AMENDED AND RESTATED EMPLOYMENT AGREEMENT

               This Agreement,  dated as of the 4th day of June, 1999 amends and
restates the Employment  Agreement dated as of the 11th day of May, 1998 between
Outsourcing  Solutions Inc., a Delaware  corporation,  with offices at 390 South
Woods Mill Road, Suite 350,  Chesterfield,  Missouri 63017 (the "Company"),  and
Michael Staed, an individual residing in the State of Missouri (the "Employee").

                                    RECITALS

               WHEREAS,   the  Company   desires  to  secure  the  services  and
employment of the Employee on behalf of the Company, and the Employee desires to
enter  into  employment  with  the  Company,   upon  the  terms  and  conditions
hereinafter set forth.

               NOW,  THEREFORE,  in  consideration  of the mutual  covenants and
promises  contained  herein,  the parties  hereto,  each intending to be legally
bound hereby, agree as follows:

               1.  Employment. The Company hereby employs the Employee as Senior
Vice  President - President  of  Outsourcing  Services of the  Company,  and the
Employee  accepts such  employment for the term of the  employment  specified in
Section 3 below.  During the Employment  Term (as defined  below),  the Employee
shall serve as the Senior Vice President - President of Outsourcing  Services of
the Company,  performing such duties as shall be reasonably  required of such an
employee of the Company, and shall have such other powers and perform such other
additional  executive  duties as may from time to time be assigned to him by the
Board of Directors of the Company.  The  Employee's  primary place of employment
shall be St. Louis, Missouri.

               2.  Performance.  The Employee will serve the  Company faithfully
and to the best of his ability and will  devote  substantially  all of his time,
energy,  experience and talents  during regular  business hours and as otherwise
reasonably necessary to such employment,  to the exclusion of all other business
activities.

               3.  Employment  Term. The employment term shall begin on the date
of  this  Agreement  and  continue  until  December  31,  1998,  unless  earlier
terminated pursuant to Section 7 below (the "Employment Term");  provided,  that
on December 31, 1998 and on each  anniversary  thereafter,  the Employment  Term
shall be automatically  extended for an additional twelve month period unless 30
days prior to such  anniversary  date either the Company or the  Employee  shall
give written notice of termination of the Agreement, in which case the Agreement
will terminate at the end of the then existing Employment Term.

               4.  Compensation.

               (a) Salary. During the Employment Term, the Company shall pay the
Employee a base salary,  payable in equal semimonthly  installments,  subject to
withholding  and other  applicable  taxes, at an annual rate of no less than Two
Hundred Fifty Thousand Dollars ($250,000.00).

               (b) Bonus.  Commencing on January 1, 1999,  the Employee shall be
eligible for a target  annual bonus of 50% of his base  salary.  Annual  bonuses
shall be based on the  satisfaction  of performance  targets  established by the
Board of Directors on or before March 31 of each year for such year.

               (c) Medical and Dental  Health,  Life  and  Disability  Insurance
Benefits.  During the Employment Term, the Employee shall be entitled to medical
and  dental  health,  life  insurance  and  disability   insurance  benefits  in
accordance  with the  Company's  established  practices  with respect to its key
employees.

               (d) Vacation;  Sick  Leave.  During   the  Employment  Term,  the
Employee  shall be entitled to vacation  and sick leave in  accordance  with the
Company's established practices with respect to its key employees.

               5.  Expenses. The Employee shall be reimbursed by the Company for
all reasonable  expenses  incurred by him in connection  with the performance of
his duties  hereunder in accordance with policies  established by the Board from
time to time and upon receipt of appropriate documentation.

               6.  Secret  Processes  and  Confidential  Information.   For  the
Employment Term and thereafter,  (a) the Employee will not divulge,  transmit or
otherwise disclose (except as legally compelled by court order, and then only to
the extent  required,  after  prompt  notice to the Company of any such  order),
directly or indirectly,  other than in the regular and proper course of business
of the Company,  any  confidential  knowledge or information with respect to the
operations or finances of the Company or with respect to  confidential or secret
processes, services, techniques,  customers or plans with respect to the Company
and (b) the Employee  will not use,  directly or  indirectly,  any  confidential
information for the benefit of anyone other than the Company; provided, however,
that the Employee has no obligation,  express or implied,  to refrain from using
or disclosing to others any such knowledge or information  which is or hereafter
shall  become  available  to the public  other than  through  disclosure  by the
Employee. All new processes,  techniques, know-how, inventions, plans, products,
patents and devices developed,  made or invented by the Employee,  alone or with
others, while an employee of the Company,  shall be and become the sole property
of the  Company,  unless  released in writing by the  Company,  and the Employee
hereby assigns any and all rights therein or thereto to the Company.

               During the term of this Agreement and thereafter,  Employee shall
not take any action to disparage  or  criticize to any third  parties any of the
services  of the Company or to commit any other  action that  injures or hinders
the business relationships of the Company.

               During the term of this  Agreement and for two years  thereafter,
Employee shall not employ,  solicit for employment or otherwise contract for the
services of any  employee of the  Company or any of its  Affiliates  (as defined
below)  at the  time of this  Agreement  or who  shall  subsequently  become  an
employee of the Company or any of its  Affiliates,  provided that Employee shall
not be  prohibited  from such  solicitation  or  employment if such employee (a)
initiated  discussions with Employee without any direct or indirect solicitation
from  Employee,  (b)  responded  to a general  public  solicitation,  or (c) has
terminated employment with the Company prior to commencement of discussions with
Employee.

               All  files,  records,  documents,  memorandums,  notes  or  other
documents  relating to the business of Company,  whether prepared by Employee or
otherwise  coming into his  possession in the course of the  performance  of his
services under this  Agreement,  shall be the exclusive  property of Company and
shall be delivered to Company and not retained by Employee upon  termination  of
this Agreement for any reason whatsoever.

               7.  Termination. The employment of the Employee  hereunder may be
terminated at any time by the Company with or without  "cause".  For purposes of
this  Agreement,   "cause"  shall  mean:  (i)   embezzlement,   theft  or  other
misappropriation of any property of the Company or any subsidiary, (ii) gross or
willful  misconduct  resulting  in  substantial  loss  to  the  Company  or  any
subsidiary  or  substantial  damage  to the  reputation  of the  Company  or any
subsidiary,  (iii)  any  act  involving  moral  turpitude  which  results  in  a
conviction for a felony involving moral turpitude,  fraud or  misrepresentation,
(iv) gross neglect of his assigned duties to the Company or any subsidiary,  (v)
gross breach of his fiduciary  obligations to the Company or any subsidiary,  or
(vi) any chemical  dependence  which  materially  affects the performance of his
duties and  responsibilities to the Company or any subsidiary;  provided that in
the case of the  misconduct  set  forth in  clauses  (iv) and (vi)  above,  such
misconduct  shall  continue  for a period of 30 days  following  written  notice
thereof by the Company to the Employee.

               8.  Severance.

(a) If (i) Employee's  employment is terminated by the Company without  "cause,"
(ii) the  Company  does  not  agree  to  extend  the  Employment  Term  upon the
expiration thereof, (iii) Employee terminates his employment because the Company
reduces his  responsibilities or compensation in a manner which is tantamount to
termination of Employee's employment,  or (iv) within two years following a Sale
of the Company (as defined in Section 9 of this  Agreement),  the Employee gives
notice to the  Company  of his  resignation  for "Good  Reason"  (as  defined in
Section  8(b)  hereof)  setting  forth in  reasonable  detail the  circumstances
claimed  to  constitute  Good  Reason and  stating  that it  constitutes  notice
pursuant to this Section 8(a), and the stated basis for Good Reason has not been
fully  corrected  within  sixty  (60)  days  from the date of such  notice,  the
Employee  shall be  entitled  to (x)  receive an amount  equal to his total cash
compensation (base salary plus bonus, excluding,  however, any Change in Control
Bonus paid pursuant to Section 9 hereof) for the year  preceding the date of the
Employee's  termination or the date on which the Employment Term expires, as the
case may be, such amount to be payable in a lump sum on the date of  termination
or the date on which the  Employment  Term expires,  as the case may be, and (y)
continue to receive the benefits referred to in Section 4(c) during the one year
period following the date of termination or expiration (the "Severance Period");
provided,  however,  if any such  event  occurs  prior to the  extension  of the
initial  Employment  Term, the Employee shall be entitled to (A) an amount equal
to his then current  salary,  payable in a lump sum on the date of  termination,
(B) an amount  equal to his target  annual  bonus,  payable in a lump sum on the
date of  termination,  and (C) continue to receive the  benefits  referred to in
Section  4(c) during the  Severance  Period.  If the  Employee's  employment  is
terminated  by the Company  "for cause",  the Employee  shall not be entitled to
severance  compensation.  The  Employee  covenants  and agrees that he will not,
during  the  one  year  period  following  the  termination  of  the  Employee's
employment by the Company,  within any  jurisdiction  or marketing area in which
the Company or any of its  Affiliates (as defined below) is doing business or is
qualified to do business,  directly or indirectly own, manage, operate, control,
be employed by or participate in the ownership, management, operation or control
of, or be connected in any manner with,  any business of the type and  character
engaged in and  competitive  with that  conducted  by the  Company or any of its
Affiliates at the time of such termination; provided, however, that ownership of
securities of 2% or less of any class of  securities  of a public  company shall
not be considered to be competition  with the Company or any of its  Affiliates.
For the  purposes of this  Agreement,  the term  "Affiliate"  shall  mean,  with
respect to the Company, any person or entity which, directly or indirectly, owns
or is owned by, or is under common  ownership with, the Company.  The term "own"
(including,  with correlative  meanings,  "owned by" and "under common ownership
with")  shall mean the  ownership  of 50% or more of the voting  securities  (or
their equivalent) of a particular entity.

               (b) For purposes of this Agreement,  "Good Reason" shall mean the
occurrence,  without the  Employee's  consent,  of any of the  following  events
during the Employment Term within two years following a Sale of the Company: (A)
a  relocation  of the  principal  location  of the  performance  of  work by the
Employee beyond a thirty mile radius of such location as of the time of the Sale
of the  Company;  (B) an  assignment  to the Employee of duties that result in a
material  diminution of the Employee's  duties and  responsibilities  under this
Agreement,  (C) a reduction  of the  Employee's  base salary in effect as of the
time  of the  Sale  of the  Company,  (D) a  material  breach  of the  Company's
obligations set forth in this Agreement,  or (E) the failure of any acquiror of,
or  successor  to, all or  substantially  all of the assets or  business  of the
Company to  expressly  assume  this  Agreement  and agree to perform  all of the
obligations of the Company hereunder.

               9.  Change in Control Bonus.  Upon consummation of a "Sale of the
Company," if the Employee is employed by the Company  immediately prior thereto,
he will be entitled to receive a payment  from the Company in the amount of 250%
of his (i) then current base salary plus (ii) target  annual  bonus,  reduced by
his "Option Gain" and subject to any applicable withholding or employment taxes.
Such  amount (the  "Change in Control  Bonus")  will be paid to the  Employee in
immediately  available  funds in a lump-sum at the time such Sale of the Company
is consummated. The foregoing to the contrary notwithstanding, the Employee will
only be entitled to receive the Change in Control Bonus if the Change in Control
Bonus is previously  approved by a vote of more than seventy-five  percent (75%)
of the voting power of the Company's  outstanding stock  immediately  before any
Sale of the Company.  For purposes of this  Agreement,  the following terms have
the meanings set forth below:

        "Sale  of the  Company"  - a (i) a stock  sale,  merger,  consolidation,
        combination,  reorganization or other transaction resulting in less than
        fifty  percent  (50%) of the combined  voting power of the  surviving or
        resulting  entity  being  owned  by  the  shareholders  of  the  Company
        immediately  prior  to such  transaction  or  (ii)  the  sale  or  other
        disposition of all or substantially all of the assets or business of the
        Company (other than, in the case of either clause (i) or (ii) above,  in
        connection  with  any  employee  benefit  plan  of  the  Company  or  an
        Affiliate);  provided,  however,  that a public  offering of the capital
        stock of the Company shall not be a "Sale of the Company."

        "Option Gain" - the aggregate  amount computed for all of the options to
        purchase  capital  stock of the  Company  or other  equity  compensation
        awards  theretofore  granted  to  the  Employee,  of the  excess  of the
        consideration  received by the holders of the Company's common stock for
        a share of such common stock in connection  with the applicable  Sale of
        the Company  over the exercise  price of the option or other  award,  if
        any,  multiplied by the number of shares of the  Company's  common stock
        covered by each such  option or award.  The  amount of the  Option  Gain
        shall be finally and  conclusively  determined by the Board of Directors
        of the Company in its good faith.

               10. Notice.  Any notices required or permitted hereunder shall be
in writing and shall be deemed to have been given when  personally  delivered or
when mailed,  certified or registered mail,  postage  prepaid,  to the following
addresses:

               If to the Employee:

                             Michael Staed
                             13231 Thornhill Drive
                             Town & Country, Missouri 63131

               If to the Company:

                             Outsourcing Solutions Inc.
                             390 South Woods Mill Road, Suite 350
                             Chesterfield, Missouri 63017
                             Attn:  President


               11. General.

               (a) Governing Law;  Jurisdiction.  The validity,  interpretation,
construction  and performance of this Agreement shall be governed by the laws of
the State of Missouri  applicable  to  contracts  executed  and to be  performed
entirely within said State. Any judicial  proceeding  brought against any of the
parties to this  Agreement or any dispute  arising out of this  Agreement or any
matter  related  hereto may be brought in the courts of the State of Missouri or
in the United States District Court for the Eastern  District of Missouri,  and,
by  execution  and  delivery  of this  Agreement,  each of the  parties  to this
Agreement accepts the jurisdiction of said courts,  and irrevocably agrees to be
bound by any judgment  rendered  thereby in connection with this Agreement.  The
foregoing  consent to  jurisdiction  shall not be deemed to confer rights on any
person other than the respective parties to this Agreement.

               (b) Assignability. The Employee may not assign his interest in or
delegate his duties under this Agreement.  Notwithstanding anything else in this
Agreement  to the  contrary,  the Company may assign this  Agreement  to and all
rights  hereunder shall inure to the benefit of any person,  firm or corporation
succeeding to all or substantially  all of the business or assets of the Company
by purchase, merger or consolidation.

               (c) Enforcement  Costs.  In  the event that either the Company or
the Employee  initiates  an action or claim to enforce any  provision or term of
this Agreement,  or in the event of any dispute or controversy arising out of or
relating to this Agreement,  the costs and expenses  (including  attorney's fees
and  disbursements)  of the  prevailing  party shall be paid by the other party,
such party to be deemed to have  prevailed  if such action or claim is concluded
pursuant to a court order or final  judgment  which is not subject to appeal,  a
settlement  agreement or dismissal of the principal claims.  Notwithstanding the
foregoing,  following a Sale of the Company,  all reasonable  costs and expenses
(including  attorney's  fees and  disbursements)  incurred by the Employee in an
action or claim to enforce  any  provision  or term of this  Agreement,  and all
costs and expenses of any court proceeding or arbitration in connection with any
dispute or controversy  arising out of or relating to this  Agreement,  shall be
promptly paid or reimbursed by the Company or its successor;  provided, however,
that no payment or reimbursement  shall be made of such costs or expenses if and
to the extent that the court or arbitrator  adjudicating  or deciding the matter
determines that any of the Employee's  litigation assertions or defenses were in
bad faith or  frivolous.  Pending  the  resolution  of any court  proceeding  or
arbitration  described in this Section 11(c), the Company or its successor shall
continue  payment  of all  amounts  and  benefits  due the  Employee  under this
Agreement.

               (d) Binding Effect.  This  Agreement  is  for  the  employment of
Employee,  personally,  and for  the  services  to be  rendered  by him  must be
rendered by him and no other person.  This  Agreement  shall be binding upon and
inure to the benefit of the Company and its successors and assigns

               (e) Entire Agreement; Modification.  This  Agreement  constitutes
the entire  agreement of the parties  hereto with respect to the subject  matter
hereof  and may not be  modified  or amended in any way except in writing by the
parties hereto.

               (f) Duration.  Notwithstanding the term of employment  hereunder,
this Agreement shall continue for so long as any  obligations  remain under this
Agreement.

               (g) Survival. The covenants set forth in Sections 6 and 8 of this
Agreement  shall  survive  and  shall  continue  to  be  binding  upon  Employee
notwithstanding the termination of this Agreement for any reason whatsoever. The
covenants  set forth in Sections 6 and 8 of this  Agreement  shall be deemed and
construed  as separate  agreements  independent  of any other  provision of this
Agreement.  The  existence  of any claim or cause of action by Employee  against
Company, whether predicated on this Agreement or otherwise, shall not constitute
a defense to the enforcement by Company of any or all covenants. It is expressly
agreed that the remedy at law for the breach or any such  covenant is inadequate
and that  injunctive  relief  shall be  available  to prevent  the breach or any
threatened breach thereof.
<PAGE>

               IN WITNESS WHEREOF,  the parties hereto,  intending to be legally
bound,  have  hereunto  executed  this  Agreement the day and year first written
above.

                                            OUTSOURCING SOLUTIONS INC.


                                            By /s/ Timothy G. Beffa
                                               ---------------------------------
                                               Timothy G. Beffa, President and
                                               Chief Executive Officer


                                    EMPLOYEE
                                            /s/ Michael B. Staed
                                            ------------------------------------
                                            Michael Staed