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                                                                    Exhibit 10.7

              [LETTERHEAD OF RMH TELESERVICES, INC. APPEARS HERE]


August 14, 1998


Mr. John Fellows
2824 Sun Meadow Drive
Flower Mound, TX  75128

Dear John:

This will reflect the terms for your joining RMH Teleservices, Inc.

1.    Position - Chief Executive Officer
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2.    Base Salary - $275,000 per annum, for the first year of your employment,
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      $300,000 per annum for the second year of your employment and $325,000 per
      annum for the third year of your employment with annual increases
      thereafter to be determined by the Board.

3.    Start Date - The Start Date will be September 8, 1998.
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4.    Annual Bonus - You may be eligible to receive an Annual Bonus, in the
      ------------
      range of $75,000 to $100,000, as determined by the Board, based on
      performance goals set by the Board.

5.    Options - You will be granted options, pursuant to the RMH Teleservices,
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      Inc., 1996 Stock Incentive Plan to purchase 100,000 RMH common shares at
      the closing price on the Start Date. The options for 25% of the shares
      will vest when you have been employed by RMH for one year and an
      additional 25% of the shares will vest at the end of the second, third and
      fourth year of employment respectively.

6.    Signing Bonus - You will be entitled to a signing bonus of $75,000 payable
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      in 12 consecutive monthly installments coordinated upon your continued
      employment at the time each installment is due.

7.    Restricted Stock Grant - You will be granted 100,000 shares of the
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      Company's restricted common stock which shall vest at the rate of 20,000
      shares per year over each of the first five anniversaries of the Start
      Date, provided you are employed by the Company on the anniversary date.

8.    Place of Employment - Your principal place of business will be RMH
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      headquarters in Bryn Mawr, Pennsylvania. The Company will reimburse you
      for your reasonable relocation expenses, up to $125,000, which includes
      income taxes.

9.    Benefits - You are entitled to participate in medical, disability, life
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      insurance, sick leave or other benefits or programs made available to
      other similarly situated employees of the Company. In 
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      addition the Company will pay for the premium for family coverage under
      the Company's health plan made applicable to other similarly situated
      employees of the Company.

10.   Non-Compete, Trade Secrets, Etc. - From the Start Date until 24 months
      --------------------------------
      following the termination of your employment with the Company, for any or
      no reason, whether initiated by you or the Company, you will not, directly
      or indirectly, engage in any capacity or be financially interested in any
      business operating within the United States or Canada which provides
      telemarketing services materially the same as the services the Company
      provides to third parties, or any other business activities which are
      materially the same and which are in direct competition with the Company
      at the time of your termination, or any other business activities which
      are materially the same a those provided by the Company for any of the
      Company's past, present or prospective clients, customers or accounts.
      Additionally, from the Start Date until 24 months following the
      termination of your employment with the Company, for any or no reason,
      whether initiated by you or the Company, you will not, directly or
      indirectly, employ, induce or attempt to influence any employee, customer,
      independent contractor or supplier of the Company to terminate employment
      or any other relationship with the Company. You will not use for your own
      personal benefit or disclose, communicate or divulge to, or use for the
      direct or indirect benefit of any person, firm or company other than the
      Company, any confidential information of the Company during the term of
      your employment and for a period of five years after you cease to be
      employed by the Company, for any or no reason whether initiated by you or
      the Company At the termination of your employment with the Company you
      shall return to Company all copies of confidential information in any
      medium, including computer tapes and other forms of data storage. Any and
      all writings, inventions, improvements, processes, procedures and/or
      techniques which you may make, conceive, discover or develop, either
      solely or jointly with any other person or persons, at any time when you
      are an employee, which relate to or are useful in connection with the
      Company's business or with any business now or hereafter carried on or
      contemplated by the Company, including developments or expansions of its
      present fields of operations, shall be the sole and exclusive property of
      the Company.

11.   Severance - If the Company terminates your employment without Cause, you
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      shall be entitled to your then current Base Salary payable for a period of
      18 months following such termination so long as you execute and do not
      revoke a separation agreement and general release agreement acceptable to
      the Company. Cause shall include your breach or neglect of the material
      duties you are required to perform under this Agreement, your conviction
      of a felony or a crime of moral turpitude or your entering into an plea of
      nolo contendere (or similar plea) to a charge of such an offense, your use
      of alcohol or any unlawful controlled substance while performing your
      duties under this Agreement and/or such use materially interferes with the
      performance of your duties under this Agreement, you commit any act of
      criminal fraud, material dishonesty or misappropriation relating to or
      involving the Company, you materially violate a rule, regulation, policy
      or plan governing employee performance or an express direction of the
      Board, you engage in any unauthorized disclosure of confidential
      information of the Company or you act in a manner that is materially
      contrary to the best interest of the Company.

12.   Miscellaneous - The laws of the Commonwealth of Pennsylvania will govern
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      your employment arrangements. All compensation for the calendar year 1998
      will be pro rated based on the 

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      number of days during 1998 of your employment. Cause, for purposes of this
      letter, shall mean your willful refusal to perform a material and
      substantial part of your duties which has not been cured after 30 days
      written notice of the failure, or your commission of personal dishonesty,
      materially injurious to the company, or any act of fraud, misappropriation
      or criminal conduct.

If the foregoing accurately reflects our understanding, please sign a copy of
this letter and return it to me.

Sincerely,

/s/ William A. Rosoff

William A. Rosoff
Chairman of the Board


Accepted and agreed to this

16th day of August, 1998.


/s/ John Fellows
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       John Fellows

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