COMPASS INTERNATIONAL SERVICES CORP, S-1, 1997-10-06

COMPASS INTERNATIONAL SERVICES CORP
S-1, 1997-10-06

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 6, 1997

REGISTRATION NO. 333-
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
COMPASS INTERNATIONAL SERVICES CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
----------------
DELAWARE 7322 22-3540815
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION OF INDUSTRIAL CLASSIFICATION IDENTIFICATION NO.)
INCORPORATION OR CODE NO.)
ORGANIZATION)
5 INDEPENDENCE WAY, SUITE 300, PRINCETON, NEW JERSEY 08540; (609) 514-5156
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------
MICHAEL J. CUNNINGHAM
5 INDEPENDENCE WAY
SUITE 300
PRINCETON, NEW JERSEY 08540
(609) 514-5156
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
HOWARD S. LANZNAR, ESQ. NEIL GOLD, ESQ.
MARGUERITE M. ELIAS, ESQ. CAROLINE AIKEN KOSTER, ESQ.
KATTEN MUCHIN & ZAVIS FULBRIGHT & JAWORSKI L.L.P.
525 WEST MONROE STREET 666 FIFTH AVENUE
SUITE 1600 31ST FLOOR
CHICAGO, ILLINOIS 60661 NEW YORK, NEW YORK 10103
(312) 902-5200 (212) 318-3000
----------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
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, check the following box and
list the Securities Act registration statement number of 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: [X].
CALCULATION OF REGISTRATION FEE
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- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROPOSED
TITLE OF EACH CLASS OF AMOUNT PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE TO BE MAXIMUM AGGREGATE REGISTRATION
REGISTERED REGISTERED OFFERING PRICE OFFERING PRICE FEE
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock............ 4,715,000 shares(1) $12.00 per share(2) $56,580,000(2) $17,146
- ---------------------------------------------------------------------------------------------------
</TABLE>
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(1) Includes 615,000 shares to be offered upon exercise of the Underwriters'
over-allotment option.
(2) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457 of Regulation C under the Securities Act of 1933, as amended.
----------------
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 THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO
SECTION 8(A), MAY DETERMINE.

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<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. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED OCTOBER 6, 1997

4,100,000 SHARES

LOGO
COMPASS INTERNATIONAL SERVICES CORPORATION

COMMON STOCK

All of the 4,100,000 shares of Common Stock offered hereby are being sold by
the Company.

Prior to this offering (the "Offering") there has been no public market for
the Common Stock of the Company. It is currently estimated that the initial
public offering price of the Common Stock will be between $ and $ per
share. See "Underwriting" for a discussion of the factors considered in
determining the initial public offering price. Application has been made to
have the Common Stock approved for quotation on the Nasdaq National Market
under the symbol "CMPS."

SEE "RISK FACTORS" COMMENCING ON PAGE 9 OF THIS PROSPECTUS FOR A DISCUSSION
OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE
COMMON STOCK OFFERED HEREBY.

-----------

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>
Price to Underwriting Proceeds to
Public Discount(1) Company(2)
- -----------------------------------------------
<S> <C> <C> <C>
Per
Share.... $ $ $
Total(3). $ $ $
- -----------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
(1) See "Underwriting" for information concerning indemnification of the
Underwriters and other matters.
(2) Before deducting expenses payable by the Company, estimated at $3,000,000.
(3) The Company has granted to the Underwriters a 30-day option to purchase up
to 615,000 additional shares of Common Stock solely to cover over-
allotments, if any. If the Underwriters exercise this option in full, the
total Price to Public, Underwriting Discount and Proceeds to Company will
be $ , $ , and $ , respectively. See "Underwriting."

The shares of Common Stock are offered by the several Underwriters named
herein, subject to receipt and acceptance by them and subject to their right to
reject any order in whole or in part. It is expected that delivery of the
certificates representing such shares will be made against payment therefor at
the office of NationsBanc Montgomery Securities, Inc., on or about
, 1997.

-----------

NationsBanc Montgomery Securities, Inc.
Lehman Brothers

, 1997
<PAGE>

[Description of photographs and captions on inside front cover to come.]

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

Certain persons participating in this Offering may engage in transactions
that stabilize, maintain or otherwise affect the price of the Common Stock.
Such transactions may include stabilizing, the purchase of Common Stock to
cover syndicate short positions and the imposition of penalty bids. For a
description of these activities, see "Underwriting."

2
<PAGE>

PROSPECTUS SUMMARY

Simultaneously with and as a condition to the closing of the Offering made by
this Prospectus, Compass will acquire five business services outsourcing
companies (the "Founding Companies"), in separate transactions (collectively,
the "Acquisitions"), in exchange for cash and shares of its Common Stock.
Unless otherwise indicated, all references to the "Company" herein include the
Founding Companies and references to "Compass" shall mean Compass International
Services Corporation prior to the effectiveness of the Acquisitions. For more
information about the Acquisitions, see "Certain Transactions."

The following summary is qualified in its entirety by, and should be read in
conjunction with, the detailed information and financial statements, including
the notes thereto, appearing elsewhere in this Prospectus. Unless otherwise
indicated, all such financial information and share and per share data in this
Prospectus (i) have been adjusted to give effect to the Acquisitions, (ii) give
effect to the approximate 112.185-for-1 stock split to be effected prior to the
consummation of the Offering, and (iii) assume that the Underwriters' over-
allotment option is not exercised.

THE COMPANY

Compass was organized to create a leading provider of outsourced business
services to public and private entities throughout the sales cycle (as
illustrated below, the "Sales Cycle"). The five Founding Companies collectively
provide accounts receivable management services, mailing services and
teleservices to clients in a broad range of sectors including
telecommunications, financial services, insurance, healthcare, education,
government and utilities. In addition, through its proprietary Accelerated
Payment Systems ("APS") process, the Company is a leading provider of
telephonic check drafting services which enable clients to accept payments
through checks authorized by phone. The Founding Companies, each of which has
been in business for more than ten years, have collectively achieved
substantial growth in recent years. On a pro forma combined basis, the Founding
Companies' revenues increased from $30.9 million in 1992 to $71.8 million in
1996, representing a compound annual growth rate of 23.5%.

The Company's accounts receivable management services include the recovery of
traditional delinquent accounts from both consumer and commercial debtors and
the management of early stage delinquencies. Mailing services include lead
generating direct mail, often to prompt inbound sales calls, and direct mail
for billing, payment processing or collection purposes. Mailing services also
include presorting, freight and drop shipping, data processing, laser printing,
mailing list rental and order fulfillment. Teleservices include outbound
telemarketing, inbound customer service and inbound sales. Each of the
Company's services, including APS, can be utilized at various stages of the
Sales Cycle. Upon completion of the Offering, the Company will be one of the
largest providers of its services in the United States, servicing clients from
12 call centers in ten states equipped with a total of approximately 900
workstations, a mail processing center in Texas, four sales centers in the
United States and one sales center in the United Kingdom.

Companies are increasingly outsourcing to third party experts a variety of
non-core business functions throughout the Sales Cycle, and the Company
believes that this trend toward outsourcing will continue. Both the accounts
receivable management industry and the direct marketing industry have
experienced significant growth in recent years. The American Collectors
Association estimates that consumer receivables outsourced to third parties for
management and recovery in the United States increased from approximately $43.7
billion in 1990 to approximately $84.3 billion in 1995, a compound annual
growth rate of 14.0%. The Direct Marketing Association estimates that
advertising expenditures in the United States for telemarketing increased from
approximately $63.4 billion in 1991 to $87.9 billion in 1996, a compound annual
growth rate of 6.8%, while direct mail advertising expenditures increased from
approximately $24.5 billion to $34.6 billion during the same period, a compound
annual growth rate of 7.1%. Each of the accounts receivable management, direct
mail and

3
<PAGE>

teleservices industries is highly fragmented, includes a large number of small,
independent businesses and is currently experiencing consolidation. The Company
believes significant opportunities are available to a well capitalized company
providing a broad offering of outsourced business services with a high level of
customer service.

Compass believes that companies are increasingly seeking partners who can
provide a comprehensive set of outsourced services, spanning the entire Sales
Cycle, while maintaining a high level of client service. The diagram below
illustrates the processes that comprise the Sales Cycle, from direct marketing
through accounts receivable collection, and the services of the Company that
can be utilized at various stages throughout the Sales Cycle.

[DIAGRAM OF SALES CYCLE]

The Company's goal is to become a leading, single-source provider of
outsourced business services throughout the Sales Cycle. In order to achieve
this goal, the Company intends to: (i) provide a broad array of complementary
business services; (ii) focus on high quality client service; (iii) leverage
and expand its technology and operational infrastructures; and (iv) operate
with a decentralized management structure.

The Company intends to implement a focused internal growth strategy and
pursue an aggressive acquisition program.

INTERNAL GROWTH STRATEGY. While the Company intends to acquire additional
outsourcing services companies, strong internal growth remains the core of the
Company's growth strategy. A key element of the internal growth strategy is to
capitalize on significant cross-selling opportunities. Each of the Founding
Companies is a specialist in the services it provides and has many long
standing relationships with large clients that have multiple outsourcing needs.
Combining the Founding Companies will enable the Company to capitalize on
existing clients' desires for a single point of service, and to offer bundled
services by leveraging the Founding Companies' client relationships and
reputations for quality. The Company expects to use the expertise of the
Founding Companies as a point of entry with new clients. In addition, the
Company intends to: (i) implement an aggressive, coordinated marketing program;
(ii) selectively expand its service offerings with the goal of providing
integrated "end-to-end" services to clients throughout the Sales Cycle; (iii)
implement best practices throughout the Company's operations; (iv) achieve
economies of scale; and (v) pursue opportunities in the growing international
market.

ACQUISITION STRATEGY. Compass believes that industry trends toward
consolidation and increased acceptance of outsourcing create opportunities for
expansion of the Company's business. The Company intends to capitalize on the
highly fragmented nature of the industries in which it competes by implementing
an aggressive strategic acquisition program following the Offering. Using the
Founding Companies as platforms for growth and

4
<PAGE>

consolidation, the Company will pursue acquisitions within the industry
segments and markets currently served by the Founding Companies to add to the
growth of its existing businesses and gain market share. In addition, the
Company plans to acquire additional companies that broaden and complement its
menu of services and the markets it serves.

THE OFFERING

<TABLE>
<S> <C>
Common Stock offered by the
Company........................... 4,100,000 shares
Common Stock to be outstanding
after the Offering................ 11,218,460 shares(1)
Use of proceeds.................... To pay the cash portion of the purchase
price for the Founding Companies, to retire
certain outstanding indebtedness of the
Founding Companies, and for working capital
and general corporate purposes, including
future acquisitions. See "Use of Proceeds."
Proposed Nasdaq National Market
symbol............................ CMPS
</TABLE>
- --------
(1) Does not include: (i) up to 1,000,000 additional shares reserved for
issuance pursuant to the Company's 1997 Employee Incentive Compensation
Plan (the "Incentive Plan"), of which options to purchase approximately
600,000 shares of Common Stock will be granted under the Incentive Plan
concurrently with the Offering at an exercise price equal to the initial
public offering price; (ii) 500,000 additional shares reserved for issuance
under the Company's Employee Stock Purchase Plan; or (iii) 100,000 shares
of Common Stock issuable upon the exercise of warrants to be issued
concurrently with the Offering. See "Management--1997 Employee Incentive
Compensation Plan" and "--Employee Stock Purchase Plan" and "Certain
Transactions."

5
<PAGE>

SUMMARY PRO FORMA COMBINED FINANCIAL DATA
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

Compass will acquire the Founding Companies simultaneously with and as a
condition to the consummation of this Offering. For financial statement
presentation purposes, The Mail Box, Inc., one of the Founding Companies, has
been designated as the accounting acquiror. The following unaudited summary pro
forma combined financial data present certain data for the Company as adjusted
to give effect to (i) the consummation of the Acquisitions, (ii) certain pro
forma adjustments to the historical financial statements, including adjustments
for three acquisitions completed by Bomar since August 1996, and (iii) the
consummation of this Offering and the application of the net proceeds
therefrom. See the Unaudited Pro Forma Combined Financial Statements and the
notes thereto included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
PRO FORMA COMBINED
----------------------------------
YEAR ENDED SIX MONTHS ENDED
DECEMBER 31, JUNE 30,
------------ ---------------------
1996 1996 1997
------------ ---------- ----------
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA (1):
Revenues.................................... $71,783 $34,878 $43,307
Operating expenses.......................... 45,079 21,037 27,069
---------- ---------- ----------
Gross profit.............................. 26,704 13,841 16,238
Selling, general and administrative expenses
(2)........................................ 19,510 9,861 10,879
Amortization of goodwill and other
intangibles (3)............................ 1,251 625 625
---------- ---------- ----------
Income from operations.................... 5,943 3,355 4,734
Other expense, net (4)...................... 333 146 254
---------- ---------- ----------
Income before income taxes.................. 5,610 3,209 4,480
Provision for income taxes (5)............ 2,744 1,534 2,042
---------- ---------- ----------
Net income.................................. $ 2,866 $ 1,675 $ 2,438
========== ========== ==========
Net income per share........................ $ 0.28 $ 0.16 $ 0.24
========== ========== ==========
Shares used in computing net income per
share (6).................................. 10,269,126 10,269,126 10,269,126
</TABLE>

<TABLE>
<CAPTION>
JUNE 30, 1997
--------------------------
PRO FORMA AS
COMBINED (7) ADJUSTED (8)
------------ -----------
<S> <C> <C>
BALANCE SHEET DATA:
Working capital (deficit)........................... $(18,197)(9) $
Total assets........................................ 66,382
Total long-term debt, net of current portion........ 11,613
Stockholders' equity................................ 19,354
</TABLE>
- --------
(1) The pro forma combined statement of operations data assume that the
Acquisitions and the Offering were consummated on January 1, 1996, are not
necessarily indicative of the operating results that would have been
achieved had these events actually then occurred and should not be
construed as representative of future operating results. The summary pro
forma combined statement of operations data should be read in conjunction
with the Unaudited Pro Forma Combined Financial Statements and the notes
thereto and the historical financial statements of Compass and the Founding
Companies and the notes thereto included elsewhere in this Prospectus.
(2) The pro forma combined statement of operations data reflect reductions in
salaries, bonuses and benefits to the stockholders of the Founding
Companies to which they have agreed prospectively in the employment
agreements to be entered into upon consummation of the Offering (the
"Compensation Differential"). The Compensation Differential was
approximately $3.5 million, $1.8 million and $2.1 million for the year
ended December 31, 1996 and the six months ended June 30, 1996 and 1997,
respectively.

6
<PAGE>

(3) Reflects (i) the amortization of goodwill of $37.0 million to be recorded
as a result of the Acquisitions and $3.4 million to be recorded as a result
of an acquisition by Bomar in September 1997 over periods ranging from 15
to 40 years; and (ii) the amortization of $1.0 million in intangible assets
over a period of 15 years.
(4) Reflects a reduction of interest expense associated with long term debt to
be repaid from the proceeds of the Offering of $148,000 for the year ended
December 31, 1996, and $94,000 and $138,000 for the six months ended June
30, 1996 and 1997, respectively and a reduction of interest income of
$61,000 for the year ended December 31, 1996 and $33,000 and $21,000 for
the six-month periods ended June 30, 1996 and 1997, respectively, relating
to stockholder notes to be paid off upon consummation of the Offering.
(5) Assumes that all income is subject to a corporate income tax rate of 40%
and that all goodwill is non-deductible.
(6) Includes: (i) 1,682,769 shares issued to BGL Capital Partners, L.L.C., and
management of Compass; (ii) 5,435,691 shares issued to owners of the
Founding Companies in connection with the Acquisitions; and (iii) 3,150,666
shares representing the number of shares sold in the Offering necessary to
pay the cash portion of the consideration for the Acquisitions, to pay the
underwriting discount and estimated expenses of the Acquisitions and the
Offering, and to repay certain indebtedness assumed by Compass in the
Acquisitions, net of repayment of stockholder receivables. See "Certain
Transactions."
(7) The pro forma combined balance sheet data assume that the Acquisitions were
consummated on June 30, 1997, are not necessarily indicative of the
financial position that would have been achieved had these events actually
then occurred and should not be construed as representative of future
financial position. The summary pro forma balance sheet data should be read
in conjunction with the Unaudited Pro Forma Combined Financial Statements
and the notes thereto and the historical financial statements of Compass
and the Founding Companies and the notes thereto included elsewhere in this
Prospectus.
(8) Adjusted to reflect the sale of the 4,100,000 shares of Common Stock
offered hereby and the application of the estimated net proceeds therefrom.
See "Use of Proceeds."
(9) Includes $20.0 million payable to stockholders of the Founding Companies,
representing the cash portion of the consideration for the Acquisitions to
be paid from the net proceeds of the Offering. See "Use of Proceeds" and
"Notes to Unaudited Pro Forma Combined Financial Statements."

7
<PAGE>

SUMMARY INDIVIDUAL FOUNDING COMPANY FINANCIAL DATA
(IN THOUSANDS)

The following table presents summary operating data for each of the
individual Founding Companies on a historical basis for the periods indicated.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEARS ENDED DECEMBER 31,(1) JUNE 30,(1)
------------------------------ -----------------
1994 1995 1996 1996 1997
--------- --------- --------- -------- --------
<S> <C> <C> <C> <C> <C>
MAIL BOX:
Revenues.................... $ 15,354 $ 17,370 $ 26,156 $ 12,070 $ 15,804
Operating expenses.......... 11,168 12,402 17,953 8,456 10,367
--------- --------- --------- -------- --------
Gross profit................ 4,186 4,968 8,203 3,614 5,437
Selling, general and
administrative expenses.... 3,442 4,370 5,891 2,776 3,653
--------- --------- --------- -------- --------
Income from operations...... $ 744 $ 598 $ 2,312 $ 838 $ 1,784
========= ========= ========= ======== ========
NCMC:
Revenues.................... $ 8,874 $ 12,287 $ 13,579 $ 6,856 $ 8,044
Operating expenses.......... 4,550 6,322 7,945 3,703 5,018
--------- --------- --------- -------- --------
Gross profit................ 4,324 5,965 5,634 3,153 3,026
Selling, general and
administrative expenses.... 3,400 4,328 4,798 2,498 2,531
--------- --------- --------- -------- --------
Income from operations...... $ 924 $ 1,637 $ 836 $ 655 $ 495
========= ========= ========= ======== ========
BOMAR:
Revenues.................... $ 6,859 $ 7,416 $ 9,597 $ 4,766 $ 6,677
Operating expenses.......... 4,236 4,569 6,419 2,888 4,259
--------- --------- --------- -------- --------
Gross profit................ 2,623 2,847 3,178 1,878 2,418
Selling, general and
administrative expenses.... 2,206 2,594 2,853 1,566 1,965
--------- --------- --------- -------- --------
Income from operations...... $ 417 $ 253 $ 325 $ 312 $ 453
========= ========= ========= ======== ========
MID-CONTINENT:
Revenues.................... $ 9,086 $ 8,763 $ 9,038 $ 4,548 $ 4,741
Operating expenses.......... 2,963 2,851 2,875 1,470 1,551
--------- --------- --------- -------- --------
Gross profit................ 6,123 5,912 6,163 3,078 3,190
Selling, general and
administrative expenses.... 5,862 5,974 6,054 3,025 3,116
--------- --------- --------- -------- --------
Income (loss) from
operations................. $ 261 $ (62) $ 109 $ 53 $ 74
========= ========= ========= ======== ========
IMPACT(2):
Revenues.................... $ 6,698 $ 8,748 $ 8,869 $ 4,045 $ 6,257
Operating expenses.......... 4,705 6,108 6,961 2,884 4,817
--------- --------- --------- -------- --------
Gross profit................ 1,993 2,640 1,908 1,161 1,440
Selling, general and
administrative expenses.... 1,787 2,590 2,108 1,093 1,340
--------- --------- --------- -------- --------
Income (loss) from
operations................. $ 206 $ 50 $ (200) $ 68 $ 100
========= ========= ========= ======== ========
</TABLE>
- --------
(1) Selling, general and administrative expenses for the Founding Companies for
each of the years in the three-year period ended December 31, 1996 and for
the six months ended June 30, 1996 and 1997 do not include a reduction for
the Compensation Differential as indicated below. The historical
Compensation Differential shown for Bomar does not include $86,000,
$73,000, $169,000, $46,000 and $48,000, for the years ended December 31,
1994, 1995 and 1996 and for the six months ended June 30, 1996 and 1997
respectively, related to Bomar's acquisition of FCCI which was completed in
September 1997.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEARS ENDED DECEMBER 31, JUNE 30,
-------------------------- -----------------
1994 1995 1996 1996 1997
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
MAIL BOX....................... $ 152 $ 310 $ 875 $ 369 $ 781
NCMC........................... 75 169 210 91 65
BOMAR.......................... 516 718 1,046 684 600
MID-CONTINENT.................. 981 1,057 1,161 577 632
IMPACT......................... -- -- -- -- --
-------- -------- -------- -------- --------
Total......................... $ 1,724 $ 2,254 $ 3,292 $ 1,721 $ 2,078
======== ======== ======== ======== ========
</TABLE>
(2) Impact's operating data for the years ended December 31, 1994 and 1995
reflect the operating results for the year ended September 30 for its
affiliate, Impact Tele-marketing, Inc.

8
<PAGE>

RISK FACTORS

An investment in the shares of Common Stock offered by this Prospectus
involves a high degree of risk. In addition to the other information contained
in this Prospectus, the following factors should be considered carefully
before purchasing any of the shares of Common Stock offered hereby. This
Prospectus contains certain forward-looking statements which involve risks and
uncertainties. The Company's actual results could differ materially from the
results anticipated in these forward-looking statements as a result of certain
of the factors set forth in the following risk factors and elsewhere in this
Prospectus.

ABSENCE OF COMBINED OPERATING HISTORY; RISKS OF INTEGRATION

Compass was recently formed and has conducted no operations and generated no
revenues to date. Compass has entered into agreements to acquire the Founding
Companies simultaneously with and as a condition to the closing of the
Offering. The Founding Companies have been operating as separate independent
entities. Currently, the Company has no centralized financial reporting system
and will initially rely on the existing reporting systems of the Founding
Companies. The success of the Company will depend, in part, on the Company's
ability to integrate the operations of the Founding Companies, including
centralizing certain functions to achieve cost savings and developing programs
and processes that will promote cooperation and the sharing of opportunities
and resources among the Founding Companies. The Company's management group has
been assembled only recently and there can be no assurance that the management
group will effectively be able to oversee the combined entity and implement
the Company's operating or growth strategies. Further, to the extent that the
Company is able to implement its acquisition strategy, the resulting growth of
the Company will place significant demands on management and on the Company's
internal systems and controls. There can be no assurance that the newly
assembled management group will effectively be able to direct the Company
through a period of significant growth.

A number of the Founding Companies offer different services, utilize
different accounting policies and procedures, employ different technologies
and operating systems and target different markets and client segments. While
the Company believes that there are substantial opportunities in integrating
the businesses of the Founding Companies, these differences increase the risk
inherent in successfully completing such integration. Further, there can be no
assurance that the Company's integration strategy will be successful, or that
the clients of the Founding Companies will accept the Company as a provider of
a variety of outsourced business services. In addition, there can be no
assurance that the operating results of the Company will match or exceed the
combined individual operating results achieved by the Founding Companies prior
to the Offering.

MANAGEMENT OF GROWTH

The Company expects to grow internally and through acquisitions. The Company
expects to expend significant time and effort in expanding existing businesses
and identifying, completing and integrating acquisitions. The Company's
ability to manage growth successfully will require the Company to continue to
improve its operations, management and financial systems and controls as well
as expand its employee work force. Any future growth can be expected to place
significant additional responsibilities on the Company's management,
operations, employees and resources. There can be no assurance the Company
will be able to maintain or accelerate its current growth, effectively manage
its expanding operations or achieve planned growth on a timely or profitable
basis. To the extent that the Company is unable to manage its growth
efficiently and effectively, the Company's business, financial condition and
results of operations could be materially adversely affected. See "Business--
Growth Strategy" and "Management."

FACTORS AFFECTING INTERNAL GROWTH AND OPERATING STRATEGIES

A key element of the Company's strategy is to generate internal growth by
capitalizing on cross-selling opportunities, generating new clients through
aggressive marketing and expanding its service offerings. Internal growth will
depend upon factors including the effective initiation, development and
maintenance of client

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relationships; the expansion of marketing operations; the Company's ability to
maintain the high quality of the services and products it offers and to expand
such services and products; and the recruitment, motivation and retention of
qualified management and other personnel. Sustaining growth will also require
continued access by the Company to capital, the successful cross-selling of
products and services among the Founding Companies and realization by the
Company of economies of scale. There can be no assurance that the Company's
strategies will continue to generate internal growth or that it will be able to
generate cash flow adequate for its operations and to support growth. A key
component of the Company's strategy is to operate the Founding Companies and
subsequently acquired businesses on a decentralized basis, with local
management retaining responsibility for day-to-day operations, profitability
and the growth of the business. If proper overall business controls are not
implemented, this decentralized operating strategy could result in inconsistent
operating and financial practices at the Founding Companies and subsequently
acquired businesses and the Company's overall profitability could be adversely
affected. See "Business--Growth Strategy."

RISKS ASSOCIATED WITH THE COMPANY'S ACQUISITION STRATEGY AND FINANCING OF
ACQUISITIONS

A significant element in the Company's growth strategy is the acquisition of
additional outsourced business services companies that will add to the growth
of or complement its existing businesses. There can be no assurance that the
Company will be able to identify or reach mutually agreeable terms with
acquisition candidates and their owners, or that the Company will be able to
profitably manage additional businesses or successfully integrate such
additional businesses into the Company without substantial costs, delays or
other problems. In addition, acquisitions may involve a number of special
risks, including adverse short-term effects on the Company's reported operating
results; diversion of management's attention; dependence on retention, hiring
and training of key personnel; unanticipated problems or legal liabilities; and
amortization of acquired intangible assets. Some or all of these risks could
have a material adverse effect on the Company's operations and financial
performance. In addition, increased competition for attractive acquisition
candidates may develop, in which case there may be fewer acquisition
opportunities available to the Company as well as high acquisition prices.
There can be no assurance that the Founding Companies or other businesses
acquired in the future will achieve anticipated revenues or earnings.

The Company currently intends to finance future acquisitions by using its
Common Stock for all or a portion of the consideration to be paid. In the event
that the Common Stock does not maintain sufficient value, or potential
acquisition candidates are unwilling to accept Common Stock as consideration
for the sale of their businesses, the Company may be required to utilize more
of its cash resources, if available, in order to continue its acquisition
program. If the Company does not have sufficient cash resources, its growth
could be limited unless it is able to obtain capital through additional debt or
equity financings. There can be no assurance that such debt or equity
financings will be obtained or that, if obtained, such financing will be on
terms that are favorable to the Company or sufficient for the Company's needs.
If the Company is unable to obtain sufficient financing, it may be unable to
fully implement its acquisition strategy.

POTENTIAL FLUCTUATIONS IN QUARTERLY OPERATING RESULTS

Results for any quarter are not necessarily indicative of the results that
the Company may achieve for any subsequent quarter or a full fiscal year.
Quarterly results may vary materially as a result of the timing and structure
of acquisitions, the timing and magnitude of costs related to such acquisitions
or the gain or loss of material client relationships. Since a significant
portion of the Company's revenues are generated on a project-by-project basis,
the timing or completion of material projects could result in fluctuations in
the Company's results of operations for particular quarterly periods. Because
the anticipated financial benefits of the combination of the Founding Companies
may not be generated immediately, if at all, the Company's initial results as a
combined company may reflect corporate overhead that exceeds the realized
benefits. Unexpected variations in quarterly results could also adversely
affect the price of the Common Stock, which in turn could limit the ability of
the Company to make acquisitions.

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PATENT LITIGATION; DEPENDENCE ON PROPRIETARY TECHNOLOGY
The success of the Company's APS business is dependent in part upon a patent
covering the APS process (the "APS Patent") that was purchased by and assigned
to the Company in 1996. NCMC is currently engaged in several disputes with
respect to the APS Patent. NCMC has filed suit against the former owner and
inventor of the APS Patent (collectively, the "Defendants"), alleging that the
Defendants have breached the agreement between NCMC and the Defendants and
violated NCMC's exclusive rights to the APS Patent and related intellectual
property used in the APS portion of NCMC's business. The Defendants have filed
a counterclaim that seeks, among other things, rescission of the agreement
under which NCMC purchased the APS Patent, restoration of a prior agreement
pursuant to which the Defendants licensed the APS Patent to NCMC, return of
the APS Patent to the Defendants and unspecified damages. Although NCMC
believes that the counterclaims are without merit, there can be no assurances
that Defendants will not prevail with respect to some or all of their
counterclaims. If the purchase agreement is rescinded and the prior license
agreement restored, the royalties payable by NCMC would be higher than those
currently being paid, damages could be assessed and the ownership of the APS
Patent would be transferred to the Defendants. See "Business--Litigation."

NCMC is currently a plaintiff in two other lawsuits in which NCMC is
alleging that a competitor and a former customer are infringing the APS
Patent. These defendants have denied any infringement and filed counterclaims
seeking a declaration that the APS Patent is invalid. There can be no
assurances that NCMC will prevail in these or other patent infringement
actions it may pursue, that the APS Patent will not be declared invalid or
that the loss of either of these two lawsuits or the defendants' counterclaims
will not have a material adverse effect on the Company's business, results of
operations or financial condition. See "Business--Litigation." In addition,
there can be no assurances that the Company's competitors will not be able to
develop similar or better technology than the APS Patent.

DEPENDENCE ON LABOR FORCE
The Company's success depends in part on its ability to recruit, hire, train
and retain qualified employees. The Company's operations are very labor
intensive and have experienced high personnel turnover. A significant increase
in the Company's employee turnover rate could increase the Company's
recruiting and training costs and decrease operating efficiencies and
productivity. If the Company's growth strategy is successful, the Company will
be required to recruit, hire and train qualified personnel at an accelerated
rate. There can be no assurance that the Company will be able to hire, train
and retain a sufficient labor force of qualified employees. Because a
significant portion of the Company's operating costs consist of wages to
hourly workers, an increase in wages, costs of employee benefits or employment
taxes could have a material adverse effect on the Company's business, results
of operations and financial condition. In addition, certain of the Company's
facilities are located in geographic areas with relatively low unemployment
rates, thus potentially making it more difficult and costly to hire qualified
personnel.

DEPENDENCE ON CERTAIN SECTORS; CONTRACT RISKS
Most of the Company's revenues are derived from clients in the
telecommunications, financial services, education, healthcare, retail and
commercial, insurance, government and utilities sectors. A significant
reduction in expenditures in these sectors or trends to reduce or eliminate
the use of third-party services could have a materially adverse impact on the
Company's business, results of operations and financial condition. The Company
enters into contracts with most of its clients which define, among other
things, fee arrangements, scope of services and termination provisions.
Clients may usually terminate such contracts on short notice. Accordingly,
there can be no assurance that existing clients will continue to use the
Company's services at historical levels, if at all. The Company's 10 largest
clients in 1996 accounted for approximately 39.8% of the Company's revenues on
a pro forma combined basis. During 1996 and the six months ended June 30,
1997, VarTec Telecom, Inc. ("VarTec") accounted for 11.2% and 14.6%,
respectively, of the Company's revenues on a pro forma combined basis. The
Company's contract with VarTec allows for termination on short notice. A
significant reduction in business from VarTec could have a material adverse
effect on the Company's business, results of operations and financial
condition. See "Business--Client Relationships."

COMPETITION
The markets in which the Company competes are highly competitive, and the
Company expects competition to persist and intensify in the future. The
Company's competitors include small firms offering specific business

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<PAGE>

services, divisions of large entities, large independent firms and, most
significantly, the in-house operations of clients or potential clients. Some of
the Company's competitors have substantially greater financial, marketing and
other resources, offer more diversified services and operate in broader
geographic areas than the Company. There can be no assurance that additional
competitors with greater resources than the Company will not enter the
Company's markets. All of the services offered by the Company may be performed
in-house. Many larger clients retain multiple service providers which exposes
the Company to continuous competition in order to remain a preferred vendor.
There can be no assurance that outsourcing of the services performed by the
Company will continue or that existing Company clients will not bring some or
all of such services in-house.

RELIANCE ON MANAGEMENT

The Company's operations are dependent on the efforts of Michael J.
Cunningham, its Chief Executive Officer, Mahmud U. Haq, its President and Chief
Operating Officer, and Richard A. Alston, its Chief Financial Officer, as well
as the senior management of the Founding Companies. Furthermore, the Company
will likely be dependent on the senior management of any businesses acquired in
the future. If any of these individuals becomes unable to continue his role,
the Company's business or prospects could be adversely affected. Although the
Company has entered into an employment agreement with each of the Company's
executive officers and the senior management of each of the Founding Companies,
there can be no assurance that such individuals will continue in their present
capacities for any particular period of time. The Company does not intend to
obtain key man life insurance covering any of its executive officers or members
of senior management of the Founding Companies. See "Management."

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 telephone companies would 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. A significant increase in postage rates could adversely affect the
demand for the mailing services provided by the Company. 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 Offered."

GOVERNMENT REGULATION

The accounts receivable management and telemarketing industries are regulated
under various federal and state statutes. The Company is subject to the Fair
Debt Collection Practices Act (the "FDCPA") and various state debt collection
laws, which, among other things, establish specific guidelines and procedures
debt collectors must follow in communicating with consumer debtors, including
the time, place and manner of such communications. The accounts receivable
management business is also subject to state regulation, and some states
require that the Company be licensed as a debt collection company. The Company
is also subject to the Fair Credit Reporting Act (the "FCRA"), which regulates
the consumer credit reporting industry and which may impose liability on the
Company to the extent that the adverse credit information reported on a
consumer to a credit bureau is false, inaccurate or outside of the scope of the
Company's transactions with such consumers. With respect to the other
teleservices offered by the Company, including telemarketing, the Telemarketing
and Consumer Fraud and Abuse Prevention Act of 1994 broadly authorizes the
Federal Trade Commission (the "FTC") to issue regulations prohibiting
misrepresentations in telemarketing sales. The FTC's telemarketing sales rules,
among other things, limit the hours during which telemarketers may call,
prohibit misrepresentations of the cost, terms, restrictions, performance or
duration of products or services offered by telephone solicitation and
specifically address other perceived telemarketing abuses in the offering of
prizes and the sale of investment opportunities. In addition, the Telephone
Consumer Protection Act of 1991 (the "TCPA") restricts the use of automated
telephone equipment for telemarketing purposes, including limiting the hours
during which telemarketers may call consumers and prohibiting the use of
automated telephone dialing equipment to call certain telephone numbers. A
number of states also regulate telemarketing and some states have enacted
restrictions similar to the TCPA. The failure to comply with applicable
statutes and regulations could have a materially adverse effect on the
Company's business, results of operations and financial condition. There can be
no assurance that additional federal or state legislation, or changes in
regulatory implementation, would not limit the activities of the Company in the
future or significantly increase the cost of regulatory compliance.

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Several of the industries served by the Company are also 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.

RISK OF BUSINESS INTERRUPTION

The Company's operations are dependent upon its ability to protect its call
centers, computer and telecommunications equipment and software systems against
damage from fire, power loss, telecommunications interruption or failure,
natural disaster and other similar events. In the event the Company experiences
a temporary or permanent interruption through casualty, operating malfunction
or otherwise, the Company's business could be materially adversely affected and
the Company may be required to pay contractual damages to some clients or allow
some clients to terminate or renegotiate their contracts with the Company.
While the Company intends to obtain property and business interruption
insurance, such insurance may not adequately compensate the Company for all
losses that it may incur.

RISKS ASSOCIATED WITH RAPIDLY CHANGING TECHNOLOGY

The Company's business is highly dependent on its computer and
telecommunications equipment and software systems. The Company's failure to
maintain its technological capabilities or to respond effectively to
technological changes could have a material adverse effect on the Company's
business, results of operations or financial condition. The Company's future
success also will be highly dependent upon its ability to enhance existing
services and introduce new services to respond to changing technological
developments. There can be no assurance that the Company can successfully
develop and bring to market any new services in a timely manner, that such
services or products will be commercially successful or that competitors'
technologies or services will not render the Company's products or services
noncompetitive or obsolete.

CONTROL OF THE COMPANY

Following the completion of the Offering, the directors and executive
officers of the Company and their affiliates and the former stockholders of the
Founding Companies (collectively, the "Initial Stockholders") will beneficially
own approximately 63.5% of the then outstanding shares of Common Stock (60.2%
if the Underwriters' over-allotment option is exercised in full). These
persons, if acting in concert, will have the ability to exercise substantial
control over the Company's affairs and would likely be able to elect a
sufficient number of directors to control the Board and to approve or
disapprove any matter submitted to a vote of stockholders. The Initial
Stockholders have entered into an agreement whereby each party has agreed, for
the five years following the Offering, to vote all shares of Common Stock held
by them (i) for the nomination and reelection of the directors serving at the
time of the Offering or such successors as shall be nominated in accordance
with the agreement and (ii) as to any other matter brought to a stockholder
vote, in accordance with the recommendation of the then-incumbent Board of
Directors. The ownership position of the Initial Stockholders may have the
effect of delaying, deferring or preventing a change in control of the Company.
See "Certain Transactions," "Principal Stockholders" and "Description of
Capital Stock--Stockholders' Agreement."

POTENTIAL EFFECT OF SHARES ELIGIBLE FOR FUTURE SALE ON PRICE OF COMMON STOCK

The market price of the Common Stock of the Company could be adversely
affected by the sale of substantial amounts of Common Stock of the Company in
the public market following the Offering. The 4,100,000 shares of Common Stock
being sold in the Offering will be freely tradeable unless acquired by
affiliates (as that term is defined under the rules and regulations of the
Securities Act of 1933, as amended (the "Securities Act")) of the Company,
which shares will be subject to the resale limitations of Rule 144 ("Rule 144")
promulgated under the Securities Act.

Upon completion of the Offering, the holders of Common Stock who did not
purchase shares in the Offering will own 7,118,460 shares of Common Stock,
including (i) the stockholders of the Founding Companies who will receive, in
the aggregate, 5,435,691 shares in connection with the Acquisitions and (ii)
BGL and members of management who own 1,682,769 shares. These shares have not
been registered under the Securities Act and,

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<PAGE>

therefore, may not be sold unless registered under the Securities Act or sold
pursuant to an exemption from registration, such as the exemption provided by
Rule 144. Furthermore, these stockholders have agreed with Compass not to sell,
transfer or otherwise dispose of any of these shares of Common Stock for a one-
year period following the Offering. Such stockholders have certain piggyback
registration rights beginning one year after the Offering and one demand
registration right for the six month period beginning twenty months after the
Offering with respect to their shares of Common Stock.

The Company and the holders of all shares outstanding prior to the Offering
(including the holders of shares issued in connection with the Acquisitions)
have agreed not to offer, sell, contract to sell or otherwise dispose of any
shares of Common Stock, or any securities convertible into or exercisable or
exchangeable for Common Stock, for a period of 180 days after the date of this
Prospectus without the prior written consent of NationsBanc Montgomery
Securities, Inc. except for: (i) in the case of the Company, Common Stock
issued pursuant to any employee or director plan described herein or in
connection with acquisitions and (ii) in the case of all such holders, the
exercise of stock options pursuant to benefit plans described herein and shares
of Common Stock disposed of as bona fide gifts, subject, in each case, to any
remaining portion of the 180-day period applying to any shares so issued or
transferred. See "Shares Eligible for Future Sale" and "Underwriting."

The Company plans to register an additional 3,000,000 shares of its Common
Stock under the Securities Act after completion of the Offering for use by the
Company as consideration for future acquisitions. Upon such registration, these
shares will generally be freely tradable after issuance, unless the resale
thereof is contractually restricted. The registration rights described above
will not apply to the registration statement to be filed with respect to these
3,000,000 shares. It is contemplated that the shares issued as consideration
for future acquisitions will be subject to restrictions at least as restrictive
as those described in the preceding paragraph. See "Shares Eligible for Future
Sale."

NO PRIOR PUBLIC MARKET; POSSIBLE VOLATILITY OF STOCK PRICE

Prior to the Offering, there has been no public market for the Common Stock,
and there can be no assurance that an active public market for the Common Stock
will develop or continue after the Offering. The initial public offering price
for the Common Stock will be determined by negotiation between the Company and
the Representatives of the Underwriters and may bear no relationship to the
price at which the Common Stock will trade after the Offering. See
"Underwriting" for the factors to be considered in determining the initial
public offering price. After the Offering, the market price of the Common Stock
may be subject to significant fluctuations in response to numerous factors,
including variations in the annual or quarterly financial results of the
Company or its competitors, changes by financial research analysts in their
estimates of the earnings of the Company or the failure of the Company to meet
such estimates, conditions in the economy in general or in the industries in
which the Company competes, unfavorable publicity or changes in applicable laws
and regulations (or judicial or administrative interpretations thereof)
affecting the Company or the industries in which the Company competes. From
time to time, the stock market experiences significant price and volume
volatility, which may affect the market price of the Common Stock for reasons
unrelated to the Company's performance.

IMMEDIATE AND SUBSTANTIAL DILUTION

The purchasers of the shares of Common Stock offered hereby will experience
immediate dilution in the net tangible book value of their shares of
approximately $ per share. In the event the Company issues additional
Common Stock in the future, including shares which may be issued in connection
with future acquisitions, purchasers of Common Stock in this Offering may
experience further dilution. See "Dilution."

ANTI-TAKEOVER EFFECT OF CERTAIN CHARTER PROVISIONS

The Board of Directors of the Company is authorized to issue preferred stock
in one or more series without stockholder action. The Board of Directors of the
Company serve staggered terms. The existence of this "blank-check" preferred
stock and the staggered Board of Directors could render more difficult or
discourage an attempt to obtain control of the Company by means of a tender
offer, merger, proxy contest or otherwise. Certain provisions of the Delaware
General Corporation Law may also discourage takeover attempts that have not
been approved by the Board of Directors. See "Management--Board of Directors"
and "Description of Capital Stock."

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THE COMPANY

Compass was formed to create a leading provider of outsourced business
services to public and private entities throughout the Sales Cycle. Although
it has conducted no operations to date, Compass has entered into agreements
(the "Acquisition Agreements") to acquire the five Founding Companies
simultaneously with, and as a condition to, the closing of the Offering. A
brief description of each Founding Company is set forth below.

THE MAIL BOX, INC.

The Mail Box, Inc. (together with its subsidiary, "Mail Box"), founded in
1971, provides direct mailing services, billing services, mail presorting,
freight and drop shipping, data processing, laser printing, mailing list
rental and other related services to companies located principally in the
southwest United States. Mail Box also provides order fulfillment services and
sells printed materials such as letterhead, envelopes and business forms. Mail
Box is headquartered in Dallas where its operations are housed in four
buildings containing approximately 338,000 square feet. In the twelve months
ended June 30, 1997, Mail Box processed approximately 840 million pieces of
mail, utilizing sophisticated technology in its lettershop, data processing
and presort facilities. Mail Box has received numerous quality awards
including the U.S. Postal Service Industry Excellence Award in 1992 for
progressive practices in the direct marketing industry and the Mail
Advertising Service Association's Award for Excellence in Education in 1996
for establishing the industry's first full-time training facility. Significant
clients of Mail Box include VarTec Telecom, Inc., Medic Computer Systems,
Inc., Sears Roebuck & Co., Advantis Business Services, Inc., The Army and Air
Force Exchange Services and Southwestern Bell Mobile Systems, Inc. Mail Box's
revenues were $26.2 million in 1996 and $15.8 million in the six months ended
June 30, 1997.

NATIONAL CREDIT MANAGEMENT CORPORATION

National Credit Management Corporation (together with its subsidiary,
"NCMC"), founded in 1984, provides accounts receivable management services
and, through its patented Accelerated Payment Systems ("APS") technology,
telephonic check drafting services. NCMC is based in Hunt Valley, Maryland (a
suburb of Baltimore), where it operates a call center and sales office, and
operates an additional call center and sales office in Las Vegas. NCMC
provides traditional delinquency collection services, as well as an early
receivables management service, primarily to clients in the education,
utilities, government and healthcare industries and its APS check drafting
services primarily to clients in the financial services and utilities sectors.
Significant clients of NCMC include University Support Services, MBNA America
Bank, N.A., the State of Maryland, Bank One Corporation and General Electric
Capital Services, Inc. NCMC's revenues were $13.6 million in 1996 and $8.0
million in the six months ended June 30, 1997.

B.R.M.C. OF DELAWARE, INC.

B.R.M.C. of Delaware, Inc. (together with its subsidiaries, "Bomar"),
founded in 1984, provides accounts receivable management services, primarily
for clients in the telecommunications, insurance, financial services and
healthcare industries. Bomar is based in Destin, Florida, and conducts
operations in Atlanta, Phoenix, Houston and Tampa. Since August 1996, Bomar
has acquired three accounts receivable management companies. In August 1996
Bomar acquired a 75% interest in Advanced Credit Services, Inc. ("ACS"), in
November 1996 it acquired Clayton-Parker & Associates ("CPA") and in September
1997 it acquired Financial Claims Control, Inc. ("FCCI"). Bomar derives the
substantial majority of its revenues from primary, secondary and tertiary
consumer collections. In addition, Bomar collects subrogated accounts for
insurance companies and recently began providing early receivables management
services. Significant clients of Bomar include Bellsouth Telecommunications,
Inc., AT&T Wireless Services, MD Anderson Cancer Hospital, The FACS Group
(Federated Department Stores, Inc.) and Capital One Financial Corporation.
Bomar's revenues were $9.6 million in 1996 and $6.7 million in the six months
ended June 30, 1997.

MID-CONTINENT AGENCIES, INC.

Mid-Continent Agencies, Inc. (together with its subsidiaries, "Mid-
Continent"), founded in 1932, provides accounts receivable management services
primarily to companies in the manufacturing, insurance, wholesale

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distribution and commercial sectors. Mid-Continent was one of the first
companies in its industry to provide early receivables management services. It
derives the substantial majority of its revenues from commercial collections
with the balance derived from consumer collections. Mid-Continent is based in
Rolling Meadows, Illinois (a suburb of Chicago) where it operates a call
center, and has additional call centers in Louisville and Buffalo. Mid-
Continent also has an office in the United Kingdom which specializes in
commercial debt recovery and international credit reporting services. In a
December 1996 survey prepared by the Institute of Management & Administration,
Inc., an independent industry trade publication, Mid-Continent was ranked
first by companies comparing the services and results provided by commercial
collection agencies. Mid-Continent's significant clients include Beverly
Enterprises, Inc., CNA Insurance, Reynolds and Reynolds, Sentry Insurance and
seven state workers' compensation funds. Mid-Continent's revenues were $9.0
million in 1996 and $4.7 million in the six months ended June 30, 1997.

IMPACT TELEMARKETING GROUP, INC.

Impact Telemarketing Group, Inc. and Impact Tele-marketing, Inc.
(collectively, "Impact"), founded in 1984, provides primarily outbound
telemarketing services to national and regional companies in the insurance,
financial services, telecommunications and utilities industries. To a lesser
extent, Impact also provides inbound telemarketing and ancillary services.
Impact is based in Woodbury, New Jersey (a suburb of Philadelphia), and
operates approximately 260 call stations from its two New Jersey call centers.
In addition, Impact has an arrangement to use 160 additional call stations
located in North Dakota, as needed. Impact has won numerous quality awards
including being named one of Telemarketing Magazine's Top Fifty Service
Agencies every year since 1991, and Impact has been named in Telemarketing
Magazine as the fastest growing telemarketing company in the United States in
1995, 1996 and 1997. Impact's major clients include MemberWorks, Inc., the
Telecommunication Division of AT&T, Gerber Life Insurance Co. and MBNA America
Bank, N.A. Impact's revenues were $8.9 million in 1996 and $6.3 million in the
six months ended June 30, 1997.

THE ACQUISITIONS

Simultaneously with, and as a condition to, the closing of the Offering,
Compass will acquire all of the outstanding capital stock of each of the
Founding Companies. The aggregate consideration to be paid by Compass consists
of approximately $20.0 million in cash and 5,435,691 shares of Common Stock.
Pursuant to the Acquisitions, the Company will assume the outstanding
indebtedness of the Founding Companies. The consideration to be paid for the
Founding Companies was determined through arm's-length negotiations among
Compass and representatives of the Founding Companies. For a description of
the Acquisitions, see "Certain Transactions."
The Company's executive offices are located at 5 Independence Way, Suite
300, Princeton, New Jersey 08540, and its telephone number is (609) 514-5156.
The Company intends to relocate its headquarters to the metropolitan New York
area after the consummation of the Offering.

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USE OF PROCEEDS

The net proceeds to the Company from the sale of the 4,100,000 shares of
Common Stock offered hereby, after deducting the underwriting discount and
estimated offering expenses, are estimated to be approximately $ million
($ million if the Underwriters' over-allotment option is exercised in
full). Of the net proceeds, approximately $20.0 million will be used to pay
the cash portion of the purchase price for the Founding Companies, of which
approximately $15.4 million will be paid to former stockholders of the
Founding Companies who will become officers, directors or holders of more than
5% of the shares of Common Stock outstanding after the Offering. Such cash
portion will vary depending on the initial public offering price. In addition,
the consideration to be paid to the Founding Companies is subject to post-
closing adjustment. Approximately $11.8 million of the net proceeds will be
used to repay certain indebtedness assumed by the Company in the Acquisitions.
See "Certain Transactions." The indebtedness to be repaid from the proceeds of
the Offering bears interest at effective rates up to 19.5%, with a weighted
average interest rate of 8.4%. Such indebtedness would otherwise mature at
various dates through 2006.

The remaining $ million of net proceeds will be used for working
capital and general corporate purposes, including future acquisitions. The
Company continues to review various strategic acquisition opportunities.
Except for the Acquisition Agreements with the Founding Companies, the Company
has no agreement with respect to any acquisitions. Pending such uses, the net
proceeds will be invested in short-term, interest-bearing, investment grade
securities.

In addition to the net proceeds of the Offering, the Company will retain the
cash balances of the Founding Companies. Such balances totaled approximately
$3.7 million as of June 30, 1997. The Company is seeking to obtain a bank line
of credit in an amount up to $35 million. No commitment has been obtained, and
there can be no assurance that the Company will be able to obtain this line of
credit, or other financing it may need, on terms the Company deems acceptable.

DIVIDEND POLICY

The Company intends to retain its earnings, if any, to finance the expansion
of its business and for general corporate purposes and therefore does not
anticipate paying any cash dividends on its Common Stock in the foreseeable
future. Any payment of future dividends will be at the discretion of the Board
of Directors and will depend upon, among other things, the Company's earnings,
financial condition, capital requirements, level of indebtedness, contractual
restrictions with respect to the payment of dividends and other factors that
the Company's Board of Directors deems relevant. In addition, in the event the
Company is successful in obtaining one or more lines of credit, it is likely
that any such facility will include restrictions on the Company's ability to
pay dividends without the consent of the lender.

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CAPITALIZATION

The following table sets forth the short-term debt and capitalization of the
Company at June 30, 1997: (i) on a pro forma combined basis to give effect to
the Acquisitions; and (ii) as further adjusted to give effect to the Offering
and the application of the estimated net proceeds therefrom. This table should
be read in conjunction with the Unaudited Pro Forma Combined Financial
Statements of the Company and the notes thereto included elsewhere in this
Prospectus.

<TABLE>
<CAPTION>
JUNE 30, 1997
-----------------
PRO AS
FORMA(1) ADJUSTED
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Short-term debt (2).......................................... $ 3,997 $
======= =======
Long-term debt, net of current portion (2)................... $11,613 $
Stockholders' equity:
Preferred Stock, par value $0.01 per share, 10,000,000
shares authorized; none issued or outstanding............. --
Common Stock, par value $0.01 per share, 50,000,000 shares
authorized; 7,118,460 shares issued and outstanding, pro
forma; 11,218,460 shares issued and outstanding, as
adjusted.................................................. 71
Additional paid-in-capital................................. 16,924
Retained earnings............................................ 2,359
------- -------
Total stockholders' equity............................... 19,354
------- -------
Total capitalization................................... $30,967 $
======= =======
</TABLE>
- --------
(1) Combines the respective accounts of Compass and the Founding Companies at
June 30, 1997 and gives effect to the reclassification of the capital
structures of NCMC, Bomar, Mid-Continent and Impact as additional paid-in-
capital.
(2) For a description of the Company's debt, see Notes to the Financial
Statements of the Founding Companies.
(3) Does not include: (i) up to 1,000,000 additional shares reserved for
issuance pursuant to the Incentive Plan, of which options to purchase
approximately 600,000 shares of Common Stock will be granted concurrently
with the Offering at an exercise price equal to the initial public
offering price; (ii) 500,000 additional shares reserved for issuance under
the Company's Employee Stock Purchase Plan; or (iii) 100,000 shares of
Common Stock issuable upon the exercise of warrants to be issued
concurrently with the Offering. See "Management-- 1997 Employee Incentive
Compensation Plan" and "--Employee Stock Purchase Plan" and "Certain
Transactions."

18
<PAGE>

DILUTION

The deficit in pro forma net tangible book value of the Company as of June
30, 1997 was approximately $23.1 million or $3.24 per share of Common Stock,
after giving effect to the Acquisitions. The deficit in pro forma net tangible
book value per share represents the Company's pro forma net tangible assets
less total liabilities divided by the number of shares of Common Stock to be
outstanding after giving effect to the Acquisitions. After giving effect to
the sale of the 4,100,000 shares of Common Stock offered hereby (at an assumed
initial public offering price of $ per share less the underwriting
discount and estimated offering expenses) and the application of the net
proceeds therefrom, the Company's pro forma net tangible book value at June
30, 1997 would have been approximately $ , or $ per share.
This represents an immediate increase in pro forma net tangible book value of
$ per share to existing stockholders and an immediate dilution of $
per share to new investors purchasing the shares in the Offering. The
following table illustrates this pro forma dilution:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share............ $
Pro forma deficit in net tangible book value per share
before the Offering..................................... $(3.24)
Increase in pro forma net tangible book value per share
attributable to new investors...........................
------
Pro forma net tangible book value per share after the
Offering..................................................
--------
Dilution per share to new investors........................
========
</TABLE>

The following table sets forth, on a pro forma basis to give effect to the
Acquisitions as of June 30, 1997, the number of shares of Common Stock
purchased from the Company, the total consideration paid and the average price
per share paid by existing stockholders (after giving effect to the
Acquisitions) and the new investors purchasing shares of Common Stock from the
Company in the Offering:

<TABLE>
<CAPTION>
SHARES PURCHASED AVERAGE
------------------ TOTAL PRICE
NUMBER PERCENT CONSIDERATION PER SHARE
---------- ------- ------------- ---------
<S> <C> <C> <C> <C>
Existing stockholders............. 7,118,460 63.5%
New investors..................... 4,100,000 36.5%
---------- ------ -------
Total........................... 11,218,460 100.0%
========== ====== =======
</TABLE>

19
<PAGE>

SELECTED FINANCIAL DATA
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

Compass will acquire the Founding Companies simultaneously with and as a
condition to the consummation of this Offering. For financial statement
presentation purposes, Mail Box has been identified as the accounting
acquiror. The following selected historical financial data of Mail Box as of
December 31, 1995 and 1996 and for the years ended December 31, 1994, 1995 and
1996 have been derived from the audited financial statements of Mail Box
included elsewhere in this Prospectus. The following selected historical
financial data for Mail Box as of December 31, 1992, 1993 and 1994 and as of
June 30, 1997, for the years ended December 31, 1992 and 1993 and for the six
months ended June 30, 1996 and 1997 have been derived from unaudited financial
statements of Mail Box, which have been prepared on the same basis as the
audited financial statements and, in the opinion of Mail Box, reflect all
adjustments, consisting only of normal recurring adjustments, necessary for a
fair presentation of such data. The selected unaudited pro forma combined
financial data present data for the Company, adjusted for (i) the consummation
of the Acquisitions; (ii) certain pro forma adjustments to the historical
financial statements, including adjustments for three acquisitions completed
by Bomar since August 1996; and (iii) the consummation of this Offering and
the application of the net proceeds therefrom. See the Unaudited Pro Forma
Combined Financial Statements and the notes thereto and the historical
Financial Statements of Mail Box and the other Founding Companies and the
notes thereto included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEARS ENDED DECEMBER 31, JUNE 30,
--------------------------------------------- -----------------------
1992 1993 1994 1995 1996 1996 1997
------- ------- ------- ------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF
OPERATIONS DATA:
MAIL BOX
Revenues........ $10,688 $14,314 $15,354 $17,370 $ 26,156 $ 12,070 $ 15,804
Operating
expenses....... 8,236 11,286 11,168 12,402 17,953 8,456 10,367
------- ------- ------- ------- ----------- ----------- -----------
Gross profit.... 2,452 3,028 4,186 4,968 8,203 3,614 5,437
Selling, general
and
administrative
expenses....... 2,589 2,957 3,442 4,370 5,891 2,776 3,653
------- ------- ------- ------- ----------- ----------- -----------
Income (loss)
from
operations..... (137) 71 744 598 2,312 838 1,784
Other expense... 182 128 212 302 337 167 209
------- ------- ------- ------- ----------- ----------- -----------
Income (loss)
before income
taxes.......... (319) (57) 532 296 1,975 671 1,575
Provision
(benefit) for
income taxes... (86) (13) 206 134 700 240 562
------- ------- ------- ------- ----------- ----------- -----------
Net (loss)
income ........ $ (233) $ (44) $ 326 $ 162 $ 1,275 $ 431 $ 1,013
======= ======= ======= ======= =========== =========== ===========
PRO FORMA
COMBINED (1):
Revenues........................................ $ 71,783 $ 34,878 $ 43,307
Operating expenses.............................. 45,079 21,037 27,069
----------- ----------- -----------
Gross profit................................... 26,704 13,841 16,238
Selling, general and administrative expenses
(2)............................................ 19,510 9,861 10,879
Goodwill and intangible amortization (3)........ 1,251 625 625
----------- ----------- -----------
Income from operations.......................... 5,943 3,355 4,734
Interest and other expense, net (4)............. 333 146 254
----------- ----------- -----------
Income before income taxes...................... 5,610 3,209 4,480
Provision for income taxes (5).................. 2,744 1,534 2,042
----------- ----------- -----------
Net income...................................... $ 2,866 $ 1,675 $ 2,438
=========== =========== ===========
Net income per share............................ $ 0.28 $ 0.16 $ 0.24
=========== =========== ===========
Shares used in computing net income per share
(6)............................................ 10,269,126 10,269,126 10,269,126
</TABLE>

<TABLE>
<CAPTION>
MAIL BOX COMBINED COMPANIES
----------------------------------------------- -------------------------
DECEMBER 31, JUNE 30, JUNE 30, 1997
-------------------------------------- -------- -------------------------
PRO
FORMA AS
1992 1993 1994 1995 1996 1997 COMBINED ADJUSTED (8)
------ ------ ------ ------ ------- -------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET
DATA:
Working capital
(deficit)...... $ (488) $ (587) $ (218) $ 36 $ 272 $ 376 $(18,197)(9)
Total assets.... 4,267 4,374 5,481 7,425 12,539 10,127 66,382
Long-term debt,
net of current
portion........ 1,022 582 871 1,485 1,266 2,224 11,613
Stockholders'
equity......... 253 191 642 995 2,206 2,232 19,354
</TABLE>
- --------
(1) The pro forma combined statement of operations data assume that the
Acquisitions and the Offering were consummated on January 1, 1996, are not
necessarily indicative of the operating results that would have

20
<PAGE>

been achieved had these events actually then occurred and should not be
construed as representative of future operating results. The summary pro
forma combined statement of operations data should be read in conjunction
with the Unaudited Pro Forma Combined Financial Statements and the notes
thereto and the historical financial statements of Compass and the Founding
Companies and the notes thereto included elsewhere in this Prospectus.
(2) The pro forma combined statement of operations data reflect reductions in
salaries, bonuses and benefits to the stockholders of the Founding
Companies to which they have agreed prospectively in the employment
agreements to be entered into upon consummation of the Offering (the
"Compensation Differential"). The Compensation Differential was
approximately $3.5 million, $1.8 million and $2.1 million, respectively
for 1996 and the six months ended June 30, 1996 and 1997.
(3) Reflects: (i) the amortization of goodwill of $37.0 million to be recorded
as a result of the Acquisitions and $3.4 million of goodwill to be
recorded as a result of an acquisition by Bomar in September 1997; and
(ii) the amortization of $1.0 million in intangible assets over a period
of 15 years.
(4) Reflects a reduction of interest expense associated with long term debt to
be repaid from the proceeds of the Offering of $148,000 for the year ended
December 31, 1996, and $94,000 and $138,000 for the six months ended June
30, 1996 and 1997, respectively and a reduction of interest income of
$61,000 for the year ended December 31, 1996 and $33,000 and $21,000 for
the six-month periods ended June 30, 1996 and 1997, respectively, relating
to stockholder notes to be paid off upon consummation of the Offering.
(5) Assumes that all income is subject to a corporate income tax rate of 40%
and that all goodwill is non-deductible.
(6) Includes: (i) 1,682,769 shares issued to BGL Capital Partners, L.L.C., and
management of Compass; (ii) 5,435,691 shares issued to owners of the
Founding Companies in connection with the Acquisitions; and (iii)
3,150,666 shares representing the number of shares sold in the Offering
necessary to pay the cash portion of the consideration for the
Acquisitions, to pay the underwriting discount and estimated expenses of
the Acquisitions and the Offering, and to repay certain indebtedness
assumed by Compass in the Acquisitions, net of repayment of stockholder
receivables. See "Certain Transactions."
(7) The pro forma combined balance sheet data assume that the Acquisitions
were consummated on June 30, 1997, are not necessarily indicative of the
financial position that would have been achieved had these events actually
then occurred and should not be construed as representative of future
financial position. The summary pro forma balance sheet data should be
read in conjunction with the Unaudited Pro Forma Combined Financial
Statements and the notes thereto and the historical financial statements
of Compass and the Founding Companies and the notes thereto included
elsewhere in this Prospectus.
(8) Adjusted to reflect the sale of the 4,100,000 shares of Common Stock
offered hereby and the application of the estimated net proceeds
therefrom. See "Use of Proceeds."
(9) Includes $20.0 million payable to stockholders of the Founding Companies,
representing the cash portion of the consideration for the Acquisitions to
be paid from a portion of the net proceeds of the Offering. See "Use of
Proceeds" and "Notes to Unaudited Pro Forma Combined Financial
Statements."

21
<PAGE>

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

The following should be read in conjunction with "Selected Financial Data"
and the Founding Companies' Financial Statements and related Notes thereto
appearing elsewhere in this Prospectus.

INTRODUCTION

The Company was established to create a leading provider of outsourced
business services to public and private entities throughout the Sales Cycle.
The five Founding Companies collectively provide accounts receivable
management services, mailing services and teleservices to clients in a broad
range of sectors including telecommunications, financial services, insurance,
healthcare, education, government and utilities. The Company was formed in
April 1997 and has conducted no operations to date. Upon consummation of the
Offering, the Founding Companies will be acquired by the Company.

The Company's revenue is derived from the recovery of delinquent accounts
receivable and providing mailing services and teleservices. The Company
generally charges its clients for accounts receivable management services on a
contingency fee basis, with the amount of the fee determined by the length of
the delinquency of the accounts and the extent to which prior collection
efforts have been made. Revenue is earned and recognized upon collection of
accounts receivable. The Company provides a variety of mailing services
including the mailing of direct marketing materials, billing services, mail
presorting, freight and drop shipping, data processing, mailing list rental,
and other services related to mail handling. Typically, the Company charges a
fixed fee per piece for processing mail. These fees are earned and recognized
as revenue upon delivery to the United States Postal Service. Postage expenses
are passed directly through to the Company's clients and are not recognized as
revenues or expenses on the Company's financial statements. Revenues for
outbound and inbound teleservices consist of hourly rate charges and incentive
based commissions that are recognized as these services are provided. The
Company also generates revenue from APS which enables clients to accept
payments through checks authorized by phone. Clients are typically charged an
initial setup fee and a transaction fee for each usage of the APS service.
Revenues are recognized for APS when services are provided.

The Company and most of its clients enter into contracts which define, among
other things, fee arrangements, scope of services and termination provisions.
In most cases, clients may terminate contracts with 30 or 60 days notice.

The Company's operating expenses consist primarily of payroll,
telecommunications expense and postage expense (other than client postage
relating to mailing services). Payroll consists of wages and salaries,
commissions, bonuses and benefits for all employees of the Company directly
involved in providing services to clients. Telecommunications expense includes
telephone costs associated with inbound and outbound teleservice and
collection activities. Postage expense is related primarily to the mailing of
collection notices and APS check confirmation letters. Selling, general and
administrative expenses include management salaries, selling commissions,
occupancy and other facilities costs, equipment maintenance and depreciation,
and data processing costs.

The Founding Companies have operated as independent, privately-owned
entities throughout the periods presented. Their results from operations
reflect varying historical levels of owners' compensation. The owners and key
employees of the Founding Companies have agreed to certain reductions of their
salaries, bonuses, and benefits in connection with the Acquisitions (the
"Compensation Differential"). The Compensation Differential was approximately
$3.5 million, $1.8 million and $2.1 million for 1996 and the six months ended
June 30, 1996 and 1997, respectively. These amounts have been reflected as a
pro forma adjustment in the Unaudited Pro Forma Combined Statement of
Operations. The Unaudited Pro Forma Combined Statement of Operations includes
a provision for income tax as if all Founding Companies had been subject to
applicable federal and state statutory tax rates.

22
<PAGE>

Following the Acquisitions, the Company expects to realize certain savings
as a result of: (i) consolidation of telecommunications, postage and other
operating expenses; (ii) consolidation of insurance, employee benefits and
other administrative expenses; and (iii) the Company's ability to borrow at
interest rates lower than those at which most of the Founding Companies have
borrowed historically. The Company has not and cannot quantify these savings
until completion of the Acquisitions. The Company also expects to incur
additional costs associated with public ownership and the new management team.
These costs cannot be quantified precisely. Accordingly, neither the expected
savings nor the expected costs have been included in the pro forma combined
financial information of the Company.

Since August 1996, Bomar has made three acquisitions, two in 1996 and one in
the third quarter of 1997. As a result of these acquisitions, the Company has:
(i) expanded its geographic presence in the accounts receivable collection
market; (ii) gained access to new information systems and customer service
capabilities; and (iii) expanded its secondary and tertiary collection
capabilities. The acquisitions have been accounted for using the purchase
method of accounting with the results of the acquired companies included in
Bomar's statements of income beginning on the respective dates of the
acquisitions. The Unaudited Pro Forma Combined Financial Statements give
effect to these acquisitions as if they had occurred on January 1, 1996.

In July 1996, the Securities and Exchange Commission issued Staff Accounting
Bulletin No. 97 ("SAB 97") relating to business combinations immediately prior
to an initial public offering. SAB 97 requires that these combinations be
accounted for using the purchase method of acquisition accounting. In
accordance with SAB 97, Mail Box has been designated as the accounting
acquiror. Accordingly, the excess purchase price over the fair value of the
net assets acquired from NCMC, Bomar, Mid-Continent and Impact of
approximately $37.0 million, and goodwill of approximately $3.4 million
recorded as a result of an acquisition by Bomar in September 1997, will be
amortized over periods ranging from 15 to 40 years as a non-cash charge to the
Company's income statement. This amortization, including the amortization of
an intangible asset associated with a patent at NCMC over a 15-year period, is
approximately $1.3 million per year. The amount of goodwill to be recorded and
the related amortization expense will depend in part on the initial public
offering price. See "The Company."

PRO FORMA COMBINED RESULTS OF OPERATIONS

The following table provides the pro forma operating results of the Company
for the year ended December 31, 1996 and the six months ended June 30, 1996
and 1997. For a discussion of the pro forma adjustments, see the Unaudited Pro
Forma Combined Financial Statements and the notes thereto included elsewhere
in this Prospectus.

<TABLE>
<CAPTION>
YEAR ENDED SIX MONTHS ENDED JUNE 30,
DECEMBER 31, ----------------------------
1996 1996 1997
------------- ------------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Revenues.......................... $71,783 100.0% $34,878 100.0% $43,307 100.0%
Operating expenses................ 45,079 62.8 21,037 60.3 27,069 62.5
------- ----- ------- ----- ------- -----
Gross profit...................... 26,704 37.2 13,841 39.7 16,238 37.5
Selling, general and
administrative expenses.......... 19,510 27.2 9,861 28.3 10,879 25.1
Goodwill amortization............. 1,251 1.7 625 1.8 625 1.4
------- ----- ------- ----- ------- -----
Income from operations............ $ 5,943 8.3% $ 3,355 9.6% $ 4,734 10.9%
======= ===== ======= ===== ======= =====
</TABLE>

PRO FORMA COMBINED RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO
THE SIX MONTHS ENDED JUNE 30, 1996

Revenues. Revenues increased $8.4 million, or 24.2%, from $34.9 million for
the six months ended June 30, 1996 to $43.3 million for the six months ended
June 30, 1997. The increase was primarily attributable to increased business
from existing clients of Mail Box, Impact and NCMC, as well as growth within
ACS and CPA, companies acquired by Bomar in 1996.

23
<PAGE>

Operating expenses. Operating expenses increased $6.0 million, or 28.7%, from
$21.0 million for the six months ended June 30, 1996 to $27.1 million for the
six months ended June 30, 1997. As a percentage of revenues, operating expenses
increased from 60.3% for the six months ended June 30, 1996 to 62.5% for the
six months ended June 30, 1997. The primary reasons for the increase in
operating expenses as a percentage of revenues were: (i) increased personnel
and related expenses at Impact associated with its recent increase in call
center capacity; and (ii) decreases in the price per APS check while related
costs remained substantially unchanged. Additionally, operating expenses as a
percentage of revenues of the companies acquired by Bomar in 1996 were higher
than those of existing businesses.

Selling, general and administrative expenses. Selling, general and
administrative expenses increased $1.0 million, or 10.3%, from $9.9 million for
the six months ended June 30, 1996 to $10.9 million for the six months ended
June 30, 1997. Selling, general and administrative expenses decreased as a
percentage of revenues from 28.3% for the six months ended June 30, 1996 to
25.1% for the six months ended June 30, 1997 as the costs of management and
administrative personnel were spread over a larger revenue base, particularly
at Impact.

PRO FORMA COMBINED LIQUIDITY AND CAPITAL RESOURCES

The Company is a holding company that conducts all of its operations through
its subsidiaries. Accordingly, the primary internal source of the Company's
liquidity is the cash flow of its subsidiaries. After the consummation of the
Acquisitions and the Offering, the Company will have approximately $ million
of cash. It is expected that the short term debt of the Founding Companies
which totaled $2.3 million at June 30, 1997 will be repaid either from the net
proceeds of the Offering or the line of credit described below.

The Company is seeking to obtain a bank line of credit of up to $35 million.
No commitment has been obtained, and there can be no assurance that the Company
will be able to obtain this line of credit, or other financing it may need, on
terms the Company deems acceptable. It is expected that the line of credit, if
obtained, will require the Company to comply with various loan covenants
including: (i) maintenance of certain financial ratios including minimum
tangible net worth; (ii) restriction on additional indebtedness; and (iii)
restrictions on liens, guarantees, advances, and dividends. The facility is
intended to be used for acquisitions, capital expenditures, and general
corporate purposes.

The Company believes that its cash flow from operations will provide cash in
excess of the Company's expected working capital needs, debt service
requirements and planned capital expenditures. The Company made capital
expenditures of $2.0 million in 1996 and $1.1 million during the six months
ended June 30, 1997. Each of the Founding Companies has upgraded its
information systems over the past two years. In addition, Mail Box has invested
in new intelligent inserting and sorting equipment to upgrade and expand its
mail services capabilities. As a result, the Company does not expect to have
significant capital expenditures for information systems in the next two years,
other than as may be required to integrate the systems of the Founding
Companies and to upgrade and integrate companies that are acquired in the
future. After the consummation of the Acquisitions, the Company intends to
study the feasibility of integrating the systems of the Founding Companies.
Consequently, the Company has not yet established its capital needs for such
integration, which capital requirements are likely to change as the Company
acquires other companies in the future.

The Company intends to pursue attractive acquisition opportunities. The
timing, size or success of any acquisition efforts is unpredictable.
Accordingly, the Company is unable to accurately estimate its expected capital
commitments. Funding for future acquisitions will likely come from a
combination of proceeds of the Offering, cash flow from operations, borrowings
under the proposed credit facility and the issuance of additional equity. The
Company plans to register an additional 3,000,000 shares of its Common Stock
under the Securities Act after completion of the Offering for use by the
Company as consideration for future acquisitions.

RESULTS OF OPERATIONS--MAIL BOX

Mail Box provides direct mailing services, billing services, mail presorting,
freight and drop shipping, data processing, laser printing, mailing list rental
and order fulfillment to companies located principally in the southwest United
States.

24
<PAGE>

The following table sets forth certain selected financial data for Mail Box
on a historical basis and as a percentage of revenues for the periods
indicated:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31, SIX MONTHS ENDED JUNE 30,
------------------------------------------- ----------------------------
1994 1995 1996 1996 1997
------------- ------------- ------------- ------------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues................ $15,354 100.0% $17,370 100.0% $26,156 100.0% $12,070 100.0% $15,804 100.0%
Operating expenses...... 11,168 72.7 12,402 71.4 17,953 68.6 8,456 70.1 10,367 65.6
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Gross profit............ 4,186 27.3 4,968 28.6 8,203 31.4 3,614 29.9 5,437 34.4
Selling, general and
administrative
expenses............... 3,442 22.4 4,370 25.2 5,891 22.5 2,776 23.0 3,653 23.1
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Income from operations.. $ 744 4.8% $ 598 3.4% $ 2,312 8.8% $ 838 6.9% $ 1,784 11.3%
======= ===== ======= ===== ======= ===== ======= ===== ======= =====
</TABLE>

RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO THE SIX MONTHS
ENDED JUNE 30, 1996--MAIL BOX

Revenues. Revenues increased $3.7 million, or 30.9%, from $12.1 million for
the six months ended June 30, 1996 to $15.8 million for the six months ended
June 30, 1997, primarily due to new mailing programs initiated by existing
customers. Mail volume increased from approximately 340 million pieces in the
six months ended June 30, 1996 to approximately 445 million pieces in the six
months ended June 30, 1997.

Operating expenses. Operating expenses increased approximately $1.9 million,
or 22.6%, from $8.5 million for the six months ended June 30, 1996 to $10.4
million for the six months ended June 30, 1997. As a percentage of revenues,
operating expenses decreased from 70.1% in the six months ended June 30, 1996
to 65.6% in the six months ended June 30, 1997, primarily due to improved
efficiency in mailing operations and revenue mix changes, with higher margin
list rental revenues growing as a percentage of revenues.

Selling, general and administrative expenses. Selling, general and
administrative expenses increased $877,000, or 31.6%, from $2.8 million for
the six months ended June 30, 1996 to $3.7 million for the six months ended
June 30, 1997. As a percentage of revenues, selling, general and
administrative expenses increased from 23.0% in the six months ended June 30,
1996 to 23.1% in the six months ended June 30, 1997. Excluding Compensation
Differential of $369,000 for the six months ended June 30, 1996 and $781,000
for the six months ended June 30, 1997, selling, general and administrative
expenses decreased from 19.9% of revenues to 18.2% of revenues, respectively.

RESULTS FOR 1996 COMPARED TO 1995--MAIL BOX

Revenues. Revenues increased $ 8.8 million, or 50.6%, from $17.4 million in
1995 to $26.2 million in 1996, primarily due to expanded volume with existing
customers. In addition, Mail Box generated an additional $2.3 million in
revenues from a new client in the medical claims industry. Mail volume
increased from approximately 500 million pieces in 1995 to approximately 840
million pieces in 1996.

Operating expenses. Operating expenses increased approximately $5.6 million,
or 44.8%, from $12.4 million in 1995 to $18.0 million in 1996. As a percentage
of revenues, operating expenses decreased from 71.4% in 1995 to 68.6% in 1996,
primarily due to improved efficiency in mailing operations.

Selling, general and administrative expenses. Selling, general and
administrative expenses increased $1.5 million, or 34.8%, from $4.4 million in
1995 to $5.9 million in 1996. As a percentage of revenues, selling, general
and administrative expenses decreased from 25.2% in 1995 to 22.5% in 1996.
Excluding Compensation Differential of $310,000 in 1995 and $875,000 in 1996,
selling, general and administrative expenses decreased from 23.4% of revenues
to 19.2% of revenues, respectively. This decrease as a percentage of revenues
was the result of spreading fixed expenses over a larger revenue base.

RESULTS FOR 1995 COMPARED TO 1994--MAIL BOX

Revenues. Revenues increased $2.0 million, or 13.1%, from $15.4 million in
1994 to $17.4 million in 1995, primarily due to expanded volume with existing
clients, including large telecommunication service providers, and growth
within Mail Box's data processing and freight services. Mail volume increased
from approximately 440 million pieces in 1994 to approximately 500 million
pieces in 1995.

25
<PAGE>

Operating expenses. Operating expenses increased approximately $1.2 million,
or 11.0%, from $11.2 million in 1994 to $12.4 million in 1995. Operating
expenses as a percentage of revenues decreased from 72.7% in 1994 to 71.4% in
1995. The primary cause of this improvement was a change in revenue mix to
higher margin services, specifically an increase in mailing services and a
decrease in laser printing as a percentage of revenues.

Selling, general and administrative expenses. Selling, general and
administrative expenses increased $928,000, or 27.0%, from $3.4 million in
1994 to $4.4 million in 1995. As a percentage of revenues, selling, general
and administrative expenses increased from 22.4% in 1994 to 25.2% in 1995.

LIQUIDITY AND CAPITAL RESOURCES--MAIL BOX

Mail Box provided $2.9 million of cash from operating activities in 1996. In
the six months ended June 30, 1997, Mail Box provided $846,000 of cash from
operating activities. Net cash used in investing activities totaled $1.0
million and $746,000 for the year ended December 31, 1996 and the six months
ended June 30, 1997, respectively.

RESULTS OF OPERATIONS--NCMC

NCMC provides accounts receivable management services primarily to clients
in the education, utilities, government and healthcare industries. NCMC also
provides check drafting services initiated by telephone instruction primarily
to clients in the financial services and utilities sectors.

The following table sets forth certain selected financial data for NCMC on a
historical basis and as a percentage of revenues for the periods indicated:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31, SIX MONTHS ENDED JUNE 30,
------------------------------------------ --------------------------
1994 1995 1996 1996 1997
------------ ------------- ------------- ------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues................ $8,874 100.0% $12,287 100.0% $13,579 100.0% $6,856 100.0% $8,044 100.0%
Operating expenses...... 4,550 51.3 6,322 51.5 7,945 58.5 3,703 54.0 5,018 62.4
------ ----- ------- ----- ------- ----- ------ ----- ------ -----
Gross profit............ 4,324 48.7 5,965 48.5 5,634 41.5 3,153 46.0 3,026 37.6
Selling, general and
administrative
expenses............... 3,400 38.3 4,328 35.2 4,798 35.3 2,498 36.4 2,531 31.5
------ ----- ------- ----- ------- ----- ------ ----- ------ -----
Income from operations.. $ 924 10.4% $ 1,637 13.3% $ 836 6.2% $ 655 9.6% $ 495 6.2%
====== ===== ======= ===== ======= ===== ====== ===== ====== =====
</TABLE>

RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO THE SIX MONTHS
ENDED JUNE 30, 1996-- NCMC

Revenues. Revenues increased $1.2 million, or 17.3%, from $6.9 million for
the six months ended June 30, 1996 to $8.0 million for the six months ended
June 30, 1997, primarily due to increased transaction volume with existing APS
customers and increased collections business from existing customers. APS
check transaction volume increased from 2.4 million checks in the six months
ended June 30, 1996 to 4.3 million checks in the six months ended June 30,
1997. While transaction volume grew 78.9%, per check prices decreased 35.5% as
a result of increased competition.

Operating expenses. Operating expenses increased approximately $1.3 million,
or 35.5%, from $3.7 million for the six months ended June 30, 1996 to $5.0
million for the six months ended June 30, 1997. As a percentage of revenues,
operating expenses increased from 54.0% for the six months ended June 30, 1996
to 62.4% for the six months ended June 30, 1997, primarily due to a $361,000
increase in mailing costs associated with APS check confirmation letters,
without a commensurate increase in revenues. Costs during the period were also
unfavorably impacted by one-time non-recurring expenses including $160,000 of
compensation related expenses, $104,000 of relocation expenses and executive
search fees, and $76,000 in legal expenses.

Selling, general and administrative expenses. Selling, general and
administrative expenses were approximately $2.5 million in both periods. As a
percentage of revenues, selling, general and administrative expenses decreased
from 36.4% for the six months ended June 30, 1996 to 31.5% for the six months
ended June 30, 1997. This decrease as a percentage of revenues was the result
of spreading fixed expenses over a larger revenue base.

26
<PAGE>

RESULTS FOR 1996 COMPARED TO 1995--NCMC

Revenues. Revenues increased $1.3 million, or 10.5%, from $12.3 million in
1995 to $13.6 million in 1996, primarily due to expanded APS check volume with
existing customers. APS transaction volume increased from approximately 3.6
million checks in 1995 to approximately 5.5 million checks in 1996. This 52.8%
increase was partly offset by a 21.2% average APS per check price decrease
during 1996 as a result of increased competition. Receivables management
revenues grew modestly during 1996 as NCMC restructured its operations and
sales management.

Operating expenses. Operating expenses increased approximately $1.6 million,
or 25.7%, from $6.3 million in 1995 to $7.9 million in 1996. As a percentage
of revenues, operating expenses increased from 51.5% in 1995 to 58.5% in 1996,
primarily due to increased mailing costs associated with APS check
confirmation letters and growth in direct payroll. As a percentage of
revenues, mailing costs increased from 10.7% in 1995 to 12.3% in 1996.

Selling, general and administrative expenses. Selling, general and
administrative expenses increased $470,000, or 10.9%, from $4.3 million in
1995 to $4.8 million in 1996. As a percentage of revenues, selling, general
and administrative expenses increased from 35.2% in 1995 to 35.3% in 1996.

RESULTS FOR 1995 COMPARED TO 1994--NCMC

Revenues. Revenues increased $3.4 million, or 38.5%, from $8.9 million in
1994 to $12.3 million in 1995 primarily due to expanded volume with existing
customers as well as the addition of new customers. Expanded APS check volume
with large credit card issuers accounted for most of the increase. APS check
volume increased from approximately 1.5 million checks in 1994 to
approximately 3.6 million checks in 1995. Receivables management revenues grew
$395,000, or 6.1%, from $6.5 million in 1994 to $6.9 million in 1995. This
increase was primarily attributable to new customer activity.

Operating expenses. Operating expenses increased approximately $1.8 million,
or 38.9%, from $4.6 million in 1994 to $6.3 million in 1995. As a percentage
of revenues, operating expenses increased from 51.3% in 1994 to 51.5% in 1995,
primarily due to increased payroll and other direct operating expenses.

Selling, general and administrative expenses. Selling, general and
administrative expenses increased $928,000, or 27.3%, from $3.4 million in
1994 to $4.3 million in 1995. As a percentage of revenues, selling, general
and administrative expenses decreased from 38.3% in 1994 to 35.2% in 1995.
This decrease resulted from lower management salaries and depreciation as a
percentage of revenues.

LIQUIDITY AND CAPITAL RESOURCES--NCMC

NCMC provided $566,000 of cash from operating activities in 1996. In the six
months ended June 30, 1997, NCMC provided $495,000 of cash from operating
activities. Net cash used in investing activities totaled $164,000 and
$195,000 for the year ended December 31, 1996 and the six months ended June
30, 1997, respectively.

RESULTS OF OPERATIONS--BOMAR

Bomar provides accounts receivable management services primarily for clients
in the telecommunications, insurance, financial services and healthcare
industries.

The following table sets forth certain selected financial data for Bomar on
a historical basis and as a percentage of revenues for the periods indicated:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31, SIX MONTHS ENDED JUNE 30,
---------------------------------------- --------------------------
1994 1995 1996 1996 1997
------------ ------------ ------------ ------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues................ $6,859 100.0% $7,416 100.0% $9,597 100.0% $4,766 100.0% $6,677 100.0%
Operating expenses...... 4,236 61.8 4,569 61.6 6,419 66.9 2,888 60.6 4,259 63.8
------ ----- ------ ----- ------ ----- ------ ----- ------ -----
Gross profit............ 2,623 38.2 2,847 38.4 3,178 33.1 1,878 39.4 2,418 36.2
Selling, general and
administrative
expenses............... 2,206 32.2 2,594 35.0 2,853 29.7 1,566 32.9 1,965 29.4
------ ----- ------ ----- ------ ----- ------ ----- ------ -----
Income from operations.. $ 417 6.1% $ 253 3.4% $ 325 3.4% $ 312 6.5% $ 453 6.8%
====== ===== ====== ===== ====== ===== ====== ===== ====== =====
</TABLE>

27
<PAGE>

RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO THE SIX MONTHS
ENDED JUNE 30, 1996--BOMAR

Revenues. Revenues increased $1.9 million, or 40.1%, from $4.8 million for
the six months ended June 30, 1996 to $6.7 million for the six months ended
June 30, 1997, primarily due to the acquisitions of ACS in August 1996 and CPA
in November 1996, which added revenues of $589,000 and $635,000, respectively,
in the six months ended June 30, 1997. Additionally, revenues grew as a result
of increased business from existing clients.

Operating expenses. Operating expenses increased approximately $1.4 million,
or 47.5%, from $2.9 million for the six months ended June 30, 1996 to $4.3
million for the six months ended June 30, 1997. As a percentage of revenues,
operating expenses increased from 60.6% for the six months ended June 30, 1996
to 63.8% for the six months ended June 30, 1997, primarily due to increased
collector salaries and incentives which increased $1.2 million from $1.8
million to $3.0 million.

Selling, general and administrative expenses. Selling, general and
administrative expenses increased $399,000, or 25.5%, from $1.6 million for
the six months ended June 30, 1996 to $2.0 million for the six months ended
June 30, 1997. As a percentage of revenues, selling, general and
administrative expenses decreased from 32.9% for the six months ended June 30,
1996 to 29.4% for the six months ended June 30, 1997. This decrease as a
percentage of revenues was the result of spreading fixed expenses over a
larger revenue base.

RESULTS FOR 1996 COMPARED TO 1995--BOMAR

Revenues. Revenues increased $2.2 million, or 29.4%, from $7.4 million in
1995 to $9.6 million in 1996, due in part to the acquisitions of ACS and CPA,
which together contributed over $300,000 of revenues in 1996, and in part to
business from new clients.

Operating expenses. Operating expenses increased approximately $1.9 million,
or 40.5%, from $4.6 million in 1995 to $6.4 million in 1996. As a percentage
of revenues, operating expenses increased from 61.6% in 1995 to 66.9% in 1996,
primarily due to higher collector salaries which increased $1.2 million from
$3.0 million to $4.2 million as a result of an increase in full time employees
in the second half of 1996. The acquired companies also had higher operating
expenses as a percentage of revenues.

Selling, general and administrative expenses. Selling, general and
administrative expenses increased $259,000, or 10.0%, from $2.6 million in
1995 to $2.9 million in 1996. As a percentage of revenues, selling, general
and administrative expenses decreased from 35.0% in 1995 to 29.7% in 1996.

RESULTS FOR 1995 COMPARED TO 1994--BOMAR

Revenues. Revenues increased $557,000, or 8.1%, from $6.9 million in 1994 to
$7.4 million in 1995, primarily due to increased business from existing
clients.

Operating expenses. Operating expenses increased approximately $333,000, or
7.9%, from $4.2 million in 1994 to $4.6 million in 1995. As a percentage of
revenues, operating expenses decreased from 61.8% in 1994 to 61.6% in 1995.

Selling, general and administrative expenses. Selling, general and
administrative expenses increased $388,000, or 17.6%, from $2.2 million in
1994 to $2.6 million in 1995. As a percentage of revenues, selling, general
and administrative expenses increased from 32.2% in 1994 to 35.0% in 1995.
This increase resulted from a $202,000 increase in management compensation in
1995, as well as increased occupancy costs as a result of new space for call
centers. Excluding Compensation Differential of $516,000 in 1994 and $718,000
in 1995, selling, general and administrative expenses as a percentage of
revenues increased slightly from 24.6% in 1994 to 25.3% in 1995.

LIQUIDITY AND CAPITAL RESOURCES--BOMAR

Bomar provided $359,000 of cash from operating activities in 1996. In the
six months ended June 30, 1997, Bomar provided $723,000 of cash from operating
activities. Net cash used in investing activities totaled $1.4 million
(including $791,000 for acquisitions) and $57,000 for 1996 and the six months
ended June 30, 1997, respectively.

28
<PAGE>

RESULTS OF OPERATIONS--MID-CONTINENT

Mid-Continent provides accounts receivable management services primarily to
companies in the manufacturing, insurance, wholesale distribution and
commercial sectors. Mid-Continent's business is comprised of contingency fee
collections and outsourced collection services.

The following table sets forth certain selected financial data for Mid-
Continent on a historical basis and as a percentage of revenues for the
periods indicated:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31, SIX MONTHS ENDED JUNE 30,
---------------------------- --------------------------
1995 1996 1996 1997
------------- ------------ ------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues................ $8,763 100.0% $9,038 100.0% $4,548 100.0% $4,741 100.0%
Operating expenses...... 2,851 32.5 2,875 31.8 1,470 32.3 1,551 32.7
------ ----- ------ ----- ------ ----- ------ -----
Gross profit............ 5,912 67.5 6,163 68.2 3,078 67.7 3,190 67.3
Selling, general and
administrative
expenses............... 5,974 68.2 6,054 67.0 3,025 66.5 3,116 65.7
------ ----- ------ ----- ------ ----- ------ -----
Income (loss) from
operations............. $ (62) (0.7)% $ 109 1.2% $ 53 1.2% $ 74 1.6%
====== ===== ====== ===== ====== ===== ====== =====
</TABLE>

RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO THE SIX MONTHS
ENDED
JUNE 30, 1996--MID-CONTINENT

Revenues. Revenues increased $193,000, or 4.2%, from $4.5 million for the
six months ended June 30, 1996 to $4.7 million for the six months ended June
30, 1997, primarily due to increased volume relating to outsourced collection
services.

Operating expenses. Operating expenses increased $81,000, or 5.5%, from $1.5
million for the six months ended June 30, 1996 to $1.6 million for the six
months ended June 30, 1997 primarily due to increased collector costs. As a
percentage of revenues, operating expenses remained relatively flat between
the periods.

Selling, general and administrative expenses. Selling, general and
administrative expenses increased $91,000, or 3.0%, from $3.0 million for the
six months ended June 30, 1996 to $3.1 million for the six months ended June
30, 1997. As a percentage of revenues, selling, general and administrative
expenses decreased from 66.5% for the six months ended June 30, 1996 to 65.7%
for the six months ended June 30, 1997.

RESULTS FOR 1996 COMPARED TO 1995--MID-CONTINENT

Revenues. Revenues increased $275,000, or 3.1%, from $8.8 million in 1995 to
$9.0 million in 1996, primarily due to increased contingency fee business from
existing clients.

Operating expenses. Operating expenses increased approximately $24,000, or
0.8%, from $2.8 million in 1995 to $2.9 million in 1996. As a percentage of
revenues, operating expenses decreased from 32.5% in 1995 to 31.8% in 1996, as
a result of an increase in revenues.

Selling, general and administrative expenses. Selling, general and
administrative expenses increased $80,000, or 1.3%, from $6.0 million in 1995
to $6.1 million in 1996. As a percentage of revenues, selling, general and
administrative expenses decreased from 68.2% in 1995 to 67.0% in 1996.
Excluding the Compensation Differential in both years, selling, general and
administrative expenses as a percentage of revenues decreased from 56.1% in
1995 to 54.1% in 1996.

LIQUIDITY AND CAPITAL RESOURCES--MID-CONTINENT

Mid-Continent provided $176,000 of cash from operating activities in 1996.
In the six months ended June 30, 1997, Mid-Continent provided $6,000 of cash
from operating activities. Net cash used in investing activities totaled
$46,000 and $25,000 for the year ended December 31, 1996 and the six months
ended June 30, 1997, respectively.

29
<PAGE>

RESULTS OF OPERATIONS--IMPACT

Impact provides primarily outbound telemarketing services to national and
regional companies in the insurance, financial services, telecommunications
and utilities industries.

The following table sets forth certain selected financial data for Impact on
a historical basis and as a percentage of revenues for the periods indicated:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, SIX MONTHS ENDED JUNE 30,
------------- --------------------------
1996 1996 1997
------------- ------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Revenues........................... $8,869 100.0% $4,045 100.0% $6,257 100.0%
Operating expenses................. 6,961 78.5 2,884 71.3 4,817 77.0
------ ----- ------ ----- ------ -----
Gross profit....................... 1,908 21.5 1,161 28.7 1,440 23.0
Selling, general and administrative
expenses.......................... 2,108 23.8 1,093 27.0 1,340 21.4
------ ----- ------ ----- ------ -----
Income (loss) from operations...... $ (200) (2.3)% $ 68 1.7% $ 100 1.6%
====== ===== ====== ===== ====== =====
</TABLE>

RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO THE SIX MONTHS
ENDED JUNE 30, 1996--IMPACT

Revenues. Revenues increased $2.2 million, or 54.7%, from $4.0 million for
the six months ended June 30, 1996 to $6.3 million for the six months ended
June 30, 1997, primarily due to increased business from existing clients.

Operating expenses. Operating expenses increased approximately $1.9 million,
or 67.0%, from $2.9 million for the six months ended June 30, 1996 to $4.8
million for the six months ended June 30, 1997. As a percentage of revenues,
operating expenses increased from 71.3% for the six months ended June 30, 1996
to 77.0% for the six months ended June 30, 1997, primarily due to personnel
and related expenses associated with the recent increase in Impact's call
center capacity.

Selling, general, and administrative expenses. Selling, general and
administrative expenses increased $247,000, or 22.6%, from $1.1 million for
the six months ended June 30, 1996 to $1.3 million for the six months ended
June 30, 1997. As a percentage of revenues, selling, general and
administrative expenses decreased from 27.0% for the six months ended June 30,
1996 to 21.4% for the six months ended June 30, 1997. This decrease as a
percentage of revenues was the result of spreading fixed expenses over a
larger revenue base.

LIQUIDITY AND CAPITAL RESOURCES--IMPACT

Impact provided $96,000 of cash from operating activities in 1996. In the
six months ended June 30, 1997, Impact used $306,000 of cash from operating
activities. Net cash provided by investing activities totaled $2,000 in 1996
and net cash used in investing activities totaled $19,000 for the six months
ended June 30, 1997, respectively.

30
<PAGE>

BUSINESS

INTRODUCTION

Compass was organized to create a leading provider of outsourced business
services to public and private entities throughout the Sales Cycle. The five
Founding Companies collectively provide accounts receivable management
services, mailing services and teleservices to clients in a broad range of
sectors including telecommunications, financial services, insurance,
healthcare, education, government and utilities. In addition, through its
proprietary Accelerated Payment Systems ("APS") process, the Company is a
leading provider of telephonic check drafting services which enable clients to
accept payments through checks authorized by phone. The Founding Companies,
each of which has been in business for more than ten years, have collectively
achieved substantial growth in recent years. On a combined basis, the Founding
Companies' revenues increased from $30.9 million in 1992 to $71.8 million in
1996, representing a compound annual growth rate of 23.5%.

Compass believes that companies are increasingly seeking partners who can
provide a comprehensive set of outsourcing services, spanning the entire Sales
Cycle, while maintaining a high level of client service. The diagram below
illustrates the processes that comprise the Sales Cycle, from direct marketing
through accounts receivable collection, and the services of the Company that
can be utilized at various stages throughout the Sales Cycle.

[DIAGRAM OF SALES CYCLE]

Following the Offering, the Company will become a single source provider of
outsourced business services throughout the Sales Cycle. The Company intends to
leverage the strong client relationships developed by the Founding Companies to
cross-sell additional services to existing clients and to use the expertise of
the Founding Companies as a point of entry with new clients. In addition, the
Company intends to pursue an aggressive acquisition program to broaden the
services it offers, expand its client base and gain access to new markets.

31
<PAGE>

INDUSTRY OVERVIEW

Companies are increasingly outsourcing to third party experts a variety of
non-core business functions throughout the Sales Cycle. The Company believes
that this trend toward outsourcing will continue due to a number of factors.
Outsourcing allows companies to focus on strategic issues and redirect
resources to core business activities while having operational details assumed
by a third party provider. In addition, by partnering with specialized
outsourcing providers, a company gains access to new technology, tools and
techniques that it may not possess internally. By outsourcing functions
previously performed in-house, companies can convert the fixed costs
associated with investments in equipment, processes, technology and personnel
into variable costs incurred only when such functions are needed, and can
perform these functions more cost effectively.

In addition to the general trend toward outsourcing, management believes
that a number of significant factors and trends are creating opportunities in
the Company's businesses. In particular, both the accounts receivable
management industry and the direct marketing industry have experienced
significant growth in recent years.

The American Collectors Association ("ACA"), an industry trade group,
estimates that consumer receivables outsourced to third parties for management
and recovery in the United States increased from approximately $43.7 billion
in 1990 to approximately $84.3 billion in 1995, a compound annual growth rate
of 14.0%. The Company believes that this growth results in large part from a
combination of increasing delinquent consumer debt and the increasing trend of
companies and government entities to outsource collection of such debt to
third parties. According to the ACA, consumer debt increased from
approximately $3.6 trillion in 1990 to nearly $5.0 trillion in 1995 and the
delinquent amount of consumer debt increased from $106 billion to $147 billion
during the same period. As debt levels have increased, companies are
outsourcing more as a result of the (i) increased investment associated with
large-scale collection efforts, (ii) ability to use a third party agency to
collect funds thereby minimizing the negative impact on customer relations and
(iii) increasing complexity of the collection process. The percentage of
delinquent consumer debt referred for collection increased from 41.5% in 1990
to 57.0% in 1995. The Company also believes, based on its recent experience,
that companies are beginning to utilize third party service providers earlier
in the collection cycle.

According to the Direct Marketing Association ("DMA"), a trade association,
overall media spending for direct marketing initiatives totalled $144.5
billion in 1996, a 6.3% increase from 1995. The DMA estimates that advertising
expenditures in the United States for telemarketing (the largest component of
total direct marketing expenditures) increased from approximately $63.4
billion in 1991 to $87.9 billion in 1996, a compound annual growth rate of
6.8%. Direct mail advertising expenditures, which constitute the second
largest (after telemarketing) component of total direct marketing
expenditures, increased from approximately $24.5 billion in 1991 to $34.6
billion in 1996, a compound annual growth rate of 7.1%. Management believes
that direct marketing will continue to grow, due in part to the increasing
cost effectiveness of direct marketing as compared to other marketing methods,
increased competition in the telecommunications industry and rapidly changing,
complex technology. Although a very small percentage of teleservices and
direct mail business is currently being outsourced, the Company believes that
the percentage of the market that is outsourced will also increase as
businesses continue to recognize the benefits of outsourcing.

Each of the accounts receivable management, direct mail and teleservices
industries is highly fragmented, includes a large number of small, independent
businesses and is currently experiencing consolidation. As companies seek to
focus on their core competencies and maximize asset utilization, they are
increasingly turning to outside parties who have the technological expertise,
service focus and full range of capabilities necessary to efficiently perform
complex or large projects on a multi-regional or national basis. In addition,
management believes that companies are increasingly seeking to limit the
number of vendors that satisfy their outsourcing needs by finding vendors that
can provide multiple outsourcing services. Compass believes that outsourcing

32
<PAGE>

companies will require significant capital to grow and to deploy state-of-the-
art technology in order to meet the demands of their clients. As a result, the
Company believes significant opportunities are available to a well capitalized
company providing a broad offering of outsourced business services with a high
level of customer service.

BUSINESS STRATEGY

Provide Broad Array of Complementary Services. Each of the Founding
Companies has developed extensive expertise and a strong reputation with
respect to the services it provides. Upon completion of the Offering, the
Company will be able to provide clients with a broad range of services. The
Company expects to offer bundled and complementary services to companies that
are currently outsourcing to multiple vendors or performing such functions in-
house. In response to the particular needs of each client, the Company will
develop customized, coordinated solutions, such as a package of direct
marketing, mail fulfillment, billing, customer service and accounts receivable
management services. Management believes that companies that can provide a
broad array of complementary business services are well positioned for growth
as clients are increasingly demanding strategic business partnerships with
their vendors, including a single point of contact for many services. In
addition, management believes that the Company's reputation for and focus on
creating individual business solutions will help it to compete on a basis
other than price.

Focus on High Quality Client Service. The Company believes that maintaining
high levels of service and satisfaction is integral to attracting and
retaining clients. In addition to the importance of customized, value-added
solutions, client and end-user satisfaction is an important differentiating
factor in vendor selection. Each Founding Company has a strong commitment to
quality and satisfaction, and conducts regular client performance reviews. For
example, Impact has dedicated account teams who implement an extensive quality
process that includes validation of the data sent by a client, constant
monitoring of the phone conversations done on-site or at the client's location
to ensure that scripts are properly executed, and an internally designed
verification process to ensure that all of the client's requirements have been
fulfilled.

Leverage and Expand Technology and Operational Infrastructures. A key
element of the Company's strategy will be to capitalize on the investments
made by the Founding Companies in technology and the development of
operational processes in order to deliver the most effective client solutions.
The Company intends to continue to invest in sophisticated telecommunications,
mail center and information technology. Continued investment in technology
will facilitate the Company's ability to integrate its existing service
offerings and expand its menu of services. In addition, the Company will
review technology and operational practices across its businesses with the
goal of leveraging the best platforms and processes, optimizing MIS
capabilities and sharing technologies.

Operate with Decentralized Management Structure. Compass believes that the
experienced local management teams at the Founding Companies have a valuable
understanding of their respective markets and businesses and strong client
relationships upon which they may capitalize. Accordingly, the Company intends
to operate with a decentralized management strategy. Senior management at the
Founding Companies will continue to make day-to-day operating decisions and
will be responsible for the profitability and growth of their business. The
Company's executive management team will work closely with the Founding
Companies to coordinate, integrate and expand their service offerings. The
Company intends to utilize stock ownership, as well as appropriate incentive
compensation, to ensure that the objectives of local management are aligned
with those of the Company.

33
<PAGE>

GROWTH STRATEGY

The Company believes that there are significant opportunities to expand its
business and to further penetrate the market for outsourced business services.
The key elements of its growth strategy are as follows:

Implement Internal Growth Strategy. While the Company intends to acquire
additional outsourcing services companies, strong internal growth remains the
core of the Company's growth strategy. The key elements of the Company's
internal growth strategy include the following:

Capitalize on Cross-Selling Opportunities. Each of the Founding Companies
is a specialist in the services it provides, and each has many long
standing relationships with large clients who have multiple outsourcing
needs. Combining the Founding Companies will enable the Company to
capitalize on clients' desires for a single point of service, and to offer
bundled services by leveraging the Founding Companies' client relationships
and reputations for quality. For example, the Company will offer follow-up
teleservices to its direct mailing services clients, utilizing identical
databases for both processes. The Company also intends to offer accounts
receivable management services to its billing services clients.

Generate New Clients Through an Aggressive Marketing Program. The Company
intends to expand its client base by capitalizing on the breadth of its
services, its size, financial resources and geographic scope. The Company
will establish a coordinated marketing strategy to effectively market and
sell the services of all Founding Companies on a national basis.

Expand Service Offerings. The Company expects to continue to selectively
expand its service offerings, with the goal of providing integrated "end-
to-end" services to clients throughout the Sales Cycle. New services will
be complementary to and further leverage the Company's current offerings.

Implement Best Practices. The Company will identify best practices at
each of the Founding Companies that can be implemented throughout the
Company. For example, the Company intends to identify and utilize the most
effective call center management programs, collection techniques, mail
services and technologies. In addition, the Company intends to focus on the
most effective hiring, training, benefits and employee retention programs
of the Founding Companies and implement those practices throughout its
operations.

Achieve Economies of Scale. The Company believes that it can achieve
significant cost savings as a result of the Acquisitions, as well as future
acquisitions. The Company expects to benefit from greater purchasing power
in such key expense areas as telecommunications, postage, credit bureau
reports, insurance and employee benefits. The Company believes that it can
reduce the total operating expenses of the Founding Companies and other
acquired businesses by eliminating or consolidating certain duplicative
administrative functions. In addition, the Company expects to realize cost
savings and maximize capacity utilization by shifting work among its
locations as appropriate.

Pursue International Opportunities. Management believes that
international markets for accounts receivable management and teleservices
are growing rapidly in conjunction with the growth of overall credit card
spending and the expansion of the business of major credit card issuers
overseas. Management also believes that the United States is significantly
more advanced in outsourcing technology and procedures than the rest of the
world. Accordingly, the Company intends to pursue opportunities in
international markets in order to provide services to its multinational
clients. In addition, the Company may pursue other expansion overseas as
attractive opportunities arise. Where appropriate, the Company may enter
into a strategic partnership with an existing local business to facilitate
entry into a new international market. The Company believes that it is
well-positioned to capitalize on international opportunities through its
existing relationships with multinational clients as well as the expertise
and reputations of the Founding Companies.

Pursue an Aggressive Acquisition Program. Compass believes that industry
trends toward consolidation and increased acceptance of outsourcing create
opportunities for expansion of the Company's business. The Company intends to
capitalize on the highly fragmented nature of the industries in which it
competes by implementing an aggressive strategic acquisition program following
the Offering. Using the Founding Companies as platforms for growth and
consolidation, the Company will pursue acquisitions within the industry

34
<PAGE>

segments and markets currently served by the Founding Companies to add to the
growth of its existing businesses and gain market share. In addition, the
Company plans to acquire additional companies that broaden and complement the
Company's menu of services and the markets it serves. In analyzing acquisition
candidates, the Company will look for profitable companies with strong
management teams and a reputation for high quality client service. The Company
may also consider acquiring companies that possess technology or proprietary
rights to functions or services that would significantly enhance the value
provided by the Company to its clients.

The Company believes that the opportunity to be acquired by Compass will be
attractive to many specialized outsourcing companies. The Company offers owners
of potential acquisition candidates: (i) significant opportunities to enhance
the growth of their businesses through cross-selling the Company's wide range
of outsourced services; (ii) access to sophisticated technology and operational
processes; (iii) the Company's financial strength and visibility as a public
company; (iv) a decentralized management structure; and (v) near-term
liquidity.

In selecting the Founding Companies, Compass analyzed significant data on
outsourced business services companies and met with owners of many individual
companies. In addition, the owners of the Founding Companies have extensive
industry knowledge and strong reputations and have developed relationships with
other companies in their industry sectors, and the Company believes that this
will be of significant value in the Company's acquisition program. The Company
continues to review various strategic acquisition opportunities. Other than the
Acquisition Agreements with the Founding Companies, the Company is not a party
to any agreements regarding any acquisitions.

As consideration for future acquisitions, the Company intends to use various
combinations of Common Stock, cash and notes. Following the Offering, the
Company plans to register an additional 3,000,000 shares of its Common Stock
under the Securities Act for use by the Company as all or a portion of the
consideration to be paid in future acquisitions.

SERVICES OFFERED BY THE COMPANY

The Company provides a broad array of complementary business services which
can be utilized by its clients throughout the Sales Cycle. These services
include accounts receivable management services, mailing services and
teleservices. In addition, the Company provides telephonic check drafting
services through its APS service bureau. The services related to accounts
receivable management include recovery of early and later stage delinquent
consumer and commercial accounts. Mailing services include data processing,
printing, addressing, inserting, presorting and other aspects of mail handling.
Teleservices include telemarketing, customer service, market research and lead
generation activities. Several of the Company's services, such as customer
service and APS, can be utilized at multiple stages of the Sales Cycle.

Accounts Receivable Management Services

The Company, through NCMC, Bomar and Mid-Continent, provides a wide range of
accounts receivable management services with respect to the collection of both
consumer and commercial accounts. The Company primarily provides services
related to the recovery of traditional delinquent accounts which can be
categorized as primary (generally 90 to 360 days past due), secondary
(generally 12 to 18 months past due with some previous collection efforts) and
tertiary (generally more than 18 months past due with extensive previous
collection efforts). The Company also provides recovery services for early
stage delinquencies (generally less than 90 days past due) at either the
client's location or the Company's location, sometimes on an outsourced basis.
The Company generally charges its clients on a contingency fee basis at various
rates depending on the category of debt. Generally, the Company charges (i) 2%
to 25% of the amount collected for early stage delinquencies; (ii) 25% to 35%
for primary accounts; (iii) 35% to 50% for secondary accounts and (iv) 50% to
70% for tertiary accounts.

Recovery activities begin with the Company working with a client to design a
customized recovery solution based upon various factors including age and size
of the account, type and source of debt, and the client's specific

35
<PAGE>

requirements and standards. After the Company and the client have determined
the approach, the Company electronically or manually transfers data provided
by the client onto its system. The Company then searches various databases,
public records and other sources to locate customers whose telephone numbers
or addresses are not available from the client. Once the customer is located,
the Company forwards a past due notification letter which serves as official
notification to the customer under the FDCPA. The Company continues the
recovery process through notifications by mail and/or telephone, based on the
nature of the account, during which time the Company's telephone
representatives continue the dialogue with customers to seek immediate payment
or develop a payment program. At the client's request, the Company will report
delinquent accounts to one or more of the national credit bureaus. Payments
collected by the Company are either remitted to the client net of the
Company's fee or remitted in full, with the Company billing the client for its
services. The Company also provides litigation management services for clients
with respect to certain accounts. Such services include managing the attorney
relationships and facilitating the transfer of necessary documentation.
Throughout this process, the Company provides activity reports to the client.

Mailing Services

The Company, through Mail Box, provides direct mailing services and billing
services, mail presorting, freight and drop shipping, data processing, laser
printing, mailing list rental and other services related to mail handling.
Mailing services involve the high speed inserting, addressing and stamping of
mail. Utilizing the Company's inserting machines and addressing and stamping
systems, the Company processed approximately 840 million pieces of mail during
the twelve months ended June 30, 1997. The Company also provides mail
presorting services (i.e., combining volumes of like mail and presorting and
bar coding it to United States Postal Service specifications), which are
designed to generate significant postal discounts for its customers. Utilizing
the Company's sophisticated technology, mail can be presorted to the walk
sequence of a specific mail carrier. The mail which is presorted includes both
mail processed by other vendors and mail processed by the Company. Fees
charged for mailing and presorting are based on the number of pieces
processed. Another service offered by the Company which is designed to
generate postage savings is drop shipping, whereby the Company, instead of
sending mail from its Dallas location, transports the mail to other locations
in order to be mailed. The fee charged for drop shipping is a percentage of
the postal savings realized by the client.

Data processing and laser printing services include converting data sent by
the client and processing it to produce a letter or a bill. For example, if a
client transfers billing information and a corresponding mailing list, the
Company standardizes the mailing list in order to reduce postage costs (e.g.,
deleting duplicative addresses, correcting street names and obtaining current
addresses through its change-of-address technology) and merges the list with
the bills to be mailed. Data processing services also include state of the art
predictive modeling and analysis for market segmentation to achieve higher
response rates for direct marketing campaigns. The fee charged for data
processing is based on the number of pieces processed. The Company also rents
mailing lists, which the Company customizes for a particular client utilizing
lists purchased from other sources. Other services of the Company include
order fulfillment and sales of printed material such as letterhead, envelopes
and forms.

Teleservices

The Company, through Impact, provides primarily outbound business-to-
consumer teleservices where telephone representatives place calls to parties
targeted by the client to offer products or services or to obtain information.
The Company currently has a total of approximately 260 call stations, all of
which are available for outbound telemarketing. The Company has an arrangement
to use 160 additional call stations located in North Dakota, as needed. The
Company outsources additional business during peak periods. At the beginning
of a typical outbound program, the Company receives customer data files that
the client has selected to match the demographic profile of the targeted
customer for the product or service being offered. These files contain each
targeted customer's name, address, phone number and other relevant data. The
Company's data management system checks the files for duplicate information,
updates for recent area code changes and otherwise modifies the information as
needed. Prior to the beginning of the calling effort, the Company works with
the client to develop a script appropriate to the specific program.

36
<PAGE>

Actual telephone calling at the centers is controlled by computerized call
management systems that utilize a predictive dialing system to automatically
dial the telephone numbers in the files. The call management system then
forwards all connected calls, along with the customer's name and other
information, to the workstation of a telephone representative who has been
trained for the client's program. The telephone representative uses the
customized script to solicit an order for the product or service or to request
information that will be added to the client's database. Information regarding
sales and other aspects of the program is captured, processed and verified by
software systems and made available to clients in customized report formats.
The Company charges its outbound teleservices clients on a commission basis,
at an hourly rate or through a combination of both.

Inbound teleservices account for a small percentage of the Company's
teleservices revenues, although the Company intends to expand this business.
Forty of the Company's call stations may be used for inbound teleservices
which involve the processing of incoming calls, often placed by customers
using toll-free numbers, to a customer service representative for service,
order fulfillment or product information. Inbound teleservices include
activities such as customer care services, credit card and loan application
processing and catalog sales. More sophisticated inbound programs assist
clients in responding to customer inquiries, offering technical and product
support services and assessing overall customer satisfaction. Inbound
teleservices are normally billed at an hourly or cost-per-minute rate.

Accelerated Payment Systems

Accelerated Payment Systems ("APS") was introduced to the market by NCMC in
1992 and patented in 1996. It was originally developed to service the "urgency
payment" market in the collections industry by allowing consumers to resolve
delinquencies on mortgage, telephone, utility, credit card or other recurring
bills through telephonic authorization of a payment by check. The use of APS
has since expanded to retail, telecommunications, utilities, banking, sales
and other industries as clients have begun to appreciate the advantages of
telephonically authorized payments by check as compared to other methods of
immediate payment such as wire transfers, money orders, overnight mail, credit
cards and debit cards. Compass believes that the advantages include the
following: (i) APS does not require written authorization; (ii) APS checks can
be printed at the client's location for same day deposit; and (iii) credit
cards are not a payment option in the urgency payment market for certain
receivables such as credit card debt.

The APS procedure begins when the client's representative obtains verbal
authorization and checking account, bank and other information from the
customer. The client enters such information into the computer where the APS
software has been installed, and transmits the data to the APS service bureau.
APS receives the transmission and either prints the checks on site for
overnight delivery to the client or a designated bank or provides the client
access to print the checks at the client's location for same day deposit.

The Company charges its APS clients a one-time setup fee as well as a per
transaction fee. APS includes a license to use its proprietary software, bank
and zip code database updates, software upgrades, data backup and service
bureau support including a client help desk and consumer hotline. Management
believes that the combination of the Founding Companies creates a significant
opportunity to apply APS beyond the urgency payment market. For example, the
Company intends to offer APS to its clients as a payment option to improve
response rates on outbound telemarketing calls.

CLIENT RELATIONSHIPS

The Company provides its services to clients in a broad range of sectors
including telecommunications, financial services, insurance, healthcare,
education, government and utilities. The Company's 10 largest clients in 1996
accounted for approximately 39.8% of the Company's revenues on a pro forma
combined basis. In 1996 and the six months ended June 30, 1997, VarTec
Telecom, Inc. ("VarTec") accounted for approximately 11.2% and 14.6% of the
Company's revenues on a pro forma combined basis. Other than VarTec, no client
accounted for more than 10% of the Company's revenues on a pro forma combined
basis in such periods.

37
<PAGE>

The Company enters into contracts with most of its clients which define,
among other things, fee arrangements, scope of services and termination
provisions. Clients may usually terminate such contracts on short notice.

The following table sets forth a list of certain of the Company's
representative clients:

<TABLE>
<CAPTION>
FINANCIAL
SERVICES EDUCATION HEALTHCARE
--------- --------- ----------
<S> <C> <C>
Allstate
Insurance Columbia University Beverly Enterprises, Inc.
Bank One DeVRY, INC. MD Anderson Cancer Hospital
Corporation
Capital One Loyola University of Chicago Medical Resource Systems, Inc.
Financial Roosevelt College Medic Computer Systems, Inc.
Corporation
General University Support Services
Electric
Capital
Services,
Inc.
MBNA
America
Bank, N.A.
<CAPTION>
GOVERNMENT
AND
UTILITIES TELECOMMUNICATIONS RETAIL AND COMMERCIAL
---------- ------------------ ---------------------
<S> <C> <C>
The Army AT&T Corporation Advantis Business Services, Inc.
and Air AT&T Wireless Services Circuit City, Inc.
Force
Exchange
Services
Baltimore Bellsouth Telecommunications, Inc. The FACS Group (Federated
Gas & Southwestern Bell Mobile Systems, Inc. Department Stores, Inc.)
Electric
Company
Georgia VarTec Telecom, Inc.
Power Co. MemberWorks, Inc.
State of
Maryland Sears Roebuck & Co.
Nevada
Power
Company
</TABLE>

QUALITY ASSURANCE AND CLIENT SERVICE

The Company's reputation for quality service is critical to acquiring and
retaining clients and the Company has a strong commitment to quality and
client satisfaction. With respect to the Company's telephone representatives,
the Company and its clients monitor such representatives for compliance with
the clients' specifications and the Company's policies. The Company regularly
measures the quality of its services by capturing and reviewing such
information as the amount of time spent talking with clients' customers, level
of customer complaints and a variety of other operating measures. In order to
provide ongoing improvement in the performance of the Company's telephone
representatives and to assure compliance with the Company's policies and
standards, quality assurance personnel monitor each telephone representative
on a regular basis and provide ongoing training to the representative based on
this review. The Company's information systems enable it to provide clients
with reports as to the status of their accounts. In some cases, clients can
choose to network with the Company's computer system to access such
information directly.

The Company believes that extensive training of employees is essential in
providing high quality service. For example, Mail Box established the Mail Box
Academy, a dedicated training facility at which all new mailing service
employees must complete a six-week program that includes training in United
States postal regulations, data processing and operation of inserting and
presorting machines.

SALES AND MARKETING

Each Founding Company has dedicated sales personnel who work directly with
clients and potential clients to develop solutions to satisfy their
outsourcing needs and cultivate successful, long term relationships.
Historically, the Founding Companies have acquired new clients and marketed
services by pursuing client referrals, responding to requests for proposals,
attending trade and industry conferences and using targeted direct marketing
efforts. The Company's sales force includes 40 direct sales employees and six
independent contractors.

38
<PAGE>

The Company intends to continue the Founding Companies' emphasis on
developing and maintaining long-
term client relationships. The Company will implement a marketing strategy
which: (i) provides a broad range of high quality, complementary services;
(ii) expands service offerings; and (iii) enables the cross-selling of
services to existing and new clients. Marketing strategies will be coordinated
to optimize the sales force efforts and prioritize new client acquisitions of
major national accounts.

TECHNOLOGY AND INFRASTRUCTURE

Accounts Receivable Management Services

The Company has made a substantial investment in its client/server and
local- and wide-area networks which run its collection agency software and
call management systems such as predictive dialers, automated call
distribution systems and digital switching.

The Company utilizes predictive dialers to address its low balance, high
volume accounts. These systems scan the Company's database and simultaneously
initiate calls on all available telephone lines and determine if a live
connection is made. Upon determining that a live connection has been made, the
computer immediately switches the call to an available representative and
instantaneously displays the associated account record on the telephone
representative's workstation. Calls that reach other signals, such as a busy
signal, telephone company intercept or no answer, are tagged for statistical
analysis and placed in priority recall queues or multiple-pass calling cycles.
The system also automates virtually all recordkeeping and follow-up activities
including letter and report generation. The Company's automated operations
improve the productivity of the Company's collection staff.

Mailing Services

The Company utilizes software and technology in its lettershop, presort, and
data processing facilities. For data processing, the Company utilizes an IBM
mainframe and sophisticated letter processing and database management systems
to provide high speed data manipulation, flexibility in letter text setup and
predictive modeling and analysis. In addition, the Company is able to use its
data processing technology to reduce postage costs for clients by deleting
duplicative addresses, correcting street names and obtaining current addresses
through its change-of-address technology. In the lettershop, the Company has
sixty inserting machines, including intelligent inserting machines which
burst, fold, select, match or handle multiple page inserts, and eighteen
addressing and stamping systems which allows the Company to process high
volumes of mail in a short period of time. For mail presorting, the Company
utilizes multiline optical character readers which read the address, cross
reference the National Postal Database and encode the corresponding bar code.

Teleservices

The Company provides its teleservices through call stations which utilize
sophisticated call management systems including a predictive dialing system,
automated call distribution systems and digital switching which are integrated
with database management systems and local and wide area networks. In
addition, the Company uses proprietary software for customizing scripts used
by its telephone representatives. The Company's predictive dialing system was
designed to be used in conjunction with its scripting and data capture
software, while allowing for the import of data in any standardized format.
This system can run up to 128 campaigns simultaneously and was designed to
allow the Company to increase capacity rapidly and cost effectively.

The Company has implemented procedures to protect the loss of data against
power loss, fire and other casualty. In addition, the Company has installed a
security system to protect the integrity and confidentiality of its computer
system and data.

39
<PAGE>

COMPETITION

The markets in which the Company competes are highly competitive, and the
Company expects competition to persist and intensify in the future. As a
result, the Company faces aggressive price competition in most of its
businesses and expects price competition to continue. The Company's
competitors include small firms offering specific applications, divisions of
large entities, large independent firms and, most significantly, the in-house
operations of clients or potential clients. Some of the Company's competitors
have substantially greater financial, marketing and other resources, offer
more diversified services and operate in broader geographic areas than the
Company. There can be no assurance that additional competitors with greater
resources than the Company will not enter the Company's markets. All of the
services offered by the Company may be performed in-house. Many larger clients
retain multiple accounts receivable management providers which exposes the
Company to continuous competition in order to remain a preferred vendor. There
can be no assurance that outsourcing of the services performed by the Company
will continue or that existing Company clients will not bring some or all of
such services in-house. The Company competes primarily on performance, client
service, range of services offered and price.

GOVERNMENT REGULATION

The accounts receivable management and telemarketing industries are
regulated under various federal and state statutes. The Company is subject to
the FDCPA and various state debt collection laws, which, among other things,
establish specific guidelines and procedures debt collectors must follow in
communicating with consumer debtors, including the time, place and manner of
such communications. The accounts receivable management business is also
subject to state regulation, and some states require that the Company be
licensed as a debt collection company. The Company is also subject to the
FCRA, which regulates the consumer credit reporting industry and which may
impose liability on the Company to the extent that the adverse credit
information reported on a consumer to a credit bureau is false, inaccurate or
outside of the scope of the Company's transactions with such consumers. With
respect to the other teleservices offered by the Company, including
telemarketing, the Telemarketing and Consumer Fraud and Abuse Prevention Act
of 1994 broadly authorizes the FTC to issue regulations prohibiting
misrepresentations in telemarketing sales. The FTC's telemarketing sales
rules, among other things, limit the hours during which telemarketers may
call, prohibit misrepresentations of the cost, terms, restrictions,
performance or duration of products or services offered by telephone
solicitation and specifically address other perceived telemarketing abuses in
the offering of prizes and the sale of business opportunities or investments.
In addition, the TCPA restricts the use of automated telephone equipment for
telemarketing purposes, including limiting the hours during which
telemarketers may call consumers and prohibiting the use of automated
telephone dialing equipment to call certain telephone numbers. A number of
states also regulate telemarketing and some states have enacted restrictions
similar to the TCPA. The failure to comply with applicable statutes and
regulations could have a materially adverse effect on the Company's business,
results of operations and financial condition. There can be no assurance that
additional federal or state legislation, or changes in regulatory
implementation, would not limit the activities of the Company in the future or
significantly increase the cost of regulatory compliance.

Several of the industries served by the Company are also 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.

The Company devotes significant and continuous efforts, through training of
personnel and monitoring of compliance, to ensure that it is in compliance
with all federal and state regulatory requirements. The Company believes that
it is in material compliance with all such regulatory requirements.

EMPLOYEES

As of August 31, 1997, the Founding Companies employed a total of 1,023
full-time and 283 part-time employees, of whom 625 were employed in connection
with accounts receivable management services, 331 were

40
<PAGE>

employed in connection with teleservices and 350 were employed in connection
with mailing services. In addition, the Company currently uses 255 independent
contractors (primarily for its mailing services) and hires temporary employees
as needed. None of the Company's employees is represented by a labor union.
The Company believes that its relations with its employees are good.

FACILITIES

The Company currently operates 15 leased facilities. The chart below sets
forth certain information regarding such facilities.

<TABLE>
<CAPTION>
LOCATION OF APPROXIMATE
FACILITY COMPANY AND OPERATIONS CONDUCTED SQUARE FEET
----------- -------------------------------- -----------
<S> <C> <C>
Atlanta, GA Bomar--Accounts receivable management 3,000
Buffalo, NY Mid-Continent--Accounts receivable management, sales and administrative 7,700
Destin, FL Bomar--Administrative 1,200
Dallas, TX Mail Box--Mailing services and administrative 338,000
Houston, TX Bomar--Accounts receivable management 2,800
Hunt Valley, MD NCMC--Accounts receivable management and administrative 18,600
Las Vegas, NV NCMC--Accounts receivable management 3,000
Louisville, KY Mid-Continent--Accounts receivable management, sales and administrative 5,500
Norcross, GA Bomar--Accounts receivable management and sales 22,700
Phoenix, AZ Bomar--Accounts receivable management 4,000
Princeton, NJ (1) Compass--Corporate headquarters 1,000
Rolling Meadows, IL Mid-Continent--Accounts receivable management, sales and administrative 17,000
Tampa, FL Bomar--Accounts receivable management 8,000
Voorhees, NJ Impact--Outbound telemarketing 16,000
Woodbury, NJ Impact--Telemarketing, data processing and administrative 8,500
</TABLE>
- --------
(1) The Company intends to relocate its headquarters from Princeton, New
Jersey to the metropolitan New York area after consummation of the
Offering.

LITIGATION

The Company is engaged in certain disputes concerning a patent (the "APS
Patent") owned by the Company and used in its APS process to provide
telephonic check drafting services. The following is a summary of such
disputes:

In January 1994, NCMC entered into an Intellectual Property Licensing
Agreement (the "1994 Agreement") with Autoscribe Corporation ("ASC") and
Robert E. Pollin (the "Inventor"). Pursuant to the 1994 Agreement, NCMC was
granted, with certain exceptions, the exclusive right to use certain
intellectual property that was at the time the subject of a patent
application. In March 1996, NCMC purchased the intellectual property from ASC
and the Inventor pursuant to an Intellectual Property Purchase and License
Agreement (the "1996 Agreement") that superseded the 1994 Agreement. The APS
Patent was issued in April 1996 and assigned to NCMC.

NCMC is a plaintiff in two lawsuits (the "Patent Infringement Lawsuits")
alleging that a competitor and a former customer willfully infringed the APS
Patent. NCMC's claims against the defendants seek lost profits, damages,
attorneys' fees and costs, treble damages for willful infringement and
punitive damages. The defendants in the Patent Infringement Lawsuits have
denied infringing the APS Patent and have challenged the validity of the APS
Patent in a counterclaim. Management believes that the counterclaim is without
merit. Compass has entered into an agreement with NCMC and its stockholders
with respect to the allocation of damages, if any, awarded to NCMC in the
Patent Infringement Lawsuits. See "Certain Transactions."

41
<PAGE>

In April 1997, ASC and the Inventor filed an arbitration claim against NCMC
seeking rescission of the 1996 Agreement and certain monetary damages. In May
1997, NCMC filed a lawsuit against ASC and the Inventor in the Circuit Court
for Montgomery County, Maryland alleging that ASC and the Inventor have
violated NCMC's ownership rights to the APS Patent and exclusive rights to use
the intellectual property by continuing to solicit maintenance customers and
provide maintenance services in contravention of the 1996 Agreement. NCMC
seeks unspecified damages and injunctive relief. ASC and the Inventor have
denied NCMC's claims and have filed a counterclaim seeking rescission of the
1996 Agreement, reassignment of the APS Patent to the Inventor, reinstatement
of the 1994 Agreement, the ability to participate as a plaintiff in the Patent
Infringement Lawsuits, unspecified damages and other relief. ASC and the
Inventor allege that the 1996 Agreement should be rescinded because the
Inventor lacked the capacity to sign the 1996 Agreement and because the 1996
Agreement was the product of misrepresentations and duress and is not
supported by adequate consideration. ASC and the Inventor also allege that (i)
NCMC was and is required under the 1996 Agreement to pay royalties at a rate
equal to 7.25% of NCMC's APS-related revenues rather than the 4.5% rate at
which they have been paid; (ii) NCMC improperly offset against the royalties
certain litigation expenses incurred by it in the Patent Infringement
Lawsuits; and (iii) NCMC failed to properly prosecute the Patent Infringement
Lawsuits. NCMC intends to deny these allegations.

While NCMC believes that the counterclaims are without merit, there can be
no assurance that ASC and the Inventor will not prevail with respect to some
or all of their counterclaims. In the event that ASC and the Inventor are
successful in their counterclaims, both an award of damages and rescission of
the 1996 Agreement could occur, with the future rights of the parties being
determined by the 1994 Agreement. If the 1994 Agreement were reinstated, NCMC
would be required to pay royalties at the rate of 7.25% of its APS-related
revenues rather than the 4.5% rate at which royalties are being paid under the
1996 Agreement. Management does not believe that a decision adverse to NCMC in
this dispute would have a material adverse effect on the Company's business,
results of operations or financial condition.

The Company is not involved in any other legal proceedings material to the
financial condition or results of operations of the Company.

42
<PAGE>

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The following table sets forth information concerning the Company's
directors, executive officers and certain key employees, as well as those
persons who will become directors and executive officers upon consummation of
the Offering. In addition to the persons named as directors below, it is
anticipated that two independent directors will be elected to the Company's
board at or prior to the consummation of the Offering. The Company is in the
process of selecting these two individuals.

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Michael J. Cunningham... 40 Chairman of the Board and Chief Executive Officer
Mahmud U. Haq........... 38 President and Chief Operating Officer
Richard A. Alston....... 42 Chief Financial Officer
Kenneth W. Murphy....... 58 Chief Executive Officer--Mail Box; Director
Leeds Hackett........... 57 Chief Executive Officer--NCMC; Director
John Maloney............ 52 Chief Operating Officer--Bomar; Director
Les J. Kirschbaum....... 55 Chief Executive Officer--Mid-Continent; Director
Edward A. DuCoin........ 32 Co-President--Impact; Director
Scott H. Lang........... 51 Director
Gene Collins............ 55 Chief Executive Officer--Bomar
David T. DuCoin......... 39 Co-President--Impact
</TABLE>

MICHAEL J. CUNNINGHAM joined Compass in June 1997. Prior to joining the
Company, Mr. Cunningham held various senior executive positions at American
Express Company ("American Express"). From 1992 until June 1997, Mr. Cunningham
was Vice President--Operations of the Travel Related Services division of
American Express where he was responsible for management of the billing and
payment processes for all domestic credit card holders, as well as the
collection agency management function. He also chaired the steering committee
and managed the group that develops and enhances the global system that
generates Travel Related Services customer statements throughout the world. At
this position, Mr. Cunningham managed approximately 1,400 employees in seven
locations with an annual operating budget exceeding $300 million. From 1988 to
1992, Mr. Cunningham was the Vice President of Finance of the Travel Related
Services division and from 1984 to 1988 he served as Director of Corporate
Financial Analysis for American Express. Mr. Cunningham formerly served on the
Advisory Council for the National Foundation for Consumer Credit.

MAHMUD U. HAQ joined Compass in April 1997. From December 1996 until joining
the Company, Mr. Haq was the Executive Vice President of Global Business
Development at Nationwide Credit, Inc., one of the nation's largest accounts
receivable management companies. From 1985 to 1996, Mr. Haq held various senior
executive positions at American Express, including Vice President--Risk
Management of Global Collections for the Travel Related Services division
(1994-1996) and Vice President and Controller--Consumer Card Group Operations
for the Travel Related Services division (1992-1994). Mr. Haq formerly served
on the Board of Directors of the Consumer Credit Association of New York.

RICHARD A. ALSTON joined Compass in June 1997. From December 1994 to March
1997, Mr. Alston served as the Executive Vice President--Finance and Corporate
Development at National Processing, Inc., the nation's second largest credit
card processing company. During Mr. Alston's tenure, National Processing, Inc.
completed an initial public offering in August 1996. From 1991 to 1994, Mr.
Alston was the President of Alston Associates which provided strategic and
operations consulting services to Fortune 500 clients. From 1986 to 1991, Mr.
Alston was a Senior Vice President at Sealy, Inc. where he oversaw the
implementation of new manufacturing and financial systems throughout the
Company and was responsible for the Company's international licensing
activities and contract sales.

43
<PAGE>

KENNETH W. MURPHY will become a director of the Company after the
consummation of the Offering. Mr. Murphy has served as the President and Chief
Executive Officer of Mail Box since its founding in 1971. Mr. Murphy was the
Chairman of the Board of Directors of The Mail Advertising Service
Association, International ("MASA"), a mailing industry trade association,
from 1987 to 1993. He is currently a member of the Board of Directors of MASA-
Southwest and a member of the Advertising Mail Marketing Association, the
Direct Marketing Association of North Texas and the Dallas-Fort Worth and
Austin Postal Customer Councils.

LEEDS HACKETT will become a director of the Company after the consummation
of the Offering. Mr. Hackett has served as the Chairman and Chief Executive
Officer of NCMC since 1991. From 1989 to 1991, Mr. Hackett was Executive Vice
President and Chief Financial Officer of The Union Corporation, a New York
Stock Exchange company, which has subsidiaries in the debt collection
business. From 1987 to 1989, he was the President and Chief Executive Officer
of The Park Avenue Bank, N.A. and from 1965 to 1986, he held various
management positions at Marine Midland Bank.

JOHN MALONEY will become a director of the Company after the consummation of
the Offering. Mr. Maloney has served as the Chief Operating Officer of Bomar
since its founding in 1986. In such position, Mr. Maloney manages all of
Bomar's operations and production processes. He has played an integral role in
Bomar's strategic planning and development since its formation.

LES J. KIRSCHBAUM will become a director of the Company after the
consummation of the Offering. Mr. Kirschbaum has served as President of Mid-
Continent since 1974 and became Chief Executive Officer in 1995. Mr.
Kirschbaum served as the Chairman of the Commercial Agency Section ("CAS") of
the Commercial Law League of America ("CLLA") from 1986 to 1988, and was the
CAS representative on the Board of Governors of the CLLA from 1991 to 1994.
The CLLA is a trade association of commercial attorneys and commercial
collection agencies with approximately 6,000 members. Mr. Kirschbaum
frequently gives in-house seminars and guest lectures for a variety of
companies and trade associations. He is an active member of two presidents'
organizations: The Executive Committee and the Chief Executive Officers' Club.

EDWARD A. DUCOIN will become a director of the Company after the
consummation of the Offering. Mr. DuCoin founded Impact in 1984 and serves as
its Co-President with his brother, David T. DuCoin. He was a member of the
Board of Directors of the American Telemarketing Association from 1992 to 1993
and has been a national speaker on the subject of telemarketing. Mr. DuCoin
was recently selected by the Philadelphia Business Journal as one of its "40
under 40" Young Business Leaders.

SCOTT H. LANG became a director of the Company in April 1997. Since 1996,
Mr. Lang has been a Managing Member of BGL Management Company, LLC, which is
the Managing Member of BGL Capital Partners, LLC ("BGL"), a merchant banking
firm which originates and finances industry consolidations. Mr. Lang is also a
Managing Director and Principal of Brown, Gibbons, Lang & Company, L.P., an
investment banking firm, a position he has held since 1995. From 1985 to 1995,
he served as Executive Vice President and Managing Director of Investment
Banking at Rodman & Renshaw, Inc., a Chicago-based securities firm.

GENE COLLINS has served as the Chief Executive Officer of Bomar since its
founding in 1986. In such position, he manages the marketing efforts and
business development of the organization. In addition, Mr. Collins is
responsible for Bomar's financial planning and works closely with Mr. Maloney
in determining the company's strategic plan.

DAVID T. DUCOIN became actively involved with Impact in 1986 and has served
as its Co-President since 1993. He has been instrumental in the development of
Impact's proprietary predictive dialing system as well as the integration of
inbound and outbound technology in a shared database environment. Prior to
joining Impact, Mr. DuCoin was involved in television production and was the
Senior Editor and Chief Engineer for a variety of programs including major
league sports broadcasts.

44
<PAGE>

BOARD OF DIRECTORS

After consummation of the Acquisitions, the Board of Directors of the Company
will consist of nine directors divided into three classes with each class
serving for a term of three years. At each annual meeting of stockholders,
directors will be elected by the holders of the Common Stock to succeed those
directors whose terms are expiring. Directors whose terms will expire in 1998
are: Les J. Kirschbaum, Edward A. DuCoin and an independent director to be
named; directors whose terms will expire in 1999 are: John Maloney, Scott H.
Lang and an independent director to be named; directors whose terms will expire
in 2000 are: Leeds Hackett, Kenneth W. Murphy and Michael J. Cunningham. The
Initial Stockholders have entered into an agreement with respect to nominating
and electing directors in the five years following the Offering. See
"Description of Capital Stock--Stockholders' Agreement." The Company expects
that the Board of Directors will establish an Audit Committee, a Compensation
Committee, and such other committees as the Board may determine. The members of
each committee are expected to be determined at the first meeting of the Board
of Directors following the consummation of the Acquisitions. Directors elected
by the Company's stockholders may be removed only for cause.

DIRECTOR COMPENSATION

Directors who are also employees of the Company or one of its subsidiaries do
not receive compensation for serving as directors. Each director who is not an
employee of the Company or one of its subsidiaries receives a fee of $2,000 for
attendance at each Board of Directors' meeting and $1,000 for each committee
meeting (unless held on the same day as a Board of Directors' meeting).
Directors are also reimbursed for out-of-pocket expenses incurred in attending
meetings of the Board of Directors or committees thereof or otherwise incurred
in their capacity as directors. Upon the consummation of the Offering, each
non-employee director will be granted options to purchase 10,000 shares of
Common Stock at an exercise price equal to the initial public offering price.
See "--1997 Employee Incentive Compensation Plan."

EXECUTIVE COMPENSATION; EMPLOYMENT AGREEMENTS; COVENANTS-NOT-TO-COMPETE

Compass was incorporated in April 1997 and has conducted no operations and
generated no revenue to date. BGL has entered into agreements with Messrs.
Cunningham, Haq and Alston, dated April 28, 1997, March 31, 1997 and May 28,
1997, respectively, pursuant to which Messrs. Cunningham, Haq and Alston
provide consulting services to BGL in connection with the Acquisitions and the
Offering. As compensation for these consulting services, Messrs. Cunningham,
Haq and Alston are receiving annual consulting fees of $225,000, $200,000 and
$200,000, respectively. Such fees will remain in effect until the earliest of
the closing of the Offering, the execution of an employment agreement with
Compass, as described below, or termination of the consulting agreement.
Amounts paid by BGL pursuant to the consulting agreements, together with
interest thereon at 8% per annum, will be repaid by Compass to BGL from the net
proceeds of the Offering.

Prior to the consummation of the Offering, Messrs. Cunningham, Haq and Alston
will enter into three-year employment agreements with the Company providing for
annual base salaries of $225,000 for Mr. Cunningham and $200,000 for each of
Mr. Haq and Mr. Alston. Each agreement provides that the executive is eligible
to earn an annual bonus of up to 100% of his salary based upon specified
performance criteria. Unless terminated or not renewed by the Company or the
executive, the term of each such employment agreement will continue thereafter
on a year-to-year basis on the same terms and conditions existing at the time
of renewal. Each employment agreement will contain a covenant not to compete
with the Company for a period of two years following termination of employment.
Under this covenant, the executive is prohibited from: (i) engaging in any
business in competition with the Company anywhere in the United States; (ii)
enticing a managerial employee of the Company away from the Company; (iii)
soliciting or selling any competitive products or services to any person or
entity which is, or has been within one year prior to the date of termination,
a customer of the Company, or that was actively solicited by the Company during
such period; or (iv) calling upon a prospective acquisition candidate which the
employee knew was approached or analyzed by the Company, for the purpose of
acquiring the entity. The covenant may be enforced by injunctions or
restraining orders and shall be construed in accordance with the changing
activities, business and location of the Company.

45
<PAGE>

Each of these employment agreements will provide that, in the event of a
termination of employment by the Company without cause during the term of the
agreement, the Company will pay to the executive, as severance compensation,
(i) his then current salary plus the bonus paid to him the last fiscal year for
a period of two years following the date of termination and (ii) his bonus for
the current year prorated through the termination date. Payment is due in equal
installments on the Company's normal payroll payment dates during the severance
period. The employment agreements will further provide that in the event of a
change in control of the Company (as defined in the employment agreements), the
executive will have the right, following such change in control, to terminate
his employment for Good Reason (or, in the 60 days immediately following such
change in control, for any reason) and be entitled to receive severance
benefits as described above. So long as the executive does not engage in
conduct giving rise to the right to terminate employment for cause, Good Reason
includes (i) the failure to elect the executive to the office previously held,
the removal of the executive from his position or the assignment to the
executive of any additional duties or responsibilities or a reduction in
executive's duties or responsibilities which, in either case, are inconsistent
with those customarily associated with such position and (ii) a relocation by
the Company of the executive's place of employment beyond a specified area.

Upon the consummation of the Acquisitions, the Founding Companies will enter
into five-year employment agreements with certain of their executive officers,
including Messrs. Murphy, Hackett, Maloney, Kirschbaum, Collins, Edward A.
DuCoin and David T. DuCoin. Each agreement specifies an annual base salary and
provides that the executive is eligible to earn an annual bonus of up to 100%
of salary upon specified performance criteria. The Founding Companies will also
enter into employment agreements with other key employees for a term of two
years. Unless terminated or not renewed by the Founding Companies or the
employee, the term of each employment agreement will continue thereafter on a
year-to-year basis on the same terms and conditions existing at the time of
renewal. Each employment agreement will contain a covenant not to compete
whereby, for a two-year period following termination of employment (one year
with respect to employees other than executive officers), the employee is
prohibited from (i) engaging in any business in competition with the business
in which the applicable Founding Company engages anywhere in the United States,
(ii) enticing a managerial employee of the Founding Company away from the
Founding Company, (iii) soliciting or selling any competitive products or
services to any person or entity which is, or has been within one year prior to
the date of termination, a customer of the Founding Company, or that was
actively solicited by the Founding Company during such period, or (iv) calling
upon a prospective acquisition candidate which the employee knew was approached
or analyzed by the Company, for the purpose of acquiring the entity. Each
agreement will provide that upon termination of employment by the Founding
Company without cause, the employee will be entitled to receive from the
Company his or her annual salary for a period of two years following
termination (one year with respect to employees other than executive officers)
plus his or her bonus for the current year prorated through the termination
date.

Upon the consummation of the Offering, certain of the executive officers of
the Company will be granted options to purchase Common Stock at an exercise
price equal to the initial public offering price. See "--1997 Employee
Incentive Compensation Plan."

1997 EMPLOYEE INCENTIVE COMPENSATION PLAN

Prior to the consummation of the Offering, the Board of Directors and the
Company's stockholders are expected to approve the Company's 1997 Employee
Incentive Compensation Plan (the "Plan"). The purpose of the Plan is to provide
directors, officers, employees, consultants and independent contractors with
additional incentives by increasing their ownership interests in the Company.
Individual awards under the Plan may take the form of one or more of: (i)
either incentive stock options ("ISOs") or non-qualified stock options
("NQSOs"); (ii) stock appreciation rights ("SARs"); (iii) restricted or
deferred stock; (iv) dividend equivalents; and (v) cash awards or other awards
not otherwise provided for, the value of which is based in whole or in part
upon the value of the Common Stock. The Compensation Committee will administer
the Plan and generally select the individuals who will receive awards and the
terms and conditions of those awards.

The Company has reserved 1,000,000 shares of Common Stock for use in
connection with the Plan. Beginning with the Company's first fiscal quarter
after the closing of the Offering and continuing each fiscal quarter
thereafter, the number of shares available for use in connection with the Plan
will be the greater of 1,000,000 shares or 10% of the aggregate number of
shares of Common Stock outstanding on the last day of the preceding calendar
quarter. Shares of Common Stock which are attributable to awards which have
expired, terminated or been canceled or forfeited are available for issuance or
use in connection with future awards.

46
<PAGE>

The Plan will remain in effect until terminated by the Board of Directors.
The Plan may be amended by the Board of Directors without the consent of the
stockholders of the Company, except that any amendment, although effective when
made, will be subject to stockholder approval if required by any federal or
state law or regulation or by the rules of any stock exchange or automated
quotation system on which the Common Stock may then be listed or quoted.

In connection with the Offering, NQSOs to purchase a total of 600,000 shares
of Common Stock will be granted. Of this amount, options to purchase 350,000
shares of Common Stock will be granted to management of the Company, including
150,000 options to Mr. Cunningham and 100,000 options to each of Messrs. Haq
and Alston, and an aggregate of 250,000 options will be granted to certain
employees of the Founding Companies. The grants of all of the foregoing options
will be effective as of the date of the Offering and each option will have an
exercise price equal to the initial public offering price per share in the
Offering. These options will vest in three equal annual installments commencing
on the first anniversary of the grant, and will expire 10 years from the date
of grant or three months following termination of employment.

The Plan also provides for: (i) the automatic grant to each non-employee
director (a "Participant") serving at the commencement of the Offering of an
option to purchase 10,000 shares of Common Stock; and thereafter (ii) the
automatic grant to each Participant of an option to purchase 10,000 shares upon
such person's initial election as a director. In addition, the Plan provides
for an automatic annual grant to each Participant of an option to purchase
5,000 shares at each annual meeting of stockholders following the Offering,
provided, however, that if the first annual meeting of stockholders following a
person's initial election as a non-employee director is within three months of
the date of such election or appointment, such person will not be granted an
option to purchase 5,000 shares of Common Stock at such annual meeting. These
options will have an exercise price per share equal to the fair market value of
a share at the date of grant. Options granted under the Plan will expire at the
earlier of 10 years from the date of grant or one year after termination of
service as a director, and options will be immediately exercisable.

The Plan affords the Compensation Committee discretion to fashion performance
awards for eligible participants with incentives the Compensation Committee
deems appropriate. It permits the issuance of awards based on the satisfaction
of specific performance criteria in cash or Common Stock. The performance goals
for any year may be based on a broad array of performance measures as selected
by the Compensation Committee, including financial results on a consolidated
basis or an operating unit basis depending on the responsibility of the
participant, as well as achievement of personal performance goals. The maximum
value of such awards for any participant in any year is 100% of such
participant's salary. In addition, the Compensation Committee has discretion to
pay, cancel or provide for the substitution or assumption of such bonus awards.

EMPLOYEE STOCK PURCHASE PLAN

Prior to consummation of the Offering, the Company will adopt the Employee
Stock Purchase Plan (the "Stock Purchase Plan"), pursuant to which a total of
500,000 shares of Common Stock will be reserved for issuance. The Stock
Purchase Plan, which is intended to qualify under Section 423 of the Code,
permits eligible employees of the Company to purchase Common Stock through
payroll deductions with all such deductions credited to an account under the
Stock Purchase Plan. Payroll deductions may not exceed $25,000 for all purchase
periods ending with any Plan Year (as hereinafter defined).

The Stock Purchase Plan operates on a calendar year basis (the "Plan Year").
To be eligible to participate during a Plan Year, an employee must file all
requisite forms prior to a specified due date known as the "Grant Date."
Generally the first day of each Plan Year will be the Grant Date and the last
day of each Plan Year will be an Exercise Date (the "Exercise Date"). The
determination of the Grant Date and the Exercise Dates are completely within
the discretion of the Plan Committee. On each Exercise Date, participants'
payroll deductions credited to their accounts will be automatically applied to
the purchase price of Common Stock at a price per share which is the lesser of
eighty-five percent (85%) of the fair market value of the Common Stock on the
Grant Date or on the Exercise Date. Employees may end their participation in
the Stock Purchase Plan at any time during an offering period, and their
payroll deductions to date will be refunded. Participation ends automatically
upon termination of employment with the Company.

47
<PAGE>

Employees are eligible to participate in the Stock Purchase Plan if they are
customarily employed by the Company or a designated subsidiary for at least 20
hours per week and for more than five months in any calendar year. No person
will be able to purchase Common Stock under the Stock Purchase Plan if such
person, immediately after the purchase, would own stock possessing 5% or more
of the total combined voting power or value of all outstanding shares of all
classes of stock of the Company.

CERTAIN TRANSACTIONS

ORGANIZATION OF THE COMPANY

The Company was formed in April 1997. The Company was initially capitalized
by BGL and Messrs. Cunningham, Haq and Alston. Mr. Lang, a director of the
Company, is a Managing Partner of BGL Management Company, LLC, which is the
managing member of BGL. Following the approximate 112.185-for-one stock split
to be effected prior to the consummation of the Offering, the 15,000 shares of
Common Stock initially issued by the Company to its founders will total
1,682,769 shares.

The aggregate consideration to be paid by Compass in the Acquisitions
consists of approximately $20.0 million in cash and 5,435,691 shares of Common
Stock. The following table sets forth the consideration to be paid to the
stockholders of each of Founding Companies and the debt of each Founding
Company to be assumed by Compass in the Acquisitions.

<TABLE>
<CAPTION>
SHARES OF
COMMON DEBT
FOUNDING COMPANY CASH(1) STOCK(1) ASSUMED(2)
---------------- ------- --------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Mail Box..................................... $ 9,847 2,461,852 $ 3,532
NCMC......................................... 2,897 965,801 265
Bomar........................................ 4,607 1,151,787 4,937
Mid-Continent................................ 1,869 467,127 4,997
Impact....................................... 824 389,124 618
------- --------- -------
Total...................................... $20,044 5,435,691 $14,349
======= ========= =======
</TABLE>
- --------
(1) The number of shares of Common Stock to be issued to the stockholders of
the Founding Companies is fixed. If the initial public offering price is
higher or lower than the assumed price, the cash consideration will vary
proportionately. For example, a $1.00 per share increase or decrease from
the assumed offering price will result in a $1.7 million increase or
decrease, respectively, in the aggregate cash consideration paid to
Founding Company stockholders.
(2) Reflects: (i) long-term debt of the Founding Companies, including capital
leases; (ii) debt related to Bomar's acquisition of FCCI; and (iii) debt
incurred by Mid-Continent in connection with a stock redemption.

The consideration to be paid for each Founding Company is subject to possible
post-closing adjustment based upon adjusted 1997 earnings. If a Founding
Company's adjusted earnings exceed current estimates of adjusted earnings by
more than five percent, Compass will pay the former stockholders of such
Founding Company additional cash consideration equal to five percent of the
total consideration previously paid for such Founding Company in the
Acquisition. The maximum possible increase in the consideration paid by Compass
for all Founding Companies is approximately $4.3 million. The potential
increase in goodwill due to this increase in consideration is approximately
$2.3 million, with associated amortization of approximately $69,000 per year.
If a Founding Company's adjusted 1997 earnings are less than current estimates
of adjusted earnings by more than five percent, the former stockholders of such
Founding Company will be required to repay to Compass in cash up to ten percent
of the total consideration previously paid to them in the Acquisition. The
maximum possible decrease in the consideration paid by Compass for all Founding
Companies is approximately $8.5 million. The potential decrease in goodwill due
to this decrease in consideration is approximately $4.6 million, with an
associated reduction in amortization of approximately $138,000 per year.

The consideration to be paid for the Founding Companies was determined
through arm's-length negotiations between Compass and representatives of each
Founding Company. The factors considered by the parties in

48
<PAGE>

determining the consideration to be paid include, among others, the historical
operating results, the net worth, the levels and type of indebtedness and the
future prospects of the Founding Companies. Each Founding Company was
represented by independent counsel in the negotiation of the terms and
conditions of the Acquisitions.

Each Acquisition Agreement contains standard representations and warranties
of each party as well as indemnification provisions in the event of a breach
of any representations and warranties made by any party to the agreement.
Furthermore, each Acquisition Agreement provides that the consummation of the
acquisition is subject to customary conditions. These conditions include,
among others, (i) the continuing material accuracy on the closing date of the
Acquisitions of the representations and warranties of the Founding Company,
the stockholders of the Founding Company and Compass; (ii) the performance of
all covenants included in the Acquisition Agreements; (iii) the absence of a
material adverse change in the results of operations, financial condition or
business of the Founding Company; and (iv) the simultaneous closing of all of
the Acquisitions.

Pursuant to each Acquisition Agreement, the principal stockholders of the
Founding Companies have agreed not to compete with the Company for five years
following the closing of the Acquisitions wherever the Company conducts
business.

In connection with the Acquisitions, and as consideration for their
interests in the Founding Companies, certain officers, directors and holders
of more than 5% of the outstanding shares of the Company will receive cash and
shares of Common Stock of the Company as follows:

<TABLE>
<CAPTION>
SHARES OF
COMMON
NAME CASH STOCK
---- ---------- ---------
<S> <C> <C>
Kenneth W. Murphy................................... $6,861,606 1,715,401
Leeds Hackett....................................... 1,110,084 370,050
Gene Collins........................................ 2,121,672 530,418
Mary Maloney........................................ 2,121,672 530,418
Les J. Kirschbaum................................... 1,868,508 467,127
Edward A. DuCoin.................................... 412,013 194,562
David T. DuCoin..................................... 412,013 194,562
</TABLE>

The Company intends to repay certain indebtedness of the Founding Companies
from the net proceeds of the Offering, including approximately $4.0 million of
indebtedness that is personally guaranteed by certain stockholders of the
Founding Companies. As of June 30, 1997, the approximate aggregate amount of
such guarantees for each of such individuals was as follows: Kenneth W.
Murphy--$2.0 million; Gene Collins and John Maloney--$530,000; Les J.
Kirschbaum--$747,000; and Edward A. DuCoin and David T. DuCoin--$675,000.

OTHER TRANSACTIONS

As of June 30, 1997, BGL had paid $104,000 in connection with Compass'
formation, the Offering and the Acquisitions. This amount includes (i) payment
of certain expenses and (ii) payment of consulting fees to Messrs. Cunningham,
Haq and Alston under their consulting agreements. See "Management." The
Company anticipates that additional amounts will be advanced by BGL on
Compass' behalf prior to the consummation of the Offering. All amounts
advanced by BGL to Compass and paid by BGL under the consulting agreements,
together with interest thereon at 8% per annum, will be repaid by Compass from
the net proceeds of the Offering.

Mail Box owns a 50% interest in MB Strategic, Ltd. ("MBS"), a database
management company which commenced operations in February 1997. Mail Box
provided MBS with $20,000 in start-up capital and continues to fund monthly
operating expenses of $15,000 for a total commitment of $185,000, which is
intended to cover compensation paid to the president of MBS. Mail Box provides
MBS space within its facilities and the use of data management systems, and
pays the salaries and benefits of MBS' clerical employees. Mail Box is
entitled to receive 20% of gross monthly revenues of MBS, in addition to 50%
of its operating profits and losses.

49
<PAGE>

Since 1982, Mail Box has leased its corporate headquarters and certain of
its mailing facilities from TDC #12, Ltd. ("TDC") pursuant to a lease which
expires in October 2002. Mr. Murphy is a 50% limited partner of TDC. The
annual rent under this lease was approximately $290,000 in 1996 and will total
approximately $321,000 in 1997.

From April 1996 through August 1996, Mail Box leased certain inserting
machines from a partnership, the partners of which include certain
stockholders of Mail Box. The cost of the equipment was $223,000 and in
September 1997, Mail Box exercised its option to purchase the equipment for
$130,000.

In connection with the Patent Infringement Lawsuits, Compass has entered
into an agreement with NCMC and its former stockholders whereby any monetary
settlement or judgement in NCMC's favor will be allocated: first, to the
Company in an amount necessary to pay income or other taxes arising therefrom;
second, to the Company in an amount necessary to reimburse it for all fees and
costs incurred in pursuing the litigation; third, to the former stockholders
of NCMC to the extent that the amounts remaining are paid with respect to
infringement occurring prior to the closing of the Acquisitions; and fourth,
all remaining amounts to the Company. Mr. Hackett, a director of the Company
and a former stockholder of NCMC, is a party to this agreement. See
"Business--Litigation."

Impact leases office space on a month to month basis from a partnership
owned by Edward and David DuCoin. Total rent expense was $139,000 and $62,000
for 1996 and the six months ended June 30, 1997, respectively. Effective July
1, 1997, the annual rent was reduced to $84,000.

At December 31, 1996 and June 30, 1997, the outstanding balance of advances
made by Impact to Edward and David DuCoin and to Woodbury Executive Center and
Eastern Shore Travel, which are partnerships owned by the DuCoins, was
$188,000. These advances will be repaid in full simultaneously with the
closings of the Acquisitions.

At December 31, 1995 and 1996 and June 30, 1997, the outstanding balance of
loans made by Mid-Continent to Les J. Kirschbaum totaled $710,000, $751,000
and $784,000, respectively. These loans accrue interest at the short-term
annual Applicable Federal Rate prescribed by the Internal Revenue Service,
with the balance of principal and interest due upon demand. Immediately prior
to the closing of the Acquisitions, Mid-Continent will redeem certain of Mr.
Kirschbaum's shares in retirement of his loans.

Mid-Continent Agencies of New York, Inc. ("MCNY"), a subsidiary of Mid-
Continent, leases office space from William J. Vallecourse, a stockholder of
MCNY, pursuant to a lease that expires in May 2004. Annual rent under this
lease is approximately $90,000.

The Company has agreed to issue warrants (the "Warrants") to purchase an
aggregate of 100,000 shares of Common Stock to Catamount Capital, L.L.C. as a
fee for consulting services in connection with the Offering and the
Acquisitions. The Warrants will be exercisable for a period of five years
commencing on the first anniversary of the Offering, at a price equal to 120%
of the initial public offering price, subject to adjustment in certain events.
Each Warrant contains certain piggyback registration rights relating to the
shares issuable thereunder. In addition, the Company will pay a finders' fee
of $440,000 from the net proceeds of the Offering to an unaffiliated business
broker in connection with the Bomar acquisition.

COMPANY POLICY

In the future, any transactions with officers, directors and affiliates will
be approved by a majority of the Board, including a majority of the
disinterested members of the Board, and will be made on terms no less
favorable to the Company than could be obtained from unaffiliated third
parties.

50
<PAGE>

PRINCIPAL STOCKHOLDERS

The following table sets forth, after giving effect to the Acquisitions,
certain information with respect to the beneficial ownership of the Company's
Common Stock by: (i) each person known by the Company to own beneficially more
than 5% of the outstanding shares of Common Stock; (ii) each director and
person who is or will become a director upon consummation of the Offering;
(iii) each executive officer; and (iv) all executive officers and directors as
a group.

<TABLE>
<CAPTION>
PERCENTAGE OWNED
------------------------------
SHARES OF
NAME AND ADDRESS OF BENEFICIAL COMMON
OWNER(1) STOCK BEFORE OFFERING AFTER OFFERING
------------------------------ --------- --------------- --------------
<S> <C> <C> <C>
Kenneth W. Murphy..................... 1,715,401 24.1% 15.3%
Leeds Hackett......................... 370,050 5.2% 3.3%
Gene Collins.......................... 530,418 7.5% 4.7%
Mary Maloney.......................... 530,418 7.5% 4.7%
John Maloney(2)....................... 530,418 7.5% 4.7%
Les J. Kirschbaum..................... 467,127 6.6% 4.2%
Edward A. DuCoin...................... 194,562 2.7% 1.7%
David T. DuCoin....................... 194,562 2.7% 1.7%
Michael J. Cunningham................. 252,415 3.6% 2.3%
Mahmud U. Haq......................... 196,323 2.8% 1.8%
Richard A. Alston..................... 112,185 1.6% 1.0%
Scott H. Lang(3)(4)................... 1,131,846 15.9% 10.1%
BGL Capital Partners, L.L.C. (4)...... 1,121,846 15.8% 10.0%
All directors and officers as a group
(eleven persons)(2)(3)............... 5,695,307 80.0% 50.7%
</TABLE>
- --------
(1) Unless otherwise indicated, the address of the beneficial owners is c/o
Compass, 5 Independence Way, Suite 300, Princeton, New Jersey 08540.
(2) Includes 530,418 shares of Common Stock owned by Mr. Maloney's spouse, of
which he may be deemed the beneficial owner.
(3) Includes 10,000 shares of Common Stock issuable upon the exercise of
options which will be granted and vest upon the closing of the Offering
and 1,121,846 shares held by BGL. Mr. Lang is a managing member of BGL
Management Company, L.L.C., which is the managing member of BGL.
(4) The address of each of Mr. Lang and BGL is 225 W. Washington Street, 16th
Floor, Chicago, Illinois 60606.

51
<PAGE>

DESCRIPTION OF CAPITAL STOCK

The authorized capital stock of the Company consists of 50,000,000 shares of
Common Stock, and 10,000,000 shares of preferred stock, $.01 par value per
share ("Preferred Stock").

COMMON STOCK

Of the 50,000,000 shares of Common Stock authorized, 11,218,460 shares will
be outstanding upon consummation of the Offering. Subject to the rights of the
holders of Preferred Stock, the holders of outstanding shares of Common Stock
are entitled to share ratably in dividends declared out of assets legally
available therefor at such time and in such amounts as the Board of Directors
may from time to time lawfully determine. Each holder of Common Stock is
entitled to one vote for each share held. Subject to the rights of holders of
any outstanding Preferred Stock, upon liquidation, dissolution or winding up of
the Company, any assets legally available for distribution to stockholders as
such are to be distributed ratably among the holders of the Common Stock then
outstanding. All shares of Common Stock currently outstanding are, and all
shares of Common Stock offered hereby when duly issued and paid for will be,
fully paid and nonassessable. Shares of Common Stock are not subject to any
redemption provisions and are not convertible into any other securities of the
Company.

The Board of Directors is classified into three classes as nearly equal in
number as possible, with the term of each class expiring on a staggered basis.
See "Management--Board of Directors." The classification of the Board of
Directors may make it more difficult to change the composition of the Board of
Directors and thereby may discourage or make more difficult an attempt by a
person or group to obtain control of the Company. Cumulative voting for the
election of directors is not permitted, enabling holders of a majority of the
outstanding Common Stock to elect all members of the class of Directors whose
terms are then expiring.

PREFERRED STOCK

The Amended and Restated Certificate of Incorporation of the Company
authorizes the Board of Directors to issue preferred stock in classes or series
and to establish the designations, preferences, qualifications, limitations or
restrictions of any class or series with respect to, among other things, the
rate and nature of dividends, the price, terms and conditions on which shares
may be redeemed, the terms and conditions for conversion or exchange into any
other class or series of the stock and voting rights. The Company will have
authority, without approval of the holders of Common Stock, to issue preferred
stock that has voting, dividend or liquidation rights superior to the Common
Stock and that may adversely affect the rights of holders of Common Stock. The
issuance of preferred stock, while providing flexibility in connection with
possible acquisitions and other corporate purposes, could, among other things,
adversely affect the voting power of the holders of Common Stock and could have
the effect of delaying, deferring or preventing a change in control of the
Company. The Company currently has no plans to issue any shares of Preferred
Stock.

One of the effects of undesignated Preferred Stock may be to enable the Board
of Directors to render more difficult or to discourage an attempt to obtain
control of the Company by means of a tender offer, proxy contest, merger or
otherwise, and thereby to protect the continuity of the Company's management.
The issuance of shares of the Preferred Stock pursuant to the Board of
Directors' authority described above may adversely affect the rights of the
holders of Common Stock. For example, Preferred Stock issued by the Company may
rank prior to the Common Stock as to dividend rights, liquidation preference or
both, may have full or limited voting rights and may be convertible into shares
of Common Stock. Accordingly, the issuance of shares of Preferred Stock may
discourage bids for the Common Stock or may otherwise adversely affect the
market price of the Common Stock.

STOCKHOLDERS' AGREEMENT

In connection with the Acquisitions, the Initial Stockholders entered into an
agreement (the "Stockholders' Agreement") with respect to nominating and
electing Directors to the Board of Directors of the Company. The

52
<PAGE>

Stockholders' Agreement sets forth the manner and terms by which the
stockholders of the Founding Companies and founders of Compass may nominate
Directors in each of the Classes. Each of the parties to the Stockholders'
Agreement has agreed to vote its Common Stock (i) for the reelection of the
incumbent directors of the Company or their successors as described below and
(ii) with respect to any matter put to a stockholder vote, in accordance with
the recommendation of the incumbent Board of Directors. In the event that an
incumbent director who is a former shareholder of a Founding Company is unable
to or does not stand for reelection, the former shareholders of such Founding
Company may designate his successor for nomination. Should Mr. Lang be unable
to or not stand for reelection, BGL may designate his successor. Nominees for
other vacancies will be selected by a majority of the then-incumbent Board of
Directors. The Stockholders' Agreement terminates immediately following the
Company's annual meeting of stockholders relating to fiscal year 2002 (but
occurring in fiscal year 2003). The Stockholders' Agreement may be amended by
the holders of a majority of the aggregate number of shares of outstanding
Common Stock then held by the Initial Stockholders.

CERTAIN PROVISIONS AFFECTING STOCKHOLDERS

Delaware, like many other states, permits a corporation to adopt a number of
measures through amendment of the corporate charter or bylaws or otherwise,
which may have the effect of delaying or deterring any unsolicited takeover
attempts. In addition, Section 203 of the Delaware General Corporation Law
restricts certain "business combinations" with "interested stockholders"
(generally a holder of 15% or more of the Company's voting stock) for three
years following the date that person becomes an interested stockholder. By
delaying or deterring unsolicited takeover attempts, these provisions could
adversely affect prevailing market prices for the Common Stock.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Company's Common Stock is
.

SHARES ELIGIBLE FOR FUTURE SALE

After the Offering, the Company will have outstanding 11,218,460 shares of
Common Stock. The 4,100,000 shares being sold in the Offering are freely
tradable without restriction unless acquired by affiliates of the Company. None
of the remaining 7,118,460 outstanding shares of Common Stock has been
registered under the Securities Act, which means that they may be resold
publicly only upon registration under the Securities Act or in compliance with
an exemption from the registration requirements of the Securities Act,
including the exemption provided by Rule 144 thereunder.

In general, under Rule 144 as currently in effect, if one year has elapsed
since the later of the date of the acquisition of restricted shares of Common
Stock from either the Company or any affiliate of the Company, the acquiror or
subsequent holder thereof may sell, within any three-month period commencing 90
days after the date of the Prospectus relating to the Offering, a number of
shares that does not exceed the greater of one percent of the then outstanding
shares of the Common Stock, or the average weekly trading volume of the Common
Stock on the Nasdaq National Market during the four calendar weeks preceding
the date on which notice of the proposed sale is sent to the Commission. Sales
under Rule 144 are also subject to certain manner of sale provisions, notice
requirements and the availability of current public information about the
Company. If two years have elapsed since the later of the date of the
acquisition of restricted shares of Common Stock from the Company or any
affiliate of the Company, a person who is not deemed to have been an affiliate
of the Company at any time for 90 days preceding a sale would be entitled to
sell such shares under Rule 144 without regard to the volume limitations,
manner of sale provisions or notice requirements.

Upon completion of the Offering, the holders of Common Stock who did not
purchase shares in the Offering will own 7,118,460 shares of Common Stock,
including the stockholders of the Founding Companies who will receive, in the
aggregate, 5,435,601 shares in connection with the Acquisitions and founders
and executive

53
<PAGE>

officers of Compass who own 1,682,769 shares. These shares have not been
registered under the Securities Act and, therefore, may not be sold unless
registered under the Securities Act or sold pursuant to an exemption from
registration, such as the exemption provided by Rule 144. Furthermore, the
stockholders of the Founding Companies have agreed with the Company not to
sell, transfer or otherwise dispose of any of these shares for a one-year
period following the Offering. The stockholders of the Founding Companies have
certain piggyback registration rights beginning one year after the Offering and
one demand registration right for the six-month period beginning twenty months
after the Offering with respect to these shares.

The Company and the holders of all shares outstanding prior to the Offering
(including the holders of shares issued in connection with the Acquisitions)
have agreed not to offer, sell, contract to sell or otherwise dispose of any
shares of Common Stock, or any securities convertible into or exercisable or
exchangeable for Common Stock, for a period of 180 days after the date of this
Prospectus without the prior written consent of NationsBanc Montgomery
Securities, Inc. except for: (i) in the case of the Company, Common Stock
issued pursuant to any employee or director plan described herein or in
connection with acquisitions and (ii) in the case of all such holders, the
exercise of stock options pursuant to benefit plans described herein and shares
of Common Stock disposed of as bona fide gifts, subject, in each case, to any
remaining portion of the 180-day period applying to any shares so issued or
transferred. In evaluating any request for a waiver of the 180-day lock-up
period, NationsBanc Montgomery Securities, Inc. will consider, in accordance
with their customary practice, all relevant facts and circumstances at the time
of the request, including, without limitation, the recent trading market for
the Common Stock, the size of the request and, with respect to a request by the
Company to issue additional equity securities, the purpose of such an issuance.

The 3,000,000 shares of Common Stock to be registered pursuant to the
Company's shelf registration statement will be, upon issuance thereof, freely
tradable unless acquired by parties to the acquisition or affiliates of such
parties, other than the issuer, in which case they may be sold pursuant to Rule
145 under the Securities Act. Rule 145 permits such persons to resell
immediately securities acquired in transactions covered under the Rule,
provided such securities are resold in accordance with the public information,
volume limitations and manner of sale requirements of Rule 144. If a period of
one year has elapsed since the date such securities were acquired in such
transaction and if the issuer meets the public information requirements of Rule
144, Rule 145 permits a person who is not an affiliate of the issuer to freely
resell such securities. The Company intends to contractually restrict the sale
of shares issued in connection with future acquisitions. The registration
rights described above do not apply to such shelf registration statement.

Sales, or the availability for sale of, substantial amounts of the Common
Stock in the public market could adversely affect prevailing market prices and
the ability of the Company to raise equity capital in the future.

54
<PAGE>

UNDERWRITING

The Underwriters named below (the "Underwriters"), represented by NationsBanc
Montgomery Securities, Inc. and Lehman Brothers Inc. (the "Representatives"),
have severally agreed, subject to the terms and conditions in the underwriting
agreement (the "Underwriting Agreement"), by and between the Company and the
Underwriters, to purchase from the Company the number of shares of Common Stock
indicated below opposite its name, at the public offering price less the
underwriting discount set forth on the cover page of this Prospectus. The
Underwriting Agreement provides that the obligations of the Underwriters are
subject to certain conditions precedent and that the Underwriters are committed
to purchase all of the shares of Common Stock, if they purchase any.

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES
------------ ---------
<S> <C>
NationsBanc Montgomery Securities, Inc..........................
Lehman Brothers Inc.............................................

---------
Total....................................................... 4,100,000
=========
</TABLE>

The Representatives have advised the Company that the Underwriters propose
initially to offer the shares of Common Stock to the public on the terms set
forth on the cover page of this Prospectus. The Underwriters may allow selected
dealers a concession of not more than $ per share; and the Underwriters
may allow, and such dealers may reallow, a concession of not more than $
per share to certain other dealers. After the public offering, the offering
price and other selling terms may be changed by the Representatives. The Common
Stock is offered subject to receipt and acceptance by the Underwriters and to
certain other conditions, including the right to reject orders in whole or in
part.

The Company has granted to the Underwriters an over-allotment option,
exercisable for 30 days from the date of this Prospectus, to purchase up to a
maximum of 615,000 additional shares of Common Stock to cover over-allotments,
if any, at the same price per share as the initial shares to be purchased by
the Underwriters. To the extent the Underwriters exercise such over-allotment
option, each of the Underwriters will be committed, subject to certain
conditions, to purchase such additional shares in approximately the same
proportion as set forth in the above table. The Underwriters may exercise this
over-allotment option only to cover over-allotments made in connection with the
Offering.

The Underwriting Agreement provides that the Company will indemnify the
Underwriters against certain liabilities, including civil liabilities under the
Securities Act, or will contribute to payments the Underwriters may be required
to make in respect thereof.

The Company's officers and directors and all of the stockholders of the
Company prior to the Offering (including the holders of shares issued in
connection with the Acquisitions) have agreed that for a period of 180 days
after the date of this Prospectus they will not, without the prior written
consent of NationsBanc Montgomery Securities, Inc. directly or indirectly sell,
offer, contract or grant any option to sell, pledge, transfer, establish an
open put equivalent position or otherwise dispose of any shares of Common
Stock, options or warrants to acquire shares of Common Stock or securities
exchangeable or exercisable for or convertible into shares of Common Stock. The
Company has also agreed not to issue, offer, sell, grant options to purchase or
otherwise dispose of any of the Company's equity securities for a period of 180
days after the effective date of this Offering without the prior written
consent of NationsBanc Montgomery Securities, Inc. except for securities issued
by the Company in connection with acquisitions and for grants and exercises of
stock options, subject in each case to any remaining portion of the 180-day
period applying to shares issued or transferred. In evaluating any request for
a waiver of the 180-day lock-up period, NationsBanc Montgomery Securities, Inc.
will consider, in accordance with their customary practice, all relevant facts
and circumstances at the time of the request, including, without limitation,
the recent trading market for the Common Stock, the size of the request and,
with respect to a request by the Company to issue additional equity securities,
the purpose of such an issuance. See "Shares Eligible for Future Sale."

55
<PAGE>

In connection with the Offering, certain Underwriters and selling group
members and their respective affiliates may engage in transactions that
stabilize, maintain or otherwise affect the market price of the Common Stock.
Such transactions may include stabilization transactions effected in
accordance with Rule 104 of Regulation M under the Securities and Exchange Act
of 1934, as amended, pursuant to which such persons may bid for or purchase
Common Stock for the purpose of stabilizing its market price. The Underwriters
also may create a short position for the account of the Underwriters by
selling more Common Stock in connection with the Offering than they are
committed to purchase from the Company and, in such case, may purchase Common
Stock in the open market following completion of the Offering to cover all or
a portion of such short position. The Underwriters may also cover all or a
portion of such short position, up to 615,000 shares of Common Stock, by
exercising the Underwriters' over-allotment option referred to above. In
addition, NationsBanc Montgomery Securities, Inc. on behalf of the
Underwriters, may impose "penalty bids" under contractual arrangements with
the Underwriters whereby it may reclaim from an Underwriter (or dealer
participating in the Offering) for the account of the other Underwriters, the
selling concession with respect to Common Stock that is distributed in the
Offering but subsequently purchased for the account of the Underwriters in the
open market. Any of the transactions described in this paragraph may result in
the maintenance of the price of the Common Stock at a level above that which
might otherwise prevail in the open market. None of the transactions described
in this paragraph is required, and, if they are undertaken, they may be
discontinued at any time.

The Representatives have informed the Company that the Underwriters do not
intend to confirm sales of Common Stock offered by this Prospectus to accounts
over which they exercise discretionary authority in excess of 5% of the number
of shares of Common Stock offered hereby.

Prior to the Offering, there has been no public trading market for the
Common Stock. Consequently, the initial public offering price was determined
by negotiations between the Company and the Representatives. Among the factors
considered in such negotiations were the history of and prospects for the
Company and the industries in which it operates, an assessment of the
Company's management, its past and present earnings and the trend of such
earnings, the prospects for future earnings of the Company, the present state
of the Company's development, the general condition of securities markets at
the time of the Offering and the market price of publicly traded stock of
comparable companies in recent periods.

CERTAIN LEGAL MATTERS

The legality of the shares of Common Stock offered hereby will be passed
upon for the Company by Katten Muchin & Zavis, Chicago, Illinois. Certain
partners of Katten Muchin & Zavis are investors in BGL, which will own 10.0%
of the shares of Common Stock outstanding upon completion of the Offering.
Certain legal matters in connection with this offering will be passed upon for
the Underwriters by Fulbright & Jaworski L.L.P., New York, New York.

EXPERTS

The balance sheet of Compass as of June 30, 1997 included in this Prospectus
has been so included in reliance on the report of Price Waterhouse LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.

The consolidated financial statements of The Mail Box, Inc. as of December
31, 1995 and 1996 and for each of the three years in the period ended December
31, 1996 included in this Prospectus have been so included in reliance on the
report of Price Waterhouse LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.

The audited consolidated financial statements of National Credit Management
Corporation and Subsidiary as of December 31, 1996 and 1995 and for each of
the years in the three-year period ended December 31, 1996, included in this
Prospectus, have been audited by Arthur Andersen LLP, independent public
accountants, as stated in their report with respect thereto, and are included
herein in reliance upon the authority of said firm as experts in giving said
report.

56
<PAGE>

The consolidated financial statements of B.R.M.C. of Delaware, Inc. at
December 31, 1996 and 1995 and for each of the three years in the period ended
December 31, 1996 appearing in this Prospectus and Registration Statement have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon appearing elsewhere herein, and are included in reliance upon
such report, given upon the authority of such firm as experts in accounting
and auditing.

The consolidated financial statements of Mid-Continent Agencies, Inc. as of
December 31, 1995 and 1996 and for the years then ended, included in this
Prospectus have been so included in reliance on the report of Price Waterhouse
LLP, independent accountants, given on the authority of said firm as experts
in auditing and accounting.

The combined financial statements of Impact Telemarketing Group, Inc. as of
and for the year ended December 31, 1996, included in this Prospectus have
been so included in reliance on the report (which contains an explanatory
paragraph relating to Impact Telemarketing Group, Inc.'s ability to continue
as a going concern as described in Note 1 to the financial statements) of
Price Waterhouse LLP, independent accountants, given on the authority of said
firm as experts in auditing and accounting.

ADDITIONAL INFORMATION

The Company has filed with the Commission a Registration Statement on Form
S-1 (which term shall encompass any and all amendments thereto) under the
Securities Act with respect to the Common Stock offered hereby. This
Prospectus does not contain all of the information set forth in the
Registration Statement and the exhibits and schedules thereto. Statements
contained in this Prospectus as to the contents of any contract or any other
document are not necessarily complete and in each instance reference is made
to the copy of such contract or document filed as an exhibit to the
Registration Statement, each such statement being qualified in all respects by
such reference. For further information with respect to the Company, reference
is hereby made to the Registration Statement and such exhibits and schedules
filed as a part thereof, which may be inspected without charge, at the Public
Reference Section of the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the regional offices of the
Commission located at Seven World Trade Center, 13th Floor, New York, New York
10048 and at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. The Commission maintains a web site that contains reports,
proxy and information statements regarding registrants that file
electronically with the SEC. The address of this web site is
http://www.sec.gov. Copies of all or any portion of the Registration Statement
may be obtained from the Public Reference Section of the Commission, upon
payment of the prescribed fees.

The Company intends to furnish its stockholders with an annual report
containing audited financial statements and an opinion thereon expressed by
independent auditors for each fiscal year and with quarterly reports
containing unaudited summary information for the first three quarters of each
fiscal year.

57
<PAGE>

COMPASS INTERNATIONAL SERVICES CORPORATION

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
COMPASS INTERNATIONAL SERVICES CORPORATION UNAUDITED PRO FORMA COMBINED
FINANCIAL STATEMENTS:
Introduction to Unaudited Pro Forma Combined Financial Statements...... F-2
Unaudited Pro Forma Combined Balance Sheet............................. F-3
Unaudited Pro Forma Combined Statements of Operations.................. F-4
Notes to Unaudited Pro Forma Combined Financial Statements............. F-7
COMPASS INTERNATIONAL SERVICES CORPORATION:
Report of Independent Accountants...................................... F-10
Balance Sheet.......................................................... F-11
Notes to Financial Statement........................................... F-12
THE MAIL BOX, INC.:
Report of Independent Accountants...................................... F-14
Consolidated Balance Sheet............................................. F-15
Consolidated Statement of Operations................................... F-16
Consolidated Statement of Stockholders' Equity......................... F-17
Consolidated Statement of Cash Flows................................... F-18
Notes to Consolidated Financial Statements............................. F-19
NATIONAL CREDIT MANAGEMENT CORPORATION AND SUBSIDIARY:
Report of Independent Public Accountants............................... F-26
Consolidated Balance Sheets............................................ F-27
Consolidated Statements of Operations.................................. F-28
Consolidated Statements of Stockholders' Equity........................ F-29
Consolidated Statements of Cash Flows.................................. F-30
Notes to Financial Statements.......................................... F-31
B.R.M.C. OF DELAWARE INC.:
Report of Independent Auditors......................................... F-37
Consolidated Balance Sheet............................................. F-38
Consolidated Statement of Operations................................... F-39
Consolidated Statement of Stockholders' Equity......................... F-40
Consolidated Statement of Cash Flows................................... F-41
Notes to Consolidated Financial Statements............................. F-42
MID-CONTINENT AGENCIES, INC.:
Report of Independent Accountants...................................... F-47
Consolidated Balance Sheet............................................. F-48
Consolidated Statement of Operations................................... F-49
Consolidated Statement of Stockholders' Equity......................... F-50
Consolidated Statement of Cash Flows................................... F-51
Notes to Consolidated Financial Statements............................. F-52
IMPACT TELEMARKETING GROUP, INC.:
Report of Independent Accountants...................................... F-59
Combined Balance Sheet................................................. F-60
Combined Statement of Operations....................................... F-61
Combined Statement of Stockholders' Equity............................. F-62
Combined Statement of Cash Flows....................................... F-63
Notes to Combined Financial Statements................................. F-64
</TABLE>

F-1
<PAGE>

COMPASS INTERNATIONAL SERVICES CORPORATION

INTRODUCTION TO UNAUDITED PRO FORMA
COMBINED FINANCIAL STATEMENTS

The following unaudited pro forma combined financial statements give effect
to the acquisitions by Compass International Services Corporation ("Compass")
of the outstanding capital stock of The Mail Box, Inc. ("Mail Box"), National
Credit Management Corp. ("NCMC"), B.R.M.C. of Delaware, Inc. ("Bomar"), Mid-
Continent Agencies, Inc. ("Mid Continent") and Impact Telemarketing Group,
Inc. ("Impact") (together, the "Founding Companies"). These acquisitions (the
"Acquisitions") will occur simultaneously with the closing of Compass's
initial public offering (the "Offering") and will be accounted for using the
purchase method of accounting. In accordance with the provisions of Securities
and Exchange Commission Staff Accounting Bulletin No. 97, Mail Box is deemed
to be the accounting acquiror as the stockholders of Mail Box will receive the
largest portion of the voting rights in the combined corporation.

The unaudited pro forma combined balance sheet gives effect to the
Acquisitions, the Offering and an acquisition by Bomar in September 1997 as if
they had occurred on June 30, 1997. The unaudited pro forma combined statement
of operations gives effect to the Acquisitions as if they had occurred on
January 1, 1996, reflects reductions in salaries, bonuses and certain benefits
to the owners of the Founding Companies to which they have agreed
prospectively, reflects reductions in interest expense associated with
reductions in debt and gives effect to the three acquisitions by Bomar as if
they had occurred on January 1, 1996.

With respect to other potential cost savings, Compass has not and cannot
quantify these savings until completion of the Acquisitions of the Founding
Companies. It is anticipated that these savings will be offset by costs
related to Compass' new corporate management and by the costs associated with
being a public company. However, these costs, like the savings they offset,
cannot be accurately quantified at this time. Neither the expected savings nor
the anticipated costs have been included in the pro forma combined financial
information of Compass.

The pro forma adjustments are based on estimates, available information and
certain assumptions and may be revised as additional information becomes
available. The pro forma combined financial data do not purport to represent
what Compass' financial position or results of operations would actually have
been if such transactions in fact had occurred on those dates and are not
necessarily representative of Compass' financial position or results of
operations for any future period. Since the Founding Companies were not under
common control or management, historical combined results may not be
comparable to, or indicative of, future performance. 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.
See "Risk Factors" included elsewhere herein.

F-2
<PAGE>

COMPASS INTERNATIONAL SERVICES CORPORATION

UNAUDITED PRO FORMA COMBINED BALANCE SHEET

JUNE 30, 1997
(IN THOUSANDS)

<TABLE>
<CAPTION>
ACQUISITION OFFERING
ADJUSTMENTS PRO ADJUSTMENTS
(SEE NOTE FORMA (SEE NOTE
ASSETS COMPASS MAIL BOX NCMC BOMAR MCA IMPACT 3) COMBINED 3) AS ADJUSTED
- ------ ------- -------- ------ ------ ------ ------ ----------- -------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Cash and cash
equivalents............ $-- $ 858 $1,363 $ 183 $ 121 $ 187 $ 1,022 $ 3,734 $ 10,704 $14,438
Cash held for clients... -- -- -- 792 -- -- 117 909 -- 909
Commissions/accounts
receivable, net........ -- 2,610 2,498 1,111 485 1,991 -- 8,695 -- 8,695
Due from related parties
and stockholders....... -- -- -- 30 1,463 216 (1,552) 157 -- 157
Inventories............. -- 362 -- -- -- -- -- 362 -- 362
Postage on hand......... -- 1,917 -- -- -- -- -- 1,917 -- 1,917
Prepaid expenses and
other.................. -- 155 192 34 168 4 -- 553 -- 553
Deferred offering costs. 254 -- -- -- -- -- -- 254 (254) --
---- ------- ------ ------ ------ ------ ------- ------- -------- -------
Total current assets. 254 5,902 4,053 2,150 2,237 2,398 (413) 16,581 10,450 27,031
Property and equipment,
net.................... -- 4,078 1,061 899 150 630 41 6,859 -- 6,859
Goodwill, net........... -- -- -- 848 -- -- 40,347 41,195 -- 41,195
Other assets............ -- 147 192 159 214 26 1,009 1,747 -- 1,747
---- ------- ------ ------ ------ ------ ------- ------- -------- -------
Total assets......... $254 $10,127 $5,306 $4,056 $2,601 $3,054 $40,984 $66,382 $ 10,450 $76,832
==== ======= ====== ====== ====== ====== ======= ======= ======== =======
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Short-term debt......... $104 $ 1,308 $ 237 $ 948 $ 569 $ 831 $ -- $ 3,997 $ (1,744) $ 2,253
Accounts payable and
accrued expenses....... -- 1,983 1,845 1,051 510 1,759 562 7,710 (544) 7,166
Collections due to
clients................ -- -- -- 792 -- -- -- 792 -- 792
Postage allowances and
deposits............... -- 1,605 -- -- -- -- -- 1,605 -- 1,605
Income taxes payable.... -- 630 -- -- -- -- -- 630 -- 630
Payable to Founding
Company stockholders... -- -- -- -- 52 -- 19,992 20,044 (20,044) --
---- ------- ------ ------ ------ ------ ------- ------- -------- -------
Total current
liabilities......... 104 5,526 2,082 2,791 1,131 2,590 20,554 34,778 (22,332) 12,446
Long-term debt.......... -- 1,375 28 426 178 -- 8,011 10,018 (10,018) --
Capital lease
obligations............ -- 849 96 313 -- 337 -- 1,595 -- 1,595
Deferred income taxes... -- 145 120 14 -- -- -- 279 -- 279
Other................... -- -- -- 173 179 -- -- 352 -- 352
---- ------- ------ ------ ------ ------ ------- ------- -------- -------
Total liabilities.... 104 7,895 2,326 3,717 1,488 2,927 28,565 47,022 (32,350) 14,672
Minority interest in
subsidiary............. -- -- -- 6 -- -- -- 6 -- 6
Stockholders' equity:
Common stock........... 17 13 2 1 10 91 (63) 71 41 112
Additional paid-in
capital............... 133 947 752 60 73 -- 14,959 16,924 42,759 59,683
Retained earnings...... -- 2,359 2,226 272 1,044 36 (3,578) 2,359 -- 2,359
Unrealized loss on
securities............ -- -- -- -- (14) -- 14 -- --
Less: Treasury stock... -- (1,087) -- -- -- -- 1,087 -- -- --
---- ------- ------ ------ ------ ------ ------- ------- -------- -------
Total stockholders'
equity.............. 150 2,232 2,980 333 1,113 127 12,419 19,354 42,800 62,154
---- ------- ------ ------ ------ ------ ------- ------- -------- -------
Total liabilities and
stockholders'
equity.............. $254 $10,127 $5,306 $4,056 $2,601 $3,054 $40,984 $66,382 $ 10,450 $76,832
==== ======= ====== ====== ====== ====== ======= ======= ======== =======
</TABLE>

F-3
<PAGE>

COMPASS INTERNATIONAL SERVICES CORPORATION

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 1996

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>
PRO
OTHER FORMA
ACQUISI- ADJUST-
TIONS MENTS
MAIL (SEE (SEE PRO FORMA
BOX NCMC BOMAR MCA IMPACT NOTE 4) NOTE 5) COMBINED
------- ------- ------ ------ ------ -------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues................ $26,156 $13,579 $9,597 $9,038 $8,869 $4,544 -- $71,783
Operating expenses...... 17,953 7,945 6,419 2,875 6,961 2,926 -- 45,079
------- ------- ------ ------ ------ ------ ------- ----------
Gross profit........... 8,203 5,634 3,178 6,163 1,908 1,618 -- 26,704
Selling, general and
administrative
expenses............... 5,891 4,798 2,853 6,054 2,108 1,328 $(3,461)(A) 19,510
-- -- -- -- -- -- (61)(B) --
Goodwill and intangible
amortization........... -- -- -- -- -- 85 1,166 (C) 1,251
------- ------- ------ ------ ------ ------ ------- ----------
Income (loss) from
operations............ 2,312 836 325 109 (200) 205 2,356 5,943
Other (income) expense:
Interest expense....... 337 79 122 68 30 36 (148)(D) 524
Interest income........ -- (46) -- (117) -- (2) 61 (E) (104)
Other, net............. -- 15 -- 3 (105) -- -- (87)
------- ------- ------ ------ ------ ------ ------- ----------
Income (loss) before
income taxes.......... 1,975 788 203 155 (125) 171 2,443 5,610
Provision for income
taxes.................. 700 335 73 107 -- -- 1,529 (F) 2,744
------- ------- ------ ------ ------ ------ ------- ----------
Net income (loss)....... $ 1,275 $ 453 $ 130 $ 48 $ (125) $ 171 $ 914 $ 2,866
======= ======= ====== ====== ====== ====== ======= ==========
Net income per share.... $ 0.28
==========
Shares used in computing
pro forma net income
per share (See Note 6). 10,269,126
==========
</TABLE>

See Notes to Unaudited Pro Forma Combined Financial Statements.

F-4
<PAGE>

COMPASS INTERNATIONAL SERVICES CORPORATION

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS

FOR THE SIX MONTHS ENDED JUNE 30, 1996

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>
OTHER
ACQUISI-
TIONS PRO FORMA
(SEE ADJUST-MENTS PRO FORMA
MAIL BOX NCMC BOMAR MCA IMPACT NOTE 4) (SEE NOTE 5) COMBINED
-------- ------ ------ ------ ------ -------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues................ $12,070 $6,856 $4,766 $4,548 $4,045 $2,593 -- $34,878
Operating expenses...... 8,456 3,703 2,888 1,470 2,884 1,636 -- 21,037
------- ------ ------ ------ ------ ------ ------- ----------
Gross profit........... 3,614 3,153 1,878 3,078 1,161 957 13,841
Selling, general and
administrative......... 2,776 2,498 1,566 3,025 1,093 705 $(1,767)(A) 9,861
-- -- -- -- -- -- (35)(B) --
Goodwill and intangible
amortization........... -- -- -- -- -- 42 583 (C) 625
------- ------ ------ ------ ------ ------ ------- ----------
Income from operations. 838 655 312 53 68 210 1,219 3,355
Other (income) expense:
Interest expense....... 167 39 43 37 7 13 (94)(D) 212
Interest income........ -- (26) -- (76) -- -- 33 (E) (69)
Other, net............. -- -- -- 3 -- -- -- 3
------- ------ ------ ------ ------ ------ ------- ----------
Income before income
taxes.................. 671 642 269 89 61 197 1,280 3,209
Provision for income
taxes................. 240 264 42 58 -- -- 930 (F) 1,534
------- ------ ------ ------ ------ ------ ------- ----------
Net income.............. $ 431 $ 378 $ 227 $ 31 $ 61 $ 197 $ 350 $ 1,675
======= ====== ====== ====== ====== ====== ======= ==========
Net income per share.... $ 0.16
==========
Shares used in computing
pro forma net income
per share
(See Note 6)........... 10,269,126
==========
</TABLE>

See Notes to Unaudited Pro Forma Combined Financial Statements.

F-5
<PAGE>

COMPASS INTERNATIONAL SERVICES CORPORATION

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS

FOR THE SIX MONTHS ENDED JUNE 30, 1997

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>
OTHER PRO FORMA
ACQUISITIONS ADJUSTMENTS
(SEE (SEE NOTE PRO FORMA
MAIL BOX NCMC BOMAR MCA IMPACT NOTE 4) 5) COMBINED
-------- ------ ------ ------ ------ ------------ ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues................ $15,804 $8,044 $6,677 $4,741 $6,257 $1,784 -- $43,307
Operating expenses...... 10,367 5,018 4,259 1,551 4,817 1,057 -- 27,069
------- ------ ------ ------ ------ ------ ------- ----------
Gross profit........... 5,437 3,026 2,418 3,190 1,440 727 -- 16,238
Selling, general and
administrative
expenses............... 3,653 2,531 1,965 3,116 1,340 413 $(2,126)(A) 10,879
-- -- -- -- -- -- (13)(B) --
Goodwill and intangible
amortization........... -- -- -- -- -- 42 583 (C) 625
------- ------ ------ ------ ------ ------ ------- ----------
Income from operations. 1,784 495 453 74 100 272 1,556 4,734
Other (income) expense:
Interest expense....... 209 23 103 41 42 1 (138)(D) 281
Interest income........ -- (24) -- (25) -- -- 21 (E) (28)
Other, net............. -- 1 -- -- -- -- -- 1
------- ------ ------ ------ ------ ------ ------- ----------
Income before income
taxes.................. 1,575 495 350 58 58 271 1,673 4,480
Provision for income
taxes................. 562 233 122 46 -- -- 1,079 (F) 2,042
------- ------ ------ ------ ------ ------ ------- ----------
Net income.............. $ 1,013 $ 262 $ 228 $ 12 $ 58 $ 271 $ 594 $ 2,438
======= ====== ====== ====== ====== ====== ======= ==========
Net income per share.... $ 0.24
==========
Shares used in computing
pro forma net income
per share (See Note 6). 10,269,126
==========
</TABLE>

See Notes to Unaudited Pro Forma Combined Financial Statements.

F-6
<PAGE>

COMPASS INTERNATIONAL SERVICES CORPORATION

NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT SHARE DATA)

NOTE 1--GENERAL

Compass International Services Corporation ("Compass") was organized to
create a leading provider of outsourced business services to public and
private entities. Compass has conducted no operations to date and will acquire
the Founding Companies concurrently and as a condition with the closing of
this Offering.

The historical financial statements reflect the financial position and
results of operations of Compass and the Founding Companies and were derived
from the respective financial statements. The periods included in these
financial statements for all of the individual Founding Companies are as of
and for the year ended December 31, 1996 and as of and for the six months
ended June 30, 1996 and 1997. The audited historical financial statements
included elsewhere herein have been included in accordance with Securities and
Exchange Commission Staff Accounting Bulletin No. 80.

NOTE 2--ACQUISITION OF FOUNDING COMPANIES

Concurrently and as a condition with the closing of this Offering, Compass
will acquire all of the outstanding capital stock of the Founding Companies.
The Acquisitions will be accounted for using the purchase method of accounting
with Mail Box treated as the accounting acquiror.

The following table sets forth the consideration to be paid in cash and in
shares of Common Stock to the common stockholders of each of the Founding
Companies.

<TABLE>
<CAPTION>
SHARES OF COMMON
CASH(1) STOCK
----------------- -------------------
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<S> <C> <C>
Mail Box............................ $ 9,847 2,461,852
NCMC................................ 2,897 965,801
Bomar............................... 4,607 1,151,787
Mid-Continent....................... 1,869 467,127
Impact.............................. 824 389,124
----------------- -------------------
Total............................... $ 20,044 5,435,691
================= ===================
</TABLE>
- --------
(1) The number of shares of Common Stock to be paid to the stockholders of the
Founding Companies is fixed. If the initial public offering price is
higher or lower than the assumed price, the cash consideration will vary
proportionately. For example, a $1.00 per share increase or decrease from
the assumed offering price will result in a $1.7 million increase or
decrease, respectively, in the aggregate cash consideration paid to
Founding Company stockholders.

The consideration to be paid for each Founding Company is subject to
possible post-closing adjustment based upon adjusted 1997 earnings. If a
Founding Company's adjusted earnings exceed current estimates of adjusted
earnings by more than five percent, Compass will pay the former stockholders
of such Founding Company additional cash consideration equal to five percent
of the total consideration previously paid for such Founding Company in the
Acquisition. The maximum possible increase in the consideration paid by
Compass for all Founding Companies is approximately $4.3 million. The
potential increase in goodwill due to this increase in consideration is
approximately $2.3 million, with associated amortization of approximately
$69,000 per year. If a Founding Company's adjusted 1997 earnings are less than
current estimates of adjusted earnings by more than five percent, the former
stockholders of such Founding Company will be required to repay to Compass in
cash up to ten percent of the total consideration previously paid to them in
the Acquisition. The maximum possible decrease in the consideration paid by
Compass for all Founding Companies is approximately $8.5 million. The
potential decrease in goodwill due to this decrease in consideration is
approximately $4.6 million, with an associated reduction in amortization of
approximately $138,000 per year.

F-7
<PAGE>

COMPASS INTERNATIONAL SERVICES CORPORATION

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

NOTE 3--UNAUDITED PRO FORMA COMBINED BALANCE SHEET ADJUSTMENTS

The following table summarizes unaudited pro forma combined balance sheet
adjustments (in thousands):

<TABLE>
<CAPTION>
OFFERING TOTAL
ASSETS ACQUISITION ADJUSTMENTS TOTAL ADJUSTMENTS OFFERING
------ ---------------------------- ACQUISITION ----------------- ADJUST-
(A) (B) (C) (D) ADJUSTMENTS (E) (F) MENTS
------ ----- ------- ----- ----------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Cash and cash
equivalents............ $ 195 $ -- $ -- $ 827 $ 1,022 $42,950 $(32,246) $10,704
Cash held for clients... 117 -- -- -- 117 -- -- --
Due from stockholders... 127 (800) -- (879) (1,552) -- -- --
Deferred offering costs. -- -- -- -- -- (254) -- (254)
------ ----- ------- ----- ------- ------- -------- -------
Total current assets. 439 (800) -- (52) (413) 42,696 (32,246) 10,450
Property and equipment.. 41 -- -- -- 41 -- -- --
Other assets............ 9 -- 1,000 -- 1,009 -- -- --
Goodwill, net........... 3,394 -- 36,953 -- 40,347 -- -- --
------ ----- ------- ----- ------- ------- -------- -------
Total assets......... $3,883 $(800) $37,953 $ (52) $40,984 $42,696 $(32,246) $10,450
====== ===== ======= ===== ======= ======= ======== =======
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Short term debt......... $ -- $ -- $ -- $ -- $ -- $ -- $ (1,744) $(1,744)
Accounts payable and
accrued expenses....... 122 -- 440 -- 562 (104) (440) (544)
Payable to Founding
Company stockholders... -- -- 20,044 (52) 19,992 -- (20,044) (20,044)
------ ----- ------- ----- ------- ------- -------- -------
Total current
liabilities......... 122 -- 20,484 (52) 20,554 (104) (22,228) (22,332)
Long-term debt.......... 3,761 -- 4,250 -- 8,011 -- (10,018) (10,018)
------ ----- ------- ----- ------- ------- -------- -------
Total liabilities.... 3,883 -- 24,734 (52) 28,565 (104) (32,246) (32,350)
Stockholders' equity:
Common stock........... -- -- (63) -- (63) 41 -- 41
Additional paid-in
capital............... -- -- 14,959 -- 14,959 42,759 -- 42,759
Retained earnings...... -- (800) (2,778) -- (3,578) -- -- --
Unrealized loss on
securities............ -- -- 14 -- 14 -- -- --
Treasury stock......... -- -- 1,087 -- 1,087 -- -- --
------ ----- ------- ----- ------- ------- -------- -------
Total stockholders'
equity.............. -- (800) 13,219 -- 12,419 42,800 -- 42,800
------ ----- ------- ----- ------- ------- -------- -------
Total liabilities and
stockholders'
equity.............. $3,883 $(800) $37,953 $ (52) $40,984 $42,696 $(32,246) $10,450
====== ===== ======= ===== ======= ======= ======== =======
</TABLE>
- -------
(A) Records the assets and liabilities of FCCI as of June 30, 1997, a company
acquired by Bomar subsequent to June 30, 1997 and includes debt incurred
by Bomar to finance the acquisition and associated goodwill.
(B) Reflects the exclusion of a note receivable from a stockholder of Mid-
Continent which will be retained by the stockholder.
(C) Records the Acquisitions of the Founding Companies including: (i)
establishment of the liability for the cash portion of the consideration
to be paid to the stockholders of the Founding Companies of $20.0 million
and a broker fee of $440,000; (ii) the issuance of 5,435,691 shares of
Common Stock to the stockholders of the Founding Companies; (iii) the
assumption of $4.3 million of debt as part of the consideration for Mid-
Continent; (iv) the allocation of the purchase price to the Company's
historical assets and liabilities based on their respective values and to
certain identifiable intangible assets acquired; and (v) the recognition
of goodwill representing the excess of the purchase price over the fair
value of net assets acquired. The Common Stock consideration was valued at
$9.00 per share, which represents a 25% discount of the assumed offering
price of $12.00 due to the restrictions on the transferability of the
Common Stock to be acquired by the stockholders of the Founding Companies.
(D) Represents the settlement of certain stockholder receivables and payables
pursuant to the Acquisition Agreements.
(E) Records the cash proceeds from the issuance of 4,100,000 shares of Common
Stock, net of estimated Offering costs (based on an assumed initial public
offering price of $12.00 per share). Offering costs primarily consist of
the underwriting discount, accounting fees, legal fees and printing
expenses.
(F) Records the use of Offering proceeds to pay the cash portion of the
consideration due to the stockholders of the Founding Companies in
connection with the Acquisitions, to repay certain long-term debt of the
Founding Companies and to pay certain Acquisition-related liabilities.

F-8
<PAGE>

NOTE 4--OTHER ACQUISITIONS

Gives effect to two acquisitions of Bomar consummated in fiscal 1996 and the
acquisition by Bomar of Financial Claims Control, Inc. ("FCCI") in September
1997, as if these acquisitions were consummated on January 1, 1996, including
the amortization of approximately $3.4 million of goodwill over 40 years.

NOTE 5--UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS

(A) Reflects the reduction in salaries, bonuses and benefits to the owners of
the Founding Companies to which they have agreed prospectively as a
condition of the Acquisitions.
(B) Reflects a reduction in rent expense related to a lease on a building
controlled by a stockholder of a Founding Company which has been agreed to
prospectively as a condition of the Acquisition.
(C) Reflects (i) the amortization of $37.0 million of goodwill to be recorded
as a result of these Acquisitions over the respective goodwill lives
ranging from 15 to 40 years, and (ii) the amortization of a $1.0 million
intangible asset associated with a patent at NCMC amortized over 15 years.
(D) Reflects the net reduction in interest expense associated with long-term
debt to be paid from the proceeds of the Offering.
(E) Reflects a net reduction of interest income on stockholder loans to one of
the Founding Companies.
(F) Reflects the incremental provision for federal and state income taxes
assuming all entities were subject to federal and state income tax and
relating to the other statements of operations' adjustments and for income
taxes on S Corporation income.

NOTE 6--NET INCOME PER SHARE

The shares used in computing net income per share include: (i) 1,682,769
shares issued to BGL Capital Partners, L.L.C. and management of Compass; (ii)
5,435,691 shares to be issued to the stockholders of the Founding Companies in
connection with the Acquisitions; (iii) 2,240,333 shares representing the
number of shares sold in the Offering necessary to pay the $20.0 million cash
portion of the consideration for the Acquisitions and to pay the estimated
underwriting discount and other acquisition and offering related costs; and
(iv) 910,333 shares to be issued in connection with the offering necessary to
fund approximately $11.8 million of debt to be repaid from proceeds of the
Offering, net of repayments from stockholder receivables.

F-9
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors
and Stockholders of
Compass International Services Corporation

The Stock Split described in Note 3 to the financial statements has not been
consummated at September 24, 1997. When it has been consummated, we will be in
a position to furnish the following report:

"In our opinion, the accompanying balance sheet presents fairly, in all
material respects, the financial position of Compass International Services
Corporation at June 30, 1997, in conformity with generally accepted accounting
principles. This financial statement is the responsibility of the Company's
management; our responsibility is to express an opinion on this financial
statement based on our audit. We conducted our audit of this statement in
accordance with generally accepted auditing standards which 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, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for the opinion expressed above."

/s/ Price Waterhouse LLP

Minneapolis, Minnesota
September 24, 1997

F-10
<PAGE>

COMPASS INTERNATIONAL SERVICES CORPORATION
BALANCE SHEET
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
JUNE 30,
ASSETS 1997
------ --------
<S> <C>
Deferred offering costs............................................... $254
----
Total assets...................................................... $254
====
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
<S> <C>
Notes payable......................................................... $104
Stockholders' equity:
Preferred Stock, 10,000,000 shares authorized, no shares issued or
outstanding;
Common Stock, 50,000,000 authorized, $.01 par value, 1,682,769
shares issued and outstanding...................................... 17
Additional paid-in-capital.......................................... 133
----
Total stockholders' equity........................................ 150
----
Total liabilities and stockholders' equity........................ $254
====
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-11
<PAGE>

COMPASS INTERNATIONAL SERVICES CORPORATION

NOTES TO FINANCIAL STATEMENT

NOTE 1--BUSINESS AND ORGANIZATION

Compass International Services Corporation, a Delaware corporation
("Compass" or the "Company") was founded in April 1997 to create a leading
provider of outsourced business services to public and private entities
throughout the United States upon consummation of an initial public offering
(the "Offering") of its common stock.

In connection with the organization and initial capitalization of Compass,
the Company issued 1,682,769 shares (post split) of common stock for $150,000.

Compass has not conducted any operations, and all activities to date have
related to the Offering and the Acquisitions. Expenditures have been funded by
advances from BGL Capital Partners, which are payable upon consummation of the
Offering, with interest at 8%. Accordingly, statements of operations and cash
flows for this period would not provide meaningful information and have been
omitted. As of June 30, 1997, approximately $254,000 has been incurred in
connection with the Offering and the Company has capitalized these costs as
Deferred Offering Costs. These costs include legal and accounting fees which
will be offset against the proceeds of the Offering at closing. Compass is
dependent upon the Offering to execute the pending Acquisitions. There is no
assurance that the pending Acquisitions discussed will be completed or that
Compass will be able to generate future operating revenues.

NOTE 2--NEW ACCOUNTING PRONOUNCEMENTS

Accounting for Stock-Based Compensation

Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting
for Stock-Based Compensation," allows entities to choose between a fair value
based method of accounting for employee stock options or similar equity
instruments and the intrinsic value-based method of accounting prescribed by
Accounting Principles Board Opinion No. 25 ("APB No. 25"). Entities electing
to remain with the accounting in APB Opinion No. 25 must make pro forma
disclosures of net income and earnings per share as if the fair value method
of accounting has been applied. The Company will provide pro forma disclosure
of net income and earnings per share, as applicable, in the notes to future
consolidated financial statements.

Earnings Per Share

In February 1997, the Financial Accounting Standards Board issued Statement
of Accounting Standards No. 128 "Earnings per Share" ("SFAS No. 128"). For the
Company, SFAS No. 128 will be effective for the year ended December 31, 1997.
SFAS No. 128 simplifies the standards required under current accounting rules
for computing earnings per share and replaces the presentation of primary
earnings per share and fully diluted earnings per share with a presentation of
basic earnings per share ("basic EPS") and diluted earnings per share
("diluted EPS"). Basic EPS excludes dilution and is determined by dividing
income available to common stockholders by the weighted average number of
common shares outstanding during the period. Diluted EPS reflects the
potential dilution that could occur if securities and other contracts to issue
common stock were exercised or converted into common stock. Diluted EPS is
computed similarly to fully diluted earnings per share under current
accounting rules. The implementation of SFAS No. 128 is not expected to have a
material effect on the Company's earnings per share as determined under
current accounting rules.

NOTE 3--UNAUDITED SUBSEQUENT EVENTS

Subsequent Events

On October 1, 1997, the Board of Directors approved several actions in
connection with the Offering. These actions included the approval of a
112.185-for-1 stock split which will occur prior to the effectiveness of the
Company's Registration Statement. All common stock related information
included in the financial statements has been adjusted to reflect this split.

F-12
<PAGE>

COMPASS INTERNATIONAL SERVICES CORPORATION

NOTES TO FINANCIAL STATEMENT--(CONTINUED)

Compass has signed definitive agreements to acquire all of the outstanding
capital stock of five companies ("Founding Companies") to be consummated
contemporaneously with the Offering. The Founding Companies are The Mail Box,
Inc. (Mail Box), National Credit Management Corp. (NCMC), BRMC of Delaware,
Inc. (Bomar), Mid-Continent Agencies, Inc. (Mid-Continent) and Impact
Telemarketing Group, Inc. (Impact). The aggregate consideration that will be
paid by Compass to acquire the Founding Companies is approximately $20.0
million in cash and 5,435,691 shares of Common Stock.

The consideration to be paid for each Founding Company is subject to
possible post-closing adjustment based on adjusted 1997 earnings.

On October 6, 1997, Compass filed a registration statement on Form S-1 for
the Offering.

F-13
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Stockholders of
The Mail Box, Inc.

In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of operations, of stockholders' equity and of cash
flows present fairly, in all material respects, the financial position of The
Mail Box, Inc. and its wholly-owned subsidiary, Mail Box Data Services, Inc.
(the "Company") at December 31, 1995 and 1996, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1996, in conformity with generally accepted accounting principles.
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 of these statements in accordance with
generally accepted auditing standards which 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, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for the
opinion expressed above.

/s/ Price Waterhouse LLP

Minneapolis, Minnesota
September 22, 1997

F-14
<PAGE>

THE MAIL BOX, INC.

CONSOLIDATED BALANCE SHEET

(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
DECEMBER 31,
--------------- JUNE 30,
1995 1996 1997
------ ------- -----------
(UNAUDITED)
ASSETS
------
<S> <C> <C> <C>
Current assets:
Cash............................................. $ 16 $ 1,419 $ 858
Accounts receivable, net of allowance for
doubtful accounts of
$116, $81 and $125, respectively................ 3,397 3,419 2,610
Inventories...................................... 490 708 362
Postage on hand.................................. 887 3,593 1,917
Prepaid expenses and other current assets........ 78 69 111
Deferred income taxes............................ 74 26 44
------ ------- -------
Total current assets........................... 4,942 9,234 5,902
Property and equipment, net........................ 2,374 3,205 4,078
Other assets....................................... 109 100 147
------ ------- -------
Total assets................................... $7,425 $12,539 $10,127
====== ======= =======
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
<S> <C> <C> <C>
Current liabilities:
Line of credit................................... $ 439 $ 569 $ --
Notes payable, current portion................... -- -- 309
Secured equipment financing facilities, current
portion......................................... 251 327 459
Capitalized lease obligations, current portion... 254 450 540
Accounts payable................................. 1,114 1,450 1,089
Accrued expenses and other liabilities........... 594 824 894
Income taxes payable............................. 214 524 630
Postage advances and deposits.................... 2,040 4,818 1,605
------ ------- -------
Total current liabilities...................... 4,906 8,962 5,526
Long-term liabilities:
Notes payable, net of current portion............ -- -- 568
Secured equipment financing facilities, net of
current portion................................. 792 616 807
Capitalized lease obligations, net of current
portion......................................... 693 650 849
Deferred income taxes............................ 39 105 145
------ ------- -------
Total liabilities.............................. 6,430 10,333 7,895
Commitments and contingencies
Stockholders' equity:
Common stock, $.10 par value, 500,000 shares
authorized,
132,900, 132,900 and 132,900 shares issued, and
129,300, 129,300, and 96,900 shares outstanding
at December 31, 1995 and 1996 and June 30, 1997,
respectively.................................... 13 13 13
Additional paid-in-capital....................... 947 947 947
Treasury stock, at cost, 3,600, 3,600, and 36,000
shares at
December 31, 1995 and 1996 and June 30, 1997,
respectively.................................... (100) (100) (1,087)
Retained earnings................................ 135 1,346 2,359
------ ------- -------
Total stockholders' equity..................... 995 2,206 2,232
------ ------- -------
Total liabilities and stockholders' equity..... $7,425 $12,539 $10,127
====== ======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.

F-15
<PAGE>

THE MAIL BOX, INC.

CONSOLIDATED STATEMENT OF OPERATIONS

(IN THOUSANDS)

<TABLE>
<CAPTION>
YEARS ENDED SIX MONTHS
DECEMBER 31, ENDED JUNE 30,
----------------------- ---------------
1994 1995 1996 1996 1997
------- ------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues............................... $15,354 $17,370 $26,156 $12,070 $15,804
Operating expenses..................... 11,168 12,402 17,953 8,456 10,367
------- ------- ------- ------- -------
Gross profit......................... 4,186 4,968 8,203 3,614 5,437
Selling, general and administrative
expenses.............................. 3,442 4,370 5,891 2,776 3,653
------- ------- ------- ------- -------
Income from operations............... 744 598 2,312 838 1,784
Other expense:
Interest expense..................... 212 302 337 167 209
------- ------- ------- ------- -------
Income before income taxes............. 532 296 1,975 671 1,575
Provision for income taxes............. 206 134 700 240 562
------- ------- ------- ------- -------
Net income............................. $ 326 $ 162 $ 1,275 $ 431 $ 1,013
======= ======= ======= ======= =======
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-16
<PAGE>

THE MAIL BOX, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL UNEARNED
-------------- PAID-IN- TREASURY ESOP RETAINED
SHARES AMOUNT CAPITAL STOCK COMPENSATION EARNINGS TOTAL
------- ------ ---------- -------- ------------ -------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance January 1, 1994. 102,900 $10 $622 $ (61) $(113) $ (268) $ 190
Net income............. 326 326
ESOP compensation...... 20 68 88
Capital contribution... 50 50
Sales of treasury
stock................. 12 12
Cash dividends, $.25
per share............. (25) (25)
------- --- ---- ------- ----- ------ ------
Balance, December 31,
1994................... 102,900 10 692 (49) (45) 33 641
Net income............. 162 162
ESOP compensation...... 32 45 77
Capital contribution... 86 86
Purchases of treasury
stock................. (51) (51)
Cash dividends, $.50
per share............. (60) (60)
Sale of common stock... 30,000 3 137 140
------- --- ---- ------- ----- ------ ------
Balance, December 31,
1995................... 132,900 13 947 (100) 135 995
Net income............. 1,275 1,275
Cash dividends, $.50
per share............. (64) (64)
------- --- ---- ------- ----- ------ ------
Balance, December 31,
1996................... 132,900 13 947 (100) 1,346 2,206
Net income (unaudited). 1,013 1,013
Purchases of treasury
stock
(unaudited)........... (987) (987)
------- --- ---- ------- ----- ------ ------
Balance, June 30, 1997,
(unaudited)............ 132,900 $13 $947 $(1,087) $ -- $2,359 $2,232
======= === ==== ======= ===== ====== ======
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-17
<PAGE>

THE MAIL BOX, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

(IN THOUSANDS)

<TABLE>
<CAPTION>
SIX MONTHS
YEARS ENDED ENDED JUNE
DECEMBER 31, 30,
------------------- --------------
1994 1995 1996 1996 1997
---- ----- ------ ------ ------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income.............................. $326 $ 162 $1,275 $ 431 $1,013
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization......... 400 616 768 375 467
ESOP compensation..................... 88 77 -- -- --
Employee stock compensation........... 50 86 -- -- --
Provision for doubtful accounts....... 47 60 82 40 45
Change in deferred taxes.............. 98 (48) 114 89 22
Changes in operating assets and
liabilities:
Accounts receivable................... (456) (862) (104) 542 764
Inventories........................... (23) (322) (218) (503) 346
Postage on hand....................... (387) (65) (2,706) (2,612) 1,676
Prepaid expenses and other assets..... (13) 47 18 (38) (89)
Accounts payable and accrued expenses. 45 340 566 (217) (291)
Postage advances and deposits......... (50) 1,328 2,778 2,660 (3,213)
Federal income taxes payable.......... 107 107 310 (125) 106
---- ----- ------ ------ ------
Net cash provided by operating
activities......................... 232 1,526 2,883 642 846
Cash flows from investing activities:
Purchases of property and equipment..... (486) (810) (1,007) (488) (784)
Proceeds from disposal of property and
equipment.............................. -- -- -- -- 38
---- ----- ------ ------ ------
Net cash used in investing
activities......................... (486) (810) (1,007) (488) (746)
Cash flows from financing activities:
Net borrowings (payments) on line of
credit................................. 97 (725) 130 58 (569)
Repayments of capital lease obligations. (217) (321) (439) (196) (305)
Proceeds from long-term debt............ 585 692 161 180 1,360
Repayment of long-term debt............. (214) (360) (261) (134) (160)
Proceeds from issuance of common stock.. 12 140 -- -- --
Repurchases of treasury stock........... -- (51) -- -- (987)
Cash dividends paid..................... -- (85) (64) (64) --
---- ----- ------ ------ ------
Net cash provided by (used in)
financing activities............... 263 (710) (473) (156) (661)
Net increase (decrease) in cash........... 9 6 1,403 (2) (561)
Cash at beginning of period............... 1 10 16 16 1,419
---- ----- ------ ------ ------
Cash at end of period..................... $ 10 $ 16 $1,419 $ 14 $ 858
==== ===== ====== ====== ======
Supplemental disclosure of cash flow
information:
Cash paid for interest.................. $213 $ 302 $ 338 $ 167 $ 207
Cash paid for taxes..................... -- 74 276 276 433
Noncash investing and financing
activities:
Equipment acquired under capital leases. 267 551 592 223 594
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-18
<PAGE>

THE MAIL BOX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1--NATURE OF OPERATIONS

The Mail Box, Inc. and its wholly owned subsidiary Mail Box Data Services,
Inc. (collectively the "Company") provides direct mailing services, billing
services, mail presorting, freight and drop shipping, data processing, laser
printing, mailing list rental and order fulfillment to companies based
primarily in the southwest United States. The Company operates from a single
location in Dallas, Texas.

NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use 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. While management believes that the estimates and related
assumptions used in the preparation of these financial statements are
appropriate, actual results could differ from those estimates. Estimates are
made when accounting for the allowance for doubtful accounts, inventories,
depreciation and amortization and income taxes.

Principles of Consolidation

The consolidated financial statements include the accounts of The Mail Box,
Inc. and its wholly owned subsidiary, Mail Box Data Services, Inc. All
significant inter-company transactions have been eliminated.

Revenue Recognition

Revenues are recognized when services are rendered and are presented in the
financial statements net of sales allowances. The Company's services are
considered rendered when all printing, sorting, labeling and ancillary
services have been provided and the mailing material has been received and
accepted by the United States Postal Service.

Property and Equipment

Property and equipment is recorded at cost less accumulated depreciation and
amortization. Depreciation, and amortization of assets recorded under capital
leases, is provided using the straight-line method over estimated useful lives
of each class of assets, or, if shorter, the terms of leases for capital
leases. Leasehold improvements are amortized using the straight-line method
over the shorter of the estimated useful life of the asset or the term of the
lease. Average useful lives range from 5 to 7 years. Expenditures for
maintenance and repairs are charged to expense as incurred.

Inventories

Inventories consist of work in progress, spare parts, and paper and envelope
stock, recorded at cost not to exceed market. The cost of work in process
includes the costs of completed but unmailed production.

Income Taxes

The Company records income taxes using the liability method, under which
deferred tax assets and liabilities are recognized for the estimated future
tax consequences attributable to temporary differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax basis, using enacted tax rates.

Accounting for Stock Based Compensation

The Company accounts for its employee stock options under Accounting
Principles Board Opinion No. 25 (APB 25).

F-19
<PAGE>

THE MAIL BOX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Earnings Per Share

Earnings per share for the Company have not been presented in the
accompanying financial statements because such disclosure is not deemed
meaningful considering the proposed transaction discussed in Note 14.

Unaudited Interim Financial Information

The interim financial information as of June 30, 1997 and for the six month
periods ended June 30, 1996 and 1997 has been prepared from the unaudited
financial records of the Company and in the opinion of management, reflects all
adjustments, consisting only of normal recurring items, necessary for a fair
presentation of the financial position and results of operations and of cash
flows for the respective interim periods.

Concentration of Credit Risk

Financial instruments which potentially subject the Company to concentrations
of credit risk are principally accounts receivable. The Company performs
ongoing credit evaluations of its customers' financial condition and requires
no collateral from its customers. The allowance for doubtful accounts is
maintained based upon the expected collectability of the accounts receivable.

Fair Value of Financial Instruments

The carrying amounts of the Company's financial instruments, including cash,
accounts receivable, accounts payables and long-term debt, approximate fair
value.

NOTE 3--INVENTORIES

Inventories consist of the following:

<TABLE>
<CAPTION>
DECEMBER
31,
--------- JUNE 30,
1995 1996 1997
---- ---- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Work in progress................................... $294 $466 $ 98
Spare parts........................................ 103 130 196
Paper and envelope stock........................... 93 112 68
---- ---- ----
$490 $708 $362
==== ==== ====
</TABLE>

NOTE 4--PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------
1995 1996
------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
Furniture and fixtures.............................. $ 538 $ 552
Plant equipment..................................... 2,812 3,996
Computer equipment and software..................... 3,321 3,654
Leasehold improvements.............................. -- 70
------- -------
6,671 8,272
Accumulated depreciation and amortization........... (4,297) (5,067)
------- -------
$ 2,374 $ 3,205
======= =======
</TABLE>

Depreciation and amortization expense was $400,000, $616,000 and $768,000 for
the years ended December 31, 1994, 1995 and 1996.

F-20
<PAGE>

THE MAIL BOX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 5--ACCRUED EXPENSES AND OTHER LIABILITIES

Accrued expenses and other liabilities consist of the following:

<TABLE>
<CAPTION>
DECEMBER
31,
-----------
1995 1996
----- -----
(IN
THOUSANDS)
<S> <C> <C> <C>
Accrued compensation...................................... $ 263 $ 314
Accrued vacation.......................................... 184 214
Other liabilities......................................... 147 296
----- -----
Total accrued expenses and other liabilities.............. $ 594 $ 824
===== =====
</TABLE>

NOTE 6--CREDIT FACILITIES

Obligations under long term credit facilities are as follows:

<TABLE>
<CAPTION>
DECEMBER
31,
------------
1995 1996
------ ----
(IN
THOUSANDS)
<S> <C> <C> <C>
Secured equipment financing facilities payable to
financial institutions. Monthly fixed payments
ranging from $1,000 to $14,000. Interest rates
ranging from 8.98% to 10.95%. Maturity dates ranging
from 1998 to 2000................................... $1,043 $943
Less: Current portion................................ (251) (327)
------ ----
$ 792 $616
====== ====
</TABLE>

As of December 31, 1996, approximately $279,000 of these balances may not be
prepaid prior to February 27, 1998; thereafter, such balances may be prepaid,
subject to declining prepayment penalties. Other balances may be prepaid at
any time subject to a 2% prepayment penalty.

The following summarizes the Company's required principal payments under
secured equipment financing facilities at December 31, 1996 for the next four
years (in thousands):

Revolving Credit Facility

The Company has a revolving credit facility with a financial institution
which provides for borrowings of $2,250,000 at December 31, 1996 to be
utilized for working capital purposes. The facility matures on October 31,
1998. The line of credit is collateralized by certain property and equipment,
and accounts receivable of the Company. Borrowings outstanding are also
secured by a pledge of all of the Company's common stock owned by the
principal stockholder. Borrowings outstanding from time to time bear interest
at a short term floating interest rate (8.6% and 8.8% at December 31, 1995 and
1996, respectively.)

The revolving credit facility contains, among other provisions, requirements
to maintain defined levels of working capital, net worth, various financial
ratios, limit capital expenditures, and restricts distributions to
stockholders. At December 31, 1996, the Company was in violation of the net
worth provision. An appropriate waiver was subsequently obtained from the
lender.

F-21
<PAGE>

THE MAIL BOX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The Company leases certain equipment under agreements which are classified as
capital leases. Certain equipment is leased from a related party, as discussed
more fully in Note 9. The following is a schedule of capital leases by asset
class:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------
1995 1996
------ ------
(IN
THOUSANDS)
<S> <C> <C> <C>
Furniture and fixtures................................ $ 71 $ 71
Plant equipment....................................... 216 799
Computer equipment and software....................... 1,426 959
------ ------
1,713 1,829
Accumulated amortization.............................. (800) (669)
------ ------
Total............................................... $ 913 $1,160
====== ======
</TABLE>

The following is a schedule of future minimum lease payments due under
capital lease obligations at December 31, 1996, together with the present value
of the future minimum lease payments (in thousands):

<TABLE>
<S> <C>
1997.............................................................. $ 568
1998.............................................................. 395
1999.............................................................. 255
2000.............................................................. 77
2001.............................................................. 11
------
Total future minimum lease payments............................. 1,306
Less: Amount representing interest................................ (206)
------
Present value of future minimum lease payments.................. $1,100
======
</TABLE>

The Company also leases certain facilities and equipment under non-cancelable
operating leases. The facilities leases provide that the Company pay the taxes,
insurance and maintenance expenses related to the leased facilities. Certain of
the facilities are leased from a related party as discussed more fully in Note
9. Future minimum payments, by year and in the aggregate, under these non-
cancelable operating leases with initial or remaining terms of one year or more
consist of the following (in thousands):

<TABLE>
<S> <C>
1997............................................................... $1,561
1998............................................................... 1,754
1999............................................................... 1,386
2000............................................................... 1,064
2001............................................................... 857
Thereafter......................................................... 350
------
$6,972
======
</TABLE>

Rent expense was $1,086,000, $1,390,000 and $1,534,000 for the years ended
December 31, 1994, 1995 and 1996, respectively.

F-22
<PAGE>

THE MAIL BOX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 7--INCOME TAXES

The Company's provision for income taxes is comprised of the following for
the years ended December 31:

<TABLE>
<CAPTION>
1994 1995 1996
---- ---- ----
(IN THOUSANDS)
<S> <C> <C> <C>
Current tax expense...................................... $108 $182 $586
Deferred tax expense (benefit)........................... 98 (48) 114
---- ---- ----
Total provision for income taxes......................... $206 $134 $700
==== ==== ====
</TABLE>

The effective income tax rate for the years ended December 31 varied from
the federal statutory rate as follows:
<TABLE>
<CAPTION>
1994 1995 1996
---- ---- ----
(IN THOUSANDS)
<S> <C> <C> <C>
Tax provision computed at statutory rate of 35%.......... $187 $104 $694
Nondeductible expenses and other......................... 1 (1) 6
Employee stock compensation expense...................... 18 31 --
---- ---- ----
$206 $134 $700
==== ==== ====
</TABLE>

The components of the net deferred tax asset (liability) are as follows:
<TABLE>
<CAPTION>
DECEMBER
31,
-----------
1995 1996
---- -----
(IN
THOUSANDS)
<S> <C> <C>
Deferred tax assets:
Deferred compensation..................................... $ 35 $ --
Allowance for doubtful accounts........................... 39 26
Other..................................................... -- 4
---- -----
74 30
Deferred tax liabilities
Depreciation and amortization............................. (39) (109)
---- -----
Net deferred tax asset (liability)...................... $ 35 $ (79)
==== =====
</TABLE>

NOTE 8--EMPLOYEE BENEFIT PLANS

The Company sponsors a savings plan under Section 401(k) of the Internal
Revenue Code (the "Plan"), which was adopted in 1996 to provide employees an
opportunity to rollover their vested accounts received in connection with the
termination of the Company's leveraged employee stock ownership plan ("ESOP"),
as discussed below. The Plan allows all eligible employees to defer up to 8%
of their base salary on a pretax basis through contributions to the Plan, and
the Company will match on a discretionary basis, 25% of such employee
contributions. The Company made no contributions to the Plan in 1996.

During 1994, 1995, and 1996, the Company sponsored the ESOP, which covered
all full time employees. The Company made contributions to the ESOP equal to
scheduled debt payments plus discretionary contributions based on results of
operations. As services were rendered by plan participants, the Company
recorded compensation expense equal to the average fair value of the shares
allocated to participant accounts during the period. ESOP compensation expense
was $152,000, $215,000, and $108,000 for 1994, 1995, and 1996, respectively.
The ESOP was terminated in 1996 and all shares (32,400) were repurchased by
the Company for $987,000 in the first quarter of 1997. The Company funded the
termination with a three-year amortizing loan from a financial institution in
the amount of $987,000 with an interest rate of 2.8% plus the 30-day
commercial rate and recorded the reacquisition of shares as treasury stock.

F-23
<PAGE>

THE MAIL BOX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 9--RELATED PARTIES

The Company leases its main office and certain mailshop facilities from a
partnership in which the Company's principal stockholder is a limited partner.
Included in rent expense in each of the three years ended December 31, 1994,
1995 and 1996 is $290,000 for payments under this lease. Future minimum lease
payments under this agreement are as follows (in thousands):

<TABLE>
<S> <C>
1997............................................................... $ 321
1998............................................................... 343
1999............................................................... 343
2000............................................................... 343
2001............................................................... 343
Thereafter......................................................... 143
------
$1,836
======
</TABLE>

The Company also leases certain equipment from a partnership, the partners
of which include certain Company stockholders. The lease for this equipment
commenced on April 1, 1996 and is recorded as a capital lease. The cost of
this equipment was $223,000. The future minimum lease payments under this
agreement are as follows (in thousands):

<TABLE>
<S> <C>
1997.............................................................. $111
1998.............................................................. 111
1999.............................................................. 27
----
Total future minimum lease payments................................. 249
Less: Amount representing interest.................................. (65)
----
Present value of future minimum lease payments...................... $184
====
</TABLE>

NOTE 10--CAPITAL TRANSACTIONS

In 1995, the Company purchased into treasury from the majority stockholder,
1,600 shares of common stock for $51,000.

In 1994 and 1995, certain employees were awarded an aggregate of 1,600
shares and 2,500 shares of common stock, respectively, with an aggregate value
of $50,000 and $86,000, respectively. The shares were granted to the employees
by the majority stockholder and were accounted for as capital contributions
and employee stock compensation expense.

In December 1996, the Company granted to a certain employee-stockholder an
option to purchase 6,000 shares at $30.00 per share, the approximate fair
value at the date of grant. The option was exercised on July 17, 1997. In view
of the terms of this option, the fair value is not deemed to be significantly
different from the intrinsic value.

NOTE 11--CONCENTRATION OF CREDIT RISK

The Company had two customers that accounted for 11.5% and 14.5% of 1994
revenues, respectively, two customers that accounted for 15.5% and 11.7% of
1995 revenues, respectively, and one customer that accounted for 30.9% of 1996
revenues.

At December 31, 1995, approximately 11.0% of the Company's total accounts
receivable balance was due from a single customer.

F-24
<PAGE>

THE MAIL BOX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 12--INVENTORIES HELD IN TRUST FOR CUSTOMERS

In the ordinary course of the Company's business activities as a mailing
service company, the Company receives and stores customers' letter, statement
and paper and form stock for use in customers' mailing production processes.
The Company does not take legal title to the inventories, and accordingly,
these inventories are not carried on the Company's financial statements. The
Company maintains casualty risk insurance in amounts sufficient to cover
potential damages arising from the Company's custody of such inventories, which
varies from time to time but management estimates does not exceed $11.0
million.

NOTE 13--COMMITMENTS AND CONTINGENCIES

The Company is party from time to time to various legal proceedings
incidental to its business. In the opinion of management, the resolution of
these items, individually or in the aggregate, would not have a significant
effect on the financial position, results of operations, or cash flows of the
Company.

NOTE 14--SUBSEQUENT EVENTS (UNAUDITED)

The Company and its stockholders have entered into a definitive agreement
with Compass International Services Corporation ("Compass") pursuant to which
Compass will acquire all outstanding shares of the Company's common stock in
exchange for cash and common stock of Compass, concurrent with the consummation
of the initial public offering of the common stock of Compass.

F-25
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders of
National Credit Management Corporation and Subsidiary

We have audited the accompanying consolidated balance sheets of National
Credit Management Corporation and Subsidiary (a Maryland corporation), as of
December 31, 1995 and 1996, and the related consolidated statements of
operations, stockholders' equity and cash flows for the years ended December
31, 1994, 1995 and 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 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 consolidated financial statements referred to above
present fairly, in all material respects, the financial position of National
Credit Management Corporation and Subsidiary as of December 31, 1995 and 1996,
and the results of its operations and its cash flows for the years ended
December 31, 1994, 1995 and 1996, in conformity with generally accepted
accounting principles.

/s/ Arthur Andersen LLP

Baltimore, Maryland,
February 11, 1997

F-26
<PAGE>

NATIONAL CREDIT MANAGEMENT CORPORATION AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
DECEMBER 31,
------------- JUNE 30,
ASSETS 1995 1996 1997
------ ------ ------ -----------
(UNAUDITED)
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents.......................... $1,167 $1,149 $1,363
Accounts receivable, net of allowance for doubtful
accounts of $88, $113 and $116, respectively...... 1,994 2,141 2,498
Prepaid expenses and other......................... 129 361 134
Deferred tax asset................................. 106 73 58
------ ------ ------
Total current assets............................. 3,396 3,724 4,053
Property and equipment, net.......................... 1,084 1,053 1,061
Other assets, net of accumulated amortization of $22,
$21 and $25, respectively........................... 69 73 192
------ ------ ------
Total assets..................................... $4,549 $4,850 $5,306
====== ====== ======
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
<S> <C> <C> <C>
Current liabilities:
Current portion of note payable.................... $ -- $ -- $ 50
Trade accounts payable............................. 220 356 411
Client payables.................................... 600 484 648
Accrued compensation and related benefits.......... 248 500 534
Current portion of capital lease obligations....... 274 327 187
Other accrued expenses............................. 360 185 252
------ ------ ------
Total current liabilities........................ 1,702 1,852 2,082
Deferred tax liability............................... 81 96 120
Borrowings under line of credit...................... 100 -- 28
Long-term capital lease obligations.................. 401 184 96
------ ------ ------
Total liabilities................................ 2,284 2,132 2,326
------ ------ ------
Commitments and contingencies
Stockholders' equity:
Common stock--Class A, $.01 par value, 5,000,000
shares authorized, 210,000 shares issued and
outstanding....................................... 2 2 2
Common stock--Class B, $.01 par value, 250 shares
authorized, no shares issued and outstanding...... -- -- --
Additional paid-in-capital......................... 752 752 752
Retained earnings.................................. 1,511 1,964 2,226
------ ------ ------
Total stockholders' equity....................... 2,265 2,718 2,980
------ ------ ------
Total liabilities and stockholders' equity....... $4,549 $4,850 $5,306
====== ====== ======
</TABLE>

The accompanying notes are an integral part of these consolidated balance
sheets.

F-27
<PAGE>

NATIONAL CREDIT MANAGEMENT CORPORATION AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

(IN THOUSANDS)

<TABLE>
<CAPTION>
SIX MONTHS
YEARS ENDED ENDED
DECEMBER 31, JUNE 30,
------------------------ --------------
1994 1995 1996 1996 1997
------ ------- ------- ------ ------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues............................. $8,874 $12,287 $13,579 $6,856 $8,044
Operating expenses................... 4,550 6,322 7,945 3,703 5,018
------ ------- ------- ------ ------
Gross profit....................... 4,324 5,965 5,634 3,153 3,026
Selling, general and administrative
expenses............................ 3,400 4,328 4,798 2,498 2,531
------ ------- ------- ------ ------
Income from operations............. 924 1,637 836 655 495
------ ------- ------- ------ ------
Other (income) expense:
Interest income.................... (18) (62) (46) (26) (24)
Interest expense................... 60 90 79 39 23
Other.............................. (3) 5 15 -- 1
------ ------- ------- ------ ------
Total other expense, net......... 39 33 48 13 --
------ ------- ------- ------ ------
Income before income taxes........... 885 1,604 788 642 495
Provision for income taxes........... 354 648 335 264 233
------ ------- ------- ------ ------
Net income........................... $ 531 $ 956 $ 453 $ 378 $ 262
====== ======= ======= ====== ======
</TABLE>

The accompanying notes are an integral part of these consolidated statements.

F-28
<PAGE>

NATIONAL CREDIT MANAGEMENT CORPORATION AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
CLASS A CLASS B
COMMON STOCK COMMON STOCK
------------------ ------------------ ADDITIONAL TOTAL
SHARES SHARES PAID-IN RETAINED STOCKHOLDERS'
OUTSTANDING AMOUNT OUTSTANDING AMOUNT CAPITAL EARNINGS EQUITY
----------- ------ ----------- ------ ---------- -------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31,
1993................... 210 $-- -- $-- $754 $ 24 $ 778
One thousand for one
stock split.......... 209,790 2 -- -- (2) -- --
Net income............ -- -- -- -- -- 531 531
------- ---- --- ---- ---- ------ ------
Balance, December 31,
1994................... 210,000 2 -- -- 752 555 1,309
Net income............ -- -- -- -- -- 956 956
------- ---- --- ---- ---- ------ ------
Balance, December 31,
1995................... 210,000 2 -- -- 752 1,511 2,265
Net income............ -- -- -- -- -- 453 453
------- ---- --- ---- ---- ------ ------
Balance, December 31,
1996................... 210,000 2 -- -- 752 1,964 2,718
Net income
(unaudited).......... -- -- -- -- -- 262 262
------- ---- --- ---- ---- ------ ------
Balance, June 30, 1997
(unaudited)............ 210,000 $ 2 -- $-- $752 $2,226 $2,980
======= ==== === ==== ==== ====== ======
</TABLE>

The accompanying notes are an integral part of these consolidated statements.

F-29
<PAGE>

NATIONAL CREDIT MANAGEMENT CORPORATION AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

<TABLE>
<CAPTION>
YEARS ENDED SIX MONTHS ENDED
DECEMBER 31, JUNE 30,
---------------------- -----------------
1994 1995 1996 1996 1997
------ ------ ------ -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating
activities:
Net income........................ $ 531 $ 956 $ 453 $ 378 $ 262
Adjustments to reconcile net
income to net cash flows provided
by operating activities--
Loss from disposal of property
and equipment.................. -- 20 15 -- --
Change in deferred taxes........ (23) 59 48 63 39
Depreciation and amortization... 310 322 337 166 189
Provision for bad debts......... 35 37 (25) -- --
Increase in accounts receivable. (533) (690) (122) (220) (357)
(Increase) decrease in prepaid
expenses and other............. 73 (39) (232) (82) 227
Increase in other assets........ (10) (11) (5) (6) (121)
Increase (decrease) in trade
accounts payable and other
accrued expenses............... (206) 323 30 (4) 57
(Decrease) increase in client
payables....................... -- 56 (116) (132) 165
(Decrease) increase in income
taxes payable.................. 188 (119) (69) (188) --
Increase (decrease) in accrued
compensation and related
benefits....................... 276 (192) 252 172 34
------ ------ ------ ------- --------
Net cash flows provided by
operating activities......... 641 722 566 147 495
------ ------ ------ ------- --------
Cash flows from investing
activities:
Additions to property and
equipment........................ (104) (194) (164) (129) (195)
------ ------ ------ ------- --------
Net cash flows used in
investing activities......... (104) (194) (164) (129) (195)
------ ------ ------ ------- --------
Cash flows from financing
activities:
Repayment on borrowings from line
of credit, net of proceeds....... (30) (200) (100) (100) --
Increase in notes payable......... -- -- -- -- 77
Principal payments under capital
lease obligations................ (171) (223) (320) (93) (163)
------ ------ ------ ------- --------
Net cash flows used in
financing activities......... (201) (423) (420) (193) (86)
------ ------ ------ ------- --------
Net (decrease) increase in
cash and cash equivalents 336 105 (18) (175) 214
Cash and cash equivalents, beginning
of period.......................... 726 1,062 1,167 1,167 1,149
------ ------ ------ ------- --------
Cash and cash equivalents, end of
period............................. $1,062 $1,167 $1,149 $ 992 $ 1,363
====== ====== ====== ======= ========
</TABLE>

The accompanying notes are an integral part of these consolidated statements.

F-30
<PAGE>

NATIONAL CREDIT MANAGEMENT CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Organization and Business

National Credit Management Corporation, a Maryland corporation, and
Subsidiary (the "Company") provides accounts receivable management services
and, through its patented Accelerated Payment Systems ("APS") process,
telephonic check drafting services. The Company's collection services are
provided to a broad range of clients and industries. In addition to standard
contingency fee collections, the Company provides early-stage accounts
receivable management services to clients in the education, utilities,
government and healthcare sectors through its wholly-owned subsidiary, Total
Early Receivables Management Corporation.

Basis of Presentation

The accompanying financial statements have been prepared on the accrual basis
of accounting. 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 consolidated financial statements for the six months ended June 30, 1996
and 1997, are unaudited but, in the opinion of management, such financial
statements have been presented on the same basis as the audited consolidated
financial statements and include all adjustments, consisting only of normal
recurring adjustments necessary for a fair presentation of the financial
position, and results of operations and cash flows for these periods.

Financial Instruments

Financial instruments consist of cash and cash equivalents, accounts
receivable, accounts payable, borrowings under line of credit and capital lease
obligations, all of which approximate fair value.

Cash and Cash Equivalents

Cash and cash equivalents consist primarily of cash and overnight investments
stated at cost which approximate market value.

Property and Equipment

Property and equipment is stated at cost less accumulated depreciation.
Depreciation is computed using the straight-line method over the following
estimated useful lives:

<TABLE>
<S> <C>
Computer hardware and software..................... 3-5 years
Office furniture and equipment..................... 4-8 years
Leasehold improvements............................. Life of related leases
Property and equipment held under capital leases... 3-8 years
</TABLE>

F-31
<PAGE>

NATIONAL CREDIT MANAGEMENT CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Other Assets

Other assets consist of security deposits on leases, patent costs and other
intangible assets.

Client Payables

The Company, which is licensed as a collection agency in many states,
regularly receives payments on behalf of its clients which are deposited in
bank accounts. The Company has recorded a liability for the portion of
payments which are owed to clients as of year-end.

Income Taxes

Income taxes have been accounted for in accordance with Financial Accounting
Standards Board Statement No. 109, "Accounting for Income Taxes." Under
Statement 109, the liability method is used in accounting for income taxes.
Deferred tax liabilities are determined based on differences between financial
reporting and tax basis of assets and liabilities and are measured using tax
rates and laws that are expected to be in effect when the differences are
scheduled to reverse.

Revenue Recognition

The Company recognizes revenues in its collections business at the time a
payment is received on an account directly from the debtor, or when reported
as paid by the client. Revenue is typically based upon contractual percentages
of amounts collected. Revenues for the Company's accounts receivable
management services are recognized based upon completion of services performed
for the client. The APS division of the Company recognizes revenue based upon
the number of transactions processed for each client during the month, as well
as certain supplementary services.

Significant Customers

During 1994, approximately 14% and 21% of revenues were generated by clients
in the telecommunications and secondary education and student loan industries,
respectively.

During 1995, approximately 10%, 20% and 34% of revenues were generated by
clients in the retail, secondary education and student loan, and financial
services industries, respectively.

During 1996, approximately 11%, 12%, 19% and 34% of revenues were generated
by clients in the retail, medical, secondary education and student loan and
financial services industries, respectively.

University Support Services represented approximately 22%, 16% and 16% of
the Company's total revenues for the years ended December 31, 1994, 1995 and
1996, respectively.

2. PROPERTY AND EQUIPMENT, NET

Property and equipment consists of:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------
1995 1996
------ ------
(IN
THOUSANDS)
<S> <C> <C> <C>
Computer hardware and software.......................... $1,583 $1,754
Office furniture and equipment.......................... 826 892
Leasehold improvements.................................. 81 81
------ ------
2,490 2,727
Less--accumulated depreciation.......................... 1,406 1,674
------ ------
Property and equipment, net............................. $1,084 $1,053
====== ======
</TABLE>

F-32
<PAGE>

NATIONAL CREDIT MANAGEMENT CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

3. BORROWINGS UNDER LINE OF CREDIT AND CAPITAL LEASE OBLIGATIONS:

Borrowings Under Line of Credit

The Company has a line of credit agreement with a bank dated October 4,
1995, which expires May 15, 1997. The line of credit requires interest to be
paid monthly at the lender's prime rate plus 0.25%. The balance outstanding
under this agreement as of December 31, 1995 and 1996, is $100,000 and $0,
respectively. On January 23, 1997, the line of credit agreement was modified
to increase available borrowings to $1,250,000 and extend the expiration date
to May 15, 1999. The line of credit has available borrowings of $750,000 as of
December 31, 1995 and 1996.

Under the line of credit agreement, substantially all of the Company's
assets are pledged as collateral.

Capital Lease Obligations

Certain property and equipment leases have been capitalized using interest
rates ranging from approximately 8.75% to 16.0%. Future payments on capital
lease obligations as of December 31, 1996, are as follows (in thousands):

<TABLE>
<S> <C>
1997................................................................ $375
1998................................................................ 145
1999................................................................ 50
----
Total payments...................................................... 570
Less--amount representing interest.................................. 59
----
511
Less--current portion of capital lease obligation................... 327
----
Long-term capital lease obligations............................... $184
====
</TABLE>

4. COMMITMENTS AND CONTINGENCIES:

Operating Leases and Service Contract Commitments

The Company leases its office space under operating leases which expire
through August 2001. In addition, the Company has service contracts on certain
office equipment and computer systems held under capital leases. Total rental
expense under these agreements was approximately $225,000 $195,000 and
$325,000 for the years ended December 31, 1994, 1995 and 1996, respectively.
Future minimum payments on operating leases and service contract commitments
as of December 31, 1996, are as follows (in thousands):

<TABLE>
<S> <C>
1997............................................................... $ 355
1998............................................................... 341
1999............................................................... 337
2000............................................................... 293
2001............................................................... 238
------
Total............................................................ $1,564
======
</TABLE>

Litigation

Lawsuits and claims are filed from time to time against the Company in the
ordinary course of business. The Company, after reviewing developments to date
with legal counsel, is of the opinion that the outcome of such matters will
not have a material adverse effect on the Company's financial position.
Accordingly, no amounts have been provided for these claims in the
accompanying financial statements.

F-33
<PAGE>

NATIONAL CREDIT MANAGEMENT CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

5. INCOME TAXES:

The components of the Company's income tax provision are as follows:

<TABLE>
<CAPTION>
1994 1995 1996
---- ---- ----
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Current income tax
provision:
Federal................... $308 $487 $268
State..................... 70 102 59
---- ---- ----
378 589 327
---- ---- ----
Deferred income tax
provision:
Federal................... (21) 51 7
State..................... (3) 8 1
---- ---- ----
(24) 59 8
---- ---- ----
Total income tax
provision.............. $354 $648 $335
==== ==== ====
</TABLE>

Deferred tax assets and liabilities result from differences in timing of the
recognition of certain items for tax and financial accounting purposes. The
sources of the deferred tax assets (liabilities) are as follows:

<TABLE>
<CAPTION>
1995 1996
------- -------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Property and equipment......................... $ (117) $ (144)
Net operating loss carryforwards............... 62 35
Nondeductible reserves......................... 52 66
Other.......................................... 28 20
------- -------
Deferred tax (liability) asset, net.......... $ 25 $ (23)
======= =======
</TABLE>

The net deferred tax (liability) asset consists of the following items
included on the accompanying balance sheets as of December 31, 1995 and 1996:

<TABLE>
<CAPTION>
1995 1996
------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
Deferred tax asset.................................. $ 106 $ 73
Deferred tax liability.............................. (81) (96)
------- -------
$ 25 $ (23)
======= =======
</TABLE>

The difference between the recorded income tax provision and the federal
statutory tax rate is mainly due to lobbying expenses, premiums paid for
officers' life insurance, travel and entertainment expenses and other
nondeductible differences.

As of December 31, 1995 and 1996, the Company has net operating loss (NOL)
carryforwards of approximately $160,000 and $91,000, respectively, to offset
future taxable income. These loss carryforwards will expire during various
periods through 2007. The utilization of these NOL's may be limited pursuant
to Internal Revenue Code Section 382.

6. ADVERTISING EXPENSES:

The Company incurs advertising expenses related to promoting its services to
potential clients. These costs are expensed as incurred. The Company
recognized advertising expenses of approximately $40,000, $251,000 and
$228,000 for the years ended December 31, 1994, 1995 and 1996, respectively.

F-34
<PAGE>

NATIONAL CREDIT MANAGEMENT CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

7. STATEMENTS OF CASH FLOWS--SUPPLEMENTAL DISCLOSURE:

During 1994, 1995 and 1996, the Company paid interest of approximately
$60,000, $90,000, and $79,000, respectively. In addition, the Company paid
income taxes of approximately $188,000, $595,000 and $498,000 during 1994,
1995 and 1996, respectively.

Noncash transactions during 1994, 1995 and 1996 were as follows:

<TABLE>
<CAPTION>
1994 1995 1996
---- ---- ----
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Property acquired under capital lease
obligations..................................... $60 $673 $157
</TABLE>

8. EMPLOYEE BENEFIT PLAN:

The Company provides a 401(k) plan (the Plan) for eligible employees of the
Company. Beginning in 1995, the Board of Directors approved discretionary
contributions to the Plan. In 1996, contributions were made by the Company at
the rate of 25% of employee contributions up to a maximum amount of $1,000 per
individual. The Company's contribution, including plan administrative expense,
was $22,000 and $39,000 for the years ended December 31, 1995 and 1996,
respectively.

9. STOCK OPTION AGREEMENTS:

On August 14, 1994, the Company instituted a stock option plan whereby the
Board of Directors, at its discretion, can award employees options to purchase
shares of the Company's common stock. Unvested options granted under this plan
expire upon termination of the employee. Fully vested options expire ten years
from the date of grant. No option is exercisable until the employee has been
an employee of the Company for at least one year on a full-time salaried
basis. Typically, one-third of the options granted are vested immediately upon
grant. The remaining two-thirds of the options generally become vested
proportionately over a two-year period. The Company has reserved 23,331 shares
of common stock for these options.

During 1995, the Financial Accounting Standards Board issued SFAS No. 123,
"Accounting for Stock Based Compensation," which defines a fair value based
method of accounting for an employee stock option or similar equity
instrument. This statement allows an entity to continue to measure
compensation cost for those plans using the method of accounting prescribed by
the Accounting Principles Board Opinion No. 25 ("APB No. 25"), "Accounting for
Stock Issued to Employees." Entities electing to remain with the accounting in
APB No. 25 must make pro forma footnote disclosures of net income, as if the
fair value based method of accounting defined in SFAS No. 123 has been
applied.

The Company has elected to account for its stock-based compensation plans in
accordance with APB No. 25, under which no compensation cost has been
recognized. The Company has computed for pro forma disclosure purposes the
value of all options granted during 1995 and 1996, using the Black-Scholes
option pricing model as prescribed by SFAS No. 123 and the following weighted
average assumptions used for grants:

<TABLE>
<CAPTION>
1995 1996
------- -------
<S> <C> <C>
Risk-free interest rate................................. 5.85% 5.20%
Expected dividend yield................................. -- % -- %
Expected lives.......................................... 2 years 2 years
</TABLE>

F-35
<PAGE>

NATIONAL CREDIT MANAGEMENT CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Options were assumed to be exercised upon vesting for the purposes of this
valuation. Adjustments are made for options forfeited prior to vesting. Had
compensation costs for this plan been determined consistent with SFAS No. 123,
the Company's net income reflected on the accompanying statement of income
would have been reduced to the following "pro forma" amounts:

<TABLE>
<CAPTION>
1995 1996
----- -----
(IN
THOUSANDS)
<S> <C> <C> <C>
Net Income:
As reported............................................. $ 956 $ 453
Pro forma............................................... $ 952 $ 432
</TABLE>

The following table summarizes all stock option and purchase right activity
for the two years ended December 31, 1995 and 1996.

<TABLE>
<CAPTION>
EXERCISE
NUMBER OF PRICE PER
OPTIONS SHARE
--------- -----------
<S> <C> <C>
Outstanding as of December 31, 1994................. 6,800 $12.03
Granted........................................... 7,500 22.75
------
Outstanding as of December 31, 1995................. 14,300 12.03-22.75
Granted........................................... 9,300 40.12
Repurchased....................................... (8,400) 12.03-40.12
------
Outstanding as of December 31, 1996................. 15,200 12.03-40.12
======
</TABLE>

10. EVENTS SUBSEQUENT TO DATE OF AUDITORS' REPORT (UNAUDITED)

The Company and its stockholders have entered into a definitive agreement
with Compass International Services Corporation ("Compass") pursuant to which
Compass will acquire all of the outstanding shares of the Company's common
stock in exchange for cash and common stock of Compass, concurrent with the
consummation of the initial public offering of the common stock of Compass.

In May 1997, the Company filed suit against the former owner and inventor of
the APS patent (collectively, the "Defendants"), alleging that the Defendants
have breached the agreement between the Company and the Defendants and
violated the Company's exclusive rights to the APS patent and related
intellectual property used in the APS portion of the Company's business. The
Defendants have filed a counterclaim that seeks, among other things,
rescission of the agreement under which the Company purchased the APS patent,
restoration of a prior agreement pursuant to which the Defendants licensed the
APS patent to the Company, return of the APS patent to the Defendants and
unspecified damages. Although the Company believes that the counterclaims are
without merit, there can be no assurance that the Defendants will not prevail
with respect to some or all of their counterclaims. Management does not
believe that a decision adverse to the Company in this dispute would have a
material adverse effect on the Company's business, results of operations or
financial condition.

On October 2, 1997, the Company terminated its stock option plan and issued
21,500 shares of common stock to the former stock option holders.

F-36
<PAGE>

REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Stockholders
B.R.M.C. of Delaware, Inc.

We have audited the accompanying consolidated balance sheets of B.R.M.C. of
Delaware, Inc. as of December 31, 1996 and 1995 and the related consolidated
statements of operations, stockholders' equity, and cash flows for each of the
three years in the period ended December 31, 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 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 consolidated financial statements referred to above
present fairly, in all material respects, the financial position of B.R.M.C. of
Delaware, Inc. at December 31, 1996 and 1995, and the consolidated results of
its operations and its cash flows for each of the three years in the period
ended December 31, 1996, in conformity with generally accepted accounting
principles.

/s/ Ernst & Young LLP

January 24, 1997
Atlanta, Georgia

F-37
<PAGE>

B.R.M.C. OF DELAWARE, INC.

CONSOLIDATED BALANCE SHEET

(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
DECEMBER 31,
-------------- JUNE 30,
ASSETS 1995 1996 1997
------ ------ ------ -----------
(UNAUDITED)
<S> <C> <C> <C>
Current assets:
Cash.............................................. $ 107 $ 6 $ 183
Cash held for clients............................. 690 743 792
Commissions receivable, net....................... 1,015 1,021 1,111
Receivable from related parties................... -- 53 30
Other assets...................................... -- 39 34
------ ------ ------
Total current assets............................ 1,812 1,862 2,150
Furniture and equipment, net........................ 291 866 899
Goodwill............................................ -- 873 848
Other assets........................................ 56 141 159
------ ------ ------
Total assets.................................... $2,159 $3,742 $4,056
====== ====== ======
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
<S> <C> <C> <C>
Current liabilities:
Collections due to clients........................ $ 690 $ 743 $ 792
Checks issued in excess of cash balance........... -- 90 --
Accounts payable and accrued liabilities.......... 694 736 1,051
Current portion of long-term debt and capital
lease obligations................................ 307 517 448
Borrowings under line of credit................... -- 450 500
------ ------ ------
Total current liabilities....................... 1,691 2,536 2,791
Long-term debt, less current portion................ 341 525 426
Capital lease obligations, less current portion..... 205 502 313
Deferred income taxes............................... -- 14 14
Other liabilities................................... -- 56 173
Minority interest in subsidiary..................... -- 4 6
Stockholders' equity (deficit):
Common stock, $1 par value, 1,000 shares
authorized, issued and outstanding............... 1 1 1
Additional paid-in capital........................ 7 60 60
Retained earnings (accumulated deficit)........... (86) 44 272
------ ------ ------
Total stockholders' equity (deficit)............ (78) 105 333
------ ------ ------
Total liabilities and stockholders' equity...... $2,159 $3,742 $4,056
====== ====== ======
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-38
<PAGE>

B.R.M.C. OF DELAWARE, INC.

CONSOLIDATED STATEMENT OF OPERATIONS

(IN THOUSANDS)

<TABLE>
<CAPTION>
SIX MONTHS
YEARS ENDED ENDED JUNE
DECEMBER 31, 30,
-------------------- -------------
1994 1995 1996 1996 1997
------ ------ ------ ------ ------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Revenues................................ $6,859 $7,416 $9,597 $4,766 $6,677
Operating expenses...................... 4,236 4,569 6,419 2,888 4,259
------ ------ ------ ------ ------
Gross profit.......................... 2,623 2,847 3,178 1,878 2,418
Selling, general and administrative
expenses............................... 2,206 2,594 2,853 1,566 1,965
------ ------ ------ ------ ------
Income from operations................ 417 253 325 312 453
Other expense:
Interest expense...................... 274 103 122 43 103
------ ------ ------ ------ ------
Income before income taxes.............. 143 150 203 269 350
Provision for income taxes.............. -- -- 73 42 122
------ ------ ------ ------ ------
Net income.............................. $ 143 $ 150 $ 130 $ 227 $ 228
====== ====== ====== ====== ======
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-39
<PAGE>

B.R.M.C. OF DELAWARE, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
TOTAL
COMMON STOCK ADDITIONAL RETAINED STOCKHOLDERS'
------------- PAID-IN (DEFICIT) EQUITY
SHARES AMOUNT CAPITAL EARNINGS (DEFICIT)
------ ------ ---------- --------- -------------
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1994.... 1,000 $ 1 $ 7 $(379) $(371)
Net income.................... -- -- -- 143 143
----- --- --- ----- -----
Balance at December 31, 1994.. 1,000 1 7 (236) (228)
Net income.................... -- -- -- 150 150
----- --- --- ----- -----
Balance at December 31, 1995.. 1,000 1 7 (86) (78)
Capital contribution.......... -- -- 53 -- 53
Net income.................... -- -- -- 130 130
----- --- --- ----- -----
Balance at December 31, 1996.. 1,000 1 60 44 105
Net income for the six months
ended June 30, 1997
(unaudited).................. -- -- -- 228 228
----- --- --- ----- -----
Balance at June 30, 1997
(unaudited).................. 1,000 $ 1 $60 $ 272 $ 333
===== === === ===== =====
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-40
<PAGE>

B.R.M.C. OF DELAWARE, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
YEARS ENDED SIX MONTHS
DECEMBER 31, ENDED JUNE 30,
---------------------- ----------------
1994 1995 1996 1996 1997
------- ----- ------ ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income.......................... $ 143 $ 150 $ 130 $ 227 $ 228
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization..... 190 177 228 93 50
Minority interest................. -- -- 4 -- 2
Change in operating assets and
liabilities:
Commissions receivable.......... (770) 101 (6) 134 (89)
Cash held for clients........... -- -- (53) 353 255
Other current assets............ -- -- (39) (103) 5
Receivable from related parties. -- -- (53) -- 23
Other assets.................... (2) 4 (107) (8) (141)
Accounts payable and accrued
liabilities.................... 280 (36) 98 16 431
Due to clients.................. -- -- 53 (81) 49
Checks issued in excess of cash. 11 (506) 90 -- (90)
Deferred revenue................ (30) (65) -- -- --
Deferred income taxes........... -- -- 14 -- --
------- ----- ------ ------- -------
Net cash (used in) provided
by operating activities..... (178) (175) 359 631 723
Cash flows from investing activities:
Purchases of furniture and
equipment.......................... (118) (60) (589) (115) (57)
Purchases of accounts receivable.... (1,718) -- -- -- --
Collections of purchased
receivables........................ 2,101 718 -- -- --
Business combinations net of cash
acquired........................... -- -- (791) -- --
------- ----- ------ ------- -------
Net cash provided by (used
in) investing activities.... 265 658 (1,380) (115) (57)
Cash flows from financing activities:
Borrowings under line of credit..... 2,699 -- 450 -- 50
Additions under capital lease
obligations........................ -- -- 346 -- --
Repayment of line of credit......... (2,627) (777) -- -- --
Principal payments of capital lease
obligations........................ (113) (78) (124) (88) (92)
Issuance of long-term debt.......... -- 750 466 -- 35
Principal payments of long-term
debt............................... (46) (271) (271) (166) (170)
Capital contributions............... -- -- 53 -- --
------- ----- ------ ------- -------
Net cash (used in) provided
by financing activities..... (87) (376) 920 (254) (177)
------- ----- ------ ------- -------
Net increase (decrease) in cash....... -- 107 (101) 262 489
Cash at beginning of period........... -- -- 107 107 6
------- ----- ------ ------- -------
Cash at end of period................. $ -- $ 107 $ 6 $ 369 $ 495
======= ===== ====== ======= =======
Supplemental disclosure of cash flow
information:
Cash paid for interest.............. $ 274 $ 100 $ 116 $ 43 $ 103
======= ===== ====== ======= =======
Cash paid for income taxes.......... $ -- $ -- $ -- $ -- $ 25
======= ===== ====== ======= =======
Furniture and equipment acquired
through capital lease obligations.. $ 153 $ -- $ 542 $ 33 $ --
======= ===== ====== ======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.

F-41
<PAGE>

B.R.M.C. OF DELAWARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization of the Company and Nature of Business

BoMar Credit Corporation, formerly Credit Interaction Agency, Inc. was
incorporated on June 1, 1984 under the laws of the state of Georgia. In
February 1988, BoMar was acquired by East Coast Financial Services, Inc., at
which time the name of the company was changed to BoMar Credit Corporation. On
April 22, 1996 BoMar Receivable Management Company (B.R.M.C.) of Delaware,
Inc. was incorporated under the laws of the state of Delaware. As of that
date, the shareholders of BoMar Credit Corporation exchanged their shares for
those of B.R.M.C. of Delaware (the "Parent"). The assets and liabilities of
BoMar Credit Corporation were transferred to two newly formed and wholly owned
subsidiaries of the Parent, BoMar Credit Corporation of Georgia and BoMar
Credit Corporation of Texas. The accompanying financial statements reflect the
operations of these wholly owned subsidiaries for the period January 1, 1996
to December 31, 1996 as the above noted transactions were accounted for in a
manner similar to a pooling of interests. All assets and liabilities were
transferred at net book value.

At December 31, 1996, B.R.M.C. of Delaware had four subsidiaries: BoMar
Credit Corporation of Georgia; BoMar Credit Corporation of Texas; Advanced
Credit Services ("ACS"); and Clayton-Parker & Associates ("CPA"). All
subsidiaries are wholly owned by the Company, with the exception of Advanced
Credit Services, of which the Company has 75% ownership. The accompanying
financial statements present the consolidated financial condition and results
of operations of B.R.M.C. of Delaware and subsidiaries (the "Company"). All
significant intercompany accounts and transactions have been eliminated in
consolidation.

The Company provides accounts receivable management services primarily for
clients in the telecommunications, insurance, financial services and
healthcare industries. The Company is paid a collection fee by the clients
based on a percentage of the dollar amount collected. The Company's operations
are primarily in the continental United States, however, some business is
conducted internationally.

Business Combinations

On August 1, 1996, the Parent acquired a controlling interest in ACS, a
Delaware corporation. The transaction was accounted for as a purchase. The
Parent obtained a note receivable from the sole shareholder of ACS in the
amount of $75,000 as the fair value of liabilities assumed exceeded assets
received. As such, no goodwill was recorded in conjunction with the
acquisition. The accompanying financial statements reflect the results of
operations of ACS from the date of acquisition to December 31, 1996.

On November 26, 1996, the Parent acquired CPA, an Arizona corporation. The
Parent paid cash of $400,000 and issued promissory notes in the amount of
$450,000 in connection with the transaction which was accounted for as a
purchase. Goodwill of $836,000 was recorded in conjunction with the
acquisition. The accompanying financial statements reflect the results of
operations of CPA from the date of acquisition to December 31, 1996.

Cash Held for Clients and Collections Due to Clients

Cash held for clients and collections due to clients consists of amounts
collected on behalf of the Company's clients, net of the Company's commission.

Commissions Receivable

As of December 31, 1995 and 1996, commissions receivable from companies in
the telecommunications industry totaled approximately $400,000 and $454,000,
respectively. Credit is extended based on an evaluation of the customer's
financial condition, and generally collateral is not required. Credit losses
are provided for in the financial statements and have been within management's
expectations.

F-42
<PAGE>

B.R.M.C. OF DELAWARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Goodwill

Goodwill relates to the excess of purchase price over net assets acquired in
business combinations. Such amounts are amortized over a fifteen year period.
Accumulated amortization as of December 31, 1996 was $16,000. Goodwill is
measured for possible impairment periodically and is reduced through a charge
to earnings if impairment exists.

Accounts Receivable Purchased

Accounts receivable purchased consist of receivables purchased from the
Georgia Power Company at a discount from the gross receivable owed to the
client. The Company is guaranteed, by the Georgia Power Company, to collect
16.2% of the gross receivables purchased within one year of the purchase. The
Company initially records receivables purchased at the guaranteed amount. The
guaranteed collection rate of at least 16.2% is approximately 4% above the
average purchase price of the receivables. The uncollected gross amounts of
receivables purchased were $31 million at December 31, 1995.

The contract also provides for profit sharing with the utility if
collections exceed 17.2%, in that the Company agrees to pay the client 32.5%
of such surplus amounts collected.

Deferred Revenue

When receivables were purchased from the Georgia Power Company, the
guaranteed portion of the gross receivable (16.2%) was recorded. Since
accounts are purchased for approximately 12.2%, deferred revenue was
established at the purchase date representing approximately 4% of the gross
receivables purchased. The revenue is deferred as the earnings process was not
complete at the purchase date. Deferred revenue is amortized into income over
a three month period, representing the period the guaranteed amount is earned.

Furniture and Equipment

Furniture and equipment are stated at cost and are depreciated using the
double declining balance method over the estimated useful lives of the
individual assets which range from five to seven years. Included in
depreciation expense is amortization of assets recorded under capital leases.

Revenue Recognition

The Company recognizes revenue (commission income) based on contractual
rates in the period in which collection occurs.

Income Taxes

The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109 which requires the liability method of
accounting for income taxes.

Use 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 as of
the date of the balance sheet and revenues and expenses for the period. Actual
results could differ significantly from those estimates.

Interim Statements

The interim financial data for the six months ended June 30, 1996 and 1997
is unaudited; however, in the opinion of management, the interim data includes
all adjustments, consisting only of normal recurring adjustments, necessary
for a fair statement of the results for the interim periods, on a consistent
basis.

F-43
<PAGE>

B.R.M.C. OF DELAWARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

2. FURNITURE AND EQUIPMENT

Furniture and equipment consisted of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------
1995 1996
------- -------
(IN THOUSANDS)
<S> <C> <C>
Furniture and equipment.................................. $ 1,125 $ 2,940
Less accumulated depreciation............................ 834 2,074
------- -------
$ 291 $ 866
======= =======
</TABLE>

Furniture and equipment includes $449,000 and $826,000 acquired under
various capital leases at December 31, 1995 and 1996, respectively.
Accumulated depreciation on this equipment at December 31, 1995 and 1996 was
$315,000 and $113,000, respectively. Depreciation expense was $189,000,
$176,000 and $216,000 for the years ended December 31, 1994, 1995 and 1996,
respectively.

3. DEBT

Borrowings Under Line of Credit

Borrowings under a line of credit at were as follows:

As of December 31, 1996 borrowings under a $1,500,000 line of credit
totaled $450,000. The line of credit is payable on September 30, 1997 and
is secured by substantially all assets of the Company, with simple interest
payable monthly at a rate of 9.75%.

Long-Term Debt

Long-term debt consisted of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------
1995 1996
------- -------
(IN THOUSANDS)
<S> <C> <C>
Note payable, interest at 10.5% per annum;
secured by substantially all of the assets of the
Company, payable in equal monthly installments through
March 1998............................................. $ 583 $ 340
Note payable, interest at 19.5% per annum;
payable in equal monthly installments through March
2000................................................... -- 51
Note payable, interest at 8% per annum's
payable in equal monthly installments through December
2006................................................... -- 450
------- -------
$ 583 $ 841
======= =======
</TABLE>

Principal maturities of long-term debt at December 31, 1996 were as follows
(in thousands):

<TABLE>
<S> <C>
1997................................................................. $316
1998................................................................. 120
1999................................................................. 52
2000................................................................. 43
2001................................................................. 42
Thereafter........................................................... 268
----
$841
====
</TABLE>

F-44
<PAGE>

B.R.M.C. OF DELAWARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

4. LEASES AND OTHER COMMITMENTS

The Company leases office space for its operations in Arizona, Georgia,
Florida and Texas under noncancelable operating lease agreements. Certain
leases have escalation clauses which provide for increases in annual rentals.
The leases for office space expire in years through fiscal 2002.

Future minimum rental payments required under the operating lease agreements
at December 31, 1996 were as follows (in thousands):

<TABLE>
<S> <C>
1997............................................................... $ 399
1998............................................................... 389
1999............................................................... 376
2000............................................................... 344
2001............................................................... 243
Thereafter......................................................... 4
------
$1,755
======
</TABLE>

Total rent expense was $187,000, $280,000 and $319,000 for the year ended
December 31, 1994, 1995 and 1996, respectively.

In addition, the Company has entered into various capital leases to finance
equipment. Future minimum lease payments under capital leases are as follows
(in thousands):

<TABLE>
<S> <C>
1997................................................................. $244
1998................................................................. 201
1999................................................................. 189
2000................................................................. 99
2001................................................................. 43
Thereafter........................................................... --
----
$776
====
</TABLE>

Obligations under capital leases as scheduled above include imputed interest
of approximately $168,000.

In addition to the lease commitments above, the Company entered into an
agreement to pay a minimum of $360,000 annually for certain telecommunications
services. The agreement expires July 15, 1997.

5. EMPLOYEE BENEFIT PLANS

The Company sponsors a defined contribution 401(k) plan which permits
substantially all employees to make tax deferred contributions of up to 15% of
their annual compensation. The Company currently makes a discretionary
matching contribution of 25% of the employee contribution. The Company
contributed approximately $9,000, $11,000 and $7,000 in 1994, 1995 and 1996,
respectively.

In addition, the Company sponsors a Medical Plan. The Company voluntarily
contributes approximately 50% of the premiums for all employees who elect to
participate in the Medical Plan. The Company contributed approximately
$48,000, $54,000 and $91,000 in 1994, 1995 and 1996, respectively.

F-45
<PAGE>

B.R.M.C. OF DELAWARE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

6. INCOME TAXES

The provision for income taxes consisted of the following:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1996
-----------------
(IN THOUSANDS)
<S> <C>
Current:
Federal............................................... $49
State................................................. 3
---
52
Deferred:
Federal............................................... 20
State................................................. 1
---
21
---
Provision for income taxes.............................. $73
===
</TABLE>

Income tax expense differs from income taxes computed at statutory rates due
to certain non-deductible expenses and the effect of net operating loss
carryforwards.

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components
of the Company's deferred tax liabilities and assets at December 31, 1995 and
1996 were as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------
1995 1996
------- -------
(IN THOUSANDS)
<S> <C> <C>
Deferred tax liabilities:
Depreciation.......................................... $ -- $ 10
Capitalized leases.................................... -- 11
------- -------
Total deferred tax liabilities.......................... -- 21
Deferred tax assets..................................... 25 --
------- -------
Net deferred tax assets (liabilities)................... $ 25 $ (21)
======= =======
</TABLE>

The Company's deferred income taxes in 1995 consist of net operating loss
(NOL) carryforwards of approximately $72,000 at December 31, 1995. The NOL
amounts result in deferred tax assets of approximately $25,000 at December 31,
1995. A valuation allowance was established for the total deferred NOL
carryforward amounts for 1995. The Company utilized approximately $155,000 and
$150,000 of their NOL carryforwards in 1994 and 1995, respectively. Deferred
tax assets and valuation allowances were reduced by approximately $54,000 and
$52,000 during 1994 and 1995, respectively. No tax expense was recorded for
the years ended December 31, 1994 and 1995.

The Company utilized $32,000 in net operating losses during the year ended
December 31, 1996. There are no remaining NOL carryforwards. During 1996, the
Company reversed a previously recorded deferred tax asset valuation allowance
of approximately $28,000.

7. SUBSEQUENT EVENTS (UNAUDITED)

Effective September 1, 1997, the Company purchased all outstanding common
shares of Financial Claims Control, Inc. ("FCCI"), a Florida corporation. FCCI
had revenues of $ for the year ended December 31, 1996 and $1,733,000
for the six months ended June 30, 1997. The acquisition is expected to be
accounted for as a purchase.

The Company and its stockholders have entered into a definitive agreement
with Compass International Services Corporation ("Compass") pursuant to which
Compass will acquire all outstanding shares of the Company's common stock in
exchange for cash and common stock of Compass, concurrent with the
consummation of the initial public offering of the common stock of Compass.

F-46
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Stockholders of
Mid-Continent Agencies, Inc.

In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of operations, of stockholders' equity and of cash
flows present fairly, in all material respects, the financial position of Mid-
Continent Agencies, Inc. and its subsidiaries at December 31, 1995 and 1996,
and the results of their operations and their cash flows for the years then
ended in conformity with generally accepted accounting principles. 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 of these statements in accordance with
generally accepted auditing standards which 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, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for the
opinion expressed above.

/s/ Price Waterhouse LLP

Chicago, Illinois
September 19, 1997

F-47
<PAGE>

MID-CONTINENT AGENCIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
DECEMBER 31,
------------- JUNE 30,
ASSETS 1995 1996 1997
------ ------ ------ -----------
(UNAUDITED)
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents......................... $ 1 $ -- $ 121
Accounts receivable, trade........................ 535 546 485
Receivables due from stockholders................. 1,297 1,421 1,463
Prepaid expenses and other current assets......... 159 165 168
------ ------ ------
Total current assets............................ 1,992 2,132 2,237
Funds held in trust for clients
Property and equipment, net......................... 165 146 150
Deferred income tax benefit......................... 54 70 73
Other assets........................................ 132 136 141
------ ------ ------
Total assets.................................... $2,343 $2,484 $2,601
====== ====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable and accrued expenses............. $ 492 $ 590 $ 510
Notes payable to stockholders..................... 51 51 52
Notes payable, current portion.................... 232 388 569
------ ------ ------
Total current liabilities....................... 775 1,029 1,131
Funds held in trust for clients
Notes payable....................................... 340 178 178
Deferred compensation............................... 158 174 179
------ ------ ------
Total liabilities............................... 1,273 1,381 1,488
------ ------ ------
Commitments and contingencies
Stockholders' equity:
Common stock, no par value, 10,000 shares
authorized, 1,000 shares issued and outstanding.. 10 10 10
Additional paid-in capital........................ 73 73 73
Retained earnings................................. 984 1,032 1,044
Unrealized gain (loss) on securities.............. 3 (12) (14)
------ ------ ------
Total stockholders' equity...................... 1,070 1,103 1,113
------ ------ ------
Total liabilities and stockholders' equity.......... $2,343 $2,484 $2,601
====== ====== ======
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-48
<PAGE>

MID-CONTINENT AGENCIES INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS

(IN THOUSANDS)

<TABLE>
<CAPTION>
SIX MONTHS
YEARS ENDED ENDED
DECEMBER 31, JUNE 30,
-------------- --------------
1995 1996 1996 1997
------ ------ ------ ------
(UNAUDITED)
<S> <C> <C> <C> <C>
Revenues........................................ $8,763 $9,038 $4,548 $4,741
Operating expenses.............................. 2,851 2,875 1,470 1,551
------ ------ ------ ------
Gross profit.................................. 5,912 6,163 3,078 3,190
Selling, general and administrative expenses.... 5,974 6,054 3,025 3,116
------ ------ ------ ------
Income (loss) from operations................. (62) 109 53 74
Other (income) expense:
Interest and investment income................ (99) (117) (76) (25)
Interest expense.............................. 48 68 37 41
Loss on disposal of property and equipment.... -- 3 3 --
------ ------ ------ ------
(51) (46) (36) 16
------ ------ ------ ------
Income (loss) before income taxes............... (11) 155 89 58
Provision for income taxes...................... 34 107 58 46
------ ------ ------ ------
Net income (loss)............................... $ (45) $ 48 $ 31 $ 12
====== ====== ====== ======
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-49
<PAGE>

MID-CONTINENT AGENCIES INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
COMMON STOCK
---------------- UNREALIZED
NUMBER RETAINED GAIN (LOSS)
OF SHARES AMOUNT PAID-IN-CAPITAL EARNINGS ON SECURITIES TOTAL
--------- ------ --------------- -------- ------------- ------
<S> <C> <C> <C> <C> <C> <C>
Balance, January 1,
1995................... 10 $10 $73 $1,029 $-- $1,112
Net loss............... -- -- -- (45) -- (45)
Change in unrealized
gain on securities.... -- -- -- -- 3 3
--- --- --- ------ ---- ------
Balance, December 31,
1995................... 10 10 73 984 3 1,070
Net income............. -- -- -- 48 -- 48
Change in unrealized
(loss) gain on
securities............ -- -- -- -- (15) (15)
--- --- --- ------ ---- ------
Balance, December 31,
1996................... 10 10 73 1,032 (12) 1,103
Net income (unaudited). -- -- -- 12 -- 12
Change in unrealized
(loss) gain on
securities
(unaudited)........... -- -- -- -- (2) (2)
--- --- --- ------ ---- ------
Balance, June 30, 1997
(unaudited)............ 10 $10 $73 $1,044 $(14) $1,113
=== === === ====== ==== ======
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-50
<PAGE>

MID-CONTINENT AGENCIES INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

(IN THOUSANDS)

<TABLE>
<CAPTION>
YEARS ENDED SIX MONTHS
DECEMBER ENDED JUNE
31, 30,
------------ ------------
1995 1996 1996 1997
----- ----- ----- -----
(UNAUDITED)
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net income (loss)................................ $ (45) $ 48 $ 31 $ 12
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization................... 44 64 32 21
Loss on disposal of property and equipment...... -- 3 4 --
Changes in deferred taxes....................... (13) (2) (1) 1
Changes in operating assets and liabilities:
Accounts receivable, trade..................... (106) (11) 48 60
Prepaid expenses and other current assets...... 39 (6) 24 (2)
Accounts payable and accrued expenses.......... (60) 68 141 (86)
Deferred compensation.......................... 21 16 9 5
Other assets................................... (54) (4) (4) (5)
----- ----- ----- -----
Net cash provided by (used in) operating
activities................................ (174) 176 284 6
Cash flows from investing activities:
Purchase of property and equipment............... (89) (49) (22) (25)
Proceeds from sale of property and equipment..... -- 3 3 --
----- ----- ----- -----
Net cash used in investing activities...... (89) (46) (19) (25)
Cash flows from financing activities:
Proceeds from notes payable...................... 600 250 250 550
Payments of notes payable........................ (376) (257) (118) (369)
Payments of notes payable to stockholders........ (10) -- -- --
Proceeds from notes receivable from stockholders. (159) (124) (64) (41)
----- ----- ----- -----
Net cash provided by (used in) financing
activities........................................ 55 (131) 68 140
Net increase (decrease) in cash.................... (208) (1) 333 121
Cash and cash equivalents at beginning of period... 209 1 -- --
----- ----- ----- -----
Cash and cash equivalents at end of period......... $ 1 $ -- $ 333 $ 121
===== ===== ===== =====
Supplemental disclosure of cash flow information:
Cash paid for interest........................... $ 48 $ 69 $ 38 $ 42
Cash paid for income taxes....................... 46 90 39 33
Increase (decrease) in funds held in trust for
clients......................................... (53) (253) 243 157
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-51
<PAGE>

MID-CONTINENT AGENCIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1--NATURE OF OPERATIONS

Mid-Continent Agencies, Inc. ("MCA") and subsidiaries (collectively referred
to as the "Company") provides accounts receivable management services
primarily to companies in the manufacturing, insurance, wholesale distribution
and commercial sectors. The Company has three domestic offices located in
Chicago, IL, Louisville, KY and Buffalo, NY and an office in the United
Kingdom.

NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

Principles of Consolidation

The consolidated financial statements include accounts of MCA and its
subsidiaries. All intercompany balances and transactions have been eliminated.

Cash and Cash Equivalents

Cash and cash equivalents are highly liquid unrestricted investments with
original maturities of three months or less. Cash equivalents are stated at
cost which approximates market.

Accounts Receivable, Trade

The Company remits collections to clients either on the net method, in which
funds are remitted to the client net of the related earned commission or on
the gross method, in which all collected funds are remitted to the client and
the Company bills the client separately for its earned commission, resulting
in a trade account receivable. Due to the nature of the trade accounts
receivable, no allowance is provided and the carrying value is considered to
estimate the fair value.

Funds Held in Trust for Clients

Funds held in trust for clients consists of funds collected on behalf of
clients, net of the Company's commission. These funds are held in segregated
accounts and are regularly remitted to clients. Funds held in trust of
$1,468,000 and $1,214,000 at December 31, 1995 and 1996, respectively, and
their offsetting liability are presented net for financial statement
presentation purposes.

The Company is entitled to invest these funds in specified marketable debt
and equity instruments. Amounts not invested in marketable debt and equity
instruments are invested in cash equivalents (See Note 4). Investments in
marketable securities are accounted for in accordance with Financial
Accounting Standards No. 115, "Accounting for Certain Investments in Debt and
Equity Securities". Management has classified all marketable securities as
"available for sale" and accordingly, net unrealized gains and losses are
presented, net of tax, as a separate component of equity. Realized gains are
computed based on cost of investments sold.

F-52
<PAGE>

MID-CONTINENT AGENCIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Property and Equipment

Property and equipment, including additions and improvements and expenditures
for repairs and maintenance that significantly add to productivity or extend
the economic lives of the assets, are capitalized at cost and depreciated using
an accelerated depreciation method, the results of which are not materially
different from the straight-line method, over their estimated useful lives as
follows:

<TABLE>
<S> <C>
Furniture and fixtures..................................... 5 to 7 years
Equipment.................................................. 5 to 7 years
Leasehold improvements..................................... Term of lease
</TABLE>

Maintenance, repairs, and minor replacements of these items are charged to
expense as incurred.

Deferred Compensation

Deferred compensation represents executive termination benefits for four key
officers of the Company. Deferred compensation is determined generally by the
formulas specified in the officers' employment agreements. Deferred
compensation is charged to income currently.

Income Taxes

Provisions are made to record deferred income taxes for items reported in
different periods for financial reporting purposes than for federal and state
income tax purposes. The Company records deferred income taxes using the
liability method in accordance with Statement of Financial Accounting Standards
No. 109 "Accounting for Income Taxes".

Concentration of Credit Risk

The Company has over 300 commercial insurance clients which accounted for 38%
and 30% of its revenues at December 31, 1995 and 1996. No one client represents
more than 5% of revenues.

Revenue Recognition

The Company generates revenues from contingency fees and contractual
services. Contingency fee revenue is recognized as a contractual percentage of
the net funds collected on behalf of clients, in the period the collection
occurs. Contractual services revenue is deferred and recognized over the period
in which the services are performed.

Unaudited Interim Financial Information

The interim financial information as of June 30, 1997 and for the six month
period June 30, 1996 and 1997 has been prepared from unaudited financial
records of the Company and, in the opinion of management, reflects all
adjustments consisting only of normal recurring items, necessary for a fair
presentation of the financial position and results of operations and of cash
flows for the respective interim periods.

F-53
<PAGE>

MID-CONTINENT AGENCIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 3--RECEIVABLES DUE FROM STOCKHOLDERS

Receivables due from stockholders includes demand notes receivable with
aggregate principal and interest amounts of $1,297,000 and $1,371,000 at
December 31, 1995 and 1996, respectively. The notes receivable accrue interest
at the short-term annual Applicable Federal Rate prescribed by the Internal
Revenue Service, with the balance of principal and interest due upon demand.
Due to the demand provision, management estimates the carrying value of the
notes receivable from stockholders approximates fair value.

NOTE 4--MARKETABLE SECURITIES

The following is a summary of the marketable debt and equity instruments of
the funds held in trust:

<TABLE>
<CAPTION>
UNREALIZED UNREALIZED ESTIMATED
HOLDING HOLDING FAIR
COST GAIN LOSS VALUE
---- ---------- ---------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
DECEMBER 31, 1995:
Equity securities...................... $ 21 $ 2 $ (5) $ 18
Debt securities issued by the U.S.
Treasury and other U.S. government
agencies.............................. 196 -- (10) 186
Debt securities issued by foreign
governments........................... 2 -- -- 2
Corporate debt securities.............. 150 6 -- 156
Mortgage-backed securities............. 139 -- (7) 132
Other debt securities.................. 264 19 (1) 282
---- ---- ---- ----
$772 $ 27 $(23) $776
==== ==== ==== ====
DECEMBER 31, 1996:
Equity securities...................... $ 11 $-- $ (4) $ 7
Debt securities issued by the U.S.
Treasury and other U.S. government
agencies.............................. 195 -- (15) 180
Debt securities issued by foreign
governments........................... 2 -- -- 2
Corporate debt securities.............. 202 4 (1) 205
Mortgage-backed securities............. 107 -- (4) 103
Other debt securities.................. 294 -- -- 294
---- ---- ---- ----
$811 $ 4 $(24) $791
==== ==== ==== ====
</TABLE>

Net realized (losses)/gains from the sale of investment securities were
$(6,000) and $12,000 for the years ended December 31, 1995 and 1996,
respectively.

The cost and estimated fair value of available for sale securities by
contractual maturity at December 31, 1996 is as follows (in thousands):

<TABLE>
<CAPTION>
ESTIMATED
COST FAIR VALUE
---- ----------
<S> <C> <C>
Due in one year or less................................... $103 $103
Due after one year through five years..................... 102 105
Investment funds or mortgage-backed securities not due
at a single maturity date................................ 596 577
---- ----
Total................................................. $801 $785
==== ====
</TABLE>

Expected maturities may differ from contractual maturities because the
issuers of the securities may have the right to prepay obligations without
prepayment penalties.

F-54
<PAGE>

MID-CONTINENT AGENCIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 5--PROPERTY AND EQUIPMENT, NET

Property and equipment consists of:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------
1995 1996
------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
Furniture and fixtures.............................. $ 491 $ 480
Equipment........................................... 793 798
Leasehold improvements.............................. 40 40
------- -------
1,324 1,318
Accumulated depreciation............................ (1,159) (1,172)
------- -------
Property and equipment, net......................... $ 165 $ 146
======= =======
</TABLE>

Depreciation expense aggregated $44,000 and $64,000 for the years ended 1995
and 1996, respectively.

NOTE 6--OTHER ASSETS

Other assets consist of:

<TABLE>
<CAPTION>
DECEMBER
31,
-----------
1995 1996
----- -----
(IN
THOUSANDS)
<S> <C> <C> <C>
Cash value of life insurance.............................. $ 28 $ 31
Deposits.................................................. 99 101
Other..................................................... 5 4
----- -----
$ 132 $ 136
===== =====
</TABLE>

NOTE 7--ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of:

<TABLE>
<CAPTION>
DECEMBER
31,
-----------
1995 1996
----- -----
(IN
THOUSANDS)
<S> <C> <C> <C>
Accounts payable.......................................... $ 104 $ 136
Accrued salaries.......................................... 82 130
Accrued bonus............................................. 114 93
Accrued vacation.......................................... 111 127
Income taxes payable...................................... 11 32
Other..................................................... 70 72
----- -----
$ 492 $ 590
===== =====
</TABLE>

The fair value of accounts payable and accrued expenses are considered to
approximate carrying value based on the short term nature of the accounts.

NOTE 8--NOTE PAYABLE TO STOCKHOLDERS

The Company has entered into a note payable agreement with its stockholders.
The note payable is unsecured, accrues interest at prime plus 0.5% and is due
on demand. The outstanding balance under the note at each of December 31, 1995
and 1996 was $51,000. No interest was accrued on the note at December 31,
1995. Interest of $6,000 and $5,000 for the years ended December 31, 1995 and
1996, respectively, was paid by the stockholders. Due to the demand provision,
management estimates the carrying value of the notes payable to stockholders
approximates fair value.

F-55
<PAGE>

MID-CONTINENT AGENCIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 9--NOTES PAYABLE

<TABLE>
<CAPTION>
DECEMBER
31,
------------
1995 1996
----- -----
(IN
THOUSANDS)
<S> <C> <C> <C>
Notes payable consist of the following:
Notes payable to bank, interest at prime plus 0.5%,
extinguished January 15, 1996............................ $ 5 $ --
Notes payable to bank, interest at prime plus 0.5%,
extinguished December 16, 1996........................... 100 --
Note payable to bank, interest at prime plus 0.5% (8.75%
at December 31, 1996), principal payments of $10,000 due
quarterly, balance due January 15, 1998.................. 140 100
Note payable to bank, interest at prime plus 0.5% (8.75%
at December 31, 1996), principal payments of $22,000 due
quarterly, balance due January 15, 1998.................. 327 241
Note payable to bank, interest at prime plus 0.5% (8.75%
at December 31, 1996), principal payments of $13,000 due
monthly, balance due February 28, 1998................... -- 175
Notes payable to bank, interest at prime plus 0.5% (8.75%
at December 31, 1996), principal due on September 15,
1997..................................................... -- 50
Notes payable to bank, interest at prime plus 0.5%,
principal due on October 31, 1997........................ -- --
----- -----
572 566
Current portion of long-term debt......................... (232) (388)
----- -----
Long-term debt............................................ $ 340 $ 178
===== =====
</TABLE>

All notes payable are payable to American National Bank and Trust Company of
Chicago and are secured by the assets of the Company and by personal
guarantees of the two stockholders. Due to the short maturities, management
estimates the carrying value of the notes payable approximates fair value.

Aggregate maturities of notes payable at December 31, 1996 are as follows
(in thousands):

NOTE 10--INCOME TAXES

The components of the provision for income taxes are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------
1995 1996
------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
Current tax expense:
Federal........................................... $ 37 $ 90
State & local..................................... 10 19
------- -------
47 109
Deferred tax expense (benefit)
Federal........................................... (11) (1)
State & local..................................... (2) (1)
------- -------
(13) (2)
------- -------
Total............................................... $ 34 $ 107
======= =======
</TABLE>

F-56
<PAGE>

MID-CONTINENT AGENCIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The provision for income taxes differs from the amount computed as the
statutory rates as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------
1995 1996
------- -------
(IN THOUSANDS)
<S> <C> <C>
Federal income at statutory rate........................ $ (4) $ 53
State income taxes, net of federal benefit.............. 5 12
Nondeductible expenses.................................. 41 41
Federal surtax exemption................................ (9) (2)
Change in valuation allowance........................... 1 3
------ -------
Total................................................. $ 34 $ 107
====== =======
</TABLE>

The significant items giving rise to the deferred tax assets and
(liabilities) are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------
1995 1996
------- -------
(IN THOUSANDS)
<S> <C> <C>
Deferred tax asset--non-current:
Deferred compensation................................. $ 60 $ 67
Unrealized loss on securities......................... -- 8
Charitable contribution carryforward.................. 10 13
Deferred tax asset valuation allowance................ (10) (13)
------- -------
Net deferred tax asset--non-current................. 60 75
Deferred tax liability--non-current:
Unrealized gain on securities......................... (2) --
Property plan & equipment............................. (4) (5)
------- -------
Net deferred tax liability--non-current............. (6) (5)
------- -------
Total................................................. $ 54 $ 70
======= =======
</TABLE>

The valuation allowance has been provided due to uncertainty surrounding the
realizability of charitable contribution carryforwards, which expire in years
1998 to 2002. Net operating loss carryforwards for state tax purposes exist in
the aggregate of approximately $1.2 million. No benefit has been recognized
for these carryforwards.

Due to the fact that the Company has filed tax returns based on a fiscal
year ending April 30, certain estimates have been used in deriving the
provisions for income taxes contained herein.

NOTE 11--EMPLOYEE BENEFIT PLANS

The Company has established a defined contribution and profit sharing plan
under Section 401(k) of the Internal Revenue Code (the "Plan") which covers
substantially all employees. Discretionary contributions to the plan were
$13,000 and $26,000, for the years ended December 31, 1995 and 1996,
respectively.

NOTE 12--COMMITMENTS AND CONTINGENCIES

The Company is party from time to time to various legal proceedings
incidental to its business. In the opinion of management none of these items
individually or in the aggregate would have a significant effect on the
financial position, results of operations, or cash flows of the Company.

F-57
<PAGE>

MID-CONTINENT AGENCIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The Company leases office space and equipment under operating leases and had
not entered into any capital lease transactions for the years ended December
31, 1995 and 1996. Minimum future rentals under non-cancelable operating
leases with initial or remaining terms of one year or more consist of the
following at December 31, 1996 (in thousands):

<TABLE>
<S> <C>
1997............................................................... $ 56
1998............................................................... 511
1999............................................................... 456
2000............................................................... 394
2001............................................................... 339
Thereafter......................................................... 644
------
$2,400
======
</TABLE>

Rent expense was $510,000 and $468,000 for the years ended December 31, 1995
and 1996, respectively.

NOTE 13--SUBSEQUENT EVENTS (UNAUDITED)

The Company and its stockholders have entered into a definitive agreement
with Compass International Services Corporation ("Compass") pursuant to which
Compass will acquire all outstanding shares of the Company's common stock in
exchange for cash and common stock of Compass, concurrent with the
consummation of the initial public offering of the common stock of Compass.

F-58
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Stockholders of
Impact Telemarketing Group, Inc.

In our opinion, the accompanying combined balance sheet and the related
combined statements of operations, stockholders' equity and cash flows present
fairly, in all material respects, the financial position of Impact
Telemarketing Group, Inc. and affiliated companies at December 31, 1996 and
the results of their operations and their cash flows for the year then ended,
in conformity with generally accepted accounting principles. 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 of these statements in accordance with
generally accepted auditing standards which 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, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for the
opinion expressed above.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has incurred losses from operations and is
not in compliance with certain covenants contained in its loan agreement. As a
result, the Company is limited in its ability to obtain additional borrowings
on its line of credit to fund operations. These matters raise substantial
doubt about the Company's ability to continue as a going concern. Management's
plans in regard to these matters are also described in Note 1. The financial
statements do not include any adjustments that might result from the outcome
of this uncertainty.

/s/ Price Waterhouse LLP

Chicago, Illinois
September 30, 1997

F-59
<PAGE>

IMPACT TELEMARKETING GROUP, INC.

COMBINED BALANCE SHEET

(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
ASSETS 1996 1997
------ ------------ -----------
(UNAUDITED)
<S> <C> <C>
Current assets:
Cash and cash equivalents........................... $ 166 $ 187
Accounts receivable, trade, net of allowance for
doubtful accounts of $40 and $66, respectively..... 1,618 1,991
Related party receivables........................... 188 190
Due from affiliate.................................. 26
Prepaid expenses and other current assets........... 4 4
------ ------
Total current assets.............................. 1,976 2,398
Property and equipment, net........................... 573 630
Other assets.......................................... 27 26
------ ------
$2,576 $3,054
====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Current portion of long-term debt................... $ 153 $ 139
Borrowings on line of credit........................ 80 550
Current portion of capitalized lease obligations.... 119 142
Accounts payable.................................... 1,605 1,320
Accrued expenses.................................... 209 439
------ ------
Total current liabilities......................... 2,166 2,590
Capitalized lease obligations, net of current portion. 293 337
------ ------
Total liabilities................................. 2,459 2,927
Commitments and contingencies
Stockholders' equity:
Common stock, no par value, 2,500 and 2,500 shares
authorized, 100 and 2,489 shares issued and
outstanding for Impact Telemarketing Group, Inc.
and Impact Telemarketing, Inc...................... 91 91
Retained earnings................................... 26 36
------ ------
Total stockholders' equity........................ 117 127
------ ------
$2,576 $3,054
====== ======
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-60
<PAGE>

IMPACT TELEMARKETING GROUP, INC.

COMBINED STATEMENT OF OPERATIONS

(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
SIX MONTHS
ENDED
YEAR ENDED JUNE 30,
DECEMBER 31, -------------
1996 1996 1997
------------ ------ ------
(UNAUDITED)
<S> <C> <C> <C>
Revenues............................................ $8,869 $4,045 $6,257
Operating expenses.................................. 6,961 2,884 4,817
------ ------ ------
Gross profit...................................... 1,908 1,161 1,440
Selling, general and administrative................. 2,108 1,093 1,340
------ ------ ------
Income (loss) from operations..................... (200) 68 100
Other (income) expense:
Interest expense.................................. 30 7 42
Gain on sale of property and equipment............ (105) -- --
------ ------ ------
Net income (loss)................................... $ (125) $ 61 $ 58
====== ====== ======
Pro forma tax provision (Unaudited) (See Note 2):
Income (loss) before income taxes................. $ (125) $ 61 $ 58
Pro forma provision for income taxes.............. (50) 24 23
------ ------ ------
Pro forma net income (loss)....................... $ (75) $ 37 $ 35
====== ====== ======
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-61
<PAGE>

IMPACT TELEMARKETING GROUP, INC.

COMBINED STATEMENT OF STOCKHOLDERS' EQUITY

(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
COMMON STOCK
---------------- ADDITIONAL
NUMBER PAID-IN RETAINED
OF SHARES AMOUNT CAPITAL EARNINGS TOTAL
--------- ------ ---------- -------- -----
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1995.......... 100 $-- $91 $191 $282
Net loss........................... -- -- -- (125) (125)
Distributions to stockholders...... -- -- -- (40) (40)
--- ---- --- ---- ----
Balance, December 31, 1996.......... 100 -- 91 26 117
Net income (unaudited)............. -- -- -- 58 58
Distributions to stockholders
(unaudited)....................... -- -- -- (48) (48)
--- ---- --- ---- ----
Balance, June 30, 1997 (unaudited).. 100 $-- $91 $ 36 $127
=== ==== === ==== ====
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-62
<PAGE>

IMPACT TELEMARKETING GROUP, INC.

STATEMENT OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED ENDED JUNE 30,
DECEMBER 31, ----------------
1996 1996 1997
------------ ------- -------
(UNAUDITED)
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss).............................. $(125) $ 61 $ 58
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization................ 128 75 91
Gain on sale of properties and equipment..... (105)
Provision for doubtful accounts.............. 77 8 26
Changes in operating assets and liabilities:
Accounts receivable, trade................. 443 465 (399)
Prepaid expenses and other current assets.. 7
Related party receivables.................. (72) (57) (2)
Due from affiliate......................... (26)
Other assets............................... (12) 3 1
Accounts payable and accrued liabilities... (245) (478) (55)
----- ------- -------
Net cash provided by (used in) operating
activities.............................. 96 77 (306)
Cash flows from investing activities:
Proceeds from sale of property and equipment... 157
Purchase of property and equipment............. (155) (77) (19)
----- ------- -------
Net cash provided by (used in) investing
activities.............................. 2 (77) (19)
Cash flows from financing activities:
Net (payments) borrowings on line of credit.... 80 456
Payments on notes payable...................... (45) (31) (146)
Payments on capital lease obligations.......... (85) (45) (62)
Borrowings under term loan..................... 146
Distributions to stockholders.................. (40) (40) (48)
----- ------- -------
Net cash provided by (used in) financing
activities.............................. (90) (116) 346
Net increase (decrease) in cash.................. 8 (116) 21
Cash and cash equivalents at beginning of year... 158 158 166
----- ------- -------
Cash and cash equivalents at end of year......... $ 166 $ 42 $ 187
===== ======= =======
Supplemental disclosure of cash flow information:
Cash paid for interest......................... $ 30 $ 13 $ 44
Noncash investing and financing activities:
Property acquired under capital leases....... $ 330 $ 26 $ 129
Assumption of North Dakota debt by third
party in conjunction with the sale of North
Dakota assets............................... $ 67 $ -- $ --
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-63
<PAGE>

IMPACT TELEMARKETING GROUP, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS

NOTE 1--NATURE OF OPERATIONS

The affiliated companies of Impact Telemarketing Group, Inc. ("Impact" or
the "Company") are individually incorporated companies owned by the same
stockholders. Each of the companies is engaged in providing primarily outbound
telemarketing services to national and regional companies in the insurance,
financial services, telecommunications and utilities industries. The
affiliated companies are comprised of Impact Telemarketing Group, Inc.
("Group"), Impact Telemarketing, Inc. ("Inc."), and Impact Telemarketing of
North Dakota, Inc. ("North Dakota"). The Company's headquarters are in
Woodbury, New Jersey.

The results of operations for the year ended December 31, 1996 include the
expenses of North Dakota. North Dakota provided telemarketing services to
Group only. North Dakota's net assets were sold to a third party on December
31, 1996 for $157,000 in cash and the assumption of $67,000 in liabilities. A
gain of $105,000 has been recognized for the difference between the total
purchase price and the net book value of the assets that were sold.

At June 30, 1997, the Company has a working capital deficit of $196,000 and
is not in compliance with certain covenants contained in its loan agreement
with a bank. Total amounts outstanding as of June 30, 1997 under the Company's
term loan and line of credit of $129,000 and $550,000, respectively, are
currently due and payable at the discretion of the bank. The accompanying
financial statements have been prepared assuming the Company will continue as
a going concern. Even with income from operations, the Company may require
additional financing to achieve its plans for 1997 and beyond. However, should
the Company be unable to obtain such financings, the Company will be required
to reduce discretionary spending. Management believes that it will be able to
reduce discretionary spending if required. The accompanying financial
statements do not include any adjustments that might result from the outcome
of these uncertainties.

NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of these 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 revenue and expenses during the
reporting period. Actual results could differ from those estimates.

Principles of Combination

The combination of the financial statements includes the accounts of all the
affiliated companies (Group, Inc. and North Dakota) in which the principal
stockholders exercised similar control and which had similar operations. All
significant inter-company transactions have been eliminated.

Revenue Recognition

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

Major Customers and Concentration of Credit Risk

For the year ended December 31, 1996, one customer accounted for
approximately 51% of revenues. The loss of the Company's major customer could
have a material adverse effect on the Company's business.

F-64
<PAGE>

IMPACT TELEMARKETING GROUP, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

Financial instruments which potentially subject the Company to concentrations
of credit risk consist principally of cash and accounts receivable. The Company
holds deposits in money market accounts. The Company's accounts receivable are
derived from sales to customers located in the United States and Canada. The
Company performs ongoing credit evaluations of its customers and generally does
not require collateral for its accounts receivable. The Company maintains
reserves for potential credit losses based upon the expected collectibility of
all accounts receivable. At December 31, 1996, one customer accounted for
approximately 81% of accounts receivable. At June 30, 1997, two customers
accounted for approximately 61% and 15% of accounts receivable.

Cash and Cash Equivalents

Cash includes cash and highly liquid investments purchased with an original
maturity of three months or less.

Property and Equipment

Property and equipment are recorded at cost less accumulated depreciation and
amortization. Depreciation is computed using the straight-line method over the
estimated useful lives of the respective assets, generally five to seven years.
Leasehold improvements are amortized over the lesser of the estimated useful
lives of the equipment or the lease term, generally ten years.

Income Taxes

The affiliated companies include separate legal entities that are controlled
by common shareholders. These entities file separate tax returns. Two companies
elected to be treated as an S Corporation for federal and state income tax
purposes and accordingly any liabilities for income taxes are the direct
responsibility of the stockholders. The other entity is a tax paying entity
which accounts for income taxes using the asset and liability method, whereby
deferred income tax assets and liabilities are determined based on the
differences between financial reporting and tax bases of assets and liabilities
and are measured using currently enacted tax rates and laws.

The taxable entity incurred losses in 1996. As of December 31, 1996, Inc. had
federal and state net operating loss carryforwards of approximately $47,000 and
$28,000, respectively. These carryforwards expire from 2003 through 2010.
Management believes sufficient uncertainty exists with regard to the
realization of these carryforwards. Accordingly, a valuation allowance of
$75,000 has been provided as of December 31, 1996.

The unaudited pro forma income tax information included in the Statement of
Operations is presented in accordance with Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes," as if the Company had been
subject to federal and state income taxes for the entire periods presented.

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 long-term debt and
capitalized lease obligations approximates fair value at December 31, 1996.

F-65
<PAGE>

IMPACT TELEMARKETING GROUP, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

Unaudited Interim Financial Information

The interim financial information as of June 30, 1997 and for the six months
ended June 30, 1996 and 1997 has been prepared from the unaudited financial
records of the Company and, in the opinion of management, reflect all
adjustments, consisting only of normal recurring items, necessary for a fair
presentation of the financial position and results of operations and of cash
flows for the respective interim periods.

NOTE 3--RELATED PARTY TRANSACTIONS

The Company rents office space owned by a partnership whose partners are the
sole stockholders of the Company. The office space is rented on a month to
month basis at above market rates. Total rent expense was $139,000 for the
year ended December 31, 1996.

As of December 31, 1996, the Company has total loans receivable from its
sole stockholders and partnerships owned by the Company's sole stockholders of
$188,000. There are no scheduled dates of repayment or interest rates
associated with these loans.

NOTE 4--PROPERTY AND EQUIPMENT, NET

<TABLE>
<CAPTION>
DECEMBER 31,
1996
--------------
(IN THOUSANDS)
<S> <C> <C>
Furniture and fixtures................................. $ 144
Computer equipment and software........................ 752
Leasehold improvements................................. 81
-----
$ 977
Less: Accumulated depreciation......................... (404)
-----
$ 573
=====
</TABLE>

Depreciation expense for the year ended December 31, 1996 was $75,000.

Included in fixed assets shown above as of December 31, 1996 are fixed
assets under capital leases with a gross amount of $518,000. Total
amortization expense was $53,000 for the year ended December 31, 1996.

NOTE 5--NOTES PAYABLE

In December 1996, the Company entered into a Loan Agreement (the
"Agreement") with a bank which provided for a $650,000 line of credit and a
$150,000 term loan (the "Term Loan"). Borrowings on the line of credit are
limited to 75% of eligible accounts receivable, as defined. Principal
outstanding on the line of credit and Term Loan bear interest at the bank's
prime rate, as defined, plus .50% ( 8.75% and 9.0% as of December 31, 1996 and
June 30, 1997, respectively). The line of credit expires December 31, 1997 and
is secured by substantially all of the Company's assets. Payments are due
monthly for accrued interest only beginning on March 1, 1997. All principal
and remaining interest is due and payable on December 1, 1997. Amounts
outstanding under this line of credit are $30,000 and $550,000 as of December
31, 1996 and June 30, 1997, respectively. The Agreement contains restrictive
covenants, which, among other things, require the maintenance of a debt
service ratio, limitations on debt and dividends and minimum tangible net
worth, as defined in the Agreement.

F-66
<PAGE>

IMPACT TELEMARKETING GROUP, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

In May 1997, the Company's line of credit under the Agreement was increased
to $850,000. In June 1997, the line of credit was reduced to $650,000 as a
result of the Company's default on certain covenants contained in the
Agreement.

In April 1997, the Company obtained a $100,000 letter of credit facility
under the Agreement. Borrowings under the letter of credit facility are due
upon demand, bear interest at the bank's prime rate, as defined, plus 2%
(10.5% as of June 30, 1997) and are secured by substantially all of the
Company's assets. No borrowings were outstanding under this letter of credit
facility as of June 30, 1997.

At December 31, 1996, the Company had a $100,000 revolving line of credit
agreement with a bank. Borrowings bear interest at the bank's prime rate, as
defined, plus 1.5% (9.75% at December 31, 1996). The balance outstanding under
this line of $50,000 at December 31, 1996 was repaid in January 1997 upon
termination of the line of credit agreement.

Notes payable consists of:

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1996 1997
------------ -----------
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C>
Term loan payable to a bank, secured by
substantially all of the Company's assets,
payable in equal monthly installments of
$4,000 over 36 months......................... -- $129
Installment note payable to a bank, secured by
accounts receivable, furniture and fixtures,
and liens on personal assets of stockholders,
payable in equal monthly installments of
$3,000, including interest at 9.5% through
May 2001...................................... $143 --
Note payable to a relative of the stockholders.
No stated maturity date or interest rate...... 10 10
---- ----
$153 $139
==== ====
</TABLE>

The installment note payable was repaid in January 1997 with borrowings
obtained from the term loan.

NOTE 6--CAPITAL LEASES

The Company leases certain equipment under capital leases. The Company's
weighted average interest rate was 9% for the year ended December 31, 1996.
Future minimum lease payments as of December 31, 1996 are as follows (in
thousands):

<TABLE>
<S> <C>
1997................................................................ $151
1998................................................................ 135
1999................................................................ 89
2000................................................................ 64
2001................................................................ 46
----
Total minimum obligations........................................... $485
Less interest at 9%................................................. 73
----
Present value of minimum lease payments............................. 412
Less: Current portion............................................... 119
----
$293
====
</TABLE>

F-67
<PAGE>

IMPACT TELEMARKETING GROUP, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

NOTE 7--EMPLOYEE BENEFIT PLANS

The Company has a savings plan under Section 401(k) of the Internal Revenue
Code (the "Plan"). The Plan allows all eligible employees to defer up to 15%
of their income on a pretax basis through contributions to the Plan. As of
June 30, 1997, the Company has not made any contributions under the Plan.

NOTE 8--COMMITMENTS AND CONTINGENCIES

Leases

The Company leases certain facilities and equipment under noncancelable
operating leases through the year 2001. Future minimum payments, by year and
in the aggregate, under noncancelable operating leases with initial or
remaining terms of one year or more consist of the following at December 31,
1996 (in thousands):

On April 7, 1997, the Company amended the operating lease for one of its
facilities. Under this amendment, the lease term was extended through 2002 and
the leased space was expanded. The expansion of space results in additional
annual rent from September 15, 1997 through September 15, 2002 as follows (in
thousands):

<TABLE>
<S> <C>
1997................................................................. $ 30
1998................................................................. 105
1999................................................................. 107
2000................................................................. 109
2001................................................................. 133
Thereafter........................................................... 174
----
$658
====
</TABLE>

Rent expense was $182,000 for the year ended December 31, 1996.

Subcontractor Arrangements

Impact has guaranteed the payments of telephone charges incurred by its
major subcontractors with the telephone company. This guaranty arrangement
expires in March, 1998, and to date, no amounts have been claimed by the
telephone company under this arrangement. Impact has a contractual right to
offset any claims by the telephone company against amounts owed by Impact to
these subcontractors.

Legal Matters

In 1996 the Company became a party to certain lawsuits and claims arising
out of the conduct of its business. While the ultimate outcome of these
matters cannot be predicted with certainty, management expects that these
matters will not have a material adverse effect on the financial position or
results of the Company.

NOTE 9--SUBSEQUENT EVENT (UNAUDITED)

The Company and its stockholders have entered into a definitive agreement
with Compass International Services Corporation ("Compass") pursuant to which
Compass will acquire all outstanding shares of the Company's common stock in
exchange for cash and common stock of Compass, concurrent with the
consummation of the initial public offering of the common stock of Compass.

F-68
<PAGE>

The inside back cover of the Prospectus contains a map of the United States
with all of the Company's locations
<PAGE>

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

No dealer, sales representative or any other person has been authorized to
give any information or to make any representations in connection with the Of-
fering other than those contained in this Prospectus, and, if given or made,
such information or representations must not be relied upon as having been au-
thorized by the Company or the Underwriters. This Prospectus does not consti-
tute an offer to sell or a solicitation of any offer to buy any securities
other than the shares of Common Stock to which it relates or an offer to, or a
solicitation of, any person in any jurisdiction where such an offer or solici-
tation would be unlawful. Neither the delivery of this Prospectus nor any sale
made hereunder shall, under any circumstances, create implication that there
has been no change in the affairs of the Company or that information contained
herein is correct as of any time subsequent to the date hereof.

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

TABLE OF CONTENTS

-------------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary........................................................ 3
Risk Factors.............................................................. 9
The Company............................................................... 15
Use of Proceeds........................................................... 17
Dividend Policy........................................................... 17
Capitalization............................................................ 18
Dilution.................................................................. 19
Selected Financial Data................................................... 20
Management's Discussion and Analysis of Financial Condition and Results of
Operations............................................................... 22
Business.................................................................. 31
Management................................................................ 43
Certain Transactions...................................................... 48
Principal Stockholders.................................................... 51
Description of Capital Stock.............................................. 52
Shares Eligible for Future Sale........................................... 53
Underwriting.............................................................. 55
Certain Legal Matters..................................................... 56
Experts................................................................... 56
Additional Information.................................................... 57
Index to Financial Statements............................................. F-1
</TABLE>

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

Until , 1997 (25 days after the date of this Prospectus), all
dealers effecting transactions in the registered securities offered hereby,
whether or not participating in this distribution, may be required to deliver a
Prospectus. This is in addition to the obligation of dealers to deliver a
Prospectus when acting as Underwriters and with respect to their unsold
allotments or subscriptions.

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

4,100,000 SHARES

LOGO

COMPASS INTERNATIONAL
SERVICES CORPORATION

COMMON STOCK

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

PROSPECTUS

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

NationsBanc
Montgomery
Securities, Inc.

Lehman Brothers

, 1997

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

Set forth below is an estimate of the approximate amount of fees and
expenses (other than underwriting commissions and discounts) payable by the
Company in connection with the issuance and distribution of the Common Stock
pursuant to the Prospectus contained in this Registration Statement. The
Company will pay all of these expenses.

<TABLE>
<CAPTION>
APPROXIMATE
AMOUNT
-----------
<S> <C>
Securities and Exchange Commission registration fee........... $ 17,146
NASD filing fee............................................... 6,158
Nasdaq National Market listing fee............................ 47,084
Accountants' fees and expenses................................ 900,000
Blue Sky fees and expenses.................................... 10,000
Legal fees and expenses....................................... 900,000
Transfer Agent and Registrar fees and expenses................ 10,000
Printing and engraving........................................ 200,000
Miscellaneous expenses........................................ 909,612
----------
Total....................................................... $3,000,000
==========
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Company's Amended and Restated Certificate of Incorporation provides
that the Company shall, to the fullest extent permitted by Section 145 of the
Delaware General Corporation Law, as amended from time to time, indemnify all
persons whom it may indemnify pursuant thereto.

Section 145 of the Delaware General Corporation Law permits a corporation,
under specified circumstances, to indemnify its directors, officers, employees
or agents against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlements actually and reasonably incurred by them in
connection with any action, suit or proceeding brought by third parties by
reason of the fact that they were or are directors, officers, employees, or
agents of the corporation, if such directors, officers, employees or agents
acted in good faith and in a manner they reasonably believed to be in or not
opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reason to believe their conduct was
unlawful. In a derivative action, i.e., one by or in the right of the
corporation, indemnification may be made only for expenses actually and
reasonably incurred by directors, officers, employees or agents in connection
with the defense or settlement of an action or suit, and only with respect to
a matter as to which they shall have acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation, except that no indemnification shall be made if such person shall
have been adjudged liable to the corporation, unless and only to the extent
that the court in which the action or suit was brought shall determine upon
application that the defendant directors, officers, employees or agents are
fairly and reasonably entitled to be indemnified for such expenses despite
such adjudication of liability.

The Company's Amended and Restated Certificate of Incorporation provides
that the Company's directors will not be personally liable to the Company or
its stockholders for monetary damages resulting from breaches of their
fiduciary duty as directors except (a) for any breach of the duty of loyalty
to the Company 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 Delaware General Corporation Law, which makes
directors liable for unlawful dividends or unlawful stock repurchase or
redemptions or (d) for transactions from which directors derive improper
personal benefit.

II-1
<PAGE>

Upon the effectiveness of this Registration Statement the Company will enter
into indemnification agreements with its directors and officers. The form of
such agreement is filed as an Exhibit hereto. The Company expects to have
director and officer insurance coverage concurrently with the consummation of
the Offering.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

The following information relates to securities of the Company issued or
sold by the Company since inception that were not registered under the
Securities Act:

The Company was organized in April 1997 and issued 15,000 shares of its
Common Stock to its founders at a price of $10.00 per share. Of such shares,
10,000 were issued to BGL Capital Partners, LLC, 2,250 were issued to Michael
J. Cunningham, 1,750 were issued to Mahmud U. Haq and 1,000 were issued to
Richard A. Alston. The offer and sale of these shares was exempt from
registration under the Securities Act of 1933, as amended ("Securities Act"),
in reliance on the exemption provided by Section 4(2) thereof. Prior to the
consummation of the Offering, the number of these shares will be increased to
1,682,769 by a 112.185-to-1 stock split.

See "Certain Transactions" for a discussion of the shares of Common Stock to
be issued in connection with the Acquisitions. It is anticipated these
transactions will be completed without registration under the Securities Act
in reliance on the exemption provided by Section 4(2).

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) EXHIBITS.

<TABLE>
<C> <S>
1.1* Form of Underwriting Agreement.
2.1* Stock Purchase Agreement dated as of October 3, 1997 by and
among the Registrant, The Mail Box, Inc. and the Stockholders
named therein.
2.2* Stock Purchase Agreement dated as of October 3, 1997 by and
among the Registrant, National Credit Management Corporation,
and the Stockholders named therein.
2.3* Stock Purchase Agreement dated as of October 3, 1997 by and
among the Registrant, BRMC of Delaware, Inc. and the
Stockholders named therein.
2.4* Stock Purchase Agreement dated as of October 3, 1997 by and
among the Registrant, Mid-Continent Agencies, Inc. and the
Stockholder named therein.
2.5* Stock Purchase Agreement dated as of October 3, 1997 by and
among the Registrant, Impact Telemarketing Group, Inc. and the
Stockholders named therein.
3.1 Form of Amended and Restated Certificate of Incorporation of the
Registrant.
3.2 Bylaws of the Registrant.
4.1* Specimen stock certificate representing Common Stock.
5* Opinion of Katten Muchin & Zavis as to the legality of the
securities being registered (including consent).
10.1* Form of 1997 Employee Incentive Compensation Plan.
10.2* Form of Employee Stock Purchase Plan.
10.3* Form of Employment Agreement between the Registrant and Michael
J. Cunningham.
10.4* Form of Employment Agreement between the Registrant and Mahmud
U. Haq.
10.5* Form of Employment Agreement between the Registrant and Richard
A. Alston.
10.6* Form of Employment Agreement between the Registrant and certain
Founding Company owners.
10.7* Form of Stockholders' Agreement.
</TABLE>

II-2
<PAGE>

<TABLE>
<C> <S>
10.8* Bonus Agreement dated as of October 2, 1997 among the
Registrant, National Credit Management Corporation and the
Stockholders named therein.
10.9 Form of Indemnification Agreement between the Registrant and its
officers and directors.
23.1 Consent of Price Waterhouse LLP.
23.2 Consent of Arthur Andersen LLP.
23.3 Consent of Ernst & Young LLP.
23.4* Consent of Katten Muchin & Zavis (contained in its opinion to be
filed as Exhibit 5 hereto).
23.5 Consent to be named as prospective director (Kenneth W. Murphy).
23.6 Consent to be named as prospective director (Leeds Hackett)
23.7 Consent to be named as prospective director (John Maloney)
23.8 Consent to be named as prospective director (Leslie J.
Kirschbaum)
23.9 Consent to be named as prospective director (Edward A. DuCoin)
24 Power of Attorney (see signature page).
</TABLE>
- --------
*To be filed by amendment

(b) FINANCIAL STATEMENT SCHEDULES.

Not Applicable.

ITEM 17. UNDERTAKINGS.

The Registrant hereby undertakes:

(1) To provide to the Underwriters at the closing specified in the
underwriting agreement, certificates in such denominations and registered in
such names as required by the Underwriters to permit prompt delivery to each
purchaser.

(2) For purposes of determining any liability under the Securities Act, 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 Company pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.

(3) For the purpose of determining any liability under the Securities Act,
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.

Insofar as indemnification for liabilities arising under the Securities Act
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 Commission, such indemnification
is against public policy as expressed in the Securities 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 of controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel
the matter had 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 Securities Act and will be governed
by the final adjudication of such issue.

II-3
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Chicago, and State of
Illinois on the 2nd day of October, 1997.

Compass International Services
Corporation

/s/ Michael J. Cunningham
By: _________________________________
Michael J. Cunningham
Chairman and Chief Executive
Officer

POWER OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints
Michael J. Cunningham his true and lawful attorney-in-fact and agent, to sign
on his behalf, individually and in each capacity stated below, all amendments
and post-effective amendments to this Registration Statement on Form S-1 and
to file the same, with all exhibits thereto and any other documents in
connection therewith, with the Commission under the Securities Act of 1933,
granting unto said attorney-in-fact and agent full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully and to all intents and purposes as each might
or could do in person, hereby ratifying and confirming each act that said
attorneys-in-fact and agent may lawfully do or cause to be done by virtue
thereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----

<S> <C> <C>
/s/ Michael J. Cunningham Chairman and Chief Executive October 2, 1997
____________________________________ Officer (Principal
Michael J. Cunningham Executive Officer)

/s/ Richard A. Alston Chief Financial Officer October 2, 1997
____________________________________ (Principal Financial and
Richard A. Alston Accounting Officer)

/s/ Scott H. Lang Director October 2, 1997
____________________________________
</TABLE> Scott H. Lang

II-4

<PAGE>

EXHIBIT 3.1

FORM OF

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION
OF
COMPASS INTERNATIONAL SERVICES CORPORATION

(Original Certificate of Incorporation
filed April 29, 1997)

Compass International Services Corporation (the "Corporation"), a
corporation organized and existing under and by virtue of the General
Corporation Law of the State of Delaware (the "Law"), does hereby certify:

A. That the Board of Directors of the Corporation adopted a resolution
setting forth the Amended and Restated Certificate of Incorporation set forth
below, declaring it advisable and submitting it to the stockholders entitled to
vote in respect thereof for their consideration of such Amended and Restated
Certificate of Incorporation.

B. That by written consent executed in accordance with Section 228 of the
Law, the holders of a majority of the outstanding stock has voted in favor of
the adoption of the Amended and Restated Certificate of Incorporation set forth
below.

C. That the Amended and Restated Certificate of Incorporation set forth
below has been duly adopted in accordance with Sections 242 and 245 of the Law:

ARTICLE I

The name of the corporation is Compass International Services Corporation.

ARTICLE II

The address of the Corporation's registered office in the State of Delaware
is 30 Old Rudnick Lane, Suite 100, Dover, Delaware 19901, in the County of Kent.
The name of its registered agent at such address is Lexis Document Services.

ARTICLE III

The nature of the business to be conducted or promoted is to engage in any
lawful act or activity for which corporations may be organized under the Law.

<PAGE>

ARTICLE IV

A. The Corporation shall have authority to issue the following classes of
stock, in the number of shares and at the par value as indicated opposite the
name of the class:

<TABLE>
<CAPTION>
NUMBER OF
SHARES PAR VALUE
CLASS AUTHORIZED PER SHARE
--------------- ---------- -------------
<S> <C> <C>
Common Stock 50,000,000 $.01
Preferred Stock 10,000,000 $.01
</TABLE>

As of the date of the filing of this Amended and Restated Certificate of
Incorporation, each issued share of Common Stock of the Corporation shall be
reclassified and changed into 112.1846 shares of Common Stock having the terms
specified in this ARTICLE IV. Each outstanding stock certificate which
immediately prior to the date hereof represented a number of shares of Common
Stock shall, without any action on the part of the holder, hereupon and
hereafter, until surrendered as hereinafter provided, represent that number of
shares of Common Stock equal to 112.1846 times the number of shares of the
Common Stock represented by such certificate. The registered holder of each such
certificate may on or after the date hereof surrender such certificate to the
Corporation for cancellation and, upon such surrender, shall receive in exchange
therefor, without charge, a new certificate registered in the name of such
holder representing that number of shares of Common Stock equal to 112.1846
times the number of shares of Common Stock which, prior to the date of filing
hereof, was represented by the certificate(s) representing shares of Common
Stock.

B. The designations and the powers, preferences and relative,
participating, optional or other rights of the capital stock and the
qualifications, limitations or restrictions thereof are as follows:

1. Common Stock.
------------

a. Voting Rights: Except as otherwise required by law or
expressly provided herein, the holders of shares of Common Stock shall
be entitled to one vote per share on each matter submitted to a vote
of the stockholders of the Corporation.

b. Dividends: Subject to the rights of the holders, if any, of
preferred stock, the holders of Common Stock shall be entitled to
receive dividends at such times and in such amounts as may be
determined by the Board of Directors of the Corporation.

-2-
<PAGE>

c. Liquidation Rights: In the event of any liquidation,
dissolution or winding up of the Corporation, whether voluntary or
involuntary, after payment or provision for payment of the debts and
other liabilities of the Corporation and the preferential amounts to
which the holders of any outstanding shares of Preferred Stock shall
be entitled upon dissolution, liquidation or winding up, the assets of
the Corporation available for distribution to stockholders shall be
distributed ratably among the holders of the shares of Common Stock.

2. Preferred Stock.
---------------

Preferred Stock may be issued from time to time in one or more
series. Subject to the other provisions of this Amended and Restated
Certificate of Incorporation, the Board of Directors is authorized, subject
to any limitations prescribed by law, to provide for the issuance of and to
issue shares of the Preferred Stock in series, and by filing a certificate
pursuant to the laws of the State of Delaware, to establish from time to
time the number of shares to be included in each such series, and to fix
the designation, powers, preferences and rights of the shares of each such
series and any qualifications, limitations or restrictions thereof. The
number of authorized shares of Preferred Stock may be increased or
decreased (but not below the number of shares thereof then outstanding) by
the affirmative vote of the holders of a majority of the Common Stock,
without a vote of the holders of any Preferred Stock, or of any series
thereof, unless a vote of any such holders is required pursuant to the
certificate or certificates establishing such series of Preferred Stock.

ARTICLE V

The business and affairs of the Corporation shall be managed by or under
the direction of a board of directors. The number of directors shall be
determined from time to time by resolution adopted by the affirmative vote of a
majority of the directors in office at the time of adoption of such resolution.
Initially, the number of directors shall be nine.

Such directors shall be divided into three classes, Class I, Class II and
Class III; with each Class having three members. At the election of directors
immediately following the adoption of this Amended and Restated Certificate of
Incorporation, Class I directors will be elected for a term expiring at the
annual meeting relating to the Corporation's 1998 fiscal year (but occurring in
calendar year 1999) (the "1998 Annual Meeting"), Class II directors will be
elected for a term expiring at the annual meeting following the Corporation's
1999 fiscal year (but occurring in calendar year 2000) and Class III directors
will be elected for a term expiring at the annual meeting relating to the
Corporation's 2000 fiscal year (but occurring in calendar year 2001). At each
annual meeting of stockholders commencing with the 1998 Annual Meeting,
successors to the class of directors whose term expires at that annual meeting
shall be elected for a three-year term. If the number of directors is changed,
any increase or decrease shall be apportioned among the classes by the Board of
Directors so as to maintain the number

-3-
<PAGE>

of directors in each class as nearly equal as reasonably possible, and any
additional director of any class elected to fill a vacancy resulting from an
increase in such class shall hold office for a term that shall coincide with the
remaining term of that class. In no case will a decrease in the number of
directors shorten the term of any incumbent director even though such decrease
may result in an inequality of the classes until the expiration of such term. A
director shall hold office until the annual meeting of the year in which his or
her term expires and until his or her successor shall be elected and shall
qualify, subject, however, to prior death, resignation, retirement or removal
from office. No director elected by the stockholders of the Corporation may be
removed except for cause. Except as required by law or the provisions of this
Amended and Restated Certificate of Incorporation, all vacancies on the board of
directors and newly-created directorships shall be filled by the board of
directors. Any director elected to fill a vacancy not resulting from an
increase in the number of directors shall have the same remaining term as that
of his or her predecessor.

Notwithstanding the foregoing, whenever the holders of any one or more
classes or series of preferred stock issued by the Corporation shall have the
right, voting separately by class or series, to elect directors at an annual or
special meeting of stockholders, the election, term of office, filling of
vacancies and other features of such directorship shall be governed by the terms
of this Amended and Restated Certificate of Incorporation and any resolutions of
the Board of Directors applicable thereto, and such directors so elected shall
not be divided into classes pursuant to this Article V. Notwithstanding
anything to the contrary contained in this Amended and Restated Certificate of
Incorporation, the affirmative vote of the holders of at least 80% of the voting
power of the shares entitled to vote generally in the election of directors
shall be required to amend, alter or repeal, or to adopt any provision
inconsistent with, this Article V.

In furtherance and not in limitation of the powers conferred by statute,
the Board of Directors is expressly authorized to adopt, amend or repeal the By-
laws of the Corporation.

ARTICLE VI

Election of Directors need not be by written ballot unless the By-laws of
the Corporation so provide.

ARTICLE VII

The Corporation reserves the right to amend, alter or repeal any provision
contained in this Amended and Restated Certificate of Incorporation, in the
manner now or hereafter prescribed by statute, and all rights conferred upon the
stockholders herein are granted subject to this reservation.

-4-
<PAGE>

ARTICLE VIII

The Corporation shall, in accordance with and to the full extent now
or hereafter permitted by law, indemnify and upon request advance expenses to
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, whether civil,
criminal, administrative or investigative (including, without limitation, an
action by or in the right of the Corporation), by reason of his acting as a
director or officer of the Corporation (and the Corporation, in the discretion
of the Board of Directors, may so indemnify a person by reason of the fact that
he is or was an employee of the Corporation or is or was serving at the request
of the Corporation in any other capacity for or on behalf of the Corporation)
against any liability or expense (including attorneys' fees and expenses)
actually and reasonably incurred by such person in respect thereof; provided,
however, that the Corporation shall not be obligated to indemnify or advance
expenses to any such person (i) with respect to proceedings, claims or actions
initiated or brought voluntarily by such person and not by way of defense, or
(ii) for any amounts paid in settlement of an action effected without the prior
written consent of the Corporation to such settlement. Such indemnification is
not exclusive of any other right to indemnification provided by law, agreement
or otherwise.

ARTICLE IX

No director of the Corporation shall be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, provided, however, that this provision shall not eliminate
or limit the liability of a director (i) for any breach of the director's duty
of loyalty to the Corporation or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law, (iii) under Section 174 of the Law, or (iv) for any transaction from
which the director derived an improper personal benefit.

ARTICLE X

No amendment to or repeal of Articles VIII or IX of this Amended and
Restated Certificate of Incorporation shall apply to or have any effect on the
rights of any individual referred to in Articles VIII or IX for or with respect
to acts or omissions of such individual occurring prior to such amendment or
repeal.

ARTICLE XI

A. Written Consent. At any time after the closing of an initial
public offering of the Corporation's Common Stock, any action required or
permitted to be taken by the stockholders

-5-
<PAGE>

of the Corporation must be effected at a duly called annual or special meeting
of stockholders of the Corporation and may not be effected by any consent in
writing by such stockholders.

B. Special Meetings. Special meetings of stockholders of the
Corporation may be called upon not less than ten nor more than 60 days' written
notice only by the Board of Directors pursuant to a resolution approved by a
majority of the Board of Directors.

C. Amendment. Notwithstanding anything contained in this Amended and
Restated Certificate of Incorporation to the contrary, the affirmative vote of
the holders of at least 80% of the shares entitled to vote generally in the
election of directors shall be required to amend, alter or repeal, or to adopt
any provision inconsistent with, this Article XI.

ARTICLE XII

Meetings of stockholders may be held within or without the State of
Delaware as the By-Laws of the Corporation may provide. The books of the
Corporation may be kept outside the State of Delaware at such place or places as
may be designated from time to time by the Board of Directors of the Corporation
or in the By-laws of the Corporation.

ARTICLE XIII

The By-laws of the Corporation may be altered, amended, or repealed or
new By-laws may be adopted by the Board of Directors or by the vote of the
holders of 66-2/3% of the votes entitled to be cast by the shares entitled to
vote generally for the election of directors if notice of such alteration,
amendment, repeal or adoption of new By-laws is contained in the notice of such
special meeting.

IN WITNESS WHEREOF, the Corporation has caused this Amended and
Restated Certificate of Incorporation to be signed by its Chief Executive
Officer on _______________.

COMPASS INTERNATIONAL SERVICES
CORPORATION

By: ____________________________________
Name: ____________________________________
Its: ____________________________________

-6-

<PAGE>

EXHIBIT 3.2

BY-LAWS

COMPASS INTERNATIONAL SERVICES CORPORATION

ARTICLE I

Offices

Section 1.1. The registered office shall be in the City of Dover, County
of Kent, State of Delaware.

Section 1.2. The Corporation may also have offices at such other places
both within and without the State of Delaware as the Board of Directors may from
time to time determine or the business of the Corporation may require.

ARTICLE II

Meetings of Stockholders

Section 2.1. All meetings of the stockholders for the election of
directors shall be held at such place within or without the State of Delaware as
shall be designated from time to time by the Board of Directors and stated in
the notice of the meeting. Meetings of stockholders for any other purpose may
be held at such time and place, within or without the State of Delaware, as
shall be stated by the Board of Directors in its notice of the meeting.

Section 2.2. Annual meetings of stockholders, at which stockholders shall
elect directors as provided in the Corporation's Certificate of Incorporation
and Section 2.4 of Article II of the by-laws and transact such other business as
may properly be brought before the meeting in accordance with Section 2.5 of
Article II of the by-laws, shall be held on such business day within the 180-day
period following the end of the Corporation's fiscal year as shall be designated
from time to time by the Board of Directors and stated in the notice of the
meeting.

Section 2.3. Except as otherwise required by law, written notice of the
annual meeting stating the place, date and hour of the meeting shall be given to
each stockholder entitled to vote at such meeting not fewer than 10 nor more
than 60 days before the date of the meeting.

Section 2.4. Only persons who are nominated in accordance with the
following procedures shall be eligible to serve as directors. Nominations of
persons for election to the Board of Directors of the Corporation at a meeting
of stockholders may be made (i) by or at the direction of the Board of
Directors, or (ii) by any stockholder of the Corporation entitled to vote for
the election of directors at the meeting who complies with the notice procedures
set forth in
<PAGE>

this Article II, Section 2.4. Such nominations, other than those made by or at
the direction of the Board of Directors, shall be made pursuant to timely notice
in writing to the Secretary of the Corporation. To be timely, a stockholder's
notice must be delivered to, or mailed and received by, the Secretary of the
Corporation at the principal executive offices of the Corporation not less than
60 nor more than 90 days prior to the meeting; provided, however, that if the
Corporation has not "publicly disclosed" (in the manner provided in the last
sentence of this Article II, Section 2.4) the date of the meeting at least 70
days prior to the meeting date, notice may be timely made by a stockholder under
this Section if received by the Secretary of the Corporation not later than the
close of business on the tenth day following the day on which the Corporation
publicly disclosed the meeting date. Such stockholder's notice shall set forth
(i) as to each person whom the stockholder proposes to nominate for election or
re-election as a director, all information relating to such person that is
required to be disclosed in solicitations of proxies for election of directors,
or is otherwise required, in each case pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended (including such person's written
consent to being named in the proxy statement as a nominee and to serving as
director if elected); and (ii) as to the stockholder giving notice (A) the name
and address, as they appear on the Corporation's books, of such stockholder and
(B) the class and number of shares of the Corporation which are beneficially
owned by such stockholder. At the request of the Board of Directors any person
nominated by the Board of Directors for election as a director shall furnish to
the Secretary of the Corporation that information required to be set forth in a
stockholder's notice of nomination which pertains to the nominee. No person
shall be eligible to serve as a director of the Corporation unless nominated in
accordance with the procedures set forth herein. The presiding officer shall, if
the facts so warrant, determine and declare to the meeting that a nomination was
not made in accordance with the procedures prescribed by the by-laws, and if
such officer should so determine, such officer shall so declare to the meeting
and the defective nomination shall be disregarded. For purposes of these by-
laws, "publicly disclosed" or "public disclosure" shall mean disclosure in a
press release reported by the Dow Jones News Service, Associated Press or a
comparable national news service or in a document publicly filed by the
Corporation with the Securities and Exchange Commission.

Section 2.5. At an annual meeting of the stockholders, only such business
shall be conducted as shall have been brought before the meeting (i) by or at
the direction of the Board of Directors, or (ii) by any stockholder of the
Corporation who complies with the notice procedures set forth in this Article
II, Section 2.5, in the time herein provided. For business to be properly
brought before an annual meeting by a stockholder, the stockholders must deliver
written notice to, or mail such written notice so that it is received by, the
Secretary of the Corporation, at the principal executive offices of the
Corporation, not less than 120 nor more than 150 days prior to the first
anniversary of the date of the Corporation's consent solicitation or proxy
statement released to stockholders in connection with the previous year's
election of directors or meeting of stockholders, except that if no annual
meeting of stockholders or election by consent was held in the previous year or
if the date of the annual meeting has been changed by more than 30 days from the
previous year's meeting, a proposal shall be received by the Corporation within
10 days after the Corporation has "publicly disclosed" the date of the meeting
in the manner provided in Article II, Section 2.4 above. The stockholder's
notice to the

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<PAGE>

Secretary shall set forth as to each matter the stockholder proposes to bring
before the annual meeting (A) a brief description of the business desired to be
brought before the annual meeting and the reasons for conducting such business
at the annual meeting, (B) the name and address, as they appear on the
Corporation's books, of the stockholder proposing such business, (C) the class
and number of shares of the Corporation which are beneficially owned by the
stockholder and (D) any material interest of the stockholder in such business.
At an annual meeting, the presiding officer shall, if the facts warrant,
determine and declare to the meeting that business was not properly brought
before the meeting and in accordance with the provisions of this Article II,
Section 2.5, and if he should so determine, he shall so declare to the meeting
and any such business not properly brought before the meeting shall not be
transacted. Whether or not the foregoing procedures are followed, no matter
which is not a proper matter for stockholder consideration shall be brought
before the meeting.

Section 2.6. Special meetings of the stockholders may be called only by
the Board of Directors. The business transacted at any special meeting of the
stockholders shall be limited to the purposes stated in the notice for the
meeting transmitted to stockholders.

Section 2.7. Written notice of a special meeting stating the place, date
and hour of the meeting and the purpose or purposes for which the meeting is
called, shall be given not fewer than 10 nor more than 60 days before the date
of the meeting, to each stockholder entitled to vote at such meeting.

Section 2.8. In order that the Corporation may determine the stockholders
entitled to vote at any meeting of stockholders or any adjournment thereof, or
entitled to receive payment of any dividend or other distribution or allotment
of any rights, or entitled to exercise any rights in respect of any change,
conversion or exchange of stock or for the purpose of any other lawful action,
the Board of Directors may fix a record date, which shall not precede the date
upon which the resolution fixing the record date is adopted, and which shall be
(i) not more than 60 nor less than 10 days before the date of a meeting, and
(ii) not more than 60 days prior to the other action. A determination of
stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting; provided, however,
that the Board of Directors may fix a new record date for any adjourned meeting.

Section 2.9. The officer who has charge of the stock ledger of the
Corporation shall prepare and make, at least 10 days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
10 days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present.

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<PAGE>

Section 2.10. The holders of a majority of the voting power of the stock
issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum at all meetings of the
stockholders for the transaction of business except as otherwise provided by
statute or by the Certificate of Incorporation. If, however, such quorum shall
not be present or represented at any meeting of the stockholders, the
stockholders entitled to vote thereat, present in person or represented by
proxy, shall have power to adjourn the meeting from time to time, without notice
other than announcement at the meeting, until a quorum shall be present or
represented; provided that if the adjournment is for more than 30 days, or if a
new record date is fixed by the directors, a new notice shall be transmitted to
the shareholders. At such adjourned meeting at which a quorum shall be present
or represented any business may be transacted at the meeting as originally
notified.

Section 2.11. When a quorum is present at any meeting, the affirmative
vote of the holders of a majority of the voting power of the stock, and cast
affirmatively or negatively at the meeting, shall decide any question brought
before such meeting, unless the question is one upon which by express provision
of statute or of the Certificate of Incorporation, a different vote is required
in which case such express provision shall govern and control the decision of
such question; provided, however, all elections shall be determined by a
plurality of the votes cast.

Section 2.12. Unless otherwise provided in the Certificate of
Incorporation, each stockholder shall at every meeting of the stockholders be
entitled to one vote in person or by proxy for each share of the capital stock
having voting power held by such stockholder, but no proxy shall be voted on
after three years from its date, unless the proxy provides for a longer period.
At any meeting of the stockholders, every stockholder entitled to vote may vote
in person or by proxy authorized by an instrument in writing or by a
transmission permitted by law filed in accordance with the procedure established
for the meeting. Any copy, facsimile telecommunication or other reliable
reproduction of the writing or transmission created pursuant to this paragraph
may be substituted or used in lieu of the original writing or transmission for
any and all purposes for which the original writing or transmission could be
used; provided that such copy, facsimile telecommunication or other reproduction
shall be a complete reproduction of the entire original writing or transmission.
All voting, including on the election of directors but excepting where otherwise
required by law, may be by a voice vote; provided, however, that upon demand
therefor by a stockholder entitled to vote or by his or her proxy, a stock vote
shall be taken. Every stock vote shall be taken by ballots, each of which shall
state the name of the stockholder or proxy voting and such other information as
may be required under the procedure established for the meeting. The Corporation
may, and to the extent required by law shall, in advance of any meeting of
stockholders, appoint one or more inspectors to act at the meeting and make a
written report thereof. The Corporation may designate one or more persons as
alternate inspectors to replace any inspector who fails to act. If no inspector
or alternate is able to act at a meeting of stockholders, the person presiding
at the meeting may, and to the extent required by law shall, appoint one or more
inspectors to act at the meeting. Each inspector, before entering upon the
discharge of his duties, shall take and sign an oath faithfully to execute the
duties of inspector with strict impartiality and according to the best of his
ability. Every

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<PAGE>

vote taken by ballots shall be counted by an inspector or inspectors appointed
by the chairman of the meeting.

Section 2.13. The Chairman of the Board of Directors shall preside at all
meetings of the stockholders. In the absence or inability to act of the
Chairman, the President or an Executive Vice President (in that order) shall
preside, and in their absence or inability to act another person designated by
one of them shall preside. The Secretary of the Corporation shall act as
Secretary of each meeting of the stockholders. In the event of his absence or
inability to act, the chairman of the meeting shall appoint a person who need
not be a stockholder to act as Secretary of the meeting.

Section 2.14. Meetings of the stockholders shall be conducted in a fair
manner but need not be governed by any prescribed rules of order. The presiding
officer's rulings on procedural matters shall be final. The presiding officer is
authorized to impose reasonable time limits on the remarks of individual
stockholders and may take such steps as such officer may deem necessary or
appropriate to assure that the business of the meeting is conducted in a fair
and orderly manner.

ARTICLE III
-----------

Directors
---------

Section 3.1. The business and affairs of the Corporation shall be under
the direction of or managed by a board comprised of directors who need not be
residents of the State of Delaware or stockholders of the Corporation. The
number of directors shall be determined in the manner provided in the
Certificate of Incorporation of the Corporation.

Section 3.2. Directors shall be elected by class for three year or other
terms as specified in the Certificate of Incorporation, and each director
elected shall hold office during the term for which he or she is elected and
until his or her successor is elected and qualified, subject, however, to his or
her prior death, resignation, retirement or removal from office.

Section 3.3. Any vacancies occurring in the Board of Directors and newly
created directorships shall be filled as provided in the Certificate of
Incorporation of the Corporation.

Meetings of the Board of Directors
----------------------------------

Section 3.4. The Board of Directors of the Corporation may hold meetings,
both regular and special, either within or without the State of Delaware.
Members of the Board of Directors may participate in any such meeting by means
of conference telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other, and participation
by such means shall constitute presence in person at such meeting.

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<PAGE>

Section 3.5. The first meeting of each newly elected Board of Directors
shall be held immediately following the adjournment of the annual meeting of the
stockholders at the same place as such annual meeting and no notice of such
meeting shall be necessary to the newly elected directors in order legally to
constitute the meeting, provided a quorum shall be present. In the event such
meeting is not held at such time and place, the meeting may be held at such time
and place as shall be specified in a notice given as hereinafter provided for
special meetings of the Board of Directors, or as shall be specified in a
written waiver signed by all of the directors.

Section 3.6. Regular meetings of the Board of Directors may be held
without notice at such time and at such place as shall from time to time be
determined by the board.

Section 3.7. Special meetings of the Board of Directors may be called by
the Chairman or Chief Executive Officer on at least one days' notice to each
director, either personally, or by courier, telephone, telefax, mail or
telegram. Special meetings shall be called by the Chairman or Chief Executive
Officer in like manner and on like notice at the written request of one-half or
more of the directors comprising the board stating the purpose or purposes for
which such meeting is requested. Notice of any meeting of the Board of Directors
for which a notice is required may be waived in writing signed by the person or
persons entitled to such notice, whether before or after the time of such
meeting, and such waiver shall be equivalent to the giving of such notice.
Attendance of a director at any such meeting shall constitute a waiver of notice
thereof, except where a director attends a meeting for the express purpose of
objecting to the transaction of any business because such meeting is not
lawfully convened. Neither the business to be transacted at nor the purpose of
any meeting of the Board of Directors for which a notice is required need be
specified in the notice, or waiver of notice, of such meeting. The Chairman
shall preside at all meetings of the Board of Directors. In the absence or
inability to act of the Chairman, the Chief Executive Officer, President or an
Executive Vice President (in that order) shall preside, and in their absence or
inability to act another director designated by one of them shall preside.

Section 3.8. At all meetings of the Board of Directors, a majority of the
then duly elected directors shall constitute a quorum for the transaction of
business and the act of a majority of the directors present at any meeting at
which there is a quorum shall be the act of the Board of Directors, except as
may be otherwise specifically provided by statute or by the Certificate of
Incorporation. If a quorum shall not be present at any meeting of the Board of
Directors, the directors present thereat may adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum
shall be present.

Section 3.9. Any action required or permitted to be taken at any meeting
of the Board of Directors may be taken without a meeting, if all members of the
board consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the board or committee.

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<PAGE>

Committees of Directors
-----------------------

Section 3.10. The Board of Directors may, by resolution passed by a
majority of the whole board, designate one or more committees, each committee to
consist of one or more of the directors of the Corporation. The board may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of the committee. In
the absence or disqualification of a member of a committee, the member or
members thereof present at any meeting and not disqualified from voting, whether
or not he, she or they constitute a quorum, may unanimously appoint another
member of the Board of Directors to act at the meeting in the place of any such
absent or disqualified member. Any such committee, to the extent provided in the
resolution of the Board of Directors, shall have and may exercise all the powers
and authority of the Board of Directors in the management of the business and
affairs of the Corporation, and may authorize the seal of the Corporation to be
affixed to all papers which may require it; but no such committee shall have the
power or authority in reference to amending the Certificate of Incorporation
(except that a committee may, to the extent authorized in the resolution or
resolutions providing for the issuance of shares of stock adopted by the Board
of Directors as provided in subsection (a) of Section 151 of the Delaware
General Corporation Law, fix the designations and any of the preferences or
rights of such shares relating to dividends, redemption, dissolution, any
distribution of assets of the Corporation or the conversion into, or the
exchange of such shares for, shares of any other class or classes or any other
series of the same or any other class or classes of stock of the Corporation or
fix the number of shares of any series of stock or authorize the increase or
decrease of the number of shares of any series), and if the resolution which
designates the committee or a supplemental resolution of the Board of Directors
shall so provide, such committee shall have the power and authority to adopt a
certificate of ownership and merger pursuant to Section 253 of the Delaware
General Corporation Law or to declare a dividend or to authorize the issuance of
stock. Such committee or committees shall have such name or names as may be
determined from time to time by resolution adopted by the Board of Directors.

Section 3.11. Each committee shall keep regular minutes of its
meetings and shall file such minutes and all written consents executed by its
members with the Secretary of the Corporation. Each committee may determine the
procedural rules for meeting and conducting its business and shall act in
accordance therewith, except as otherwise provided herein or required by law.
Adequate provision shall be made for notice to members of all meetings; one-
third of the members shall constitute a quorum unless the committee shall
consist of one or two members, in which event one member shall constitute a
quorum; and all matters shall be determined by a majority vote of the members
present. Action may be taken by any committee without a meeting if all members
thereof consent thereto in writing, and the writing or writings are filed with
the minutes of the proceedings of such committee. Members of any committee of
the Board of Directors may participate in any such meeting by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, and participation by
such means shall constitute presence in person at such meeting.

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<PAGE>

Compensation of Directors
-------------------------

Section 3.12. In the discretion of the Board of Directors, the
directors may be paid their expenses, if any, of attendance at each meeting of
the Board of Directors and may be paid a fixed sum for attendance at each
meeting of the Board of Directors or a committee thereof or a stated salary as
director. No such payment shall preclude any director from serving the
Corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like compensation for attending
committee meetings.

ARTICLE IV
----------

Notices
-------

Section 4.1. Whenever, under applicable law or the Certificate of
Incorporation or these by-laws, notice is required to be given to any director
or stockholder, unless otherwise provided in the Certificate of Incorporation or
these by-laws, such notice may be given in writing, by courier or mail,
addressed to such director or stockholder, at his or her address as it appears
on the records of the Corporation, with freight or postage thereon prepaid, and
such notice shall be deemed to be given at the time when the same shall have
been deposited with such courier or in the United States mail.

Section 4.2. Whenever any notice is required to be given under
applicable law or the provisions of the Certificate of Incorporation or these
by-laws, a waiver thereof in writing, signed by the person or persons entitled
to said notice, whether before or after the time stated therein, shall be
deemed equivalent thereto.

ARTICLE V
---------

Officers
--------

Section 5.1. Officers. The officers of the Corporation shall be a
Chairman of the Board, a Chief Executive Officer, a President, a Chief Operating
Officer, one or more Executive Vice Presidents, a Chief Financial Officer and a
Secretary, all of whom shall be elected by the Board of Directors. Any two or
more offices, except those of the Chief Executive Officer and Secretary or the
Chief Executive Officer and Chief Financial Officer, may be held by the same
person. Nothing herein contained shall be construed to require that a vacancy in
an office or offices of the Corporation must be filled, and in the event any
office or offices of the Corporation are not filled, by annual election or
otherwise, the Corporation shall not be considered dissolved therefor.

The Board of Directors may elect one or more Vice Presidents,
Assistant Officers or other Officers who shall perform such duties from time to
time as may be assigned to them by

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<PAGE>

the Chief Executive Officer, the President, the Chief Operating Officer or the
Board of Directors.

Subject to Section 5.13 of this Article, each officer or assistant
officer elected by the Board of Directors shall hold office until the first
meeting of the Board of Directors after the annual meeting of stockholders next
following his or her election and until his or her successor shall be chosen and
qualified or until his or her death or until he or she shall resign or shall
have been removed in the manner hereinafter provided.

Section 5.2. The Chairman of the Board. The Chairman of the Board
shall be a director. He or she shall, when present, preside as Chairman at all
meetings of the stockholders and of the Board of Directors. He or she may call
meetings of the Board of Directors whenever he or she deems it advisable. In
the absence or incapacity of the President to act, the Chairman of the Board
shall perform all duties and functions and exercise all the powers of the
President. Unless otherwise provided by the Board of Directors, he or she may
execute and deliver bonds, notes, contract agreements or other obligations or
instruments in the name of the Corporation. The Chairman of the Board shall
have such powers and perform such other duties as from time to time may be
assigned to him or her by the Board of Directors.

Section 5.3. The Chief Executive Officer. The Chief Executive
Officer shall have general direction over the affairs of the Corporation and
establish all major policies, subject to the control and direction for the Board
of Directors. Upon consultation with the Chief Operating Officer and Chief
Financial Officer, he or she shall authorize all capital and other major
expenditures, and major contracts of the Corporation, and shall keep the Chief
Operating Officer and Chief Financial Officer fully informed respecting the
same. He or she shall consult with, advise and instruct the Chief Operating
Officer in the latter's management, administration and operation of the
Corporation. In the absence or incapacity of the Chief Operating Officer (or if
no Chief Operating Officer is elected, such functions shall be the Chief
Executive Officer's responsibility), he or she shall exercise all of the powers
of and perform all of the duties of the Chief Operating Officer. He or she
shall have such further and other powers and duties as shall be prescribed by
the Board of Directors.

Section 5.4. The President. The President shall keep the Chairman of
the Board fully informed concerning the business of the Corporation under his
supervision. In the absence or incapacity of the Chairman of the Board, if the
Chairman of the Board has been designated Chief Executive Officer, the President
shall perform the duties of the Chief Executive Officer, and when so acting,
shall have all the powers of and be subject to all the restrictions upon the
Chief Executive Officer. The President shall have concurrent power with the
Chief Executive Officer to execute and deliver bonds, notes, contracts,
agreements or other obligations or instruments in the name of the Corporation.
The President shall have such other powers and duties from time to time assigned
to him or her by the Board of Directors.

Section 5.5. The Chief Operating Officer. The Chief Operating
Officer shall have general charge, control and supervision over the
administration and operations of the

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<PAGE>

Corporation, and shall consult with and keep the Chief Executive Officer fully
informed respecting the same. In the absence or incapacity of the Chief
Executive Officer, the Chief Operating Officer shall exercise all the powers of
and perform all the duties of the Chief Executive Officer. He or she shall see
that all resolutions of the Board of Directors and all orders of the Chief
Executive Officer are carried into effect. With the consent and approval of the
Chief Executive Officer, he or she shall appoint and is in charge of all
executives (other than the officers and assistant officers required by these by-
laws to be elected or appointed by the Board of Directors) of the Corporation.
He or she may sign, singly or with the Secretary or any other proper officer of
the Corporation thereunto authorized by the Board of Directors, any deeds,
mortgages, bonds, contracts or other instruments which the Board of Directors or
the Chief Executive Officer has authorized to be executed, except in cases where
the signing and execution thereof shall be expressly delegated by the Board of
Directors or by these by-laws to some other officer or agent of the Corporation
as shall be required by law to be otherwise signed or executed. He or she shall
have such further and other powers and duties as shall be prescribed by the
Board of Directors.

Section 5.6. The Executive Vice Presidents. In the absence or
incapacity of the Chairman of the Board and of the President, then an Executive
Vice President designated by the Chairman of the Board or by the Board of
Directors shall perform all the duties and functions and exercise all powers of
the Chairman of the Board and of the President. In the absence or incapacity of
the Chief Executive Officer and the Chief Operating Officer, then an Executive
Vice President designated by the Chief Executive Officer or by the Board of
Directors shall perform all duties and functions and exercise all power of the
Chief Executive Officer and of the Chief Operating Officer. Each Executive Vice
President shall have such other powers as in these by-laws are prescribed for
other Vice Presidents of the Corporation and shall exercise such other powers
and perform such other duties as from time to time may be assigned to him or her
by the Board of Directors or may be delegated to him by the Chairman of the
Board or the President.

Section 5.7. Vice Presidents. In the absence or incapacity of the
Chairman of the Board, the President, and the Executive Vice Presidents, a Vice
President designated by the Chairman of the Board or by the Board of Directors
shall perform all duties of the Chairman of the Board and of the President. In
the absence or incapacity of the Chairman of the Board, the President, and the
Executive Vice Presidents, a Vice President designated by the Chief Executive
Officer or by the Board of Directors shall perform all duties and functions and
exercise all powers of the Chief Executive Officer and of the Chief Operating
Officer. Each Vice President shall have such other powers and shall perform such
other duties as from time to time may be assigned to him or her by the Chief
Executive Officer, the Chief Operating Officer or by the Board of Directors.

Section 5.8. Chief Financial Officer. The Chief Financial Officer
shall be the principal financial officer of the Corporation. The Chief Financial
Officer shall: (a) keep a register of the post office address of each
stockholder, (b) have a general charge of the stock transfer books of the
Corporation, and (c) perform such other duties as may be assigned to him or her
from

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<PAGE>

time to time by the Board of Directors, Chairman of the Board, President, Chief
Executive Officer, or Chief Operating Officer.

Section 5.9. The Treasurer. Under the direction of the Chief Financial
Officer, the Treasurer shall in general perform all the duties incident to the
office of Treasurer and such other duties as from time to time may be assigned
to him or her by the Chief Executive Officer, the Chief Operating Officer, the
Chief Financial Officer, or by the Board of Directors. In the absence or
incapacity of the Chief Financial Officer, the Treasurer shall perform the
powers and duties of the Chief Financial Officer. If required by the Board of
Directors, the Treasurer shall give bond for the faithful discharge of his or
her duties in such sum and with such surety or sureties as the Board of
Directors shall determine.

Section 5.10. The Secretary. The Secretary shall: (a) if he or she is
present, act as Secretary of all meetings for the stockholders and of the
directors, and, if he or she is not present, the officer presiding at any such
meeting shall appoint a Secretary for the meeting; (b) keep the minutes of all
meetings of stockholders and of the Board of Directors in one or more books
provided for that purpose; (c) see that all notices are duly given in accordance
with the provisions of these by-laws or as required by Delaware law; (d) be
custodian of the corporate records and of the seal of the Corporation and see
that the seal of the Corporation is affixed to all documents, the execution of
which on behalf of the Corporation under its seal is duly authorized in
accordance with the provisions of these by-laws; and (e) in general perform all
duties incident to the office of Secretary and such other duties as from time to
time may be assigned to him or her by the Chief Executive Officer, the Chief
Operating Officer or by the Board of Directors.

Section 5.11. Salaries. The salaries or other compensation of the
officers shall be fixed from time to time by the Board of Directors, and no
officer shall be prevented from receiving such salary or other compensation by
reason of the fact that he or she is also a director of the Corporation.

Section 5.12. Removal of Officers. Any officer may be removed, either
with or without cause, by the vote of a majority of the directors then in office
at any meeting of the Board of Directors.

Section 5.13. Filling of Vacancies. If a vacancy shall exist in the
office of any officer or assistant officer of the Corporation, the Board of
Directors may elect any person to fill such vacancy, such person to hold office
as provided in Section 5.1 of this Article.

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<PAGE>

ARTICLE VI
----------

Certificates of Stock
---------------------

Section 6.1. Every holder of stock in the Corporation shall be entitled to
have a certificate, signed by, or in the name of the Corporation by (a) the
President or Chief Executive Officer, and (b) the Chief Financial Officer,
Treasurer, the Secretary or an Assistant Secretary of the Corporation;
certifying the number of shares owned in the Corporation. If the Corporation
shall be authorized to issue more than one class of stock or more than one
series of any class, the designations, preferences and relative, participating,
optional or other special rights of each class of stock or series thereof and
the qualifications, limitations or restrictions of such preferences and/or
rights shall be set forth in full or summarized on the face or back of the
certificate which the Corporation shall issue to represent such class or series
of stock; provided that, except as otherwise provided in Section 202 of the
General Corporation Law of Delaware, in lieu of the foregoing requirements,
there may be set forth on the face or back of the certificate which the
Corporation shall issue to represent such class or series of stock, a statement
that the Corporation will furnish without charge to each stockholder who so
requests the designations, preferences and relative, participating, optional or
other special rights of each class of stock or series thereof and the
qualifications, limitations or restrictions of such preferences and/or rights.

Section 6.2. Where a certificate is countersigned (1) by a transfer agent
other than the Corporation or its employee, or (2) by a registrar other than the
Corporation or its employee, any other signatures on the certificate may be
facsimile. In case any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
to be such officer, transfer agent or registrar before such certificate is
issued, it may be issued by the Corporation with the same effect as if he or she
were such officer, transfer agent or registrar at the date of issue.

Section 6.3. Subject to the foregoing, certificates for stock of the
Corporation shall be in such form as the Board of Directors may from time to
time prescribe.

Lost Certificates
-----------------

Section 6.4. The Board of Directors may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the Corporation alleged to have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost, stolen or destroyed. When authorizing such
issue of a new certificate or certificates, the Board of Directors may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed certificate or certificates, or his or
her legal representative, to advertise the same in such manner as it shall
require and/or give the Corporation a bond in such sum as it may direct as
indemnity against any claim that may be made against the Corporation or its
transfer agent or registrar with respect to the certificate alleged to have been
lost, stolen or destroyed.

-12-
<PAGE>

Transfers of Stock
------------------

Section 6.5. Upon surrender to the Corporation or the transfer agent of the
Corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, it shall be the
duty of the Corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.

Registered Stockholders
-----------------------

Section 6.6. The Corporation shall be entitled to recognize the exclusive
right of a person registered on its books as the owner of shares to receive
dividends and to vote as such owner and to hold liable for calls and assessments
a person registered on its books as the owner of shares, and shall not be bound
to recognize any equitable or other claim to or interest in such share or shares
on the part of any other person, whether or not it shall have express or other
notice thereof, except as otherwise provided by the laws of Delaware.

ARTICLE VII
-----------

Conflict of Interests
---------------------

Section 7.1. No contract or transaction between the Corporation and one or
more of its directors or officers, or between the Corporation and any other
Corporation, partnership, association, or other organization in which one or
more of its directors or officers are directors or officers, or have a financial
interest, shall be void or voidable solely for this reason, or solely because
the director or officer is present at or participates in the meeting of the
board of committee thereof which authorizes the contract or transaction, or
solely because his, her or their votes are counted for such purpose, if:

(1) The material facts as to his relationship or interest and as to the
contract or transaction are disclosed or are known to the Board of
Directors or the committee, and the board or committee in good faith
authorizes the contract or transaction by the affirmative vote of a
majority of the disinterested directors, even though the disinterested
directors be less than a quorum; or

(2) The material facts as to his or her relationship or interest and as to
the contract or transaction are disclosed or are known to the
stockholders entitled to vote thereon, and the contract or transaction
is specifically approved in good faith by vote of the stockholders; or

(3) The contract or transaction is fair as to the Corporation as of the
time it is authorized, approved or ratified, by the Board of
Directors, a committee thereof, or the stockholders.

-13-
<PAGE>

Section 7.2. Common or interested directors may be counted in determining
the presence of a quorum at a meeting of the Board of Directors or of a
committee which authorizes the contract or transaction.

ARTICLE VIII
------------

General Provisions
------------------

Dividends
---------

Section 8.1. Dividends upon the capital stock of the Corporation, subject
to the provisions of the Certificate of Incorporation, if any, may be declared
by the Board of Directors at any regular or special meeting, pursuant to law.
Dividends may be paid in cash, in property, or in shares of the capital stock or
rights to acquire same, subject to the provisions of the Certificate of
Incorporation.

Section 8.2. Before payment of any dividend, there may be set aside out of
any funds of the Corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the Corporation, or for such other
purpose as the directors shall think conducive to the interest of the
Corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.

Checks
------

Section 8.3. All checks or demands for money and notes of the Corporation
shall be signed by such officer or officers or such other person or persons as
the Board of Directors may from time to time designate.

Fiscal Year
-----------

Section 8.4. The fiscal year of the Corporation shall be fixed by
resolution of the Board of Directors.

Seal
----

Section 8.5. The corporate seal shall have inscribed thereon the name of
the Corporation and the words "Corporate Seal, Delaware." The seal may be used
by causing it or a facsimile thereof to be impressed or affixed or reproduced or
otherwise.

-14-
<PAGE>

ARTICLE IX
----------

Amendments
----------

These by-laws may be altered, amended, or repealed or new by-laws may be
adopted only in the manner provided in the Corporation's Certificate of
Incorporation.

-15-

<PAGE>

EXHIBIT 10.9

FORM OF

INDEMNIFICATION AGREEMENT
-------------------------

THIS INDEMNIFICATION AGREEMENT is entered into as of this _____ day of
_________________, 199__, by and between COMPASS INTERNATIONAL SERVICES
CORPORATION, a Delaware corporation (the "Company"), and
_________________________ ("Indemnitee").

RECITALS

A. The Company is aware that because of the increased exposure to
litigation costs and risks resulting from their service to such corporations,
talented and experienced persons are increasingly reluctant to serve or continue
serving as directors or officers of corporations unless they are protected by
comprehensive liability insurance and indemnification.

B. The statutes and judicial decisions regarding the duties of directors
and officers are often difficult to apply, ambiguous, or conflicting, and
therefore fail to provide such directors and officers with adequate guidance
regarding the proper course of action.

C. The Company believes that it is fair and proper to protect the
Company's directors and officers, and the directors and officers of the
Company's subsidiaries, from the risk of judgments, settlements and other
expenses which may occur as a result of their service to the Company, even in
cases in which such persons received no personal profit or were not otherwise
culpable.

D. The Board of Directors of the Company (the "Board") has concluded that,
to retain and attract talented and experienced individuals to serve as officers
and directors of the Company and its subsidiaries and to encourage such
individuals to take the business risks necessary for the success of the Company
and its subsidiaries, the Company should contractually indemnify its officers
and directors, and the officers and directors of its subsidiaries, in connection
with claims against such officers and directors in connection with their
services to the Company and its subsidiaries, and has further concluded that the
failure to provide such contractual indemnification could be detrimental to the
Company, its subsidiaries and shareholders.

NOW, THEREFORE, the parties, intending to be legally bound, hereby agree as
follows:

1. Definitions.
-----------

(a) Agent. "Agent" means any person who is or was a director, officer,
employee or other agent of the Company or a subsidiary of the Company; or
is or was serving at the request of, for the convenience of, or to
represent the interests of, the
<PAGE>

Company or a subsidiary of the Company as a director, officer, employee or
agent of another entity or enterprise; or was a director, officer, employee
or agent of a predecessor corporation of the Company or a Subsidiary of the
Company, or was a director, officer, employee or agent of another
enterprise at the request of, for the convenience of, or to represent the
interests of such predecessor corporation.

(b) Expenses. "Expenses" means all direct and indirect costs of any
type or nature whatsoever (including, without limitation, all attorneys'
fees, costs of investigation and related disbursements) incurred by the
Indemnitee in connection with the investigation, settlement, defense or
appeal of a claim or Proceeding covered hereby or establishing or enforcing
a right to indemnification under this Agreement.

(c) Proceeding. "Proceeding" means any threatened, pending, or
completed claim, suit or action, whether civil, criminal, administrative,
investigative or otherwise.

(d) Subsidiary. "Subsidiary" means any corporation of which more than
10% of the outstanding voting securities is owned directly or indirectly by
the Company, and one or more other Subsidiaries, taken as a whole.

2. Maintenance of Liability Insurance.
----------------------------------

(a) The Company hereby covenants and agrees with Indemnitee that, so
long Indemnitee shall continue to serve as an Agent of the Company and
thereafter so long as the Indemnitee shall be subject to any claim or
Proceeding by reason of the fact that Indemnitee was an Agent of the
Company or in connection with Indemnitee's acts as such an Agent, the
Company, subject to Section 2(b), shall obtain and maintain in full force
and effect directors' and officers' liability insurance ("D&O Insurance")
in reasonable amounts as the Board of Director shall determine from
established and reputable insurers, but no less than the amounts currently
in effect on the date hereof. In all policies of D&O Insurance, Indemnitee
shall be named as an insured.

(b) Notwithstanding the foregoing, the Company shall have no
obligation to obtain or maintain D&O Insurance if the Company determines in
good faith that the premium costs for such insurance are (i)
disproportionate to the amount of coverage provided after giving effect to
exclusions, and (ii) substantially more burdensome to the Company than the
premiums now paid by the Company.

3. Mandatory Indemnification. The Company shall defend, indemnify and
hold harmless Indemnitee:

(a) Third Party Actions. If Indemnitee is a person who was or is a
party or is threatened to be made a party to any Proceeding (other than an
action by or in the right of the Company) by reason of the fact that
Indemnitee is or was an Agent of the Company, or by reason of anything done
or not done by Indemnitee in any such

-2-
<PAGE>

capacity, against any and all Expenses and liabilities of any type
whatsoever (including, but not limited to, judgments, fines, ERISA excise
taxes or penalties, and amounts paid in settlement) incurred by him in
connection with the investigation, defense, settlement or appeal of such
Proceeding, so long as the Indemnitee acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
Company, or, with respect to any criminal action or Proceeding, had
reasonable cause to believe his conduct was not unlawful.

(b) Derivative Actions. If Indemnitee is a person who was or is a
party or is threatened to be made a party to any Proceeding by or in the
right of the Company by reason of the fact that he is or was an Agent of
the Company, or by reason of anything done or not done by him in any such
capacity, against any amounts paid in settlement of any such Proceeding and
all other Expenses incurred by him in connection with the investigation,
defense, settlement or appeal of such Proceeding if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the Company; except that no indemnification under this
subsection shall be made, and Indemnitee shall repay all amounts previously
advanced by the Company, in respect of any claim, issue or matter for which
such person is judged in a final, non-appealable decision to be liable to
the Company by a court of competent jurisdiction due to willful misconduct
in the performance of his duties to the Company, unless and only to the
extent that the court in which such Proceeding was brought shall determine
that Indemnitee is fairly and reasonably entitled to indemnity.

(c) Actions Where Indemnitee Is Deceased. If Indemnitee is a person
who was or is a party or is threatened to be made a party to any Proceeding
by reason of the fact that he is or was an Agent of the Company, or by
reason of anything done or not done by him in any such capacity, and prior
to, during the pendency of, or after completion of, such Proceeding, the
Indemnitee shall die, then the Company shall defend, indemnify and hold
harmless the estate, heirs and legatees of the Indemnitee against any and
all Expenses and liabilities incurred by or for such persons or entities in
connection with the investigation, defense, settlement or appeal of such
Proceeding on the same basis as provided for the Indemnitee in Sections
3(a) and 3(b) above.

The Expenses and liabilities covered hereby shall be net of any payments by D&O
Insurance carriers or others.

4. Partial Indemnification. If Indemnitee is found under Section 3(b), 7
or 10 hereof not to be entitled to indemnification for all of the Expenses
relating to a Proceeding, the Company shall indemnify the Indemnitee for any
portion of such Expenses not specifically precluded by the operation of such
Section 3(b), 7 or 10.

5. Mandatory Advancement of Expenses. Until a determination to the
contrary under Section 7 hereof is made, and unless the provisions of Section 10
apply, the Company shall advance all Expenses incurred by Indemnitee in
connection with the investigation, defense,

-3-
<PAGE>

settlement or appeal of any Proceeding to which Indemnitee is a party or is
threatened to be made a party covered by the indemnification in Section 3
hereof. If required by law, as a condition to such advances, Indemnitee shall,
at the request of the Company, undertake in a manner satisfactory to the Company
to repay such amounts advanced if it shall ultimately be determined by a final
order of a court that Indemnitee is not entitled to be indemnified by the
Company by the terms hereof or under applicable law. Subject to Section 6
hereof, the advances to be made hereunder shall be paid by the Company to
Indemnitee within 20 days following delivery of a written request by Indemnitee
to the Company, which request shall be accompanied by vouchers, invoices and
similar evidence documenting the amounts requested.

6. Indemnification Procedures.
--------------------------

(a) Promptly after receipt by Indemnitee of notice of the
commencement or threat of any Proceeding covered hereby, Indemnitee shall
notify the Company of the commencement or threat thereof, provided that any
failure to so notify shall not relieve the Company of any of its
obligations hereunder, except to the extent that such failure or delay
increases the liability of the Company hereunder.

(b) If, at the time of the receipt of a notice pursuant to Section
6(a) above, the Company has D&O Insurance in effect, the Company shall give
prompt notice of the Proceeding to its insurers in accordance with the
procedures set forth in the applicable policies. The Company shall
thereafter take all necessary or desirable action to cause such insurers to
pay all amounts payable as a result of such Proceeding in accordance with
the terms of such policies, and the Indemnitee shall not take any action
(by waiver, settlement or otherwise) which would adversely affect the
ability of the Company to obtain payment from its insurers.

(c) If the Company shall be obligated to pay the Expenses of
Indemnitee, the Company shall assume the defense (with counsel reasonably
acceptable to Indemnitee, approval thereof not to be unreasonably withheld)
of the Proceeding to which the Expenses relate and shall deliver a notice
of assumption to the Indemnitee. The Company will not be liable to
Indemnitee under this Agreement for any fees of counsel incurred after
delivery of such notice with respect to such Proceeding or any costs of
settlement not approved in advance in writing by the Company, provided that
(i) Indemnitee shall have the right to employ his own counsel in any such
Proceeding at Indemnitee's expense, and (ii) if (1) the employment of
counsel by Indemnitee has been previously authorized by the Company, (2)
the Indemnitee shall have provided the Company with an opinion of counsel
stating that there is a strong argument that a conflict of interest exists
between the Company and Indemnitee in the conduct of any such defense, or
(3) the Company shall not have assumed the defense of such Proceeding, the
fees and expenses of Indemnitee's counsel shall be at the expense of the
Company.

-4-
<PAGE>

7. Determination of Right to Indemnification.
-----------------------------------------

(a) To the extent Indemnitee has been successful on the merits or
otherwise in defense of any Proceeding, claim, issue or matter covered
hereby, the Indemnitee need not repay any of the Expenses advanced in
connection with the investigation, defense or appeal of such Proceeding.

(b) If Section 7(a) is inapplicable, the Company shall remain
obligated to indemnify Indemnitee, and the Indemnitee need not repay
Expenses previously advanced, unless the Company, by motion before a court
of competent jurisdiction, obtains a preliminary or permanent relief
suspending or denying the obligation to advance or indemnification for
Expenses.

(c) Notwithstanding a determination by a court that the Indemnitee is
not entitled to indemnification with respect to a specific Proceeding,
Indemnitee shall have the right to apply to the Court of Chancery of
Delaware for the purpose of enforcing the Indemnitee's right to
indemnification pursuant to this Agreement.

(d) Notwithstanding any other provision in this Agreement to the
contrary, the Company shall indemnify Indemnitee against all Expenses
incurred by the Indemnitee in connection with any Proceeding under Section
7(b) or 7(c) and against all Expenses incurred by Indemnitee in connection
with any other Proceeding between the Company and Indemnitee involving the
interpretation or enforcement of the rights of the Indemnitee under this
Agreement unless a court of competent jurisdiction finds that the material
claims and/or defenses of Indemnitee in any such Proceeding were frivolous
or made in bad faith.

8. Certificate of Incorporation and By-Laws. The Company agrees that the
Amended and Restated Certificate of Incorporation and By-laws of the Company in
effect on the date hereof shall not be amended to reduce, limit, hinder or delay
(i) the rights of Indemnitee granted hereby or (ii) the ability of the Company
to indemnify Indemnitee as required hereby. The Company further agrees that it
shall exercise the powers granted to it under its Amended and Restated
Certificate of Incorporation, its By-laws and applicable law to indemnify any
Indemnitee to the fullest extent possible as required hereby.

9. Witness Expenses. The Company agrees to reimburse Indemnitee for all
Expenses, including attorneys' fees and travel costs, incurred by Indemnitee in
connection with being a witness, or if Indemnitee is threatened to be made a
witness, with respect to any Proceeding, by reason of his serving or having
served as an Agent of the Company.

10. Exceptions. Notwithstanding any other provision herein to the
contrary, the Company shall not be obligated pursuant to the terms of this
Agreement:

-5-
<PAGE>

(a) Claims Initiated by Indemnitee. To indemnify or advance Expenses
to Indemnitee with respect to Proceedings or claims initiated or brought
voluntarily by Indemnitee and not by way of defense (other than Proceedings
brought to establish or enforce a right to indemnification under this
Agreement or the provisions of the Company's Amended and Restated
Certificate of Incorporation or By-laws unless a court of competent
jurisdiction determines that each of the material assertions made by the
Indemnitee in such Proceeding were not made in good faith or were
frivolous).

(b) Unauthorized Settlements. To indemnify Indemnitee under this
Agreement for any amounts paid in settlement of a Proceeding covered hereby
without the prior written consent of the Company to such settlement.

11. Non-exclusivity. This Agreement is not the exclusive arrangement
between the Company and Indemnitee regarding the subject matter hereof and shall
not diminish or affect any other rights which Indemnitee may have under any
provision of law, the Company's Amended and Restated Certificate of
Incorporation or By-laws, under other agreements, or otherwise.

12. Continuation After Term. Indemnitee's rights hereunder shall continue
after Indemnitee has ceased acting as a director or Agent of the Company and the
benefits hereof shall inure to the benefit of the heirs, executors and
administrators of Indemnitee.

13. Interpretation of Agreement. This Agreement shall be interpreted and
enforced so as to provide indemnification to Indemnitee to the fullest extent
now or hereafter permitted by law.

14. Severability. If any provision or provisions of this Agreement shall
be held to be invalid, illegal or unenforceable, (i) the validity, legality and
enforceability of the remaining provisions of the Agreement shall not in any way
be affected or impaired thereby, and (ii) to the fullest extent possible, the
provisions of this Agreement shall be construed or altered by the court so as to
remain enforceable and to provide Indemnitee with as many of the benefits
contemplated hereby as are permitted under law.

15. Counterparts, Modification and Waiver. This Agreement may be signed
in counterparts. This Agreement constitutes a separate agreement between the
Company and Indemnitee and may be supplemented or amended as to Indemnitee only
by a written instrument signed by the Company and Indemnitee, with such
amendment binding only the Company and Indemnitee. All waivers must be in a
written document. No waiver of any of the provisions of this Agreement shall be
implied by the conduct of the parties. A waiver of any right hereunder shall
not constitute a waiver of any other right hereunder.

16. Notices. All notices, demands, consents, requests, approvals and
other communications required or permitted hereunder shall be in writing and
shall be deemed to have been properly given if hand delivered (effective upon
receipt or when refused), or if sent by a

-6-
<PAGE>

courier freight prepaid (effective upon receipt or when refused), in the case of
the Company, at the addresses listed below, and in the case of Indemnitee, at
Indemnitee's address of record at the office of the Company, or to such other
addresses as the parties may notify each other in writing.

To Company: Compass International Services Corporation
____________________
_________
___________, _________ XXXXX
Attention: Chief Executive Officer

with a copy to: Katten Muchin & Zavis
525 West Monroe Street, Suite 1600
Chicago, Illinois 60661-3693
Attention: Marguerite M. Elias, Esq.

17. Evidence of Coverage. Upon request by Indemnitee, the Company shall
provide evidence of the liability insurance coverage required by this Agreement.
The Company shall promptly notify Indemnitee of any change in the Company's D&O
Insurance coverage.

18. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to the
application of the laws of the State of Delaware regarding conflicts of laws.

-7-
<PAGE>

IN WITNESS WHEREOF, the parties hereto have entered into this
Indemnification Agreement effective as of the date first above written.

COMPASS INTERNATIONAL SERVICES
CORPORATION

By: _____________________________
Its: _____________________________

ATTEST:

___________________________
Secretary
AGREED AND ACCEPTED:

INDEMNITEE:

______________________________

-8-

<PAGE>

EXHIBIT 23.1

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form S-1 of our reports relating to the respective
financial statements which appear in such Prospectus.

Financial Statements Date
- -------------------- ----

Compass International Services Corporation September 24, 1997
The Mail Box, Inc. September 22, 1997
Mid-Continent Agencies, Inc. September 19, 1997
Impact Telemarketing Group, Inc. September 30, 1997

We also consent to the reference to us under the heading "Experts".

/s/ Price Waterhouse LLP

Price Waterhouse LLP
Minneapolis, Minnesota
October 3, 1997

<PAGE>

Exhibit 23.2
ARTHUR ANDERSEN LLP

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our report
and to all references to our Firm included in or made a part of this
Registration Statement.

/s/ Arthur Andersen LLP
Baltimore, Maryland,
October 3, 1997

<PAGE>

EXHIBIT 23.3

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption "Experts" and to
the use of our report dated January 24, 1997, with respect to the financial
statements of BRMC of Delaware, Inc. included in the Registration Statement
(Form S-1 No. 333- ) and related Prospectus of Compass International
Services Corporation for the registration of 4,715,000 shares of its common
stock.

/s/ Ernst & Young LLP
October 3, 1997
Atlanta, Georgia

<PAGE>

EXHIBIT 23.5

Consent

I, Kenneth W. Murphy, do hereby consent to the inclusion of biographical
information about me, including my name, age, positions to be held with Compass
International Services Corporation, a Delaware corporation (the "Company") and
its subsidiary, my expected term as a director of the Company and the other
information required to be provided in the Company's Registration Statement on
Form S-1 (the "Registration Statement") to be filed with the Securities and
Exchange Commission on or about October 3, 1997 which information will appear
principally in the section entitled "Management--Executive Officers and
Directors." I further consent to the filing of this consent as an exhibit to the
Registration Statement.

/s/ Kenneth W. Murphy
----------------------------------
Kenneth W. Murphy

Dated: October 1, 1997

<PAGE>

EXHIBIT 23.6

Consent

I, Leeds Hackett, do hereby consent to the inclusion of biographical
information about me, including my name, age, positions to be held with Compass
International Services Corporation, a Delaware corporation (the "Company") and
its subsidiary, my expected term as a director of the Company and the other
information required to be provided in the Company's Registration Statement on
Form S-1 (the "Registration Statement") to be filed with the Securities and
Exchange Commission on or about October 3, 1997 which information will appear
principally in the section entitled "Management--Executive Officers and
Directors." I further consent to the filing of this consent as an exhibit to the
Registration Statement.

/s/ Leeds Hackett
----------------------------------
Leeds Hackett

Dated: October 1, 1997

<PAGE>

EXHIBIT 23.7

Consent

I, John Maloney, do hereby consent to the inclusion of biographical
information about me, including my name, age, positions to be held with Compass
International Services Corporation, a Delaware corporation (the "Company") and
its subsidiary, my expected term as a director of the Company and the other
information required to be provided in the Company's Registration Statement on
Form S-1 (the "Registration Statement") to be filed with the Securities and
Exchange Commission on or about October 3, 1997 which information will appear
principally in the section entitled "Management--Executive Officers and
Directors." I further consent to the filing of this consent as an exhibit to the
Registration Statement.

/s/ John Maloney
----------------------------------
John Maloney

Dated: October 1, 1997

<PAGE>

EXHIBIT 23.8

Consent

I, Les J. Kirschbaum, do hereby consent to the inclusion of biographical
information about me, including my name, age, positions to be held with Compass
International Services Corporation, a Delaware corporation (the "Company") and
its subsidiary, my expected term as a director of the Company and the other
information required to be provided in the Company's Registration Statement on
Form S-1 (the "Registration Statement") to be filed with the Securities and
Exchange Commission on or about October 3, 1997 which information will appear
principally in the section entitled "Management--Executive Officers and
Directors." I further consent to the filing of this consent as an exhibit to the
Registration Statement.

/s/ Les J. Kirschbaum
----------------------------------
Les J. Kirschbaum

Dated: October 1, 1997

<PAGE>
EXHIBIT 23.9

Consent

I, Edward A. DuCoin, do hereby consent to the inclusion of biographical
information about me, including my name, age, positions to be held with Compass
International Services Corporation, a Delaware corporation (the "Company") and
its subsidiary, my expected term as a director of the Company and the other
information required to be provided in the Company's Registration Statement on
Form S-1 (the "Registration Statement") to be filed with the Securities and
Exchange Commission on or about October 3, 1997 which information will appear
principally in the section entitled "Management--Executive Officers and
Directors." I further consent to the filing of this consent as an exhibit to the
Registration Statement.

/s/ Edward A. DuCoin
----------------------------------
Edward A. DuCoin

Dated: October 1, 1997