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 27th day of August, 1996,
as  amended  on  May  14,  1997  and  August  27,  1997,   between   Outsourcing
Solutions Inc.  (formerly known as OSI Holdings Corp.), a Delaware  corporation,
with  offices at 390 South Woods Mill Road,  Suite 350,  Chesterfield,  Missouri
63017 (the "Company"), and Timothy G. Beffa, an individual residing in the State
of Missouri (the "Employee").

                             R E C I T A L S

            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 Chief
Executive  Officer 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 Chief Executive Officer
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.  During the Employment Term, the Employee
shall serve as a member of the Board of Directors of the Company. The Employee's
primary place of employment  shall be St. Louis,  Missouri.  The Company and the
Employee  each  acknowledge  that the  Employee  shall  be  required  to  travel
extensively  in  connection  with  the  performance  of  his  duties  hereunder,
particularly  during the first year of employment.  The Company and the Employee
further  acknowledge that the Company's  headquarters  shall be relocated to St.
Louis.

            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;  provided,  however,  that the  Employee  may  continue  to serve on
outside boards of directors of which he is a member as of the date hereof.

            3.  Employment  Term. The employment term shall begin on the date of
this Agreement and continue until December 31, 1999,  unless earlier  terminated
pursuant to Section 7 below (the "Employment Term");  provided, that on December
31,  1999 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 Three
Hundred Seventy Five Thousand Dollars ($375,000.00).

            (b) Bonus.  Commencing  on January 1, 1999,  the  Employee  shall be
eligible for an annual bonus of up to 150% 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.

            (e) Automobile.  The  Company  shall  assume the  Employee's   lease
obligations  with respect to his current  automobile  and pay for all gas,  oil,
maintenance and insurance for such automobile.


            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.

            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 8(c) 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) 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").
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.

            (c) For the purposes of this  Agreement, "Sale of the Company" shall
mean (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."


            9.  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:

                        Timothy G. Beffa
                        2015 Kings Pointe Drive
                        St. Louis, Missouri 63005


            If to the Company:

                        Outsourcing Solutions Inc.
                        390 South Woods Mill Road, Suite 350
                        Chesterfield, Missouri 63017
                        Attention: Vice President and General Counsel



            10. 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 10(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.

            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/ Eric R. Fencl
                                      -----------------------
                                      Name:  Eric R. Fencl
                                      Title: Vice President & General Counsel


                                    EMPLOYEE

                                    /s/ Timothy G. Beffa
                                    -------------------------
                                    TIMOTHY G. BEFFA