TeleSpectrum Worldwide Inc. Announces Proposed Recapitalization

Business Wire, Feb 15, 2002

Business Editors

KING OF PRUSSIA, Pa.--(BUSINESS WIRE)--Feb. 15, 2002

TeleSpectrum Worldwide Inc. (OTC:TLSP) announced today that the Company has reached an agreement in principle with its bank lenders to pursue a recapitalization of the Company's balance sheet and substantially reduce its debt.

Under the terms of the agreement, the Company's bank debt will be reduced to approximately $25 million, greatly improving the Company's leverage and freeing up substantial funds for reinvestment in the Company's infrastructure and meeting customer needs. The expectation is that approximately $125 million of bank debt will be converted into preferred and common stock of the Company.

The consummation of the recapitalization is subject to several contingencies, including among others, the Company's being able to successfully negotiate settlements with a manageable number of unsecured creditors.

According to Peter Pierce, TeleSpectrum's Chairman and CEO, the Company has spent the last thirteen months rationalizing its cost structure and infrastructure to better serve its customer base and believes it is now positioned to complete the recapitalization. "We are pleased that our bank lenders concur with our assessment that a consensual conversion of much of its debt to equity is the best course of action here."

Mr. Pierce cautioned that although the Company will remain public, after the conversion of a portion of the bank debt to equity, the Company's current shareholders would retain almost none of their ownership. He also stressed that negotiations with the necessary unsecured creditors and vendors have not been completed and that their cooperation is essential in achieving this plan. Pierce said "There is still work to be done but we will make every effort to complete this plan which will greatly benefit both our customers and employees."

About TeleSpectrum Worldwide Inc.

Headquartered in King of Prussia, Pennsylvania, TeleSpectrum Worldwide Inc. is a leading full-service provider of multi-channel customer relationship management (CRM) solutions for Global 1,000 companies in diverse industries, including financial services, telecommunications, technology, insurance, healthcare, pharmaceuticals and government.

In addition to providing both traditional business-to-consumer and business-to-business teleservices, TeleSpectrum also offers inbound customer service, customer care, as well as the ability to measure, monitor and improve the customer service experience.

Forward-looking Statements

Many statements contained in this release regarding future events or our financial performance are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Readers are cautioned that these forward-looking statements involve substantial risks and uncertainties. Actual events or results may differ materially.

The factors that could cause such differences include, among others: the outcome of negotiations with creditors; our ability to implement successfully a cost reduction program; our ability to maintain our current business and generate new business; our ability to improve profitability and cash flow and meet our projected financial performance; our ability to hire and retain effective management; increased competition; and changes in laws regulating our industry.

A more extensive discussion of the risk factors that could impact these areas and our overall business and financial performance can be found in our reports filed with the Securities and Exchange Commission. The forward-looking statements are made as of the date of this press release, and we assume no obligation to update these statements or the reasons why actual results could differ.