committee. Following consummation of
the Offering, the additional independent, unaffiliated director to be elected
to the Company's Board of Directors will be appointed to the Audit Committee.

The Compensation Committee provides a general review of the Company's
compensation plans to ensure that they meet corporate objectives. The
responsibilities of the Compensation Committee also include administering the
1996 Stock Incentive Plan, including selecting the officers and salaried
employees to whom awards will be granted. Mr. DeNino is the sole member of the
Compensation Committee. Following consummation of the Offering, the additional
independent, unaffiliated director to be elected to the Company's Board of
Directors will be appointed to the Compensation Committee.

53
<PAGE>

DIRECTOR COMPENSATION

Directors who are not currently receiving compensation as officers, employees
or consultants of the Company are entitled to receive an annual retainer fee of
$7,500, plus $500 and reimbursement of expenses for each meeting of the Board
of Directors and each committee meeting that they attend in person. In
addition, directors receive certain formula grants of non-qualified stock
options under the 1996 Stock Incentive Plan. See "--Stock Option Plan."

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The members of the Compensation Committee following the consummation of the
Offering are to be Mr. DeNino and the other independent, unaffiliated director
to be elected to the Company's Board of Directors as promptly as practicable.

EXECUTIVE COMPENSATION

TeleSpectrum Worldwide was incorporated in April 1996. Effective upon
consummation of the Acquisitions and for the balance of 1996, the Company
anticipates that it will, pursuant to employment agreements, pay compensation
based on the following annual salaries to its Chief Executive Officer and to
the four other individuals named below who are to be executive officers of the
Company and who the Company believes will be its four other most highly
compensated executive officers in 1996 (together, the "Named Executive
Officers").

<TABLE>
<CAPTION>
------------------------------------
LONG-TERM
COMPENSATION
ANNUAL AWARDS
COMPENSATION ------------
SECURITIES
UNDERLYING
NAME POSITION SALARY BONUS OPTIONS
---- ------------------------ -------- ------- ------------
<C> <S> <C> <C> <C>
J. Brian O'Neill Chairman of the Board
and Chief Executive
Officer $130,000 $ -- 500,000(1)
President and Chief
Michael C. Boyd Operating Officer 275,000 225,000(2) 300,000(1)(3)
William F. Rhatigan President of the
Company's Telemarketing
Division 250,000 150,000(4) --
Morton M. Reich President of the
Company's Reich
subsidiary 300,000 200,000(5) --
Edward M. Idzik President of the
Company's Harris
subsidiary 275,000 225,000(4) --
</TABLE>
- --------
(1) Options are to be granted under the Company's 1996 Stock Incentive Plan as
of the date of this Prospectus at an exercise price equal to the initial public
offering price and will vest ratably over three years.
(2) Consists of a performance bonus to be awarded based in part upon the
individual's performance and in part upon the operating performance of the
Company.
(3) Does not include options to purchase 300,000 additional shares that the
Company is to grant ratably over the course of the next four years pursuant to
Mr. Boyd's employment agreement.
(4) Consists of a guaranteed bonus.
(5) Consists of a performance bonus to be awarded based in part upon the
individual's performance and in part upon the operating performance of the
Company's Reich subsidiary.

1996 STOCK INCENTIVE PLAN

The Company has adopted the 1996 Stock Incentive Plan, effective as of May 17,
1996. The 1996 Stock Incentive Plan provides for grants of stock options
("Options"), restricted stock, stock appreciation rights and performance units
(collectively, "Grants") to selected officers (including officers who are also
directors) and other employees of the Company, independent contractors and
consultants who perform services to the Company and its subsidiaries (the
"Participants"). In addition, the 1996 Stock Incentive Plan provides for grants
of formula stock options to non-employee directors. By encouraging stock
ownership, the Company seeks to motivate such individuals and to encourage such
individuals to devote their best efforts to the business and financial success
of the Company.

54
<PAGE>

General. Subject to adjustment in certain circumstances as discussed below, the
1996 Stock Incentive Plan authorizes up to 2,300,000 shares of Common Stock for
issuance pursuant to the terms of the 1996 Stock Incentive Plan. If and to the
extent Options or Grants granted under the 1996 Stock Incentive Plan expire or
are terminated for any reason without being exercised, the shares of Common
Stock subject to such Option or Grant again will be available for purposes of
the 1996 Stock Incentive Plan.

Administration of the 1996 Stock Incentive Plan. The 1996 Stock Incentive Plan
is administered and interpreted by the Compensation Committee (the "Committee")
of the Board of Directors consisting of not less than two persons appointed by
the Board of Directors from among its members, each of whom must be a
"disinterested person" as defined by Rule 16b-3 under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and an "outside director" as
defined by Section 162(m) of the Code. Except with the formula stock option
grants to non-employee directors, the Committee has the sole authority to (i)
determine the individuals to whom awards shall be made under the 1996 Stock
Incentive Plan, (ii) determine the type, size and terms of the awards to be
made to each such individual, (iii) determine the time when the grants will be
made and the duration of any applicable exercise or restriction period,
including the criteria for vesting and the acceleration of vesting and (iv)
deal with any other matters arising under the Plan. See "--Committees of the
Board of Directors."

Awards. Awards under the 1996 Stock Incentive Plan may consist of (i) options
intended to qualify as incentive stock options ("ISOs") within the meaning of
Section 422 of the Code, (ii) so-called "nonqualified stock options" that are
not intended to so qualify ("NQSOs"), (iii) restricted stock, (iv) stock
appreciation rights ("SARs") and (v) performance units.

Eligibility for Participation. Awards may be made to any employee (including
officers and directors), independent contractor and consultant of the Company
or its subsidiaries. Non-employee directors of the Company are entitled only to
formula awards of NQSOs. During any calendar year, no participant may receive
awards for more than shares of Common Stock issued or available for issuance
under the 1996 Stock Incentive Plan. As of June 26, 1996, no options were
outstanding under the 1996 Stock Incentive Plan.

Options. The exercise price of any ISO granted under the 1996 Stock Incentive
Plan will not be less than the fair market value of the underlying shares of
Common Stock on the date of grant. The exercise price of an ISO granted to an
employee who owns more than 10% of the Common Stock may not be less than 110%
of the fair market value of the underlying shares of Common Stock on the date
of grant. The exercise price of an NQSO may be greater than, equal to or less
than the fair market value of the underlying shares of Common Stock on the date
of grant. The Committee will determine the term of each Option; provided,
however, that the exercise period may not exceed ten years from the date of
grant, and the exercise period of an ISO granted to an employee who owns more
than 10% of the Common Stock may not exceed five years from the date of grant.
The participant may pay the exercise price (i) in cash, (ii) with the approval
of the Committee, by delivering shares of Common Stock owned by the participant
and having a fair market value on the date of exercise equal to the exercise
price or (iii) by a combination of the foregoing. The participant may instruct
the Company to deliver the shares of Common Stock due upon the exercise to a
designated broker instead of to the participant.

Formula Option Grants to Non-Employee Directors. Non-employee directors are
entitled to receive NQSOs pursuant to the formula grants under the 1996 Stock
Incentive Plan. According to the formula grants, each non-employee director who
is a member of the Board of Directors as of the effective date of the 1996
Stock Incentive Plan will receive a grant of an NQSO to purchase 2,500 shares
of Common Stock at a price equal to the initial public offering price in this
Offering. Thereafter, on each date on which the Company holds its annual
meeting of stockholders, each non-employee director in office immediately
before and after the annual election of directors will receive a grant of an
NQSO to purchase 2,500 shares of Common Stock at an exercise price equal to the
closing price per share on The Nasdaq National Market on the date of grant.
Each non-employee director who first becomes a member of the Board of Directors
after the effective date of the 1996 Stock Incentive Plan will receive a grant
of an NQSO to purchase 2,500 shares of Common Stock on the date he or she
becomes a member of the Board of Directors, at an exercise price equal to the
closing price of the Common Stock on The Nasdaq National Market on the date of
grant. The term of each such option shall be ten years and each such option
shall be fully and immediately exercisable upon the date of grant.

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<PAGE>

Restricted Stock. The Committee may issue shares of restricted Common Stock to
a participant pursuant to the 1996 Stock Incentive Plan. Shares may be issued
for consideration or for no consideration, as the Committee determines. The
number of shares of Common Stock granted to each participant shall be
determined by the Committee, subject to the maximum limit described above.
Grants of restricted stock will be made subject to such performance
requirements, vesting provisions, transfer restrictions or other restrictions
and conditions as the Committee may determine in its sole discretion.

Stock Appreciation Rights. The Committee may grant SARs alone or in tandem with
any stock option pursuant to the 1996 Stock Incentive Plan. The exercise price
of an SAR will be either (i) the exercise price of the related stock option or
(ii) the fair market value of a share of Common Stock on the date of grant of
the SAR. When the participant exercises an SAR, the participant will receive
the amount by which the fair market value of the Common Stock on the date of
exercise exceeds the exercise price of the SAR. The participant may elect to
have such appreciation paid in cash or in shares of Common Stock, subject to
Committee approval. To the extent a participant exercises a tandem SAR, the
related option shall terminate. Similarly, upon exercise of a stock option, the
related SAR, if any, shall terminate.

Performance Units. The Committee may grant performance unit awards payable in
cash or shares of Common Stock at the end of a specified performance period.
Payment will be contingent upon achieving performance goals by the end of the
performance period. The measure of a performance unit may, in the Committee's
discretion, be equal to the fair market value of a share of Common Stock. The
performance goals will be comprised of specified annual levels of one or more
performance criteria as the Committee may deem appropriate such as earnings per
share of Common Stock of the Company, net earnings, operating earnings, unit
volume, net sales, market share, balance sheet measurements, cash return on
assets, stockholder return, or return on capital. The Committee will determine
the length of an award period, the maximum payment value of an award, and the
minimum performance goals required before payment will be made.

Amendment and Termination of the 1996 Stock Incentive Plan. The Board of
Directors may amend or terminate the 1996 Stock Incentive Plan at any time;
provided, however, that, the Board of Directors may not amend the 1996 Stock
Incentive Plan to (i) increase (except for increases due to the adjustments
discussed below) the aggregate number of shares of Common Stock for which
Options and/or Grants may be granted hereunder, (ii) decrease the minimum
exercise price specified by the 1996 Stock Incentive Plan in respect of ISOs,
(iii) change the class of employees eligible to receive ISOs under the 1996
Stock Incentive Plan, (iv) increase the individual limit of shares of Common
Stock for which Options and/or Grants may be granted to any single individual
under the 1996 Stock Incentive Plan, or (v) make any amendment that requires
stockholder approval pursuant to Rule 16b-3 of the Exchange Act or Section
162(m) of the Code without stockholder approval. The 1996 Stock Incentive Plan
will terminate on the day immediately preceding the tenth anniversary of its
effective date, unless terminated earlier by the Board of Directors or extended
by the Board of Directors with approval of the stockholders.

Adjustment Provisions. Subject to the change of control provisions below, in
the event of certain transactions identified in the 1996 Stock Incentive Plan,
the Board of Directors may appropriately adjust: (i) the number of shares of
Common Stock (and the option price per share) subject to the unexercised
portion of any outstanding options or SARs, (ii) the number of sharers of
Common Stock to be acquired pursuant to an award which has not vested, and
(iii) the number of shares of Common Stock for which awards may be made under
the 1996 Stock Incentive Plan, and such adjustments shall be effective and
binding for all purposes of the 1996 Stock Incentive Plan.

Change of Control of the Company. In the event of a change of control, all
Options and Grants shall be fully vested. Each participant will be provided
with advance written notice by the Company prior to the change of control (to
the extent possible) and will have the right, within 90 days after such notice,
to exercise the options and SARs in full. Any Options or SARs not timely
exercised will terminate unless exchanged or substituted with

56
<PAGE>

the Company (or its successor). Within 12 months following a change of control,
a percentage of the performance unit payments, if any, for the full performance
period in which the participant so terminates equal to the percentage of the
performance period during which the participant was in the employ or service of
the Company (or its successor) and all amounts for the prior performance period
if not then distributed will be distributed to such participant in a lump sum.

A change of control is defined as (i) a tender offer, merger or other
transaction as a result of which any person or group becomes the owner of more
than of the Common Stock or the combined voting power of the Company's then
outstanding securities, (ii) a liquidation or a sale of substantially all the
Company's assets, (iii) the individuals constituting the Board of Directors or
individuals nominated or elected by them cease to constitute a majority of the
Board of Directors, or (iv) the Company's merger or consolidation with any
other corporation (other than a wholly owned subsidiary) if the Company is not
the surviving corporation (or survives only as a subsidiary of another
corporation).

Section 162(m). Under Section 162(m) of the Code, the Company may be precluded
from claiming a federal income tax deduction for total remuneration in excess
of $1,000,000 paid to the chief executive officer or to any of the other four
most highly compensated officers in any one year. Total remuneration would
include amounts received upon the exercise of stock options granted under the
1996 Stock Incentive Plan and the value of shares received when the shares of
restricted stock became transferable (or such other time when income is
recognized). An exception does exist, however, for "performance-based
compensation," including amounts received upon the exercise of stock options
pursuant to a plan approved by stockholders that meets certain requirements.
The 1996 Stock Incentive Plan has been approved by stockholders and is intended
to make grants of Options thereunder meet the requirements of "performance-
based compensation." Awards of restricted stock generally will not qualify as
"performance-based compensation."

New Plan Benefits. Upon the Effective Date, it is contemplated that the Company
will grant certain Options under the 1996 Stock Incentive Plan at an exercise
price equal to the initial public offering price per share. The options will
vest one-third each on the first, second and third anniversaries of the date of
grant, and will expire on the tenth anniversary of the date of grant. The
following table sets forth certain information with respect to such
contemplated Option grants.

<TABLE>
<CAPTION>
NAME ND POSITIONA DOLLAR VALUE(1) NUMBER OF UNITS(2)
- ----------------- ---------------- ------------------
<S> <C> <C>
J. Brian O'Neill..................... Not determinable 500,000
Chairman of the Board and Chief
Executive Officer
Michael C. Boyd...................... Not determinable 300,000(3)
President and Chief Operating
Officer
William F. Rhatigan.................. Not determinable --
President of the Company's
Telemarketing Division
Morton M. Reich...................... Not determinable --
President of the Company's Reich
subsidiary
Edward M. Idzik...................... Not determinable --
President of the Company's Harris
subsidiary
All current executive officers as a Not determinable 900,000(3)(4)
group...............................
All current directors who are not Not determinable 2,500
executive officers as a group.......
All employees, including all current
officers who are not executive
officers, as a group................ Not determinable 383,600
</TABLE>
- --------
(1)The dollar values of the awards under the 1996 Stock Incentive Plan are not
determinable at this time, since the options are expected to be granted at an
exercise price equal to the initial public offering price of the Common Stock.
(2) The number of units represents the number of shares of Common Stock
underlying the options expected to be granted.
(3)Does not include options to purchase 300,000 additional shares that the
Company is to grant ratably over the course of the next four years pursuant to
Mr. Boyd's employment agreement.

(4)Does not include options to purchase 100,000 additional shares that the
Company is to grant ratably over the course of the next four years pursuant to
an executive officer's employment agreement.

57
<PAGE>

EMPLOYMENT AGREEMENTS

Effective as of the consummation of the Offering, the Company and the wholly
owned subsidiaries of the Company which will hold the net assets of the
Operating Businesses will enter into employment agreements with the Named
Executive Officers and certain of the Company's other executive officers. Mr.
O'Neill's agreement provides that he will be employed by the Company at an
annual salary of $130,000. Mr. Boyd's agreement provides that he will be
employed by the Company at an annual salary of $275,000, plus an annual
performance bonus of up to $225,000 based in part upon his performance and in
part upon the operating performance of the Company. Mr. Schwenk's agreement
provides that he will be employed by the Company at an annual salary of
$200,000, plus an annual performance bonus of up to $150,000 based in part upon
his performance and in part upon the operating performance of the Company. Mr.
Rhatigan's agreement provides that he will be employed by the Company for a
four-year term at an annual salary of $250,000, plus an annual guaranteed bonus
of $150,000. If Mr. Rhatigan is terminated without cause, he will continue to
receive his salary and bonus for the remainder of the term of the agreement.
Mr. Alcorn's agreement provides that he will be employed by the Company for a
four-year term at an annual salary of $195,000, plus an annual performance
bonus of up to $195,000 based upon the operating performance of the Company's
SOMAR subsidiary. If Mr. Alcorn is terminated without cause, he will continue
to receive his salary for the remainder of the term of the agreement. Mr.
Baldasare's agreement provides that he will be employed through December 31,
1999 at an annual salary of $195,000, which shall increase to $220,000 after
December 21, 1997, plus an annual bonus, which bonus shall be a portion of a
pool, the amount of which shall be determined by the operating performance of
the Company's The Response Center subsidiary. If Mr. Baldasare is terminated
without cause, he will continue to receive his salary for the remainder of the
term of the agreement and his bonus for the year of termination. Mr. Gallant's
agreement provides that he will be employed by the Company for a four-year term
at an annual salary of $250,000, plus an annual guaranteed bonus of $150,000.
If Mr. Gallant is terminated without cause, he will continue to receive his
salary and bonus for the remainder of the term of the agreement. Mr. Idzik's
agreement provides that he will be employed by the Company for a four-year term
at an annual salary of $275,000, plus an annual guaranteed bonus of $225,000.
If Mr. Idzik is terminated without cause, he will continue to receive his
salary and bonus for the remainder of the term of the agreement. Mr. Reich's
agreement provides that he will be employed by the Company through December 31,
1999 at an annual salary of $300,000 plus an annual performance bonus of up to
$200,000 based in part upon his performance and in part upon the operating
performance of the Company's Reich subsidiary. If Mr. Reich is terminated
without cause, he will continue to receive his salary for the remainder of the
term of the agreement. Ms. Schweitzer's agreement provides that she will be
employed by the Company for a four-year term at an annual salary of $160,000
plus an annual performance bonus of at least $150,000 based in part upon her
performance, and in part upon the operating performance of the Company's
TeleSpectrum subsidiary. If Ms. Schweitzer is terminated without cause, she
will continue to receive her salary for the remainder of the term at the
agreement. Each of the agreements contains confidentiality and non-competition
provisions. The non-competition provisions apply throughout the term of
employment and for a period of two years thereafter.

58
<PAGE>

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

The following table contains information concerning the aggregate cash paid and
stock and warrants issued in connection with the Acquisitions (excluding cash
and securities that may be paid or issued in connection with earn-out
arrangements).

<TABLE>
<CAPTION>
CASH SHARES
(IN SHARES OF UNDERLYING
OPERATING BUSINESS MILLIONS) COMMON STOCK WARRANTS
- ------------------ --------- ------------ ----------
<S> <C> <C> <C>
SOMAR...................................... $25.0 2,207,340 210,000
NBG........................................ 14.1 1,120,225 112,500
Harris..................................... 12.2 202,192 60,900
Reich...................................... 20.0 441,468 105,000
TeleSpectrum............................... 8.0(1) 176,587 44,100
The Response Center........................ 11.6 256,051 60,900
----- --------- -------
Total.................................... $90.9 4,403,863 593,400
</TABLE>
- --------
(1) Does not include the cancellation of a $0.5 million promissory note from
the Seller of the Operating Business held by the Company.

THE ACQUISITIONS

Simultaneously with and as a condition of the consummation of the sale of the
shares of Common Stock offered hereby, TeleSpectrum Worldwide will acquire the
Operating Businesses in the Acquisitions, upon the following material terms:

SOMAR

TeleSpectrum Worldwide will acquire substantially all of the assets (and assume
substantially all of the liabilities) of SOMAR for $25.0 million in cash,
2,207,340 shares of Common Stock, contingent payments, the grant of warrants
and the payment of certain of SOMAR's expenses. The contingent payment for
1996, if any, is equal to 50% of the amount by which the earnings before
interest and taxes ("EBIT") of the Company's SOMAR subsidiary for 1996 exceed
$4.3 million and is payable in cash. SOMAR's 1995 EBIT was $1.7 million. The
contingent payment for 1997, if any, is equal to the amount by which 1997 EBIT
of the Company's SOMAR subsidiary exceeds $17.3 million, multiplied by five,
less the bonus payment discussed below, not to exceed $45.0 million. The 1997
payment is payable in Common Stock registrable upon demand by SOMAR. The number
of shares to be issued in satisfaction of the contingent payment will be
calculated by reference to the trading price of the Company's Common Stock at
the time of the determination of 1997 EBIT. In addition, the Company shall make
a bonus payment to the Company's SOMAR Subsidiary, in an amount equal to 50% of
the amount by which the 1997 EBIT exceeds $17.3 million, not to exceed $5.0
million. The bonus payment is payable in cash to the SOMAR subsidiary for the
purpose of granting bonuses to employees of the SOMAR subsidiary, at the
discretion of Mr. Alcorn. SOMAR shall reimburse the Company the amount, if any,
by which the shareholders' equity set forth on the SOMAR balance sheet as of
the closing date of the Acquisition is less than the shareholders' equity set
forth on the SOMAR balance sheet as of December 31, 1995, excluding expenses
associated with the Acquisition and the Offering and certain permitted
distributions.

The Company will issue warrants exercisable for an aggregate of 210,000 shares
of Common Stock to certain senior management personnel of SOMAR, including
Messrs. Alcorn (31,500 shares) and Virtue (129,500 shares) at an exercise price
per share equal to the initial public offering price. The warrants will be
immediately exercisable and will expire ten years from issuance. On the
Effective Date the Company will grant options under the 1996 Stock Incentive
Plan to purchase an aggregate of 90,000 shares of Common Stock to certain
employees of SOMAR, not including Messrs. Alcorn and Virtue, at an exercise
price per share equal to the initial public offering price, which options shall
be subject to a three-year vesting period. The Company has granted piggyback
registration rights with respect to those shares issued in payment of a portion
of the purchase price of the Acquisition. SOMAR has the right to include in the
Offering 171,429 shares of Common Stock.

The Company will cause the Operating Business of SOMAR to be held and operated
as a separate subsidiary of the Company through December 31, 1997. The Company
has committed to make available to the Company's

59
<PAGE>

SOMAR subsidiary up to $14.0 million for the purpose of meeting SOMAR's capital
expenditure requirements. At or prior to the Effective Date, CRW Financial, a
significant stockholder of the Company, will nominate and vote its shares in
favor of the election of Mr. Virtue to the Company's Board of Directors.

The Company will reimburse SOMAR for the fees and expenses incurred in
connection with the audit of its financial statements for the years ended
December 31, 1993 and 1994; one-half of the fee paid by SOMAR to The Robinson-
Humphrey Company, Inc., not to exceed $400,000; one-half of all accounting
fees, excluding those fees described above, incurred by SOMAR in connection
with the Acquisition and the Offering; and one-half of the legal fees incurred
by SOMAR in connection with the Acquisition and the Offering.

Upon consummation of the Offering, Mr. Virtue will repay to the Seller of the
SOMAR Operating Business an advance that, as of March 31, 1996, was in the
amount of $1.0 million. At or prior to the consummation of the Offering, all
amounts owing to the Company from certain entities which are under common
control and ownership with SOMAR, Inc. (the "SOMAR Affiliates"), or owing to
the SOMAR Affiliates from the Company, will be fully satisfied. All agreements,
understanding and arrangements with such SOMAR Affiliates will be amended so
that all continuing obligations of the Company's SOMAR subsidiary thereunder
are no greater than they would be under agreements with unaffiliated third
parties.

NBG

TeleSpectrum Worldwide will acquire substantially all of the assets (and assume
substantially all of the liabilities) of NBG for $14.1 million in cash,
1,120,225 shares of Common Stock, a contingent payment, the grant of warrants,
and the payment of certain of NBG's expenses. The contingent payment is equal
to the amount by which the product of NBG's 1996 EBIT and 7.25 exceeds $25.4
million. NBG's 1995 EBIT was $2.1 million. The amount of the contingent payment
is payable in the form of a convertible promissory note to be issued at closing
of the Acquisition of NBG, which note is payable in three equal installments of
principal, together with accrued interest thereon, ending January 2, 1999.
Interest on the unpaid principal balance of the note accrues at 7.25% per
annum. The outstanding principal balance, or a portion thereof, is convertible
into shares of the Common Stock after the thirtieth day following the first
anniversary of the closing of the Acquisition of NBG, at a conversion price
equal to the average of the closing sale prices of the Common Stock on the five
trading days prior to December 31, 1996. NBG shall reimburse the Company the
amount, if any, by which the shareholders' equity set forth on the NBG balance
sheet as of the closing date of the Acquisition is less than the shareholders'
equity set forth on the NBG balance sheet as of December 31, 1995, excluding
certain permitted distributions.

The Company will issue warrants exercisable for an aggregate of 56,250 shares
of Common Stock to each of Messrs. Rhatigan and Gallant, at an exercise price
per share equal to the initial public offering price. The warrants will be
immediately exercisable and will expire ten years from the date of issuance. On
the Effective Date, the Company will grant options under the 1996 Stock
Incentive Plan to purchase an aggregate of 75,000 shares of the Common Stock to
certain employees of NBG, not including Messrs. Rhatigan and Gallant, at an
exercise price per share equal to the initial public offering price, which
options shall be subject to a three-year vesting period. NBG has piggyback
registration rights with respect to those shares of Common Stock issued in
payment of a portion of the purchase price of the Acquisition and those shares
of Common Stock to be issued pursuant to the convertible note, if any. NBG has
the right to include in the Offering 285,714 shares of Common Stock.

At or prior to the Effective Date, CRW Financial, a significant stockholder of
the Company, shall nominate and vote its shares in favor of the election of Mr.
Rhatigan to the Company's Board of Directors. The Company will cause the
Operating Business of NBG to be held and operated as a separate subsidiary
through December 31, 1996. The Company shall pay the expenses incurred by NBG's
independent public accounting firm and up to $100,000 of the legal fees
incurred by NBG in connection with the Acquisition and the Offering.

Harris
TeleSpectrum Worldwide will acquire substantially all of the assets (and assume
substantially all of the liabilities) of Harris for $12.2 million in cash,
202,192 shares of Common Stock, the grant of warrants and the payment of
certain of Harris's expenses. Harris has piggyback registration rights with
respect to those shares of Common Stock issued in payment of a portion of the
purchase price of the Acquisition. The Company will issue warrants exercisable
for an aggregate of 60,900 shares of Common Stock to certain executives of
Harris, including warrants exercisable for 54,810 shares to Mr. Idzik, at an
exercise price per share equal to the initial public offering price.

60
<PAGE>

The warrants will be immediately exercisable and will expire ten years from the
date of issuance. On the Effective Date, the Company will grant options under
the 1996 Stock Incentive Plan to purchase an aggregate of 26,100 shares of the
Common Stock to certain employees of Harris, not including Mr. Idzik, at an
exercise price per share equal to the initial public offering price, which
options shall be subject to a three-year vesting period. Harris shall reimburse
the Company the amount, if any, by which the shareholders' equity set forth on
the Harris balance sheet as of the closing date of the Acquisitions is less
than the shareholders' equity set forth on the Harris balance sheet as of
December 31, 1995, excluding certain permitted distributions. The Company will
pay the expenses incurred by Harris's independent accounting firm and up to
$100,000 of the legal fees incurred by Harris in connection with the
Acquisition and the Offering.

Reich

TeleSpectrum Worldwide will acquire substantially all of the assets (and assume
substantially all of the liabilities) of Reich for $20.0 million in cash,
441,468 shares of Common Stock, a contingent payment, the grant of warrants,
and the payment of certain of Reich's expenses. The contingent payment is based
upon the amount, if any, by which Reich's 1996 EBIT multiplied by 7.25 exceeds
$25.0. Reich's 1995 EBIT was $1.9 million. The contingent payment is payable in
the form of a convertible promissory note to be issued at closing of the
Acquisition, which note is payable in three equal installments of principal,
together with accrued interest thereon, ending January 2, 1999. Interest on the
unpaid principal balance of the note accrues at 7.25% per annum. The
outstanding principal balance, or a portion thereof, is convertible into shares
of the Common Stock after the thirtieth day following the first anniversary of
the closing of the Acquisition of Reich, at a conversion price equal to the
average of the closing sale prices of the Common Stock on the five trading days
prior to December 31, 1996. The Company will issue warrants exercisable for an
aggregate of 105,000 shares of Common Stock to Morton M. Reich, at an exercise
price per share equal to the initial public offering price. The warrants will
be immediately exercisable and will expire ten years from the date of issuance.
On the Effective Date, the Company will grant options under the 1996 Stock
Incentive Plan to purchase an aggregate of 45,000 shares of the Common Stock to
certain employees of Reich, not including Mr. Reich, at an exercise price per
share equal to the initial public offering price, which options shall be
subject to a three-year vesting period. Reich has piggyback registration rights
with respect to those shares of Common Stock issued in payment of a portion of
the purchase price of the Acquisition and those shares of Common Stock to be
issued pursuant to the convertible note, if any. Reich shall reimburse the
Company the amount, if any, by which the shareholders' equity set forth on the
Reich balance sheet as of the closing date is less than the shareholders'
equity set forth in the Reich balance sheet as of December 31, 1995, excluding
expenses associated with the Acquisition and the Offering. In addition, prior
to the closing of the Acquisition, Reich may (i) make distributions in an
amount necessary to enable Mr. Reich to pay all federal, state and local taxes
for all periods prior to such closing and (ii) distribute on the day
immediately prior to such closing an amount equal to the aggregate net income
of Reich for federal income tax purposes for 1995; provided, however, that if
Reich does not have sufficient cash to make such distributions, the Company
will assume an obligation to pay such amount prior to March 1, 1997. The
Company will cause the Operating Business of Reich to be held and operated as a
separate subsidiary at least through December 31, 1996. The Company will pay
the expenses incurred by Reich's independent accounting firm and up to $100,000
of the legal fees incurred by Reich in connection with the Acquisition and the
Offering.

TeleSpectrum
TeleSpectrum Worldwide will acquire substantially all of the assets (and assume
substantially all of the liabilities) of TeleSpectrum for $8.0 million in cash,
176,587 shares of Common Stock, the grant of warrants, the payment of certain
of TeleSpectrum's expenses and the cancellation of the outstanding principal
amount of a promissory note held by TeleSpectrum Worldwide, in the original
principal amount of $500,000, which represented an advance of purchase price
from CRW Financial to TeleSpectrum on behalf of TeleSpectrum Worldwide. The
Company will issue warrants exercisable for an aggregate of 44,100 shares to
two executives of TeleSpectrum, including warrants to Ms. Schweitzer
exercisable for 22,050 shares at an exercise price per share equal to the
initial public offering price. The warrants will be immediately exercisable and
will expire ten years from the date of issuance. On the Effective Date, the
Company will grant options under the 1996 Stock Incentive Plan to purchase an
aggregate of

61
<PAGE>

18,900 shares of Common Stock to certain employees of TeleSpectrum, not
including Ms. Schweitzer, at an exercise price per share equal to the initial
public offering price, which options shall be subject to a three-year vesting
period. TeleSpectrum has piggyback registration rights with respect to those
shares of Common Stock issued in payment of a portion of the purchase price of
the Acquisition. TeleSpectrum shall reimburse the Company the amount, if any,
by which the shareholders' equity set forth on the TeleSpectrum balance sheet
as of the closing date of the Acquisition is less than the shareholders' equity
set forth on the TeleSpectrum balance sheet as of December 31, 1995. The
Company will pay the expenses incurred by TeleSpectrum's independent accounting
firm and up to $100,000 of the legal fees incurred by TeleSpectrum in
connection with the Acquisition and the Offering.

The Response Center

TeleSpectrum Worldwide will acquire substantially all of the assets (and assume
substantially all of the liabilities) of The Response Center for $11.6 million
in cash, 256,051 shares of Common Stock, the grant of warrants and the payment
of certain of The Response Center's expenses. The Company will issue warrants
exercisable for an aggregate of 60,900 shares of Common Stock to certain
executives of The Response Center, including warrants to Mr. Baldasare
exercisable for 55,474 shares, at an exercise price per share equal to the
initial public offering price. The warrants will be immediately exercisable and
will expire ten years from the date of issuance. On the Effective Date, the
Company will grant options under the 1996 Stock Incentive Plan to purchase an
aggregate of 26,100 shares of Common Stock to certain employees of The Response
Center, including 11,887 to Mr. Baldasare, at an exercise price per share equal
to the initial public offering price, which options shall be subject to a
three-year vesting period. The Response Center has piggyback registration
rights with respect to those shares of Common Stock issued at closing in
payment of a portion of the purchase price of the Acquisition. TeleSpectrum
Worldwide will pay the expenses incurred by The Response Center's independent
public accounting firm and up to $100,000 of legal fees incurred in connection
with the Acquisition and the Offering. The Response Center shall reimburse the
Company the amount, if any, by which the shareholders' equity set forth on The
Response Center balance sheet as of the closing date is less than the sum of
the shareholders' equity set forth on The Response Center balance sheet as of
September 30, 1995 and The Response Center's net income for income tax purposes
for the period from October 1, 1995 through March 31, 1996, minus the sum of
$455,000 and certain permitted distributions.

CONSULTING AGREEMENT WITH PERSON NAMED TO BECOME DIRECTOR

Effective as of the consummation of the Offering, the Company will enter into a
consulting agreement with Richard W. Virtue, who has been named to become a
director of the Company. Mr. Virtue's agreement provides that he will perform
consulting services for the Company for $150,000 per year. The agreement has a
three-year term and contains confidentiality and non-competition provisions.

HEADQUARTERS LEASE

TeleSpectrum Worldwide subleases an aggregate of approximately 3,000 square
feet of space in King of Prussia, Pennsylvania from CRW Financial. The space
houses TeleSpectrum Worldwide's headquarters facility, and comprises 14.2% of
the aggregate space previously occupied by CRW Financial at this location. CRW
Financial, in turn, leases this space from CRW Building Limited Partnership, a
partnership controlled by J. Brian O'Neill, who is Chairman and Chief Executive
Officer of both TeleSpectrum Worldwide and CRW Financial. The sublease
commenced on May 9, 1996, and expires on September 30, 2004. Under the
sublease, TeleSpectrum Worldwide performs and pays 14.2% of all obligations of
CRW Financial under its lease with CRW Building Limited Partnership; monthly
base rent payments under the sublease are approximately $4,100. TeleSpectrum
Worldwide believes that the sublease reflects the prevailing commercial market
rate for the space that it occupies.

62
<PAGE>

CRW TRANSACTIONS

Initial Capitalization

CRW Financial, the sole stockholder of TeleSpectrum Worldwide, has made a
capital contribution to TeleSpectrum Worldwide of $1.6 million in cash and $0.5
million in the form of a promissory note from TeleSpectrum, Inc. to CRW
Financial. The capital contribution represents the proceeds of borrowings by
CRW Financial under subordinated notes (the "CRW Notes") issued to eight
individuals and one partnership (the "Lenders") on May 22, 1996. Amounts
outstanding under the CRW Notes bear interest at 12% per annum. Principal and
interest on the CRW Notes are due and payable in full immediately upon
repayment in full of all amounts owing from CRW Financial to Mellon Bank N.A.
(the "Mellon Repayment"), or in quarterly installments of 12.5% of the
principal amount plus accrued but unpaid interest beginning January 1, 1997 if
the Mellon Repayment has not been effected on or before any such quarterly
repayment date. As part of the consideration for the CRW Notes, CRW Financial
issued to the Lenders warrants (the "CRW Lender Warrants") to purchase a total
of 1,433,454 shares of Common Stock of TeleSpectrum Worldwide that are
currently owned by CRW Financial. The CRW Lender Warrants are exercisable at
any time during a 10-year period at a price of $1.50 per share (the "CRW
Warrant Price"), the fair value of a share of Common Stock of TeleSpectrum
Worldwide on the date of grant, as determined by the CRW Financial Board of
Directors. In connection with the CRW Initial Capitalization, TeleSpectrum
Worldwide has granted the Lenders the right to have the TeleSpectrum Worldwide
shares of Common Stock owned by CRW Financial and underlying the CRW Lender
Warrants registered under the Securities Act along with the registration of any
other TeleSpectrum Worldwide shares of Common Stock and also the right to
certain demand registrations subject to the Lenders' agreement not to sell
during the 180 days after consummation of the Offering any shares of Common
Stock acquired through exercise of the CRW Lender Warrants. The Lenders, their
respective relationships with CRW Financial and TeleSpectrum Worldwide and
their respective loan and share amounts are as follows:

<TABLE>
<CAPTION>
SHARES OWNED BY
CRW FINANCIAL AND
UNDERLYING CRW
LENDER CRW NOTE LENDER WARRANTS
- ------ -------- ---------------
<S> <C> <C>
Technology Leaders II L.P. $650,000 443,693
Stockholder of CRW Financial
J. Brian O'Neill 650,000 443,693
Chairman of the Board and Chief Executive
Officer of CRW Financial and of the Company
Michael C. Boyd 200,000 136,514
President and Chief Operating Officer of the Com-
pany
Richard C. Schwenk, Jr. 200,000 136,514
Senior Vice President and Chief Financial Officer
of the Company
Bernard Morgan 100,000 68,250
Director of CRW Financial
Robert N. Verratti 100,000 68,250
Director of CRW Financial
Arthur R. Spector 100,000 68,250
Consultant to CRW Financial
Jonathan P. Robinson 50,000 34,145
Chief Financial Officer of CRW Financial and
Director of Acquisitions of the Company
Kevin E. Mullin 50,000 34,145
Director of Acquisitions of CRW Financial
---------- ---------
$2,100,000 1,433,454
========== =========
</TABLE>

63
<PAGE>

CRW Management Warrants
CRW Financial granted warrants (the "CRW Management Warrants") on May 17, 1996
to four individuals related to CRW Financial (the "CRW Managers") who are
performing services on behalf of CRW Financial in connection with the
Acquisitions and the Offering. The CRW Management Warrants entitle the holders
to purchase a total of 839,108 shares of Common Stock of TeleSpectrum Worldwide
that are currently owned by CRW Financial. The CRW Management Warrants vest
immediately and are exercisable at any time after vesting during a 10-year
period at the CRW Warrant Price. TeleSpectrum Worldwide has granted the CRW
Managers the right to have the shares of Common Stock underlying the CRW
Management Warrants registered under the Securities Act along with the
registration of any other shares of Common Stock and also the right to certain
demand registrations, subject to the CRW Managers' agreement not to sell during
the 180 days after consummation of the Offering any shares of Common Stock
acquired through exercise of the CRW Management Warrants. The CRW Managers
(whose respective relationships with CRW Financial and TeleSpectrum Worldwide
are described above in connection with the CRW Notes) and their respective
share amounts underlying the CRW Management Warrants are as follows: J. Brian
O'Neill--610,160 shares; Arthur R. Spector--76,316 shares; Jonathan P.
Robinson--76,316 shares; and Kevin E. Mullin--76,316 shares.

CRW Market Research
On or prior to the Effective Date, CRW Financial will terminate the operations
of the market research business it has conducted since January 1996 ("CRWMR")
and will make the employees of CRWMR available to be hired by the Company or
The Response Center subsidiary on or after the closing of the Acquisitions.
Neither the Company nor The Response Center subsidiary will have any obligation
to hire any CRWMR employees. CRW Financial will retain the accounts receivable
and all accounts payable and other obligations associated with the CRWMR
business.

64
<PAGE>

PRINCIPAL AND SELLING STOCKHOLDERS

Prior to the Acquisitions and the Offering, all of the Common Stock was held by
CRW Financial. The following table sets forth certain information regarding the
beneficial ownership of the Common Stock as of June 26, 1996, assuming
completion of the Acquisitions, and as adjusted to reflect the sale of the
Common Stock being offered hereby, by: (i) each person (or group of affiliated
persons) known by the Company to be the beneficial owner of more than five
percent of the outstanding Common Stock; (ii) each executive officer of the
Company; (iii) each director of the Company and each person named to become a
director; (iv) all of the Company's directors, persons named to become
directors and executive officers as a group; and (v) the Selling Stockholders.
Each stockholder possesses sole voting and investment power with respect to the
shares listed, unless otherwise noted.

<TABLE>
-----------------------------------------------------------------------------
<CAPTION>
SHARES BENEFICIALLY OWNED SHARES TO BE BENEFICIALLY
PRIOR TO THE OFFERING NUMBER OF OWNED AFTER OFFERING
---------------------------------- SHARES ----------------------------------
NUMBER BEING NUMBER
BENEFICIAL OWNER OF SHARES PERCENT OFFERED OF SHARES PERCENT
- ---------------- --------------- ----------- --------- --------------- -----------
<S> <C> <C> <C> <C> <C>
CRW Financial, Inc. 8,510,137 65.9 -- 8,510,137 36.7
443 South Gulph Road
King of Prussia, PA
19406
J. Brian O'Neill 8,510,137 (1) 65.9 -- 8,510,137 (1) 36.7
443 South Gulph Road
King of Prussia, PA
19406
Technology Leaders II 8,510,137 (2) 65.9 -- 8,510,137 (2) 36.7
L.P.
435 Devon Park Drive
Wayne, PA 19087
SOMAR, Inc. 2,207,340 17.1 36,000 2,171,340 9.2
118 South Main Street
Salisbury, NC 28144
NBG Services, Inc. 1,120,225 8.7 285,714 834,511 3.6
One Broadway, 12th
Floor
Cambridge, MA 02142
Michael C. Boyd 136,514 (3) 1.0 -- 136,514 (3) *
Richard C. Schwenk, Jr. 136,514 (3) 1.0 -- 136,514 (3) *
Mark J. DeNino 8,512,637 (2)(4) 65.9 -- 8,512,637 (2)(4) 36.7
William F. Rhatigan 1,176,475 (5) 9.1 -- 890,761 (5) 3.8
Richard W. Virtue 2,336,840 (6) 17.9 -- 2,165,411 (6) 9.3
Gregory M. Alcorn 31,500 (7) * -- 31,500 (7) *
Patrick M. Baldasare 323,412 (8) 2.4 -- 323,412 (8) 1.4
Edward M. Idzik 257,002 (9) 2.0 -- 257,002 (9) 1.1
Morton M. Reich 546,468 (10) 4.1 -- 546,468 (10) 2.3
Karen E. Schweitzer 198,637 (11) 1.5 -- 198,637 (11) *
Michael J. Gallant 1,176,475 (5) 9.1 -- 890,761 (5) 3.8
All directors, persons
named to become direc-
tors and executive of-
ficers, as a group (12
persons) 13,439,221 (12) 100.0 321,714 13,117,507 (12) 54.7
</TABLE>
- --------
* Less than one percent.

(1)Consists of 8,510,137 shares held by CRW Financial. Mr. O'Neill is Chairman
of the Board and Chief Executive Officer, and a principal stockholder, of CRW
Financial, and may be deemed to have shared voting and investment power over
the shares held by CRW Financial. Mr. O'Neill disclaims beneficial ownership of
all such shares. Of the shares held by CRW Financial, 443,693 shares are
purchasable by Mr. O'Neill from CRW Financial upon the exercise of CRW Lender
Warrants granted to Mr. O'Neill, and 610,160 shares are issuable by CRW
Financial to Mr. O'Neill upon the exercise of CRW Management Warrants granted
to Mr. O'Neill. Does not include 500,000 shares issuable upon the exercise of
stock options contemplated to be granted to Mr. O'Neill under the 1996 Stock
Incentive Plan upon consummation of the Offering at an exercise price equal to
the initial public offering price per share. None of the excluded warrants or
options will be exercisable within 60 days of June 26, 1996.

65
<PAGE>

(2)Consists of 8,510,137 shares held by CRW Financial. Technology Leaders II
L.P. ("TL Ventures") is a limited partnership whose sole general partner is
Technology Leaders II Management L.P. Mark J. DeNino, a director of the Company
is a general partner of Technology Leaders II Management L.P. TL Venture is a
significant stockholder of CRW Financial, and may be deemed to share with
Technology Leaders II L.P., voting and investment power over the shares held by
CRW Financial, of which Mr. DeNino is a director. TL Ventures and Mr. DeNino
disclaim beneficial ownership of all such shares. Of the shares held by CRW
Financial, 443,693 shares are purchasable by TL Ventures upon the exercise of
CRW Lender Warrants granted to TL Ventures, which warrants are immediately
exercisable. Mr. DeNino disclaims beneficial ownership of all such shares.

(3)Consists of 136,514 shares issuable upon the exercise of CRW Lender
Warrants, which warrants are immediately exercisable. Does not include 300,000
and 100,000 shares issuable upon the exercise of stock options contemplated to
be granted to Messrs. Boyd and Schwenk, respectively, under the 1996 Stock
Incentive Plan upon consummation of the Offering at an exercise price equal to
the initial public offering price per share; none of these options will be
exercisable within 60 days of June 26, 1996.
(4)Includes 2,500 shares issuable upon the exercise of options granted to Mr.
DeNino under the 1996 Stock Incentive Plan in connection with Mr. DeNino's
appointment to the Company's Board of Directors. All such options are
immediately exercisable.
(5)Includes 1,120,225 shares held by NBG Services, Inc. Mr. Rhatigan and Mr.
Gallant together own all of the outstanding capital stock of NBG Services,
Inc., and each may be deemed to share voting and investment power over the
shares held by NBG Services, Inc. Also includes 56,250 shares issuable to each
of Messrs. Rhatigan and Gallant upon exercise of warrants granted to such
persons in connection with the Acquisition of the NBG Operating Business, which
warrants are immediately exercisable.

(6)Includes 2,207,340 shares held by SOMAR, Inc. Mr. Virtue is a principal
shareholder of SOMAR, Inc., and may be deemed to share voting and investment
power over the shares held by SOMAR, Inc. with Christopher F. Virtue, a
principal shareholder of SOMAR. Mr. Virtue disclaims beneficial ownership of
all such shares. Also includes 129,500 shares issuable upon the exercise of
warrants granted to Mr. Virtue in connection with the Acquisition of the SOMAR
Operating Business, which warrants are immediately exercisable.
(7)Consists of 31,500 shares issuable upon the exercise of warrants granted to
Mr. Alcorn in connection with the Acquisition of the SOMAR Operating Business,
which warrants are immediately exercisable.

(8)Includes 256,051 shares held by The Response Center, Inc. and The Tab House,
Inc. Mr. Baldasare is a principal stockholder of both The Response Center, Inc.
and The Tab House, Inc., and may be deemed to have sole voting and investment
power over the shares held by such entities. Also includes 55,474 shares
issuable upon the exercise of warrants granted to Mr. Baldasare in connection
with the Acquisition of The Response Center Operating Business, which warrants
are immediately exercisable, and 11,887 shares issuable upon the exercise of
options granted to Mr. Baldasare in connection with the Acquisition of The
Response Center Operating Business, which options are immediately exercisable.

(9)Includes 202,192 shares held by HDM and HFI. Mr. Idzik is a principal
stockholder of HDM and HFI, and may be deemed to have sole voting and
investment power over the shares held by HDM and HFI. Also includes 54,810
shares issuable upon the exercise of warrants granted to Mr. Idzik in
connection with the Acquisition of the Harris Operating Business, which
warrants are immediately exercisable.

(10)Includes 441,468 shares held by The Reich Group, Inc. and its affiliates.
Mr. Reich is the sole stockholder of The Reich Group, Inc. and of all such
affiliates, and may be deemed to have sole voting and investment power over the
shares held by such entities. Also includes 105,000 shares issuable upon the
exercise of warrants granted to Mr. Reich in connection with the Acquisition of
the Reich Operating Business, which warrants are immediately exercisable.

(11)Includes 176,587 shares held by TeleSpectrum, Inc. Ms. Schweitzer is
President and a 50% stockholder of TeleSpectrum, Inc. and may be deemed to
share voting and investment power over the shares held by TeleSpectrum, Inc.
with Sherry F. Paterra a 50% stockholder. Also includes 22,050 shares issuable
upon the exercise of warrants to be granted to Ms. Schweitzer in connection
with the Acquisition of the TeleSpectrum Operating Business, which warrants are
immediately exercisable.

(12)Includes 510,834 shares issuable upon the exercise of immediately
exercisable warrants, and 14,387 shares issuable upon the exercise of
immediately exercisable options issued in connection with the Acquisitions.
Does not include 1,471,052 shares issuable upon the exercise of options to be
granted upon consummation of the Offering or 400,000 shares issuable upon the
exercise of options to be granted by the Company ratably over the next four
years to two executive officers pursuant to their employment agreements; none
of the excluded options will be exercisable within 60 days of June 26, 1996.
See also Notes (1) through (11) above.

66
<PAGE>

DESCRIPTION OF CAPITAL STOCK

GENERAL

The authorized capital stock of the Company consists of 200,000,000 shares of
Common Stock, par value $.01 per share, and 5,000,000 shares of preferred
stock, par value $.01 per share (the "Preferred Stock"). The following summary
description of the capital stock of the Company does not purport to be complete
and is subject to the detailed provisions of, and qualified in its entirety by
reference to, the Certificate of Incorporation and Bylaws, copies of which have
been filed as exhibits to the registration statement of which this Prospectus
forms a part, and to the applicable provisions of the General Corporation Law
of the State of Delaware (the "DGCL").

COMMON STOCK

The holders of Common Stock are entitled to one vote for each share held of
record on all matters submitted to a vote of the stockholders. Subject to the
rights of any holders of Preferred Stock, holders of Common Stock are entitled
to receive ratably such dividends as may be declared by the Board of Directors
out of funds legally available. See "Dividend Policy." In the event of a
liquidation, dissolution or winding up of the Company, holders of the Common
Stock are entitled to share ratably in the distribution of all assets remaining
after payment of liabilities, subject to the rights of any holders of Preferred
Stock. The holders of Common Stock have no preemptive rights to subscribe for
additional shares of the Company and no right to convert their Common Stock
into any other securities. In addition, there are no redemption or sinking fund
provisions applicable to the Common Stock. All of the outstanding shares of
Common Stock are, and the Common Stock offered hereby will be, fully paid and
nonassessable.

PREFERRED STOCK

The Board of Directors is authorized, without further action by the
stockholders, to issue any or all shares of authorized Preferred Stock as a
class without series or in one or more series and to fix the rights,
preferences, privileges and restrictions thereof, including dividend rights,
conversion rights, voting rights, terms of redemption, liquidation preferences
and the number of shares constituting any series. The issuance of Preferred
Stock could adversely affect the voting power of holders of Common Stock and
could have the effect of delaying, deferring or impeding a change in control of
the Company. As of the date of this Prospectus, the Company has not authorized
the issuance of any Preferred Stock and there are no plans, agreements or
understandings for the issuance of any shares of Preferred Stock.

CERTAIN PROVISIONS OF DELAWARE LAW AND THE COMPANY'S CERTIFICATE OF
INCORPORATION AND BYLAWS

The Company is subject to the provisions of Section 203 of the DGCL. Section
203 prohibits a publicly-held Delaware corporation from engaging in a "business
combination" with an "interested stockholder" for a period of three years after
the date of the transaction in which the person became an interested
stockholder, unless the business combination is approved in a prescribed
manner. A "business combination" includes a merger, asset sale or other
transaction resulting in a financial benefit to the interested stockholder.
Subject to certain exceptions, an "interested stockholder" is a person who,
together with affiliates and associates, owns, or within three years prior to
the proposed business combination has owned 15% or more of the corporation's
voting stock.

The Company's Certificate of Incorporation provides that liability of directors
of the Company is eliminated to the fullest extent permitted under Section
102(b)(7) of the DGCL. As a result, no director of the Company will be liable
to the Company or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability: (i) for any breach of the director's
duty of loyalty to the Company or its stockholders; (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing
violation of law; (iii) for any wilful or negligent payment of an unlawful
dividend, stock purchase or redemption; or (iv) for any transaction from which
the director derived an improper personal benefit.

67
<PAGE>

The Bylaws of the Company provide that stockholders must follow an advance
notification procedure for certain stockholder nominations of candidates for
the Board of Directors and for certain other stockholder business to be
conducted at an annual meeting. These provisions could, under certain
circumstances, operate to delay, defer or prevent a change in control of the
Company.

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for the Common Stock is Chemical Mellon
Shareholder Services, L.L.C.

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of this Offering and the Acquisitions, the Company will have
23,200,000 shares of Common Stock outstanding, based upon the number of shares
outstanding as of June 26, 1996. The 10,607,714 shares sold in this Offering
will be freely tradeable without restriction or further registration under the
Securities Act, unless acquired by an "affiliate" of the Company as that term
is defined in Rule 144 promulgated under the Securities Act ("Rule 144"), which
shares will be subject to resale limitations of Rule 144 described below. As of
the consummation of this Offering, holders of 6,354,712 shares of Common Stock
will have piggyback rights to require the Company in certain circumstances to
register such shares for sale under the Securities Act.

In general, under Rule 144 as currently in effect, a stockholder who has
beneficially owned for at least two years shares privately acquired directly or
indirectly from the Company or from an affiliate of the Company, and persons
who are affiliates of the Company who have acquired the shares in registered
transactions, will be entitled to sell within any three-month period a number
of shares that does not exceed the greater of: (i) one percent of the
outstanding shares of Common Stock (approximately 232,000 shares immediately
after completion of the offering); or (ii) the average weekly trading volume in
the Common Stock during the four calendar weeks preceding such sale. Sales
under Rule 144 are also subject to certain requirements relating to the manner
and notice of sale and the availability of current public information about the
Company.

The Company, each of its directors and officers, the holders of all of the
shares of Common Stock that are or will be outstanding prior to the
consummation of the Acquisitions and the holders of all of the CRW Lender
Warrants and CRW Management Warrants have agreed with the Underwriters not to
offer, sell or otherwise dispose of any shares of Common Stock or securities
convertible into or exercisable or exchangeable for such shares for a period of
180 days after the date of this Prospectus without the prior written consent of
J.P. Morgan Securities Inc. The holders of the shares of Common Stock and
warrants issued or to be issued in the Acquisitions have agreed with the
Underwriters not to offer, sell or otherwise dispose of any shares of Common
Stock or securities convertible into or exercisable or exchangeable for such
shares for a period of 360 days after the date of this Prospectus without the
prior written consent of J.P. Morgan Securities Inc.

In connection with the Acquisitions, the Company has granted certain of the
Sellers the right to include up to 4,082,149 shares of Common Stock in certain
registrations of Common Stock under the Securities Act effected following
consummation of the Offering. In addition, certain of the Sellers have the
right to demand or piggyback registration of all or a portion of the shares of
Common Stock that may be issued to them in payment of the earn-out component of
the purchase price for their Operating Businesses. In connection with the
shares issuable upon exercise of the CRW Lender Warrants and the CRW Management
Warrants, the Company has agreed to include the 2,272,562 shares of Common
Stock issuable upon exercise thereof in any registration of shares of Common
Stock to be sold by the Company.

Prior to this Offering, there has been no market for the Common Stock. No
predictions can be made with respect to the effect, if any, that public sales
of shares of the Common Stock or the availability of shares for sale will have
on the market price of the Common Stock after the completion of the Offering.
Sales of substantial amounts of Common Stock in the public market following the
Offering, or the perception that such sales may occur, could adversely affect
the market price of the Common Stock or the ability of the Company to raise
capital through sales of its equity securities. See "Risk Factors--No Prior
Public Market; Possible Volatility of Stock Price."

68
<PAGE>

UNDERWRITING

Under the terms and subject to the conditions contained in an Underwriting
Agreement dated the date of this Prospectus (the "Underwriting Agreement"), the
Underwriters named below, for whom J.P. Morgan Securities Inc., Dillon, Read &
Co. Inc., Legg Mason Wood Walker, Incorporated and The Robinson-Humphrey
Company, Inc. are acting as representatives (the "Representatives"), have
severally agreed to purchase, and the Company has agreed to sell to them, the
respective numbers of shares of Common Stock set forth opposite their names
below. Under the terms and conditions of the Underwriting Agreement, the
Underwriters are obligated to take and pay for all such shares of Common Stock,
if any are taken. Under certain circumstances, the commitments of nondefaulting
Underwriters may be increased as set forth in the Underwriting Agreement.

<TABLE>
<CAPTION>
NUMBER
UNDERWRITERS OF SHARES
------------ ----------
<S> <C>
J.P. Morgan Securities Inc.
Dillon, Read & Co. Inc.
Legg Mason Wood Walker, Incorporated
The Robinson-Humphrey Company, Inc.
----------
Total 10,607,714
==========
</TABLE>

The Underwriters propose initially to offer the Common Stock directly to the
public at the price set forth on the cover page of this Prospectus and to
certain dealers at such price less a concession not in excess of $ per
share. The Underwriters may allow, and such dealers may reallow, a concession
not in excess of $ per share to other dealers. After the initial public
offering of the Common Stock, the public offering price and such concession may
be changed.

The Company has granted to the Underwriters an option, expiring at the close of
business on the 30th day after the date of this Prospectus, to purchase up to
1,591,157 additional shares of Common Stock at the initial public offering
price, less the underwriting discount. The Underwriters may exercise such
option solely for the purpose of covering over-allotments, if any. To the
extent the Underwriters exercise the option, each Underwriter will have a firm
commitment, subject to certain conditions, to purchase approximately the same
percentage of such additional shares as the number set forth next to such
Underwriter's name in the preceding table bears to the total number of shares
of Common Stock offered hereby.

The Company and the Selling Stockholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act.

The Company, each of its directors and officers, and the holders of all of the
shares of Common Stock and options or warrants to purchase shares of Common
Stock that are or will be outstanding prior to the consummation of the
Acquisitions have agreed with the Underwriters not to offer, sell or otherwise
dispose of any shares of Common Stock or securities convertible into or
exercisable or exchangeable for such shares for a period of 180 days after the
date of this Prospectus without the prior written consent of J.P. Morgan
Securities Inc. The holders of the shares of Common Stock and warrants issued
or to be issued in the Acquisitions have agreed with the Underwriters not to
offer, sell or otherwise dispose of any shares of Common Stock or securities
convertible into or exercisable or exchangeable for such shares for a period of
360 days after the date of this Prospectus without the prior written consent of
J.P. Morgan Securities Inc.

69
<PAGE>

The Company has applied for listing of the Common Stock on The Nasdaq National
Market, under the trading symbol "TLSP."

The Underwriters have advised the Company that they do not expect that sales to
accounts over which they exercise discretionary authority will exceed 5% of the
shares offered hereby.

Prior to this Offering, there has been no public market for the Common Stock.
The initial public offering price for the shares of Common Stock offered hereby
was determined by agreement among the Company and the Underwriters. Among the
factors considered in making such determination were the history of and the
prospects for the industry in which the Company competes, an assessment of the
Company's management, the present operations of the Company, the historical
results of operations of the Company and the trend of its revenues and
earnings, the prospects for future earnings of the Company, the general
conditions of the securities markets at the time of the Offering and the prices
of similar securities of generally comparable companies.

There can be no assurance that an active trading market will develop for the
Common Stock or that the Common Stock will trade in the public market
subsequent to the Offering at or above the initial public offering price.

From time to time in the ordinary course of their respective businesses, the
Representatives and their respective affiliates have provided and may in the
future provide investment banking and other financial services to the Company
and its affiliates. The Company will pay Legg Mason Wood Walker, Incorporated a
fee of $1.4 million for investment banking services rendered in connection with
the structuring and negotiation of the Acquisitions. The Company has also
agreed to pay one-half of the $800,000 fee due from the Seller of the SOMAR
Operating Business to The Robinson-Humphrey Company, Inc. for financial
advisory services, including advice regarding the Acquisition of SOMAR by
TeleSpectrum Worldwide. See "Certain Relationships and Related Party
Transactions--The Acquisitions--SOMAR."

LEGAL MATTERS

The validity of the shares of Common Stock offered hereby will be passed upon
for the Company by Morgan, Lewis & Bockius LLP, Philadelphia, Pennsylvania.
Certain legal matters relating to the shares of Common Stock offered hereby
will be passed upon for the Underwriters by Pepper, Hamilton & Scheetz,
Philadelphia, Pennsylvania.

EXPERTS

The financial statements of TeleSpectrum Worldwide as of April 30, 1996 and for
the period from inception (April 26, 1996) to April 30, 1996 included in this
Prospectus have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their report with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in
giving said reports.

The financial statements of SOMAR, Harris and Reich as of December 31, 1994 and
1995 and for each of the three years in the period ended December 31, 1995
included in this Prospectus have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said reports.

The financial statements of NBG as of December 30, 1994 and December 29, 1995
and for each of the three fiscal years in the period ended December 29, 1995
included in this Prospectus have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said reports.

70
<PAGE>

The financial statements of The Response Center as of September 30, 1994 and
1995 and for each of the two years in the period ended September 30, 1995
included in this Prospectus have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said reports.

The financial statements of TeleSpectrum as of and for the year ended December
31, 1995 included in this Prospectus have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said reports.

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-1 (the "Registration
Statement") under the Securities Act and the rules and regulations promulgated
thereunder, covering the Common Stock offered hereby. This Prospectus omits
certain information contained in the Registration Statement, and reference is
made to the Registration Statement, and the exhibits and schedules thereto for
further information with respect to the Company and the Common Stock offered
hereby. Statements contained in this Prospectus as to the contents of any
contract, agreement or other document filed as an exhibit to the Registration
Statement are not necessarily complete, and in each instance, reference is made
to the exhibit for a more complete description of the matter involved, each
such statement being qualified in its entirety by such reference. The
Registration Statement may be inspected and copied at the public reference
facilities maintained by the Commission at Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549 and at the regional offices of the Commission
maintained at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and
Seven World Trade Center, Suite 1300, New York, New York 10048. Copies of such
materials may be obtained from the Public Reference Section of the Commission,
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. In addition, registration statements and certain other
filings made with the Commission through its Electronic Data Gathering,
Analysis and Retrieval ("EDGAR") system are publicly available through the
Commission's site on the Internet's World Wide Web, located at
http://www.sec.gov. The Registration Statement, including all exhibits thereto
and amendments thereof, has been filed with the Commission through EDGAR.

The Company intends to furnish its stockholders with unaudited quarterly
reports and annual reports containing financial statements audited by
independent public accountants.

71
<PAGE>

INDEX TO FINANCIAL STATEMENTS

TELESPECTRUM WORLDWIDE INC.

<TABLE>
<S> <C>
PRO FORMA COMBINED FINANCIAL STATEMENTS:
Basis of Presentation................................................... F-3
Pro Forma Combined Balance Sheet as of March 31, 1996................... F-4
Pro Forma Combined Statement of Income for the Year Ended December 31,
1995.................................................................. F-5
Pro Forma Combined Statement of Income for the Three Months Ended
March 31, 1995........................................................ F-6
Pro Forma Combined Statement of Income for the Three Months Ended
March 31, 1996........................................................ F-7
Notes to Pro Forma Combined Financial Statements........................ F-8
HISTORICAL FINANCIAL STATEMENTS(/1/):
TELESPECTRUM WORLDWIDE INC. (TELESPECTRUM WORLDWIDE)
Report of Independent Public Accountants........................... F-12
Balance Sheet as of April 30, 1996................................. F-13
Statement of Operations for the Period from Inception (April 26,
1996) to April 30, 1996.......................................... F-13
Notes To Financial Statements...................................... F-14
SOMAR, INC. (SOMAR)
Report of Independent Public Accountants........................... F-16
Balance Sheets as of December 31, 1994 and 1995 and March 31,
1996............................................................. F-17
Statements of Income for the Years Ended December 31, 1993, 1994
and 1995 and Three Months Ended March 31, 1995 and 1996.......... F-18
Statements of Stockholders' Equity for the Years Ended December 31,
1993, 1994 and 1995 and Three Months Ended March 31, 1996........ F-19
Statements of Cash Flows for the Years Ended December 31, 1993,
1994 and 1995 and Three Months Ended March 31, 1995 and 1996..... F-20
Notes to Financial Statements...................................... F-21
NBG SERVICES, INC. (NBG)
Report of Independent Public Accountants........................... F-28
Balance Sheets as of December 30, 1994, December 29, 1995 and
March 29, 1996................................................... F-29
Statements of Income for the Years Ended December 31, 1993,
December 30, 1994 and December 29, 1995 and Thirteen Weeks Ended
March 31, 1995 and March 29, 1996................................ F-30
Statements of Shareholders' Equity for the Years Ended December 31,
1993, December 30, 1994 and December 29, 1995 and Thirteen Weeks
Ended March 29, 1996............................................. F-31
Statements of Cash Flows for the Years Ended December 31, 1993,
December 30, 1994 and December 30, 1995 and Thirteen Weeks Ended
March 31, 1995 and March 29, 1996................................ F-32
Notes to Financial Statements...................................... F-33
HARRIS DIRECT MARKETING, INC. AND HARRIS FULFILLMENT, INC. (HARRIS)
Report of Independent Public Accountants........................... F-37
Combined Balance Sheets as of December 31, 1994 and 1995 and
March 31, 1996................................................... F-38
Combined Statements of Income for the Years Ended December 31,
1993, 1994 and 1995 and Three Months Ended March 31, 1995 and
1996............................................................. F-39
Combined Statements of Shareholders' Equity for the Years Ended
December 31, 1993, 1994 and 1995 and Three Months Ended March 31,
1995 and 1996.................................................... F-40
Combined Statements of Cash Flows for the Years Ended December 31,
1993, 1994 and 1995 and Three Months Ended March 31, 1995 and
1996............................................................. F-41
Notes to Combined Financial Statements............................. F-42
</TABLE>
(1) The audited financial statements included in this Prospectus have been
included in accordance with Securities and Exchange Commission Staff
Accounting Bulletin No. 80.

F-1
<PAGE>

<TABLE>
<S> <C>
THE REICH GROUP COMPANIES (REICH)
Report of Independent Public Accountants............................ F-47
Combined Balance Sheets as of December 31, 1994 and 1995 and March
31, 1996........................................................... F-48
Combined Statements of Income for the Years Ended December 31, 1993,
1994 and 1995 and Three Months Ended March 31, 1995 and 1996....... F-49
Combined Statements of Shareholder's Equity for the Years Ended De-
cember 31, 1993, 1994 and 1995 and Three Months Ended March 31,
1996............................................................... F-50
Combined Statements of Cash Flows for the Years Ended December 31,
1993, 1994 and 1995 and Three Months Ended March 31, 1995 and
1996............................................................... F-51
Notes To Combined Financial Statements................................ F-52
THE RESPONSE CENTER INC. AND THE TAB HOUSE, INC. (THE RESPONSE
CENTER)
Report of Independent Public Accountants........................... F-58
Combined Balance Sheets as of September 30, 1994 and 1995 and December
31, 1995 and March 31, 1996...................................... F-59
Combined Statements of Income for the Years Ended September 30, 1994
and 1995 and Three Months Ended December 31, 1994 and 1995 and
Six Months Ended March 31, 1995 and 1996......................... F-60
Combined Statements of Shareholders' Equity for the Years Ended Sep-
tember 30, 1994 and 1995 and Three Months Ended December 31, 1995
and Six Months Ended March 31, 1996.............................. F-61
Combined Statements of Cash Flows for the Years Ended September 30,
1994 and 1995 and Three Months Ended December 31, 1994 and 1995
and Six Months Ended March 31, 1995 and 1996..................... F-62
Notes To Combined Financial Statements............................. F-63
TELESPECTRUM, INC. AND TELESPECTRUM TRAINING SERVICES, INC.
(TELESPECTRUM)
Report of Independent Public Accountants........................... F-67
Combined Balance Sheets as of December 31, 1995 and March 31,
1996............................................................... F-68
Combined Statements of Income for the Year Ended December 31, 1995 and
Three Months Ended March 31, 1995 and 1996....................... F-69
Combined Statements of Stockholders' Equity for the Year Ended Decem-
ber 31, 1995 and Three Months Ended March 31, 1996............... F-70
Combined Statements of Cash Flows for the Year Ended December 31, 1995
and Three Months Ended March 31, 1995 and 1996................... F-71
Notes To Combined Financial Statements............................. F-72
</TABLE>

F-2
<PAGE>

TELESPECTRUM WORLDWIDE INC. AND OPERATING BUSINESSES

PRO FORMA COMBINED FINANCIAL STATEMENTS

BASIS OF PRESENTATION
(UNAUDITED)

The following unaudited pro forma combined financial statements give effect
to the acquisitions by TeleSpectrum Worldwide Inc. ("TeleSpectrum Worldwide")
of substantially all of the net assets of (i) SOMAR, (ii) NBG, (iii) Harris,
(iv) Reich, (v) The Response Center and (vi) TeleSpectrum (together the
"Operating Businesses"). TeleSpectrum Worldwide and the Operating Businesses
are hereafter referred to as the "Company." These acquisitions (the
"Acquisitions") will occur simultaneous with the closing of TeleSpectrum
Worldwide's initial public offering (the Offering) and will be accounted for
using the purchase method. The unaudited pro forma combined financial
statements also give effect to the issuance of Common Stock, which will be
issued by TeleSpectrum Worldwide to the sellers of the Operating Businesses
(the "Sellers") upon the effectiveness of the Offering. These statements are
based on the historical financial statements of the Operating Businesses
included elsewhere in this Prospectus and the estimates and assumptions set
forth below and in the notes to the unaudited pro forma combined financial
statements.

The unaudited pro forma combined balance sheet gives effect to these
transactions (the "Acquisitions and Offering") and the initial capitalization
of TeleSpectrum Worldwide (See Note 1) as if they occurred on March 31, 1996.
The unaudited pro forma combined statements of income give effect to these
transactions as if they occurred on January 1, 1995.

The pro forma adjustments are based upon preliminary estimates, currently
available information and certain assumptions that management deems
appropriate. In management's opinion, the preliminary estimates regarding
allocation of the purchase price of the Operating Businesses are not expected
to materially differ from the final adjustments. These adjustments will be
finalized after the Closing of the Acquisitions. The unaudited pro forma
combined financial data presented herein are not necessarily indicative of the
results TeleSpectrum Worldwide would have obtained had such events occurred at
the beginning of the period, as assumed, or of the future results of
TeleSpectrum Worldwide. The unaudited pro forma combined financial statements
should be read in conjunction with the other financial statements and notes
thereto included elsewhere in this Prospectus.

F-3
<PAGE>

TELESPECTRUM WORLDWIDE INC. AND OPERATING BUSINESSES

PRO FORMA COMBINED BALANCE SHEET

MARCH 31, 1996
(UNAUDITED)

<TABLE>
<CAPTION>
PRO FORMA OPERATING BUSINESSES--HISTORICAL
PRO FORMA TELESPECTRUM ------------------------------------------------------
INITIAL WORLDWIDE* THE
DOLLARS IN TELESPECTRUM CAPITALIZATION AFTER INITIAL RESPONSE
THOUSANDS WORLDWIDE(A) ADJUSTMENT(B) CAPITALIZATION SOMAR NBG HARRIS REICH CENTER TELESPECTRUM
- ---------- ------------ -------------- -------------- ------- ------ ------- ------ -------- ------------
(NOTE 4) (NOTE 4)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash
equivalents....... $ 10 $1,600 $1,610 $ 4 $1,988 $ 2,311 $ 676 $ 641 $ 402
Marketable
securities........ -- -- -- -- 170 -- -- 310 --
Accounts
receivable........ -- -- -- 5,650 1,350 2,960 2,931 1,087 3,199
Amounts due from
affiliates........ -- 500 500 1,365 -- -- 160 -- --
Prepaid expenses
and other......... -- -- -- 520 148 579 157 132 92
----- ------ ------ ------- ------ ------- ------ ------ ------
Total current
assets.......... 10 2,100 2,110 7,539 3,656 5,850 3,924 2,170 3,693
----- ------ ------ ------- ------ ------- ------ ------ ------
Property and
equipment, net..... -- -- -- 6,267 1,872 4,062 2,044 250 736
Goodwill........... -- -- -- -- -- -- -- -- --
Other assets....... -- -- -- -- 149 137 26 5 106
----- ------ ------ ------- ------ ------- ------ ------ ------
Total assets.... $ 10 $2,100 $2,110 $13,806 $5,677 $10,049 $5,994 $2,425 $4,535
===== ====== ====== ======= ====== ======= ====== ====== ======
LIABILITIES AND
STOCKHOLDERS'
EQUITY
CURRENT
LIABILITIES:
Line of credit.... $ -- $ -- $ -- $ 3,586 $ -- $ -- $ -- $ -- $1,425
Current
maturities of
long-term debt.... -- -- -- 2,888 392 305 236 -- 219
Accounts
payable........... -- -- -- 2,657 273 320 1,015 198 566
Accrued
liabilities....... -- -- -- 684 442 478 402 241 929
Customer
advances.......... -- -- -- -- -- 703 -- -- --
Due to
affiliates........ -- -- -- 598 -- -- 220 -- --
Other current
liabilities....... -- -- -- -- 930 -- 141 282 429
----- ------ ------ ------- ------ ------- ------ ------ ------
Total current
liabilities..... -- -- -- 10,413 2,037 1,806 2,014 721 3,568
----- ------ ------ ------- ------ ------- ------ ------ ------
LONG-TERM DEBT..... -- -- -- 3,046 824 1,451 485 -- 18
OTHER NONCURRENT
LIABILITIES........ -- -- -- -- -- 152 108 -- 14
STOCKHOLDERS'
EQUITY:
Preferred Stock,
$.01 par value,
5,000,000 shares
authorized........ -- -- -- -- -- -- -- -- --
Common stock,
$.01 par value,
200,000,000
shares
authorized,
23,200,000 shares
issued and
outstanding (pro
forma)............ 85 -- 85 12 -- 1 2 51 6
Additional paid-
in capital........ -- 2,025 2,025 789 -- 45 450 1 217
Net unrealized
gain on
marketable
securities........ -- -- -- -- -- -- 98 --
Retained
earnings.......... (75) 75 -- (454) 2,816 6,719 3,174 1,554 712
Treasury stock,
at cost........... -- -- -- -- -- (125) (239) -- --
----- ------ ------ ------- ------ ------- ------ ------ ------
Total
stockholders'
equity.......... 10 2,100 2,110 347 2,816 6,640 3,387 1,704 935
===== ====== ====== ======= ====== ======= ====== ====== ======
Total
liabilities and
stockholders'
equity.......... $ 10 $2,100 $2,110 $13,806 $5,677 $10,049 $5,994 $2,425 $4,535
===== ====== ====== ======= ====== ======= ====== ====== ======
<CAPTION>
PRO FORMA
ACQUISITIONS PRO FORMA
DOLLARS IN AND OFFERING TELESPECTRUM
THOUSANDS ADJUSTMENTS WORLDWIDE
- ---------- -------------------------- ------------
(NOTE 4)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash
equivalents....... $ 53,025 (c)(d)(e)(f)(g) $ 60,657
Marketable
securities........ -- 480
Accounts
receivable........ -- 17,177
Amounts due from
affiliates........ (1,500)(d)(g) 525
Prepaid expenses
and other......... -- 1,628
-------------------------- ------------
Total current
assets.......... 51,525 80,467
-------------------------- ------------
Property and
equipment, net..... -- 15,231
Goodwill........... 137,609(d)(f) 137,609
Other assets....... -- 423
-------------------------- ------------
Total assets.... $189,134 $233,730
========================== ============
LIABILITIES AND
STOCKHOLDERS'
EQUITY
CURRENT
LIABILITIES:
Line of credit.... $ (5,011)(e) $ --
Current
maturities of
long-term debt.... (4,040)(e) --
Accounts
payable........... -- 5,029
Accrued
liabilities....... -- 3,176
Customer
advances.......... -- 703
Due to
affiliates........ -- 818
Other current
liabilities....... -- 1,782
-------------------------- ------------
Total current
liabilities..... (9,051) 11,508
-------------------------- ------------
LONG-TERM DEBT..... (5,824)(e) --
OTHER NONCURRENT
LIABILITIES........ 274
STOCKHOLDERS'
EQUITY:
Preferred Stock,
$.01 par value,
5,000,000 shares
authorized........ -- --
Common stock,
$.01 par value,
200,000,000
shares
authorized,
23,200,000 shares
issued and
outstanding (pro
forma)............ 75 (c)(d)(f) 232
Additional paid-
in capital........ 218,189 (c)(d)(f) 221,716
Net unrealized
gain on
marketable
securities........ (98)(f) --
Retained
earnings.......... (14,521)(f) --
Treasury stock,
at cost........... 364 (f) --
-------------------------- ------------
Total
stockholders'
equity.......... 204,009 221,948
========================== ============
Total
liabilities and
stockholders'
equity.......... $189,134 $233,730
========================== ============
</TABLE>
- ----
* TeleSpectrum Worldwide was incorporated on April 26, 1996; accordingly,
there were no historical results prior to that date (See Note 1).

See accompanying notes to pro forma combined financial statements.

F-4
<PAGE>

TELESPECTRUM WORLDWIDE INC.* AND OPERATING BUSINESSES

PRO FORMA COMBINED STATEMENT OF INCOME

YEAR ENDED DECEMBER 31, 1995
(UNAUDITED)

<TABLE>
<CAPTION>
OPERATING BUSINESSES--HISTORICAL
--------------------------------------------------------- PRO FORMA
THE ACQUISITIONS PRO FORMA
DOLLARS AND SHARES IN RESPONSE AND OFFERING TELESPECTRUM
THOUSANDS SOMAR NBG HARRIS REICH CENTER TELESPECTRUM ADJUSTMENTS WORLDWIDE
- --------------------- ------- ------- ------- ------- -------- ------------ ------------ ------------
(NOTE 5)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUES................ $31,900 $12,829 $12,690 $12,253 $6,428 $11,854 $ -- $87,954
OPERATING EXPENSES:
Cost of services....... 25,048 8,572 6,402 7,836 3,400 8,338 -- 59,596
Selling, general and
administrative........ 5,162 2,115 2,986 2,534 2,663 3,072 (1,611)(i) 16,921
Goodwill
amortization.......... -- -- -- -- -- -- 5,504 (h) 5,504
------- ------- ------- ------- ------ ------- ------- -------
Total operating
expenses............ 30,210 10,687 9,388 10,370 6,063 11,410 3,893 82,021
------- ------- ------- ------- ------ ------- ------- -------
Operating income....... 1,690 2,142 3,302 1,883 365 444 (3,893) 5,933
INTEREST INCOME......... 45 19 70 14 10 -- -- 158
INTEREST EXPENSE........ (756) (55) (214) (57) -- (184) 1,172 (j) (94)
------- ------- ------- ------- ------ ------- ------- -------
Income before taxes.... 979 2,106 3,158 1,840 375 260 (2,721) 5,997
INCOME TAXES............ -- -- -- -- -- 18 (2,537)(k) (2,519)
------- ------- ------- ------- ------ ------- ------- -------
Net income.............. $ 979 $ 2,106 $ 3,158 $ 1,840 $ 375 $ 278 $(5,258) $ 3,478
======= ======= ======= ======= ====== ======= ======= =======
PRO FORMA NET INCOME PER
SHARE.................. $ 0.15 (l)
=======
SHARES USED IN COMPUTING
PRO FORMA NET INCOME
PER SHARE.............. 23,200 (l)
=======
</TABLE>
- --------
* TeleSpectrum Worldwide was incorporated on April 26, 1996; accordingly there
were no historical results prior to that date (See Note 1).

See accompanying notes to pro forma combined financial statements.

F-5
<PAGE>

TELESPECTRUM WORLDWIDE INC.* AND OPERATING BUSINESSES

PRO FORMA COMBINED STATEMENT OF INCOME

THREE MONTHS ENDED MARCH 31, 1995
(UNAUDITED)

<TABLE>
<CAPTION>
OPERATING BUSINESSES--HISTORICAL
----------------------------------------------------- PRO FORMA
THE ACQUISITIONS PRO FORMA
DOLLARS AND SHARES IN RESPONSE AND OFFERING TELESPECTRUM
THOUSANDS SOMAR NBG HARRIS REICH CENTER TELESPECTRUM ADJUSTMENTS WORLDWIDE
- --------------------- ------ ------ ------ ------ -------- ------------ ------------ ------------
(NOTE 5)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUES................ $6,862 $2,695 $3,988 $2,059 $1,941 $2,846 $ -- $20,391
OPERATING EXPENSES:
Cost of services....... 5,032 1,766 2,078 1,327 881 1,920 -- 13,004
Selling, general and
administrative........ 1,284 508 761 297 1,061 805 (493)(i) 4,223
Goodwill
amortization.......... -- -- -- -- -- -- 1,376 (h) 1,376
------ ------ ------ ------ ------ ------ ------- -------
Total operating
expenses............ 6,316 2,274 2,839 1,624 1,942 2,725 883 18,603
------ ------ ------ ------ ------ ------ ------- -------
Operating income
(loss)................ 546 421 1,149 435 (1) 121 (883) 1,788
INTEREST INCOME......... -- -- 12 3 -- -- 15
INTEREST EXPENSE........ (129) (15) (53) (10) -- (4) 189 (j) (22)
------ ------ ------ ------ ------ ------ ------- -------
Income before taxes.... 417 406 1,108 428 (1) 117 (694) 1,781
INCOME TAXES............ -- -- -- -- -- -- (748)(k) (748)
------ ------ ------ ------ ------ ------ ------- -------
Net income (loss)....... $ 417 $ 406 $1,108 $ 428 $ (1) $ 117 $(1,442) $ 1,033
====== ====== ====== ====== ====== ====== ======= =======
PRO FORMA NET INCOME PER
SHARE.................. $ 0.04(l)
=======
SHARES USED IN COMPUTING
PRO FORMA NET INCOME
PER SHARE.............. 23,200 (l)
=======
</TABLE>
- --------
* TeleSpectrum Worldwide was incorporated on April 26, 1996; accordingly there
were no historical results prior to that date (See Note 1).

See accompanying notes to pro forma combined financial statements.

F-6
<PAGE>

TELESPECTRUM WORLDWIDE INC.* AND OPERATING BUSINESSES

PRO FORMA COMBINED STATEMENT OF INCOME

THREE MONTHS ENDED MARCH 31, 1996
(UNAUDITED)

<TABLE>
<CAPTION>
OPERATING BUSINESSES--HISTORICAL
----------------------------------------------------- PRO FORMA
THE ACQUISITIONS PRO FORMA
DOLLARS AND SHARES IN RESPONSE AND OFFERING TELESPECTRUM
THOUSANDS SOMAR NBG HARRIS REICH CENTER TELESPECTRUM ADJUSTMENTS WORLDWIDE
- --------------------- ------ ------ ------ ------ -------- ------------ ------------- ------------
(NOTE 5)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUES................ $9,274 $3,960 $2,617 $5,465 $1,429 $3,725 $ -- $26,470
OPERATING EXPENSES:
Cost of services....... 7,931 2,752 1,324 3,165 786 2,483 -- 18,441
Selling, general and
administrative........ 1,554 631 768 570 875 951 (428)(i) 4,921
Goodwill
amortization.......... -- -- -- -- -- -- 1,376 (h) 1,376
------ ------ ------ ------ ------ ------ ------- -------
Total operating
expenses............ 9,485 3,383 2,092 3,735 1,661 3,434 948 24,738
------ ------ ------ ------ ------ ------ ------- -------
Operating income
(loss)................ (211) 577 525 1,730 (232) 291 (948) 1,732
INTEREST INCOME......... 4 20 29 8 -- -- 61
INTEREST EXPENSE........ (217) (35) (41) (19) -- (43) 333 (j) (22)
------ ------ ------ ------ ------ ------ ------- -------
Income (loss) before
taxes................. (424) 562 513 1,719 (232) 248 (615) 1,771
INCOME TAXES............ -- -- -- -- -- -- (744)(k) (744)
------ ------ ------ ------ ------ ------ ------- -------
Net income (loss)....... $ (424) $ 562 $ 513 $1,719 $ (232) $ 248 $(1,359) $ 1,027
====== ====== ====== ====== ====== ====== ======= =======
PRO FORMA NET INCOME
PER SHARE.............. $ 0.04(l)
=======
SHARES USED IN COMPUTING
PRO FORMA NET INCOME
PER SHARE.............. 23,200(l)
=======
</TABLE>
- --------
* TeleSpectrum Worldwide was incorporated on April 26, 1996; accordingly,
there were no historical results prior to that date (See Note 1).

See accompanying notes to pro forma combined financial statements.

F-7
<PAGE>

TELESPECTRUM WORLDWIDE INC. AND OPERATING BUSINESSES

NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
(UNAUDITED)

1. TELESPECTRUM WORLDWIDE BACKGROUND:

TeleSpectrum Worldwide was incorporated as a wholly-owned subsidiary of CRW
Financial, Inc. ("CRW") on April 26, 1996. Accordingly, there are no historical
financial statements available for TeleSpectrum Worldwide prior to April 26,
1996. On May 22, 1996, CRW contributed $2.1 million of capital to TeleSpectrum
Worldwide. The $2.1 million CRW capital contribution consisted of $1.6 million
of cash and a $.5 million promissory note from TeleSpectrum. The note
represented an April 1996 advance of the purchase price from CRW on behalf of
TeleSpectrum Worldwide (See Note 3).

TeleSpectrum Worldwide was formed to create a national provider of integrated
teleservices solutions. TeleSpectrum Worldwide has conducted no operations to
date and will acquire the Operating Businesses simultaneously with the
consummation of the Offering. See "Risk Factors", "Certain Relationships and
Related Party Transactions" and page F-3 for additional information.

2. HISTORICAL FINANCIAL STATEMENTS:

The historical financial statements represent the financial position and
results of operations for the Sellers and were derived from the respective
financial statements where indicated. All Operating Businesses have December 31
year ends, except for the Response Center and NBG. The Response Center's year
end is September 30 and NBG operates on a fifty-two, fifty-three week fiscal
year ending on the last Friday of the calendar year. However, for purposes of
the Pro Forma Combined Financial Statements, the balance sheet and statements
of income information for The Response Center and NBG are as of March 31, 1996
and the year ended December 31, 1995 and the three months ended March 31, 1995
and 1996. The audited historical financial statements included elsewhere in
this Prospectus have been included in accordance with Securities and Exchange
Commission Staff Accounting Bulletin No. 80.

3. ACQUISITION OF OPERATING BUSINESSES:

Concurrent with the closing of the Offering, TeleSpectrum Worldwide will
acquire substantially all of the net assets of the Operating Businesses. The
Acquisitions will be accounted for using the purchase method of accounting with
TeleSpectrum Worldwide treated as the acquirer. The total estimated purchase
price is $149.4 million, which consists of (i) $90.9 million of cash to be paid
to the Sellers upon the consummation of the Offering, (ii) forgiveness of the
$.5 million promissory note from TeleSpectrum, (iii) $52.1 million estimated
fair value of 4,403,863 shares of TeleSpectrum Worldwide ("Common Stock") to be
issued to the Sellers, (iv) $2.4 million estimated fair value of warrants to
purchase 593,400 shares of Common Stock at the estimated Offering price to be
issued in connection with the Acquisitions and (v) estimated transaction costs
of $3.5 million. The estimated purchase price for the Acquisitions is subject
to certain purchase price adjustments at closing. See "Certain Relationships
and Related Party Transactions".

The holders of 4,082,149 shares of Common Stock issued in partial payment of
the Acquisitions have agreed not to offer, sell or otherwise dispose of any of
these shares for a period of 360 days after the Offering without prior written
consent of J.P. Morgan Securities Inc. The fair value of these shares reflects
this restriction.

The estimated total purchase price of $149.4 million of the Acquisitions has
been allocated to the assets acquired and liabilities assumed. Based upon
management's preliminary analysis, it is anticipated that the historical
carrying value of the Operating Businesses' assets and liabilities will
approximate fair value. The

F-8
<PAGE>

TELESPECTRUM WORLDWIDE INC. AND OPERATING BUSINESSES

NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS--(CONTINUED)
(UNAUDITED)

amount allocated to goodwill is $137.6 million. The Operating Businesses have
no long-term client contracts and client relationships can be cancelled by the
client upon relatively short notice. Though the Operating Businesses have
sophisticated computer systems, the computer systems are not proprietary. No
additional portion of the price was allocated to these items. Further,
management has not identified any other tangible or identifiable intangible
assets of the Operating Businesses to which a portion of the purchase price
could reasonably be allocated.

In addition to the purchase price discussed above, the SOMAR, NBG and Reich
acquisitions have certain earn-out provisions based upon 1996 and/or 1997
operating results. The earn out provisions will be recorded in accordance with
the Emerging Issues Task Force 95-8 "Accounting for Contingent Consideration
Paid to the Shareholders of an Acquired Company." If these earn-out provisions
are achieved there will be additional purchase price allocated to goodwill.
There are no pro forma adjustments required for the earn out provisions in the
pro forma combined financial statements relating to the earn out provisions.
In addition, TeleSpectrum Worldwide has agreed to implement a bonus plan for
the employees of SOMAR. Such bonus payments could be significant.

4. UNAUDITED PRO FORMA COMBINED BALANCE SHEET ADJUSTMENTS:

(a) To reflect the incorporation of TeleSpectrum Worldwide by CRW on April 26,
1996 (See Note 1).

(b) To reflect the $2.1 million capital contribution ($1.6 million of cash and
$0.5 million promissory note) made by CRW on May 22, 1996 (See Note 1).

(c) To reflect the sale of 10,286,000 shares of Common Stock at an assumed
initial public offering price of $17.50 per share, net of expenses and
underwriting discount of $165.3 million.

(d) To reflect: (i) the use of $90.9 million of the net proceeds of the
Offering to pay the cash portion of the purchase price of the Operating
Businesses payable at closing (ii) forgiveness of the $0.5 million
promissory note from TeleSpectrum (iii) the issuance of 4,403,863 shares
of Common Stock to the Sellers and (iv) the issuance of warrants to
purchase 593,400 shares of Common Stock at the Offering price and
estimated transaction costs of $3.5 million.

(e) To reflect the use of a portion of the net proceeds of the Offering to
reduce debt originally incurred by the Operating Businesses payable at
closing.

(f) To reflect the purchase price adjustments associated with the acquisition
of the Operating Businesses including estimated closing purchase price
adjustments to the purchase price to the Sellers such as minimum required
shareholders' equity balance at closing, excluding certain permitted
distributions (approximately $4.0 million). The estimated closing purchase
price adjustments relate primarily to additional estimated payments to the
sellers to reflect the increase in the Operating Businesses' shareholders'
equity through the closing of the Acquisitions. See "Certain Relationships
and Related Party Transactions--The Acquisitions."

(g) To reflect the repayment of the SOMAR amount due from affiliate of $1.0
million.

A summary of the unaudited proforma combined balance sheet adjustments (c),
(d), (e), (f) and (g) is as follows:

<TABLE>
<CAPTION>
DEBIT (CREDIT)
------------------------------------------------------------------
BALANCE SHEET ACCOUNTS UNAUDITED PRO FORMA COMBINED BALANCE SHEET ADJUSTMENTS
- ---------------------- ------------------------------------------------------------------
(C) (D) (E) (F) (G) TOTAL
--------- -------- -------- -------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
Cash.................... $ 165,300 $(94,400) $(14,875) $ (4,000) $ 1,000 $ 53,025
Amounts due from
affiliates............. (500) (1,000) (1,500)
Goodwill................ 149,438 (11,829) 137,609
Line of credit.......... 5,011 5,011
Current maturities of
long-term debt......... 4,040 4,040
Long-term debt.......... 5,824 5,824
Common stock............ (103) (44) 72 (75)
Additional paid-in
capital................ (165,197) (54,494) 1,502 (218,189)
Net unrealized gain on
available securities... 98 98
Retained earnings....... 14,521 14,521
Treasury stock, at
cost................... (364) (364)
--------- -------- -------- -------- --------- ---------
$ -- $ -- $ -- $ -- $ -- $ --
========= ======== ======== ======== ========= =========
</TABLE>

F-9
<PAGE>

5. UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME ADJUSTMENTS:

(h) To reflect the amortization expense for the goodwill recorded in connection
with the acquisition of the Operating Businesses. The goodwill is being
amortized on a straight-line basis over an estimated life of 25 years.

(i) To reflect officers' compensation expense of the Operating Businesses based
upon employment agreements entered into upon the closing of the
Acquisitions.

(j) To reflect the elimination of interest expense resulting from the reduction
of debt from the net proceeds of the Offering (see Adjustment(d)).

(k) To calculate the provision for income taxes on the combined pro forma
income before taxes at the effective tax rate of 42%.

(l) The weighted average shares outstanding used to calculate pro forma
earnings per share is based upon the estimated average number of shares of
Common Stock and common stock equivalents outstanding during the period
calculated as follows:

<TABLE>
<S> <C>
Shares issued in the formation of TeleSpectrum Worldwide.......... 8,510,137
Shares issued to the Sellers of the Operating Businesses.......... 4,403,863
Shares issued in the Offering..................................... 10,286,000
----------
23,200,000
==========
</TABLE>

Outstanding options and warrants have been excluded since all such options
and warrants are exercisable at the Offering price.

TeleSpectrum Worldwide has entered into employment agreements with its Chief
Executive Officer, Chief Operating Officer and a Chief Financial Officer which
provide for total minimum annual compensation of $605,000. In addition,
TeleSpectrum Worldwide is in the process of hiring other corporate staff. Also,
certain corporate expenses will be incurred in 1996 and thereafter related to
operating as a public company and in managing the Operating Businesses, which
heretofore have operated as autonomous businesses. These additional expenses
(which will be significant) have not been reflected in the accompanying pro
forma statements of income. The effect of the additional expenses and related
benefits is not currently estimable as the Acquisitions have not been
consummated and the expected synergies of combining the Operating Businesses
are not specifically quantifiable at this time. See "Executive Compensation"
and "Employment Agreements" under "Management".

F-10
<PAGE>

TELESPECTRUM WORLDWIDE INC. AND OPERATING BUSINESSES

NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS--(CONTINUED)
(UNAUDITED)

6. PRO FORMA COMBINED STATEMENTS OF INCOME SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies have been reflected in the
Company's pro forma combined income statements.

Revenue Recognition and Concentration of Credit Risk

The Company recognizes revenues as services are performed for its clients.
The Company's ten largest clients in 1995 represented approximately 56.4% of
the Company's pro forma revenues, with the largest client accounting for 11.9%.
Loss of one or more of these clients could have a material adverse effect on
the Company's business, results of operations and financial condition.

Depreciation

Depreciation is recorded on a straight line basis as follows:

<TABLE>
<CAPTION>
TYPE USEFUL LIVES
---- ------------
<S> <C>
Building and Building Improvements.............................. 10-40
Telemarketing Equipment......................................... 5-7
Machinery and Equipment......................................... 5-10
Furniture and Office Equipment.................................. 3-10
Leasehold Improvements.......................................... 5-10
</TABLE>

Training Costs

The Company maintains on-going training programs for its employees. The cost
of this training is charged to expense when incurred.

F-11
<PAGE>

After the recapitalization transaction discussed in Note 1 to Financial
Statements is effected, we expect to be in a position to render the following
audit report.

Arthur Andersen LLP

Philadelphia, PA
May 17, 1996

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To TeleSpectrum Worldwide Inc.:

We have audited the accompanying balance sheet of TeleSpectrum Worldwide
Inc. (a Delaware Corporation) as of April 30, 1996 and statement of operations
for the period from inception (April 26, 1996) to April 30, 1996. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of TeleSpectrum Worldwide
Inc. as of April 30, 1996, and the results of its operations for the period
from inception (April 26, 1996) to April 30, 1996, in conformity with
generally accepted accounting principles.

F-12
<PAGE>

TELESPECTRUM WORLDWIDE INC.

BALANCE SHEET
APRIL 30, 1996
(IN THOUSANDS--EXCEPT PAR VALUE AND SHARE AMOUNTS)

<TABLE>
<S> <C>
ASSETS
DEFERRED ACQUISITION COSTS............................................. $1,800
DEFERRED PUBLIC OFFERING COSTS......................................... 425
------
Total assets....................................................... $2,225
======
LIABILITIES AND STOCKHOLDER'S EQUITY
ACCOUNTS PAYABLE....................................................... $ 200
ACCRUED EXPENSES....................................................... 2,225
STOCKHOLDER'S EQUITY:
Preferred stock, $.01 par value, 5,000,000 shares authorized, none
issued.............................................................. --
Common stock, $.01 par value, 200,000,000 shares authorized,
8,510,137 shares issued and outstanding............................. 85
Accumulated deficit.................................................. (275)
Receivable from Stockholder.......................................... (10)
------
Total liabilities and stockholder's equity......................... $2,225
======
</TABLE>

TELESPECTRUM WORLDWIDE INC.

STATEMENT OF OPERATIONS
FOR THE PERIOD FROM APRIL 26, 1996 (INCEPTION) TO APRIL 30, 1996

<TABLE>
<S> <C>
Revenues............................................................ $ --
OPERATING EXPENSES:
Cost of services.................................................. --
Selling, general and administrative .............................. 200
---------
Total operating expenses........................................ 200
=========
Operating loss.................................................... (200)
INTEREST INCOME..................................................... --
INTEREST EXPENSE.................................................... --
---------
Net loss........................................................ $ (200)
=========
Net loss per share.............................................. $ (.02)
=========
Shares used in computing net loss per share..................... 8,510,137
=========
</TABLE>

The accompanying notes are an integral part of these statements.

F-13
<PAGE>

TELESPECTRUM WORLDWIDE INC.

NOTES TO FINANCIAL STATEMENTS

1. BACKGROUND:

TeleSpectrum Worldwide Inc. (TeleSpectrum Worldwide) was incorporated in
Delaware on April 26, 1996, as a wholly owned subsidiary of CRW Financial, Inc.
(CRW). TeleSpectrum Worldwide was formed to create a national provider of
integrated teleservices solutions (see Note 2). On May 22, 1996, TeleSpectrum
Worldwide received a $2.1 million capital contribution from CRW (see Note 5).
On June , 1996, TeleSpectrum Worldwide effected a 8.510137 for 1 split of its
Common Stock. All share and per share amounts included in the financial
statements reflect this split.

TeleSpectrum Worldwide has conducted no operations to date and has entered
into agreements to acquire substantially all of the net assets of the
businesses discussed in Note 2. These businesses have been operating
independently and TeleSpectrum Worldwide may not be able to successfully
integrate these businesses and their operations, employees and management.
Given the nature of TeleSpectrum Worldwide, it is and will be subject to many
risks, including but not limited to (i) an absence of combined operating
history, (ii) the potential inability to manage growth, (iii) risks generally
associated with acquisitions, (iv) possible fluctuations in quarterly results,
(v) reliance on major clients and key industries, (vi) possible decline in
effectiveness of telemarketing and (vii) reliance on key personnel.

2. ACQUISITIONS AND PUBLIC OFFERING:

In May 1996, CRW assigned to TeleSpectrum Worldwide its rights to acquire
substantially all of the net assets of SOMAR, Inc. (SOMAR), NBG Services, Inc.
(NBG), Harris Direct Marketing, Inc. and Harris Fulfillment, Inc. (Harris), The
Reich Group Companies (Reich), The Response Center, Inc. and The Tab House,
Inc. (Response Center) and TeleSpectrum, Inc. and TeleSpectrum Training
Services, Inc. (TeleSpectrum); together, the Operating Businesses. These
acquisitions will occur contemporaneously with the closing of TeleSpectrum
Worldwide's initial public offering (the Offering) and will be accounted for
using the purchase method. The estimated total purchase price of the Operating
Businesses is $149.4 million, which consists of (i) $90.9 million of cash to be
paid to the Sellers of the Operating Businesses (the Seller's) upon the
consummation of the Offering; (ii) forgiveness of the $.5 million promissory
note from TeleSpectrum (iii) $52.1 million estimated fair value of 4,403,863
shares of Common Stock of TeleSpectrum Worldwide (Common Stock) to be issued to
the Sellers; (iv) $2.4 million estimated fair value of warrants to purchase
593,400 shares of Common Stock at the estimated offering price issued in
connection with the acquisitions of the Operating Businesses (Acquisitions),
and (v) estimated transaction costs of $3.5 million. The estimated purchase
price for the Acquisitions is subject to certain purchase price adjustments at
Closing, as defined.

In addition to the total per share price discussed above, the SOMAR, NBG and
Reich acquisitions have earnout provisions based upon 1996 and/or 1997
operating results. If these earnout provisions are achieved, there will be
additional purchase price. In addition, TeleSpectrum Worldwide has agreed to
implement a bonus plan for the employees of SOMAR. Such bonus payments could be
significant. Also, Telespectrum Worldwide will be committed to provide up to
$14.0 million in funding for future SOMAR capital expenditures.

3. OPTIONS AND WARRANTS:

1996 EQUITY COMPENSATION PLAN

TeleSpectrum Worldwide plans to adopt a 1996 Stock Incentive Plan (the Plan)
prior to the Offering. The Plan reserves up to 2,300,000 shares of Common Stock
for issuance in connection with the exercise and/or grant of incentive and
nonqualified stock options, restricted stock, stock appreciation rights and
performance units to selected officers (including officers who are also
directors) and other TeleSpectrum Worldwide employees, independent contractors
and consultants. In addition, the Plan provides for grants of formula stock
options to employee directors.

In May 1996, TeleSpectrum Worldwide has agreed to grant to the Chief
Executive Officer, Chief Operating Officer and Chief Financial Officer and
other management options to purchase 1,000,000 shares of Common Stock

F-14
<PAGE>

at the Offering price per share. These options will vest over three years and
are exercisable over ten years. In addition, 400,000 shares are issuable upon
the exercise of options that TeleSpectrum Worldwide is to grant, pursuant to
employment agreements with two of its executive officers, ratably over the
course of the next four years.

Upon the effective date of the Offering, TeleSpectrum Worldwide has agreed to
grant to employees of the Operating Businesses, options to purchase 281,100
shares of Common Stock at the offering price per share. These options will vest
over three years and are exercisable over ten years.

Warrants

Effective upon the consummation of the Offering, TeleSpectrum Worldwide will
issue warrants to purchase 593,400 shares of Common Stock in connection with
the acquisitions of the Operating Businesses at the Offering per share price.
These options are exercisable for ten years.

4. EMPLOYMENT AGREEMENTS:

TeleSpectrum Worldwide has entered into employment agreements with its Chief
Executive Officer, Chief Operating Officer and Chief Financial Officer which
provide for minimum annual compensation of $605,000 plus bonuses. In addition,
in connection with the Closing of the Acquisitions, TeleSpectrum Worldwide will
enter employment agreements with several management members of the Operating
Businesses which provide for minimum annual compensation of $3.4 million plus
bonuses.

5. CRW TRANSACTIONS:

As discussed in Note 1, CRW made a capital contribution to TeleSpectrum
Worldwide on May 22, 1996 of $1.6 million in cash and $0.5 million in the form
of a promissory note from TeleSpectrum, Inc. to CRW. The capital contribution
represents the proceeds of borrowings by CRW under subordinated notes issued to
the following individuals and partnership: J. Brian O'Neill, TeleSpectrum
Worldwide's Chairman of the Board and Chief Executive Officer and Chairman and
Chief Executive Officer of CRW, TL Ventures (a significant CRW Shareholder),
Michael Boyd, TeleSpectrum Worldwide's Chief Operating Officer and President,
Richard C. Schwenk, Jr., TeleSpectrum Worldwide's Senior Vice President and
Chief Financial Officer, Jonathan P. Robinson, CRW's Chief Financial Officer
and TeleSpectrum Worldwide Director of Acquisitions, Kevin Mullin, CRW's
Director of Acquisitions, Arthur Spector, a consultant to CRW, Bernard Morgan
and Robert Veratti (CRW directors) and Technology Leaders L.P., a stockholder
of CRW. As additional consideration, the lenders to CRW received warrants from
CRW to purchase 1,433,454 shares of TeleSpectrum Worldwide Common Stock owned
by CRW at $1.50 per share.

CRW also agreed to issue warrants to purchase 839,108 shares of TeleSpectrum
Worldwide Common Stock owned by CRW at $1.50 per share to Messrs. O'Neill,
Robinson, Mullin and Spector. These warrants were granted by CRW to these
individuals for services provided to CRW.

6. SIGNIFICANT ACCOUNTING POLICIES:

Pervasiveness of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that effect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

New Accounting Pronouncement

The Financial Accounting Standards Board has issued SFAS No. 123, "Accounting
for Stock-Based Compensation." The Company is required to adopt this standard
for the year ending December 31, 1996. The Company has elected to adopt the
disclosure requirement of this pronouncement. The adoption of this
pronouncement will have no impact on the Company's financial position or
results of operations.

F-15
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To SOMAR, Inc.:

We have audited the accompanying balance sheets of SOMAR, Inc. (a North
Carolina corporation) as of December 31, 1994 and 1995, and the related
statements of income, stockholders' equity and cash flows for each of the three
years in the period ended December 31, 1995. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of SOMAR, Inc. as of December 31,
1994 and 1995, and the results of its operations and its cash flows for each of
the three years in the period ended December 31, 1995, in conformity with
generally accepted accounting principles.

Arthur Andersen LLP

Charlotte, North Carolina,
April 29, 1996

F-16
<PAGE>

SOMAR, INC.

BALANCE SHEETS
(IN THOUSANDS--EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
DECEMBER 31
--------------- MARCH 31,
1994 1995 1996
------ ------- -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash............................................ $ 2 $ 25 $ 4
Accounts receivable, net of reserves of $40 for
1994, 1995 and 1996............................ 2,822 4,825 5,650
Amounts due from--
Stockholders................................... 529 881 1,000
Affiliates..................................... 1 210 365
Prepaid expenses and other...................... 307 451 520
------ ------- -------
Total current assets.......................... 3,661 6,392 7,539
PROPERTY AND EQUIPMENT, net....................... 1,865 4,400 6,267
------ ------- -------
Total assets.................................. $5,526 $10,792 $13,806
====== ======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Line of credit.................................. $1,429 $ 1,182 $ 3,586
Note payable--Bank.............................. -- 1,000 --
Current portion of long term debt............... 82 2,182 1,785
Current portion of capital lease obligations.... 501 852 1,103
Accounts payable................................ 1,345 1,959 2,657
Accrued compensation............................ 340 523 437
Other accrued expenses.......................... 101 122 247
Amounts due to an affiliate..................... 105 562 598
------ ------- -------
Total current liabilities..................... 3,903 8,382 10,413
------ ------- -------
LONG-TERM DEBT.................................... 300 767 689
------ ------- -------
CAPITAL LEASE OBLIGATIONS......................... 845 872 2,357
------ ------- -------
COMMITMENTS AND CONTINGENCIES (Notes 5 and 6)
STOCKHOLDERS' EQUITY:
Common stock, $1 par value; 100,000 shares
authorized; 11,765 shares issued and
outstanding.................................... 12 12 12
Additional paid-in capital...................... 772 789 789
Retained deficit................................ (306) (30) (454)
------ ------- -------
Total stockholders' equity.................... 478 771 347
------ ------- -------
Total liabilities and stockholders' equity.... $5,526 $10,792 $13,806
====== ======= =======
</TABLE>

The accompanying notes are an integral part of these statements.

F-17
<PAGE>

SOMAR, INC.

STATEMENTS OF INCOME
(IN THOUSANDS)

<TABLE>
<CAPTION>
FOR THE
FOR THE YEAR ENDED THREE MONTHS ENDED
DECEMBER 31 MARCH 31
------------------------- --------------------
1993 1994 1995 1995 1996
------- ------- ------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
REVENUES...................... $10,703 $20,785 $31,900 $ 6,862 $ 9,274
------- ------- ------- --------- ---------
OPERATING EXPENSES............
Cost of services............ 7,731 15,623 25,048 5,032 7,931
Selling, general and
administrative expenses.... 2,787 4,115 5,162 1,284 1,554
------- ------- ------- --------- ---------
Total operating expenses.. 10,518 19,738 30,210 6,316 9,485
------- ------- ------- --------- ---------
Operating income (loss)... 185 1,047 1,690 546 (211)
INTEREST INCOME............... 17 12 45 -- 4
INTEREST EXPENSE.............. (106) (432) (756) (129) (217)
------- ------- ------- --------- ---------
NET INCOME (LOSS)............. $ 96 $ 627 $ 979 $ 417 $ (424)
======= ======= ======= ========= =========
PRO FORMA DATA (UNAUDITED)
Historical net income
(loss)..................... $ 96 $ 627 $ 979 $ 417 $ (424)
Pro forma provision
(benefit) for income
taxes...................... 49 261 414 171 (158)
------- ------- ------- --------- ---------
Pro forma net income
(loss)..................... $ 47 $ 366 $ 565 $ 246 $ (266)
======= ======= ======= ========= =========
</TABLE>

The accompanying notes are an integral part of these statements.

F-18
<PAGE>

SOMAR, INC.

STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
(IN THOUSANDS)

<TABLE>
<CAPTION>
ADDITIONAL RETAINED TOTAL
COMMON PAID-IN STOCKHOLDER EARNINGS STOCKHOLDERS'
STOCK CAPITAL LOAN (DEFICIT) EQUITY (DEFICIT)
------ ---------- ----------- --------- ----------------
<S> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1,
1993................... $12 $474 $(612) $(361) $(487)
Net income............. -- -- -- 96 96
--- ---- ----- ----- -----
BALANCE, DECEMBER 31,
1993................... 12 474 (612) (265) (391)
Net income............. -- -- -- 627 627
Distributions.......... -- -- -- (668) (668)
Repayments of
stockholder loan...... -- -- 612 -- 612
Stock Options.......... -- 298 -- -- 298
--- ---- ----- ----- -----
BALANCE, DECEMBER 31,
1994................... 12 772 -- (306) 478
Net income............. -- -- -- 979 979
Distributions.......... -- -- -- (703) (703)
Stock Options.......... -- 17 -- -- 17
--- ---- ----- ----- -----
BALANCE, DECEMBER 31,
1995................... 12 789 -- (30) 771
Net loss (unaudited)... -- -- -- (424) (424)
--- ---- ----- ----- -----
BALANCE, MARCH 31, 1996
(unaudited)............ $12 $789 $ -- $(454) $ 347
=== ==== ===== ===== =====
</TABLE>

The accompanying notes are an integral part of these statements.

F-19
<PAGE>

SOMAR, INC.

STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
FOR THE
FOR THE YEAR ENDED THREE MONTHS
DECEMBER 31 ENDED MARCH 31
----------------------- ----------------
1993 1994 1995 1995 1996
----- ------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (loss).................. $ 96 $ 627 $ 979 $ 417 $ (424)
Adjustments to reconcile net income
(loss) to net cash provided by
(used in) operating activities--
Depreciation and amortization.... 145 288 775 130 268
Stock option compensation ex-
pense........................... -- 298 17 -- --
Changes in operating assets and
liabilities--
Accounts receivable............ 144 (1,987) (2,003) (1164) (825)
Prepaid expenses and other..... (89) (123) (144) (188) (69)
Accounts payable............... (165) 559 614 248 698
Accrued expenses............... 123 395 203 482 39
----- ------- ------- ------- -------
Net cash provided by (used
in) operating activities.... 254 57 441 (75) (313)
----- ------- ------- ------- -------
INVESTING ACTIVITIES:
Purchases of property and equip-
ment.............................. (19) (174) (2,309) (1,033) (187)
Advanced to stockholder............ (426) (103) (352) (341) (119)
Advances to affiliates............. -- (2) (209) (148) (155)
Repayments of advances to affili-
ates.............................. 1 13 -- -- --
Repayment of stockholder loan...... -- 612 -- -- --
----- ------- ------- ------- -------
Net cash (used in) provided
by investing activities..... (444) 346 (2,870) (1,522) (461)
----- ------- ------- ------- -------
FINANCING ACTIVITIES:
Borrowings on long-term debt....... 24 25 2,824 891 3
Repayments on long-term debt....... (86) (31) (257) -- (478)
Borrowings (repayments) on note
payable--Bank..................... -- -- 1,000 -- (1,000)
Borrowings (repayments) from affil-
iates............................. 506 (491) 458 202 36
Distributions paid................. -- (669) (703) -- --
Payments on capital lease obliga-
tions............................. (302) (297) (623) (79) (212)
Net (repayments) borrowings on line
of credit agreement............... 63 1,046 (247) 584 2,404
----- ------- ------- ------- -------
Net cash provided by (used
in) financing activities.... 205 (417) 2,452 1,598 753
----- ------- ------- ------- -------
NET INCREASE (DECREASE) IN CASH...... 15 (14) 23 1 (21)
CASH, BEGINNING OF PERIOD............ 1 16 2 2 25
----- ------- ------- ------- -------
CASH, END OF PERIOD.................. $ 16 $ 2 $ 25 $ 3 $ 4
===== ======= ======= ======= =======
</TABLE>

The accompanying notes are an integral part of these statements.

F-20
<PAGE>

SOMAR, INC.

NOTES TO FINANCIAL STATEMENTS
(INFORMATION AS OF MARCH 31, 1996 AND FOR THE
THREE MONTHS ENDED MARCH 31, 1995
AND 1996 IS UNAUDITED)

1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES:

INDUSTRY INFORMATION

SOMAR, Inc. (the "Company") is a provider of outsourced telephone-based
sales, marketing and customer management services, to clients principally in
the insurance industry and also to clients in the financial services,
telecommunications and consumer products industries.

REVENUE RECOGNITION AND CONCENTRATION OF CREDIT RISK

The Company recognizes revenues on programs as services are performed for its
clients, generally based upon hours incurred.

The nature of the industry is such that the Company is dependent on several
large clients for a significant portion of its annual revenues. For the years
ended December 31, 1993, 1994, 1995, and for the three months ended March 31,
1996, the Company had three, four, three and three clients, respectively, that
each accounted for more than 10% of the Company's revenues. For the period
ended December 31, 1993, the three clients accounted for 36%, 25% and 11% of
the Company's revenues, respectively. For the period ended December 31, 1994,
the four clients accounted for 20%, 17%, 16% and 13% of the Company's revenues,
respectively. For the period ended December 31, 1995, the three clients
accounted for 33%, 16% and 15% of the Company's revenues. For the three months
ended March 31, 1996, the three clients accounted for 26%, 23%, and 13% of the
Company's revenues, respectively. The loss of one or more of these major
clients could have a materially adverse effect on the Company's business.

Concentration of credit risk is limited to trade accounts receivable and is
subject to the financial conditions of certain major clients described above.
Two of these clients are engaged in transactions with each other and represent
a single credit risk to the Company. The Company does not require collateral to
secure clients' receivables. The Company performs periodic reviews of its
clients' financial condition to reduce collection risk on trade accounts
receivable.

PROPERTY AND EQUIPMENT

Property and equipment are recorded at cost. Depreciation is provided using
the straight-line method for financial reporting purposes and accelerated
methods for income tax reporting purposes over the estimated useful lives of
the respective assets. Assets recorded under capital leases are amortized using
the straight-line method over the estimated useful lives of the leased assets.
Upon sale or retirement, the related cost and accumulated depreciation are
removed from the accounts, and any gain or loss is recognized in the statement
of income.

Major improvements are capitalized and charged to expense through
depreciation. Repairs and maintenance are charged to expense as incurred.
Certain general and administrative expenses associated with the opening of new
call centers are expensed prior to the opening of the call center.

As of January 1, 1993, the Company prospectively revised the remaining lives
of certain furniture and equipment to better reflect the periods during which
such assets are expected to remain in service. Furniture and equipment lives
that previously averaged three years were increased to an average of six years.
This change increased income for the year ended December 31, 1993, by $101,000.

F-21
<PAGE>

SOMAR, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION AS OF MARCH 31, 1996 AND FOR THE
THREE MONTHS ENDED MARCH 31, 1995 AND 1996 IS UNAUDITED)

STATEMENT OF CASH FLOWS

For the years ended December 31, 1993, 1994, 1995 and the three months ended
March 31, 1996, the Company paid interest of $114,000, $366,000, $750,000 and
$195,000, respectively.

INCOME TAXES

The Company has elected to be taxed as an S Corporation under the provisions
of the Internal Revenue Code and North Carolina General Statutes. As a result,
the Company is not subject to federal income taxes, and the taxable income of
the Company is included in the individual tax returns of the Company's
stockholders. Accordingly, no provision for federal or state income taxes has
been recorded in the accompanying financial statements.

The Company reports certain income and expense items for income tax purposes
on a basis different from that reflected in the accompanying financial
statements. The principal differences relate to the timing of the recognition
of accrued expenses that are not deductible for federal income tax purposes
until paid and the use of accelerated methods of depreciation for income tax
purposes. At December 31, 1995, the financial reporting basis of the Company's
net assets exceeds the tax basis of the net assets by approximately $580,000.
In the event that the S Corporation is terminated, deferred income taxes
applicable to these differences would be reflected in the accompanying
financial statements.

Given the pending sale of the business (see Note 8), for informational
purposes, the accompanying statements of income include an unaudited pro forma
adjustment for income taxes which would have been recorded if the Company had
not been an S Corporation, based on the tax laws in effect during the
respective periods. The differences between the federal statutory income tax
rate and the pro forma income tax rate primarily relates to state and local
income taxes and expenses not deductible for tax purposes.

FAIR VALUE OF FINANCIAL INSTRUMENTS

Cash, accounts receivable, accounts payable and accrued liabilities are
reflected in the financial statements at fair value due to the short-term
nature of those instruments. The carrying amount of the line of credit, note
payable and long-term debt approximates fair value on the balance sheet dates.

PREPAID AGENT LICENSE FEES

The Company capitalizes the cost of licensing its agents and amortizes
license fees over a 12-month period. Prepaid agent license fees amounted to
$59,000 and $172,000 at December 31, 1994 and 1995, respectively.

ACCOUNTING OF STOCK-BASED COMPENSATION

The Company currently utilizes Accounting Principles Board Opinion No. 25 in
its accounting for stock options. In October 1995, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards ("SFAS") No.
123, "Accounting for Stock-Based Compensation." The accounting method as
provided in the pronouncement is not required to be adopted; however, it is
encouraged. The Company does not anticipate adopting the accounting provisions
of the statement but will include in the footnotes to the financial statements
the disclosures required by SFAS No. 123 in fiscal 1996.

TRAINING COSTS

The Company maintains ongoing training programs for its employees. The cost
of this training is charged to expense when incurred. As of December 31, 1995,
the Company recorded a $407,000 receivable from a State Economic Development
Agency for certain educational and training costs that are to be reimbursed.

F-22
<PAGE>

SOMAR, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION AS OF MARCH 31, 1996 AND FOR THE
THREE MONTHS ENDED MARCH 31, 1995 AND 1996 IS UNAUDITED)

PERVASIVENESS OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

INTERIM FINANCIAL STATEMENTS

The financial statements as of March 31, 1996 and for the three months ended
March 31, 1995 and 1996 are unaudited and, in the opinion of management of the
Company, include all adjustments (consisting only of normal recurring
adjustments) necessary for a fair presentation of the results for those interim
periods. The results of operations for the three months ended March 31, 1996
are not necessarily indicative of the results to be expected for the full year.

2. PROPERTY AND EQUIPMENT:

<TABLE>
<CAPTION>
DECEMBER 31
USEFUL --------------- MARCH 31
LIVES 1994 1995 1996
--------- ------ ------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Furniture and fixtures.................. 5-7 years $ 874 $ 2,265 $2,952
Telemarketing equipment................. 5 years 1,694 3,263 3,811
Building................................ 40 years -- -- 900
Leasehold improvements.................. 5-6 years 9 359 359
------ ------- ------
2,577 5,887 8,022
Less--Accumulated depreciation and
amortization........................... (712) (1,487) (1,755)
------ ------- ------
$1,865 $ 4,400 $6,267
====== ======= ======
</TABLE>

The gross cost of equipment under capital lease obligations included above
amounted to $1,547,000, $2,547,000 and $4,435,000 at December 31, 1994, 1995
and March 31, 1996, respectively.

Depreciation and amortization expense for the years ended December 31, 1993,
1994, 1995, and for the three months ended March 31, 1996 was $145,000,
$288,000, $775,000 and $268,000, respectively.

3. LINE OF CREDIT AND NOTE PAYABLE--BANK:

At December 31, 1994 and 1995, the Company had a line of credit with Fremont
Financial Corporation ("Fremont"). The Company has entered into an agreement
with NationsBank of Georgia ("NationsBank") for a revolving line of credit with
a maximum borrowing limit of $6,500,000. Interest on the line of credit is
payable monthly and accrues on borrowings under the revolving line of credit at
the bank's prime rate (8 1/2%) plus 3%.

The Company's borrowing base under the NationsBank revolver is limited to 85%
of eligible receivables as defined by the agreement. The line is secured by
trade accounts receivable, equipment and other assets of the Company. At April
29, 1996, the Company's availability under the NationsBank revolver was
approximately $610,000.

The agreement terminates on January 1, 1997, and contains certain restrictive
covenants that, among other things, require the maintenance of certain
financial ratios, limitations on capital expenditures and bonuses, and
restrictions on future indebtedness. As of March 31, 1996, the Company was in
violation of certain loan covenants for which it has obtained a waiver letter
from the bank.

F-23
<PAGE>

SOMAR, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION AS OF MARCH 31, 1996 AND FOR THE
THREE MONTHS ENDED MARCH 31, 1995 AND 1996 IS UNAUDITED)

At December 31, 1995, the Company was transitioning its line of credit
arrangement from Fremont to NationsBank. In connection with the transition, the
Company borrowed $1,000,000 from NationsBank on a short-term basis at an
interest rate equal to the bank's prime rate (8.5%) plus 1%. This note was
repaid on January 3, 1996, with the proceeds from the new revolving line of
credit arrangement.

4. LONG-TERM DEBT:

<TABLE>
<CAPTION>
DECEMBER 31
------------- MARCH 31
1994 1995 1996
----- ------ -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Note payable to MCI Telecommunications Corpora-
tion, unsecured, payable in eight monthly in-
stallments of $128,300 through July 1996, and re-
maining payment of $118,700 due in August 1996,
interest at 9.75%................................ $ -- $ 981 $617
Notes payable to a bank, secured by related
equipment, payable on July 1, 1996, interest
payable monthly at the bank's prime rate plus 150
basis points (10% at December 31, 1995),
guaranteed by the Company's two principal
stockholders and two affiliated companies (at
April 29, 1996, these notes are in the process of
being refinanced by the West Virginia Economic
Development Authority; the refinanced notes will
be secured by assets of the Company, payable in
monthly installments of $21,100 including
interest, through May 1999, at an interest rate
of 4%)........................................... -- 720 720
Installment note payable to a bank, secured by
related equipment, payable in monthly
installments of $11,900 including interest,
through August 1998, at the bank's prime interest
rate plus 150 basis points (10% at December 31,
1995), guaranteed by the Company's two principal
stockholders and two affiliated companies........ -- 331 315
Note payable to Network Sampling Services, balance
due July 1, 1997, including interest at 10%,
guaranteed by one of the Company's principal
stockholders..................................... 382 300 300
Installment note payable to a bank, secured by
related equipment, payable in monthly
installments of $11,957 including interest,
through April 1998, at the bank's prime interest
rate plus 150 basis points (10% at December 31,
1995), guaranteed by the Company's two principal
stockholders and two affiliated companies........ -- 288 261
Installment note payable to a bank, secured by
related equipment, payable in monthly
installments of $21,774 including interest,
through October 1996, at the bank's prime rate
plus 150 basis points (10% at December 31, 1995),
guaranteed by the Company's two principal
stockholders and two affiliated companies........ -- 226 166
Installment note payable to a finance company,
unsecured, payable in monthly installments of
$3,800 including interest, through August 1998 at
an interest rate of 9%........................... -- 103 95
----- ------ ------
382 2,949 2,474
Less--Current portion........................... (82) (2,182) (1,785)
----- ------ ------
$ 300 $ 767 $ 689
===== ====== ======
</TABLE>

F-24
<PAGE>

SOMAR, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION AS OF MARCH 31, 1996 AND FOR THE
THREE MONTHS ENDED MARCH 31, 1995 AND 1996 IS UNAUDITED)

Minimum principal repayments of long-term debt as of December 31, 1995, are
as follows (in thousands):

The notes payable to a bank contain certain restrictive covenants. As of
March 31, 1996, the Company was in violation of one of the loan covenants for
which it has obtained a waiver letter from the bank.

5. COMMITMENTS AND CONTINGENCIES:

The Company is party to various claims and other matters arising in the
normal course of business. In the opinion of management, the outcome of these
matters will not have a material adverse effect on the Company's financial
position or results of operations.

LEASES

The Company leases administrative offices, telephone call centers and
equipment under noncancelable operating leases. In addition, the Company has
capital leases covering certain operating equipment. Future minimum lease
payments at December 31, 1995, are as follows (in thousands):

<TABLE>
<CAPTION>
OPERATING CAPITAL
LEASES LEASES
--------- -------
<S> <C> <C>
1996...................................................... $ 673 $ 989
1997...................................................... 549 647
1998...................................................... 449 280
1999...................................................... 221 16
2000...................................................... 179 --
Thereafter................................................ 503 --
------ -----
Total................................................. $2,574 1,932
======
Less--Amount representing interest...................... (208)
-----
Present value of future minimum lease payments............ 1,724
Less--Current portion................................... (852)
-----
$ 872
=====
</TABLE>

Rent expense under operating leases was approximately $631,000, $599,000,
$673,000 and $198,000 for the years ended December 31, 1993, 1994, 1995 and for
the three months ended March 31, 1996 (including amounts paid to related
parties), respectively (see Note 7).

The Company financed purchases of approximately $59,000, $1,488,000,
$1,000,000 and $1,948,000 through capital leases in 1993, 1994, 1995 and for
the three months ended March 31, 1996, respectively.

EMPLOYEE BENEFIT PLAN

The Company sponsors a defined contribution 401(k) profit-sharing plan for
eligible employees. Company contributions to the plan, which are based on a
company match percentage, amounted to

F-25
<PAGE>

SOMAR, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION AS OF MARCH 31, 1996 AND FOR THE
THREE MONTHS ENDED MARCH 31, 1995 AND 1996 IS UNAUDITED)

$8,000, $21,000, $30,000 and $12,000 for the years ended December 31, 1993,
1994, 1995, and for the three months ended March 31, 1996, respectively.

6. STOCK OPTIONS:

In December 1991, the Company's two principal shareholders granted stock
options to three key employees for the purchase of up to 2,588 shares of their
common stock at an exercise price of $10 per share. The options vested
immediately and were exercisable through December 31, 1994. The deemed value of
the options for accounting purposes at the date of grant was less than the $10
exercise price. Accordingly, no compensation expense was recorded at the date
of these grants.

In December 1994, the principal shareholders extended all option exercise
dates from December 31, 1994 to March 31, 1996. All remaining option terms,
including the $10 per share exercise price, remained unchanged. The deemed
value of the options for accounting purposes at the extension date was $125 per
share. Accordingly, $298,000 of compensation expense was recorded at the date
of extension.

In May 1995, the Company's two principal shareholders granted stock options
to another key employee for the purchase of up to 117 shares of their common
stock at an exercise price of $10 per share through March 31, 1996. The deemed
value of the options for accounting purposes at the date of grant was $156 per
share. Accordingly, $17,000 of compensation expense was recorded at the date of
grant.

At December 31, 1994 and 1995, no options had been exercised and 2,588 and
2,705 options were outstanding, respectively.

In March 1996, all options were exercised and 2,705 shares were issued by the
Company's principal shareholders to the option holders.

7. RELATED-PARTY TRANSACTIONS:

Southern Investments (a partnership), The Development Group, Inc. ("DGI"),
Southern Alloy of America, Inc., SOMAR Telecommunications, Inc. ("STI") and
Engineered Machine Technologies, Inc. ("EMTI") are affiliated with the Company
through common ownership.

The Company leases residential real estate, automobiles, computer equipment
and furniture and equipment from Southern Investments on a month-to-month
basis. Rent expense related to these operating leases totaled approximately
$495,000, $363,000, $278,000 and $74,000 for the years ended December 31, 1993,
1994, 1995 and for the three months ended March 31, 1996, respectively.

F-26
<PAGE>

SOMAR, INC.

NOTES TO FINANCIAL STATEMENTS--(CONCLUDED)
(INFORMATION AS OF MARCH 31, 1996 AND FOR THE
THREE MONTHS ENDED MARCH 31, 1995 AND 1996 IS UNAUDITED)

Following is a schedule of amounts due from a shareholder and affiliates (in
thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
------------- MARCH 31,
1994 1995 1996
------------- ---------
<S> <C> <C> <C>
Stockholders........................................ $529 $ 881 $1,000
Southern Investments................................ -- 102 111
DGI................................................. -- 42 96
EMTI................................................ 1 5 8
STI................................................. -- 61 150
----- ------- ------
$530 $1,091 $1,365
===== ======= ======
</TABLE>

Following is a schedule of amounts due to an affiliate (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
------------- MARCH 31,
1994 1995 1996
------ ------ ---------
<S> <C> <C> <C>
Southern Alloy of America, Inc...................... $105 $562 $598
====== ====== ====
</TABLE>
Included in interest expense and interest income in the accompanying
financial statements is interest income (expense) from (to) related parties
(including allocated interest expense) as follows (in thousands):

<TABLE>
<CAPTION>
FROM (TO)
---------------------------
DECEMBER 31,
---------------- MARCH 31,
1993 1994 1995 1996
---- ---- ---- ---------
<S> <C> <C> <C> <C>
Southern Alloy of America, Inc.................. $(18) $(99) $(94) $(22)
Southern Investments............................ (14) 12 -- --
---- ---- ---- ----
$(32) $(87) $(94) $(22)
==== ==== ==== ====
</TABLE>

In 1993, 1994, 1995 and for the three months ended March 31, 1996, the
Company was allocated interest expense from Southern Alloy of America, Inc.,
amounting to approximately $18,000, $99,000, $94,000 and $22,000, respectively.

The Company's senior management are employees of DGI. DGI charges the Company
for services provided by these individuals. These expenses amounted to
approximately $879,000, $1,132,000, $1,136,000 and $333,000 in 1993, 1994, 1995
and for the three months ended March 31, 1996, respectively.

The Company has guaranteed a line of credit agreement for Southern Alloy of
America, Inc. The outstanding balance under this agreement amounted to
$1,424,000 at December 31, 1995 and $1,384,000 at March 31, 1996. The guarantee
related to this line of credit agreement is not being assumed in connection
with the sale of the business discussed in Note 8 below.

8. SALE OF BUSINESS:

In April, 1996, the Company entered into an Asset Purchase Agreement with
TeleSpectrum Worldwide, a wholly owned subsidiary of CRW Financial, Inc.
("CRW"), whereby CRW agreed to purchase substantially all of the Company's net
assets.

F-27
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To NBG Services, Inc.:

We have audited the accompanying balance sheets of NBG Services, Inc. (a
Massachusetts corporation--see Note 1) as of December 30, 1994 and December 29,
1995, and the related statements of income, shareholders' equity and cash flows
for each of the three fiscal years in the period ended December 29, 1995. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of NBG Services, Inc. as of
December 30, 1994 and December 29, 1995, and the results of its operations and
its cash flows for each of the three fiscal years in the period ended December
29, 1995, in conformity with generally accepted accounting principles.

Arthur Andersen LLP
Philadelphia, Pa.,
May 8, 1996

F-28
<PAGE>

NBG SERVICES, INC.

BALANCE SHEETS
(IN THOUSANDS--EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
DECEMBER 30, DECEMBER 29, MARCH 29,
1994 1995 1996
------------ ------------ -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents.............. $ -- $ 700 $1,988
Short-term investments................. 14 210 170
Accounts receivable, net of reserves of
$37, $90, and $105 in 1994, 1995 and
1996, respectively.................... 527 1,757 1,350
Prepaid expenses and other............. 31 129 148
------ ------ ------
Total current assets................. 572 2,796 3,656
PROPERTY AND EQUIPMENT, net.............. 817 1,336 1,872
OTHER ASSETS............................. 94 102 149
------ ------ ------
Total assets......................... $1,483 $4,234 $5,677
====== ====== ======
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of capital lease
obligations........................... $ 273 $ 277 $ 392
Bank overdraft......................... 82 -- --
Demand note............................ -- 500 --
Accounts payable....................... 196 212 273
Accrued expenses....................... 259 537 442
Deferred revenue....................... -- -- 930
------ ------ ------
Total current liabilities............ 810 1,526 2,037
------ ------ ------
CAPITAL LEASE OBLIGATIONS................ 277 454 824
------ ------ ------
COMMITMENTS AND CONTINGENCIES (Note 5)
SHAREHOLDERS' EQUITY:
Common stock, no par value, 10,000
shares authorized,
100 shares issued and outstanding..... -- -- --
Retained earnings...................... 396 2,254 2,816
------ ------ ------
Total shareholders' equity........... 396 2,254 2,816
------ ------ ------
Total liabilities and shareholders'
equity.............................. $1,483 $4,234 $5,677
====== ====== ======
</TABLE>

The accompanying notes are an integral part of these statements.

F-29
<PAGE>

NBG SERVICES, INC.

STATEMENTS OF INCOME
(IN THOUSANDS)

The accompanying notes are an integral part of these statements.

F-30
<PAGE>

NBG SERVICES, INC.

STATEMENTS OF SHAREHOLDERS' EQUITY
(IN THOUSANDS--EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
TOTAL
RETAINED SHAREHOLDERS'
SHARES AMOUNT EARNINGS EQUITY
------ ------ -------- -------------
<S> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1993.................. 100 $ -- $ 78 $ 78
Net income.............................. -- -- 285 285
--- ----- ------ ------
BALANCE, DECEMBER 31, 1993................ 100 -- 363 363
Net income.............................. -- -- 33 33
--- ----- ------ ------
BALANCE, DECEMBER 30, 1994................ 100 -- 396 396
Net income.............................. -- -- 2,106 2,106
Distributions........................... -- -- (248) (248)
--- ----- ------ ------
BALANCE, DECEMBER 29, 1995................ 100 -- 2,254 2,254
Net income (unaudited).................. -- -- 562 562
--- ----- ------ ------
BALANCE, MARCH 29, 1996 (unaudited)....... 100 $ -- $2,816 $2,816
=== ===== ====== ======
</TABLE>

The accompanying notes are an integral part of these statements.

F-31
<PAGE>

NBG SERVICES, INC.

STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
FOR THE THIRTEEN
FOR THE FISCAL YEAR ENDED WEEKS ENDED
-------------------------------------- -------------------
DECEMBER 31, DECEMBER 30, DECEMBER 29, MARCH 31, MARCH 29,
1993 1994 1995 1995 1996
------------ ------------ ------------ --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net income............ $ 285 $ 33 $ 2,106 $406 $ 562
Adjustments to
reconcile net income
to net cash provided
by operating
activities--
Depreciation and
amortization....... 128 205 319 57 114
Provision for loss
on accounts
receivable......... -- 37 113 43 15
Changes in operating
assets and
liabilities--
Accounts
receivable....... (176) (182) (1,343) (29) 392
Prepaid expenses
and other........ (45) (46) (106) (8) (66)
Accounts payable.. 41 93 16 25 61
Accrued expenses.. 47 75 278 134 (95)
Deferred revenue.. -- -- -- -- 930
----- ---- ------- ---- ------
Net cash
provided by
operating
activities..... 280 215 1,383 628 1,913
----- ---- ------- ---- ------
CASH FLOWS FROM
INVESTING ACTIVITIES:
Purchase of short-term
investments.......... (41) (35) (205) -- --
Proceeds from short-
term investments..... -- 62 9 -- 40
Purchases of property
and equipment........ (37) (69) (398) (7) (71)
----- ---- ------- ---- ------
Net cash used in
investing
activities..... (78) (42) (594) (7) (31)
----- ---- ------- ---- ------
CASH FLOWS FROM
FINANCING ACTIVITIES:
Bank overdraft........ -- 82 (82) (82) --
Repayment of capital
lease obligations.... (207) (264) (259) (69) (94)
Proceeds from demand
note................. -- -- 500 -- --
Repayment of demand
note................. -- -- -- -- (500)
Distributions to
shareholders......... -- -- (248) -- --
----- ---- ------- ---- ------
Net cash used in
financing
activities..... (207) (182) (89) (151) (594)
----- ---- ------- ---- ------
NET INCREASE (DECREASE)
IN CASH AND CASH
EQUIVALENTS............ (5) (9) 700 470 1,288
CASH AND CASH
EQUIVALENTS, BEGINNING
OF PERIOD.............. 14 9 -- -- 700
----- ---- ------- ---- ------
CASH AND CASH
EQUIVALENTS, END OF
PERIOD................. $ 9 $ -- $ 700 $470 $1,988
===== ==== ======= ==== ======
</TABLE>

The accompanying notes are an integral part of these statements.

F-32
<PAGE>

NBG SERVICES, INC.

NOTES TO FINANCIAL STATEMENTS
(INFORMATION AS OF MARCH 29, 1996 AND FOR THE
THIRTEEN WEEKS ENDED MARCH 31,
1995 AND MARCH 29, 1996 IS UNAUDITED)

1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES:

INDUSTRY INFORMATION

RG Associates, Inc., d/b/a NBG Services, Inc. was incorporated in June 1991.
In April 1996, RG Associates, Inc., d/b/a NBG Services, Inc., amended its
Articles of Incorporation to change the name of the corporation to NBG
Services, Inc. (the "Company"). The Company provides outbound telemarketing
data processing and fulfillment services in the financial services,
telecommunications and high technology industries.

The Company operates on a fifty-two, fifty-three week fiscal year ending on
the last Friday of the calendar year.

REVENUE RECOGNITION AND CONCENTRATION OF CREDIT RISKS

The Company recognizes revenues as services are performed for its clients.
Cash received in advance of services performed is deferred and recorded as
deferred revenue in the accompanying balance sheets. For the fiscal years ended
December 31, 1993, December 30, 1994 and December 29, 1995 and the thirteen
weeks ended March 29, 1996, the Company had one, two, two and two clients,
respectively, that each accounted for more than 10% of the Company's revenues.
For the fiscal year ended December 31, 1993, one client accounted for 95% of
the Company's revenues. For the fiscal year ended December 30, 1994, the two
clients accounted for 13% and 77% of the Company's revenues, respectively. For
the fiscal year ended December 29, 1995, the two clients accounted for 40% and
53% of the Company's revenues, respectively. For the thirteen weeks ended March
29, 1996, the two clients accounted for 29% and 64% of the Company's revenue,
respectively. The loss of either of these significant clients would have a
material adverse effect on the Company's business.

The concentration of credit risk is limited to trade accounts receivables and
is subject to the financial conditions of the Company's clients. The Company
does not require collateral or other securities to support customer
receivables.

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents.

Investments are held at market value, and at December 29, 1995 and March 29,
1996 were classified as short-term. Cash, cash equivalents and investments
consisted of the following:

<TABLE>
<CAPTION>
DECEMBER 30, DECEMBER 29, MARCH 29,
1994 1995 1996
------------ -------------- ---------
(IN THOUSANDS)
<S> <C> <C> <C>
CASH:
Money market and demand accounts.... $ -- $700 $1,988
INVESTMENTS:
Common stocks....................... 11 196 160
Mutual funds........................ 3 14 10
----- ---- ------
$ 14 $910 $2,158
===== ==== ======
</TABLE>

The Company adopted Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity Securities," (SFAS 115)
effective January 1, 1994. This statement requires the Company to classify its
investment securities as: (1) held to maturity, (2) available for sale or (3)
held for trading purposes. At December 30, 1994, December 29, 1995 and March
29, 1996 all of the Company's short-term investments are classified as
available for sale, therefore any unrealized holding gains or losses should be

F-33
<PAGE>

NBG SERVICES, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION AS OF MARCH 29, 1996 AND FOR THE
THIRTEEN WEEKS ENDED MARCH 31, 1995 AND MARCH 29, 1996 IS UNAUDITED)

presented in a separate component of shareholders' equity. At December 30,
1994, December 29, 1995 and March 29, 1996, there were no significant
unrealized holding gains or losses.

PROPERTY AND EQUIPMENT

Property and equipment are recorded at cost. Property and equipment
capitalized under capital leases are recorded at the present value of the
minimum lease payments due over the term of the lease. Depreciation and
amortization are provided using the straight-line method over the estimated
useful lives or the lease term, whichever is shorter.

Expenditures for maintenance, repairs and betterments which do not prolong
the useful life of an asset have been charged to operations as incurred.
Additions and betterments which substantially extend the useful life of the
asset are capitalized. Upon sale or other disposition of assets, the cost and
related accumulated depreciation and amortization are removed from the
respective accounts, and the resulting gain or loss, if any, is included in
income.

STATEMENT OF CASH FLOWS

For the fiscal years ended December 31, 1993, December 30, 1994, December 29,
1995 and the thirteen weeks ended March 29, 1996, the Company paid interest of
$76,000, $60,000, $55,000 and $35,000, respectively. For the fiscal years ended
December 31, 1993, December 30, 1994, December 29, 1995 and the thirteen weeks
ended March 29, 1996, the Company financed equipment purchases with capital
leases of $381,000, $302,000, $440,000 and $579,000 respectively.

INCOME TAXES

The Company has elected to be taxed under Subchapter S of the Internal
Revenue Code. As a result, the Company is not subject to federal income taxes,
and the taxable income of the Company is included in the shareholders' tax
returns. Therefore, no provision for federal and state income taxes has been
made for the fiscal years ended December 31, 1993, December 30, 1994 and
December 29, 1995 and the thirteen weeks ended March 29, 1996.

The Company is on the cash basis of accounting for income tax reporting
purposes and on the accrual basis for financial reporting purposes. Therefore,
the Company reports certain income and expense items for income tax purposes on
a basis different from that reflected in the accompanying financial statements.
At December 29, 1995, the Company's financial reporting basis of the net assets
exceeds the tax basis of the net assets by approximately $1,500,000. In the
event that the S Corporation is terminated, deferred income taxes applicable to
these differences would be reflected in the accompanying financial statements.

Given the pending sale of the business (see Note 7), for informational
purposes, the accompanying statements of income include an unaudited pro forma
adjustment for income taxes which would have been recorded if the Company had
not been an S Corporation, based on the tax laws in effect during the
respective periods. The differences between the federal statutory income tax
rate and the pro forma income tax rate primarily relates to state and local
income taxes and expenses not deductible for tax purposes.

FAIR VALUE OF FINANCIAL INSTRUMENTS

Cash, accounts receivable, accounts payable and accrued liabilities are
reflected in the financial statements at fair value due to the short-term
nature of those instruments. The carrying amount of the demand note and capital
lease obligations approximates fair value at December 29, 1995 and March 29,
1996.

PERVASIVENESS OF ESTIMATES

F-34
<PAGE>

NBG SERVICES, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION AS OF MARCH 29, 1996 AND FOR THE
THIRTEEN WEEKS ENDED MARCH 31, 1995 AND MARCH 29, 1996 IS UNAUDITED)

disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

INTERIM FINANCIAL STATEMENTS

The financial statements as of March 29, 1996 and for the thirteen weeks
ended March 31, 1995 and March 29, 1996 are unaudited and, in the opinion of
management of the Company, include all adjustments (consisting only of normal
recurring adjustments) necessary for a fair presentation of the results for
those interim periods. The results of operations for the thirteen weeks ended
March 29, 1996 are not necessarily indicative of the results to be expected for
the full year.

2. PROPERTY AND EQUIPMENT:
<TABLE>
<CAPTION>
USEFUL DECEMBER 30, DECEMBER 29, MARCH 29,
LIVES 1994 1995 1996
------ ------------ ------------ ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Telemarketing equipment......... 5 $1,097 $1,845 $2,408
Furniture and office equipment.. 7 155 195 282
Leasehold improvements.......... 7 -- 50 50
------ ------ ------
1,252 2,090 2,740
Less--Accumulated depreciation
and amortization............... (435) (754) (868)
------ ------ ------
$ 817 $1,336 $1,872
====== ====== ======

</TABLE>

Depreciation expense for the fiscal years ended December 31, 1993, December
30, 1994 and December 29, 1995 and the three months ended March 29, 1996 was
$128,000, $205,000, $319,000 and $ 114,000, respectively.

3. ACCRUED EXPENSES:

<TABLE>
<CAPTION>
DECEMBER 30, DECEMBER 29, MARCH 29,
1994 1995 1996
------------ ------------ ---------
(IN THOUSANDS)
<S> <C> <C> <C>
Accrued compensation............ $ 84 $ 174 $ 214
Accrued profit sharing.......... 110 139 29
Accrued telephone............... 50 77 112
Accrued other................... 15 147 87
------ ------ ------
$ 259 $ 537 $ 442
====== ====== ======
</TABLE>

4. DEBT:

<TABLE>
<CAPTION>
DECEMBER 30, DECEMBER 29, MARCH 29,
1994 1995 1996
------------ ------------ ---------
(IN THOUSANDS)
<S> <C> <C> <C>
Demand note..................... $ -- $ 500 $ --
Capitalized lease obligations
(Note 5)....................... 550 731 1,216
------ ------ ------
550 1,231 1,216
Less-current portion............ (273) (777) (392)
------ ------ ------
$ 277 $ 454 $ 824
====== ====== ======
</TABLE>

On December 29, 1995, the Company borrowed $500,000 from a bank under a
demand note which bears interest at prime rate (8.5% at December 29, 1995). The
note matures on May 31, 1996, and is collateralized by all of the assets of the
Company. The note was repaid on March 29, 1996. Interest expense on this note
was $15,000 for the thirteen weeks ended March 29, 1996.

F-35
<PAGE>

NBG SERVICES, INC.

NOTES TO FINANCIAL STATEMENTS--(CONCLUDED)
(INFORMATION AS OF MARCH 29, 1996 AND FOR THE
THIRTEEN WEEKS ENDED MARCH 31, 1995 AND MARCH 29, 1996 IS UNAUDITED)

The Company has a line of credit with a bank which provides for maximum
borrowings of $1,000,000. The line is collateralized by all of the assets of
the Company and is personally guaranteed by the shareholders. The line of
credit expires on May 31, 1996. At December 29, 1995 and March 29, 1996, there
was no outstanding balance on this line of credit.

5. COMMITMENTS AND CONTINGENCIES:

The Company leases facilities and equipment under capital and noncancelable
operating leases at seven locations through December, 2002. Interest rates on
the capital leases range from 4% to 18%. Rent expense under operating leases
for the fiscal years ended December 31, 1993, December 30, 1994, December 29,
1995 and the thirteen weeks ended March 29, 1996 was $110,000, $213,000,
$331,000 and $138,000, respectively.

Future minimum lease payments under the Company's leases as of December 29,
1995 are as follows:

<TABLE>
<CAPTION>
OPERATING CAPITAL
LEASES LEASES
--------- -------
(IN THOUSANDS)
<S> <C> <C>
1996...................................................... $ 747 $ 328
1997...................................................... 512 277
1998...................................................... 514 154
1999...................................................... 524 57
2000...................................................... 470 --
Thereafter................................................ 462 --
------ -----
Total minimum lease payments.............................. $3,229 816
======
Less--Amount representing interest........................ (85)
-----
Present value of future minimum lease payments............ 731
-----
Less--Current portion of principal payments............... (277)
-----
$ 454
=====
</TABLE>

The Company subleases two of its facilities under noncancelable operating
leases through December 31, 1996. Total minimum lease payments have not been
reduced by the minimum sublease rentals of $90,000 due to the Company under
these two noncancelable subleases.

6. EMPLOYEE BENEFIT PLANS:

The Company sponsors a noncontributory profit sharing plan for employees. The
Company's contributions to the plan are at the discretion of the Board of
Directors. For the fiscal years ended December 31, 1993, December 30, 1994 and
December 29, 1995 the Company's discretionary contributions to the plan were
$75,000, $110,000 and $139,000, respectively. There were no contributions to
the plan for the thirteen weeks ended March 29, 1996.

On January 1, 1996, the Company adopted a defined contribution 401(k) savings
plan. The plan provides for a matching contribution by the Company based on
employee contributions. Additional Company contributions may be made at the
discretion of management. For the thirteen weeks ended March 29, 1996, the
Company contributed $4,000 to the plan.

7. SALE OF BUSINESS:

In May 1996, an asset purchase agreement was signed among TeleSpectrum
Worldwide Inc., a wholly-owned subsidiary of CRW Financial, Inc., the Company
and the shareholders of the Company, whereby TeleSpectrum Worldwide agreed to
purchase substantially all of the net assets of the Company.

F-36
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Harris Direct Marketing, Inc. and Harris Fulfillment, Inc.:

We have audited the accompanying combined balance sheets of Harris Direct
Marketing, Inc. and Harris Fulfillment, Inc. (Pennsylvania corporations) as of
December 31, 1994 and 1995, and the related combined statements of income,
shareholders' equity and cash flows for each of the three years in the period
ended December 31, 1995. These financial statements are the responsibility of
the Companies' management. Our responsibility is to express an opinion on these
financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the combined financial position of Harris Direct
Marketing, Inc. and Harris Fulfillment, Inc. as of December 31, 1994 and 1995,
and the results of their operations and their cash flows for each of the three
years in the period ended December 31, 1995, in conformity with generally
accepted accounting principles.

Arthur Andersen LLP
Philadelphia, Pa.,
April 19, 1996

F-37
<PAGE>

HARRIS DIRECT MARKETING, INC. AND HARRIS FULFILLMENT, INC.

COMBINED BALANCE SHEETS
(IN THOUSANDS--EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
DECEMBER 31 MARCH 31
--------------- -----------
1994 1995 1996
------ ------- -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents....................... $ 975 $ 2,919 $ 2,311
Accounts receivable, net of reserves of $25,
$161 and $64 at December 31, 1994, 1995 and
March 31, 1996................................. 2,872 2,930 2,960
Prepaid expenses and other...................... 592 651 579
------ ------- -------
Total current assets.......................... 4,439 6,500 5,850
PROPERTY AND EQUIPMENT, net....................... 4,270 4,139 4,062
OTHER ASSETS...................................... 64 164 137
------ ------- -------
Total assets.................................. $8,773 $10,803 $10,049
====== ======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt............... $ 349 $ 299 $ 305
Accounts payable................................ 338 362 320
Accrued expenses................................ 616 635 478
Customer advances............................... 876 1,463 703
------ ------- -------
Total current liabilities..................... 2,179 2,759 1,806
------ ------- -------
LONG-TERM DEBT.................................... 1,863 1,530 1,451
------ ------- -------
DEFERRED RENT..................................... 116 120 120
------ ------- -------
OTHER NONCURRENT LIABILITIES...................... 35 19 32
------ ------- -------
COMMITMENTS AND CONTINGENCIES (Note 7)
SHAREHOLDERS' EQUITY:
Common stock (Harris Direct Marketing, Inc.), no
par value, 10,000 shares authorized, 99 shares
issued......................................... 1 1 1
Common stock (Harris Fulfillment, Inc.), $1 par
value, 1,000 shares authorized, 111 1/9 shares
issued and outstanding......................... -- -- --
Additional paid-in capital...................... 45 45 45
Retained earnings............................... 4,659 6,454 6,719
Treasury stock, at cost......................... (125) (125) (125)
------ ------- -------
Total shareholders' equity.................... 4,580 6,375 6,640
------ ------- -------
Total liabilities and shareholders' equity.... $8,773 $10,803 $10,049
====== ======= =======
</TABLE>

The accompanying notes are an integral part of these statements.

F-38
<PAGE>

HARRIS DIRECT MARKETING, INC. AND HARRIS FULFILLMENT, INC.

COMBINED STATEMENTS OF INCOME
(IN THOUSANDS)

<TABLE>
<CAPTION>
FOR THE YEAR ENDED FOR THE THREE MONTHS
DECEMBER 31 ENDED MARCH 31
------------------------ ----------------------
1993 1994 1995 1995 1996
------ ------- ------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
REVENUES..................... $7,018 $10,115 $12,690 $3,988 $2,617
------ ------- ------- ---------- ----------
OPERATING EXPENSES:
Cost of services........... 3,834 5,530 6,402 2,078 1,324
Selling, general and
administrative expenses... 2,473 2,680 2,986 761 768
------ ------- ------- ---------- ----------
Total operating
expenses................ 6,307 8,210 9,388 2,839 2,092
------ ------- ------- ---------- ----------
Operating income......... 711 1,905 3,302 1,149 525
INTEREST INCOME.............. 21 9 70 12 29
INTEREST EXPENSE............. (163) (195) (214) (53) (41)
------ ------- ------- ---------- ----------
NET INCOME................... $ 569 $ 1,719 $ 3,158 $1,108 $ 513
====== ======= ======= ========== ==========
PROFORMA DATA (UNAUDITED)
Historical net income........ $ 569 $ 1,719 $ 3,158 $ 1,108 $ 513
Proforma provision for income
taxes....................... 271 784 1,425 501 231
------ ------- ------- ---------- ----------
Proforma net income.......... $ 298 $ 935 $ 1,733 $ 607 $ 282
====== ======= ======= ========== ==========
</TABLE>

The accompanying notes are an integral part of these statements.

F-39
<PAGE>

HARRIS DIRECT MARKETING, INC. AND HARRIS FULFILLMENT, INC.

COMBINED STATEMENTS OF SHAREHOLDERS' EQUITY
(IN THOUSANDS--EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
HARRIS DIRECT HARRIS
MARKETING, INC. FULFILLMENT, INC.
COMMON STOCK COMMON STOCK ADDITIONAL TOTAL
---------------- --------------------- PAID-IN RETAINED TREASURY SHAREHOLDER'S
SHARES AMOUNT SHARES AMOUNT CAPITAL EARNINGS STOCK EQUITY
------- ------- -------- -------- ---------- -------- -------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1,
1993................... 99 $ 1 111 1/9 $ -- $ 45 $ 2,544 $(125) $ 2,465
Net income............. -- -- -- -- -- 569 -- 569
Distributions.......... -- -- -- -- -- (27) -- (27)
------- ------- -------- -------- ---- ------- ----- -------
BALANCE, DECEMBER 31,
1993................... 99 1 111 1/9 -- 45 3,086 (125) 3,007
Net income............. -- -- -- -- -- 1,719 -- 1,719
Distributions.......... -- -- -- -- -- (146) -- (146)
------- ------- -------- -------- ---- ------- ----- -------
BALANCE, DECEMBER 31,
1994................... 99 1 111 1/9 -- 45 4,659 (125) 4,580
Net income............. -- -- -- -- -- 3,158 -- 3,158
Distributions.......... -- -- -- -- -- (1,363) -- (1,363)
------- ------- -------- -------- ---- ------- ----- -------
BALANCE, DECEMBER 31,
1995................... 99 1 111 1/9 -- 45 6,454 (125) 6,375
Net income
(unaudited)........... -- -- -- -- -- 513 -- 513
Distributions
(unaudited)........... -- -- -- -- -- (248) -- (248)
------- ------- -------- -------- ---- ------- ----- -------
BALANCE, MARCH 31, 1996
(unaudited)............ 99 $ 1 111 1/9 $ -- $ 45 $ 6,719 $(125) $ 6,640
======= ======= ======== ======== ==== ======= ===== =======
</TABLE>

The accompanying notes are an integral part of these statements.

F-40
<PAGE>

HARRIS DIRECT MARKETING, INC. AND HARRIS FULFILLMENT, INC.

COMBINED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
FOR THE THREE
FOR THE YEAR ENDED MONTHS ENDED
DECEMBER 31 MARCH 31
------------------------ --------------
1993 1994 1995 1995 1996
------- ------ ------- ------ ------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income......................... $ 569 $1,719 $ 3,158 $1,108 $ 513
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities--
Depreciation and amortization.... 436 527 591 138 154
Provision for loss on accounts
receivable...................... 31 25 136 93 16
Provision for deferred rent...... 22 94 4 1 --
Changes in operating assets and
liabilities--
Accounts receivable............ (1,265) (628) (195) (1,777) (46)
Prepaid expenses and other..... (330) (51) (159) (607) 99
Accounts payable............... 305 (152) 24 196 (42)
Accrued expenses............... 44 160 3 (139) (144)
Customer advances.............. 418 189 587 605 (760)
------- ------ ------- ------ ------
Net cash provided by (used
in) operating activities.... 230 1,883 4,149 (382) (210)
------- ------ ------- ------ ------
INVESTING ACTIVITIES:
Proceeds from the sale of property
and equipment..................... 255 -- -- -- --
Purchases of property and
equipment......................... (684) (903) (460) (239) (77)
------- ------ ------- ------ ------
Net cash used in investing
activities.................. (429) (903) (460) (239) (77)
------- ------ ------- ------ ------
FINANCING ACTIVITIES:
Net borrowings (repayments) on
lines of credit................... -- (250) -- 250 --
Repayment of long-term debt........ (398) (360) (382) (91) (73)
Proceeds from long-term debt....... 489 417 -- -- --
Shareholder distributions.......... (27) (146) (1,363) -- (248)
------- ------ ------- ------ ------
Net cash provided by (used
in) financing activities.... 64 (339) (1,745) 159 (321)
------- ------ ------- ------ ------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS.................... (135) 641 1,944 (462) (608)
CASH AND CASH EQUIVALENTS, BEGINNING
OF PERIOD........................... 469 334 975 975 2,919
------- ------ ------- ------ ------
CASH AND CASH EQUIVALENTS, END OF
PERIOD.............................. $ 334 $ 975 $ 2,919 $ 513 $2,311
======= ====== ======= ====== ======
</TABLE>

The accompanying notes are an integral part of these statements.

F-41
<PAGE>

HARRIS DIRECT MARKETING, INC. AND HARRIS FULFILLMENT, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS
(INFORMATION AS OF MARCH 31, 1996 AND FOR THE
THREE MONTHS ENDED MARCH 31, 1995
AND 1996 IS UNAUDITED)

1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES:

INDUSTRY INFORMATION

Harris Direct Marketing, Inc. and Harris Fulfillment, Inc. (together the
Company) are a regional, vertically-integrated direct mail and fulfillment
organization which provides its services primarily to companies in the
pharmaceutical, financial services and insurance industries.

The financial statements reflect the combined financial position, results of
operations and cash flows of Harris Direct Marketing, Inc. and Harris
Fulfillment, Inc. The Companies are engaged in related operations, and are
owned by the same shareholders who have identical ownership in each entity. The
financial statements reflect the elimination of all significant intercompany
accounts and transactions.

REVENUE RECOGNITION AND CONCENTRATION OF CREDIT RISKS

The Company recognizes revenues on programs as services are performed for its
clients based upon hours incurred. Cash received in advance of services
performed is deferred and recorded as customer advances in the accompanying
balance sheets. For the years ended December 31, 1993, 1994 and 1995 and the
three months ended March 31, 1996, the Company had one customer in the
pharmaceutical industry which accounted for 17.0%, 32.0%, 44.0% and 43.0%,
respectively, of the Company's revenues. The loss of this significant customer
would have a material adverse effect on the Company's business.

The concentration of credit risk is limited to trade accounts receivables and
is subject to the financial conditions of the Company's customers. The Company
does not require collateral or other securities to support customer
receivables.

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents. At the
balance sheet dates, cash equivalents were composed primarily of investments in
money market funds.

The Company maintains cash accounts which, at times, may exceed federally
insured limits. The Company has not experienced any losses from maintaining
cash accounts in excess of federally insured limits and believes that they are
not exposed to any significant risks on their cash accounts.

PROPERTY AND EQUIPMENT

Property and equipment are recorded at cost. Depreciation and amortization
are provided using the straight-line method over the estimated useful lives.

Expenditures for maintenance, repairs and improvements that do not prolong
the useful life of an asset have been charged to operations as incurred.
Additions and betterments that substantially extend the useful life of the
asset are capitalized. Upon sale or other disposition of assets, the cost and
related accumulated depreciation and amortization are removed from the
respective accounts, and the resulting gain or loss, if any, is included in
income.

F-42
<PAGE>

HARRIS DIRECT MARKETING, INC. AND HARRIS FULFILLMENT, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION AS OF MARCH 31, 1996 AND FOR THE
THREE MONTHS ENDED MARCH 31, 1995 AND 1996 IS UNAUDITED)

STATEMENT OF CASH FLOWS

For the years ended December 31, 1993, 1994 and 1995 and the three months
ended March 31, 1996, the Company paid interest of $150,000, $197,000, $222,000
and $32,000, respectively.

INCOME TAXES

The Company has elected to be taxed under Subchapter S of the Internal
Revenue Code. As a result, the Company is not subject to federal income taxes,
and the taxable income of the Company is included in the shareholders' tax
returns. The Company has also elected S Corporation status for state income tax
purposes. Therefore, no provision for federal and state income taxes has been
made for the years ended December 31, 1993, 1994 and 1995 and the three months
ended March 31, 1996.

The Company reports certain income and expense items for income tax purposes
on a basis different from that reflected in the accompanying financial
statements. The principal differences relate to timing of the recognition of
bad debt expense, and the use of accelerated methods of depreciation for income
tax purposes. At December 31, 1995, the Company's financial reporting basis of
the net assets exceeds the tax basis of the net assets by approximately
$300,000. In the event that the S Corporation is terminated, deferred income
taxes applicable to these differences would be reflected in the accompanying
financial statements.

Given the pending sale of the business (see Note 9), for informational
purposes, the accompanying statements of income include an unaudited pro forma
adjustment for income taxes which would have been recorded if the Company had
not been an S Corporation, based on the tax laws in effect during the
respective periods. The differences between the federal statutory income tax
rate and the pro forma income tax rate primarily relates to state and local
income taxes and expenses not deductible for tax purposes.

FAIR VALUE OF FINANCIAL INSTRUMENTS

Cash, accounts receivable, accounts payable and accrued liabilities are
reflected in the financial statements at fair value due to the short-term
nature of those instruments. The carrying amount of long-term debt obligations
approximates fair value at the balance sheet dates.

PERVASIVENESS OF ESTIMATES

INTERIM FINANCIAL SERVICES

F-43
<PAGE>

HARRIS DIRECT MARKETING, INC. AND HARRIS FULFILLMENT, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION AS OF MARCH 31, 1996 AND FOR THE
THREE MONTHS ENDED MARCH 31, 1995 AND 1996 IS UNAUDITED)

2. PREPAID EXPENSES AND OTHER:

<TABLE>
<CAPTION>
DECEMBER 31 MARCH 31
----------- --------
1994 1995 1996
----- ----- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Prepaid postage........................................ $ 418 $ 498 $427
Other.................................................. 174 153 152
----- ----- ----
$ 592 $ 651 $579
===== ===== ====
</TABLE>

3. PROPERTY AND EQUIPMENT:

<TABLE>
<CAPTION>
DECEMBER 31 MARCH 31
USEFUL ---------------- -----------
LIVES 1994 1995 1996
------ ------- ------- ------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Machinery and equipment............... 5-10 $ 3,344 $ 3,543 $3,549
Furniture and office equipment........ 5-10 814 969 1,040
Building and building improvements.... 10-30 2,341 2,345 2,345
Leasehold improvements................ 15 41 41 41
Land.................................. 80 80 80
------- ------- ------
6,620 6,978 7,055
Less--Accumulated depreciation and
amortization......................... (2,350) (2,839) (2,993)
------- ------- ------
$ 4,270 $ 4,139 $4,062
======= ======= ======
</TABLE>

Depreciation expense for the years ended December 31, 1993, 1994 and 1995 and
the three months ended March 31, 1996, was $436,000, $527,000, $591,000, and
$154,000, respectively.

4. ACCRUED EXPENSES:

<TABLE>
<CAPTION>
DECEMBER 31 MARCH 31
----------- --------
1994 1995 1996
----- ----- ----
(IN THOUSANDS)
<S> <C> <C> <C>
Accrued vacation..................................... $ 217 $ 210 $210
Accrued compensation................................. 139 161 48
Accrued other........................................ 260 264 220
----- ----- ----
$ 616 $ 635 $478
===== ===== ====
</TABLE>

5. LINES OF CREDIT:

The Company had two lines of credit with the same bank that expired in April
1996 and had a combined borrowing limit of $850,000. The lines bear interest at
the bank's prime rate (9.0% at December 31, 1994, 8.25% at December 31, 1995
and 8.25% at March 31, 1996). The Company had no outstanding balances on the
lines of credit at December 31, 1994 and 1995, and March 31, 1996. The maximum
borrowed under the lines was $390,000 and $850,000 in 1994 and 1995,
respectively, and $0 for the three months ended March 31, 1996, and the average
amount outstanding was $128,000 and $212,000 in 1994 and 1995, respectively and
$0 for the three months ended March 31, 1996. The weighted average interest
rate during 1994 and 1995 and the three months ended March 31, 1996 was
approximately 6.92%, 9.0% and 0%, respectively.

F-44
<PAGE>

HARRIS DIRECT MARKETING, INC. AND HARRIS FULFILLMENT, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
(INFORMATION AS OF MARCH 31, 1996 AND FOR THE
THREE MONTHS ENDED MARCH 31, 1995 AND 1996 IS UNAUDITED)

6. LONG-TERM DEBT:

<TABLE>
<CAPTION>
DECEMBER 31 MARCH 31
------------- ----------
1994 1995 1996
------ ------ ------
(IN THOUSANDS)
<S> <C> <C> <C>
Mortgage payable to bank, payable in variable
monthly installments including interest at the
bank's prime rate plus .75% (10.25% at December
31, 1995) through June 2005...................... $1,317 $1,245 $1,224
Note payable to bank, payable in monthly
installments of $17,000 plus interest at 8.25%
through October 1998............................. 791 584 532
Note payable to bank, payable in monthly
installments of $4,000 plus interest at 7%
through December 1996............................ 93 -- --
Note payable to bank, payable in monthly
installments of $2,000 plus interest at prime
plus 1% through March 1995....................... 5 -- --
Other............................................. 6 -- --
------ ------ ------
2,212 1,829 1,756
Less--Current portion............................. 349 299 305
------ ------ ------
$1,863 $1,530 $1,451
====== ====== ======
</TABLE>

In November 1994, the Company refinanced $509,000 of its outstanding debt
with an $825,000 note with the same bank. The net proceeds were used to finance
additional equipment purchases.

The mortgage and notes payable are with the same bank and are collateralized
by all of the Company's assets. Minimum principal repayments of long-term debt
as of December 31, 1995, are as follows (in thousands):

<TABLE>
<S> <C>
1996.................................................................. $ 299
1997.................................................................. 298
1998.................................................................. 273
1999.................................................................. 112
2000.................................................................. 124
Thereafter............................................................ 723
------
$1,829
======
</TABLE>

F-45
<PAGE>

HARRIS DIRECT MARKETING, INC. AND HARRIS FULFILLMENT, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONCLUDED)
(INFORMATION AS OF MARCH 31, 1996 AND FOR THE
THREE MONTHS ENDED MARCH 31, 1995 AND 1996 IS UNAUDITED)

7. COMMITMENTS AND CONTINGENCIES:

The Company leases facilities at three locations through August 31, 2002.
Rent expense under operating leases for the years ended December 31, 1993, 1994
and 1995 and the three months ended March 31, 1996, was $272,000, $568,000,
$583,000 and $155,000, respectively.

Future minimum lease payments under the Company's operating leases as of
December 31, 1995, are as follows (in thousands):

<TABLE>
<CAPTION>
OPERATING
LEASES
---------
<S> <C>
1996.............................................................. $ 567
1997.............................................................. 357
1998.............................................................. 388
1999.............................................................. 433
2000.............................................................. 464
Thereafter........................................................ 821
------
Total minimum lease payments...................................... $3,030
======
</TABLE>

8. PROFIT SHARING PLAN:

The Company has a noncontributory profit sharing plan to provide retirement
benefits to its eligible employees. The amount of the Company's contribution is
determined at the discretion of the Company's Board of Directors. For the years
ended December 31, 1993, 1994 and 1995 and the three months ended March 31,
1996 the Company contributed $62,000, $55,000, $49,000, and $0, respectively,
to the profit sharing plan.

9. SALE OF BUSINESS:

In April 1996, an asset purchase agreement was entered into among CRW
Financial Inc. ("CRW"), the Company and the shareholders of the Company,
whereby TeleSpectrum Worldwide Inc., a wholly-owned subsidiary of CRW agreed to
purchase substantially all of the net assets of the Company.

F-46
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To The Reich Group Companies:

We have audited the accompanying combined balance sheets of The Reich Group
Companies identified in Note 1 as of December 31, 1994 and 1995, and the
related combined statements of operations, shareholder's equity (deficit) and
cash flows for each of the three years in the period ended December 31, 1995.
These financial statements are the responsibility of the Companies' management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the combined financial position of The Reich Group
Companies as of December 31, 1994 and 1995, and the results of their operations
and their cash flows for each of the three years in the period ended December
31, 1995, in conformity with generally accepted accounting principles.

Arthur Andersen LLP
Philadelphia, Pa.,
April 24, 1996

F-47
<PAGE>

THE REICH GROUP COMPANIES

COMBINED BALANCE SHEETS
(IN THOUSANDS--EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
DECEMBER 31 MARCH 31
-------------- -----------
1994 1995 1996
------ ------ -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash......................................... $ 31 $ 220 $ 676
Accounts receivable, net of reserves of $16
in 1994 and $73 in 1995 and 1996............ 691 2,544 2,931
Due from shareholder......................... 49 132 160
Prepaid expenses and other................... 87 79 157
------ ------ ------
Total current assets....................... 858 2,975 3,924
EQUIPMENT AND FURNITURE, net................... 248 1,328 2,044
OTHER ASSETS................................... 5 15 26
------ ------ ------
Total assets............................... $1,111 $4,318 $5,994
====== ====== ======
LIABILITIES AND SHAREHOLDER'S EQUITY (DEFICIT)
CURRENT LIABILITIES:
Line of credit............................... $ 70 $ -- $ --
Current portion of long-term debt............ 102 155 236
Current portion of deferred rent............. 68 68 68
Accounts payable............................. 370 930 1,015
Accrued salaries and wages................... 128 363 402
Notes payable to shareholder................. -- 570 220
Other current liabilities.................... 179 68 73
------ ------ ------
Total current liabilities.................. 917 2,154 2,014
------ ------ ------
LONG-TERM DEBT................................. 273 371 485
------ ------ ------
DEFERRED RENT.................................. 193 125 108
------ ------ ------
COMMITMENTS AND CONTINGENCIES (Note 6)
SHAREHOLDER'S EQUITY (DEFICIT):
Common stock (see Note 8).................... 2 2 2
Additional paid-in capital................... 350 450 450
Retained earnings (deficit).................. (385) 1,455 3,174
Treasury stock, at cost (TRG/Communications,
Inc. 150 shares)............................ (239) (239) (239)
------ ------ ------
Total shareholder's equity (deficit)....... (272) 1,668 3,387
------ ------ ------
Total liabilities and shareholder's equity
(deficit)................................. $1,111 $4,318 $5,994
====== ====== ======
</TABLE>

The accompanying notes are an integral part of these statements.

F-48
<PAGE>

THE REICH GROUP COMPANIES

COMBINED STATEMENTS OF INCOME
(IN THOUSANDS)

<TABLE>
<CAPTION>
FOR THE THREE
FOR THE YEAR ENDED MONTHS ENDED
DECEMBER 31 MARCH 31
----------------------- --------------
1993 1994 1995 1995 1996
------ ------ ------- ------ ------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
REVENUES.............................. $4,375 $5,424 $12,253 $2,059 $5,465
------ ------ ------- ------ ------
OPERATING EXPENSES:
Cost of services.................... 3,172 4,225 7,836 1,327 3,165
Selling, general and administrative
expenses........................... 1,111 976 2,534 297 570
------ ------ ------- ------ ------
Total operating expenses.......... 4,283 5,201 10,370 1,624 3,735
------ ------ ------- ------ ------
Operating income.................. 92 223 1,883 435 1,730
INTEREST INCOME....................... 16 13 14 3 8
INTEREST EXPENSE...................... (37) (37) (57) (10) (19)
------ ------ ------- ------ ------
NET INCOME............................ $ 71 $ 199 $ 1,840 $428 $1,719
====== ====== ======= ====== ======
PROFORMA DATA (UNAUDITED)
Historical net income............... $ 71 $ 199 $ 1,840 $ 428 $1,719
Proforma provision for income
taxes............................... 39 97 746 190 701
------ ------ ------- ------ ------
Proforma net income................. $ 32 $ 102 $ 1,094 $ 238 $1,018
====== ====== ======= ====== ======
</TABLE>

The accompanying notes are an integral part of these statements.

F-49
<PAGE>

THE REICH GROUP COMPANIES

COMBINED STATEMENTS OF SHAREHOLDER'S EQUITY (DEFICIT)
(IN THOUSANDS - EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
DIALDIRECT
THE REICH TELE- TRG/ COMMUNI- INSUREDIRECT
GROUP, INC. DIALDIRECT, INC. MARKETING, LTD. CATIONS, INC. AGENCY INC.
------------- ------------------- ----------------- ------------- -------------
COMMON STOCK COMMON STOCK COMMON STOCK COMMON STOCK COMMON STOCK ADDITIONAL RETAINED
------------- ------------------- ----------------- ------------- ------------- PAID-IN EARNINGS TREASURY
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT CAPITAL (DEFICIT) STOCK
------ ------ -------- --------- ------- -------- ------ ------ ------ ------ ---------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE, JANUARY
1, 1993......... 100 $ -- 100 $ -- 100 $ -- 150 $ 2 100 $ -- $350 $ (655) $(239)
Net income..... -- -- -- -- -- -- -- -- -- -- -- 71 --
--- ----- ------- --------- ------ -------- --- --- --- ----- ---- ------ -----
BALANCE, DECEMBER
31, 1993........ 100 -- 100 -- 100 -- 150 2 100 -- 350 (584) (239)
Net income..... -- -- -- -- -- -- -- -- -- -- -- 199 --
--- ----- ------- --------- ------ -------- --- --- --- ----- ---- ------ -----
BALANCE, DECEMBER
31, 1994........ 100 -- 100 -- 100 -- 150 2 100 -- 350 (385) (239)
Capital
contribution
to Dial Direct
Telemarketing,
Ltd. by
shareholder... -- -- -- -- -- -- -- -- -- -- 100 -- --
Net income..... -- -- -- -- -- -- -- -- -- -- -- 1,840 --
--- ----- ------- --------- ------ -------- --- --- --- ----- ---- ------ -----
BALANCE, DECEMBER
31, 1995........ 100 -- 100 -- 100 -- 150 2 100 -- 450 1,455 (239)
--- ----- ------- --------- ------ -------- --- --- --- ----- ---- ------ -----
Net income
(unaudited).... -- -- -- -- -- -- -- -- -- -- -- 1,719 --
--- ----- ------- --------- ------ -------- --- --- --- ----- ---- ------ -----
BALANCE, MARCH
31, 1996
(unaudited).... 100 $ -- 100 $ -- 100 $ -- 150 $ 2 100 $ -- $450 $3,174 $(239)
=== ===== ======= ========= ====== ======== === === === ===== ==== ====== =====
<CAPTION>
TOTAL
SHAREHOLDER'S
EQUITY
(DEFICIT)
-------------
<S> <C>
BALANCE, JANUARY
1, 1993......... $ (542)
Net income..... 71
-------------
BALANCE, DECEMBER
31, 1993........ (471)
Net income..... 199
-------------
BALANCE, DECEMBER
31, 1994........ (272)
Capital
contribution to
Dial Direct
Telemarketing,
Ltd. by
shareholder... 100
Net income...... 1,840
-------------
BALANCE, DECEMBER
31, 1995........ 1,668
-------------
Net income
(unaudited).... 1,719
-------------
BALANCE, MARCH
31, 1996
(unaudited)..... $3,387
=============
</TABLE>

The accompanying notes are an integral part of these statements.

F-50
<PAGE>

THE REICH GROUP COMPANIES

COMBINED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
FOR THE THREE
FOR THE YEAR ENDED MONTHS ENDED
DECEMBER 31 MARCH 31
--------------------- --------------
1993 1994 1995 1995 1996
----- ----- ------- ------ -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income............................ $ 71 $ 199 $ 1,840 $ 428 $1,719
Adjustments to reconcile net income to
net cash provided by (used in)
operating activities--
Depreciation and amortization....... 106 143 220 33 93
Amortization of deferred rent....... (68) (68) (68) (17) (17)
Loss on disposal of property........ 8 1 7 -- --
Changes in operating assets and
liabilities --
Accounts receivable............... (34) (193) (1,853) (845) (387)
Due from shareholder.............. 57 (40) (83) (2) (28)
Prepaid expenses and other
assets........................... 227 (33) (2) -- (89)
Accounts payable.................. (348) 88 560 158 85
Accrued salaries and wages........ (43) 37 235 99 39
Other current liabilities......... 20 85 (111) 77 5
----- ----- ------- ----- -------
Net cash provided by (used in)
operating activities........... (4) 219 745 (69) 1,420
----- ----- ------- ----- -------
INVESTING ACTIVITIES:
Purchases of furniture and equipment,
net of capital lease obligations of
$178 in 1993 and $95 in 1995......... (37) (138) (1,212) (14) (559)
----- ----- ------- ----- -------
Net cash used in investing
activities..................... (37) (138) (1,212) (14) (559)
----- ----- ------- ----- -------
FINANCING ACTIVITIES:
Net borrowings (repayments) on line of
credit............................... 60 10 (70) 78 --
Repayment of long-term debt........... (97) (88) (109) (23) (55)
Proceeds from long-term debt.......... 76 -- 165 -- --
Capital contribution to DialDirect
Telemarketing, Ltd. from
shareholder.......................... -- -- 100 -- --
Proceeds from (repayment of) notes
payable to shareholder............... -- -- 570 -- (350)
----- ----- ------- ----- -------
Net cash provided by (used in)
financing activities........... 39 (78) 656 55 (405)
----- ----- ------- ----- -------
NET INCREASE (DECREASE) IN CASH......... (2) 3 189 (28) 456
CASH, BEGINNING OF PERIOD............... 30 28 31 31 220
----- ----- ------- ----- -------
CASH, END OF PERIOD..................... $ 28 $ 31 $ 220 $ 3 $ 676
===== ===== ======= ===== =======
</TABLE>

The accompanying notes are an integral part of these statements.

F-51
<PAGE>

THE REICH GROUP COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS

(INFORMATION AS OF MARCH 31, 1996 AND FOR THE THREE MONTHS ENDED
MARCH 31, 1995 AND 1996 IS UNAUDITED)

1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES:

INDUSTRY INFORMATION

The Reich Group Companies (the "Company") offers telemarketing services to
clients in the financial services, insurance, telecommunications and publishing
industries. In 1995, the Company derived 93% of its revenue from telemarketing
activities.

The 1993, 1994 and 1995 financial statements reflect the combined financial
position, results of operations and cash flows of The Reich Group, Inc.,
DialDirect, Inc., DialDirect Telemarketing, LTD., TRG/Communications, Inc. and
InsureDirect Agency, Inc. The accompanying financial statements are presented
on a combined basis, as all companies are owned by the same shareholder. The
financial statements reflect the elimination of all significant intercompany
accounts and transactions.

REVENUE RECOGNITION AND CONCENTRATION OF CREDIT RISK

The Company recognizes revenues on programs as services are performed for
customers, generally based upon hours incurred. For the years ended December
31, 1993, 1994, 1995, and for the three months ended March 31, 1996, the
Company had three, two, four and three clients, respectively, that each
accounted for more than 10% of the Company's revenues. For the year ended
December 31, 1993, the three clients accounted for 36%, 21% and 11% of the
Company's revenues, respectively. For the year ended December 31, 1994, the two
clients accounted for 47% and 24% of the Company's revenues, respectively. For
the year ended December 31, 1995, the four clients accounted for 46%, 12%, 15%
and 15% of the Company's revenues, respectively. For the three months ended
March 31, 1996, the three clients accounted for 45%, 12% and 34% of the
Company's revenues, respectively. The loss of one or more of these major
clients could have a materially adverse effect on the Company's business.

The concentration of credit risk is limited to trade accounts receivables and
is subject to the financial and industry conditions of the Company's customers.
The Company does not require collateral or other securities to support customer
receivables.

CASH

The Company maintains cash accounts which, at times, may exceed federally
insured limits. The Company has not experienced losses from maintaining cash
accounts in excess of federally insured limits. The Company believes that it is
not exposed to significant credit risk in relation to their cash accounts.

EQUIPMENT AND FURNITURE

Equipment and furniture are recorded at cost. Equipment and furniture
capitalized under capital leases are recorded at the present value of the
minimum lease payments due over the term of the lease. Depreciation and
amortization are provided using the straight-line method over the estimated
useful lives of five to seven years.

Expenditures for maintenance, repairs and betterments which do not prolong
the useful life of an asset are charged to expense as incurred. Additions and
betterments which extend the useful life of the properties are capitalized.
Upon sale or other disposition of assets, the cost and related accumulated
depreciation and amortization are removed from the respective accounts, and the
resulting gain or loss, if any, is included in income.

F-52
<PAGE>

THE REICH GROUP COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AS OF MARCH 31, 1996 AND FOR THE THREE MONTHS ENDED
MARCH 31, 1995 AND 1996 IS UNAUDITED)

PROFIT SHARING PLAN

The Company has a noncontributory profit sharing plan covering all eligible
employees. Contributions to the plan are at the sole discretion of the
management. Contributions of $40,000, and $62,000 were made for the years ended
December 31, 1993 and 1994, respectively. No contribution was made for the year
ended December 31, 1995 or for the three months ended March 31, 1996.

STATEMENT OF CASH FLOWS

For the years ended December 31, 1993, 1994 and 1995 and the three months
ended March 31, 1996, the Company paid interest of $37,000, $37,000, $57,000
and $19,000.

INCOME TAXES

The Company has elected to be taxed under Subchapter S of the Internal
Revenue Code. As a result, the Company is not subject to federal or state
income taxes, and the taxable income of the Company is included in the
shareholder's tax returns. Therefore, no provision for federal and state income
taxes has been made for the years ended December 31, 1993, 1994 and 1995 and
the three months ended March 31, 1996.

The Company is on the cash basis of accounting for income tax reporting
purposes and on the accrual basis for financial reporting purposes. Therefore,
the Company reports certain income and expense items for income tax purposes on
a basis different from that reflected in the accompanying financial statements.
At December 31, 1995, the Company's financial reporting basis of the net assets
exceeds the tax basis of the net assets by approximately $934,000. In the event
that the S Corporation status is terminated, deferred income taxes applicable
to these differences would be reflected in the accompanying financial
statements.

Given the pending sale of the business (see Note 9), for informational
purposes, the accompanying statements of income include an unaudited pro forma
adjustment for income taxes which would have been recorded if the Company had
not been an S Corporation, based on the tax laws in effect during the
respective periods. The differences between the federal statutory income tax
rate and the pro forma income tax rate primarily relates to state and local
taxes and expenses not deductible for tax purposes.

FAIR VALUE OF FINANCIAL INSTRUMENTS

Cash, accounts receivable, accounts payable and accrued liabilities are
reflected in the financial statements at fair value due to the short-term
nature of those instruments. The carrying amount of long-term debt and capital
lease obligations approximates fair value at the balance sheet dates.

PERVASIVENESS OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the recorded amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

INTERIM FINANCIAL STATEMENTS

F-53
<PAGE>

THE REICH GROUP COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AS OF MARCH 31, 1996 AND FOR THE THREE MONTHS ENDED
MARCH 31, 1995 AND 1996 IS UNAUDITED)

2. EQUIPMENT AND FURNITURE:

<TABLE>
<CAPTION>
DECEMBER 31 MARCH 31
USEFUL ---------------- --------
LIVES 1994 1995 1996
------ ------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Telemarketing equipment............. 5 $ 471 $ 1,766 $ 2,332
Furniture and office equipment...... 5-7 777 768 892
Leasehold improvements.............. 7 60 76 195
------- ------- -------
1,308 2,610 3,419
Less--Accumulated depreciation and
amortization....................... (1,060) (1,282) (1,375)
------- ------- -------
$ 248 $ 1,328 $ 2,044
======= ======= =======
</TABLE>

Depreciation expense for the years ended December 31, 1993, 1994 and 1995,
and the three months ended March 31, 1996 was $106,000, $143,000, $220,000 and
$93,000, respectively.

3. OTHER CURRENT LIABILITIES:

<TABLE>
<CAPTION>
DECEMBER 31
----------- MARCH 31
1994 1995 1996
----- ----- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Accrued profit sharing.................................. $ 62 $ -- $--
Advance billings........................................ 82 60 67
Other accrued liabilities............................... 35 8 6
----- ----- ----
$ 179 $ 68 $ 73
===== ===== ====
</TABLE>

4. LINE OF CREDIT:

The Company has a revolving line of credit with a bank which provides for
maximum borrowings of $700,000. Borrowings under the line are limited to 60% of
eligible accounts receivable, as defined. The line is collateralized by the
Company's accounts receivable and general intangibles, a second mortgage on the
personal residences of the Company's shareholder and his wife and other
personal assets of the Company's shareholder and his wife. The line is also
personally guaranteed by the Company's shareholder and his wife. At December
31, 1995, and March 31, 1996 there was no outstanding balance on this line of
credit. Interest on the outstanding balance is payable monthly and accrues on
borrowings under the revolving line of credit at the bank's base rate (10.5% at
December 31, 1995).

The agreement shall continue until all indebtedness to the bank has been
repaid in full and the parties terminate the agreement.

F-54
<PAGE>

THE REICH GROUP COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AS OF MARCH 31, 1996 AND FOR THE THREE MONTHS ENDED
MARCH 31, 1995 AND 1996 IS UNAUDITED)

5. LONG-TERM DEBT:
<TABLE>
<CAPTION>
DECEMBER 31
------------ MARCH 31
1994 1995 1996
----- ----- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Note payable to bank, interest is payable monthly
at the bank's rate plus 1/2% (11% on December 31,
1995). Principal due in monthly installments of
$4,000 through August 1998. This note is collater-
alized by accounts receivable, equipment and other
assets of the Company and a second mortgage on the
personal residences of the Company's shareholder
and his wife. Payment on the note is also guaran-
teed by the Company's shareholder and his wife.... $ 140 $ 105 $ 96
Note payable to regional industrial development au-
thority, interest accrues at 5%, principal and in-
terest due in monthly installments of $3,000
through August 2000, collateralized by specified
furniture and equipment of the Company............ -- 155 148
Payable to landlord, no stated interest (discounted
at 8.9%), unsecured, due in varying monthly in-
stallments from $3,000 to $4,000 through October
31, 1998.......................................... 117 96 88
Capitalized lease obligations (Note 6)............. 118 170 389
----- ----- -----
375 526 721
Less--Current portion.............................. (102) (155) (236)
----- ----- -----
$ 273 $ 371 $ 485
===== ===== =====
</TABLE>

Minimum principal repayments of long-term debt as of December 31, 1995,
excluding capitalized lease obligations (see Note 6), are as follows (in
thousands):

In December 1995, the City of Wheeling, West Virginia issued a commitment to
provide $235,000 of financing at 5% interest for a term of five years.
Additionally, the West Virginia Economic Development Authority issued a
commitment to provide $500,000 of financing at prime less 4% (minimum rate of
5%) interest for a term of five years. Each loan is to be collateralized by the
furniture and equipment in the Company's West Virginia facility.

In 1995, the Company received a grant of $187,000 from the West Virginia
Economic Development Authority as a reimbursement for certain costs in
connection with the establishment of a calling center in West Virginia. The
grant has been recorded as an offset to cost of services in the combined
statement of income.

F-55
<PAGE>

THE REICH GROUP COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONCLUDED)

(INFORMATION AS OF MARCH 31, 1996 AND FOR THE THREE MONTHS ENDED
MARCH 31, 1995 AND 1996 IS UNAUDITED)
6. COMMITMENTS AND CONTINGENCIES:

The Company leases facilities and equipment under capital and noncancelable
operating leases with terms through 2000. Interest rates on the capital leases
range from 11.0% to 15.5%. At December 31, 1995, the capital leases are
collateralized by telemarketing equipment with a book value of $137,000 (net of
accumulated amortization of $313,000). Rent expense under operating leases for
the years ended December 31, 1993, 1994, 1995 and the three months ended March
31, 1996 was $132,000, $140,000, $195,000 and $58,000, respectively.

Future minimum lease payments under the Company's leases as of December 31,
1995 are as follows (in thousands):

<TABLE>
<CAPTION>
OPERATING CAPITAL
LEASES LEASES
--------- -------
<S> <C> <C>
1996....................................................... $238 $ 78
1997....................................................... 220 78
1998....................................................... 188 44
1999....................................................... 11 1
2000....................................................... 1 --
---- ----
Total minimum lease payments............................... $658 201
====
Less--Amount representing interest......................... (31)
----
Present value of future minimum lease payments............. 170
Less--Current portion of principal payments................ (60)
----
$110
----
</TABLE>

In February 1996, the Company entered into an additional capital lease for
the acquisition of furniture and equipment for the Company's Delaware facility.
The total amount of the future lease commitment was $250,000 with monthly
payments of $8,000 for 36 months.

In November and December 1995, the Company entered into two leases for new
office space in connection with the expansion of its telemarketing facilities
in Delaware and West Virginia. The lease for the Delaware facility commenced on
January 1, 1996 with a minimum monthly rental payment of $6,000 for a term of
three years. The lease for the West Virginia facility commenced on April 1,
1996 with a minimum monthly rental payment of $10,000 beginning June 15, 1996
for a term of five years.

7. NOTES PAYABLE TO SHAREHOLDER:

In December 1995, the Company received the proceeds from two demand notes
payable to its shareholder for $500,000 (repaid subsequent to December 31,
1995) and $70,000, respectively. The remaining note of $70,000 accrues interest
at 8%.

F-56
<PAGE>

THE REICH GROUP COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AS OF MARCH 31, 1996 AND FOR THE THREE MONTHS ENDED
MARCH 31, 1995 AND 1996 IS UNAUDITED)

8. COMMON STOCK:

The description of the Company's common stock is as follows:

<TABLE>
<CAPTION>
COMMON
STOCK
PAR VALUE
---------
<S> <C>
The Reich Group, Inc.
$1 par value, 1,000 shares authorized, 100 shares issued and
outstanding.................................................... $ 100
DialDirect, Inc.
$1 par value, 1,000 shares authorized, 100 shares issued and
outstanding.................................................... 100
DialDirect Telemarketing, Ltd.
$1 par value, 1,000 shares authorized, 100 shares issued and
outstanding.................................................... 100
TRG/Communications, Inc.
$2,000 stated value, 150 shares outstanding.................... 2,000
InsureDirect Agency, Inc.
$1 par value, 1,000 shares authorized, 100 shares issued and
outstanding.................................................... 100
------
$2,400
======
</TABLE>

9. SALE OF BUSINESS:

In April 1996, an asset purchase agreement was entered into among CRW
Financial Inc. ("CRW"), the Company and the shareholder of the Company whereby
TeleSpectrum Worldwide Inc., a wholly-owned subsidiary of CRW agreed to
purchase substantially all of the net assets of the Company.

F-57
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To The Response Center, Inc. and The Tab House, Inc.:

We have audited the accompanying combined balance sheets of The Response
Center, Inc. and The Tab House, Inc. (Pennsylvania corporations) as of
September 30, 1994 and 1995, and the related combined statements of operations,
shareholders' equity and cash flows for each of the two fiscal years in the
period ended September 30, 1995. These financial statements are the
responsibility of the Companies' management. Our responsibility is to express
an opinion on these financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the combined financial position of The Response Center,
Inc. and The Tab House, Inc. as of September 30, 1994 and 1995, and the results
of their operations and their cash flows for each of the two fiscal years in
the period ended September 30, 1995, in conformity with generally accepted
accounting principles.

As discussed in Note 2 to the combined financial statements, the Company
changed its method of accounting for marketable securities in fiscal 1995.

Arthur Andersen LLP
Philadelphia, Pa.,
April 26, 1996

F-58
<PAGE>

THE RESPONSE CENTER, INC. AND THE TAB HOUSE, INC.

COMBINED BALANCE SHEETS
(IN THOUSANDS--EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
SEPTEMBER 30
------------- DECEMBER 31, MARCH 31,
1994 1995 1995 1996
------ ------ ------------ -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents........... $ 72 $ 282 $1,178 $ 641
Marketable securities............... 248 324 316 310
Accounts receivable, net of reserves
of $32, $28, $28, and $28.......... 1,357 1,522 843 1,087
Prepaid expenses and other.......... 14 23 82 132
------ ------ ------ ------
Total current assets.............. 1,691 2,151 2,419 2,170
PROPERTY AND EQUIPMENT, net........... 164 139 178 250
OTHER ASSETS.......................... 8 8 34 5
------ ------ ------ ------
Total assets...................... $1,863 $2,298 $2,631 $2,425
====== ====== ====== ======
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable.................... $ 126 $ 119 $ 140 $ 198
Accrued expenses.................... 326 275 233 241
Deferred revenue.................... 128 92 315 282
------ ------ ------ ------
Total current liabilities......... 580 486 688 721
------ ------ ------ ------
COMMITMENTS AND CONTINGENCIES (Note 5)
SHAREHOLDERS' EQUITY:
Common stock (The Response Center,
Inc.), no par value, 1,000 shares
authorized, 550 shares issued and
outstanding........................ 51 51 51 51
Common stock (The Tab House, Inc.),
$.01 par value, 1,000 shares
authorized, 550 shares issued and
outstanding........................ -- -- -- --
Additional paid-in capital.......... 1 1 1 1
Net unrealized gain on marketable
securities available for sale...... -- 121 105 98
Retained earnings................... 1,231 1,639 1,786 1,554
------ ------ ------ ------
Total shareholders' equity........ 1,283 1,812 1,943 1,704
------ ------ ------ ------
Total liabilities and
shareholders' equity............. $1,863 $2,298 $2,631 $2,425
====== ====== ====== ======
</TABLE>

The accompanying notes are an integral part of these statements.

F-59
<PAGE>

THE RESPONSE CENTER, INC. AND THE TAB HOUSE, INC.

COMBINED STATEMENTS OF INCOME
(IN THOUSANDS)

<TABLE>
<CAPTION>
FOR THE FISCAL YEAR FOR THE THREE FOR THE SIX
ENDED MONTHS ENDED MONTHS ENDED
SEPTEMBER 30 DECEMBER 31 MARCH 31
-------------------- ------------- -------------
1994 1995 1994 1995 1995 1996
--------- --------- ------ ------ ------ ------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
REVENUES..................... $ 6,183 $ 6,719 $1,643 $1,352 $3,584 $2,781
OPERATING EXPENSES:
Cost of services........... 3,426 3,583 930 748 1,811 1,534
Selling, general and
administrative............ 2,800 2,717 490 435 1,551 1,310
--------- --------- ------ ------ ------ ------
Total operating
expenses................ 6,226 6,300 1,420 1,183 3,362 2,844
--------- --------- ------ ------ ------ ------
Operating income (loss).. (43) 419 223 169 222 (63)
INTEREST INCOME.............. 8 10 -- -- -- --
INTEREST EXPENSE............. (2) -- -- -- -- --
--------- --------- ------ ------ ------ ------
NET INCOME (LOSS)............ $ (37) $ 429 $ 223 $ 169 $ 222 $ (63)
========= ========= ====== ====== ====== ======
PRO FORMA DATA (UNAUDITED)
Historical net income
(loss).................... $ (37) $ 429 $ 223 $ 169 $ 222 $ (63)
Pro forma provision
(benefit) for income
taxes..................... (15) 180 91 69 91 (25)
--------- --------- ------ ------ ------ ------
Pro forma net income
(loss).................... $ (22) $ 249 $ 132 $ 100 $ 131 $ (38)
========= ========= ====== ====== ====== ======
</TABLE>

The accompanying notes are an integral part of these statements.

F-60
<PAGE>

THE RESPONSE CENTER, INC. AND THE TAB HOUSE, INC.

COMBINED STATEMENTS OF SHAREHOLDERS' EQUITY
(IN THOUSANDS--EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
THE RESPONSE THE
CENTER, INC. TAB HOUSE, INC. UNREALIZED
COMMON STOCK COMMON STOCK ADDITIONAL GAIN ON TOTAL
------------- ------------------ PAID-IN MARKETABLE RETAINED SHAREHOLDERS'
SHARES AMOUNT SHARES AMOUNT CAPITAL SECURITIES EARNINGS EQUITY
------ ------ ------- -------- ---------- ---------- -------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE, OCTOBER 1,
1993................... 550 $ 51 550 $ -- $ 1 $-- $1,301 $1,353
Net loss............... -- -- -- -- -- -- (37) (37)
Distributions.......... -- -- -- -- -- -- (33) (33)
--- ---- ------- -------- ---- ---- ------ ------
BALANCE, SEPTEMBER 30,
1994................... 550 51 550 -- 1 -- 1,231 1,283
Net income............. -- -- -- -- -- -- 429 429
Distributions.......... -- -- -- -- -- -- (21) (21)
Net unrealized gain on
marketable
securities............ -- -- -- -- -- 121 -- 121
--- ---- ------- -------- ---- ---- ------ ------
BALANCE, SEPTEMBER 30,
1995................... 550 51 550 -- 1 121 1,639 1,812
Net loss (unaudited)... -- -- -- -- -- -- 169 169
Distributions
(unaudited)........... -- -- -- -- -- -- (22) (22)
Net unrealized loss on
marketable securities
(unaudited)........... -- -- -- -- -- (16) -- (16)
--- ---- ------- -------- ---- ---- ------ ------
BALANCE, DECEMBER 31,
1995 (unaudited)....... 550 51 550 -- 1 105 1,786 1,943
Net loss (unaudited)... -- -- -- -- -- -- (232) (232)
Net unrealized loss on
marketable securities
(unaudited)........... -- -- -- -- -- (7) -- (7)
--- ---- ------- -------- ---- ---- ------ ------
BALANCE, MARCH 31, 1996
(unaudited)............ 550 $ 51 550 $ -- $ 1 $ 98 $1,554 $1,704
=== ==== ======= ======== ==== ==== ====== ======
</TABLE>

The accompanying notes are an integral part of these statements.

F-61
<PAGE>

THE RESPONSE CENTER, INC. AND THE TAB HOUSE, INC.

COMBINED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
FOR THE
THREE
FOR THE FISCAL YEAR MONTHS FOR THE SIX
ENDED ENDED MONTHS ENDED
SEPTEMBER 30 DECEMBER 31 MARCH 31
-------------------- ------------ -------------
1994 1995 1994 1995 1995 1996
--------- --------- ---- ------ ----- ------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (loss).......... $ (37) $ 429 $223 $ 169 $ 222 $ (63)
Adjustments to reconcile
net income to net cash
provided by operating
activities--
Depreciation and
amortization............ 43 48 16 12 28 30
Gain on sale of
marketable securities... (7) (22) -- (2) (16) (2)
Changes in operating
assets and
liabilities--
Accounts receivable..... 13 (165) 450 679 (47) 435
Prepaid expenses and
other.................. 41 (8) (12) (59) (19) (109)
Other assets............ (2) -- -- (25) -- 4
Accounts payable........ (202) (7) 35 21 35 78
Accrued expenses........ 219 (51) (42) (43) (74) (34)
Deferred revenue........ 43 (36) 94 223 1 190
--------- --------- ---- ------ ----- ------
Net cash provided by
(used in) operating
activities............ 111 188 764 975 130 529
--------- --------- ---- ------ ----- ------
INVESTING ACTIVITIES:
Purchases of marketable
securities.............. (93) -- -- (15) -- (15)
Proceeds on sales of
marketable securities... 73 67 -- 9 44 9
Purchases of property and
equipment............... (39) (23) (21) (51) (21) (142)
--------- --------- ---- ------ ----- ------
Net cash provided by
(used in) investing
activities............ (59) 44 (21) (57) 23 (148)
--------- --------- ---- ------ ----- ------
FINANCING ACTIVITIES:
Repayment of shareholder
loan.................... (160) -- -- -- -- --
Distributions paid....... (33) (22) (22) (22) (22) (22)
--------- --------- ---- ------ ----- ------
Net cash used in
financing activities.. (193) (22) (22) (22) (22) (22)
--------- --------- ---- ------ ----- ------
NET INCREASE (DECREASE) IN
CASH AND CASH
EQUIVALENTS............... (141) 210 721 896 131 359
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD....... 213 72 72 282 72 282
--------- --------- ---- ------ ----- ------
CASH AND CASH EQUIVALENTS,
END OF PERIOD............. $ 72 $ 282 $793 $1,178 $ 203 $ 641
========= ========= ==== ====== ===== ======
</TABLE>

The accompanying notes are an integral part of these statements.

F-62
<PAGE>

THE RESPONSE CENTER, INC. AND THE TAB HOUSE, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS

(INFORMATION AS OF DECEMBER 31, 1995 AND MARCH 31, 1996 AND FOR THE THREE
MONTHS ENDED DECEMBER 31, 1994 AND 1995 AND THE SIX MONTHS ENDED MARCH 31, 1995
AND 1996 IS UNAUDITED)

1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES:

INDUSTRY INFORMATION

The Response Center, Inc. and the Tab House, Inc. (collectively the
"Company") provide custom market research and analysis, principally to clients
in the telecommunications, financial services, pharmaceutical and healthcare
industries.

The accompanying financial statements reflect the combined financial position
and results of operations of The Response Center, Inc. and The Tab House, Inc.
The accompanying financial statements are presented on a combined basis, as The
Response Center, Inc. and The Tab House, Inc. are owned by the same
shareholders who have identical ownership in each entity. The financial
statements reflect the elimination of all significant intercompany accounts and
transactions.

REVENUE RECOGNITION AND CONCENTRATION OF CREDIT RISK

The Company recognizes revenues as services are performed for customers on a
per project basis. In fiscal 1994, 1995 and the three months ended December 31,
1995, the Company had one customer, which accounted for 36%, 27% and 24.6% of
revenues, and 24%, 27% and 20% of accounts receivable, respectively. The
Company expects total revenues for this customer to decline in fiscal 1996
versus 1995.

CASH AND CASH EQUIVALENTS

The Company maintains cash accounts which, at times, may exceed federally
insured limits. The Company has not experienced any losses from maintaining
cash accounts in excess of federally insured limits. The Company believes that
they are not exposed to any significant credit risks on their cash accounts.

MARKETABLE SECURITIES

During fiscal 1995, the Company began reporting marketable securities in
accordance with Statement of Financial Accounting Standards No. 115. All
securities have been classified as available-for-sale and reported at quoted
market value with net unrealized gains being reported as a separate component
of shareholders' equity. Prior to 1995, marketable securities were reported at
the lower of cost or market.

PROPERTY AND EQUIPMENT

Property and equipment are recorded at cost. Depreciation and amortization
are provided using the straight-line method over the estimated useful lives as
follows:

<TABLE>
<S> <C>
Computer and office equipment...... 5 years
Furniture and fixtures............. 7 years
Leasehold improvements............. The lessor of 6 years or the lease term.
</TABLE>

F-63
<PAGE>

THE RESPONSE CENTER, INC. AND THE TAB HOUSE, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AS OF DECEMBER 31, 1995 AND MARCH 31, 1996 AND FOR THE THREE
MONTHS ENDED DECEMBER 31, 1994 AND 1995 AND THE SIX MONTHS ENDED MARCH 31, 1995
AND 1996 IS UNAUDITED)

Expenditures for maintenance, repairs and betterments which do not prolong
the normal useful life of an asset have been charged to operations as incurred.
Additions and improvements which substantially extend the useful lives of the
properties are capitalized. Upon sale or other disposition of assets, the cost
and related accumulated depreciation and amortization are removed from the
respective accounts, and the resulting gain or loss, if any, is included in
income.

INCOME TAXES

The Company has elected to be taxed under Subchapter S of the Internal
Revenue Code. As a result, the Company is not subject to federal income taxes,
and the taxable income of the Company is included in the shareholders' tax
returns. The Company has also elected S Corporation status for state income tax
purposes. Therefore, no provision for federal and state income taxes has been
made in the accompanying financial statements.

The Company is on the cash basis of accounting for income tax purposes and on
the accrual basis for financial reporting purposes. Therefore, the Company
reports certain income and expense items for income tax purposes on a basis
different from that reflected in the accompanying financial statements. At
September 30, 1995, the Company's financial reporting basis of the net assets
exceeds the tax basis of the net assets by approximately $1,000,000. In the
event that the S Corporation is terminated, deferred income taxes applicable to
these differences would be reflected in the accompanying financial statements.

Given the pending sale of the business (see Note 6), for informational
purposes, the accompanying statements of income include an unaudited pro forma
adjustment for income taxes which would have been recorded if the Company had
not been an S Corporation, based on the tax laws in effect during the
respective periods. The differences between the federal statutory income tax
rate and the pro forma income tax rate primarily relates to state and local
income taxes and expenses not deductible for tax purposes.

FAIR VALUE OF FINANCIAL INSTRUMENTS

Cash, accounts receivable, accounts payable and accrued liabilities are
reflected in the financial statements at the fair value due to the short-term
nature of those instruments.

PERVASIVENESS OF ESTIMATES

INTERIM FINANCIAL STATEMENTS

The financial statements as of December 31, 1995 and March 31, 1996 and for
the three months ended December 31, 1994 and 1995 and for the six months ended
March 31, 1995 and 1996 are unaudited and, in the opinion of management of the
Company, include all adjustments (consisting only of normal recurring
adjustments) necessary for a fair presentation of the results for those interim
periods. The results of operations for the three months ended December 31, 1995
and the six months ended March 31, 1996 are not necessarily indicative of the
results to be expected for the full year.

401(K) PLAN

On October 1, 1991, the Company adopted a 401(k) plan for its employees (the
"Plan"). The Plan allows all participants to contribute a percentage of their
compensation with Company contributions. The Company contributed $10,000 and
$13,000 in fiscal 1994 and 1995, respectively.

F-64
<PAGE>

THE RESPONSE CENTER, INC. AND THE TAB HOUSE, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

INFORMATION AS OF DECEMBER 31, 1995 AND MARCH 31, 1996 AND FOR THE THREE MONTHS
ENDED DECEMBER 31, 1994 AND 1995 AND THE SIX MONTHS ENDED MARCH 31, 1995 AND
1996 IS UNAUDITED

2. MARKETABLE SECURITIES:

The Company adopted Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity Securities," (SFAS 115)
effective October 1, 1994. This statement requires the Company to classify its
investment securities as: (1) held-to-maturity, (2) available-for-sale or (3)
trading securities. At September 30, 1995, all of the Company's marketable
securities are classified as available for sale and reported at market value;
therefore, any unrealized holding gains or losses are presented as a separate
component of shareholders' equity. The cumulative effect of adopting SFAS 115
was an increase in shareholders' equity of $121,000.

In accordance with SFAS 115, the Company has not restated the financial
statements for prior years. For the year ended September 30, 1994, marketable
securities are carried at the lower of cost or market. The following is a
summary of available-for-sale securities as of September 30, 1995 (in
thousands):

<TABLE>
<CAPTION>
UNREALIZED UNREALIZED
HOLDING HOLDING MARKET
COST LOSSES GAINS VALUE
---- ---------- ---------- ------
<S> <C> <C> <C> <C>
Common stocks............................. $118 $ (6) $106 $218
Municipal bonds, maturity dates ranging
from 12/99 to 3/05....................... 59 -- 20 79
Mutual Funds.............................. 26 -- 1 27
---- ---- ---- ----
Total Marketable Securities............... $203 $ (6) $127 $324
==== ==== ==== ====
</TABLE>

During the year ended September 30, 1995 the Company sold marketable
securities in the amount of $103,000. Under the specific identification method,
the Company realized gains of $22,000 on these sales.

The following is a summary of available-for-sale securities as of September
30, 1994 (in thousands):

<TABLE>
<CAPTION>
UNREALIZED UNREALIZED
HOLDING HOLDING MARKET
COST LOSSES GAINS VALUE
---- ---------- ---------- ------
<S> <C> <C> <C> <C>
Common stocks............................. $148 $ (9) $ 77 $216
Municipal bonds, maturity dates ranging
from 12/99 to 3/05....................... 59 -- 12 71
Mutual Funds.............................. 41 (2) -- 39
---- ---- ---- ----
Total Marketable Securities............... $248 $(11) $ 89 $326
==== ==== ==== ====
</TABLE>

During the period ended September 30, 1994, the Company sold marketable
securities in the amount of $243,000. Under the specific identification method,
the Company realized gains of $17,000 on these sales.

F-65
<PAGE>

THE RESPONSE CENTER, INC. AND THE TAB HOUSE, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONCLUDED)

INFORMATION AS OF DECEMBER 31, 1995 AND MARCH 31, 1996 AND FOR THE THREE MONTHS
ENDED DECEMBER 31, 1994 AND 1995 AND THE SIX MONTHS ENDED MARCH 31, 1995 AND
1996 IS UNAUDITED

3. PROPERTY AND EQUIPMENT:

<TABLE>
<CAPTION>
DECEMBER MARCH
SEPTEMBER 30 31 31
---------------- -------- -----
1994 1995 1995 1996
------- ------- -------- -----
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Computer equipment......................... $ 161 $ 154 $ 180 $198
Furniture and office equipment............. 89 96 122 148
Leasehold improvements..................... 19 19 19 65
------- ------- ----- ----
269 269 321 411
Less--Accumulated depreciation and
amortization.............................. (105) (130) (143) (161)
------- ------- ----- ----
$ 164 $ 139 $ 178 250
======= ======= ===== ====
</TABLE>

Depreciation and amortization expense for the fiscal years ended September
30, 1994 and 1995 and the three months ended December 31, 1995 and March 31,
1996 was $43,000, $48,000, $12,000 and $18,000 respectively.

4. ACCRUED EXPENSES:

<TABLE>
<CAPTION>
SEPTEMBER 30 DECEMBER 31 MARCH 31
--------------- ----------- --------
1994 1995 1995 1996
------- ------- ----------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Accrued compensation and
related expenses.............. $ 115 $ 132 $123 $103
Accrued local taxes............ 19 30 30 30
Other accrued liabilities...... 192 113 80 108
------- ------- ---- ----
$ 326 $ 275 $233 $241
======= ======= ==== ====
</TABLE>

5. COMMITMENTS AND CONTINGENCIES:

The Company leases a facility and equipment. Such leases have terms which
extend through 2000. Rent expense for the fiscal years ended September 30, 1994
and 1995 and the three months ended December 31, 1995 was $157,000, $161,000
and $38,000 respectively.

Future minimum lease payments under the Company's leases as of September 30,
1995 are as follows (in thousands):

<TABLE>
<S> <C>
1996................................................................... $138
1997................................................................... 111
1998................................................................... 58
1999................................................................... 55
2000................................................................... 55
----
Total minimum lease payments........................................... $417
====
</TABLE>

6. SALE OF BUSINESS:

In April 1996, an asset purchase agreement was entered into among
TeleSpectrum Worldwide Inc. a wholly-owned subsidiary of CRW Financial, the
Company, and the shareholders of the Company whereby TeleSpectrum Worldwide
agreed to purchase substantially all of the net assets of the Company.

F-66
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To TeleSpectrum, Inc. and TeleSpectrum Training Services, Inc.:

We have audited the accompanying combined balance sheet of TeleSpectrum, Inc.
and TeleSpectrum Training Services, Inc. (Maryland corporations) as of December
31, 1995, and the related combined statements of income, stockholders' equity
and cash flows for the year then ended. These financial statements are the
responsibility of the Companies' management. Our responsibility is to express
an opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the combined financial position of TeleSpectrum, Inc.
and TeleSpectrum Training Services, Inc. as of December 31, 1995, and the
results of their operations and their cash flows for the year then ended, in
conformity with generally accepted accounting principles.

Arthur Andersen LLP
Philadelphia, Pa.,
April 17, 1996

(Except with respect to
the matter discussed in
paragraph one of Note 7,
as to which the date is
May 1, 1996)

F-67
<PAGE>

TELESPECTRUM, INC. AND TELESPECTRUM TRAINING SERVICES, INC.

COMBINED BALANCE SHEET

(IN THOUSANDS--EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
DECEMBER 31 MARCH 31
----------- -----------
1995 1996
----------- -----------
(UNAUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash................................................. $ 15 $ 402
Accounts receivable, net of reserves of $22 and $22.. 2,690 3,199
Due from shareholder/officer......................... 4 --
Prepaid expenses and other........................... 95 92
------ ------
Total current assets............................... 2,804 3,693
PROPERTY AND EQUIPMENT, net............................ 657 736
OTHER ASSETS........................................... 88 106
------ ------
Total assets....................................... $3,549 $4,535
====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Line of credit....................................... $1,350 $1,425
Current portion of long-term debt.................... 198 219
Accounts payable..................................... 498 566
Accrued compensation................................. 161 453
Deferred revenue..................................... 197 429
Other accrued expenses............................... 363 476
------ ------
Total current liabilities.......................... 2,767 3,568
------ ------
LONG-TERM DEBT AND OTHER NONCURRENT LIABILITIES........ 81 18
------ ------
DEFERRED TAXES......................................... 14 14
------ ------
COMMITMENTS AND CONTINGENCIES (Note 5)
STOCKHOLDERS' EQUITY:
Common stock, TeleSpectrum, Inc. $.01 par value,
5,000 shares authorized, 3,000 shares issued and
outstanding......................................... -- --
Common stock, TeleSpectrum Training Services, Inc. no
par value, 5,000 shares authorized, 200 shares
issued and outstanding.............................. 6 6
Additional paid-in capital........................... 217 217
Retained earnings.................................... 464 712
------ ------
Total stockholders' equity......................... 687 935
------ ------
Total liabilities and stockholders' equity......... $3,549 $4,535
====== ======
</TABLE>

The accompanying notes are an integral part of these statements.

F-68
<PAGE>

TELESPECTRUM, INC. AND TELESPECTRUM TRAINING SERVICES, INC.

COMBINED STATEMENT OF INCOME
(IN THOUSANDS)

<TABLE>
<CAPTION>
FOR THE THREE
MONTHS ENDED
MARCH 31
FOR THE YEAR ENDED --------------
DECEMBER 31, 1995 1995 1996
------------------ ------ ------
(UNAUDITED)
<S> <C> <C> <C>
REVENUES.................................... $11,854 $2,846 $3,725
------- ------ ------
OPERATING EXPENSES:
Cost of services.......................... 8,338 1,920 2,483
Selling, general and administrative
expenses................................. 3,072 805 951
------- ------ ------
Total operating expenses................ 11,410 2,725 3,434
------- ------ ------
Operating income........................ 444 121 291
INTEREST EXPENSE............................ (184) (4) (43)
------- ------ ------
Income before income taxes.............. 260 117 248
INCOME TAX BENEFIT.......................... 18 -- --
------- ------ ------
NET INCOME.................................. $ 278 $ 117 $ 248
======= ====== ======
PRO FORMA DATA (UNAUDITED)
Historical net income..................... $ 278 $ 117 $ 248
Pro forma provision for income taxes...... 112 46 97
------- ------ ------
Pro forma net income...................... $ 166 $ 71 $ 151
======= ====== ======
</TABLE>

The accompanying notes are an integral part of these statements.

F-69
<PAGE>

TELESPECTRUM, INC. AND TELESPECTRUM TRAINING SERVICES, INC.

COMBINED STATEMENT OF STOCKHOLDERS' EQUITY
(IN THOUSANDS--EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
COMMON STOCK
---------------------------------
TELESPECTRUM
TRAINING
TELESPECTRUM, SERVICES, ADDITIONAL TOTAL
INC. INC. PAID-IN RETAINED STOCKHOLDERS'
SHARES SHARES AMOUNT CAPITAL EARNINGS EQUITY
------------- ------------ ------ ---------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1,
1995................... 3,000 200 $ 6 $217 $186 $409
Net income............ -- -- -- -- 278 278
----- --- ---- ---- ---- ----
BALANCE, DECEMBER 31,
1995................... 3,000 200 6 217 464 687
----- --- ---- ---- ---- ----
Net income
(unaudited).......... -- -- -- -- 248 248
Distribution
(unaudited).......... -- -- -- -- -- --
----- --- ---- ---- ---- ----
BALANCE, MARCH 31, 1996
(unaudited)............ 3,000 200 $ 6 $217 $712 $935
===== === ==== ==== ==== ====
</TABLE>

The accompanying notes are an integral part of these statements.

F-70
<PAGE>

TELESPECTRUM, INC. AND TELESPECTRUM TRAINING SERVICES, INC.

COMBINED STATEMENT OF CASH FLOWS

(IN THOUSANDS)

<TABLE>
<CAPTION>
FOR THE THREE
MONTHS ENDED
MARCH 31
FOR THE YEAR ENDED --------------
DECEMBER 31, 1995 1995 1996
------------------ ------ ------
(UNAUDITED)
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income................................ $ 278 $ 117 $ 248
Adjustments to reconcile net income to net
cash used in operating activities--
Depreciation and amortization........... 343 86 83
Changes in operating assets and
liabilities--
Accounts receivable................... (679) (224) (509)
Due from stockholder/officer.......... 1 -- 4
Prepaid expenses and other............ (2) (10) 3
Other, net ........................... (114) (3) (43)
Deferred revenue...................... (205) (251) 232
Accounts payable and accrued
liabilities.......................... 374 118 473
----- ------ ------
Net cash used in operating
activities......................... (4) (167) 491
----- ------ ------
INVESTING ACTIVITIES:
Purchases of property and equipment....... (99) 87 (162)
----- ------ ------
Net cash used in investing
activities......................... (99) (87) (162)
----- ------ ------
FINANCING ACTIVITIES:
Net borrowings on line of credit.......... 807 158 75
Proceeds from notes payable............... -- -- 50
Principal payments on long-term debt and
capital leases........................... (852) (38) (67)
Bank overdraft............................ -- (29) --
----- ------ ------
Net cash used in financing
activities......................... (45) 91 58
----- ------ ------
NET (DECREASE) INCREASE IN CASH............. (148) (163) 387
CASH, BEGINNING OF PERIOD................... 163 163 15
----- ------ ------
CASH, END OF PERIOD......................... $ 15 $ -- $ 402
===== ====== ======
CASH PAID FOR:
Interest.................................. 182 46 43
===== ====== ======
Taxes..................................... 36 30 55
===== ====== ======
</TABLE>

The accompanying notes are an integral part of these statements.

F-71
<PAGE>

TELESPECTRUM, INC. AND TELESPECTRUM TRAINING SERVICES, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS
(INFORMATION AS OF MARCH 31, 1996 AND FOR THE THREE MONTHS ENDED MARCH 31, 1995
AND 1996 IS UNAUDITED)

1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES:

INDUSTRY INFORMATION

TeleSpectrum, Inc. and TeleSpectrum Training Services, Inc. (together the
"Company") specializes in providing both outbound and inbound telemarketing
services and fullfillment to the high technology, pharmaceutical and healthcare
and consumer products industries.

The financial statements reflect the combined financial position and results
of operations of TeleSpectrum, Inc. and TeleSpectrum Training Services, Inc.
The accompanying financial statements are presented on a combined basis, as
TeleSpectrum, Inc. and TeleSpectrum Training Services, Inc. are owned by the
same stockholders who have identical ownership in each entity. The financial
statements reflect the elimination of all significant intercompany accounts and
transactions.

REVENUE RECOGNITION AND CONCENTRATION OF CREDIT RISK

The Company recognizes revenues on programs as services are performed for the
clients, generally based upon hours incurred. In 1995 and the three months
ended March 31, 1996, the Company had one client which accounted for
approximately 12% and 21% of revenues and 15% and 19% of accounts receivable,
respectively.

PROPERTY AND EQUIPMENT

Expenditures for maintenance, repairs and betterments which do not prolong
the normal useful life of an asset have been charged to operations as incurred.
Additions and betterments which substantially extend the useful life of the
properties are capitalized. Upon sale or other disposition of assets, the cost
and related accumulated depreciation and amortization are removed from the
respective accounts, and the resulting gain or loss, if any, is included in
income.

INCOME TAXES

TeleSpectrum, Inc. elected to be taxed as an S Corporation under the
provisions of the federal and state statutes. In lieu of federal and state
corporate income taxes, the stockholders are taxed on their proportionate share
of the Company's taxable income. Accordingly, no provision for federal or state
income taxes was recorded for the year ended December 31, 1995 or the three
months ended March 31, 1996.

The Company reports certain income and expense items for income tax purposes
on a basis different from that reflected in the accompanying financial
statements. The principal differences relate to the timing of the recognition
of accrued expenses which are not deductible for federal income tax purposes
until paid and the use of accelerated methods of depreciation for income tax
purposes. At December 31, 1995, the financial reporting basis of the Company's
net assets exceeds the tax basis of the net assets by approximately $140,000.
In the event that the S Corporation is terminated, deferred income taxes
applicable to these differences would be reflected in the accompanying
financial statements.

F-72
<PAGE>

TELESPECTRUM, INC. AND TELESPECTRUM TRAINING SERVICES, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
INFORMATION AS OF MARCH 31, 1996 AND FOR THE THREE MONTHS ENDED MARCH 31, 1995
AND 1996 IS UNAUDITED

differences between the federal statutory income tax rate and the pro forma
income tax rate primarily related to state and local income taxes and expenses
not deductible for tax purposes.

TeleSpectrum Training Services, Inc. is a C Corporation and follows the
provisions of Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes." This standard requires an asset and liability approach to
the recognition of deferred tax assets and liabilities related to the expected
future consequences of events that have been recognized in the financial
statements or tax returns.

TeleSpectrum Training Services, Inc. has recorded $14,000 of long-term
deferred tax liabilities as of December 31, 1995 and March 31, 1996. This
amount relates principally to differences between the accelerated depreciation
methods used for income tax purposes and those used for financial reporting
purposes.

The (benefit) for income taxes for TeleSpectrum Training Services, Inc. is
comprised of the following (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31 MARCH 31
1995 1996
----------- --------
<S> <C> <C>
Current................................................... $ 2 $--
Deferred.................................................. (20) --
---- ----
Total benefit........................................... $(18) $--
==== ====
</TABLE>

FAIR VALUE OF FINANCIAL INSTRUMENTS

Cash, accounts receivable, accounts payable and accrued liabilities are
reflected in the financial statements at fair value due to the short-term
nature of those instruments. The carrying amounts of line of credit, long-term
debt and capital lease obligations approximate fair value at the balance sheet
dates.

PERVASIVENESS OF ESTIMATES

INTERIM FINANCIAL STATEMENTS

2. PROPERTY AND EQUIPMENT (IN THOUSANDS--EXCEPT USEFUL LIFE DATA):

<TABLE>
<CAPTION>
DECEMBER 31 MARCH 31
USEFUL ----------- --------
LIVES 1995 1996
------ ----------- --------
<S> <C> <C> <C>
Telemarketing equipment......................... 5- 7 $ 825 $ 889
Furniture and office equipment.................. 3- 5 1,221 1,319
Leasehold Improvements.......................... 3-10 91 91
------- -------
2,137 2,299
Less--Accumulated depreciation and
amortization................................... (1,480) (1,563)
------- -------
$ 657 $ 736
======= =======
</TABLE>

F-73
<PAGE>

TELESPECTRUM, INC. AND TELESPECTRUM TRAINING SERVICES, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
INFORMATION AS OF MARCH 31, 1996 AND FOR THE THREE MONTHS ENDED MARCH 31, 1995
AND 1996 IS UNAUDITED
Depreciation expense for the year ended December 31, 1995 and the three
months ended March 31, 1996, was $343,000 and $83,000, respectively.

3. LINE OF CREDIT:

The Company has a $1.75 million line of credit with a bank, with interest at
the bank's prime rate plus 2.5% (11% at December 31, 1995). At December 31,
1995, the balance of this line was $1.35 million. Interest expense on
borrowings under this line of credit amounted to $127,000 during 1995 and
$34,000 during the three months ended March 31, 1996.

The line of credit agreement contains certain financial covenants which
require, among other things, the Company to maintain a minimum net worth and
minimum ratios with respect to net worth and cash flow to debt service. As of
December 31, 1995, the Company had not met its minimum net worth covenant. In
May 1995, the Company entered into a forbearance agreement with the bank (see
Note 4) which expires on May 31, 1996. (See Note 7).

4. LONG-TERM DEBT (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1995 1996
------------ ---------
<S> <C> <C>
Note payable to bank (see Note 3), interest at the
bank's prime rate plus 2%, monthly principal payments
of $13,000 plus interest, maturing July 1996,
collateralized by all assets of the Company; eighty
percent (80%) guaranteed by the United States Small
Business Administration (SBA); personally guaranteed by
the Company's officers................................. $ 91 $ 52
Note payable, interest at 15%, monthly principal and
interest payments of $2,000, maturing October 1997,
guaranteed by an officer of the
company................................................ 38 37
Note payable, interest at 22%, maturing June 1996,
guaranteed by an officer of the Company................ -- 50
Capitalized lease obligations (Note 5).................. 126 98
----- ----
255 237
Less--Current portion................................... (198) (219)
----- ----
$ 57 $ 18
===== ====
</TABLE>

Minimum principal repayments of long-term debt as of December 31, 1995,
excluding capitalized lease obligations, are as follows (in thousands):

<TABLE>
<S> <C>
1996.................................................................... $110
1997.................................................................... 19
----
$129
====
</TABLE>
5. COMMITMENTS AND CONTINGENCIES:

F-74
<PAGE>

TELESPECTRUM, INC. AND TELESPECTRUM TRAINING SERVICES, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
INFORMATION AS OF MARCH 31, 1996 AND FOR THE THREE MONTHS ENDED MARCH 31, 1995
AND 1996 IS UNAUDITED
The Company leases facilities and equipment at several locations. Rent
expense under operating leases for the year ended December 31, 1995 and the
three months ended March 31, 1996 was $264,000 and $69,000, respectively.

Future minimum lease payments under the Company's leases as of December 31,
1995 are as follows (in thousands):

<TABLE>
<CAPTION>
OPERATING CAPITAL
LEASES LEASES
--------- -------
<S> <C> <C>
1996...................................................... $ 395 $ 99
1997...................................................... 447 36
1998...................................................... 441 4
1999...................................................... 382 --
2000...................................................... 19 --
------ ----
Total minimum lease payments.............................. $1,684 139
======
Less--Amount representing interest........................ (13)
----
Present value of future minimum lease payments............ 126
Less--Current portion..................................... (88)
----
$ 38
====
</TABLE>

6. SALE OF BUSINESS:

In April 1996, an asset purchase agreement was entered into among CRW
Financial, Inc. ("CRW"), the Company and the shareholders of the Company
whereby TeleSpectrum Worldwide Inc., a wholly-owned subsidiary of CRW, agreed
to purchase substantially all of the net assets of the Company.

7. SUBSEQUENT EVENTS:

Effective May 1, 1996, a financial institution issued a commitment letter to
the Company to establish a $4 million revolving line of credit with interest at
the bank's prime rate plus 1 1/2%. This revolving credit facility is to be used
for refinancing of existing debt, working capital purposes and capital
expenditure purposes. This credit facility contains a financial covenant which
requires the Company to maintain interest coverage, defined as earnings before
interest, taxes and depreciation divided by interest expense, at a minimum of 3
to 1 on a quarterly basis.

Upon signing the asset purchase agreement (see Note 6), CRW advanced the
Company $500,000 in the form of a promissory note due one year from the date
the proceeds are received with interest at 9%. Upon the closing of the
transaction, a portion of the purchase price will be paid by cancellation of
the promissory note.

Effective April 21, 1996, the Anne Arundel Economic Development Corporation
issued a three year loan to the Company for $250,000 with interest at 12%,
subject to adjustment each year on January 1. This loan is to be used to
acquire operating equipment and for working capital purposes. The Company will
be required to make monthly principal and interest payments of $8,300.

F-75
<PAGE>

The inside back cover depicts two flow charts. The first flow chart is
entitled "Inbound Process" and describes the inbound process using the following
text:
Customer Device Product or Service or House Questions
Response Via
Phone, Mail, Internet
Connect With
Telespectrum Representative
Who
Collects, Verifies, and enhances Data and Interfaces with
External Customer Database
Client Needs Met Through
Fulfillment, E-Mail, Internet
Phone Call Back, Customer Satisfied, Client Reports

The second flow chart is entitled "Outbound Process" and describes the
outbound process using the following text:

Product/Service Offering
Generate List & Conduct Market Research to Segment List
Ongoing Database Management to Adjust Offering
Outbound Autodialing by Telespectrum Representative to Reach Customers
Customer Says Yes or Customer Says No
Quality Control
Fulfill/Take Orders or Capture Why
Update Master File/Generate Reports for Client

The back cover depicts the Company logo above the words "Telespectrum
Worldwide, Inc."
<PAGE>

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth fees payable to the Securities and Exchange
Commission and the National Association of Securities Dealers, Inc., and other
estimated expenses expected to be incurred in connection with issuance and
distribution of securities being registered. All such fees and expenses shall
be paid by the Company.

<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee........... $ 74,555
NASD Fee...................................................... 22,121
Nasdaq National Market Listing Fee............................ 50,000
Printing and Engraving Expenses............................... *
Accounting Fees and Expenses.................................. *
Legal Fees and Expenses....................................... *
Blue Sky Qualification Fees and Expenses...................... *
Transfer Agent Fees and Expenses.............................. *
Miscellaneous................................................. *
----------
Total....................................................... $2,100,000
==========
</TABLE>
- --------
*To be filed by amendment

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 102(b)(7) of the Delaware General Corporation Law (the "DGCL")
permits a corporation, in its certificate of incorporation, to limit or
eliminate, subject to certain statutory limitations, the liability of
directors to the corporation or its stockholders for monetary damages for
breaches of fiduciary duty, except for liability (a) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (b) for
acts or omissions not in good faith or which involve intentional misconduct or
a knowing violation of law, (c) under Section 174 of the DGCL, or (d) for any
transaction from which the director derived and improper personal benefit.
Article 7 of the registrant's Certificate of Incorporation provides that the
personal liability of directors of the registrant is eliminated to the fullest
extent permitted by Section 102(b)(7) of the DGCL.

Under Section 145 of the DGCL, a corporation has the power to indemnify
directors and officers under certain prescribed circumstances and subject to
certain limitations against certain costs and expenses, including attorneys'
fees actually and reasonably incurred in connection with any action, suit or
proceeding, whether civil, criminal, administrative or investigative, to which
any of them is a party by reason of being a director or officer of the
corporation if it is determined that the director of officer acted in
accordance with the applicable standard of conduct set forth in such statutory
provision. Article 7 of the registrant's Bylaws provides that the registrant
will indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding by
reason of the fact that he is or was a director, officer, employee or agent of
the registrant, or is or was serving at the request of the registrant as a
director, officer, employee or agent of another entity, against certain
liabilities, costs and expenses. Article 7 further permits the registrant to
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the registrant, or is or was serving at the request of
the registrant as a director, officer, employee or agent of another entity,
against any liability asserted against such person and incurred by such person
in any such capacity or arising out of his status as such, whether or not the
registrant would have the power to indemnify such person against such
liability under the DGCL. The registrant maintains directors' and officers'
liability insurance.

Under Section 9 of the Underwriting Agreement, the Underwriters are
obligated, under certain circumstances, to indemnify directors and officers of
the registrant against certain liabilities, including liabilities under the
Securities Act. Reference is made to the form of Underwriting Agreement filed
as Exhibit 1.01 hereto.

II-1
<PAGE>

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

On April 29, 1996, the registrant sold 8,510,137 shares of its common stock
(after giving effect to a 8.510137-to-1 stock split effected through a stock
dividend paid to stockholders of record on May 22, 1996) to CRW Financial,
Inc. in an organizational subscription for aggregate cash consideration of
$10,000. The transaction was intended to be exempt from the registration
requirements of the Securities Act of 1933, as amended, by virtue of Section
4(2) thereof.

On May 22, 1996, the registrant entered into an Amended and Restated Asset
Purchase Agreement with Harris Direct Marketing Inc., Harris Fulfillment Inc.,
Bruce M. Schorle and Edward M. Idzik, pursuant to which the registrant has
agreed to issue 202,192 shares of its Common Stock and warrants to purchase
60,900 shares, as partial consideration for the purchase by the registrant of
all of the net assets of the "Harris Operating Business" (as defined in the
Prospectus which forms a part of this registration statement (the
"Prospectus")). Pursuant to the Amended and Restated Asset Purchase Agreement,
the Company has agreed to grant 26,100 stock options to certain employees of
this Operating Business following consummation of the asset purchase. The
transaction was intended to be exempt from the registration requirements of
the Securities Act of 1933, as amended, by virtue of Section 4(2) thereof.

On May 22, 1996, the registrant entered into an Amended and Restated Asset
Purchase Agreement with Dial Direct, Inc., Insure Direct, Inc., Dial Direct
Telemarketing, Ltd., TRG/Communication, Inc., The Reich Group, Inc. and Morton
M. Reich, pursuant to which the registrant has agreed to issue 441,468 shares
of its Common Stock and warrants to purchase 105,000 shares as partial
consideration for the purchase by the registrant of all of the net assets of
the "Reich Operating Business" (as defined in the Prospectus). Pursuant to the
Amended and Restated Asset Purchase Agreement, the Company has agreed to grant
45,000 stock options to certain employees of this Operating Business following
consummation of the asset purchase. The transaction was intended to be exempt
from the registration requirements of the Securities Act of 1933, as amended,
by virtue of Section 4(2) thereof.

On May 22, 1996 the registrant entered into an Amended and Restated Asset
Purchase Agreement with TeleSpectrum, Inc., TeleSpectrum Training Services,
Inc., Karen Schweitzer and Sherry Paterra, pursuant to which the registrant
has agreed to issue 176,587 shares of its Common Stock and warrants to
purchase 44,100 shares as partial consideration for the purchase by the
registrant of all of the net assets of the "TeleSpectrum Operating Business"
(as defined in the Prospectus). Pursuant to the Amended and Restated Asset
Purchase Agreement, the Company has agreed to grant 18,900 stock options to
certain employees of this Operating Business following consummation of the
asset purchase. The transaction was intended to be exempt from the
registration requirements of the Securities Act of 1933, as amended, by virtue
of Section 4(2) thereof.

On May 22, 1996, the registrant entered into an Amended and Restated Asset
Purchase Agreement with SOMAR, Inc., and Richard W. Virtue, pursuant to which
the registrant has agreed to issue 2,207,340 shares of its Common Stock and
warrants to purchase 210,000 shares as partial consideration for the purchase
by the registrant of all of the net assets of the "SOMAR Operating Business"
(as defined in the Prospectus). Pursuant to the Amended and Restated Asset
Purchase Agreement, the Company has agreed to grant 90,000 stock options to
certain employees of this Operating Business following consummation of the
asset purchase. The transaction was intended to be exempt from the
registration requirements of the Securities Act of 1933, or amended, by virtue
of Section 4(2) thereof.

On May 22, 1996, the registrant entered into an Amended and Restated Asset
Purchase Agreement with the Response Center, Inc., The Tab House, Inc.,
Patrick M. Baldasare, Richard Raquet and Edward Olesky, pursuant to which the
registrant has agreed to issue 256,051 shares of its Common Stock and warrants
to purchase 60,900 shares as partial consideration for the purchase by the
registrant of all of the net assets of "The Response Center Operating
Business" (as defined in the Prospectus). Pursuant to the Amended and Restated
Asset Purchase Agreement, the Company has agreed to grant 26,100 stock options
to certain employees of this Operating Business following consummation of the
asset purchase. The transaction was intended to be exempt from the
registration requirements of the Securities Act of 1933, or amended, by virtue
of Section 4(2) thereof.

II-2
<PAGE>

On May 22, 1996, the registrant entered into an Amended and Restated Asset
Purchase Agreement with NBG Services, Inc., William F. Rhatigan and Michael J.
Gallant, pursuant to which the registrant has agreed to issue 1,120,225 shares
of its Common Stock and warrants to purchase 112,500 shares as partial
consideration for the purchase by the registrant of all of the net assets of
the "NBG Operating Business" (as defined in the Prospectus). Pursuant to the
Amended and Restated Asset Purchase Agreement, the Company has agreed to grant
75,000 stock options to certain employees of this Operating Business following
consummation of the asset purchase. The transaction was intended to be exempt
from the registration requirements of the Securities Act of 1933, as amended,
by virtue of Section 4(2) thereof.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) The following exhibits are filed as part of this registration statement:

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
1.01 Form of Underwriting Agreement.
3.01 Restated Certificate of Incorporation of TeleSpectrum Worldwide Inc.
(to be filed by amendment).
3.02 Bylaws of TeleSpectrum Worldwide Inc.*
5.01 Opinion of Morgan, Lewis & Bockius LLP as to the legality of the
securities being registered (to be filed by amendment).
10.01 Asset Purchase Agreement, dated as of April 4, 1996, supplemented
April 6, 1996 and amended and restated as of May 22, 1996, by and
among CRW Financial, Inc., TeleSpectrum Worldwide Inc., Harris
Direct Marketing, Inc., Harris Fulfillment, Inc., Bruce M. Schorle
and Edward M. Idzik.*
10.02 Asset Purchase Agreement, dated as of April 5, 1996 and amended and
restated as of May 22, 1996, by and among CRW Financial, Inc.,
TeleSpectrum Worldwide Inc., DialDirect, Inc., InsureDirect, Inc.,
DialDirect Telemarketing, Ltd., TRG/Communications, Inc., The Reich
Group, Inc. and Morton M. Reich.*
10.03 Asset Purchase Agreement, dated as of April 10, 1996 and amended and
restated as of May 22, 1996, by and among CRW Financial, Inc.,
TeleSpectrum Worldwide Inc., TeleSpectrum, Inc., TeleSpectrum
Training Services, Inc., Karen Schweitzer and Sherry Paterra.*
10.04 Asset Purchase Agreement, dated as of April 26, 1996 and amended and
restated as of May 22, 1996, by and among SOMAR, Inc., Richard W.
Virtue, CRW Financial, Inc. and TeleSpectrum Worldwide Inc.*
10.05 Asset Purchase Agreement, dated as of April 30, 1996 and amended and
restated as of May 22, 1996, by and among TeleSpectrum Worldwide
Inc., The Response Center, Inc., The Tab House, Inc., Patrick M.
Baldasare, Richard Raquet and Edward Olesky.*
10.06 Asset Purchase Agreement, dated as of May 3, 1996 and amended and
restated as of May 22, 1996, by and among TeleSpectrum Worldwide
Inc., CRW Financial, Inc., NBG Services, Inc., William F. Rhatigan
and Michael J. Gallant.*
10.07 Form of Employment Agreement to be entered into among TeleSpectrum
Worldwide Inc., CRW Financial, Inc., Edward M. Idzik.*
10.08 Form of Employment Agreement to be entered into among TeleSpectrum
Worldwide Inc., CRW Financial Inc. and Karen Schweitzer.*
10.09 Form of Employment Agreement to be entered into among TeleSpectrum
Worldwide Inc., CRW Financial, Inc. and Morton M. Reich.*
10.10 Form of Employment Agreement to be entered into among TeleSpectrum
Worldwide Inc., CRW Financial, Inc., Patrick M. Baldasare.*
10.11 Form of Employment Agreement to be entered into among TeleSpectrum
Worldwide Inc., CRW Financial, Inc., and Gregory M. Alcorn.*
10.12 Form of Employment Agreement to be entered into among TeleSpectrum
Worldwide Inc., CRW Financial, Inc., and Michael J. Gallant.*
</TABLE>
- --------

*Previously filed.

II-3
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.13 Form of Employment Agreement to be entered into between TeleSpectrum
Worldwide Inc. and William F. Rhatigan.*
10.14 Form of Consulting Agreement to be entered into between TeleSpectrum
Worldwide Inc. and Richard W. Virtue.*
10.15 Employment Agreement to be entered into between TeleSpectrum
Worldwide Inc. and J. Brian O'Neill (to be filed by amendment).
10.16 Employment Agreement to be entered into between TeleSpectrum
Worldwide Inc. and Michael C. Boyd (to be filed by amendment).
10.17 Employment Agreement to be entered into between TeleSpectrum
Worldwide Inc. Richard C. Schwenk, Jr. (to be filed by amendment).
10.18 TeleSpectrum Worldwide Inc. 1996 Equity Compensation Plan (to be
filed by amendment).
23.01 Consent of Arthur Andersen LLP.
23.02 Consent of Morgan, Lewis & Bockius LLP (included in opinion filed as
Exhibit 5.01) (to be filed by amendment).
24.01 Power of Attorney.*
27.01 Financial Data Schedule.*
99.01 Consent of William F. Rhatigan as a person named to become a
director.*
99.02 Consent of Richard W. Virtue as a person named to become a
director.*
</TABLE>
- --------

*Previously filed.

(b) Financial statement schedules have been omitted because they are
inapplicable, are not required under applicable provisions of Regulation S-X,
or the information that would otherwise be included in such schedules is
contained in the registrant's financial statements or accompanying notes.

ITEM 17. UNDERTAKINGS.

The undersigned registrant hereby undertakes to provide to the underwriter
at the closing specified in the underwriting agreements certificates in such
denominations and registered in such names as required by the underwriter to
permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registrations statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

II-4
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this amendment to registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of
Philadelphia, Commonwealth of Pennsylvania, on June 28, 1996.

TeleSpectrum Worldwide Inc.

/s/ J. Brian o'Neill
By: _________________________________
J. Brian O'Neill
Chairman of the Board and
Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this amendment to
registration statement has been signed by the following persons in the
capacities and on the dates indicated.

SIGNATURE CAPACITY DATE
- --------- -------- ----

Chairman of the Board
/s/ J. Brian O'Neill and Chief Executive June 28, 1996
- ------------------------- Officer and a Director
J. Brian O'Neill (Principal Executive
Officer)

President and Chief
* Operating Officer and a June 28, 1996
- ------------------------- Director
Michael C. Boyd

Chief Financial Officer
* (Principal Financial June 28, 1996
- ------------------------- and Accounting Officer)
Richard C. Schwenk, Jr.

* Director June 28, 1996
- -------------------------
Mark J. DeNino

/s/ J. Brian O'Neill

*By
-------------------------------------

J. Brian O'Neill, Attorney-in-Fact,
pursuant to powers of attorney
previously filed as part of this
registration statement.

II-5
<PAGE>

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
1.01 Form of Underwriting Agreement.
3.01 Restated Certificate of Incorporation of TeleSpectrum Worldwide Inc.
(to be filed by amendment).
3.02 Bylaws of TeleSpectrum Worldwide Inc. (to be filed by amendment)
5.01 Opinion of Morgan, Lewis & Bockius LLP as to the legality of the
securities being registered (to be filed by amendment).
10.01 Asset Purchase Agreement, dated as of April 4, 1996, supplemented
April 6, 1996 and amended and restated as of May 22, 1996, by and
among CRW Financial, Inc., TeleSpectrum Worldwide Inc., Harris
Direct Marketing, Inc., Harris Fulfillment, Inc., Bruce M. Schorle
and Edward M. Idzik.*
10.02 Asset Purchase Agreement, dated as of April 5, 1996 and amended and
restated as of May 22, 1996, by and among CRW Financial, Inc.,
TeleSpectrum Worldwide Inc., DialDirect, Inc., InsureDirect, Inc.,
DialDirect Telemarketing, Ltd., TRG/Communications, Inc., The Reich
Group, Inc. and Morton M. Reich.*
10.03 Asset Purchase Agreement, dated as of April 10, 1996 and amended and
restated as of May 22, 1996, by and among CRW Financial, Inc.,
TeleSpectrum Worldwide Inc., TeleSpectrum, Inc., TeleSpectrum
Training Services, Inc., Karen Schweitzer and Sherry Paterra.*
10.04 Asset Purchase Agreement, dated as of April 26, 1996 and amended and
restated as of May 22, 1996, by and among SOMAR, Inc., Richard W.
Virtue, CRW Financial, Inc. and TeleSpectrum Worldwide Inc.*
10.05 Asset Purchase Agreement, dated as of April 30, 1996 and amended and
restated as of May 22, 1996, by and among TeleSpectrum Worldwide
Inc., The Response Center, Inc., The Tab House, Inc., Patrick M.
Baldasare, Richard Raquet and Edward Olesky.*
10.06 Asset Purchase Agreement, dated as of May 3, 1996 and amended and
restated as of May 22, 1996, by and among TeleSpectrum Worldwide
Inc., CRW Financial, Inc., NBG Services, Inc., William F. Rhatigan
and Michael J. Gallant.*
10.07 Form of Employment Agreement to be entered into among TeleSpectrum
Worldwide Inc., CRW Financial, Inc., Edward M. Idzik.*
10.08 Form of Employment Agreement to be entered into among TeleSpectrum
Worldwide Inc., CRW Financial Inc. and Karen Schweitzer.*
10.09 Form of Employment Agreement to be entered into among TeleSpectrum
Worldwide Inc., CRW Financial, Inc. and Morton M. Reich.*
10.10 Form of Employment Agreement to be entered into among TeleSpectrum
Worldwide Inc., CRW Financial, Inc., Patrick M. Baldasare.*
10.11 Form of Employment Agreement to be entered into among TeleSpectrum
Worldwide Inc., CRW Financial, Inc., and Gregory M. Alcorn.*
10.12 Form of Employment Agreement to be entered into among TeleSpectrum
Worldwide Inc., CRW Financial, Inc., and Michael J. Gallant.*
10.13 Form of Employment Agreement to be entered into between TeleSpectrum
Worldwide Inc. and William F. Rhatigan.*
10.14 Form of Consulting Agreement to be entered into between TeleSpectrum
Worldwide Inc. and Richard W. Virtue.*
10.15 Employment Agreement to be entered into between TeleSpectrum
Worldwide Inc. and J. Brian O'Neill (to be filed by amendment).
10.16 Employment Agreement to be entered into between TeleSpectrum
Worldwide Inc. and Michael C. Boyd (to be filed by amendment).
10.17 Employment Agreement to be entered into between TeleSpectrum
Worldwide Inc. Richard C. Schwenk, Jr. (to be filed by amendment).
10.18 TeleSpectrum Worldwide Inc. 1996 Equity Compensation Plan (to be
filed by amendment).
23.01 Consent of Arthur Andersen LLP.
23.02 Consent of Morgan, Lewis & Bockius LLP (included in opinion filed as
Exhibit 5.01) (to be filed by amendment).
24.01 Power of Attorney (included on signature page of this registration
statement).
27.01 Financial Data Schedule.*
99.01 Consent of William F. Rhatigan as a person named to become a
director.*
99.02 Consent of Richard W. Virtue as a person named to become a
director.*
</TABLE>
- --------

* Previously filed.

<PAGE>

TeleSpectrum Worldwide Inc.

Shares of Common Stock
-----------

Underwriting Agreement

, 1996
--------------------

J.P. Morgan Securities Inc.
Dillon, Read & Co. Inc.
Legg Mason Wood Walker, Incorporated
The Robinson-Humphrey Company, Inc.
As Representatives of the several underwriters
listed in Schedule I hereto
c/o J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260

Ladies and Gentlemen:

TeleSpectrum Worldwide Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to the several Underwriters listed in Schedule I
hereto (the "Underwriters"), for whom you are acting as representatives (the
"Representatives") an aggregate of shares of common stock, par value
-----------
$ per share, of the Company (the "Underwritten Company Shares") and, for the
---
sole purpose of covering over-allotments in connection with the sale of the
Underwritten Shares, at the option of the Underwriters, up to an additional
shares of common stock, par value $ per share, of the Company (the
- -------- ---
"Option Shares"). SOMAR Inc. and NBG Services, Inc. (the "Selling
Stockholders") propose to sell to the several Underwriters and
----------
shares, respectively, of common stock par value $ per share, of
- ---------- ---
the Company (the "Selling Stockholder Underwritten Shares" and together with the
Underwritten Company Shares, the "Underwritten Shares"). The Underwritten
Shares and the Option Shares are herein referred to as the "Shares." The shares
of common stock, par value $ per share, of the Company to be outstanding after
--
giving effect to the sale of the Shares are herein referred to as the "Stock".
The Company has entered into the Amended and Restated Asset Purchase Agreements
identified on Exhibit B attached hereto (the "Acquisition Agreements") with each
of Harris Direct Marketing, Inc., Harris Direct Fulfillment, Inc., DialDirect,
Inc., InsureDirect, Inc., DialDirect Telemarketing, Ltd., TRG/Communications,
Inc., The Reich Group, Inc., TeleSpectrum, Inc., TeleSpectrum Training Services,
Inc., SOMAR, Inc., The Response Center, Inc., The Tab House, Inc. and NBG
Services, Inc. (together, the "Sellers") to purchase substantially all of their
assets (the "Operating Businesses") simultaneous with the closing of the sale of
the Underwritten
<PAGE>

Shares (the "Acquisitions"). For the purposes of this Agreement, unless the
context expressly otherwise requires, references to the Company and its
subsidiaries shall include the Operating Businesses as if the Acquisitions have
been completed.

The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Securities Act"), a registration
statement, including a prospectus, relating to the Shares. The registration
statement as amended at the time when it shall become effective or, if a post-
effective amendment is filed with respect thereto, as amended by such post-
effective amendment at the time of its effectiveness, including in each case
information (if any) deemed to be part of the registration statement at the time
of effectiveness pursuant to Rule 430A under the Securities Act, is referred to
in this Agreement as the "Registration Statement", and the prospectus in the
form first used to confirm sales of Shares is referred to in this Agreement as
the "Prospectus". If the Company has filed an abbreviated registration
statement pursuant to Rule 462(b) under the Securities Act (the "Rule 462
Registration Statement"), then any reference herein to the term "Registration
Statement" shall be deemed to include such Rule 462 Registration Statement.

The Company and the Selling Stockholders hereby agree with the
Underwriters as follows:

1. The Company agrees to issue and sell the Underwritten Company
Shares to the several Underwriters as hereinafter provided, and each
Underwriter, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agrees to purchase,
severally and not jointly, from the Company the respective number of
Underwritten Company Shares set forth opposite such Underwriter's name in
Schedule I hereto at a purchase price per share (the "Purchase Price") of
$ .
------------
The Selling Stockholders agree to sell the Underwritten Selling
Stockholder Shares to the several Underwriters as hereinafter provided, and each
Underwriter, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated agrees to purchase,
severally and not jointly, from the Selling Stockholders the respective number
of Underwritten Selling Stockholder Shares set forth opposite such Underwriter's
name in Schedule I hereto at the Purchase Price.

In addition, the Company agrees to issue and sell the Option Shares to
the several Underwriters as hereinafter provided, and the Underwriters on the
basis of the representations and

-2-
<PAGE>

warranties herein contained, but subject to the conditions hereinafter stated,
shall have the option to purchase, severally and not jointly, from the Company
up to an aggregate of Option Shares at the Purchase Price, for the sole
--------
purpose of covering over-allotments (if any) in the sale of Underwritten Shares
by the several Underwriters.

If any Option Shares are to be purchased, the number of Option Shares
to be purchased by each Underwriter shall be the number of Option Shares which
bears the same ratio to the aggregate number of Option Shares being purchased as
the number of Underwritten Shares set forth opposite the name of such
Underwriter in Schedule I hereto (or such number increased as set forth in
Section 11 hereof) bears to the aggregate number of Underwritten Shares being
purchased from the Company by the several Underwriters, subject, however, to
such adjustments to eliminate any fractional Shares as the Representatives in
their sole discretion shall make.

The Underwriters may exercise the option to purchase the Option Shares
at any time (but not more than once) on or before the thirtieth day following
the date of this Agreement, by written notice from the Representatives to the
Company. Such notice shall set forth the aggregate number of Option Shares as
to which the option is being exercised and the date and time when the Option
Shares are to be delivered and paid for which may be the same date and time as
the Closing Date (as hereinafter defined) but shall not be earlier than the
Closing Date nor later than the tenth full Business Day (as hereinafter defined)
after the date of such notice (unless such time and date are postponed in
accordance with the provisions of Section 11 hereof). Any such notice shall be
given at least two Business Days prior to the date and time of delivery
specified therein.

2. The Company and the Selling Stockholders understand that the
Underwriters intend (i) to make a public offering of the Shares as soon after
(A) the Registration Statement has become effective and (B) the parties hereto
have executed and delivered this Agreement, as in the judgment of the
Representatives is advisable and (ii) initially to offer the Shares upon the
terms set forth in the Prospectus.

3. Payment for the Company Underwritten Shares shall be made to the
Company and payment for the Selling Stockholder Underwritten Shares shall be
made to the Selling Stockholders, in each case, by wire transfer in immediately
available funds to the accounts specified by the Company and the Selling
Stockholders, respectively, to the Representatives, no later than noon the
Business Day (as defined below) prior to the Closing Date (as defined below), on
, 19 , or at such other time on the same or such other date,
- ---------------- --
not later than the fifth Business Day thereafter, as the Representatives, the
Company and the

-3-
<PAGE>

Selling Stockholders may agree upon in writing or, in the case of the Option
Shares, on the date and time specified by the Representatives in the written
notice of the Underwriters' election to purchase such Option Shares. The time
and date of such payment for the Underwritten Shares is referred to herein as
the "Closing Date" and the time and date for such payment for the Option Shares,
if other than the Closing Date, are herein referred to as the "Additional
Closing Date". As used herein, the term "Business Day" means any day other than
a day on which banks are permitted or required to be closed in New York City.

Payment for the Shares to be purchased on the Closing Date or the
Additional Closing Date, as the case may be, shall be made against delivery to
the Representatives for the respective accounts of the several Underwriters of
the Shares to be purchased on such date registered in such names and in such
denominations as the Representatives shall request in writing not later than two
full Business Days prior to the Closing Date or the Additional Closing Date, as
the case may be, with any transfer taxes payable in connection with the transfer
to the Underwriters of the Shares duly paid by the Company or the Selling
Stockholders, as the case may be. The certificates for the Shares will be made
available for inspection and packaging by the Representatives at the office of
[the stock transfer agent, address] [J.P. Morgan Securities Inc. set forth
above] not later than 1:00 P.M., New York City time, on the Business Day prior
to the Closing Date or the Additional Closing Date, as the case may be.

4. The Company represents and warrants to each Underwriter that:

(a) no order preventing or suspending the use of any preliminary
prospectus has been issued by the Commission, and each preliminary prospectus
filed as part of the Registration Statement as originally filed or as part of
any amendment thereto, or filed pursuant to Rule 424 under the Securities Act,
complied when so filed in all material respects with the Securities Act, and did
not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
provided that this representation and warranty shall not apply to any statements
or omissions made in reliance upon and in conformity with information relating
to any Underwriter furnished to the Company in writing by such Underwriter
through the Representatives expressly for use therein;

(b) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that purpose has
been instituted or, to the knowledge of the Company, threatened by the
Commission; and the Registration

-4-
<PAGE>

Statement and Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) comply, or will comply, as the
case may be, in all material respects with the Securities Act and do not and
will not, as of the applicable effective date as to the Registration Statement
and any amendment thereto and as of the date of the Prospectus and any amendment
or supplement thereto, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading, and the Prospectus, as amended or
supplemented, if applicable, at the Closing Date or Additional Closing Date, as
the case may be, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading; except
that the foregoing representations and warranties shall not apply to statements
or omissions in the Registration Statement or the Prospectus made in reliance
upon and in conformity with information relating to any Underwriter furnished to
the Company in writing by such Underwriter through the Representatives expressly
for use therein;

(c) The pro forma combined financial statements of the Company
and the historical financial statements of the Company and the Sellers, and the
related notes thereto, included in the Registration Statement and the Prospectus
present fairly the pro forma combined or historical financial position, as the
case may be, of the Company and the Sellers, as the case may be, as of the dates
indicated and the results of their operations and changes in their cash flows
for the periods specified; and said financial statements have been prepared in
conformity with generally accepted accounting principles applied on a consistent
basis, and the supporting schedules included in the Registration Statement
present fairly the information required to be stated therein; and the pro forma
combined financial statements, and the related notes thereto, included in the
Registration Statement and the Prospectus has been prepared in accordance with
the applicable requirements of the Securities Act and are based upon good faith
estimates and assumptions believed by the Company to be reasonable;

(d) since the respective dates as of which information is given
in the Registration Statement and the Prospectus, there has not been any change
in the capital stock or long-term debt of the Company or any of its
subsidiaries, or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
business, prospects, management, financial position, stockholders' equity or
results of operations of the Company and its subsidiaries, taken as a whole,
otherwise than as set forth or contemplated in the Prospectus; and except as set
forth or contemplated in the Prospectus neither the Company nor any of its

-5-
<PAGE>

subsidiaries has entered into any transaction or agreement (whether or not in
the ordinary course of business) material to the Company and its subsidiaries
taken as a whole;

(e) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its jurisdiction of
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and has been
duly qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business, so as to require such
qualification, other than where the failure to be so qualified or in good
standing would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole;

(f) each of the Company's subsidiaries has been duly incorporated
and is validly existing as a corporation under the laws of its jurisdiction of
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and has been
duly qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such qualification, other
than where the failure to be so qualified or in good standing would not have a
material adverse effect on the Company and its subsidiaries taken as a whole;
and all the outstanding shares of capital stock of each subsidiary of the
Company have been duly authorized and validly issued, are fully-paid and non-
assessable, and (except, in the case of foreign subsidiaries, for directors'
qualifying shares) are owned by the Company, directly or indirectly, free and
clear of all liens, encumbrances, security interests and claims;

(g) this Agreement has been duly authorized, executed and
delivered by the Company;

(h) the Company has an authorized capitalization as set forth in
the Prospectus and such authorized capital stock conforms as to legal matters to
the description thereof set forth in the Prospectus, and all of the outstanding
shares of capital stock of the Company have been duly authorized and validly
issued, are fully-paid and non-assessable and are not subject to any pre-emptive
or similar rights; and, except as expressly described in the Prospectus, there
are no outstanding rights (including, without limitation, pre-emptive rights),
warrants or options to acquire, or instruments convertible into or exchangeable
for, any shares of capital stock or other equity interests in the Company or any
of its subsidiaries, or any contract, commitment, agreement, understanding or
arrangement of any kind relating to the issuance of any capital stock of the

-6-
<PAGE>

Company or any such subsidiary, any such convertible or exchangeable securities
or any such rights, warrants or options;

(i) the Shares to be issued and sold by the Company hereunder
have been duly authorized, and, when issued and delivered to and paid for by the
Underwriters in accordance with the terms of this Agreement, will be duly issued
and will be fully paid and non-assessable and will conform to the descriptions
thereof in the Prospectus; and the issuance of the Shares is not subject to any
preemptive or similar rights;

(j) neither the Company nor any of its subsidiaries is, or with
the giving of notice or lapse of time or both would be, in violation of or in
default under, its Certificate of Incorporation or By-Laws or any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which it or any of
them or any of their respective properties is bound, except for violations and
defaults which individually and in the aggregate are not material to the Company
and its subsidiaries taken as a whole; the issue and sale of the Shares and the
performance by the Company of its obligations under this Agreement and the
consummation of the transactions contemplated herein will not conflict with or
result in a breach of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject, nor
will any such action result in any violation of the provisions of the
Certificate of Incorporation or the By-Laws of the Company or any applicable law
or statute or any order, rule or regulation of any court or governmental agency
or body having jurisdiction over the Company, its subsidiaries or any of their
respective properties; and no consent, approval, authorization, order, license,
registration or qualification of or with any such court or governmental agency
or body is required for the issue and sale of the Shares or the consummation by
the Company of the transactions contemplated by this Agreement, except such
consents, approvals, authorizations, orders, licenses, registrations or
qualifications as have been obtained under the Securities Act and as may be
required under state securities or Blue Sky Laws in connection with the purchase
and distribution of the Shares by the Underwriters;

(k) other than as set forth in the Prospectus, there are no legal
or governmental investigations, actions, suits or proceedings pending or, to the
knowledge of the Company, threatened against or affecting the Company or any of
its subsidiaries or any of their respective properties or to which the Company
or any of its subsidiaries is or may be a party or to which any property of the
Company or any of its subsidiaries is

-7-
<PAGE>

or may be the subject which, if determined adversely to the Company or any of
its subsidiaries, could individually or in the aggregate have, or reasonably be
expected to have, a material adverse effect on the general affairs, business,
prospects, management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, taken as a whole, and, to the
best of the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others; and there are
no statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or Prospectus or to be filed as exhibits
to the Registration Statement that are not described or filed as required;

(l) the Company and its subsidiaries have good and marketable
title in fee simple to all items of real property and good and marketable title
to all personal property owned by them, in each case free and clear of all
liens, encumbrances and defects except such as are described or referred to in
the Prospectus or such as do not materially affect the value of such property
and do not interfere with the use made or proposed to be made of such property
by the Company and its subsidiaries; and any real property and buildings held
under lease by the Company and its subsidiaries are held by them under valid,
existing and enforceable leases with such exceptions as are not material and do
not interfere with the use made or proposed to be made of such property and
buildings by the Company or its subsidiaries;

(m) no relationship, direct or indirect, exists between or among
the Company or any of its subsidiaries on the one hand, and the directors,
officers, stockholders, customers or suppliers of the Company or any of its
subsidiaries on the other hand, which is required by the Securities Act to be
described in the Registration Statement and the Prospectus which is not so
described;

(n) no person, except for the Selling Stockholders, has the right
to require the Company to register any securities for offering and sale under
the Securities Act by reason of the filing of the Registration Statement with
the Commission or the issue and sale of the Shares;

(o) the Company is not and, after giving effect to the offering
and sale of the Shares, will not be an "investment company" or entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");

(p) the Company has complied with all provisions of Section
517.075, Florida Statutes (Chapter 92-198, Laws of Florida) relating to doing
business with the Government of Cuba or with any person or affiliate located in
Cuba;

-8-
<PAGE>

(q) Arthur Andersen LLP, which has audited certain financial
statements of the Company and its subsidiaries and the Sellers, are independent
public accountants with regard to the Sellers and the Company as required by the
Securities Act;

(r) the Company and its subsidiaries have filed all federal,
state, local and foreign tax returns which have been required to be filed and
have paid all taxes shown thereon and all assessments received by them or any of
them to the extent that such taxes have become due and are not being contested
in good faith; and, except as disclosed in the Registration Statement and the
Prospectus, there is no tax deficiency which has been or might reasonably be
expected to be asserted or threatened against the Company or any subsidiary;

(s) the Company has not taken nor will it take, directly or
indirectly, any action designed to, or that might be reasonably expected to,
cause or result in stabilization or manipulation of the price of the Stock;

(t) the Company and each of its subsidiaries carry, or are
covered by, insurance (including self-insurance) in such amounts and covering
such risks as is adequate for the conduct of their respective businesses and the
value of their respective properties;

(u) the Company and each of its subsidiaries own or possess
adequate rights to use all material trademarks, service marks, trade names,
trademark registrations, service mark registrations, copyrights and licenses
(and any authorizations or permits) necessary for the conduct of their
respective businesses ("Intellectual Property") and have no reason to believe
that the conduct of their businesses will conflict with, and have not received
any notice of any claim of conflict with, the rights of others in respect
thereof;

(v) there are no contracts or other documents that are required
to be filed as exhibits to the Registration Statement by the Securities Act that
have not been filed as exhibits to the Registration Statement or that are
required to be summarized in the Prospectus that are not so summarized;

(w) each of the Company and its subsidiaries owns, possesses or
has obtained all licenses, permits, certificates, consents, orders, approvals
and other authorizations from, and has made all declarations and filings with,
all federal, state, local and other governmental authorities (including foreign
regulatory agencies), all self-regulatory organizations and all courts and other
tribunals, domestic or foreign, necessary to own or lease, as the case may be,
and to operate its properties and to carry on its business as conducted as of
the date hereof, and neither the Company nor any such subsidiary has received
any actual notice of any proceeding

-9-
<PAGE>

relating to revocation or modification of any such license, permit, certificate,
consent, order, approval or other authorization, except as described in the
Registration Statement and the Prospectus; and each of the Company and its
subsidiaries is in compliance with all laws and regulations relating to the
conduct of its business as conducted as of the date hereof;

(x) there are no existing or, to the best knowledge of the
Company, threatened labor disputes with the employees of the Company or any of
its subsidiaries which are likely to have individually or in the aggregate a
material adverse effect on the Company and its subsidiaries taken as a whole;

(y) the Company and its subsidiaries (i) are in compliance with
any and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their
respective businesses and (iii) are in compliance with all terms and conditions
of any such permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such permits,
licenses or approvals would not, singly or in the aggregate, have a material
adverse effect on the Company and its subsidiaries, taken as a whole;

(z) each employee benefit plan, within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended,
("ERISA") that is maintained, administered or contributed to by the Company or
any of its affiliates for employees or former employees of the Company and its
affiliates has been maintained in compliance with its terms and the requirements
of any applicable statutes, orders, rules and regulations, including but not
limited to ERISA and the Internal Revenue Code of 1986, as amended, ("Code"). No
prohibited transaction, within the meaning of Section 406 of ERISA or Section
4975 of the Code has occurred with respect to any such plan excluding
transactions effected pursuant to a statutory or administrative exemption. For
each such plan which is subject to the funding rules of Section 412 of the Code
or Section 302 of ERISA no "accumulated funding deficiency" as defined in
Section 412 of the Code has been incurred, whether or not waived, and the fair
market value of the assets of each such plan (excluding for these purposes
accrued but unpaid contributions) exceeded the present value of all benefits
accrued under such plan determined using reasonable actuarial assumptions;

-10-
<PAGE>

(aa) the Stock of the Company, including the Shares, is
authorized for quotation, subject to official notice of issuance, on the Nasdaq
National Market; and

(ab) the Acquisition Agreements are in full force and effect on
the date hereof, and neither the Company, any of the Sellers or any of the other
parties hereto is in breach of its obligations thereunder.

5. Each of the Selling Stockholders severally represents and
warrants to each Underwriter that:

(a) the execution and delivery of this Agreement, the sale of the
Selling Stockholder Underwritten Shares and the performance by such Selling
Stockholder of its obligations under this Agreement, and the consummation of the
transactions contemplated herein will not conflict with or result in a breach of
any of the terms, or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other material agreement
or instrument to which such Selling Stockholder is a party or by which such
Selling Stockholder is bound or to which any of the property or assets of such
Selling Stockholder is subject;

(b) such Selling Stockholder has and will have at the Closing
Date good and marketable title to the Shares to be sold by such Selling
Stockholder hereunder, free and clear of any pledge, lien, security interest,
encumbrance, claim or equity other than pursuant to this Agreement; such Selling
Stockholder has full right, power and authority to sell, transfer and deliver
the Shares to be sold by such Selling Stockholder hereunder; and upon delivery
of the Shares to be sold by such Selling Stockholder hereunder and payment of
the Purchase Price therefor as herein contemplated, each of the Underwriters
will receive good and marketable title to the Shares purchased by it from such
Selling Stockholder, free and clear of any pledge, lien security interest,
encumbrance, claim or equity;

(c) such Selling Stockholder has duly executed and delivered in
the form heretofore furnished to the Underwriters a Power of Attorney and
Custody Agreement with , as attorneys-in-fact (each, an "Attorney-
--------------
in-Fact") and with , as custodian (the "Custodian"); the Attorneys-
------------
in-Fact, or either of them, are authorized to execute and deliver this Agreement
on behalf of such Selling Stockholder, to determine the Purchase Price to be
paid by the Underwriters to such Selling Stockholder within the limits specified
in the Power of Attorney and Custody Agreement, to authorize the delivery of the
Shares to be sold by such Selling Stockholder hereunder, to accept payment
therefor, and otherwise to act on behalf of such Selling Stockholder in
connection with this Agreement;

-11-
<PAGE>

(d) all authorizations, approvals and consents necessary for the
execution and delivery by such Selling Stockholder of the Power of Attorney and
Custody Agreement, the execution and delivery by or on behalf of such Selling
Stockholder of this Agreement, and the sale and delivery of the Shares to be
sold by such Selling Stockholder hereunder (except such consents, approvals,
authorizations, registrations or qualifications as may be required under the
Securities Act and the state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the Underwriters) have been obtained
and are in full force and effect; and such Selling Stockholder has the full
right, power and authority to enter into this Agreement and such Power of
Attorney and Custody Agreement and to sell, transfer and deliver the Shares to
be sold by such Selling Stockholder;

(e) all information furnished to the Company by such Selling
Stockholder or on the Selling Stockholder's behalf for use in connection with
the preparation of the Registration Statement and Prospectus (including, without
limiting the generality of the foregoing, all representations and warranties of
such Selling Stockholder in the Power of Attorney) is true and correct and does
not omit to state any material fact necessary to be stated therein in order to
make such information not misleading;

(f) such Selling Stockholder has no reason to believe that any of
the representations and warranties of the Company set forth in Section 4 of this
Agreement is or will be untrue or inaccurate in any material respect;

(g) such Selling Stockholder is not prompted to sell the Shares
to be sold by the Selling Stockholder hereunder by any information concerning
the Company which is not set forth in the preliminary prospectus;

(h) such Selling Stockholder has not taken, and will not take,
directly or indirectly, any action which is designed to or which has constituted
or which might reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Shares; and

(i) certificates in negotiable form for all Shares to be sold
hereunder by such Selling Stockholder have been placed in custody with the
Custodian for the purpose of effecting delivery hereunder.

6. The Company covenants and agrees with each of the several
Underwriters as follows:

(a) to use its best efforts to cause the Registration Statement
to become effective at the earliest

-12-
<PAGE>

possible time and, if required, to file the final Prospectus with the Commission
within the time periods specified by Rule 424(b) and Rule 430A under the
Securities Act and to furnish copies of the Prospectus to the Underwriters in
New York City prior to 10:00 a.m., New York City time, on the Business Day next
succeeding the date of this Agreement in such quantities as the Representatives
may reasonably request;

(b) to deliver, at the expense of the Company, to the
Representatives seven signed copies of the Registration Statement (as originally
filed) and each amendment thereto, in each case including exhibits, and to each
other Underwriter a conformed copy of the Registration Statement (as originally
filed) and each amendment thereto, in each case without exhibits and, during the
period mentioned in paragraph (e) below, to each of the Underwriters as many
copies of the Prospectus (including all amendments and supplements thereto) as
the Representatives may reasonably request;

(c) before filing any amendment or supplement to the Registration
Statement or the Prospectus, whether before or after the time the Registration
Statement becomes effective, to furnish to the Representatives a copy of the
proposed amendment or supplement for review and not to file any such proposed
amendment or supplement to which the Representatives reasonably object;

(d) to advise the Representatives promptly, and to confirm such
advice in writing (i) when the Registration Statement has become effective, (ii)
when any amendment to the Registration Statement has been filed or becomes
effective, (iii) when any supplement to the Prospectus or any amended Prospectus
has been filed and to furnish the Representatives with copies thereof, (iv) of
any request by the Commission for any amendment to the Registration Statement or
any amendment or supplement to the Prospectus or for any additional information,
(v) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus or the Prospectus or the
initiation or threatening of any proceeding for that purpose, (vi) of the
occurrence of any event, within the period referenced in paragraph (e) below, as
a result of which the Prospectus as then amended or supplemented would include
an untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not misleading,
and (vii) of the receipt by the Company of any notification with respect to any
suspension of the qualification of the Shares for offer and sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose; and to use its best efforts to prevent the issuance of any such stop
order, or of any order preventing or suspending the use of any preliminary
prospectus or the

-13-
<PAGE>

Prospectus, or of any order suspending any such qualification of the shares, or
notification of any such order thereof and, if issued, to obtain as soon as
possible the withdrawal thereof;

(e) if, during such period of time after the first date of the
public offering of the Shares as in the opinion of counsel for the Underwriters
a prospectus relating to the Shares is required by law to be delivered in
connection with sales by the Underwriters or any dealer, any event shall occur
as a result of which it is necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if it is necessary to
amend or supplement the Prospectus to comply with law, forthwith to prepare and
furnish, at the expense of the Company, to the Underwriters and to the dealers
(whose names and addresses the Representatives will furnish to the Company) to
which Shares may have been sold by the Representatives on behalf of the
Underwriters and to any other dealers upon request, such amendments or
supplements to the Prospectus as may be necessary so that the statements in the
Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be misleading or
so that the Prospectus will comply with law;

(f) to endeavor to qualify the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as the Representatives
shall reasonably request and to continue such qualification in effect so long as
reasonably required for distribution of the Shares; provided that the Company
--------
shall not be required to file a general consent to service of process in any
jurisdiction;

(g) to make generally available to its security holders and to
the Representatives as soon as practicable an earnings statement covering a
period of at least twelve months beginning with the first fiscal quarter of the
Company occurring after the effective date of the Registration Statement, which
shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
of the Commission promulgated thereunder;

(h) so long as the Shares are outstanding, to furnish to the
Representatives copies of all reports or other communications (financial or
other) furnished to holders of the Shares, and copies of any reports and
financial statements furnished to or filed with the Commission or any national
securities exchange;

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<PAGE>

(i) for a period of 180 days after the date of the initial public
offering of the Shares not to (i) offer, pledge, sell, contract to sell, sell
any option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase or otherwise transfer or dispose
of, directly or indirectly, any shares of Stock or any securities convertible
into or exercisable or exchangeable for Stock, (ii) enter into any swap or other
agreement that transfers, in whole or in part, any of the economic consequences
of ownership of the Stock or (iii) file a registration statement with the
Commission relating to shares of Stock issuable upon exercise or exchange of
securities convertible into shares of Stock, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of Stock or
such other securities, in cash or otherwise without the prior written consent of
J.P. Morgan Securities Inc., other than the Shares to be sold hereunder and any
shares of Stock of the Company issued upon the exercise of options granted under
existing employee stock option plans as of the date hereof as further described
in the Prospectus;

(j) to use the net proceeds received by the Company from the sale
of the Shares pursuant to this Agreement in the manner specified in the
Prospectus under the caption "Use of Proceeds";

(k) to use its best efforts to list for quotation the Shares on
the National Association of Securities Dealers Automated Quotations National
Market (the "Nasdaq National Market");

(l) to file with the Commission such reports on Form SR as may be
required by Rule 463 under the Securities Act;

(m) whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or cause to be
paid all costs and expenses incident to the performance of its obligations
hereunder, including without limiting the generality of the foregoing, all costs
and expenses (i) incident to the preparation, issuance, execution and delivery
of the Shares, (ii) incident to the preparation, printing and filing under the
Securities Act of the Registration Statement, the Prospectus and any preliminary
prospectus (including in each case all exhibits, amendments and supplements
thereto), (iii) incurred in connection with the registration or qualification of
the Shares under the laws of such jurisdictions as the Representatives may
designate (including fees of counsel for the Underwriters and its
disbursements), (iv) in connection with the listing of the Shares on the Nasdaq
National Market, (v) related to the filing with, and clearance of the offering
by, the National Association of Securities Dealers, Inc. (including the
reasonable fees and disbursements of counsel for the Underwriters), (vi) in

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<PAGE>

connection with the printing (including word processing and duplication costs)
and delivery of this Agreement, the Preliminary and Supplemental Blue Sky
Memoranda and the furnishing to the Underwriters and dealers of copies of the
Registration Statement and the Prospectus, including mailing and shipping, as
herein provided, (vii) any expenses incurred by the Company in connection with a
"road show" presentation to potential investors, (viii) the cost of preparing
stock certificates and (ix) the cost and charges of any transfer agent and any
registrar;

(n) as soon as practicable after the Closing Date, the Company
will take all necessary action to elect two additional independent directors to
its Board of Directors; and

(o) the Company and its subsidiaries will comply with all of
their respective covenants under the Acquisition Agreements.

7. Each of the Selling Stockholders covenants and agrees with the
several Underwriters as follows:

(a) for a period of 360 days after the date of the initial public
offering of the Shares not to offer, sell, contract to sell or otherwise dispose
of any shares of Stock of the Company or any securities convertible into or
exercisable or exchangeable for shares of Stock of the Company without the prior
written consent of J.P. Morgan Securities, Inc., other than the Shares to be
sold hereunder and Shares distributed to designees pursuant to the Acquisition
Agreement and subject to this Section 7(a).

8. The several obligations of the Underwriters hereunder to purchase
the Shares on the Closing Date or the Additional Closing Date, as the case may
be, are subject to the performance by the Company of its obligations hereunder
and to the following additional conditions:

(a) the Registration Statement shall have become effective (or if
a post-effective amendment is required to be filed under the Securities Act,
such post-effective amendment shall have become effective) not later than 5:00
P.M., New York City time, on the date hereof; and no stop order suspending the
effectiveness of the Registration Statement or any post-effective amendment
shall be in effect, and no proceedings for such purpose shall be pending before
or threatened by the Commission; the Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Securities Act and in
accordance with Section 6(a) hereof; and all requests for additional information
shall have been complied with to the satisfaction of the Representatives;

-16-
<PAGE>

(b) the representations and warranties of the Company and the
Selling Stockholders contained herein are true and correct on and as of the
Closing Date or the Additional Closing Date, as the case may be, as if made on
and as of the Closing Date or the Additional Closing Date, as the case may be,
and each of the Company and the Selling Stockholders shall have complied with
all agreements and all conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date or the Additional Closing Date, as the
case may be;

(c) since the respective dates as of which information is given
in the Prospectus there shall not have been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries or any material adverse
change, or any development involving a prospective material adverse change, in
or affecting the general affairs, business, prospects, management, financial
position, stockholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole, otherwise than as set forth or contemplated in
the Prospectus, the effect of which in the judgment of the Representatives makes
it impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares on the Closing Date or the Additional Closing Date, as
the case may be, on the terms and in the manner contemplated in the Prospectus;
and neither the Company nor any of its subsidiaries has sustained since the date
of the latest audited financial statements included in the Prospectus any
material loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus;

(d) the Representatives shall have received on and as of the
Closing Date or the Additional Closing Date, as the case may be, a certificate
of an executive officer of the Company, with specific knowledge about the
Company's financial matters, satisfactory to the Representatives to the effect
set forth in subsections (a) and (b) (with respect to the respective
representations, warranties, agreements and conditions of the Company) of this
Section and to the further effect that there has not occurred any material
adverse change, or any development involving a prospective material adverse
change, in or affecting the general affairs, business, prospects, management,
financial position, stockholders' equity or results of operations of the Company
and its subsidiaries taken as a whole from that set forth or contemplated in the
Registration Statement;

(e) the Representatives shall have received on and as of the
Closing Date a certificate of or , as Attorney-in-Fact
----------- ------------
for the Selling Stockholders, to the effect that the representations and
warranties of each of the Selling Stockholders contained herein are true and
correct on and as of the Closing Date as if made on and as of the Closing

-17-
<PAGE>

Date and each of the Selling Stockholders shall have complied with all
agreements and all conditions on its part to be performed or satisfied hereunder
at or prior to the Closing Date;

(f) the Acquisitions shall have been consummated pursuant to the
Acquisition Agreements and as described in the Registration Statement;

(g) Morgan Lewis & Bockius, counsel for the Company, shall have
furnished to the Representatives their written opinion, dated the Closing Date
or the Additional Closing Date, as the case may be, in form and substance
satisfactory to the Representatives, to the effect that:

(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its jurisdiction of
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus;

(ii) the Company has been duly qualified as a foreign
corporation for the transaction of business and is in good standing under the
laws of each other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification, other than where the
failure to be so qualified or in good standing would not have a material adverse
effect on the Company and its subsidiaries taken as a whole;

(iii) each of the Company's subsidiaries has been duly
incorporated and is validly existing as a corporation under the laws of its
jurisdiction of incorporation with power and authority (corporate and other) to
own its properties and conduct its business as described in the Prospectus and
has been duly qualified as a foreign corporation for the transaction of business
and is in good standing under the laws of each other jurisdiction in which it
owns or leases properties, or conducts any business, so as to require such
qualification, other than where the failure to be so qualified and in good
standing would not have a material adverse effect on the Company and its
subsidiaries taken as a whole; and all of the outstanding shares of capital
stock of each subsidiary have been duly and validly authorized and issued, are
fully paid and non-assessable, and (except, in the case of foreign subsidiaries,
for directors' qualifying shares are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or claims;

(iv) other than as set forth or contemplated in the
Prospectus, there are no legal or governmental investigations, actions, suits or
proceedings pending or, to the best of such counsel's knowledge, threatened
against or affecting the Company or any of its subsidiaries or any of their
respective properties or to which the Company or any of its subsidiaries is

-18-
<PAGE>

or may be a party or to which any property of the Company or its subsidiaries is
or may be the subject which, if determined adversely to the Company or any of
its subsidiaries, could individually or in the aggregate have, or reasonably be
expected to have, a material adverse effect on the general affairs, business,
prospects, management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries taken as a whole; to the best of
such counsel's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others; and such counsel does not know
of any statutes, regulations, contracts or other documents that are required to
be described in the Registration Statement or Prospectus or to be filed as
exhibits to the Registration Statement that are not described or filed as
required;

(v) this Agreement has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement to the Company,
except as enforcement thereof may be limited by fraudulent conveyance,
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally or by general equitable principles and except as
rights to indemnity and contribution hereunder may be limited by applicable law;

(vi) the authorized capital stock of the Company conforms as
to legal matters to the description thereof contained in the Prospectus;

(vii) the shares of capital stock of the Company
outstanding prior to the issuance of the Shares to be sold by the Company,
including the Stock issued in the Acquisitions, have been duly authorized and
are validly issued, fully paid and non-assessable;

(viii) the Shares to be issued and sold by the Company
hereunder have been duly authorized, and when delivered to and paid for the
Underwriters in accordance with the terms of this Agreement, will be validly
issued, fully paid and non-assessable and the issuance of the Shares is not
subject to any preemptive or similar rights ;

(ix) the statements in the Prospectus under "Allegra
Facilities," "Legal Proceedings", "Certain Transactions", "Description of
Capital Stock" and "Underwriting", and in the Registration Statement in Items 14
and 15, insofar as such statements constitute a summary of the terms of the
Stock, legal matters, documents or proceedings referred to therein, fairly
present the information called for with respect to such terms, legal matters,
documents or proceedings;

(x) the Registration Statement and the Prospectus and any
amendments and supplements thereto (other than

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<PAGE>

the financial statements and related schedules therein, as to which such counsel
need express no opinion) comply as to form in all material respects with the
requirements of the Securities Act and believes that (other than the financial
statements and related schedules therein, as to which such counsel need express
no belief) the Registration Statement and the prospectus included therein at the
time the Registration Statement became effective did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
that the Prospectus, as amended or supplemented, if applicable, does not contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;

(xi) neither the Company nor any of its subsidiaries is, or
with the giving of notice or lapse of time or both would be, in violation of or
in default under, its Certificate of Incorporation or By-Laws or any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument known
to such counsel to which the Company or any of its subsidiaries is a party or by
which it or any of them or any of their respective properties is bound, except
for violations and defaults which individually and in the aggregate are not
material to the Company and its subsidiaries taken as a whole; the issue and
sale of the Shares being delivered on the Closing Date or the Additional Closing
Date, as the case may be, and the performance by the Company of its obligations
under this Agreement and the consummation of the transactions contemplated
herein will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument known to such counsel to
which the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject, nor will any such action
result in any violation of the provisions of the Certificate of Incorporation or
the By-Laws of the Company or any applicable law or statute or any order, rule
or regulation of any court or governmental agency or body having jurisdiction
over the Company, its subsidiaries or any of their respective properties;

(xii) no consent, approval, authorization, order, license,
registration or qualification of or with any court or governmental agency or
body is required for the issue and sale of the Shares or the consummation of the
other transactions contemplated by this Agreement, except such consents,
approvals, authorizations, orders, licenses, registrations or qualifications as
have been obtained under the Securities Act and as may be required under state
securities or

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<PAGE>

Blue Sky laws in connection with the purchase and distribution of the Shares by
the Underwriters;

(xiii) the Company is not and, after giving effect to the
offering and sale of the Shares, will not be an "investment company" or entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act;

(xiv) each of the Company and its subsidiaries owns,
possesses or has obtained all licenses, permits, certificates, consents, orders,
approvals and other authorizations from, and has made all declarations and
filings with, all federal, state, local and other governmental authorities
(including foreign regulatory agencies), all self-regulatory organizations and
all courts and other tribunals, domestic or foreign, necessary to own or lease,
as the case may be, and to operate its properties and to carry on its business
as conducted as of the date hereof, and neither the Company nor any such
subsidiary has received any actual notice of any proceeding relating to
revocation or modification of any such license, permit, certificate, consent,
order, approval or other authorization, except as described in the Registration
Statement and the Prospectus; and each of the Company and its subsidiaries is in
compliance with all laws and regulations relating to the conduct of its business
as conducted as of the date of the Prospectus;

(xv) each of the Company and its subsidiaries owns,
possesses or has the right to use the Intellectual Property employed by it in
connection with the business conducted by it as of the date hereof;

(xvi) the Company and its subsidiaries have good and
marketable title in fee simple to all real property and good and marketable
title to all personal property owned by them, in each case free and clear of all
liens, encumbrances and defects except such as are described or referred to in
the Prospectus or such as do not materially affect the value of such property
and do not interfere with the use made and proposed to be made of such property
by the Company and its subsidiaries; and any real property and buildings held
under lease by the Company and its subsidiaries are held by them under valid,
existing and enforceable leases with such exceptions as are not material and do
not interfere with the use made or proposed to be made of such property and
buildings by the Company or its subsidiaries;

(xvii) except as set forth in the Prospectus, there are no
restrictions upon the voting or transfer of, any shares of Stock pursuant to the
Company's Certificate of Incorporation or By-laws or any agreement or other
instrument known to such counsel to which the Company is a party or by which the
Company is bound;

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<PAGE>

(xviii) the Registration Statement was declared effective
under the Securities Act as of the date and time specified in such opinion, the
Prospectus was filed with the Commission in the manner and within the time
period required by Rule 424(b) and no stop order suspending the effectiveness of
the Registration Statement has been issued and, to the best knowledge of such
counsel, no proceeding for that purpose is pending or threatened by the
Commission;

(xix) except as set forth in the Prospectus, to the best
of such counsel's knowledge, there are no contracts, agreements or
understandings between the Company and any person granting such person the right
to require the Company to file a registration statement under the Securities Act
with respect to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities in the securities
registered pursuant to the Registration Statement or in any securities being
registered pursuant to any other registration statement filed by the Company
under the Securities Act;

(xx) the Acquisitions have been consumated pursuant to the
Acquisition Agreements and as described in the Registration Statement; and

(xxi) the offer and sale of the shares of Stock in the
Acquisitions, and all other offers and sales of securities by the Company on or
prior to the Closing Date, are exempt from the registration requirements of
Section 5 of the Securities Act and are exempt from registration under all
applicable state securities laws or Blue Sky Laws.

In rendering such opinions, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States and
the States of Delaware and Pennsylvania, to the extent such counsel deems
proper and to the extent specified in such opinion, if at all, upon an opinion
or opinions (in form and substance reasonably satisfactory to Underwriters'
counsel) of other counsel reasonably acceptable to the Underwriters' counsel,
familiar with the applicable laws; (B) as to matters involving the Operating
Businesses, to the extent such counsel deems proper and to the extent specified
in such opinion, if at all, upon an opinion or opinions (in form and substance
reasonably satisfactory to Underwriters' counsel) of counsel to the Operating
Businesses; and (C) as to matters of fact, to the extent such counsel deems
proper, on certificates of responsible officers of the Company and certificates
or other written statements of officials of jurisdictions having custody of
documents respecting the corporate existence or good standing of the Company.
The opinion of such counsel for the Company shall state that the opinion of any
such other counsel upon which they relied is in form satisfactory to such
counsel and, in such counsel's opinion, the Underwriters and they are justified
in

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<PAGE>

relying thereon. With respect to the matters to be covered in subparagraph (ix)
above counsel may state their opinion and belief is based upon their
participation in the preparation of the Registration Statement and the
Prospectus and any amendment or supplement thereto and review and discussion of
the contents thereof but is without independent check or verification except as
specified.

The opinion of Morgan Lewis & Bockius described above shall be
rendered to the Underwriters at the request of the Company and shall so state
therein.

(h) , special counsel for NBG Services, Inc.
--------------------
as a Selling Stockholder, shall have furnished to the Representatives their
written opinion, dated the Closing Date, in form and substance satisfactory to
the Representatives, to the effect that:

(i) this Agreement and the Power of Attorney and Custody
Agreement have been duly authorized, executed and delivered by such Selling
Stockholder; and

(ii) to the best of its knowledge and information, such
Selling Stockholder has good and marketable title to the Shares to be sold by
such Selling Stockholder hereunder and full power, right and authority to sell
such Shares, and upon the delivery of and payment for the Shares as herein
contemplated, each of the Underwriters will receive good and marketable title to
the Shares purchased by it from such Selling Stockholder, free and clear of any
mortgage, pledge, lien, security interest, encumbrance, claim or equity. In
rendering such opinion, counsel may assume that the Underwriters are without
notice of any defect in the title of such Selling Stockholder to the Shares
being purchased from such Selling Stockholder.

(i) Smith Helms Mulliss & Moore, L.L.P., special counsel for
SOMAR, Inc. as a Selling Stockholder, shall have furnished to the
Representatives their written opinion, dated the Closing Date, in form and
substance satisfactory to the Representatives, to the effect that:

(i) this Agreement and the Power of Attorney and Custody
Agreement have been duly authorized, executed and delivered by such Selling
Stockholder; and

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<PAGE>

Selling Stockholder, free and clear of any mortgage, pledge, lien, security
interest, encumbrance, claim or equity. In rendering such opinion, counsel may
assume that the Underwriters are without notice of any defect in the title of
such Selling Stockholder to the Shares being purchased from such Selling
Stockholder.

(j) on the effective date of the Registration Statement and the
effective date of the most recently filed post-effective amendment to the
Registration Statement and also on the Closing Date or Additional Closing Date,
as the case may be, Arthur Anderson LLP shall have furnished to you letters,
dated the respective dates of delivery thereof, in form and substance
satisfactory to you, containing statements and information of the type
customarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information with
respect to the Company and its subsidiaries, the Sellers and the Operating
Businesses, contained in the Registration Statement and the Prospectus;

(k) the Representatives shall have received on and as of the
Closing Date or Additional Closing Date, as the case may be, an opinion of
Pepper, Hamilton & Scheetz, counsel to the Underwriters, with respect to the due
authorization and valid issuance of the Shares, the Registration Statement, the
Prospectus and other related matters as the Representatives may reasonably
request, and such counsel shall have received such papers and information as
they may reasonably request to enable them to pass upon such matters;

(l) the Shares to be delivered on the Closing Date or Additional
Closing Date, as the case may be, shall have been approved for quotation on The
Nasdaq National Market, subject to official notice of issuance;

(m) on or prior to the Closing Date or Additional Closing Date,
as the case may be, the Company shall have furnished to the Representatives such
further certificates and documents as the Representatives shall reasonably
request;

(n) The "lock-up" agreements, each substantially in the form of
Exhibit B hereto, between you, all holders of securities of the Company
(including securities issued in or in connection with the Acquisitions) and all
officers and directors of the Company relating to sales and certain other
dispositions of shares of Stock or certain other securities, delivered to you on
or before the date hereof, shall be in full force and effect on the Closing Date
or Additional Closing Date, as the case may be; and

(o) all transactions contemplated by the Acquisition Agreements
shall have been consummated on or prior to the Closing Date.

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<PAGE>

The several obligations of the Underwriters to purchase Option shares
hereunder are subject to satisfaction of the conditions set forth in paragraphs
(a) - (n) above on and as of the Additional Closing Date, except that the
certificate called for by paragraph (d) above, the opinions called for by
paragraphs (f), (g), (h) and (j) above and the comfort letter called for by
paragraph (i) above shall be dated the Additional Closing Date.

9. The Company and, subject to the last paragraph of this Section 9,
the Selling Stockholders jointly and severally agree to indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, from and against any and all losses, claims, damages and
liabilities (including, without limitation, the legal fees and other expenses
incurred in connection with any suit, action or proceeding or any claim
asserted) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) or any preliminary prospectus, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any untrue statement
or omission or alleged untrue statement or omission made in reliance upon and in
conformity with information relating to any Underwriter furnished to the Company
in writing by such Underwriter through the Representatives expressly for use
therein.

Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the Registration
Statement and each person who controls the Company within the meaning of Section
15 of the Securities Act and Section 20 of the Exchange Act and the Selling
Stockholders to the same extent as the foregoing indemnity from the Company and
the Selling Stockholders to each Underwriter, but only with reference to
information relating to such Underwriter furnished to the Company in writing by
such Underwriter through the Representatives expressly for use in the
Registration Statement, the Prospectus, any amendment or supplement thereto, or
any preliminary prospectus.

If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such person (the "Indemnified Person") shall promptly
notify the person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent

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<PAGE>

the Indemnified Person and any others the Indemnifying Person may designate in
such proceeding and shall pay the fees and expenses of such counsel related to
such proceeding. In any such proceeding, any Indemnified Person shall have the
right to retain its own counsel, but the fees and expenses of such counsel shall
be at the expense of such Indemnified Person unless (i) the Indemnifying Person
and the Indemnified Person shall have mutually agreed to the contrary, (ii) the
Indemnifying Person has failed within a reasonable time to retain counsel
reasonably satisfactory to the Indemnified Person or (iii) the named parties in
any such proceeding (including any impleaded parties) include both the
Indemnifying Person and the Indemnified Person and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the Indemnifying Person
shall not, in connection with any proceeding or related proceeding in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all Indemnified Persons, and that all
such fees and expenses shall be reimbursed as they are incurred. Any such
separate firm for the Underwriters and such control persons of Underwriters
shall be designated in writing by J.P. Morgan Securities Inc. and any such
separate firm for the Company, its directors, its officers who sign the
Registration Statement and such control persons of the Company shall be
designated in writing by the Company. The Indemnifying Person shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the Indemnifying Person agrees to indemnify any Indemnified
Person from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified
Person shall have requested an Indemnifying Person to reimburse the Indemnified
Person for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the Indemnifying Person agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such
Indemnifying Person of the aforesaid request and (ii) such Indemnifying Person
shall not have reimbursed the Indemnified Person in accordance with such request
prior to the date of such settlement. No Indemnifying Person shall, without the
prior written consent of the Indemnified Person, effect any settlement of any
pending or threatened proceeding in respect of which any Indemnified Person is
or could have been a party and indemnity could have been sought hereunder by
such Indemnified Person, unless such settlement includes an unconditional
release of such Indemnified Person from all liability on claims that are the
subject matter of such proceeding.

If the indemnification provided for in the first and second
paragraphs of this Section 9 is unavailable to an Indemnified Person in respect
of any losses, claims, damages or

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<PAGE>

liabilities referred to therein, then each Indemnifying Person under such
paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall
contribute to the amount paid or payable by such Indemnified Person as a result
of such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Selling Stockholders on the one hand and the Underwriters on the other hand from
the offering of the Shares or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company and the Selling Stockholders on the one
hand and the Underwriters on the other in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative benefits received
by the Company and the Selling Stockholders on the one hand and the Underwriters
on the other shall be deemed to be in the same respective proportions as the net
proceeds from the offering (before deducting expenses) received by the Company
and the Selling Stockholders and the total underwriting discounts and the
commissions received by the Underwriters, in each case as set forth in the table
on the cover of the Prospectus, bear to the aggregate public offering price of
the Shares. The relative fault of the Company and the Selling Stockholders on
the one hand and the Underwriters on the other shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Selling Stockholders or by
the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.

The Company, the Selling Stockholders and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 9
were determined by pro rata allocation (even if the Underwriters were treated as
--- ----
one entity for such purposes) or by any other method of allocation that does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an Indemnified Person as a
result of the losses, claims, damages and liabilities referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses incurred by such
Indemnified Person in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 9, in no event shall an
Underwriter be required to contribute any amount in excess of the amount by
which the total price at which the Shares underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages that
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No

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<PAGE>

person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute pursuant to this Section 9 are several in proportion
to the respective number of Shares set forth opposite their names in Schedule I
hereto, and not joint.

The remedies provided for in this Section 9 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.

The indemnity and contribution agreements contained in this Section 9
and the representations and warranties of the Company and the Selling
Stockholders set forth in this Agreement shall remain operative and in full
force and effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter or by or on behalf of the Company, its officers or directors or
any other person controlling the Company or the Selling Stockholders and (iii)
acceptance of and payment for any of the Shares.

Notwithstanding any provision of this Section 9 to the contrary, the
liability of each Selling Stockholder under this Section 9 shall not exceed the
purchase price received by such Selling Stockholder from the Underwriters for
the Stock sold by such Selling Stockholder.

10. Notwithstanding anything herein contained, this Agreement (or the
obligations of the several Underwriters with respect to the Option Shares) may
be terminated in the absolute discretion of the Representatives, by notice given
to the Company and the Selling Stockholders, if after the execution and delivery
of this Agreement and prior to the Closing Date (or, in the case of the Option
Shares, prior to the Additional Closing Date) (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
New York Stock Exchange or the American Stock Exchange, the National Association
of Securities Dealers, Inc., the Chicago Board Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of or guaranteed by the Company shall have been suspended on any
exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal, New York State, or the Commonwealth of Pennsylvania authorities, or
(iv) there shall have occurred any outbreak or escalation of hostilities or any
change in financial markets or any calamity or crisis that, in the judgment of
the Representatives, is material and adverse and which, in the judgment of the
Representatives, makes it impracticable to market the Shares being delivered at
the Closing Date or the Additional Closing

-28-
<PAGE>

Date, as the case may be, on the terms and in the manner contemplated in the
Prospectus.

11. This Agreement shall become effective upon the later of (x)
execution and delivery hereof by the parties hereto and (y) release of
notification of the effectiveness of the Registration Statement (or, if
applicable, any post-effective amendment) by the Commission.

If on the Closing Date or the Additional Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase Shares
which it or they have agreed to purchase hereunder on such date, and the
aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate number of Shares to be purchased on such date, the other Underwriters
shall be obligated severally in the proportions that the number of Shares set
forth opposite their respective names in Schedule I bears to the aggregate
number of Underwritten Shares set forth opposite the names of all such non-
defaulting Underwriters, or in such other proportions as the Representatives may
specify, to purchase the Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided
--------
that in no event shall the number of Shares that any Underwriter has agreed to
purchase pursuant to Section 1 be increased pursuant to this Section 11 by an
amount in excess of one-ninth of such number of Shares without the written
consent of such Underwriter. If on the Closing Date or the Additional Closing
Date, as the case may be, any Underwriter or Underwriters shall fail or refuse
to purchase Shares which it or they have agreed to purchase hereunder on such
date, and the aggregate number of Shares with respect to which such default
occurs is more than one-tenth of the aggregate number of Shares to be purchased
on such date, and arrangements satisfactory to the Representatives, the Company
and the Selling Stockholder for the purchase of such Shares are not made within
36 hours after such default, this Agreement (or the obligations of the several
Underwriters to purchase the Option Shares, as the case may be) shall terminate
without liability on the part of any non-defaulting Underwriter, the Company or
the Selling Stockholders. In any such case either you or the Company shall have
the right to postpone the Closing Date (or, in the case of the Option Shares,
the Additional Closing Date), but in no event for longer than seven days, in
order that the required changes, if any, in the Registration Statement and in
the Prospectus or in any other documents or arrangements may be effected. Any
action taken under this paragraph shall not relieve any defaulting Underwriter
from liability in respect of any default of such Underwriter under this
Agreement.

12. If this Agreement shall be terminated by the Underwriters, or any
of them, because of any failure or refusal on the part of the Company or the
Selling Stockholders to comply

-29-
<PAGE>

with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company or the Selling Stockholders shall be unable to perform
its obligations under this Agreement or any condition of the Underwriters'
obligations cannot be fulfilled, the Company and the Selling Stockholders agree
to reimburse the Underwriters or such Underwriters as have so terminated this
Agreement with respect to themselves, severally, for all out-of-pocket expenses
(including the fees and expenses of its counsel) reasonably incurred by the
Underwriter in connection with this Agreement or the offering contemplated
hereunder.

13. This Agreement shall inure to the benefit of and be binding upon
the Company, the Selling Stockholders, the Underwriters, any controlling persons
referred to herein and their respective successors and assigns. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any other person, firm or corporation any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. No purchaser of Shares from any Underwriter shall be deemed to be a
successor by reason merely of such purchase.

14. Any action by the Underwriters hereunder may be taken by the
Representatives jointly or by J.P. Morgan Securities Inc. alone on behalf of the
Underwriters, and any such action taken by the Representatives jointly or by
J.P. Morgan Securities Inc. alone shall be binding upon the Underwriters. All
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Underwriters shall be given to the
Representatives, c/o J.P. Morgan Securities Inc., 60 Wall Street, New York, New
York 10260 (telefax: ); Attention: Syndicate Department. Notices to the
------
Company shall be given to it at , , ,
------------ ------------- ------------
(telefax: ); Attention: . Notices to SOMAR shall be given to
-------- ------------
it at , , (telefax: );
----------------- ------------- -----------
Attention: . Notices to NBG Services, Inc. shall be given to it at
-------------
, , (telefax: );
- ----------------- ------------- -----------
Attention: .
-------------

15. This Agreement may be signed in counterparts, each of which shall
be an original and all of which together shall constitute one and the same
instrument.

-30-
<PAGE>

16. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, without giving effect to the conflicts
of laws provisions thereof.

If the foregoing is in accordance with your understanding, please sign
and return seven counterparts hereof.

Very truly yours,

TELESPECTRUM WORLDWIDE INC.

By:
-------------------------------
Title:

SOMAR, INC.

By:
-------------------------------
Attorney-in-Fact

[EXECUTIONS CONTINUED]

-31-
<PAGE>

NBG SERVICES, INC.

By:
-------------------------------
Attorney-in-Fact

Accepted: , 1996
---------
J.P. Morgan Securities Inc.

Acting severally on behalf
of themselves and the
several Underwriters listed
in Schedule I hereto.

By: J.P. Morgan Securities Inc.
Acting on behalf of itself and the
several Underwriters listed in
Schedule I hereto.

By:
-------------------------------
Title:

-32-
<PAGE>

SCHEDULE I
<TABLE>
<CAPTION>

Number of Shares
Underwriter To Be Purchased
- ----------- ----------------
<S> <C>

J.P. Morgan Securities Inc....................
Dillon, Read & Co. Inc........................
Legg Mason Wood Walker, Incorporated......
The Robinson-Humphrey Company, Inc............

Total ================

</TABLE>

-33-

<PAGE>
EXHIBIT 23.01

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our reports
and to all references to our firm included in or made a part of this
registration statement.

Philadelphia, PA ARTHUR ANDERSEN LLP
June 28, 1996