Document:

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                                                                    Exhibit 10.8

                             EMPLOYMENT AGREEMENT
                             --------------------

          THIS AGREEMENT, made this 1st day of October 2000, by and between RMH
Teleservices, Inc., a Pennsylvania corporation (hereinafter called "Company"),
and John Fellows, an individual residing at 3 Wingate Court, Flourtown, PA 19031
(hereinafter called "Executive").

                             W I T N E S S E T H:
                             - - - - - - - - - -

          Company wishes to continue to employ Executive and Executive wishes to
continue to be in the employ of Company on the terms and conditions contained in
this Agreement.

          WHEREAS, due to Company's desire to continue to employ Executive as
Chief Executive Officer and to gain the protections and benefits contained in
this Employment Agreement, Company and Executive agree to the covenants and
restrictions contained herein;

          WHEREAS, due to Executive's desire to continue to serve as Chief
Executive Officer and the protections and new and expanded benefits contained in
this Employment Agreement ("Agreement"), Executive agrees to the covenants and
restrictions contained herein;

          WHEREAS, this Agreement supercedes all of the provisions of the
original Agreement which was executed by the parties on August 16, 1998 ("1998
Employment Agreement"), except for provisions from the 1998 Agreement
specifically referred to in this Agreement as surviving.

          NOW, THEREFORE, in consideration of the facts, mutual promises and
covenants contained herein and intending to be legally bound hereby, Company and
Executive agree as follows:

          1.   Definitions. As used herein, the following terms shall have the
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meanings set forth below unless the context otherwise requires.

               "Affiliate" shall mean a person or entity who or which (i) with
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respect to any entity, directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
such entity; or (ii) with respect to Executive, is a parent, spouse, child or
issue of Executive, including persons in an adopted or step relationship.

               "Annual Bonus" shall mean the bonus payments set forth in Section
                ------------
5(b), as such amount may be adjusted from time to time.

               "Base Salary" shall mean the annual rate of compensation set
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forth in Section 5(a), as such amount may be adjusted from time to time.
<PAGE>

               "Board" shall mean the Board of Directors of Company.
                -----

               "Business" shall mean the business conducted by Company or any
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Subsidiary or corporate parent thereof or entity sharing a common corporate
parent with the Company on the date of execution of this Agreement, including
business activities in developmental stages, business activities which may be
developed by the Company, or by any Subsidiary or corporate parent thereof or
entity sharing a common corporate parent with the Company, during the period of
Executive's employment by Company, and all other business activities which flow
from a reasonable expansion of any of the foregoing during Executive's
employment with the Company and about which Executive had or has constructive or
actual knowledge.

               "Cause" shall include any one or more of the following:
                -----

                    (a)  Executive breaches or neglects the material and
substantial duties that Executive is required to perform under the terms of this
Agreement, including if Executive performs his duties in an incompetent manner,
after written notice of the breach or neglect and thirty (30) days to cure such
breach or neglect;

                    (b)  The reasonable belief of a majority of the Board of
Directors that Executive has committed a crime of moral turpitude or has entered
a plea of nolo contendere(or similar plea) to a charge of such an offense;

                    (c)  Executive uses alcohol in an inappropriate manner or
any unlawful controlled substance while performing his duties under this
Agreement and such use materially interferes with the material performance of
Executive's duties under this Agreement;

                    (d)  Executive commits any act of criminal fraud, material
dishonesty or misappropriation relating to or involving the Company;

                    (e)  Executive materially violates a rule(s), regulation(s),
policy(ies) or plan(s) governing Executive performance or express direction(s)
of the Board;

                    (f)  Executive engages in the unauthorized disclosure of
Confidential Information; or

                    (g)  Executive acts in a manner that is materially contrary
to the best interest of the Company after he is given written notice of his
actions, as well as 30 days to cure.

               "Change of Control" shall be deemed to have occurred upon the
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earliest to occur of the following events:
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                    (a)  any "person" as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934 ("the Exchange Act") (other than
the Company, any subsidiary of the Company, any "person" (as defined herein)
acting on behalf of the Company as underwriter pursuant to an offering who is
temporarily holding securities in connection with such offering, any trustee or
other fiduciary holding securities under an Executive benefit plan of the
Company, or any "person" who, on the date the RMH Teleservices, Inc. 1996 Stock
Incentive Plan (the "Plan") is effective, shall have been the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act) of or have voting control over
shares of capital stock of the Company possessing more than thirty percent (30%)
of the combined voting power of the Company's then outstanding securities,
excluding any transactions whereby RT Investors LLC transfers some or all of its
shares to its members and excluding transfers between and among any members of
RT Investors LLC) is or becomes the "beneficial owner" (as herein above
defined), directly or indirectly, of securities of the Company representing
thirty percent (30%) or more of the combined voting power of the Company's then
outstanding securities;

                    (b)  during any period of not more than two consecutive
years (not including any period prior to the date the Plan is effective),
individuals who at the beginning of such period constitute the Board of
Directors, and any new director (other than a director designated by a "person"
who has entered into an agreement with the Company to effect a transaction
described in clause (a), (c) or (d) of this definition) whose election by the
Board of Directors or nomination for election by the Company's shareholders was
approved by a vote of at least two-thirds of the directors then still in office
who either were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute at least a majority thereof;

                    (c)  the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation or other legal entity,
other than (1) a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than fifty percent (50%) of the
combined voting power of the voting securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation or (2) a
merger or consolidation effected to implement a recapitalization of the Company
(or similar transaction) in which no "person"(other than a "person" who, on the
date the Plan is effective, shall have been the "beneficial owner" of or have
voting control over shares of capital stock of the Company possessing more than
fifty percent (50%) of the combined voting power of the Company's then
outstanding securities) acquires more than fifty percent (50%) of the combined
voting power of the Company's then outstanding securities; or

                    (d)  the shareholders of the Company approve a plan of
complete liquidation of the entire Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's assets
(or any transaction having a similar effect).
<PAGE>

               "Commencement Date" shall have the meaning specified in Section 4
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hereof.

               "Confidential Information" shall have the meaning specified in
                ------------------------
Section 12(b) hereof.

               "Disability" shall mean Executive's inability, for a period of
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thirteen (13) consecutive weeks, or a cumulative period of 120 business days
(i.e., Mondays through Fridays, exclusive of days on which Company is generally
closed for a holiday) out of a consecutive period of twelve (12) months, to
perform the essential duties of Executive's position, due to a disability as
that term is defined in the American With Disabilities Act.

               "Restricted Area" shall have the meaning specified in Section
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12(a)(i) hereof.

               "Restricted Period A" shall have the meaning specified in Section
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12(a) hereof.

               "Restricted Period B" shall have the meaning specified in Section
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12(b) hereof.

               "Subsidiary" shall mean any company in which Company owns
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directly or indirectly 50% or more of the Voting Stock or 50% or more of the
equity; or any other venture in which it owns either 50% or more of the voting
rights or 50% or more of the equity.

               "Term of Employment" shall mean the period specified in Section 4
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hereof as the same may be terminated in accordance with this Agreement.

          2.   Employment. Company hereby employs Executive as Chief Executive
               ----------
Officer and Executive hereby accepts employment by Company for the period and
upon the terms and conditions specified in this Agreement.
<PAGE>

          3.   Office and Duties.
               -----------------

               (a)  Executive shall continue to serve as the Chief Executive
Officer of Company. In such capacity, Executive shall render such services as
are necessary and desirable to protect and advance the best interests of
Company, acting, in all instances, under the supervision of and in accordance
with the policies set by the Board. As Chief Executive Officer, Executive shall
be responsible for managing the day-to-day operations of the business and shall
have the responsibility and authority, subject to policies set by and with the
approval of the Board, to employ and terminate Executives, sign agreements and
otherwise to implement the policies and directives of the Board, all subject to
the provisions of any operating budget or budgets as may be approved from time
to time by the Board and subject to the By-Laws of the Company. Executive shall
perform any other duties reasonably required by the Board and reasonably related
to his responsibilities as Chief Executive Officer.

               (b)  For as long as Executive shall remain an Executive of
Company, Executive's entire working time, energy, skill and best efforts shall
be devoted to the performance of Executive's duties hereunder in a manner which
will faithfully and diligently further the business and interests of Company.
Executive may engage in charitable, civic, fraternal, trade and professional
association activities that do not interfere with Executive's obligations to
Company, but Executive shall not work for any other for-profit business without
so disclosing such activity to the Board, in which event the Board may not
unreasonably withhold its consent to such activity.

          4.   Term. Executive shall be employed by Company for an initial Term
               ----
of Employment (the "Initial Term"), commencing September 8, 2000 (the
"Commencement Date"), and ending on January 16, 2004, unless sooner terminated
as hereinafter provided. However, at the end of the Initial Term on January 16,
2004, the Term of Employment and this Employment Agreement will be automatically
extended for consecutive one (1) year terms ("Additional Term") unless not later
than thirty (30) days prior to January 16, 2004 or thirty (30) days prior to any
successive anniversary of that date, either party gives written notice that it
does not wish to extend this Employment Agreement. During any Additional Term,
this Agreement and Executive's employment can be terminated in accordance with
Sections 7 - 10 below.

          5.   Compensation and Benefits.
               -------------------------

               (a)  For all of the service rendered by Executive to Company,
Executive shall receive Base Compensation at the gross annual rate of Six
Hundred and Fifty Thousand Dollars ($650,000), payable in installments in
accordance with Company's regular payroll practices in effect from time to time.
The Base Compensation shall be reviewed annually, on or around the anniversary
date of the Commencement Date of this Agreement to ascertain, in the sole
discretion of the Board or the Compensation Committee, the amount, if at all,
the Executive's Base Compensation should be increased, but it shall not be
decreased.
<PAGE>

               (b)  In addition to the foregoing compensation, Executive is
eligible to receive an Annual Bonus each fiscal year in an amount, as shall be
determined by a majority of the Board of Directors or the Compensation
Committee, in their sole discretion, (subject to the minimum Annual Bonus) based
on performance goals (Company and Executive's) set by the Board. Such Annual
Bonus shall be equal to no less than twenty percent (20%) (and this minimum
Annual Bonus amount is not discretionary) of Executive's Base Compensation and
shall have no cap. If Executive, in the Board of Directors' or Compensation
Committee's sole discretion, meets the targets set by the Board of Directors or
the Compensation Committee, the Annual Bonus will be seventy percent (70%) of
Executive's Base Compensation. The Annual Bonus shall be payable in a single
lump-sum payment within ninety (90) days after the end of each fiscal year. To
be eligible for the Annual Bonus, Executive must be actively employed by the
Company on the last day of the relevant fiscal year.

                    (i)    Executive will be granted an additional 100,000
shares of the Company's restricted common stock. Such stock shall vest upon the
earlier of a Change of Control, death of Executive or upon a three year vesting
cycle commencing January 16, 2001, provided Executive has not been terminated
under Section 7, 8, 9 or 10 hereof as of the anniversary date. The 100,000
shares of the Company's restricted common stock Executive was granted in the
1998 Employment Agreement between Company and Executive continues to vest as per
the provisions of the 1998 Employment Agreement, unless the vesting schedule is
accelerated by the Board of Directors, but the vesting schedule shall not be
lengthened.

                    (ii)   The options granted to Executive in the 1998
Employment Agreement, pursuant to the RMH Teleservices, Inc. 1996 Stock
Incentive Plan, to purchase 100,000 RMH common shares will continue to vest as
stated in the 1998 Employment Agreement.

               (c)  If Executive's employment is terminated by the Company at
any time within three months before, or six month after the occurrence of a
Change in Control, Executive shall be entitled to the following severance, in
lieu of any other Base Compensation, Annual Bonus, additional bonus or any other
compensation and benefits provided herein:

                    (i)    The Company shall pay as severance pay to Executive,
no later than the tenth business day following the termination, a lump sum
severance payment equal to 100% of Executive's Base Compensation for twenty-four
(24) months.

                    (ii)   For twenty-four (24) months after such termination,
Executive shall be entitled to all Fringe Benefits described in 6(a) herein,
except for sick time, and subject to the terms, conditions and restrictions of
the specific plans. The Company shall use its best efforts to arrange to provide
Executive with group health coverage substantially similar to the Plan which
Executive was covered under immediately prior to the termination. Fringe
Benefits otherwise receivable by the Executive pursuant to this paragraph (ii)
will be reduced to
<PAGE>

the extent comparable benefits are actually received from other sources by
Executive during such period.

                    (iii)  Executive shall not be required to mitigate the
amount of any payment provided for in this Section 5(c) by seeking employment or
otherwise.

                    (iv)   In the event that any payment or benefit received or
to be received by Executive in connection with a Change in Control or the
termination of Executive's employment (whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the Company)
(collectively the "Total Payments"), would not be deductible (in whole or in
part) as a result of Section 280G of the Internal Revenue Code of 1986, as
amended (the "Code"), by the Company, an Affiliate or other person making such
payment or providing such benefit, the payments or benefits shall be so reduced
until no portion of the Total Payments is not deductible under Code Section 280G
(such reduction being referred to herein as the "280G Limitation"). Executive
shall be entitled to elect which payments or benefits shall be so reduced. For
purposes of this limitation, (1) no portion of the Total Payments the receipt or
enjoyment of which Executive shall have effectively waived in writing prior to
the date of payment shall be taken into account, (2) no portion of the Total
Payments shall be taken into account which in the opinion of tax counsel
selected by the Company's independent auditors and acceptable to Executive does
not constitute a "parachute payment" within the meaning of Section 280G(b)(2) of
the Code, and (3) the value of any noncash benefit or any deferred payment or
benefit included in the Total Payments shall be determined by the Company's
independent auditors in accordance with the principles of Sections 280(d)(3) and
(4) of the Code. Notwithstanding the foregoing, if Executive's net payments,
after taking into account all applicable taxes, including but not limited to
federal, state and local income taxes, and excise taxes imposed under Section
4999 of the Code would be greater if no reduction to Total Payments were
implemented by reason of the 280G Limitation, the 280G Limitation shall be
inapplicable. All determinations under this Section 5(c)(iv) shall be made by
the Company's regularly engaged tax counsel and accountants.

               (d)  Executive agrees and acknowledges that his employment and
the other protections and benefits of this Agreement are full, adequate and
sufficient consideration for the restrictions and obligations set forth in
Sections 11 and 12 of this Agreement.

          6.   Fringe Benefits. As an inducement to Executive to continue
               ---------------
employment hereunder, and in consideration of Executive's covenants under this
Agreement, Executive shall be eligible to the benefits set forth below (the
"Fringe Benefits") during the Term of Employment:

          (a) Executive shall be eligible to participate in any health, life,
accident or disability insurance, sick leave or other benefit plans or programs
made available to other similarly situated Executives of Company on terms at
least equal to those available to other similarly situated Executives of Company
as long as the plans and programs  are kept in force by Company and provided
that Executive meets the eligibility requirements and other terms,
<PAGE>

conditions and restrictions of the respective plans and programs, with the
understanding that the Company will keep in force throughout the Term of this
Agreement health, life, accident and disability insurance and sick leave
benefits equal to or greater than those in effect at the Commencement Date.

               (b)  Executive shall be entitled to four (4) weeks paid vacation
during each year, subject to Company's generally applicable policies relating to
vacations, and excluding standard Company holidays.

               (c)  Company will provide Executive with an expense allowance of
$1500 per month to cover all reasonable and necessary expenses incurred by
Executive in connection with the performance of Executive's duties hereunder
upon receipt of documentation therefor in accordance with Company's regular
reimbursement.

               (d)  Company will pay for Executive to receive financial planning
assistance each year during which Executive remains employed by Company under
this Agreement.

          7.   Disability. If Executive suffers a Disability as that term is
               ----------
defined in Section 1 herein, the Company may terminate Executive's employment
relationship with Company at any time thereafter (after the expiration of time
periods described in the definition of "Disability" in Section 1) by giving
Executive thirty (30) days written notice of termination. Thereafter, Company
shall have no obligation to Executive for Base Compensation, Annual Bonus,
Fringe Benefits or any other form of compensation or benefit to Executive,
except as otherwise required by law or by benefit plans provided at Company
expense, other than (a) amounts of Base Compensation accrued through the date of
termination, (b) a prorated portion of the Annual Bonus, (c) vested Stock and
Stock Options and (d) reimbursement of appropriately documented expenses
incurred by Executive before the termination of employment, to the extent that
Executive would have been entitled to such reimbursement but for the termination
of employment.

          8.   Death. If Executive dies during the Term of Employment, the Term
               -----
of Employment and Executive's employment with Company shall terminate as of the
date of Executive's death. Company shall have no obligation to Executive or
Executive's estate for Base Compensation, Annual Bonus, Fringe Benefits or any
other form of compensation or benefit, except as otherwise required by law or by
benefit plans provided at Company expense, other than (a) amounts of Base
Compensation that have accrued through the date of Executive's death, (b) a
prorated portion of the Annual Bonus, (c) vested Stock and Stock Options and all
Stock and Stock Options shall fully vest automatically upon death of Executive,
and (d) reimbursement of appropriately documented expenses incurred by Executive
before the termination of employment, to the extent that Executive would have
been entitled to such reimbursement but for the termination of employment.
<PAGE>

          9.   Termination for Cause. Company may terminate Executive's
               ---------------------
employment relationship with Company at any time for Cause as that term is
defined in Section 1 herein, effective not less than ten (10) days after written
notice of such termination. Upon the effective date of termination of Executive
under this Section 9, Company shall have no obligation to Executive for Base
Compensation, Annual Bonus, Fringe Benefits, or any other form of compensation
or benefits other than (a) amounts of Base Compensation, and vested Stock and
Stock Options accrued through the effective date of termination, and (b)
reimbursement of appropriately documented expenses incurred by Executive before
the written notice of termination of employment, to the extent that Executive
would have been entitled to such reimbursement but for the termination of
employment. In such event, Executive will be entitled to elect to continue
participation in any health, life, accident or disability insurance plans of the
Company at Executive's expense if plans allow for continuation at no cost to the
Company.

          10.  Termination without Cause.
               -------------------------

               (a)  Company may terminate Executive's employment relationship
with Company at any time without Cause upon ninety (90) days written notice.
Notwithstanding termination of Executive under this Section 10, Company shall
continue to pay Executive's Base Compensation, as such Base Compensation would
have accrued through a twenty-four (24) month period following the expiration of
the 90-day notice period and Fringe Benefits, if permitted by law and the
Company's insurance plans at the time, and prorated Annual Bonus through the
expiration of the 90-day notice period, and vested Stock and Stock Options (all
of which will fully vest upon such termination), so long as Executive executes
and does not revoke a Separation Agreement and General Release Agreement
acceptable to Company which will be substantially in the terms and form attached
hereto as Exhibit "A".

               (b)  Executive may terminate his employment with Company for any
or no reason, upon ninety (90) days written notice. If such notice is provided
by Executive, Employer, in its sole discretion, may waive the notice period or
any portion thereof, with pay (Base Compensation) and reimbursement by Company
of Executive's COBRA premiums to Executive for the remaining notice period. Upon
termination by Executive of his employment under the provisions of this
Subsection 10(b), the Company shall have no obligation to Executive for Base
Compensation, Annual Bonus, Fringe Benefits or any other form of compensation or
benefits other than (a) amounts of Base Compensation, vested Stock and Stock
Options accrued through the effective date of termination, and (b) reimbursement
of appropriately documented expenses incurred by Executive before the
termination of employment, to the extent that Executive would have been entitled
to such reimbursement but for his termination of his employment.

               (c)  Termination of Executive's employment pursuant to Sections 7
through 10 shall release the Company of all its liabilities and obligations
under this Agreement, except as expressly provided in Sections 7 through 10.
Termination of Executive's employment
<PAGE>

pursuant to this Section shall not, however, release Executive from Executive's
obligations and restrictions as stated in Sections 11 and 12 of this Agreement.

               (d) Executive shall not be entitled to any payment or benefit
under any Company severance plan other than as reflected herein under Section
10, practice or policy, if any, in effect at or after the time of Executive's
termination since this Agreement supersedes all such plans, practices and
policies.

          11.  Company Property.  All advertising, sales, manufacturers' and
               ----------------
other materials or articles or information, including without limitation data
processing reports, computer programs, software, customer information and
records, business records, price lists or information, samples, or any other
materials or data of any kind physically furnished to Executive by Company or
developed by Executive on behalf of Company or at Company's direction or for
Company's use or otherwise in connection with Executive's employment hereunder,
are and shall remain the sole property of Company, including in each case all
copies thereof in any medium, including computer tapes and other forms of
information storage.  If Company requests the return of such materials at any
time during or at or after the termination of Executive's employment, Executive
shall deliver all copies of the same to Company immediately.

          12.  Noncompetition, Trade Secrets, Etc.  Executive hereby
               -----------------------------------
acknowledges that, during and solely as a result of his employment by Company,
Executive has had and will have access to Confidential Information as that term
is defined herein.  In consideration of such special and unique opportunities
afforded by Company to Executive as a result of Executive's employment and the
other benefits referred to within this Agreement, the Executive hereby agrees as
follows:
               (a) From the date hereof until twenty four (24) months following
the termination of Executive's employment with Company, for any or no reason,
whether initiated by Executive or Company, ("Restricted Period A");

                   (i) Executive shall not, for his own benefit or the benefit
of any third party, directly or indirectly engage in (as a principal,
shareholder, partner, director, officer, agent, Executive, consultant or
otherwise) or be financially interested in any business operating within the
United States or Canada (the "Restricted Area"), which provides telemarketing
services materially the same as the services Company provides to third parties,
or any other business activities which are materially the same as and which are
in direct competition with the Business, or with any business activities carried
on by Company or being planned by Company, at the time of the termination of
Executive's employment, or any other business activities which are materially
the same as the Business for any of the Company's past, present or prospective
clients, customers or accounts; provided however, nothing contained in this
Section 12 shall prevent Executive from holding for investment less than five
percent (5%) of any class of equity securities of a company whose securities are
publicly traded on a national securities exchange or in a national market
system.
<PAGE>

                   (ii) Induce or attempt to influence any Executive, customer,
independent contractor or supplier of Company to terminate employment or any
other relationship with Company.  During the Restricted Period, while Executive
is still employed by the Company, Executive shall not, directly or indirectly,
disclose or otherwise communicate to any of the clients, customers or accounts
of Company, its Affiliates or any Subsidiary thereof that he has been
terminated, is considering terminating or has decided to terminate employment
with Company.

               (b) From the date hereof until three (3) years following the
termination of Executive's employment with the Company, for any or no reason,
whether initiated by Executive or Company ("Restricted Period B"), Executive
shall not use for Executive's personal benefit, or disclose, communicate or
divulge to, or use for the direct or indirect benefit of any person, firm,
association or company other than Company, any "Confidential Information" which
term shall mean any information regarding the business methods, business
policies, policies, procedures, techniques, research or development projects or
results, historical or projected financial information, budgets, trade secrets,
or other knowledge or processes of or developed by Company or any names and
addresses of customers or clients or any data on or relating to past, present or
prospective Company customers or clients or any other confidential information
relating to or dealing with the business operations or activities of Company,
made known to Executive or learned or acquired by Executive while in the employ
of Company.  Confidential Information shall not include (1) information
unrelated to the Company which was lawfully received by Executive free of
restriction from another source having the right to so furnish such Confidential
Information; or (2) information after it has become generally available to the
public or to industry competitors without breach of this Agreement by the
Executive; or (3) information which at the time of disclosure to the Executive
was known to the Executive to be free of restriction as evidenced by
documentation from the Company which the Executive possesses, or (4) information
which Company agrees in writing is free of such restrictions.  All memoranda,
notes, lists, records, files, documents and other papers and other like items
(and all copies, extracts and summaries thereof) made or compiled by Executive
or made available to Executive concerning the business of Company shall be
Company's property and shall be delivered to Company promptly upon the
termination of Executive's employment with Company or at any other time on
request.  The foregoing provisions of this Subsection 12(b) shall apply during
and for a period of three (3) years after Executive is an Executive of Company
and shall be in addition to (and not a limitation of) any legally applicable
protections of Company's interest in confidential information, trade secrets and
the like.  At the termination of Executive's employment with Company, Executive
shall return to Company all copies of Confidential Information in any medium,
including computer tapes and other forms of data storage.

               (c) Any and all writings, inventions, improvements, processes,
procedures and/or techniques which Executive may make, conceive, discover or
develop, either solely or jointly with any other person or persons, at any time
when Executive is an Executive of Company, whether or not during working hours
and whether or not at the request or upon the suggestion of Company, which
relate to or are useful in connection with the Business or with any
<PAGE>

business now or hereafter carried on or contemplated by Company, including
developments or expansions of its present fields of operations, shall be the
sole and exclusive property of Company. Executive shall make full disclosure to
Company of all such writings, inventions, improvements, processes, procedures
and techniques, and shall do everything necessary or desirable to vest the
absolute title thereto in Company. Executive shall write and prepare all
specifications and procedures regarding such inventions, improvements,
processes, procedures and techniques and otherwise aid and assist Company so
that Company can prepare and present applications for copyright or Letters
Patent therefor and can secure such copyright or Letters Patent wherever
possible, as well as reissues, renewals, and extensions thereof, and can obtain
the record title to such copyright or patents so that Company shall be the sole
and absolute owner thereof in all countries in which it may desire to have
copyright or patent protection. Executive shall not be entitled to any
additional or special compensation or reimbursement regarding any and all such
writings, inventions, improvements, processes, procedures and techniques.

               (d) Executive acknowledges that the restrictions contained in the
foregoing Subsections in view of the nature of the business in which Company is
engaged, are reasonable and necessary in order to protect the legitimate
interests of Company, that their enforcement will not impose a hardship on
Executive or significantly impair Executive's ability to earn a livelihood, and
that any violation thereof would result in irreparable injuries to Company.
Executive and Company acknowledge that, in the event either party believes the
other party has violated any of the terms of this Agreement, the other party
shall be entitled to seek from any court of competent jurisdiction, without
attempting arbitration, preliminary and permanent injunctive relief.

               (e) If the Restricted Periods or the Restricted Area specified
above should be adjudged unreasonable in any proceeding, then the period of time
shall be reduced by such amount or the area shall be reduced by the elimination
of such portion or both such reductions shall be made so that such restrictions
may be enforced for such time and in such area as is adjudged to be reasonable.
If Executive violates any of the restrictions contained in the foregoing
Subsections, the relevant Restricted Period shall be extended by a period equal
to the length of time from the commencement of any such violation until such
time as such violation shall be cured by Executive to the satisfaction of
Company. Executive hereby expressly consents to the jurisdiction of any court
within the Eastern District of Pennsylvania for the purpose of seeking a
preliminary or permanent injunction as described above in Section 12(d), and
agrees to accept service of process by certified mail return receipt requested
relating to any such proceeding. Company may supply a copy of Section 12 of this
Agreement to any future or prospective employer of Executive or to any person to
whom Executive has supplied information if Company determines in good faith that
there is a reasonable likelihood that Executive has violated or will violate
such Section.

          13.  Prior Agreements.  Executive represents to Company that there are
               ----------------
no restrictions, agreements or understandings, oral or written, to which
Executive is a party or by
<PAGE>

which Executive is bound that prevent or make unlawful Executive's execution or
performance of this Agreement.

          14.  Miscellaneous.
               -------------

               (a) Indulgences, Etc. Neither the failure nor any delay on the
                   ----------------
part of either party to exercise any right, remedy, power or privilege under
this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege preclude any other or
further exercise of the same or of any other right, remedy, power or privilege,
nor shall any waiver of any right, remedy, power or privilege with respect to
any occurrence be construed as a waiver of such right, remedy, power or
privilege with respect to any other occurrence. No waiver shall be effective
unless it is in writing and is signed by the party asserted to have granted such
waiver.

               (b) Controlling Law. This Agreement and all questions relating to
                   ---------------
its validity, interpretation, performance and enforcement (including, without
limitation, provisions concerning limitations of actions), shall be governed by
and construed in accordance with the laws of the Commonwealth of Pennsylvania,
notwithstanding any conflict-of-laws doctrines of such jurisdiction to the
contrary, and without the aid of any canon, custom or rule of law requiring
construction against the draftsman.

               (c) Notices. All notices, requests, demands and other
                   -------
communications required or permitted under this Agreement shall be in writing
and shall be deemed to have been duly given, made and received only when
personally delivered, on the day specified for delivery when deposited with a
recognized national or regional courier service for delivery to the intended
addressee or two (2) days following the day when deposited in the United States
mails, first class postage prepaid, addressed as set forth below:

                   (i)   If to Executive:

                         Mr. John Follows
                         3 Wingate Cr.
                         Flourtown, PA 19031

                         with a copy, given in the manner prescribed above, to:

                         Chris Hart, Esquire
                         Odenweller, Fabrega, Hood & Hart, L.L.P.
                         808 Travis, Suite 1107
                         Houston, TX   77002

                   (ii) If to Company:
<PAGE>

                         Mr. Herbert Kurtz
                         Chairman of the Board
                         RMH Teleservices, Inc.
                         40 Morris Avenue
                         Bryn Mawr, PA   19010

                         with a copy, given in the manner prescribed above, to:

                         Jay Dubow, Esquire
                         Wolf, Block, Schorr and Solis-Cohen LLP
                         1650 Arch Street, 22nd Floor
                         Philadelphia, PA   19103

              In addition, notice by mail shall be by air mail if posted outside
of the continental United States. Any party may alter the address to which
communications or copies are to be sent by giving notice of such change of
address in conformity with the provisions of this Section for the giving of
notice.

          (d) Binding Nature of Agreement.  This Agreement shall be binding upon
              ---------------------------
Company and shall inure to the benefit of Company, its present and future
Subsidiaries, Affiliates, successors and assigns including any transferee of the
business operation, as a going concern, in which Executive is employed and shall
be binding upon Executive, Executive's heirs and personal representatives.  None
of the rights or obligations of Executive hereunder may be assigned or
delegated, except that in the event of Executive's death or Disability, any
rights of Executive hereunder shall be transferred to Executive's estate or
personal representative, as the case may be.  Company may assign its rights and
obligations under this Agreement in whole or in part to any one or more
Affiliates or successors, but no such assignment shall relieve Company of its
obligations to Executive if any such assignee fails to perform such obligations.

          (e) Execution in Counterparts.  This Agreement may be executed in any
              -------------------------
number of counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall
together constitute one and the same instrument.  This Agreement shall become
binding when one or more counterparts hereof, individually or taken together,
shall bear the signatures of all of the parties reflected hereon as the
signatories.

          (f) Provisions Separable.  The provisions of this Agreement are
              --------------------
independent of and separable from each other, and no provision shall be affected
or rendered invalid or unenforceable by virtue of the fact that for any reason
any other or others of them may be invalid or unenforceable in whole or in part.

          (g) Entire Agreement.  This Agreement contains the entire
              ----------------
understanding among the parties hereto with respect to the employment of
Executive by
<PAGE>

Company, and supersedes all prior and contemporaneous agreements and
understandings, inducements or conditions, express or implied, oral or written,
except as herein contained. The express terms hereof control and supersede any
course of performance and/or usage of the trade inconsistent with any of the
terms hereof. This Agreement may not be modified or amended other than by an
agreement in writing. Notwithstanding the foregoing, nothing herein shall limit
the application of any generally applicable Company policy, practice, plan or
the terms of any manual or handbook applicable to Company's Executives
generally, except to the extent the foregoing directly conflict with this
Agreement, in which case the terms of this Agreement shall prevail.

          (h) Section Headings.  The Section headings in this Agreement are for
              ----------------
convenience only; they form no part of this Agreement and shall not affect its
interpretation.

          (i) Number of Days.  Except as otherwise provided herein, for example,
              --------------
in the context of vacation days, in computing the number of days for purposes of
this Agreement, all days shall be counted, including Saturdays, Sundays and
holidays; provided, however, that if the final day of any time period falls on a
Saturday, Sunday or holiday on which federal banks are or may elect to be
closed, then the final day shall be deemed to be the next day which is not a
Saturday, Sunday or such holiday.

          (j) Gender, Etc.  Words used herein, regardless of the number and
              -----------
gender specifically used, shall be deemed and construed to include any other
number, singular or plural, and any other gender, masculine, feminine or neuter,
as the context indicates is appropriate.

          (k) Dispute Resolution.  In the event of any disagreement of any
              ------------------
nature whatsoever between the parties to this Employment Agreement in any way
relating to this Employment Agreement, except for the ability of the parties to
seek a preliminary or permanent injunction as described above, which need not be
discussed between the parties or arbitrated, the parties shall meet to attempt
to resolve such disagreement.  In the event of their failure to do so within
fifteen (15) days or such longer period of time as shall be mutually agreed upon
by the parties, either party may serve notice in writing upon the other party
requesting arbitration, which notice shall specify in reasonable detail the
nature of the dispute.  Any arbitration under this Section shall be held in
Philadelphia, Pennsylvania or such other place as shall be mutually agreed to by
the parties, and conducted in accordance with the procedures set forth hereafter
and, to the extent not inconsistent with this Section, in accordance with the
Employment Dispute Resolution Rules of the American Arbitration Association in
effect on the date of this Agreement.  Company shall have the right and remedy
to ask the arbitrator to require Executive to account for any pay over to
Company all compensation, profits, monies, accruals, increments or other
benefits derived or received by Executive as the result of any transactions
constituting a breach of Section 12, and Executive shall account for and pay
over such amounts to Company upon the arbitrator's determination thereof.
<PAGE>

               (1) Any arbitration under this Section shall be before an
arbitrator who shall be experienced in the area of employment law. The
arbitrator shall be selected by the parties from lists provided by the American
Arbitration Association. The parties agree to exchange all relevant documents
prior to any hearing, and further agree that any dispute over such exchange may
be submitted to the arbitrator for decision, which decision shall be binding on
the parties. The parties further agree to exchange hearing exhibits and
designations of witnesses to be called at the hearing at least ten (10) calendar
days before any hearing as a party may not offer at the hearing as part of its
direct case any witness, evidence or document not so disclosed, unless such
witness(es), evidence or document(s) became available and/or known to the party
who wishes to introduce such witness(es), evidence and/or document(s) within the
ten (10) calendar days prior to the arbitration, and such witness(es), evidence
or document(s) is immediately provided to the arbitrator and the other party, or
unless the evidence is for rebuttal or impeachment purposes and its need was not
anticipated or foreseen before the hearing.

               (2) Within 60 days of the production of all documents, evidence
and witness list as outlined in the preceding section, the arbitrator shall
conduct the arbitration hearing. Each party will have one day to present its
case, unless, upon request the arbitrator determines that more or less time is
appropriate. Within 30 days of the arbitration hearing, the arbitrator shall
render a decision in writing to each party.

               (3) Any arbitration award must (i) be rendered in accordance with
applicable law as described in this Employment Agreement and (ii) be set forth
in a written decision which sets forth the reasons (including, without
limitation, the conclusions of fact and/or law) upon which such award is
rendered.  Judgment upon an arbitration award may be rendered in any court of
competent jurisdiction or application may be made to any such state or federal
court of competent jurisdiction for judicial acceptance of an order to
enforcement of an arbitration award, as the case may be.  Any arbitration award
shall be final and binding on the parties.  Once an issue has been arbitrated
pursuant hereto, the decision of the arbitrator shall be res judicata with
respect to such issue.

               (4) The arbitrator shall have the power to issue subpoenas
compelling testimony and/or the production of documents from any person whether
or not a party hereto, which subpoenas shall be enforceable in all courts of
competent jurisdiction in the Eastern District of Pennsylvania. In addition, the
arbitrator and attorney-of-record shall have the power to request through the
above-mentioned courts of competent jurisdiction the taking of depositions from
any person, not a party or a director, officer, executive, employee or agent of
a party, who cannot be subpoenaed or is unable to attend the arbitration, whose
testimony the arbitrator deems both important and relevant to the resolution of
the issues presented for arbitration.

               (5) The cost of the arbitration and all attorney fees shall be
borne by the parties in such proportion as the arbitrator shall direct, with
such arbitrator to give due consideration to the fault of the parties.
<PAGE>

               (6) Notwithstanding the foregoing, the parties need not arbitrate
any request for preliminary or permanent injunctive relief, such relief may be
brought by either party in any state or federal court in the Eastern District of
Pennsylvania. Such litigation will toll the Restricted Periods beginning on the
alleged date of Executive's violation until the date the dispute is resolved.

          (l)  Jurisdiction of Courts. Any legal suit, action, claim, proceeding
               ----------------------
or investigation arising out of or relating to Sections 11 or 12 of this
Agreement may be instituted in any state or federal court in the Eastern
District of Pennsylvania, and each of the parties hereto waives any objection
which party may now or hereafter have to such venue of any such suit, action,
claim, proceeding or investigation, and irrevocably submits to the jurisdiction
of any such court. Any and all service of process and any other notice in any
such suit, action, claim, proceeding or investigation shall be effective against
any party if given by registered or certified mail, return receipt requested, or
by any other means of mail which requires a signed receipt, postage prepaid,
mailed to such party as herein provided. If for any reason such service of
process by mail is ineffective, then Company shall be deemed to have appointed
Jay Dubow, Esquire, Wolf, Block, Schorr and Solis-Cohen LLP, 1650 Arch Street,
22nd Floor, Philadelphia, Pennsylvania 19103, as the authorized agent of Company
to accept and acknowledge, on behalf of Company, service of any and all process
which may be served in any such suit, action, claim, proceeding or
investigation. Nothing herein contained shall be deemed to affect the right of
any party to serve process in any manner permitted by law or to commence legal
proceedings or otherwise proceed against any other party in any jurisdiction
other than Pennsylvania.

          (m)  Survival.  All provisions of this agreement which by their terms
               --------
survive the termination of Executive's employment with Company, including
without limitation the covenants of Executive set forth in Sections 11 and 12
and the obligations of Company to make any post-termination payments under this
Agreement, shall survive termination of Executive's employment by Company and
shall remain in full force and effect thereafter in accordance with their terms.
<PAGE>

          IN WITNESS WHEREOF, the parties have duly executed and delivered this
Agreement in Philadelphia, Pennsylvania as of the date first above written.

                           RMH TELESERVICES, INC.

                           By:  /s/ P. Gregory Lakin
                               ------------------------  August 9, 2001
                               Name:  P. Gregory Lakin
                               Title: Chairman of Compensation Committee,
                                      Board of Directors, RMH Teleservices, Inc.

                                /s/ John Fellows
                               ------------------------  August 9, 2001
                                      John Fellows<PAGE>

                                                                    EXHIBIT 10.1
                                                                    ------------

                           INDEMNIFICATION AGREEMENT

          THIS AGREEMENT (this "Agreement") is made and entered into as of this
7th day of August, 2001, between Covalent Group, Inc., a Nevada corporation (the
"Company") and the individual whose name appears on the signature page hereto
(the "Officer").

                                   BACKGROUND

          The Officer, the current Chief Information Officer, Secretary and
Treasurer of the Company, performs a valuable service in such capacity for the
Company. To induce the Officer to continue to serve in his capacity as an
officer of the Company, the Company has determined and agreed to enter into this
Agreement with the Officer.

                                   AGREEMENT

          NOW, THEREFORE, in consideration of the promises contained in this
Agreement and the Officer's agreement to continue service as an officer of the
Company, the parties hereto, intending to be legally bound, agree as follows:

          1.  Certain Definitions. Capitalized terms used in this Agreement
              -------------------
shall have the meanings set forth on Appendix A to this Agreement. Other terms
                                     ----------
are defined where appropriate in this Agreement.

          2.  Scope of Indemnity.  The Company shall hold harmless and indemnify
              ------------------
the Officer from any action described in Sections 3 and 4 of this Agreement to
the fullest extent permitted by Nevada law, now in effect or as may hereafter be
in effect, including any changes after the date of the Agreement in any
applicable law, statute, or rule which expands the right of a Nevada corporation
to indemnify a member of its board of directors. All such changes shall be, ipso
                                                                            ----
facto, within the purview of the Officer's rights and the Company's obligations
-----
under this Agreement. In the event of any change in any applicable law, statute,
or rule which narrows the right of a Nevada corporation to indemnify one of its
officers, such changes, to the extent not otherwise required by such law,
statute or rule to be applied to the Agreement shall have no effect on this
Agreement or the parties' rights and obligations hereunder or to any matter that
arose from circumstances that occurred before the effective date of such change.

          3.  Indemnity of the Officer. Subject only to the limitations
              ------------------------
contained in Section 5 of this Agreement, the Company shall hold harmless and
indemnify the Officer to the fullest extent permitted by Nevada law if the
Officer 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), because the Officer is
or was a director, officer, employee or agent of the Company or any subsidiary
of the Company, or is or was serving at the request of the Company as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, or is or was serving in a fiduciary capacity
with respect to any profit sharing, pension, or other type of benefit plan or
trust for the benefit of employees of the Company or any subsidiary of the
Company against all Expenses and Liabilities actually incurred by the Officer in
connection with the Proceeding, unless a final adjudication establishes that the
Officer's acts or omissions involved

                                       1
<PAGE>

intentional misconduct, fraud or a knowing violation of the law and was material
to the cause of action.

          4.  Proceeding by or in the Right of the Company. Subject only to the
              --------------------------------------------
limitations contained in Section 5 of this Agreement, the Company shall
indemnify the Officer to the fullest extent permitted by Nevada law if the
Officer was or is a party or is threatened to be a party to any Proceeding by or
in the right of the Company or by or in the right of any employee benefit plan
or trust to procure a judgment in its favor and to which the Officer was or is a
party because the Officer is or was a director, officer, stockholder, employee,
or agent of the Company or is or was serving at the request of the Company as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, or that the Officer is or was serving in a
fiduciary capacity with respect to any profit sharing, pension or other type of
benefit plan for the benefit of employees of the Company or any subsidiary of
the Company against all Expenses and Liabilities actually incurred by the
Officer in connection with the defense or settlement of the Proceeding unless a
final adjudication establishes that the Officer's acts or omissions involved
intentional misconduct, fraud or a knowing violation of the law and was material
to the cause of action.

          5.  Limitations on Indemnity.
              ------------------------

              (a)  No indemnity pursuant to Sections 3 or 4 of this Agreement
shall be paid by the Company for any of the following:

                   (i)  in respect of remuneration paid to the Officer if it
shall be determined by a final judgment or other final adjudication that such
remuneration was in violation of law;

                   (ii) on account of any Proceeding in which judgment is
rendered against the Officer for an accounting of profits made from the purchase
or sale by the Officer of securities of the Company pursuant to the provisions
of Section 16 of the Securities Exchange Act of 1934 and amendments thereto or
similar provisions of any federal, state or local statutory law;

                   (iii)  provided there has been no Change of Control, on
account of or arising in response to any Proceeding (other than a Proceeding
referred to in Section 12(b) hereof) initiated by the Officer or any of the
Officer's affiliates against the Company or against any officer, director or
stockholder of the Company unless such Proceeding was authorized by the Board of
Officers of the Company;

                   (iv) if a final decision by a court having jurisdiction in
the matter shall determine that such indemnification is not lawful; or

                   (v)  on account of any Proceeding to the extent that the
Officer is a plaintiff, a counter-complainant or a cross-complainant therein
(other than an action, suit or proceeding permitted by Section 5(a)(iii) or
Section 12(b) of this Agreement).

                                       2
<PAGE>

          (b)  In addition to those limitations set forth above in paragraph (a)
of this Section 5, no indemnity pursuant to Section 4 of this Agreement in an
action by or in the right of the Company shall be paid by the Company for any of
the following:

                   (i)  with respect to any transaction from which the Officer
derived an improper personal benefit, if so established by an Adverse Judgment;

                   (ii) on account of acts or omissions that show a reckless
disregard for the Officer's duty to the Company or its stockholders in
circumstances in which the Officer was aware, or should have been aware, in the
ordinary course of performing a director's duties, of a risk of serious injury
to the Company or its stockholders, if so established by an Adverse Judgment;
and

                   (iii)  Liabilities and Expenses paid or incurred in
settlement of a pending Proceeding without the approval of the Company, which
approval shall not be unreasonably withheld.

          6.  Procedure for Determination of Entitlement to Indemnification.
              -------------------------------------------------------------

              (a)  Whenever the Officer believes that he is entitled to
indemnification pursuant to this Agreement, the Officer shall submit a written
request for indemnification to the Company. A request for indemnification shall
include sufficient documentation or information reasonably available to the
Officer to support his claim for indemnification. The Officer shall submit his
claim for indemnification within a reasonable time not to exceed three years
after any judgment, order, settlement, dismissal, arbitration award, conviction,
acceptance of a plea of nolo contendere or its equivalent, final termination or
other disposition or partial disposition of any Proceeding, whichever is the
later date for which the Officer requests indemnification. The president or the
secretary or other appropriate officer of the Company shall, promptly upon
receipt of the Officer's request for indemnification, advise the Board of
Officers in writing that the Officer has made such a request. Determination of
the Officer's entitlement to indemnification shall be made not later than 90
days after the Company's receipt of his written request for such
indemnification.

              (b)  The Officer shall be entitled to select the forum in which
the Officer's request for indemnification will be heard, which selection shall
be included in the written request for indemnification required in Section 6(a).
If the Officer fails to make such designation, his claim shall be determined by
the forum selected by the Company. The forum shall be one of the following:

                   (i)  A quorum of the Board of Officers consisting of
Disinterested Officers; or

                   (ii) Independent Legal Counsel, who shall make the
determination in a written opinion.

          7.  Presumptions and Effect of Certain Proceedings. Upon making a
              ----------------------------------------------
request for indemnification, the Officer shall be presumed to be entitled to
indemnification under this Agreement and the Company shall have the burden of
proof to overcome that presumption in

                                       3
<PAGE>

reaching any contrary determination. The termination of any Proceeding by
judgment, order, settlement, arbitration award or conviction, or upon a plea of
nolo contendere or its equivalent shall not affect this presumption or establish
a presumption with regard to any factual matter relevant to determining the
Officer's rights to indemnification under this Agreement. If the person or group
so empowered to make a determination pursuant to Section 66(b) hereof fails to
make the requested determination within 90 days after receipt of the written
request required by Section 6(a) hereof, the determination that the Officer is
entitled to indemnification shall be deemed to have been made.

          8.  Contribution. If the indemnification provided in Sections 2, 3 and
              ------------
4 is unavailable and may not be paid to the Officer for any reason other than
those set forth in Section 5 (excluding subsection 5(b)(iii)), then in respect
of any Proceeding in which the Company is or is alleged to be jointly liable
with the Officer, the Company shall contribute to the amount of Expenses and
Liabilities actually incurred and paid or payable by the Officer in such
proportion as is appropriate to reflect:

                   (i)  the relative benefits received by the Company on the one
hand and the Officer on the other hand from the transaction or events that form
the basis of the Proceeding giving rise to the Officer's Expenses and
Liabilities, and

                   (ii) the relative fault of the Company on the one hand and of
the Officer on the other in connection with the events that resulted in such
Expenses and Liabilities, as well as any other relevant equitable
considerations. The relative fault of the Company on the one hand and of the
Officer on the other shall be determined by reference to, among other things,
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent the circumstances resulting in such Expenses and
Liabilities. The Company agrees that it would not be just and equitable if
contribution pursuant to this Section 8 were determined by pro rata allocation
or any other method of allocation which does not take account of the foregoing
equitable considerations.

          9.  Continuation of Obligations. All obligations of the Company
              ---------------------------
contained herein shall continue during the period the Officer is a director,
officer, employee or agent of the Company (or is or was serving at the request
of the Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise) and shall continue
thereafter so long as the Officer shall be subject to any possible claim or
threatened, pending or completed Proceeding, by reason of the fact that the
Officer was serving the Company or any such other entity in any capacity
referred to herein.

          10.  Notification and Defense of Claim. Promptly after receipt by the
               ---------------------------------
Officer of notice of the commencement of any Proceeding, the Officer will, if a
claim in respect thereof is to be made against the Company under this Agreement,
notify the Company of the commencement thereof; but the failure so to notify the
Company shall not relieve the Company from any liability which it may have to
the Officer under this Agreement, unless and only to the extent that the failure
to provide notice results in prejudice to the Company. With respect to any such
Proceeding as to which the Officer notifies the Company of the commencement
thereof:

              (a)  the Company will be entitled to participate therein at its
own expense;

                                       4
<PAGE>

              (b)  except as otherwise provided below, to the extent that it may
wish, the Company jointly with any other indemnifying party similarly notified
will be entitled to assume the defense thereof, with counsel reasonably
satisfactory to the Officer. After notice from the Company to the Officer of its
election to assume the defense thereof, the Company will not be liable to the
Officer under this Agreement for any Expenses subsequently incurred by the
Officer in connection with the defense thereof other than reasonable costs of
investigation or as otherwise provided below. The Officer shall have the right
to employ its counsel in such action, suit or proceeding, but the fees and
expenses of such counsel incurred after notice from the Company of its
assumption of the defense thereof shall be at the expense of the Officer unless:

                   (i)  the employment of counsel by the Officer has been
authorized by the Company,

                   (ii)  counsel to the Company reasonably concludes and
notifies the Officer that there may be a conflict of interest between the
Company and the Officer in the conduct of the defense of such action, and the
Officer notifies the Company after receiving such notice from the Company that
he is engaging counsel, or

                   (iii)  the Company shall not in fact have employed counsel to
assume the defense of such action. In each of the foregoing three cases, the
Company shall reimburse the Officer for all Expenses incurred by him. The
Company shall not be entitled to assume the defense of any Proceeding brought by
or on behalf of the Company or as to which the Officer shall have made the
conclusion referred to in (ii) above; and

              (c)  the Company shall not settle any Proceeding in any manner
which would impose any penalty or limitation on the Officer without the
Officer's prior written consent.

          11.  Advancement and Repayment of Expenses.
               -------------------------------------

              (a)  If the Officer employs his own counsel pursuant to Section
10(b)(i) through (iii) above, the Company shall advance to the Officer, prior to
any final disposition of any Proceeding, all Expenses incurred in investigating
or defending any Proceeding within 30 days after receiving copies of invoices
presented to the Officer for such Expenses.

              (b)  The Officer shall reimburse the Company for all Expenses paid
by the Company in defending any Proceeding against the Officer if, and only to
the extent that, it is ultimately determined by a final judicial decision (from
which there is no right of appeal) that the Officer is not entitled, under
applicable law, the Company's articles of incorporation or bylaws, this
Agreement or otherwise, to be indemnified by the Company for such Expenses.

          12.  Remedies of the Officer.
               -----------------------

              (a)  If (i) a determination pursuant to Section 6 hereof is made
that the Officer is not entitled to indemnification, (ii) advances of Expenses
are not made pursuant to this Agreement, (iii) payment has not been timely made
following a determination of entitlement to indemnification pursuant to this
Agreement, or (iv) the Officer otherwise seeks enforcement of

                                       5
<PAGE>

this Agreement, the Officer shall be entitled to a final adjudication of his
rights in an appropriate court. The Company shall not oppose the Officer's right
to seek any such adjudication.

              (b)  If a determination that the Officer is not entitled to
indemnification, in whole or in part, has been made pursuant to Section 6
hereof, the decision in the judicial proceeding provided in paragraph (a) of
this Section 12 shall be made de novo and the Officer shall not be prejudiced by
reason of a determination that he is not entitled to indemnification.

              (c)  If a determination that the Officer is entitled to
indemnification has been made pursuant to Section 6 hereof or otherwise pursuant
to the terms of this Agreement, the Company shall be bound by such determination
in the absence of (i) a misrepresentation of a material fact by the Officer or
(ii) a specific finding (which has become final) by a court that all or any part
of such indemnification is prohibited by law.

              (d)  In any Proceeding brought by the Officer under this Section
12, the Company shall be precluded from asserting that the procedures and
presumptions of this Agreement are not valid, binding and enforceable. The
Company shall stipulate in any such court that the Company is bound by all the
provisions of this Agreement and is precluded from making any assertion to the
contrary.

              (e)  The Company acknowledges that a monetary remedy for breach of
this Agreement, at some later date, will be inadequate, impracticable and
difficult to prove, and further acknowledges that such breach would cause the
Officer irreparable harm. Accordingly, the Officer shall be entitled to
temporary and permanent injunctive relief, including temporary restraining
orders, preliminary injunctions and permanent injunctions, without the necessity
of posting bond or other undertaking in connection therewith. Any such
requirement of bond or undertaking is hereby waived by the Company, and the
Company acknowledges that in the absence of such a waiver, a bond or undertaking
may be required by the court.

          13. Enforcement.
              -----------

              (a)  The Company acknowledges that it has entered into this
Agreement and assumed the obligations imposed on the Company hereby in order to
induce the Officer to continue as a director of the Company, and acknowledges
that the Officer is relying upon this Agreement in continuing in such capacity.

              (b)  If the Officer is required to bring any action to enforce
rights or to collect moneys due under this Agreement and is successful in such
action, the Company shall reimburse the Officer for all of the Officer's
Expenses incurred in bringing and pursuing such action.

          14.  Mutual Acknowledgement.  Both the Company and the Officer
               ----------------------
acknowledge that in certain instances, federal law or applicable public policy
may prohibit the Company from indemnifying the Officer under this Agreement or
otherwise. For example, the Company and the Officer acknowledge that the
Securities and Exchange Commission (the "SEC") has taken the position that
indemnification is not permissible for liabilities arising under certain federal
securities laws, and federal legislation prohibits indemnification for certain
ERISA violations. The Officer understands and acknowledges that the Company has
undertaken or may be required

                                       6
<PAGE>

in the future to undertake with the SEC to submit the question of
indemnification to a court in certain circumstances for a determination of the
Company's ability under public policy to indemnify the Officer.

          15.  Separability. Each of the provisions of this Agreement is a
               ------------
separate and distinct agreement and independent of the others, so that if any
provision hereof shall be held to be invalid or unenforceable to any extent for
any reason, such invalidity or unenforceability shall not affect the validity or
enforceability of the other provisions hereof, and the affected provision shall
be construed and enforced so as to effectuate the parties' intent to the maximum
extent possible.

          16.  Governing Law. This Agreement shall be governed by and
               -------------
interpreted and enforced in accordance with the laws of the State of Nevada.

          17.  Consent To Jurisdiction.  The Company and the Officer each
               -----------------------
irrevocably consent to jurisdiction of the courts of the Commonwealth of
Pennsylvania for all purposes in connection with any Proceeding which arises out
of or relates to this Agreement and agree that any action instituted under this
Agreement shall be brought only in the state courts of the Commonwealth of
Pennsylvania.

          18.  Binding Effect. This Agreement shall be binding upon the Officer
               --------------
and upon the Company, its successors and assigns, and shall inure to the benefit
of the Officer, his heirs, personal representatives and assigns and to the
benefit of the Company, its successors and assigns.

          19.  Entire Agreement. This Agreement represents the entire agreement
               ----------------
between the parties hereto and there are no other agreements, contracts or
understandings between the parties hereto with respect to the subject matter of
this Agreement. Notwithstanding the foregoing, the rights conferred on the
Officer by this Agreement shall not be exclusive of any other right which the
Officer may have or hereafter acquire under any statute, provision of the
Company's articles of incorporation or bylaws, vote of stockholders or
directors, or otherwise, both as to action in his official capacity and as to
action in another capacity while holding office or under any insurance policy
maintained by the Company.

          20.  Amendment and Termination. No amendment, modification, waiver,
               -------------------------
termination or cancellation of this Agreement shall be effective for any purpose
unless set forth in writing signed by both parties hereto.

          21.  Subrogation. If the Company makes any payment under this
               -----------
Agreement, it shall be subrogated to the extent of such payment to all of the
rights of recovery of the Officer, who shall execute all documents required and
shall do all acts that may be necessary to secure such rights and to enable the
Company effectively to bring suit to enforce such rights.

          22.  Survival Of Rights. The rights conferred on the Officer by this
               ------------------
Agreement shall continue after the Officer has ceased to be a director, officer,
employee or other agent of the Company and shall inure to the benefit of the
Officer's heirs, executors and administrators.

                                       7
<PAGE>

          23.  Notices. All notices, requests, demands and other communications
               -------
hereunder shall be in writing and shall be addressed to the Officer or to the
Company, as the case may be, at the address indicated on the signature page
below, or to such other address as may have been furnished by either party to
the other, and shall be deemed to have been duly given if (a) delivered by hand
and receipted for by the party to whom said notice or other communication shall
have been directed, (b) delivered by a nationally recognized overnight delivery
service, on the first business after the date on which it is delivered to or
deposited with such service for overnight delivery, or (c) mailed by certified
or registered mail with postage prepaid, on the third business day after the
date on which it is so mailed.

                           [Signature Page Follows]

                                       8
<PAGE>

          IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
and as of the day and year first above written.

OFFICER:                                   CORPORATION:

                                           COVALENT GROUP, INC.

/s/ David Weitz                            By: /s/ Kenneth M. Barrow, M.D.
-------------------------------               -------------------------------
Signature                                     Signature

David Weitz                                   Kenneth M. Barrow, M.D.
-------------------------------               -------------------------------
Print Name                                    Print Name

                                              CEO/President
                                              -------------------------------
                                              Title

Address for Notices:                          Address for Notices:

-------------------------------               One Glenhardie Corporate Center
                                              1275 Drummers Lane
704 Delaware Ave.                             Wayne, PA 19087
-------------------------------

Lansdale, PA 19446
-------------------------------

<PAGE>

                                                                      Appendix A

                             Certain Defined Terms
                             ---------------------

          1.  "Adverse Judgment" means a judgment or final adjudication of a
court that contains findings of fact or conclusions of law adverse to the
Officer's interest.

          2.  "Change of Control" means any "person" (as such term is used in
Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended)
through the acquisition or aggregation of securities becoming, after the date
hereof, the beneficial owner, directly or indirectly, of securities of the
Company representing 20% or more of the combined voting power of the Company's
then outstanding securities ordinarily having the right to vote at elections of
directors (the "Capital Stock"), except that any change in ownership of the
Company's securities by any person resulting solely from a reduction in the
aggregate number of outstanding shares of Capital Stock, and any decrease
thereafter in such person's ownership of securities, shall be disregarded until
such person increases in any manner, directly or indirectly, such person's
beneficial ownership of any securities of the Company.

          3.  "Disinterested Officer" means a director of the Company who is not
or was not a party to the Proceeding in respect of which indemnification is
being sought by the Officer.

          4.  "Expenses" means all direct and indirect costs (including, without
limitation, reasonable attorneys' fees and costs, retainers, court costs,
transcripts, fees and costs of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees, all other disbursements or out-of-pocket expenses)
actually and reasonably incurred in connection with a Proceeding or establishing
or enforcing a right to indemnification under this Agreement, applicable law or
otherwise. "Expenses" shall not include any Liabilities.

          5.  "Independent Legal Counsel" means a law firm or member of a law
firm selected by the Company and approved by the Officer (which approval shall
not be unreasonably withheld) and that neither is presently nor in the past five
years has been retained to represent:

              (a)  the Company, in any material matter, or

              (b)  any other party to the Proceeding giving rise to a claim for
indemnification hereunder. Notwithstanding the foregoing, the term "Independent
Legal Counsel" shall not include any person who, under the applicable standards
of professional conduct then prevailing, would have a conflict of interest in
representing the Officer in an action to determine the Officer's right to
indemnification under this Agreement.

          6.  "Liabilities" means liabilities of any type whatsoever including,
but not limited to, any judgments, fines, penalties and amounts paid in
settlement (including all interest assessments and other charges paid or payable
in connection with or in respect of such judgments, fines, penalties or amounts
paid in settlement) of any Proceeding.

                                      A-1
<PAGE>

          7.  "Proceeding" means any threatened, pending or completed action,
claim, suit, arbitration, alternative dispute resolution mechanism,
investigation, administrative hearing or any other proceeding whether civil,
criminal, administrative or investigative, including any appeal therefrom.

                                      A-2

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