SCHEDULE 14A INFORMATION
                                       
                  Proxy Statement Pursuant to Section 14(a) of the
                   Securities Exchange Act of 1934 (Amendment No.   )
 
Filed by the Registrant [X]
Filed by a Party other than the Registrant [  ]
 
Check the appropriate box:
 
[X]  Preliminary Proxy Statement
[   ]  Confidential, for Use of the Commission Only (as permitted by
       Rule 14a-6(e)(2))
[   ]  Definitive Proxy Statement
[   ]  Definitive Additional Materials
[   ]  Soliciting Material Pursuant to par.240.14a-11(c) or par.240.14a-12
 

                        PAYCO AMERICAN CORPORATION
- - ----------------------------------------------------------------------
               (Name of Registrant as Specified In Its Charter)
 
- - -----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
 
Payment of Filing Fee (Check the appropriate box):
[  ]     $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
         14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[  ]     $500 per each party to the controversy pursuant to Exchange
         Act Rule 14a-6(i)(3).
[X ]     Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
         and 0-11.
     
     $   29,149.88 
       ----------------
 1)     Title of each class of securities to which transaction applies:
  
       Common Stock 
- - -----------------------------------------------------------------------
     
2)      Aggregate number of securities to which transaction applies:
     
        10,155,085
- - ------------------------------------------------------------------------  
3)      Per unit price or other underlying value of transaction computed
        pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
        the filing fee is calculated and state how it was determined):
   
        The filing fee was determined based upon (a) 10,155,085 issued
        and outstanding shares of Common Stock, $.10 par value per share,
        of the Registrant (the "Shares") outstanding as of August 30, 1996;
        and (b) the merger consideration of $14.00 per Share (the "Merger
        Consideration") plus $3,573,195 payable to holders of the
        outstanding options to purchase Shares in cancellation of such
        options. The amount of the filing fee, calculated in accordance
        with Regulation 240.0-11 under the Securities Exchange Act of 1934,
        as amended, equals 1/50th of one percent of the aggregate of the
        Merger Consideration being paid for the Shares and payments being
        made in cancellation of options to purchase Shares. 

 
4) Proposed maximum aggregate value of transaction:
  
     $145,744,385

- - ---------------------------------------------------------------------- 

5) Total fee paid:  
  
     $29,149.88
- - -----------------------------------------------------------------------

[  ]  Fee paid previously with preliminary materials.

[  ]     Check box if any part of the fee is offset as provided by
         Exchange Act Rule 0-11(a)(2) and identify the filing for which
         the offsetting fee was paid previously. Identify the previous
         filing by registration statement number, or the Form or Schedule
         and the date of its filing.
  
1) Amount Previously Paid:

- - -----------------------------------------------------------------------
  
2) Form, Schedule or Registration Statement No.:

 
- - ------------------------------------------------------------------------
  
3) Filing Party:

- - -------------------------------------------------------------------------

4) Date Filed:
  
=========================================================================

                         PRELIMINARY COPY



                  [Payco American Corporation Logo]
      
                        PAYCO AMERICAN CORPORATION
                        180 North Executive Drive
                       Brookfield, Wisconsin 53005


                         September [__], 1996


Dear Shareholder:

     You are invited to attend a Special Meeting of Shareholders of Payco
American Corporation (the "Company") to be held at the Company's executive
offices located at 180 North Executive Drive, Brookfield, Wisconsin 53005 on
October [__], 1996 at 9:00 a.m. local time.

     At the Special Meeting you will be asked to consider and vote upon a
proposal to approve an Agreement and Plan of Merger (the "Merger
Agreement") providing for the merger (the "Merger") of the Company with a
wholly owned subsidiary of OSI Holdings Corp. ("OSI"), following which the
Company will become a wholly owned subsidiary of OSI. Upon the consummation of
the Merger, each share of common stock of the Company, $.10 par value per
share, (the "Common Stock") outstanding immediately prior to the Merger will
be converted into the right to receive $14.00 in cash, without interest, less
any applicable withholding taxes.

     William Blair & Company, L.L.C., the investment banking firm retained by
the Board of Directors of the Company in connection with the Merger, has
rendered its opinion dated August 13, 1996 that, as of such date, the $14.00
in cash per share of Common Stock to be received by the holders of shares of
Common Stock pursuant to the Merger Agreement is fair to such holders from a
financial point of view. A copy of the opinion is attached to the enclosed
Proxy Statement as Annex C and should be read in its entirety.

     YOUR BOARD OF DIRECTORS AND A SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS
HAVE APPROVED THE MERGER AND THE TRANSACTIONS RELATED THERETO AND HAVE
DETERMINED THAT THEY ARE FAIR TO AND IN THE BEST INTERESTS OF THE COMPANY AND
ITS SHAREHOLDERS. AFTER CAREFUL CONSIDERATION, YOUR BOARD OF DIRECTORS AND THE
SPECIAL COMMITTEE RECOMMEND THAT SHAREHOLDERS VOTE FOR THE APPROVAL OF THE
MERGER AGREEMENT AS DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT.

     The Common Stock is quoted on NASDAQ, and, consequently, pursuant to
Wisconsin law, holders of Common Stock do not have statutory appraisal or
dissenters' rights with respect to the Merger.

     In the materials accompanying this letter, you will find a Notice of
Special Meeting of Shareholders, a Proxy Statement relating to the actions to
be taken by shareholders of the Company at the Special Meeting and a proxy
card. The Proxy Statement more fully describes the proposed Merger and
includes information about the Company and OSI. Please read the Proxy
Statement and Notice and consider the information included therein carefully.

ALL SHAREHOLDERS ARE INVITED TO ATTEND THE SPECIAL MEETING IN PERSON. WHETHER
OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, SIGN, DATE AND
RETURN YOUR PROXY IN THE ENCLOSED ENVELOPE. IF YOU ATTEND THE SPECIAL MEETING
YOU MAY VOTE IN PERSON IF YOU WISH, EVEN THOUGH YOU HAVE PREVIOUSLY RETURNED
YOUR PROXY. IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AND VOTED AT THE
SPECIAL MEETING.

                              Sincerely,


                              /S/ DENNIS G. PUNCHES
                              ---------------------
                              Dennis G. Punches, Chairman

                                         PRELIMINARY COPY

                        PAYCO AMERICAN CORPORATION
                        180 North Executive Drive
                        Brookfield, Wisconsin 53005


               NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
                   TO BE HELD ON OCTOBER [__], 1996

     Notice is hereby given that a Special Meeting of Shareholders of Payco
American Corporation, a Wisconsin corporation, (the "Company") will be held on
October [_], 1996, at 9:00 a.m., local time, at the Company's executive
offices located at 180 North Executive Drive, Brookfield, Wisconsin 53005, for
the following purposes:

          1.     To consider and vote upon a proposal to approve the
                 Agreement and Plan of Merger, dated as of August 13,
                 1996 (the "Merger Agreement"), by and among the Company,
                 OSI Holdings Corp., a Delaware corporation ("OSI"), and
                 Boxer Acquisition Corp., a Delaware corporation and a
                 wholly owned subsidiary of OSI ("Boxer"), a copy of which
                 is attached as Appendix A to the accompanying Proxy
                 Statement, pursuant to which, among other things:
                 (a) Boxer will be merged with and into the Company (the
                 "Merger"), at which time the Company will become a wholly
                 owned subsidiary of OSI, and (b) each share of the Company's
                 common stock, par value $.10 per share ("Common Stock"),
                 outstanding immediately prior to the Merger will be
                 converted into the right to receive $14.00 in cash, without
                 interest, less any applicable withholding taxes; and

          2.     To transact such other business as may properly come
                 before the Special Meeting or any postponements or
                 adjournments thereof.

       Only shareholders of record at the close of business on September [__],
1996, the record date with respect to this solicitation (the ("Record Date"),
are entitled to notice of and to vote at the Special Meeting, or at any
postponements or adjournments thereof. The affirmative vote of the holders of
a majority of the outstanding shares of Common Stock outstanding on the Record
Date, in person or by proxy, is required to approve the Merger Agreement.

     The Common Stock is quoted on NASDAQ, and, consequently, pursuant to
Wisconsin law, holders of Common Stock do not have statutory appraisal or
dissenters' rights with respect to the Merger.
     
     A complete list of shareholders entitled to vote at the Special Meeting
will be available for inspection at the Company's principal executive offices,
located at 180 North Executive Drive, Brookfield, Wisconsin during ordinary
business hours through the date of the Special Meeting and such list will be
available for inspection at the meeting or any adjournment thereof.

YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES THAT YOU OWN.
WHETHER OR NOT YOU EXPECT TO ATTEND THE SPECIAL MEETING IN PERSON, PLEASE
COMPLETE, DATE, AND SIGN THE ENCLOSED PROXY AND RETURN IT WITHOUT DELAY IN THE
ENCLOSED ENVELOPE, WHICH REQUIRES NO ADDITIONAL POSTAGE IF MAILED IN THE
UNITED STATES. IF YOU ATTEND THE SPECIAL MEETING, YOU MAY THEN WITHDRAW YOUR
PROXY AND VOTE IN PERSON. 

PLEASE DO NOT SEND YOUR COMMON STOCK CERTIFICATES AT THIS TIME.

                    BY ORDER OF THE BOARD OF DIRECTORS

                    /S/  SUSAN MATHISON
                    -------------------                    
                    Susan Mathison, Secretary


                                                 PRELIMINARY

                        PAYCO AMERICAN CORPORATION
                        180 NORTH EXECUTIVE DRIVE
                       BROOKFIELD, WISCONSIN 53005


                              PROXY STATEMENT

                      SPECIAL MEETING OF SHAREHOLDERS
                     TO BE HELD ON OCTOBER [__], 1996

     This Proxy Statement is being furnished to the holders of shares of
common stock, $.10 par value, (the "Common Stock") of Payco American
Corporation, a Wisconsin corporation (the "Company" or "Payco"), in
connection with the solicitation of proxies by the Board of Directors of
the Company for use at the Special Meeting of Shareholders of the Company
(the "Special Meeting") to be held on October [__], 1996 at 9:00 a.m.,
local time, at the Company's executive offices located at 180 North
Executive Drive, Brookfield, Wisconsin 53005 and at any postponements or
adjournments thereof.

     At the Special Meeting, the Company's shareholders will be asked to
consider and vote upon a proposal to approve an Agreement and Plan of
Merger, dated as of August 13, 1996 (the "Merger Agreement"), by and among
the Company, OSI Holdings Corp., a Delaware corporation, ("OSI") and Boxer
Acquisition Corp., a Delaware corporation, ("Boxer"),
 which is a wholly owned subsidiary of OSI, and the transactions
contemplated thereby. A copy of the Merger Agreement is attached to this
Proxy Statement as Annex A. The Merger Agreement provides for the merger of
Boxer with and into the Company (the "Merger"). At the effective time of
the Merger (the "Effective Time"), (i) the Company will become a wholly
owned subsidiary of OSI, and (ii) each outstanding share of Common Stock
immediately prior to the Merger (other than any shares of Common Stock
which are held by any subsidiary of the Company or in the treasury of the
Company, or which are held, directly or indirectly, by OSI or any direct or
indirect subsidiary of OSI, including Boxer) will be converted into the
right to receive $14.00 per share in cash, without interest, less any
applicable withholding taxes. See "THE MERGER AGREEMENT - Conversion and
Cancellation of Common Stock." In addition, each holder of an employee
stock option to acquire shares of Common Stock will, immediately after the
Effective Time, become entitled to receive a cash payment with respect to
each share subject to such option equal to $14.00 less the per share
exercise price of such option and less any applicable withholding taxes.
See "TREATMENT OF STOCK OPTIONS."

     This solicitation of proxies is made by and on behalf of the Board of
Directors. In addition to mailing copies of this Proxy Statement and the
accompanying Notice of Special Meeting of Shareholders and proxy to all
 shareholders of record on September [__], 1996 (the "Record Date"), the
Company will request brokers, custodians, nominees and other fiduciaries to
forward copies of this material to persons for whom they hold Common Stock
in order that such shares may be voted. Solicitation may also be made by
the Company's officers and regular employees personally or by telephone. In
addition, while the Company has no present intention to retain anyone to
assist in soliciting proxies, the Company may do so if it deems such action
necessary. The cost of the solicitation of proxies will be borne by the
Company.

     The information contained in this Proxy Statement is qualified in its
entirety by the Annexes hereto and the documents referred to and
incorporated by reference herein, each of which is important and should be
carefully reviewed in its entirety.

     This Proxy Statement, the accompanying Notice of Special Meeting of
Shareholders and the accompanying proxy are first being mailed to
shareholders of the Company on or about September [__], 1996.

     IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY.  THEREFORE, WHETHER
     OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, DATE,
     SIGN AND RETURN THE PROXY CARD IN THE ENCLOSED POSTAGE PAID ENVELOPE.
 
          The date of this Proxy Statement is September [__], 1996.

                            TABLE OF CONTENTS

AVAILABLE INFORMATION..............................................
SUMMARY............................................................
  The Parties......................................................
  Special Meeting of Shareholders..................................
    Date, Time and Place...........................................
    Record Date....................................................
    Purpose of Meeting.............................................
    Outstanding Shares.............................................
    Vote Required..................................................
    No Appraisal Rights............................................
  Special Factors..................................................
    Background of the Merger; Reasons for the Merger...............
    Recommendation of the Company's Board of Directors and Special
      Committee of the Board of Directors..........................
    Opinion of Financial Advisor of the Company....................
    Interests of Certain Persons in the Merger.....................
    Federal Income Tax Consequences................................
    Regulatory Filings and Approvals...............................
    Financing of the Merger........................................
  The Merger Agreement.............................................
    The Merger.....................................................
    Effective Time.................................................
    Conversion and Cancellation of Common Stock....................
    Exchange Procedure.............................................
    Conditions to the Merger.......................................
    Additional Agreements Between the Company and OSI; Other Offers
    Termination....................................................
    Termination Fees...............................................
    Indemnification................................................
  Treatment of Stock Options.......................................
  Stock Ownership of Management and Certain Other Beneficial Owners
  Market Price of Common Stock.....................................
  Selected Consolidated Financial Data.............................
INTRODUCTION.......................................................
PARTIES TO THE MERGER..............................................
  The Company......................................................
  OSI..............................................................
  Boxer............................................................
THE SPECIAL MEETING................................................
  Date, Time and Place of Special Meeting..........................
  Record Date and Outstanding Shares...............................
  Voting Proxies...................................................
  Vote Required....................................................
  No Appraisal Rights..............................................
  Solicitation of Proxies; Expenses................................
SPECIAL FACTORS....................................................
  Background of the Merger.........................................
  Reasons for the Merger...........................................
  Recommendation of the Company's Board of Directors and Special
    Committee of the Board of Directors............................
  Opinion of Financial Advisor to the Company......................
    Analysis of Historical Projections.............................
    Implied Future Share Price Analysis............................
    Comparable Company Analyses....................................
    Stock Price Analysis...........................................

  Comparable Acquisitions Analysis.................................
    Acquisitions Premium Analysis...................................
    Discounted Cash Flow Analysis..................................
    Leveraged Buyout Analysis......................................
  Interest of Certain Persons in the Merger........................
    Agreement to Vote for Merger Agreement and Merger..............
    Consulting, Employment and Covenant Not-to-Compete Agreements..
    Stock Options..................................................
    Common Share Equivalent Plan...................................
    Indemnification of Directors and Officers......................
  Federal Income Tax Considerations................................
  Regulatory Filings and Approvals.................................
  Financing of the Merger..........................................
THE MERGER AGREEMENT...............................................
  The Merger.......................................................
  Effective Time of the Merger.....................................
  Conversion and Cancellation of Common Stock......................
  Exchange Procedure...............................................
  Conditions to the Merger.........................................
  Additional Agreements Between the Company and OSI.................
  Other Offers.....................................................
  Termination......................................................
  Expenses and Termination Fees....................................
  Indemnification..................................................
  Amendment........................................................
TREATMENT OF STOCK OPTIONS.........................................
STOCK OWNERSHIP OF MANAGEMENT AND PRINCIPAL SHAREHOLDERS...........
MARKET PRICE OF COMMON STOCK.......................................
SELECTED CONSOLIDATED FINANCIAL DATA...............................
INDEPENDENT PUBLIC ACCOUNTANTS.....................................
INCORPORATION OF INFORMATION BY REFERENCE..........................
OTHER MATTERS......................................................
ANNEX A - Agreement and Plan of Merger.............................
ANNEX B - Voting Agreement.........................................
ANNEX C - William Blair & Company L.L.C. Opinion Letter Dated 
            August 13, 1996........................................
ANNEX D - Consulting Agreement with Dennis G. Punches..............
ANNEX E - Covenant Not-to-Compete Agreement with Dennis G. Punches.
ANNEX F - Employment Agreement.....................................
ANNEX G - Covenant Not-to-Compete Agreement........................
ANNEX H - Goldman Sachs & Co. letter to OSI dated August 12, 1996..
ANNEX I - Chase Securities, Inc. letter to OSI dated August 12, 1996
ANNEX J - Chase Manhattan Bank letter to OSI dated August 7, 1996..



    

                       AVAILABLE INFORMATION
   
     The Company is subject to the informational reporting requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
in accordance therewith, files reports, proxy statements and other
information with the Securities and Exchange Commission (the "SEC"). Such
reports, proxy statements and other information may be inspected and copied
at the public reference facilities maintained by the SEC at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20949, and at the
SEC's regional offices located at Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661 and at Seven World Trade Center, 13th
Floor, New York, New York 10019. Copies of such material may be obtained by
mail from the Public Reference Section of the SEC at Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The Common
Stock is quoted on the NASDAQ National Market and certain of the Company's
reports, proxy materials and other information can be inspected at the
offices of NASDAQ, 1739 K Street, N.W., Washington, D.C. 20006.




                                 SUMMARY

     This Proxy Statement relates to the proposed merger (the "Merger") of
Boxer Acquisition Corp., a Delaware corporation, ("Boxer") which is a
wholly owned subsidiary of OSI Holdings Corp., a Delaware corporation
("OSI"), with and into Payco American Corporation, a Wisconsin corporation
(the "Company" or "Payco"). The following is intended as a summary of the
information contained in this Proxy Statement, is not intended to be a
complete statement of all material features of the proposal to be voted on
and is qualified in its entirety by the more detailed information appearing
elsewhere in this Proxy Statement or incorporated herein by reference.
Capitalized terms used but not defined in this summary have the meaning
given to them elsewhere in this Proxy Statement.

                                 THE PARTIES 
                                 -----------
     The Company is a leading provider of a full range of accounts
receivable management services, including customer service outsourcing. The
Company provides nationwide account coverage through its network of 37
offices across the United States and Puerto Rico and employs more than
3,300 people. The Company is also a majority owner of joint ventures in
Mexico City, Mexico and Tokyo, Japan that provide receivable management
services.

     OSI, based in Atlanta, was formed in September 1995 by McCown De Leeuw
& Co., a private investment company, to build the largest single-source
provider of a full range of accounts receivable management services to
credit issuers. OSI's strategy is to acquire leaders in various accounts
receivable management businesses, including contingent fee collection
services, debt portfolio purchasing, billing, teleservicing and complete
functional outsourcing. OSI currently has three separate operating
companies, Account Portfolios, Inc., A.M. Miller & Associates, Inc. and
Continental Credit Services, Inc.

     Boxer is a wholly owned subsidiary of OSI. Boxer was formed by OSI for
the purpose of effecting the Merger and has not conducted any prior
business. 

     The principal executive offices of OSI and Boxer are located at 300
Galleria Parkway, Suite 690, Atlanta, Georgia 30339 and the telephone
number at that address is (770) 988-2900.

                       SPECIAL MEETING OF SHAREHOLDERS
                       ------------------------------- 
Date, Time And Place
- - --------------------
     The Special Meeting will be held on October [__], 1996, at 9:00 a.m.,
local time, at the Company's executive offices located at 180 North
Executive Drive, Brookfield, Wisconsin 53005.

Record Date 
- - ------------
     Only holders of record of shares of Common Stock at the close of
business on September [__], 1996 (the "Record Date") are entitled to notice
of and to vote at the Special Meeting and at any postponements or
adjournments thereof.


Purpose of the Meeting
- - ----------------------
     The purpose of the Special Meeting is to consider and vote upon a
proposal to approve the Merger Agreement. The Merger Agreement provides
that, at the Effective Time, the Company will become a wholly owned
subsidiary of OSI and each outstanding share of Common Stock (other than
shares owned by the Company, OSI and OSI's subsidiaries) will be converted
into the right to receive $14.00 in cash, without interest, less any
applicable withholding taxes.

Outstanding Shares
- - ------------------
     At the close of business on the Record Date, there were [____________]
shares of Common Stock outstanding, and each such share is entitled to one
vote.

Vote Required
- - -------------
     Approval of the Merger Agreement requires the affirmative vote of the
holders of a majority of the outstanding shares of Common Stock outstanding
on the Record Date. Certain shareholders of the Company, holding in the
aggregate 2,030,985 shares of the Common Stock, or approximately [__]% of
the outstanding shares on the Record Date, have entered into Voting
Agreements with OSI, in the form of Annex B attached hereto, pursuant to
which they have agreed to vote such shares in favor of the Merger. See
"SPECIAL FACTORS - Interests of Certain Persons in the Merger."

No Appraisal Rights
- - -------------------
     The Common Stock is quoted on NASDAQ, and, consequently, pursuant to
Wisconsin law, holders of Common Stock do not have statutory appraisal or
dissenter's rights with respect to the Merger.

                             SPECIAL FACTORS
                              ---------------
Background of the Merger; Reasons For The Merger
- - ------------------------------------------------
     The negotiations with OSI resulting in the signing of the Merger
Agreement started with a meeting on October 21, 1995, ultimately leading to
intense negotiations during the period between June 11, 1996 and the
signing of the Merger Agreement on August 13, 1996.

     The Company's Board of Directors and the Special Committee of the
Board of Directors believes that the terms of the Merger are fair to the
shareholders of the Company. In reaching this conclusion, the Board has
considered a number of factors relating to the business and prospects of
the Company, the industry it serves and its customers, the advice of its
advisors, the fairness opinion of William Blair & Co., L.L.C. and the terms
of the Merger Agreement.

     For a more detailed discussion of these matters, see "SPECIAL FACTORS-
Background of the Merger," "Reasons for the Merger" and "Opinion of
Financial Advisor to the Company." 


Recommendation of the Company's Board Of Directors and Special Committee of
- - ---------------------------------------------------------------------------
the Board of Directors
- - ----------------------
 

     THE BOARD OF DIRECTORS AND THE SPECIAL COMMITTEE OF THE BOARD OF
     DIRECTORS RECOMMEND THAT THE SHAREHOLDERS OF THE COMPANY VOTE IN
     FAVOR OF THE APPROVAL OF THE MERGER AGREEMENT.



Opinion of Financial
- - --------------------
Advisor to the Company
- - ----------------------
     William Blair & Company, L.L.C. ("William Blair") has delivered its
written opinion to the Board of Directors of the Company that, as of August
13, 1996, the $14.00 in cash per share of Common Stock to be received by
the holders of shares of Common Stock pursuant to the Merger Agreement is
fair to such holders from a financial point of view. The full text of the
written opinion of William Blair, which sets forth assumptions made,
matters considered and limitations on the review undertaken in connection
with the opinion, is attached hereto as Annex C and is incorporated herein
by reference. HOLDERS OF SHARES OF COMMON STOCK ARE URGED TO, AND SHOULD,
READ SUCH OPINION IN ITS ENTIRETY. SEE "SPECIAL FACTORS - Opinion of
Financial Advisor to the Company."

Interests of Certain Persons in the Merger
- - ------------------------------------------
     In considering the recommendation of the Board of Directors of the
Company with respect to the Merger, shareholders should be aware that
certain executive officers and directors of the Company have interests in
connection with the Merger. 

     As a condition to the execution of the Merger Agreement, OSI required
that certain of the executive officers of the Company who also serve as
directors of the Company, namely Messrs. James R. Bohmann, Patrick E.
Carroll, William W. Kagel, Alvin W. Keeley, David S. Patterson, Dennis G.
Punches and Neal R. Sparby, and three other employees enter into agreements
to vote the  shares owned by them for the approval of the Merger Agreement.
As of the Record Date, such individuals owned an aggregate of 2,030,985
shares of the Common Stock, or approximately [__]% of the issued and
outstanding shares on the Record Date.

     As a condition to entering into the Merger Agreement, OSI required the
Company to enter into certain covenant not-to-compete agreements and
employment or consulting agreements with certain of the executive officers
and directors of the Company, which agreements will be effective only if
the Merger is consummated, as follows: (i) a consulting agreement with
Dennis G. Punches, Chairman of the Board of the Company, in which he agrees
to make himself available to consult with the Company for a period of three
years after the Effective Time and providing for a payment to him of


$150,000 at the conclusion of the three year period plus reimbursement of
expenses, (ii) a covenant not-to-compete agreement with Dennis G. Punches
which prohibits him from engaging in the accounts receivable management
business in North America (including Canada, Mexico and Puerto Rico) and
any other jurisdiction where the Company is doing business or qualified to
do business for a period of three years after the Effective Time in
consideration of a lump sum payment to him at the Effective Time of
$3,000,000, and (iii) employment agreements with six other directors and
executive officers, namely Messrs. Neal R. Sparby, William W. Kagel, Alvin
W. Keeley, Patrick E. Carroll, David S. Patterson and James R. Bohmann,
pursuant to which each of them will be employed by the Company in their
present capacities for a period of one year after the Effective Time at
salaries that range from $189,000 to $246,413, annually, and which require
payment of any bonus due and continued payment of base salary for the
remaining portion of such one year period (offset by remuneration from
other employment) if the employee is terminated without cause during the
initial one year term, and (iv) covenant not-to-compete agreements with the
six directors and executive officers of the Company referred to in clause
(iii), above, prohibiting them from engaging in the accounts receivable
management business in any jurisdiction where the Company is doing business
or qualified to do business for a period of one year after the Effective
Time in consideration of lump sum payments to them at the Effective Time
ranging in amount from $25,000 to $100,000. In addition, OSI required the
Company to enter into employment agreements on similar terms with two other
executive officers who are not directors and to enter into covenant not-to
- - -compete agreements with such officers and also with Joseph T. Treleven,
Director of Mergers/Acquisitions of the Company, pursuant to which he will
be paid $200,000 and will be restricted from competing with the Company for
a three year period. 

     The six directors and executive officers who have entered into
employment and covenant not-to-compete agreements described above hold
options to purchase an aggregate of 260,510 shares of the Common Stock at a
weighted average exercise price of $8.93, which options, at the Effective
Time, will be surrendered by each of them for cash payments equal to $14.00
per share less the exercise price of the related option and less any
applicable withholding taxes. 

     Two directors and executive officers, Patrick E. Carroll and James R.
Bohmann, were previously granted an aggregate of 6,960 and 4,960 Units,
respectively, under the Company's Common Share Equivalent Plan which have a
capped value of $7.50 per Unit and which, under the terms of the Plan and
elections previously made by them under the Plan, would have been paid to 
them upon termination of their employment with the Company. Under the terms
of the Merger Agreement, the value of such Units and all other Units under
the Common Share Equivalent Plan will be paid in cash at the Effective
Time.

     In the Merger Agreement, OSI agrees for certain periods of time to
keep in effect the provisions in the Articles of Incorporation and the
by-laws of the Company with respect to indemnification and exculpation from
liability of officers and directors of the Company, and to maintain in
effect certain directors' and officers' insurance covering those persons
who are currently covered by the Company's current policy.

     See "SPECIAL FACTORS - Interests of Certain Persons in the Merger."


Federal Income Consequences
- - ---------------------------
     In general, each shareholder will recognize gain or loss per share
equal to the difference between the cash received for the shareholder's
shares and the shareholder's tax basis per share in the Common Stock. Such
gain or loss generally will be treated as capital gain or loss if a
shareholder's shares of Common Stock were held as capital assets at the
time of the Merger. THE FOREGOING TAX DISCUSSION IS INCLUDED FOR GENERAL
INFORMATION ONLY AND IS BASED UPON PRESENT LAW. EACH SHAREHOLDER SHOULD
CAREFULLY REVIEW THE MORE DETAILED DESCRIPTION CONTAINED IN "THE MERGER -
Federal Income Tax Consequences" AND CONSULT SUCH SHAREHOLDER'S OWN TAX
ADVISOR AS TO THE SPECIFIC TAX CONSEQUENCES OF THE MERGER TO SUCH
SHAREHOLDER, INCLUDING THE APPLICATION AND EFFECT OF FEDERAL, STATE, LOCAL
AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN SUCH TAX LAWS.
See "SPECIAL FACTORS - Federal Income Tax Consequences."

Regulatory Filings And Approvals
- - --------------------------------
     Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), and the rules promulgated thereunder by the
Federal Trade Commission (the "FTC"), certain acquisition transactions,
including the Merger, may not be consummated until specified waiting period
requirements have been satisfied. On [___________], 1996, the Notification
and Report Forms required pursuant to the HSR Act were filed by OSI and the
Company, respectively, with the Antitrust Division of the Department of
Justice and the FTC for review in connection with the Merger. On
[__________], 1996 the applicable waiting period requirements were
satisfied. 

     The receipt of all approvals, consents, authorizations, exemptions and
waivers from governmental agencies required in order to enable the parties
to consummate the transactions contemplated by the Merger Agreement is a
condition to the obligations of the parties. Certain notification and
relicensing may be required under the collection agency laws of various
states in order for the Company to be able to continue its business without
interruption following the Effective Time.
     
     See "SPECIAL FACTORS - Regulatory Filings and Approvals"


Financing of the Merger
- - -----------------------
     The estimated total amount of funds required to consummate the Merger
and pay the related fees and expenses is expected to be approximately
$[_______]. In order to complete the Merger and to refinance certain
indebtedness of OSI, OSI requires, and the Merger is conditioned upon OSI's
obtaining, financing in the amount of $250,000,000, including $200,000,000
in the form of a senior credit facility, of which $150,000,000 would be
borrowed at the time of the consummation of the Merger, and the private
placement or public offering of approximately $100,000,000 of senior
subordinated notes. This financing would replace approximately $[_____] of
OSI's indebtedness which is currently outstanding. 

     OSI has received letters dated August 12, 1996 from Goldman, Sachs &
Co. ("Goldman Sachs") and Chase Securities Inc.("Chase Securities") that
they are highly confident of their ability to sell or place the senior

subordinated notes subject to certain terms and conditions set forth in
such letters which are attached hereto as Annexes H and I, respectively.
Such letters are not commitments by Goldman Sachs or Chase Securities to
purchase or place the senior subordinated notes. OSI has also received a
letter dated August 7, 1996 from Goldman Sachs Credit Partners L.P.
(formerly known as Pearl Street L.P.) ("GSCP"), an affiliate of Goldman
Sachs, The Chase Manhattan Bank ("Chase Manhattan") and Chase Securities in
which (i) each of GSCP and Chase Manhattan commits to make available one-
half the $200,000,000 senior credit facility required by OSI; (ii) GSCP and
Chase Manhattan agree to act as co-administrative agents with respect to
the senior credit facility and (iii) Goldman Sachs and Chase Securities
agree to act as arranging agents in connection with the senior credit
facility. A copy of such letter is attached hereto as Annex J. The
commitments and agreements contained in such letter are subject to a number
of terms and conditions, which are set forth in such letters. HOLDERS OF
SHARES OF COMMON STOCK ARE URGED TO, AND SHOULD, READ SUCH LETTERS IN THEIR
ENTIRETY.



     See "SPECIAL FACTORS - Financing of the Merger."

                            THE MERGER AGREEMENT

The Merger
- - ----------
     Pursuant to the terms of the Merger Agreement, at the Effective Time
(i) Boxer will be merged with and into the Company and will cease to exist
as a separate entity; (ii) the Company, as the surviving corporation in the
Merger (the "Surviving Corporation"), will become a wholly owned subsidiary
of OSI; and (iii) each outstanding share of Common Stock (other than shares
owned by the Company, OSI and OSI's subsidiaries) will be converted into
the right to receive $14.00 in cash, without interest, (the "Merger
Consideration") less any applicable withholding taxes.

Effective Time
- - --------------
     The Effective Time will be the time and date when Articles of Merger
are filed by the Company with the Secretary of State of the State of
Wisconsin and a Certificate of Merger is filed by Boxer with the Secretary
of State of the State of Delaware and the Merger thereby becomes effective.
Subject to the terms and conditions of the Merger Agreement, it is
presently contemplated that the Effective Time will occur as soon as
practicable after each of the conditions to the Merger have been satisfied
or waived but not later than 60 days after the Special Meeting. See "THE
MERGER AGREEMENT -Effective Time of the Merger," "- Conditions to the
Merger" and "- Regulatory Filings and Approvals."

Conversion and Cancellation of Common Stock
- - -------------------------------------------
     Upon the consummation of the Merger, each then outstanding share of
Common Stock, other than shares owned by the Company, OSI or OSI's
subsidiaries, will be converted into, and represent the right to receive,
the Merger Consideration less any applicable withholding taxes and all such
shares of Common Stock will no longer be outstanding and will be canceled
and retired and will cease to exist. See "THE MERGER AGREEMENT - Conversion
and Cancellation of Common Stock."

Exchange Procedure
- - ------------------
     Promptly after the Effective Time, the paying agent appointed by OSI
(the "Paying Agent") will mail to each holder of record of a certificate or
certificates (the "Certificates") that immediately prior to the Effective
Time represented outstanding shares of Common Stock, a letter of
transmittal with instructions for use in effecting the surrender of the
Certificates in exchange for the Merger Consideration. After the Effective
Time, there will be no further registration of transfers on the stock
transfer books of the Company, as the Surviving Corporation, of shares of
Common Stock. See "THE MERGER AGREEMENT - Exchange Procedure."

CERTIFICATES SHOULD NOT BE SURRENDERED BY THE HOLDERS OF COMMON STOCK UNTIL
SUCH HOLDERS RECEIVE THE LETTER OF TRANSMITTAL.

Conditions to the Merger
- - ------------------------
     The respective obligations of the Company and OSI to consummate the
Merger are subject to certain conditions, including, among others, (i) the 
receipt by OSI of financing to consummate the transactions contemplated by
the Merger Agreement, (ii) the approval of the Merger Agreement by the
affirmative vote of the holders of a majority of the outstanding shares of
Common Stock entitled to vote at the Special Meeting, (iii) the receipt of
all necessary regulatory approvals of the Merger, and (iv) the agreement of
all of the holders of options to purchase Common Stock of the Company to
surrender the same in cancellation and settlement thereof for a cash
consideration equal to $14.00 per share, less the exercise price of such
related options and less any applicable withholding taxes. See "THE MERGER
AGREEMENT - Conditions to the Merger."

Additional Agreements Between the Company and OSI; Other Offers
- - ---------------------------------------------------------------
     In the Merger Agreement, the Company has agreed, among other things,
that (i) the Company and each of its subsidiaries will conduct business
only in the ordinary and usual course; (ii) neither the Company nor any of
its subsidiaries will, directly or indirectly, nor will the Company or any
of its subsidiaries permit their respective officers, directors, employees,
agents and representatives to, encourage, solicit or initiate the
submission of any proposed merger or other business combination, sale or
other disposition of any material amount of assets, sale of shares of
capital stock, tender offer or exchange offer or similar transactions
involving the Company or any of its subsidiaries (an "Acquisition
Proposal"), enter into any agreement with respect to any Acquisition
Proposal or participate in any way in discussions or negotiations with, or,
furnish any information to, any other party in connection with, or take any
other action to facilitate any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any Acquisition
Proposal, provided, however, that the Company may participate in
discussions or negotiations with or furnish information to any third party
which proposes a transaction which the Board of Directors of the Company
reasonably believes will result in a tender offer, a merger or a sale of
all or substantially all of the assets of the Company on terms which the
Board of Directors of the Company determines in its good faith judgment to
be more favorable to the Company's shareholders than the transactions
contemplated by the Merger Agreement (a "Superior Proposal") if the Board
of Directors reasonably determines, in its good faith judgment (and has

been advised by independent legal counsel), that failing to take such
action would constitute a breach of its fiduciary obligations under
applicable law; (iii) the Company shall advise OSI of any request for
information or of any Acquisition Proposal, the material terms and
conditions of such request or proposal and the identity of the person
making any such proposal or inquiry and will keep OSI fully informed in all
material respects of the status and of any such request, proposal or
inquiry and the details of any information requested of or provided by the
Company and of all discussions or negotiations with respect to any such
request, proposal or inquiry; and (iv) neither the Board of Directors of
the Company nor the Special Committee shall withdraw or modify, or propose
to withdraw or modify, in a manner adverse to OSI the approval and
recommendation of the Merger and the Merger Agreement or approve or
recommend, or propose to approve or recommend, any Acquisition Proposal
unless the Merger Agreement shall have been terminated in accordance with
its terms. . See "THE MERGER AGREEMENT - Additional Agreements Between the
Company and OSI" and "- Other Offers."


Termination
- - -----------
     The Merger Agreement may be terminated at any time prior to the
Effective Time by mutual consent of the Company and OSI or by either the
Company or OSI if, among other things, (i) any governmental or regulatory
agency shall have issued an order, decree or ruling permanently enjoining,
restraining or otherwise prohibiting the consummation of the Merger and
such order, decree or ruling is final and nonappealable, (ii) the Merger
has not become effective by February 12, 1997, (iii) the Board of Directors
of the Company and, if required, the Special Committee, determines in its
good faith judgment that an Acquisition Proposal will result in a Superior
Proposal and the Board determines in its good faith judgment (and has been
advised by independent legal counsel) that a failure to terminate this
Agreement and enter into an agreement to effect the Superior Proposal would
constitute a breach of its fiduciary obligations under applicable law;
provided, however that the Company has given reasonably prompt written
notice to OSI of the receipt of such Acquisition Proposal and following
such notification by the Company to OSI of receipt of such Acquisition
Proposal, the Company has kept OSI reasonably informed of the terms and
conditions of such Acquisition Proposal and the identity of the party
making such proposal, and prior to or simultaneously with such termination
the Company has paid OSI the termination fee specified in the Merger
Agreement and prior to or simultaneously with such termination the Company
enters into a definitive acquisition, merger or similar agreement to effect
the Superior Proposal.

     In addition, the Merger Agreement may be terminated by OSI if, among
other things, (i) there shall have been a breach of any representation or
warranty on the part of the Company contained in the Merger Agreement which
would reasonably be expected to have a material adverse effect on the
business, properties, assets, liabilities, operations, financial condition,
results of operations or prospects of the Company and its subsidiaries
taken as a whole (a "Material Adverse Effect"), (ii) there shall have been
a material breach of any covenant or agreement on the part of the Company
contained in the Merger Agreement and the Company has failed to cure such
breach within ten days after written notice from OSI, or (iii) the Board of
Directors of the Company or the Special Committee has withdrawn or modified


in a manner adverse to OSI its approval or recommendation of the Merger
Agreement or the Merger and has not reinstated such approval or
recommendation within three business days or the Company has entered into a
definitive acquisition, merger or similar agreement to effect a Superior
Proposal.

     In addition, the Company may terminate the Merger Agreement if (i) the
Merger has not been consummated within 60 days after approval of the Merger
Agreement and the Merger by the Company's shareholders, unless the Merger
has not been consummated because of an intentional or willful material
breach of any representation or warranty on the part of the Company set
forth in the Merger Agreement or because of a material breach of any
obligation, covenant or agreement on the part of the Company set forth in
the Merger Agreement which the Company has failed to cure within ten days
after written notice thereof by OSI to the Company, (ii) any of the
representations and warranties of OSI or Boxer contained in the Merger
Agreement were untrue or incorrect in any material respect when made or
have since become, and at the time of termination remain, incorrect in any
material respect, or (iii) OSI or Boxer breaches or fails to comply in any
material respect with its obligations under the Merger Agreement.


Termination Fee
- - ---------------

     Under the following circumstances, the Company has agreed to pay to
OSI, in cash, a termination fee of $4,800,000 (the "Termination Fee") plus
reimbursement for the out-of-pocket fees and expenses reasonably incurred
by OSI in connection with the Merger and the transactions contemplated
thereby (not to exceed $1,500,000 in the aggregate): (i) if the Merger
Agreement is terminated (A) by the Company because of the failure of the
Merger to be consummated by February 12, 1997, under circumstances where
the Company's shareholders have not approved the Merger Agreement and
Merger but the other significant conditions to the Company's obligation to
close have been satisfied, including the obtaining by OSI of its financing
to complete the Merger, and prior to such termination, the Company shall
have notified its shareholders that a third party has made a Superior
Proposal or a third party has publicly announced a proposal which
represents a Superior Proposal, or (B) by OSI (1) as a result of an
intentional or willful breach by the Company of its representations and
warranties set forth in the Merger Agreement, (2) as a result of a breach
of any covenant or agreement on the part of the Company set forth in the
Merger Agreement which it has failed to cure within ten days after written
notice or (3) if the Board of Directors of the Company or the Special
Committee has withdrawn or modified in a manner adverse to OSI its approval
or recommendation of the Merger Agreement or the Merger and has not
reinstated such approval or recommendation within three business days or
the Company has entered into a definitive acquisition, merger or similar
agreement to effect a Superior Proposal, and within twelve months after
such termination, the Company enters into an agreement with respect to any
merger or any other business combination, sale or other disposition of any
material amount of assets, sale of shares of capital stock, tender offer or
exchange offer or similar transaction involving the Company or any of its
subsidiaries (a "Third Party Acquisition"), or a Third Party Acquisition
occurs, involving any party (or any affiliate or associate
thereof) (x) with whom the Company (or its agents) during the term of the


Merger Agreement had any discussions with respect to a Third Party
Acquisition, (y) to whom the Company (or its agents) during the term of this
Agreement furnished information with respect to or with a view toward a
Third Party Acquisition, or (z) who during the term of this Agreement had
submitted a proposal or expressed any interest publicly or to the Company
in a Third Party Acquisition, which Third Party Acquisition contemplates a
direct or indirect consideration for shares of Common Stock in excess of
the Merger Consideration, in the case of each of clauses (x), (y) and
(z) prior to such termination or (ii) if this Agreement is terminated by
the Company because of its acceptance of a Superior Proposal in the manner
permitted by the Merger Agreement.  

     If OSI terminates the Merger Agreement (i) as a result of an
intentional or willful breach of any representation or warranty which would
reasonably be expected to have a Material Adverse Effect, (ii) because a
material breach of any covenant or agreement on the part of the Company
contained in this Agreement which the Company has failed to cure within ten
days after written notice thereof from OSI, or (iii) because the Board of
Directors of the Company or the Special Committee has withdrawn or modified
in a manner adverse to OSI its approval or recommendation of this Agreement
or the Merger and has not reinstated such approval or recommendation within
three business days thereof or the Company has entered into a definitive
acquisition, merger or similar agreement to effect a Superior Proposal,
then the Company is required to pay OSI, in cash, $1,000,000, plus,
reimbursement of OSI's out-of-pocket fees and expenses reasonably incurred
by it in connection with the Merger and the transactions contemplated
thereby (not to exceed $1,500,000 in the aggregate). Such payment will be
applied against the Termination Fee which the Company may be required to
pay in certain circumstances as described above.

     See "THE MERGER AGREEMENT - Expenses and Termination Fees."



Indemnification
- - ---------------
     OSI has agreed that for a period of six years from the Effective Time,
the Articles of Incorporation and the by-laws of the Surviving Corporation
will contain the provisions with respect to indemnification and exculpation
from liability set forth in the Company's Articles of Incorporation and 
by-laws on the date of the Merger Agreement, and will not amend, repeal or
modify the same in any manner that would adversely affect the rights
thereunder of individuals who on or prior to the Effective Time were
directors, officers, employees or agents of the Company, unless such
modification is required by law. In addition, OSI has agreed for a period
of three years after the Effective Time to maintain in effect directors'
and officers' insurance covering those persons who are currently covered by
the Company's directors' and officers' liability insurance policy on terms
comparable to such existing coverage provided that if the premium would
exceed 150% of the 1996 premium, the amount of coverage may be reduced to
the amount which can be obtained for 150% of the 1996 premium. See "THE
MERGER AGREEMENT - Indemnification."



                        TREATMENT OF STOCK OPTIONS
                        --------------------------
     At the Effective Time, all options to purchase Common Stock under the
Company's 1988 Stock Option Plan and 1992 Stock Option Plan will be deemed
to be fully vested and option holders shall be entitled, upon exercise of
the Options on or after the Effective Time, only to receive the Merger
Consideration, without interest, subject to any applicable withholding
taxes, (the "Cash Payment"). [All option holders have agreed to surrender
their options and receive in cancellation and settlement thereof a cash
consideration equal to the Cash Payment, less the exercise price of the
related options.]


                STOCK OWNERSHIP OF MANAGEMENT AND CERTAIN
                -----------------------------------------
                        OTHER BENEFICIAL OWNERS
                         ----------------------
     
     As of the Record Date, the directors and executive officers of the
Company, as a group, owned [_______] shares of the Common Stock, or
approximately [__]% of the shares outstanding on such date. The only
persons known by the Company to beneficially own five percent (5%) or more
of the Common Stock as of the Record Date were Dennis G. Punches, the
Chairman of the Board of the Company, State of Wisconsin Investment Board
and Heartland Advisors, Inc.  See "STOCK OWNERSHIP OF MANAGEMENT AND
PRINCIPAL SHAREHOLDERS." 


                       MARKET PRICE OF COMMON STOCK
                       ----------------------------

     The Common Stock is quoted on the NASDAQ National Market under the
symbol "PAYC." On July 22, 1996, the last full trading day prior to the
public announcement that the Company was engaged in discussions with
potential acquirers, the high and low prices per share reported on the
NASDAQ National Market for the Common Stock were $9.25 and  $8.75,
respectively. On August 13, 1996, the last full trading day prior to the
public announcement of the signing of the Merger Agreement, the high and
low bid prices per share reported on the NASDAQ National Market for the
Common Stock were $12.00 and $11.50, respectively. For further information,
see "MARKET PRICE OF COMMON STOCK."

                   SELECTED CONSOLIDATED FINANCIAL DATA
                   ------------------------------------   
     Certain selected historical financial data of the Company is set forth
under "SELECTED CONSOLIDATED FINANCIAL DATA." That data should be read in
conjunction with the consolidated financial statements and related notes
incorporated by reference in this Proxy Statement. See "INCORPORATION OF
INFORMATION BY REFERENCE."






                               INTRODUCTION

     This Proxy Statement is furnished in connection with the solicitation
by the Company of proxies to be voted at a Special Meeting of Shareholders
of the Company to be held on October [__], 1996 (the "Special Meeting").
This Proxy Statement is first being mailed to shareholders of the Company
on or about September [__], 1996.

     The purpose of the Special Meeting is to consider and vote upon a
proposal to approve the Agreement and Plan of Merger, dated as of August
13, 1996 (the "Merger Agreement"), by and among the Company, OSI and Boxer,
pursuant to which, among other things, (a) Boxer will be merged with and
into the Company (the "Merger") and (b) each share of Common Stock
outstanding immediately prior to the Merger (other than shares owned by the
Company, OSI and OSI subsidiaries) will be converted into the right to
receive $14.00 in cash, without interest, less any applicable withholding
taxes. In addition, each holder of an employee stock option to acquire
shares of Common Stock will, immediately after the Effective Time, become
entitled to receive a cash payment equal to $14.00 less the per share
exercise price under the option for each share of Common Stock covered by
such option, less any applicable withholding taxes. Upon the consummation
of the Merger, the separate existence of Boxer will cease, all of the
rights, privileges, powers, franchises, properties, assets, liabilities and
obligations of Boxer will be vested in the Company and the Company will
become a wholly owned subsidiary of OSI. See "THE MERGER AGREEMENT - The
Merger."

THE BOARD OF DIRECTORS OF THE COMPANY AND THE SPECIAL COMMITTEE OF THE
BOARD OF DIRECTORS HAVE DETERMINED THAT THE MERGER AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED THEREBY ARE FAIR TO AND IN THE BEST INTERESTS OF
THE COMPANY AND ITS SHAREHOLDERS AND RECOMMEND THAT THE SHAREHOLDERS OF THE
COMPANY APPROVE THE MERGER AGREEMENT.
     

                           PARTIES TO THE MERGER

THE COMPANY
     
     The Company is a leading provider of a full range of accounts
receivable management services, including customer service outsourcing. The
Company provides nationwide account coverage through its network of 37
offices across the United States and Puerto Rico and employs more than
3,300 people. The Company is also a majority owner of joint ventures in
Mexico City, Mexico and Tokyo, Japan that provide receivable management
services. 
     

OSI

     OSI, based in Atlanta, was formed in September 1995 by McCown De Leeuw
& Co., a private investment company, to build the largest single-source
provider of a full range of accounts receivable management services to
credit issuers. OSI's strategy is to acquire leaders in various accounts
receivable management businesses, including contingent fee collection
services, debt portfolio purchasing, billing, teleservicing and complete
functional outsourcing. OSI currently has three separate operating
companies, Account Portfolios, Inc., A.M. Miller & Associates, Inc. and
Continental Credit Services, Inc.




BOXER
     
     Boxer is a wholly owned subsidiary of OSI and was formed by OSI to
effect the Merger and has had no prior business. Upon consummation of the
Merger, Boxer will be merged with and into the Company, and Boxer's
separate corporate existence will thereupon cease.
     

                          THE SPECIAL MEETING

DATE, TIME AND PLACE OF SPECIAL MEETING

     The Special Meeting is scheduled to be held at 9:00 a.m., local time,
on October [__], 1996, at the Company's executive offices located at 180
North Executive Drive, Brookfield, Wisconsin 53005.

RECORD DATE AND OUTSTANDING SHARES
     
     Only holders of record of shares of Common Stock at the close of
business on September [__], 1996 (the "Record Date") may vote at the
Special Meeting or at any adjournments or postponements thereof. As of the
Record Date, there were [___________] shares of Common Stock outstanding,
the only class of securities of the Company entitled to vote at the Special
Meeting, held by approximately [_____] shareholders of record. Each
shareholder is entitled to one vote for each share registered in the
shareholder's name on the Record Date.

VOTING PROXIES
     
     The Company's Board of Directors is soliciting proxies for the Special
Meeting. When a proxy card is returned properly signed and dated, the
shares represented thereby will be voted in accordance with the
instructions on the proxy card. However, if a shareholder does not return a
signed proxy card, his or her shares will not be voted by the proxies.
Shareholders are urged to mark the boxes on the proxy card to indicate how
their shares are to be voted. IF A SHAREHOLDER RETURNS A SIGNED PROXY CARD
AND A CHOICE IS NOT SPECIFIED, THE SHARES REPRESENTED BY THAT PROXY CARD
WILL BE VOTED IN FAVOR OF APPROVAL OF THE MERGER AGREEMENT AND MAY ALSO BE
VOTED IN THE PROXY HOLDER'S DISCRETION ON SUCH OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENTS OR POSTPONEMENTS
THEREOF, EXCEPT THAT SHARES REPRESENTED BY PROXIES WHICH HAVE BEEN VOTED
"AGAINST" THE APPROVAL OF THE MERGER AGREEMENT WILL NOT BE USED TO VOTE
"FOR" POSTPONEMENT OR ADJOURNMENT OF THE SPECIAL MEETING FOR THE PURPOSE OF
ALLOWING ADDITIONAL TIME FOR SOLICITING ADDITIONAL VOTES FOR THE APPROVAL
OF THE MERGER AGREEMENT. See "THE SPECIAL MEETING - Vote Required." 
     
     Shareholders of the Company who execute proxies retain the right to
revoke them at any time before they are voted. Any proxy given by a
shareholder may be revoked (i) by duly executing and delivering a later
proxy prior to the exercise of such proxy, (ii) by giving notice of
revocation in writing to the Secretary of the Company prior to the meeting,
at 180 North Executive Drive, Brookfield, Wisconsin 53005, or (iii) by
attending the Special Meeting and voting in person.


VOTE REQUIRED

     A quorum for the transaction of business at the meeting consists of
holders of the majority of the outstanding shares of the Common Stock,
present in person or by proxy. In the event that less than a majority of
the outstanding shares are present at the Special Meeting, either in person
or by proxy, a majority of the shares so represented may vote to adjourn
the Special Meeting from time to time without further notice, other than
announcement at the Special Meeting, until a quorum shall be present or
represented.
     
     The affirmative vote of holders of at least a majority of the
outstanding shares of Common Stock of the Company as of the Record Date is
required to approve and adopt the Merger Agreement and the transactions
contemplated thereby. Under the Wisconsin Business Corporation Law, in
determining whether the proposal regarding the adoption of the Merger
Agreement has received the requisite number of affirmative votes,
abstentions and broker non-votes will be counted and will have the same
effect as a vote against such proposal.

     As a condition to the execution of the Merger Agreement, OSI required
that certain of the directors and executive officers, namely Messrs. James
R. Bohmann, Patrick E. Carroll, William W. Kagel, Alvin W. Keeley, David S.
Patterson, Dennis G. Punches and Neal R. Sparby, as well as three
additional employees, enter into Voting Agreements, in the form of Annex B
hereto, to vote the shares owned by them for the approval of the Merger
Agreement. As of the Record Date, such individuals owned an aggregate of
2,030,985 shares of the Common Stock of the Company, or approximately [__]%
of the issued and outstanding shares on the Record Date.

NO APPRAISAL RIGHTS

     The Common Stock is quoted on NASDAQ, and, consequently, pursuant to
Wisconsin law, holders of Common Stock do not have statutory appraisal or
dissenter's rights with respect to the Merger.




SOLICITATION OF PROXIES; EXPENSES

     The cost of solicitation, including the cost of preparing and mailing
the Notice of the Special Meeting of Shareholders and this Proxy Statement,
will be paid by the Company. Solicitation will be made primarily by mailing
this Proxy Statement to all Shareholders entitled to vote at the Special
Meeting. Proxies may be solicited by officers and regular employees
personally or by telephone, but at no compensation in addition to their
regular compensation as employees. The Company may reimburse brokers,
banks, and others holding shares in their names for third parties, for the
cost of forwarding Proxy Statements to and obtaining proxies from third
parties. In addition, while the Company has no present intention to retain
anyone to assist in soliciting proxies, the Company may do so if it deems
such action necessary.

     

                               SPECIAL FACTORS

BACKGROUND OF THE MERGER
     
     On several occasions over the past five years, Dennis G. Punches,
Chairman of the Board of the Company, received inquiries from various
sources regarding the sale of the Company. These inquiries were from
brokers attempting to secure a commission to locate a buyer. None of the
inquiries were from people hired by qualified buyers specifically to
contact the Company and consequently, he determined that none of these
contacts represented inquiries from serious buyers.
     
     In 1995, Mr. Punches began to receive unsolicited inquiries directly
from companies involved in the accounts receivable management industry.
Certain of these organizations appeared to have the potential of being
qualified buyers that might present a serious offer that the Board of
Directors should evaluate. Mr. Punches assigned Joseph T. Treleven, the
Director of Mergers/Acquisitions for the Company and, from 1966 to 1987,
its Executive Vice President and chief operating officer and a director, to
respond to these inquiries.
     
     The first contact that led to the eventual signing of the Merger
Agreement occurred on July 17, 1995 when Mr. Frank J. Hanna, Jr. met with
Messrs. Punches and Treleven in Milwaukee. Mr. Hanna and his two sons,
Frank J. III and David G., were the former owners of Nationwide Credit,
Inc. which they had sold several years earlier. The sons had formed a new
collection company, Account Portfolios, L.P. ("AP") and it was proposed by
the Hannas that AP and the Company should merge. On September 25, 1995,
Frank Hanna, Jr. called Mr. Treleven to say AP had been sold to OSI and
that McCown De Leeuw & Co. ("McCown"), the sponsor and major shareholder of
OSI, wanted to speak to the Company about a possible sale.


     On October 21, 1995 Messrs. Punches and Treleven met in Atlanta with
David King, a partner with McCown, David Kreiss, President of OSI, Frank
Hanna, Jr., Frank Hanna III, and David Hanna. At this meeting, Mr. King
outlined the leveraged buy-out concept and suggested a fact finding visit
to Milwaukee. Messrs. Punches and Treleven suggested McCown review the
public financial information that was available concerning Payco and
present an estimated purchase price before any fact finding visit took
place. 
     
     A confidentiality agreement was entered into on November 9, 1995 and,
on November 15, 1995, Mr. Kreiss contacted Mr. Treleven and said that OSI's
estimated purchase price would be in the range of $10.00 to $14.00 per
share and that an investment in OSI stock would be required on the part of
the Company's management. Mr. Treleven told Mr. Kreiss that he did not
believe that the price was adequate and that it was unlikely that the Board
of Directors would approve a transaction unless the price were more
favorable to the Company's shareholders. Mr. Treleven telephoned Mr. King
on December 5, 1995 to determine McCown's pricing rationale and Mr. King
told him that the pricing was based upon cash flow. Mr. Treleven stated the
pricing did not recognize the infrastructure that the Company had in place,
an asset and capability that OSI would have to acquire at some point. Mr.
Treleven suggested that McCown and OSI visit the Company when and if they
were ready to acknowledge the value of the Company's infrastructure, in
addition to its cash flow.
     
     On April 5, 1996, Mr. Kreiss called Mr. Treleven and suggested he,
David Hanna and Tyler Zachem of McCown visit Milwaukee to learn more about
the Company's data system, computer center, billing systems, and
infrastructure. This visit was held on April 22, 1996.
     
     These contacts, as well as certain other contacts which the Company
had received and which are described below, were reported to the Board of
Directors at its annual meeting held on May 7, 1996. At this meeting, the
Board of Directors authorized continued discussions with the potential
acquirors through Mr. Treleven. 
     
     On June 11, 1996, Mr. Kreiss, representatives of McCown and
representatives of Goldman Sachs, advisor to OSI, visited Milwaukee and met
with Messrs. Punches and Treleven and with Neal R. Sparby, the Company's
President. At the conclusion of this meeting, the McCown representatives
expressed renewed interest in the Company and stated they would reconsider
their pricing. On June 25, 1996, McCown indicated that OSI would be willing
to pay as much as $14.50 per share for the Common Stock and requested a
period of time for conducting an extensive due diligence investigation of
the Company during which the Company would not be permitted to negotiate
with other potential acquirors, other than those which had previously
contacted the Company. Such a letter agreement was entered into on June 27,
1996 granting OSI an exclusivity period of 30 days. This exclusivity
period, subject to the Company's ability to respond to other parties with
which the Company had been previously contacted, was extended several times
during the course of negotiations with McCown and OSI, resulting in the
exclusivity period covering the period from the initial letter on June 27,
1996 through the signing of the Merger Agreement on August 13, 1996.
     
     On June 26, 1996 the Board of Directors, by unanimous consent
resolution, formed a special committee of the Board (the "Special
Committee") comprised of Dennis Shea and Richard Miles, both of whom are 
directors with no other affiliations with the Company. The resolution
forming the Special Committee required that any proposal to acquire the
Company be approved by the Special Committee as well as by a majority of
the Board of Directors.
     
     From the period commencing on June 27, 1996 through August 12, 1996
when the Board of Directors of the Company and the Special Committee met to
consider the Merger Agreement extensive negotiations continued between
McCown and OSI on the one hand and Messrs. Punches and Treleven on the
Company's behalf. During this period of time, the members of the Board of
Directors, including the members of the Special Committee, were kept
advised of the progress of negotiations and on July 29, 1996, with the
approval of the Company's Board of Directors, including the members of the
Special Committee, William Blair was retained to act as the Company's
financial advisor, including rendering its opinion as to the fairness of
any proposed transaction. Also, in the course of the negotiations over this
period, McCown eliminated the requirement that the management of the
Company invest in OSI. OSI also indicated during this period of time that
it would require covenant not-to-compete agreements from nine executive
officers of the Company, including seven who were directors, as well as
from Mr. Treleven and a consulting agreement from Mr. Punches and
employment agreements from the other eight executive officers who would be
required to sign covenant not-to-compete agreements. Also, during this
period of time, OSI presented a draft of the Merger Agreement which was the


subject of negotiations regarding a number of issues, including the
circumstances under which the Company could terminate the Merger Agreement
in order to accept a more favorable proposal,  the related breakup fee and
the consequences of any breach of the Merger Agreement by the Company.
     
     On August 8, 1996, McCown and OSI indicated to Mr. Treleven that OSI
was prepared to pay $13.50 per share based on the Company's July, 1996
operating results which were below budget and certain other factors
discovered during the due diligence review. After extensive negotiations
during the next several days, McCown and OSI agreed to increase their offer
of $13.50 per share to $14.00 per share and OSI and the Company resolved
the remaining differences over the terms and conditions of the Merger
Agreement and the breakup fee if a higher offer were presented to and
accepted by the Company after the signing of the Merger Agreement.
     
     The Special Committee held meetings on June 26 and 28, July 3, 19 and
25 and August 9, 1996 for purposes of reviewing and monitoring developments
in the negotiations with OSI, the selection by the Board of William Blair
as the Company's financial advisor and the approval of the Merger
Agreement. On August 12, 1996, the Board of Directors of the Company and
the Special Committee met to consider the Merger and a possible transaction
with another potential acquiror. The Board meeting commenced at 9:00 a.m.
and was concluded at 6:00 p.m. During a recess of the Board meeting held in
the afternoon, the Special Committee also met for approximately one hour.
During the course of the Board meeting, (i) Mr. Treleven reported on the
negotiations with OSI and other parties, (ii) William Blair presented a
detailed report on the valuation work which it had performed and reported
that it believed the Merger Consideration was fair, from a financial point
of view, to the Company's shareholders, (iii) the Company's legal counsel
reviewed the terms and conditions of the proposed Merger Agreement in
detail, and (iv) Mr. Punches reviewed the terms and conditions of the
covenant not-to-compete and consulting agreements that OSI required the 
Company to enter into with himself, the covenant not-to-compete and
employment agreements that OSI required the Company to enter into with the
eight other executive officers (six of whom also serve as directors of the
Company) and the covenant not-to-compete agreement required to be entered
into with Mr. Treleven. After extensive discussions, the members of the
Board of Directors in attendance at the meeting, including both of the
members of the Special Committee, unanimously approved the Merger Agreement
and the Merger. Late in the evening of August 13, 1996, the Company was
able to fulfill the condition that all of the eight executive officers of
the Company, other than Mr. Punches, execute the proposed employment
agreements and covenant not-to-compete agreements with the Company and that
Mr. Treleven execute the proposed covenant not-to-compete agreement, at
which time the Merger Agreement was executed. The public announcement of
the signing of the Merger Agreement was made at about 9:00 a.m. on August
14, 1996.
     
      During the period of time that the Company was engaged in
negotiations with OSI and McCown, the Company also held discussions with
two other parties that appeared to be serious potential acquirors of the
Company. The discussions with one of these parties ended without an offer
being made to the Company. The other party communicated an interest in
acquiring 80% of the Common Stock in a transaction which would have
resulted in cash and the retention of an interest in the stock of the
restructured Company. The Board of Directors and William Blair both


concluded that the value of such offer was less than the $14.00 per share
offered by OSI. The Company requested such party to make an offer to
acquire all of the Company's shares of Common Stock for cash at a more
favorable price to the Company's shareholders, but no such proposal was
made by such party. 
     
REASONS FOR THE MERGER

     The Board of Directors and the Special Committee have determined that
the Merger Agreement and the Merger are advisable and fair to and in the
best interests of the Company and its shareholders and have approved the
Merger Agreement and the Merger by the unanimous vote of those directors
present at the meeting at which the matter was acted upon. Accordingly, the
Board of Directors and the Special Committee recommend that the
shareholders of the Company vote for approval of the Merger Agreement.

     In reaching their determination that the Merger Agreement and the
Merger are in the best interests of the Company and its shareholders, the
Board of Directors and Special Committee considered a number of factors,
including the following:
     
          (i) the relationship of the Merger Consideration to the
historical stock price for the Common Stock and the fact that the price
represents a substantial premium over the trading range of the Common Stock
of the Company over the prior four-year period (see "-Opinion of Financial
Advisor to the Company--Analysis of the Purchase Price");
          
          (ii) information relating to the financial condition and results
of operations of the Company and management's estimates of the prospects of
the Company, which, in the view of the Board and the Special Committee,
supported a determination that the Merger Consideration was fair to the
Company's shareholders;
          
          (iii) the fact that the Company's business has become
increasingly competitive;
          
          (iv) the lack of any proposals from any other third party at a
price or terms superior to the Merger Consideration to be received in the
Merger;
          
          (v) the belief of the Board of Directors and the Special
Committee that the covenant not-to-compete and consulting and employment
agreements with certain executive officers and directors were appropriate
in the light of the nature of the Merger and were consistent with the
advisability and fairness of the Merger Agreement and the Merger to the
Company and its shareholders;
          
          (vi) the opinion of William Blair that, as of such time, the
$14.00 in cash per share of Common Stock to be received by the holders of
shares of Common Stock pursuant to the Merger Agreement is fair to such
holders from a financial point of view;
          
          (vii) the view of the Board of Directors and the Special
Committee that the terms of the Merger Agreement, as reviewed by the Board
and Special Committee with outside legal counsel and William Blair, are

advisable and fair to the Company and its shareholders in the light of the
nature of the transaction with OSI and provide the Company with the
flexibility, under certain circumstances, to accept a Superior Proposal for
a competing transaction and terminate the Merger Agreement.
          
     The foregoing discussion of the information and factors discussed by
the Board of Directors and the Special Committee is not meant to be
exhaustive, but includes material factors considered by the Board and the
Special Committee. The Board and the Special Committee did not quantify or
attach any particular weight to the various factors that they considered in
reaching their determination that the Merger is in the best interests of
the Company's shareholders.


RECOMMENDATION OF THE COMPANY'S BOARD OF DIRECTORS AND SPECIAL COMMITTEE OF
                       THE BOARD OF DIRECTORS


     THE BOARD OF DIRECTORS AND THE SPECIAL COMMITTEE OF THE BOARD OF
     DIRECTORS RECOMMEND THAT THE SHAREHOLDERS OF THE COMPANY VOTE IN
     FAVOR OF THE APPROVAL OF THE MERGER AGREEMENT.


OPINION OF FINANCIAL ADVISOR TO THE COMPANY

     On August 12, 1996, William Blair delivered its oral opinion to the
Board of Directors of the Company and to the Special Committee, confirmed
by its written opinion on August 13, 1996, that, as of the date of such
opinion, the $14.00 in cash per share of Common Stock to be received by the
holders of shares of Common Stock pursuant to the Merger Agreement is fair
to such holders.
     
     In connection with its opinion, William Blair reviewed, among other
things, (i) the Merger Agreement; (ii) the Annual Reports to Shareholders
and Annual Reports on Form 10-K of the Company for the five years ended
December 31, 1995; (iii) certain interim reports to shareholders and
Quarterly Reports on Form 10-Q of the Company; (iv) certain other
communications from the Company to its shareholders; and (v) certain
internal financial analyses and forecasts for the Company prepared by its
management. William Blair also held discussions with members of the senior
management of the Company regarding its past and current business
operations, financial condition and future prospects. In addition, William
Blair reviewed the reported price and trading activity for the Common
Stock, compared certain financial and stock market information for the
Company with similar information for certain other companies, the
securities of which are publicly traded, reviewed the financial terms of
certain recent business combinations in the accounts receivable management
industry specifically and in other industries generally and performed such
other studies and analyses as it considered appropriate.
     
     William Blair relied without independent verification upon the
accuracy and completeness of all of the financial and other information
reviewed by it for purposes of its opinion. In addition, William Blair has
not made an independent evaluation or appraisal of the assets and
liabilities of the Company or any of its subsidiaries and William Blair has
not been furnished with any such evaluation or appraisal.

     
     The following is a summary of certain of the financial analyses used
by William Blair in connection with providing its oral opinion to the Board
of Directors of the Company on August 12, 1996, and confirmed in its
written opinion on August 13, 1996. The full text of the opinion of William
Blair, dated August 13, 1996, is attached hereto as Annex C. Shareholders
of the company are urged to, and should, read such opinion in its entirety.
The summary of the opinion of William Blair set forth in this Proxy
Statement is qualified in its entirety by reference to the full text of
such opinion. William Blair's opinion is directed only to the fairness from
a financial point of view of the consideration to be received by holders of
shares of the Common Stock pursuant to the Merger and does not constitute a
recommendation to any Company shareholder as to how to vote at the Special
Meeting.
     
     In arriving at its fairness opinion, William Blair (a) reviewed the
terms and conditions of the Merger Agreement and the financial terms of the
Merger as set forth in the Merger Agreement; (b) analyzed certain publicly
available financial statements of the Company; (c) analyzed certain
financial and other information relating to the prospects of the Company
provided to William Blair by the Company's management, including financial
projections; (d) discussed the past and current operations and financial
condition and the prospects of the Company with senior executives of the
Company; (e) reviewed the historical prices and trading activity for the
Common Stock; (f) reviewed the financial terms, to the extent publicly
available, of selected actual business combinations William Blair believed
to be relevant; and (g) performed such other analyses as William Blair
deemed appropriate.

     In connection with its review, William Blair assumed and relied upon
the accuracy and completeness of all such information and did not attempt
to verify independently any of such information. In addition, William Blair
did not make or obtain an independent valuation, appraisal or physical
inspection of any of the assets, properties or liabilities of the Company.
With respect to financial projections, William Blair assumed that the
projections had been reasonably prepared on bases reflecting the best
currently available estimates and judgments of the Company's management as
to the future financial performance of the Company, and that such
projections provided a reasonable basis upon which William Blair could form
an opinion. William Blair assumed no responsibility for, and expressed no
view as to, such forecasts or the assumptions on which they were based.
William Blair's opinion is necessarily based solely upon information
available to William Blair and business, market, economic and other
conditions as they existed on, and could be evaluated as of, August 13,
1996. William Blair also assumed that the Merger could be consummated on
the terms described in the Merger Agreement without any waiver of any
material terms or conditions by the Company.
     
     The following presentation summarizes certain financial analyses
performed by William Blair in arriving at its opinion dated August 13,
1996, which analyses William Blair discussed with the Board of Directors of
the Company.

     
     Analysis of Historical Projections. William Blair relied on the 
     ----------------------------------
projections of management in arriving at its valuation of the Common Stock.
As part of its analysis, William Blair examined actual income statement
results for 1993, 1994 and 1995, respectively against the original
management projections compiled at the beginning of each of those years.
William Blair noted that the actual operating income fell short of
management estimates by 10% to 21% per year while net income fell short of
management estimates by 8% to 29% per year.
     
     Implied Future Share Price Analysis. Using the projections by the 
     -----------------------------------
Company's management of future earnings and a discount rate equal to the
Company's estimated cost of equity of 14%, William Blair estimated that the
present value of the Company's stock based on the projected price in the
year 1998 would be $11.48 per share at a price/earnings multiple of 15,
$13.01 at a price/earnings multiple of 17 and $14.54 at a price/earnings
multiple of 19. Applying the same methodology to projected earnings in 2000
yielded a present value stock price of $12.36 per share at a price/earnings
multiple of 15, $14.01 at a price/earnings multiple of 17 and $15.66 at a
price/earnings multiple of 19. The 15 to 19 range of price/earnings
multiples used in the analysis approximates the actual range of multiples
of trailing 12 months earnings per share at which the Common Stock has
traded over the last two years.
     
      Comparable Company Analyses. William Blair compared selected
      ---------------------------
historical and projected operating information, stock market data and
financial ratios for the Company to selected historical and projected
operating information, stock market data and financial ratios of certain
other publicly traded credit services companies including Union
Corporation, Equifax, Inc., Dun & Bradstreet Corporation, First Data
Corporation, SPS Transaction Services, Inc., CRW Financial, Inc., National
Data Corporation and Deluxe Corporation. For these companies used as
comparables, an analysis of current stock prices to most recent twelve
months earnings per share yielded a range of 8.9 to 44.1 times earnings
with a median of 33.8 times earnings, compared to 30.5 times earnings for
the Company in the Merger. An analysis of current stock price to projected
calendar 1996 earnings per share yielded a range for the comparable
companies of 11.2 to 35.2 times earnings with a median of 20.6 times
earnings compared to 25.1 times earnings for Company in the Merger. An
analysis of current stock prices to projected calendar 1997 earnings per
share yielded a range for the comparable companies of 9.7 to 27.5 times
earnings with a median of 17.3 times earnings compared to 17.1 times
earnings for the Company in this transaction. William Blair indicated that
the price to last twelve months, estimated calendar 1996 and estimated
calendar 1997 earnings multiples calculated for the Company based on the
financial terms of the Merger were within the ranges of multiples of the
comparable companies and above the medians for price to projected 1996
earnings.
     

     Stock Price Analysis. William Blair examined the history of the
     --------------------
trading prices and volume for the Common Stock over a two year period. This
analysis revealed that between August 2, 1994 and August 2, 1996, over 92%
of the Common Stock trading volume had been at or below $10.00 per share
and 100% had been traded at or below $12.50 per share. Further analysis
revealed that none of the volume that had traded above $10.00 had occurred
until after the public announcement of negotiations by the Company with
potential acquirors on July 23, 1996.
     
     Comparable Acquisitions Analysis. William Blair reviewed 66 mergers
     --------------------------------
and acquisitions involving credit services and management services
companies during the period from January 1, 1990 to July 26, 1996. In
examining these transactions, William Blair analyzed certain income
statement and balance sheet parameters of the acquired companies relative
to the consideration paid. Multiples analyzed included total transaction
value (defined as transaction equity value adjusted by adding long-term
debt and subtracting cash and short-term investments) as a multiple of
latest twelve months revenues, last twelve months earnings before interest,
taxes, depreciation and amortization ("EBITDA") and last twelve months
earnings before interest and taxes ("EBIT"). In certain cases, complete
financial data were not publicly available for these transactions and only
partial information was used in such instances. An analysis of these ratios
yielded a median range of value for the Common Stock of between $10.79 and
$13.72, as compared to the Merger Consideration of $14.00 per share. 
     
     Acquisitions Premium Analysis. William Blair's analysis also indicated
     -----------------------------
that the average percentage premium of offer prices to trading prices one
month prior to the announcement date for publicly announced transactions
was 41.1% in 1992, 38.8% in 1993, 41.9% in 1994, 45.4% in 1995 and 32.0% in
the first quarter of 1996. The Merger Consideration of $14.00 per share
represented a premium based on the Company's closing stock price as of July
22, 1996 (the date immediately prior to the Company's public disclosure of
negotiations with OSI) of 51.4%
     
     Discounted Cash Flow Analysis. William Blair performed a discounted
     -----------------------------
cash flow analysis of the Company. The analysis was performed on two sets
of projections, a base case projection and a conservative projection, both
provided by the Company's management. Using assumed weighted average costs
of capital between 12.5% and 13.5%, the base case analysis yielded values
ranging from $13.99 to $16.34 per share of the Common Stock while the
conservative case yielded values ranging from $9.74 to $11.30 per share,
compared to the Merger Consideration of $14.00 per share.

     Leveraged Buyout Analysis. William Blair also analyzed implied returns
     -------------------------
to investors based upon an assumed leveraged buyout. This analysis
indicated that in order to pay the $14.00 per share being paid in the
Merger, approximately $6,000,000 of annual operating income benefit over
and above management projections would be required to be obtained by the
buyer in the form of cost savings or revenue increases to achieve an
assumed minimum required return on invested common equity of approximately
25%.
     
     While the foregoing summary describes all analyses and examinations
that William Blair deems material to its opinion, it is not a comprehensive
description of all analyses and examinations actually performed by William
Blair in connection with its fairness opinion. The preparation of a
fairness opinion involves various subjective business determinations as to
the most appropriate and relevant methods of financial analysis and the
application of those methods to the particular circumstances, and therefore
such an opinion is not readily susceptible to partial analysis or summary
description. Accordingly, notwithstanding the separate factors summarized
above, William Blair believes that its analyses must be considered as a
whole and that selecting portions of its analyses and considering
individual factors without considering all analyses and factors could
create an incomplete and misleading view of the evaluation process
underlying its opinion. With respect to comparable companies analyses and
comparable transaction analyses, a particular analysis performed by William
Blair is not necessarily indicative of actual values, which may be
significantly higher or lower than suggested by such analyses, The analyses
are not appraisals and do not necessarily reflect the prices for which
businesses actually could be sold or actual values or future results that
might be achieved. In addition, William Blair used in its analyses various
projections as to the future performance of the Company. Such projections
are based on numerous variables and assumptions that are inherently
unpredictable and must be considered not certain of occurrence as
projected. Accordingly, actual results could vary significantly from those
set forth in such projections. William Blair's analyses were prepared
solely as part of William Blair's review of the fairness of the
consideration to be received by the Company's shareholders, from a
financial point of view, in connection with the delivery of William Blair's
opinion. In addition, William Blair's opinion and presentation to the
Company's Board was only one of the many factors taken into consideration
by the Company's Board in making its determination to approve the Merger
Agreement and the Merger.
     
     Pursuant to the terms of the engagement by the Company as its
financial advisor in connection with the Merger, William Blair has been
paid a total of $250,000 in fees to date. Upon consummation of the Merger,
William Blair will receive a fee based on 7/10ths of one percent of the
aggregate of the consideration to be received by the Company's shareholders
and the excess of $14.00 per share over the exercise price of options to
acquire shares of the Common Stock outstanding at the date of the Merger
(less fees paid to date). This fee is expected to be approximately $1.0
million. William Blair will be reimbursed for out-of-pocket expenses in
connection with the engagement. The Company has also agreed to indemnify
and hold harmless William Blair and certain related parties from and
against certain liabilities, including liabilities under the federal
securities laws, in connection with its engagement.
     
     William Blair has in the past provided financial advisory and
investment banking services to the Company for which it received customary
fees. William Blair is a market maker for the Common Stock. William Blair,
as part of its investment banking business, is engaged in the valuation of
businesses and their securities in connection with mergers and
acquisitions, underwritings, private offerings of securities and valuations
for corporate reorganizations and other purposes. The Company's Board of
Directors, with the concurrence of the members of the Special Committee,
selected William Blair to act as financial advisor on the basis of William
Blair's prior relationship with the Company and because William Blair is a
nationally recognized investment banking firm that has substantial
experience in transactions similar to the Merger.


INTERESTS OF CERTAIN PERSONS IN THE MERGER

     In considering the recommendation of the Board of Directors of the
Company with respect to the Merger, shareholders should be aware that
certain executive officers and directors of the Company have interests in
connection with the Merger.

Agreement to Vote for Merger Agreement and Merger
- - -------------------------------------------------     
     As a condition to the execution of the Merger Agreement, OSI required
that certain of the executive officers of the Company who also serve as
directors, namely Messrs. James R. Bohmann, Patrick E. Carroll, William W.
Kagel, Alvin W. Keeley, David S. Patterson, Dennis G. Punches and Neal R.
Sparby, and three other employees enter into Voting Agreements with OSI, in
the form of Annex B attached hereto, pursuant to which they have agreed to
vote such shares in favor of the Merger. As of the Record Date, such
individuals owned an aggregate of 2,030,985 shares of the Common Stock, or
approximately [__]% of the issued and outstanding shares on the Record
Date.

Consulting, Employment and Covenant Not-to-Compete Agreements
- - -------------------------------------------------------------
     As a further condition to signing the Merger Agreement, OSI required
the Company to enter into the following agreements with certain of its
executive officers who also serve as directors of the Company: (i)
consulting agreement with Dennis G. Punches, the Chairman of the Board of
Directors, in the form attached hereto as Annex D; (ii) a covenant not- 
to-compete agreement with Mr. Punches in the form attached hereto as
Annex E; (iii) employment agreements in the form attached hereto as Annex F
with six other directors who serve as executive officers of the Company;
and (iv) covenant not-to-compete agreements in the form attached hereto
as Annex G with the same six individuals who have entered into employment
agreements with the Company. 

     In the consulting agreement with Mr. Punches, he agrees to perform
advisory and consulting services for the Company as mutually agreed upon
for a three year period commencing at the Effective Time. Pursuant to the
terms of such agreement, the Company will reimburse Mr. Punches for all
reasonable expenses incurred by him in connection with the performance of
such services and will pay him a fee on the third anniversary of the
Effective Time of $150,000.
    
     In the covenant not-to-compete agreement with Mr. Punches, he agrees
for a consideration of $3,000,000, payable to him at the Effective Time,
that (i) for a term of three years from the Effective Time he will not in
North America (including Canada, Mexico and Puerto Rico) and any other
jurisdiction where the Company is doing business or 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 a business that is
competitive with that currently conducted by the Company and any of its
subsidiaries, and (ii) with the exception of two specific employees, he
will not employ, solicit for employment or otherwise contract for the
services of any employee of the Company or its affiliates. 


     
     The employment agreements with the six directors, other than Mr.
Punches, who serve as executive officers provide that each such individual
will be employed by the Company in his or her present capacity for a one
year period commencing at the Effective Time. The names of such directors
and executive officers, their position with the Company and the salary
payable to each of them during such one year period are as follows: Neal R.
Sparby, President and Chief Executive Officer ($246,413); William W. Kagel,
Senior Vice President- Production ($217,913); Alvin W. Keeley, Senior Vice
President-Marketing ($217,913); Patrick E. Carroll, Senior Vice President
of Sales ($217,913); James R. Bohmann, Senior Vice President - Corporate
Development and Treasurer ($189,000); and David S. Patterson, Executive
Vice President and Chief Operating Officer ($207,900). Under the terms of
these agreements, each of these executive officers will receive during
their terms of employment (i) for the period of 1996 (and if applicable for
the period of 1997) prior to the Effective Time all or a ratable portion of
their bonus in accordance with the Company's past practices, (ii) medical
and dental benefits and vacation and sick leave in accordance with the
Company's existing policies for key employees, and (iii) reimbursement for
all reasonable expenses incurred in connection with the performance of
their duties. Under the terms of the employment agreements, the employment
of any of such individuals may be terminated by the Company with or without
cause. If the employment of any of said individuals is terminated without
cause, he or she will be entitled to any unpaid and to his or her base
salary for the period starting on the date of such termination and ending
on the first anniversary of the Effective Time, reduced by any salary and
bonus earned by such individual from other employment. No severance amount
is payable if the employee is terminated for cause which is defined as
(i) embezzlement, theft or other misappropriation of Company property,
(ii) gross or willful misconduct resulting in substantial loss to, or
substantial damage to the reputation of, the Company or any subsidiary,
(iii) any act involving moral turpitude which if the subject of a criminal
proceeding could reasonably result in a conviction of a felony involving
moral turpitude, fraud or misrepresentation, (iv) gross breach of fiduciary
duty to the Company or a subsidiary, or (v) any chemical dependence which
materially affects the performance of the employee's duties and
responsibilities to the Company or any subsidiary.
     
     Pursuant to the covenant not-to-compete agreements with the six
directors and executive officers who have entered into employment
agreements with the Company as described above, each such individual agrees
that (i) for a term of one year from the Effective Time he or she will not 
in any jurisdiction where the Company is doing business or 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 a business that is
competitive with that currently conducted by the Company and any of its
subsidiaries, and (ii) he or she will not employ, solicit for employment or
otherwise contract for the services of any employee of the Company or its
affiliates. The amounts payable to each such individual at the Effective
Time pursuant to the specific agreement entered into with him or her are as
follows: Neal R. Sparby ($100,000); William W. Kagel ($100,000); Alvin W.
Keeley ($100,000); Patrick E. Carroll ($100,000); James R. Bohmann
($100,000); and David S. Patterson ($25,000).


     
     OSI also required the Company to enter into employment agreements and
covenant not-to-compete agreements on similar terms as described above with
two other executive officers who are not directors and also to enter into a
covenant not-to-compete agreement with Joseph T. Treleven, Director of
Mergers/Acquisitions of the Company, pursuant to which he will be paid
$200,000 and will be restricted from competing for a three year period. 

Stock Options
- - -------------
     The six directors and executive officers who have entered into
employment and covenant not-to-compete agreements described above hold
options to purchase shares of the Common Stock, which options, at the
Effective Time, will be surrendered by each of them for cash payments to
such individuals equal to $14.00 per share less the exercise price of the
related option and less any applicable withholding taxes. The number of
options held by each such individual and the weighted average exercise
price of the options held by him or her are as follows: Neal R. Sparby -
49,377 shares ($8.85); William W. Kagel - 36,000 shares ($9.29); Alvin W.
Keeley - 40,377 shares ($8.76); Patrick E. Carroll - 42,960 shares ($8.71);
James R. Bohmann - 43,878 shares ($8.76); and David S. Patterson - 45,000
shares ($9.29). All of such options are fully vested.

Common Share Equivalent Plan
- - ----------------------------
     The Company has in effect a Common Share Equivalent Plan pursuant to
which awards are made to key employees of the Company. While executive
officers of the Company are not eligible for awards under the Common Share
Equivalent Plan, two individuals who are directors and executive officers
of the Company, Patrick E. Carroll and James R. Bohmann, are participants
under the Plan based on awards of 6,960 and 4,960 Units, respectively, made
to them prior to becoming executive officers. The value of each Unit
awarded under the Plan is equal to the value of one share of the Common
Stock but on May 20, 1993, Messrs. Carroll and Bohmann agreed to cap the
value of the Units awarded to them under the Plan at $7.50 each in
consideration of which the exercise price of options held by them for the
equivalent number of shares of Common Stock (which are included in the
number of options described above as held by them) were reduced from an
exercise price of $12.625 to a new exercise price of $7.50. Under the terms
of the Plan and elections made by them under the Plan, the value of the
Units held by Messrs. Carroll and Bohmann would have been paid to them upon
the termination of their employment with the Company. Under the terms of
the Merger Agreement, the value of all Units under the Common Share
Equivalent Plan, subject to any applicable cap on value, will be paid in
cash at the Effective Time.

Indemnification of Directors and Officers 
- - -----------------------------------------
     In the Merger Agreement, OSI agrees (i) that for a period of six years
from the Effective Time, to keep in effect and not amend, in any respect
adverse to the persons presently covered thereby, the provisions in the
Articles of Incorporation and the by-laws of the Company with respect to
indemnification and exculpation from liability of officers and directors of



the Company, and (ii) for a period of three years after the Effective Time
to maintain in effect directors' and officers' insurance covering those
persons who are currently covered by the Company's directors' and officers'
liability insurance policy on terms comparable to such existing coverage
provided that if the premium would exceed 150% of the 1996 premium, the
amount of coverage may be reduced to the amount which can be obtained for
150% of the 1996 premium. See "THE MERGER AGREEMENT- Indemnification."
     
FEDERAL INCOME TAX CONSIDERATIONS

     The following discussion summarizes the material federal income tax
considerations relevant to the Merger that are generally applicable to
holders of Common Stock. This discussion is based on currently existing
provisions of the Code, existing and proposed Treasury Regulations
thereunder and current administrative rulings and court decisions, all of
which are subject to change. Any such change, which may or may not be
retroactive, could alter the tax consequences to the Company's shareholders
as described herein.

     The receipt by the shareholders of cash in the Merger for shares of
Common Stock will be a taxable transaction for federal income tax purposes.
Each shareholder's gain or loss per share will be equal to the difference
between $14.00 and the shareholder's tax basis per share in the Common
Stock. If a shareholder holds Common Stock as a capital asset, the gain or
loss from the exchange will be a capital gain or loss. This gain or loss
will be long term if the shareholder's holding period is more than one
year.

THE FOREGOING TAX DISCUSSION IS INCLUDED FOR GENERAL INFORMATION ONLY AND
IS BASED UPON PRESENT LAW. EACH SHAREHOLDER SHOULD CONSULT SUCH
SHAREHOLDER'S OWN TAX ADVISOR AS TO THE SPECIFIC TAX CONSEQUENCES OF THE
MERGER TO SUCH SHAREHOLDER, INCLUDING THE APPLICATION AND EFFECT OF
FEDERAL, STATE, LOCAL AND OTHER TAX LAWS AND THE POSSIBLE EFFECT OF CHANGES
IN SUCH TAX LAWS.



REGULATORY FILINGS AND APPROVALS

     Under the HSR Act, and the rules promulgated thereunder by the FTC,
certain acquisition transactions, including the Merger, may not be
consummated until specified waiting period requirements have been
satisfied. On [_________], 1996, the Notification and Report Forms required
pursuant to the HSR Act were filed by OSI and the Company with the
Antitrust Division of the Department of Justice and the FTC for review in
connection with the Merger. As of [_______] the waiting period requirements
were satisfied.
     
     The receipt of all approvals, consents, authorizations, exemptions and
waivers from governmental agencies required in order to enable the parties
to consummate the transactions contemplated by the Merger Agreement is a
condition to the obligations of the parties. Certain notification and
relicensing may be required under the collection agency laws of various
states in order for the Company to be able to continue its business without
interruption following the Effective Time.


FINANCING OF THE MERGER

     The estimated total amount of funds required to consummate the Merger
and pay the related fees and expenses is expected to be approximately
$________ as follows:
     
     Merger Consideration to Company Shareholders        $
     Settlement of Stock Options
     Payment of Amounts Due Under
          Common Share Equivalent Plan
     Expenses (includes both Company and OSI)
          Investment Banking Fees
          Financing Commitment Fees
          Legal Fees
          HSR Act Filing Fee
          Miscellaneous             
                                                          --------------
                                                          $

     In order to complete the Merger and to refinance certain indebtedness
of OSI, OSI requires, and the Merger is conditioned upon OSI's obtaining,
financing in the amount of $250,000,000, including $200,000,000 in the form
of a senior credit facility, of which $150,000,000 would be borrowed at the
time of the consummation of the Merger, and the private placement or public
offering of approximately $100,000,000 of senior subordinated notes. This
financing would replace approximately $[_____] of OSI's indebtedness which
is currently outstanding.
     
     OSI has received letters dated August 12, 1996 from Goldman Sachs and
Chase Securities that they are highly confident of their ability to sell or
place the senior subordinated notes subject to certain terms and conditions
set forth in such letters which are attached hereto as Annexes H and I,
respectively, including (i) the terms and conditions of the senior
subordinated notes and other debt of OSI being in acceptable form, (ii) the
execution of satisfactory documentation, (iii) the absence of material
adverse change in the business, condition, results of operations, assets,
liabilities, or prospects of the Company or OSI, (iv) the receipt of all 
necessary governmental, regulatory and third party consents, (v) the
results of such party's continuing due diligence not disclosing any fact
which would materially alter its view of the proposed transactions,
(vi) the absence of any disruption in the market for high yield debt
securities, (vii) an adequate amount of time to market the senior
subordinated notes with the assistance of management of the Company and
OSI, (viii) there being at least $50,000,000 available for borrowing under
the senior credit facility, (ix) the completion of an acceptable offering
circular, and (x) the absence of any change or proposed change in law which
would have a material adverse effect on the economic consequences of the
transaction. The letters delivered by Goldman  Sachs and Chase Securities
are not commitments to purchase or place the senior subordinated notes.
HOLDERS OF SHARES OF COMMON STOCK ARE URGED TO, AND SHOULD, READ SUCH
LETTERS IN THEIR ENTIRETY.



     OSI has also received a letter dated August 7, 1996 from GSCP
(formerly known as Pearl Street L.P.), Chase Manhattan and Chase Securities
in which (i) each of GSCP and Chase Manhattan commits to make available
one-half the $200,000,000 senior credit facility required by OSI; (ii) GSCP
and Chase Manhattan agree to act as co-administrative agents with respect
to the senior credit facility and (iii) Goldman Sachs and Chase Securities
agree to act as arranging agents in connection with the senior credit
facility. A copy of such letter is attached hereto as Annex J. The
commitments and agreements contained in such letter are subject to a number
of terms and conditions which are set forth in such letters, including
(i) the absence of material adverse change in the business, condition,
results of operations, assets, liabilities, or prospects of the Company or
OSI, (ii) the absence of any disruption or adverse change in the financial
or capital markets or market for loan syndications, (iii) the satisfactory
negotiation, execution and delivery of the loan documentation, (iv) the
satisfaction of such parties with the results of their continuing due
diligence investigation, (v) the receipt by OSI of at least $100,000,000 in
gross proceeds from the issuance of unsecured subordinated indebtedness on
terms and conditions reasonably satisfactory to GSCP and Chase Manhattan,
(vi) receipt of all necessary governmental, third party and shareholder
approvals, (vii) the corporate structure (and all agreements relating
thereto) of OSI and the Company, and all material contracts and intangible
assets of OSI and the Company, being reasonably satisfactory to GSCP and
Chase Manhattan, and (viii) receipt of a business plan submitted by OSI
with regard to the incorporation of the Company into OSI's business that is
reasonably satisfactory to GSCP and Chase Manhattan. HOLDERS OF SHARES OF
COMMON STOCK ARE URGED TO, AND SHOULD, READ SUCH LETTER IN ITS ENTIRETY.


                          THE MERGER AGREEMENT

     The discussion in this Proxy Statement of the Merger and the
description of the principal terms of the Merger Agreement are subject to
and qualified in their entirety by reference to the Merger Agreement, a
copy of which is attached hereto as Annex A, and incorporated herein by
reference, and to each of the other Annexes to this Proxy Statement.


THE MERGER

     Pursuant to the terms of the Merger Agreement, at the Effective Time
(i) Boxer will be merged with and into the Company and will cease to exist
as a separate entity; (ii) the Company, as the surviving corporation in the
Merger (the "Surviving Corporation"), will become a wholly owned subsidiary
of OSI; and (iii) each outstanding share of Common Stock (other than shares
owned by the Company, OSI and OSI's subsidiaries) will be converted into
the right to receive $14.00 in cash, without interest, (the "Merger
Consideration") less any applicable withholding taxes.

EFFECTIVE TIME OF THE MERGER

     The Merger will become effective upon the filing of Articles of Merger
contemplated by the Merger Agreement with the Secretary of State of the
State of Wisconsin and a Certificate of Merger contemplated by the Merger
Agreement with the Secretary of State of the State of Delaware (the


"Effective Time") in accordance with the Wisconsin Business Corporation Law
("WBCL") and the Delaware General Corporation Law ("DGCL"). Such filings
will be made as soon as practicable after all conditions to the Merger have
been fulfilled or waived, which is anticipated to be on or about the date
of the Special Meeting. The Merger Agreement also provides that (i) the
Articles of Incorporation of the Company shall be the Articles of
Incorporation of the Surviving Corporation; (ii) the Bylaws of the Company
shall be the Bylaws of the Surviving Corporation; (iii) the directors of
Boxer shall be the initial directors of the Surviving Corporation; (iv) the
officers of the Company immediately prior to the Effective Time shall be
the officers of the Surviving Corporation; and (v) the Merger shall, from
and after the Effective Time, have all the effects provided by the WBCL and
the DGCL.

CONVERSION AND CANCELLATION OF COMMON STOCK

     Upon the consummation of the Merger, each then outstanding share of
Common Stock, other then shares owned by the Company, OSI or OSI's
subsidiaries, including Boxer, will be converted into the right to receive
the Merger Consideration, less any applicable withholding taxes. At the
Effective Time, all such shares of Common Stock will no longer be
outstanding and will be canceled and retired and will cease to exist, and
each certificate representing any shares of Common Stock will thereafter
represent only the right to receive the Merger Consideration, less any
applicable withholding taxes. 

EXCHANGE PROCEDURE

     Promptly after the Effective Time, the Paying Agent appointed by OSI
will mail to each holder of record of a certificate or certificates that
immediately prior to the Effective Time represented outstanding shares of
Common Stock (a "Certificate" or "Certificates") which are being converted
into the right to receive the Merger Consideration pursuant to the Merger
Agreement, a letter of transmittal with instructions for use in effecting
the surrender of the Certificates in exchange for the Merger Consideration.
After the Effective Time, there will be no further registration of
transfers on the stock transfer books of the Company, as the Surviving
Corporation, of shares of Common Stock. CERTIFICATES SHOULD NOT BE
SURRENDERED BY THE HOLDERS OF COMMON STOCK UNTIL SUCH HOLDERS RECEIVE THE
LETTER OF TRANSMITTAL.



     Upon the surrender of a Certificate to the Paying Agent, together with
a duly executed letter of transmittal, the holder of such Certificate will
be entitled to receive in exchange therefor an amount of cash equal to
$14.00, without interest, multiplied by the number of shares of Common
Stock represented by such Certificate, less any applicable withholding
taxes. In the event of a transfer of ownership of Common Stock which is not
registered on the transfer records of the Company, the appropriate amount
of the Merger Consideration may be delivered to a transferee if the
Certificate representing such Common Stock is presented to the Paying
Agent, together with the related letter of transmittal, and accompanied by
all documents required to evidence and effect such transfer and to evidence
that any applicable stock transfer taxes have been paid.


     Until a Certificate representing Common Stock has been surrendered to
the Paying Agent, each such Certificate will be deemed at any time after
the Effective Time to represent only the right to receive upon such
surrender the Merger Consideration to which the shareholder is entitled
under the Merger Agreement.
     
CONDITIONS TO THE MERGER

     The obligations of both OSI and the Company to effect the Merger are
subject to the condition that OSI has received the financing necessary to
enable it and Boxer to consummate the transactions contemplated by the
Merger Agreement. See "- Financing." 

     Each party's respective obligation to effect the Merger is also
subject to the following conditions: (i) the Merger Agreement and the
Merger have been approved and adopted by the holders of the outstanding
Common Stock of the Company in accordance with the requirements of the
WBCL, (ii) the waiting period applicable to the consummation of the Merger
under the HSR Act shall have expired or been terminated, (iii) no
preliminary or permanent injunction or other order has been issued by any
court or by any governmental or regulatory agency, body or authority which
prohibits the consummation of the Merger and the other transactions
contemplated by the Merger Agreement, (iv) no statute, rule, regulation,
executive order, decree or order of any kind has been enacted, entered,
promulgated or enforced by any court or governmental authority which
prohibits the consummation of the Merger or has the effect of making the
consummation of the Merger illegal, and (v) all consents, approvals or
waivers, if any, required in connection with the consummation of the
transactions contemplated by the Merger Agreement have 

been received and all of the consents, approvals, authorizations,
exemptions and waivers from governmental agencies that are required in
order to enable the parties to consummate the transactions contemplated by
the Merger Agreement have been obtained.

     The obligations of the Company to effect the Merger are also subject
to the satisfaction at or prior to the Closing Date of the Merger of each
of the following conditions, unless waived by the Company: (i) the
representations and warranties of OSI and Boxer contained in the Merger
Agreement are true and correct in all material respects on and as of the
Closing Date with the same effect as though such representations and
warranties had been made on and as of such date; (ii) all of the agreements
of OSI and Boxer to be performed prior to the closing pursuant to the
Merger Agreement have been duly performed in all material respects; and
(iii) the Company has received a certificate of OSI executed on its behalf
by an executive officer of OSI to the effect that the foregoing conditions
have been satisfied and that OSI has received its financing to consummate
the Merger.

     The obligations of OSI and Boxer to effect the Merger are also subject
to the satisfaction or waiver at or prior to the Effective Time of each of
the following conditions: (i) the representations and warranties of the
Company contained in the Merger Agreement are true and correct on and as of
the Closing Date with the same effect as though such representations and
warranties had been made on and as of such date, except where the failure
of such representations and warranties to be true and correct shall not



reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect; (ii) all of the agreements of the Company to be
performed prior to the Closing pursuant to the terms of the Merger
Agreement have been duly performed in all material respects; (iii) OSI and
Boxer have received a certificate of the Company executed on its behalf by
an executive officer of the Company to the effect that the foregoing
conditions have been satisfied; and (iv) the Company has obtained all
necessary consents to ensure that, upon the Effective Time, the holders of
options to purchase Common Stock of the Company have agreed to surrender
the same in cancellation and settlement thereof for a cash consideration
equal to $14.00 per share, less the exercise price of such related options
and less any applicable withholding taxes and that after the Effective
Time, the Surviving Corporation will have no obligation to issue, transfer
or sell any shares of common stock of the Surviving Corporation pursuant to
any employee benefit plan of the Company.

ADDITIONAL AGREEMENTS BETWEEN THE COMPANY AND OSI

     Under the terms of the Merger Agreement, for the period from the date
of the Merger Agreement and continuing until the closing of the Merger, the
Company has agreed to, and to cause each of its subsidiaries to, conduct
its operations only according to its ordinary and usual course of business;
use its reasonable efforts to (i) preserve intact its business
organizations, (ii) keep available the services of its officers and
employees and (iii) maintain satisfactory relationships with licensors,
suppliers, distributors, customers, landlords, employees, agents and others
having business relationships with it. Prior to the closing of the Merger,
except as may be first approved in writing by OSI or as is otherwise
permitted or required by the Merger Agreement, the Company has agreed in
the Merger Agreement to, and to cause each of its subsidiaries to: (a)
maintain its Articles of Incorporation, by-laws and other organizational
documents, as applicable, in its form on the date of the Merger Agreement,
(b) other than in the ordinary course of business consistent with past
practice, refrain from paying or increasing any bonuses, salaries, or other
compensation to any director, officer, employee or stockholder or entering
into any employment, severance, or similar agreement with any director,
officer, or employee, (c) refrain from the adopting or, other than in the
ordinary course of business consistent with past practice, increasing of
any profit sharing, bonus, deferred compensation, savings, insurance,
pension, retirement, or other employee benefit plan for or with any of its
employees except as required by law, (d) refrain from entering into any
material contract or commitment except material contracts and commitments
in the ordinary course of business, (e) refrain from increasing its
indebtedness for borrowed money except current borrowings in the ordinary
course, (f) refrain from canceling or waiving any claim or right of
substantial value which individually or in the aggregate is material, (g)
refrain from declaring or paying any dividends in respect of its capital
stock or redeeming, purchasing or otherwise acquiring any of its capital
stock, (h) refrain from making any material change in accounting methods or
practices, except as required by law or generally accepted accounting
principles, (i) refrain from issuing or selling any shares of capital stock
or any other securities except pursuant to outstanding options, or issuing
any securities convertible into, or options, warrants or rights to purchase


or subscribe to, or entering into any arrangement or contract with respect
to the issue and sale of, any shares of its capital stock or any other
securities, or making any other changes in its capital structure, (j)
refrain from selling, leasing or otherwise disposing of any material asset
or property other than sales in the ordinary course of business consistent
with past practice, (k) refrain from making any capital expenditure or
commitment therefor, except in the ordinary course of business, (l) refrain
from writing off as uncollectible any notes or accounts receivable, except
write-offs in the ordinary course of business consistent with past
practice, (m) refrain from purchasing or otherwise acquiring portfolios of
loans, notes, accounts receivable, mortgages or other indebtedness, for a
purchase price in excess of $500,000 for any such portfolio, and (n)
refrain from agreeing in writing to do any of the foregoing.

     The Company has also agreed to give prompt notice to OSI of: (i) the
occurrence, or non-occurrence, of any event known to the Company, the
occurrence, or non-occurrence, of which would reasonably be expected to
cause any representation or warranty of the Company contained in the Merger
Agreement to be untrue or inaccurate in any material respect, (ii) any
failure of the Company to comply with or satisfy any covenants, condition
or agreement to be complied with or satisfied by it under the Merger
Agreement, (iii) any notice of, or other communication relating to, a
material default or event that, with notice or lapse of time or both, would
become a material default, received by the Company or any of its
subsidiaries subsequent to the date of the Merger Agreement and prior to
the Effective Time, under any material contract to which the Company or any
of its subsidiaries is a party or is subject, and (iv) the occurrence of
any event known to the Company which has resulted in or could reasonably be
expected to result in a Material Adverse Effect. 

OTHER OFFERS

     The Company has further agreed that neither the Company nor any of its
subsidiaries will, directly or indirectly, take (and the Company will not
authorize or permit its or its subsidiaries' officers, directors,
employees, representatives, consultants, investment bankers, attorneys,
accountants or other agents or affiliates, to so take) any action to
(i) encourage, solicit or initiate the submission of any proposed merger or
other business combination, sale or other disposition of any material
amount of assets, sale of shares of capital stock, tender offer or exchange
offer or similar transactions involving the Company or any of its
subsidiaries (an "Acquisition Proposal"), (ii) enter into any agreement
with respect to any Acquisition Proposal or (iii) participate in any way in
discussions or negotiations with, or, furnish any information to, any
person (other than the Company, OSI or Boxer) in connection with, or take
any other action to facilitate any inquiries or the making of any proposal
(including without limitation by taking any action that would make Section
180.1141 of the WBCL inapplicable to an Acquisition Proposal) that
constitutes, or may reasonably be expected to lead to, any Acquisition
Proposal, provided, however, that the Company may participate in
discussions or negotiations with or furnish information to any third party
which proposes a transaction which the Board of Directors of the Company
reasonably believes will result in a Superior Proposal if the Board of
Directors determines, in its good faith judgment (and has been advised by



independent legal counsel), that failing to take such action would
constitute a breach of its fiduciary obligations under applicable law. In
addition, neither the Board of Directors of the Company nor the Special
Committee may withdraw or modify, or propose to withdraw or modify, in a
manner adverse to OSI the approval and recommendation of the Merger and the
Merger Agreement or approve or recommend, or propose to approve or
recommend, any Acquisition Proposal; provided that the Board of Directors
of the Company and the Special Committee may recommend to the Company's
shareholders an Acquisition Proposal and in connection therewith withdraw
or modify its approval or recommendation of the Merger Agreement and the
Merger if (i) the Board of Directors of the Company and the Special
Committee have determined that such Acquisition Proposal is a bona fide
proposal made by a third party to acquire not less than 80% of the
outstanding shares of the Company pursuant to a tender offer, a merger or a
sale of all or substantially all of the assets of the Company on terms
which a majority of the members of the Board of Directors of the Company
determines in its good faith judgment to be more favorable to the Company's
shareholders than the transactions contemplated by the Merger Agreement (a
"Superior Proposal"), (ii) all the conditions to the Company's right to
terminate the Agreement in accordance with the terms of the Merger
Agreement have been satisfied (including the payment of the termination fee
and expenses of OSI as required by the Merger Agreement) and (iii) the
Merger Agreement is terminated in accordance with its terms. See "-
Expenses and Termination Fees."

     The Company has also agreed in the Merger Agreement that on the date
of receipt thereof the Company will advise OSI of any request for
information or of any Acquisition Proposal, or any proposal with respect to
any Acquisition Proposal, the material terms and conditions of such request
or takeover proposal, and the identity of the person making any such
takeover proposal or inquiry. The Company has further agreed to keep OSI
fully informed in all material respects of the status and details
(including amendments or proposed amendments) of any such request, takeover
proposal or inquiry and to keep OSI fully informed in all material respects
as to the details of any information requested of or provided by the
Company and as to the details of all discussions or negotiations with
respect to any such request, takeover proposal or inquiry.

TERMINATION

     The Merger Agreement may be terminated and the Merger may be abandoned
at any time prior to the Effective Time, before or after the approval of
the Merger Agreement by the shareholders of the Company, by the mutual
consent of OSI and the Company. In addition, the Merger Agreement may be
terminated and the Merger may be abandoned by action of the Board of
Directors of either OSI or the Company if (i) any governmental or
regulatory agency has issued a final, non-appealable order, decree or
ruling permanently enjoining, restraining or otherwise prohibiting the
consummation of the Merger; (ii) the Merger has not been consummated by
February 12, 1997; (iii) the Board of Directors of the Company and, if
required, the Special Committee, determines in its good faith judgment that
an Acquisition Proposal will result in a Superior Proposal and the Board
determines in its good faith judgment (and has been advised by independent
legal counsel) that a failure to terminate the Merger Agreement and enter
into an agreement to effect the Superior Proposal would constitute a breach

of its fiduciary obligations under applicable law and, if terminated by the
Company, the Company has given reasonably prompt written notice to OSI of
the receipt of such Acquisition Proposal and, following such notification,
the Company has kept OSI reasonably informed of the terms and conditions of
such Acquisition Proposal (and any modification thereto), and the identity
of the person making such proposal and, prior to or simultaneously with
such termination, the Company has paid the Termination Fee to OSI, in cash,
and, prior to or simultaneously with such termination, the Company entered
into a definitive acquisition, merger or similar agreement to effect the
Superior Proposal.

     OSI may also terminate the Merger Agreement if (i) there has been a
breach of any representation or warranty on the part of the Company
contained in the Merger Agreement which would reasonably be expected to
have a Material Adverse Effect, (ii) there has been a material breach of
any covenant or agreement on the part of the Company contained in the
Merger Agreement and the Company has failed to cure such breach within ten
days after written notice from OSI, or (iii) the Board of Directors of the
Company or the Special Committee have withdrawn or modified in a manner
adverse to Parent its approval or recommendation of this Agreement or the
Merger and have not reinstated such approval or recommendation within three
business days or the Company has entered into a definitive acquisition,
merger or similar agreement to effect a Superior Proposal.

     The Company may also terminated the Merger Agreement if (i) the Merger
has not been consummated within 60 days after approval of the Agreement and
the Merger by the Company's shareholders, unless the Merger has not been
consummated because of an intentional or willful material breach of any
representation or warranty on the part of the Company set forth in the
Merger Agreement or because of a material breach of any covenant or
agreement on the part of the Company set forth in the Merger Agreement
which the Company has failed to cure within ten days after written notice
thereof by OSI to the Company; or (ii) any of the representations and
warranties of OSI or Boxer contained in the Merger Agreement were untrue or
incorrect in any material respect when made or have since become, and at
the time of termination remain, incorrect in any material respect, or OSI
or Boxer have breached or failed to comply in any material respect with any
of their respective obligations under the Merger Agreement.

EXPENSES AND TERMINATION FEES

     Whether or not the Merger is consummated, all costs and expenses
incurred in connection with the Merger Agreement and the transactions
contemplated thereby will be paid by the party incurring such expense,
except as further described below. If (i) the Merger Agreement is
terminated (A) by the Company because the Merger has not been consummated
by February 12, 1997 under circumstances where the Company's shareholders
have not approved the Merger Agreement and the Merger but the other
significant conditions to the Company's obligations to close the
transaction, including the obtaining by OSI of its required financing, have
been satisfied and prior to such termination, the Company has notified its
shareholders that a third party has made a Superior Proposal or a third
party has publicly announced a proposal which may represent a Superior
Proposal, or (B) by OSI as a result of an intentional or willful breach of
a warranty or representation of the Company set forth in the Merger
Agreement which would reasonably be expected to have a Material Adverse
Effect or as a result of an intentional or willful breach of any covenant

or agreement on the part of the Company set forth in the Merger Agreement
and the Company has failed to cure such breach within ten days after
written notice from OSI, and within twelve months after such termination,
the Company enters into an agreement with respect to a Third Party
Acquisition, or a Third Party Acquisition occurs, involving any party (or
any affiliate or associate thereof) (x) with whom the Company (or its
agents) during the term of the Merger Agreement had any discussions with
respect to a Third Party Acquisition, (y) to whom the Company (or its
agents) during the term of the Merger Agreement furnished information with
respect to or with a view toward a Third Party Acquisition, or (z) who
during the term of the Merger Agreement submitted a proposal or expressed
any interest publicly or to the Company in a Third Party Acquisition, which
Third Party Acquisition contemplates a direct or indirect consideration for
shares of Common Stock in excess of the Merger Consideration, in the case
of each of clauses (x), (y) and (z) prior to such termination or (ii) the
Merger Agreement is terminated (A) by the Company because it has accepted a
Superior Proposal in accordance with the terms of the Merger Agreement; or
(B) by OSI because the Board of Directors of the Company or the Special
Committee has withdrawn or modified in a manner adverse to OSI its approval
or recommendation of the Merger Agreement or the Merger and has not
reinstated such approval or recommendation within three business days or
the Company has entered into a definitive acquisition, merger or similar
agreement to effect a Superior Proposal, then the Company is required to
pay to OSI, in cash, within two business days following such termination
(except as required to be earlier paid if the Company has terminated the
Merger Agreement in connection with the acceptance of a Superior Proposal
in accordance with the terms of the Merger Agreement) an amount equal to
$4,800,000 (the "Termination Fee") plus, within two business days of being
furnished with appropriate documentation, reimbursement for the out-of-
pocket fees and expenses reasonably incurred by OSI in connection with the
Merger and the transactions contemplated thereby (not to exceed $1,500,000
in the aggregate). The Company will receive credit against such required
payment for any amounts paid to OSI by the Company in the event that the
Merger Agreement is terminated by OSI as a result of an intentional or
willful breach of a warranty or representation of the Company set forth in
the Merger Agreement which would reasonably be expected to have a Material
Adverse Effect or as a result of an intentional or willful breach of any
covenant or agreement on the part of the Company set forth in the Merger
Agreement which the Company has failed to cure within ten days after
written notice from OSI, as described below.

     If OSI terminates the Merger Agreement as a result of an intentional
or willful breach of a warranty or representation of the Company set forth
in the Merger Agreement which would reasonably be expected to have a
Material Adverse Effect or as a result of an intentional or willful breach
of any covenant or agreement on the part of the Company set forth in the
Merger Agreement which the Company has failed to cure within ten days after
written notice from OSI, the Company is required to pay OSI, in cash,
within two business days following such termination $1,000,000, plus,
within two business days of being furnished with appropriate documentation,
reimbursement for the out-of-pocket fees and expenses reasonably incurred
by OSI in connection with the Merger and the transactions contemplated
thereby (not to exceed $1,500,000 in the aggregate).


INDEMNIFICATION

     OSI has agreed that the Articles of Incorporation and the by-laws of
the Surviving Corporation shall contain the provisions with respect to
indemnification and exculpation from liability set forth in the Company's
Articles of Incorporation and by-laws on the date of the Merger Agreement,
and that such provisions will not be amended, repealed or otherwise
modified for a period of six years from the Effective Time in any manner
that would adversely affect the rights thereunder of individuals who on or
prior to the Effective Time were directors, officers, employees or agents
of the Company, unless such modification is required by law.

     OSI has further agreed that for three years from the Effective Time,
the Surviving Corporation shall maintain in effect the Company's current
directors' and officers' liability insurance policy covering those persons
who are currently covered on the date of the Merger Agreement by such
policy but the Surviving Corporation is not required to expend in any one
year an amount in excess of 150% of the $44,500 annual premiums currently
paid by the Company for such insurance (the "Current Premium") and if the
annual premiums of such insurance coverage exceed 150% of the Current
Premium, the Surviving Corporation may, at its option, terminate the
existing policy and obtain a policy with the greatest coverage available
for a cost not exceeding 150% of the Current Premium and containing terms
and conditions which are no less advantageous in any material respect to
the Company's current and past directors and officers and provided that
said substitution does not result in any gaps or lapses in coverage with
respect to matters occurring prior to the Effective Time. Alternatively,
the Surviving Corporation may either (i) substitute for the Company policy
a policy with at least the same coverage containing terms and conditions
which are no less advantageous in any material respect to the Company's
current and past directors and officers and provided that said substitution
does not result in any gaps or lapses in coverage with respect to matters
occurring prior to the Effective Time or (ii) cause OSI's directors' and
officers' liability insurance then in effect to cover those persons who are
covered on the date of the Merger Agreement by the Company's directors' and
officers' liability insurance policy, but only if OSI's policy provides at
least the same coverage containing terms and conditions which are no less
advantageous in any material respect to the Company's current and past
directors and officers and provided that said substitution does not result
in any gaps or lapses in coverage with respect to matters occurring prior
to the Effective Time.


AMENDMENT

     The Merger Agreement may be amended by OSI and the Company, by action
taken by their respective Boards of Directors, at any time before or after
approval of the Merger by the shareholders of the Company, but after any
such shareholder approval, no amendment may be made which by law requires
the further approval of shareholders unless such further approval is
obtained.


                        TREATMENT OF STOCK OPTIONS

     At the Effective Time, all options to purchase Common Stock under the
Company's 1988 Stock Option Plan and 1992 Stock Option Plan will be deemed
to be fully vested and option holders shall be entitled, upon exercise of
the Options on or after the Effective Time, only to receive the Merger
Consideration, without interest, subject to any applicable withholding
taxes, (the "Cash Payment"). [All option holders have agreed to surrender
their options and receive in cancellation and settlement thereof a cash
consideration equal to the Cash Payment, less the exercise price of the
related options.]

     
         STOCK OWNERSHIP OF MANAGEMENT AND PRINCIPAL SHAREHOLDERS

     The following table sets forth certain information regarding the
beneficial ownership of Common Stock as of the Record Date by (i) each
director of the Company, (ii) each of the Company's seven highest paid
executive officers, (iii) all of the Company's directors and executive
officers as a group, and (iv) each person who is known by the Company to
own beneficially more than five percent of the outstanding Common Stock,

                   Number of Shares            Percent of 
Name and Address Beneficially Owned (1)(2)     Class                     
- - ---------------- --------------------------    ------------
Directors and Executive Officers(3)
 James R. Bohmann              76,070(4)           (5)    
 Patrick E. Carroll            75,747(4)           (5) 
 Bo S. Goranson                   --              -- 
 William A. Inglehart          15,596              (5) 
 William W. Kagel             154,208(4)           1.5% 
 Alvin W. Keeley              139,106(4)           1.4% 
 Raymond J. Larkin                600              (5) 
 Richard G. Miles                 --              --  
 David S. Patterson            45,585(4)           (5)
 Dennis G. Punches          1,602,681             15.8%
 Dennis Shea                      100              (5) 
 Neal R. Sparby               135,032(4)           1.3%
Directors and executive 
 officers as a group        2,353,899(4)(6)       22.4%

Other 5% Beneficial Owners
 State of Wisconsin           957,000              9.4%
 Investment Board
 P.O. Box 7842 
 Madison, WI 53707
 
 Heartland Advisors, Inc.   2,898,400             28.5%
 790 North Milwaukee Street
 Milwaukee, WI 53202
- - -----------
(1)          Includes shares, if any, owned by spouse and minor children
     of each director and officer. As to all material amounts of shares
     listed, the indicated person possesses the sole voting and investment
     power unless otherwise noted.
  
(2)       Includes shares allocated to the account of each director
      and officer in the Payco American Retirement Plan and Trust.
          
(3)       The address of all directors and executive officers is c/o Payco
      American Corporation, 180 North Executive Drive, Brookfield,         
      Wisconsin 53005.
           
(4)       Includes the following numbers of shares of common stock which
      such individual or group has the right to acquire within 60 days of
      [__________], 1996 through the exercise of stock options: Mr.
      Bohmann - 43,878 shares; Mr. Carroll - 42,960 shares; Mr.
      Kagel -36,000 shares; Mr. Keeley - 40,377 shares; Mr. Patterson
      - 45,000 shares; and Mr. Sparby - 49,377 shares; and all directors
     and executive officers as a group 344,964 shares. For purposes of
     calculating the percentage of outstanding shares beneficially owned
     by such individual or group, the shares which such individual or group
     had the right to acquire within such period through the exercise of
     stock options are deemed to be outstanding.
 
(5)       Less than 1%. 
           
(6)       Does not include 108,322 shares owned by the Payco American
      Retirement Plan and Trust and not allocated to the individual
      accounts of executive officers or directors. If participants do
      not direct voting of shares allocated to their accounts, the
      Trustee, who is selected by the Company, may vote the shares as
      directed by the Company. 

           
                    MARKET PRICE OF COMMON STOCK

   The Common Stock is traded in the over-the-counter market on the NASDAQ
National Market under the symbol the "PAYC." The following table sets forth
for the periods indicated the high and low sale prices as reported by
NASDAQ.

     QUARTER ENDED                                  HIGH     LOW
     1993:
          First Quarter                            11.00     8.13
          Second Quarter                            9.25     7.25
          Third Quarter                             8.25     6.25
          Fourth Quarter                           11.50     7.00          
     1994:
          First Quarter                            12.00     9.00
          Second Quarter                           10.00     8.50
          Third Quarter                             9.50     8.25
          Fourth Quarter                            9.50     6.50
     1995:
          First Quarter                             9.00     7.00
          Second Quarter                            8.50     6.38
          Third Quarter                             9.63     7.63
          Fourth Quarter                            9.50     8.25
     1996:
          First Quarter                             9.50     7.00
          Second Quarter                           10.25     7.25
          Third Quarter (through September __)     [___]     [___]

     On July 22, 1996, the last full trading day prior to the public
announcement that the Company was engaged in discussions with potential
acquirors, the high and low sale prices per share reported on the NASDAQ
National Market for the Common Stock were $9.25 and $8.75, respectively. On
August 13, 1996, the last full trading day prior to the public announcement
of the signing of the Merger Agreement, the high and low sale prices per
share reported on the NASDAQ National Market for the Common Stock were
$12.00 and $11.50, respectively. The average daily high and low sale prices
per share reported on the NASDAQ National Market for the Common Stock
during the period from June 22 through July 22, 1996 were $9.29 and $8.83,
respectively. 




                   SELECTED CONSOLIDATED FINANCIAL DATA

     The following selected financial information, in part derived from the
audited financial statements of the Company, presents a summary of
operations and financial data of the Company and its subsidiaries for the
five fiscal year periods ended December 31, 1995, 1994, 1993, 1992 and
1991, and for the six month periods ended June 30, 1996 and 1995. The
selected financial data should be read in conjunction with the financial
information and accompanying notes set forth in the Company's 1995 Annual
Report to Shareholders which is incorporated by reference in the Company's
Annual Report of Form 10-K for the fiscal year ended December 31, 1995,
which is incorporated herein by reference.

     No pro forma financial information is included in this Proxy
Statement. Due to the nature of the Merger which is proposed, such
information is not deemed to be material to a shareholder's decision
regarding approval of the Merger Agreement.




                                         SELECTED FINANCIAL DATA
                                 ( in thousands except share & per share data)
                                       Six Month
                                     Period Ended
                                       June 30,                 For the Years Ended December 31,
                              ----------------------   -------------------------------------------------------
                                 1996       1995          1995       1994       1993       1992       1991
                              ----------------------   -------------------------------------------------------
                                                                              
SUMMARY OF OPERATIONS

Operating Revenues               $89,116    $85,741      $175,560   $150,696   $150,795   $123,585   $112,452

Income before
 Extraordinary Items               2,659      3,259         5,250      4,559      4,001      3,288      4,932
Extraordinary Items                -          -             -          -          -          -          -
                              ----------------------   -------------------------------------------------------
Net Income                         2,659      3,259         5,250      4,559      4,001      3,288      4,932

PER COMMON SHARE DATA:
Primary
Income before
 Extraordinary Items             $0.26      $0.32         $0.52      $0.45      $0.40      $0.33      $0.49
Income from 
 Extraordinary Items               -          -             -          -          -          -          -
                              ----------------------   -------------------------------------------------------
Net Income                       $0.26      $0.32         $0.52      $0.45      $0.40      $0.33      $0.49

Average number of Common
Shares Outstanding         10,155,085   10,133,478    10,133,173 10,080,889 10,075,886 10,075,886 10,043,056
Common Cash Dividends              -          -             -          -          -          -          -

Book Value per Share (1)           $5.50      $5.07         $5.25      $4.77      $4.33      $3.93      $3.60

FINANCIAL DATA

Current Assets                   $65,702    $63,799       $62,624    $59,848    $55,991    $47,130    $41,114
Total Assets                     113,877     97,869       103,675     87,498     79,081     73,232     63,590
Current Liabilities               56,912     45,309        49,357     38,118     33,914     32,093     25,264

Long-term Debt and
  Capitalized
  Lease Obligations                  334        365           334        395        447        255         95
Net Working Capital                8,790     18,490        13,267     21,730     22,077     15,037     15,850
Shareholders'  Investment         55,809     51,338        53,150     48,043     43,584     39,583     36,200

[FN]
(1)  Represents total shareholders' equity as of such dates divided by the 
      total number of Common Shares outstanding as of such dates.


                      INDEPENDENT PUBLIC ACCOUNTANTS

   The consolidated financial statements of the Company at and for the
three years ended December 31, 1995, incorporated in this Proxy Statement
by reference to the Company's Annual Report on Form 10-K for such period,
have been incorporated in reliance on the report of Arthur Andersen LLP,
independent certified public accountants, also incorporated by reference
herein. A representative of Arthur Andersen LLP will be at the Special
Meeting to answer questions by shareholders and will have the opportunity
to make a statement, if so desired.

               INCORPORATION OF INFORMATION BY REFERENCE

     The following documents previously filed with the SEC by the Company,
File No. 0-5589 are incorporated herein by reference:

          1.     The Company's Annual Report on Form 10-K for the fiscal
                 year ended December 31, 1995, filed March 27, 1996, which
                 incorporates by reference the 1995 Annual Report to
                 Shareholders which contains audited financial statements
                 of the Company for the fiscal years ended December 31,
                 1994 and 1995;

          2.     The Company's 1996 Proxy Statement for the Annual Meeting
                 of Shareholders held on May 7, 1996; 
           
          3.     The Company's Quarterly Reports on Form 10-Q for the
                 quarters ended March 31, 1996 and June 30, 1996; and

          4.     The Company's Current Reports on Form 8-K filed on July
                 23, 1996 and on August 14, 1996.
          
     All reports and definitive proxy or information statements filed by
the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange
Act subsequent to the date of this Proxy Statement and prior to the date of
the Special Meeting shall be deemed to be incorporated by reference into
this Proxy Statement from the date of filing of such documents. Any
statement contained in a document incorporated or deemed to be incorporated
herein by reference shall be deemed to be modified or superseded for
purposes of this Proxy Statement to the extent that a statement contained
herein or in any other subsequently filed document which also is or is
deemed to be incorporated herein by reference modifies or supersedes such
statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Proxy Statement.

   THIS PROXY STATEMENT INCORPORATES CERTAIN DOCUMENTS OF THE COMPANY BY
REFERENCE WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. SUCH
DOCUMENTS (NOT INCLUDING EXHIBITS THERETO) ARE AVAILABLE TO ANY PERSON TO
WHOM THIS PROXY STATEMENT IS DELIVERED, UPON ORAL OR WRITTEN REQUEST,
WITHOUT CHARGE, DIRECTED TO SUSAN MATHISON, SECRETARY, PAYCO AMERICAN
CORPORATION, 180 NORTH EXECUTIVE DRIVE, BROOKFIELD, WISCONSIN, 53005,
TELEPHONE NUMBER (414) 780-7407. IN ORDER TO ENSURE TIMELY DELIVERY OF THE
DOCUMENTS, SUCH REQUESTS SHOULD BE MADE BY OCTOBER [__], 1996.

                              OTHER MATTERS

     The Board of Directors knows of no other business which will be acted
upon at the Special Meeting other than the approval of the Merger
Agreement. In the event that any other business not known or determined at
this time does come before the meeting, the persons named in the enclosed
proxy intend to vote in accordance with their best judgment.
                    
                    
                         By Order of the Board of Directors,

                         SUSAN MATHISON, Secretary

                         
                                                   ANNEX A
                                                  ---------
 
                     AGREEMENT AND PLAN OF MERGER


          AGREEMENT AND PLAN OF MERGER, dated as of August 13, 1996 (this
"Agreement"), by and among OSI HOLDINGS CORP., a Delaware corporation
("Parent"), BOXER ACQUISITION CORP., a Delaware corporation ("Purchaser"), and
PAYCO AMERICAN CORPORATION, a Wisconsin corporation (the "Company").

          WHEREAS, the respective Boards of Directors of Parent, Purchaser and
the Company have approved the acquisition of the Company by Parent and
Purchaser;

          WHEREAS, to complete such acquisition, the respective Boards of
Directors of Parent, Purchaser and the Company have approved the merger of
Purchaser with and into the Company (the "Merger"), pursuant to and subject to
the terms and conditions of this Agreement; 

          WHEREAS, the Board of Directors of the Company and the Special
Committee of the Board of Directors of the Company (the "Special Committee")
has each determined that the Merger is fair to, and in the best interests of,
the stockholders of the Company;

          WHEREAS, simultaneously with the execution of this Agreement,
Purchaser has entered into an agreement with certain stockholders of the
Company pursuant to which such stockholders agree, subject to certain
conditions, to vote the shares of the Common Stock of the Company owned by
them in favor of the Merger; and

          WHEREAS, simultaneously with the execution of this Agreement, and as
required by the Purchaser, the Company has entered into a covenant not to
compete agreement and consulting agreement with Dennis G. Punches, covenant
not to compete agreements and employment agreements with eight other executive
officers of the Company and a covenant not to compete agreement with Joseph T.
Treleven, all of which agreements shall be effective only upon the
consummation of the Merger.  

          NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, representations, warranties and agreements herein contained, the
parties hereto agree as follows:

     ARTICLE I

                  THE MERGER AND RELATED MATTERS

          1.01  The Merger.
                ---------- 
          (a)  Subject to the terms and conditions of this Agreement, at the
time of the Closing (as defined in Section 1.10 hereof), articles of merger
(the "Articles of Merger") shall be duly prepared, executed and acknowledged
by the Company in accordance with the Wisconsin Business Corporation Law (the
"WBCL") and a certificate of merger (the "Certificate of Merger") shall be
duly prepared, executed and acknowledged by Purchaser and the Company in
accordance with the Delaware General Corporation Law (the "DGCL") and shall be
filed on the Closing Date (as defined in Section 1.10 hereof).  The Merger
shall become effective upon the filing of the Articles of Merger with the
Secretary of State of the State of Wisconsin and the Certificate of Merger
with the Secretary of State of the State of Delaware in accordance with
applicable law.  The date and time when the Merger shall become effective is
hereinafter referred to as the "Effective Time."

          (b)  At the Effective Time, Purchaser shall be merged with and into
the Company and the separate corporate existence of Purchaser shall cease, and
the Company shall continue as the surviving corporation under the laws of the
State of Wisconsin under the name of "Payco American Corporation" (the
"Surviving Corporation").

2
          (c)  From and after the Effective Time, the Merger shall have the
effects set forth in the WBCL and the DGCL.  Without limiting the generality
of the foregoing, and subject thereto, at the Effective Time, all the
properties, rights, privileges, powers and franchises of the Company and
Purchaser shall vest in the Surviving Corporation, and all debts, liabilities
and duties of the Company and Purchaser shall become the debts, liabilities
and duties of the Surviving Corporation.

          (d) If Purchaser so elects, the Merger may alternatively be
structured with Purchaser as the Surviving Corporation. In the event of such
an election, the parties agree to execute an appropriate amendment to this
Agreement in order to reflect such election. If Purchaser elects to structure
the Merger so that Purchaser rather than the Company is the Surviving
Corporation, the inaccuracy of any representation or warranty of the Company
which becomes inaccurate solely as a result of Purchaser becoming the
Surviving Corporation, rather than the Company, shall not be deemed to be a
breach of such representation or warranty.
          
          1.02  Conversion of Stock.  At the Effective Time: 
                -------------------
          (a)  Each share of common stock, par value $.10 per share, of the
Company (the "Common Stock") then issued and outstanding (other than any
shares of Common Stock which are held by any subsidiary of the Company or in
the treasury of the Company, or which are held, directly or indirectly, by
Parent or any direct or indirect subsidiary of Parent (including Purchaser),
all of which shall be cancelled and none of which shall receive any payment
with respect thereto) shall, by virtue of the Merger and without any action on
the part of the holder thereof, be converted into and represent the right to
receive an amount in cash, without interest, equal to $14.00 (the "Merger
Consideration") payable to the holder thereof less any required withholding
taxes; and

          (b)  Each share of capital stock of Purchaser then issued and
outstanding shall, by virtue of the Merger and without any action on the part
of the holder thereof, become one fully paid and nonassessable share of
capital stock of like tenor of the Surviving Corporation.

          1.03  Surrender of Certificates.
                -------------------------
          (a)  Prior to the Effective Time, Parent shall designate a bank or
trust company located in the United States, reasonably satisfactory to
Company, to act as paying agent (the "Paying Agent") for purposes of making
the cash payments contemplated hereby.  As soon as practicable after the
Effective Time, Parent shall cause the Paying Agent to mail and/or make
available to each holder of a certificate theretofore evidencing shares of
Common Stock (other than those which are held by any subsidiary of the Company
or in the treasury of the Company or which are held directly or indirectly by
Parent or any direct or indirect subsidiary of Parent (including Purchaser)) a
notice and letter of transmittal advising such holder of the effectiveness of
the Merger and the procedure for surrendering to the Paying Agent such
certificate or certificates which immediately prior to the Effective Time
represented outstanding Common Stock (the "Certificates") in exchange for the
Merger Consideration deliverable in respect thereof pursuant to this Article
I.  Upon the surrender for cancellation to the Paying Agent of such Certifi-
cates, together with a letter of transmittal, duly executed and completed in
accordance with the instructions thereon, and any other items specified by the
letter of transmittal, the Paying Agent shall promptly pay to the Person (as
defined in Section 8.14 hereof) entitled thereto the Merger Consideration
deliverable in respect thereof.  Until so surrendered, each Certificate shall
be deemed, for all corporate purposes, to evidence only the right to receive
upon such surrender the Merger Consideration deliverable in respect thereof to
which such Person is entitled pursuant to this Article I.  No interest shall
be paid or accrued in respect of such cash payments.

          (b)  If the Merger Consideration (or any portion thereof) is to be
delivered to a Person other than the Person in whose name the Certificates
surrendered in exchange therefor are registered, it shall be a condition to
the payment of the Merger Consideration that the Certificates so surrendered 
3
shall be properly endorsed or accompanied by appropriate stock powers and
otherwise in proper form for transfer, that such transfer otherwise be proper
and that the Person requesting such transfer pay to the Paying Agent any
transfer or other taxes payable by reason of the foregoing or establish to the
satisfaction of the Paying Agent that such taxes have been paid or are not
required to be paid.

          (c)  In the event any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Person claiming
such Certificate to be lost, stolen or destroyed, the Paying Agent will issue
in exchange for such lost, stolen or destroyed Certificate the Merger
Consideration deliverable in respect thereof as determined in accordance with
this Article I, provided that, the Person to whom the Merger Consideration is
paid shall, as a condition precedent to the payment thereof, give Parent a
bond in such sum as it may direct or otherwise indemnify Parent in a manner
satisfactory to it against any claim that may be made against Parent with
respect to the Certificate claimed to have been lost, stolen or destroyed.

          1.04  Payment.
                -------
            Concurrently with or immediately prior to the Effective Time,
Parent or Purchaser shall deposit in trust with the Paying Agent cash in
United States dollars in an aggregate amount equal to the product of (i) the
number of shares of Common Stock outstanding immediately prior to the
Effective Time (other than shares of Common Stock which are held by any sub-
sidiary of the Company or in the treasury of the Company or which are held
directly or indirectly by Parent or any direct or indirect subsidiary of
Parent (including Purchaser)) and (ii) the Merger Consideration (such amount
being hereinafter referred to as the "Payment Fund").  The Payment Fund shall
be invested by the Paying Agent as directed by Parent in direct obligations of
the United States, obligations for which the full faith and credit of the
United States is pledged to provide for the payment of principal and interest,
commercial paper rated of the highest quality by Moody's Investors Services,
Inc.  or Standard & Poors Ratings Group or certificates of deposit, bank
repurchase agreements or bankers' acceptances of a commercial bank having the
highest rating of Moody's Investors Services, Inc.  or Standard & Poor's
Ratings Group (collectively, "Permitted Investments") or in money market funds
which are invested in Permitted Investments, and any net earnings with respect
thereto shall be paid to Parent as and when requested by Parent.  The Paying
Agent shall, pursuant to irrevocable instructions, make the payments referred
to in Section 1.02(a) hereof out of the Payment Fund.  The Payment Fund shall
not be used for any other purpose except as otherwise agreed to by Parent. 
Promptly following the date which is three months after the Effective Time,
the Paying Agent shall pay to Parent all cash, certificates and other instru-
ments in its possession that constitute any portion of the Payment Fund, and
the Paying Agent's duties shall terminate.  Thereafter, each holder of a
Certificate may surrender such Certificate to the Surviving Corporation and
(subject to applicable abandoned property, escheat and similar laws) receive
in exchange therefor the Merger Consideration, without interest, but shall
have no greater rights against the Surviving Corporation or Parent than may be
accorded to general creditors of the Surviving Corporation or Parent under
applicable law.  Notwithstanding the foregoing, neither the Paying Agent nor
any party hereto shall be liable to a holder of shares of Common Stock for any
Merger Consideration delivered to a public official pursuant to applicable
abandoned property, escheat and similar laws.

          1.05  No Further Rights of Transfers.
                ------------------------------
          At and after the Effective Time, each holder of a Certificate shall
cease to have any rights as a stockholder of the Company, except for, in the
case of a holder of a Certificate (other than shares to be cancelled pursuant
to Section 1.02(a) hereof), the right to surrender his or her Certificate in
exchange for payment of the Merger Consideration, and no transfer of shares of
Common Stock shall be made on the stock transfer books of the Surviving
Corporation.  Certificates presented to the Surviving Corporation after the
Effective Time shall be cancelled and exchanged for cash as provided in this
Article I.  At the close of business on the day of the Effective Time the
stock ledger of the Company with respect to Common Stock shall be closed.
4
          1.06  Stock Option and Other Plans.
                ----------------------------         
          (a)  Prior to the Effective Time, the Board of Directors of the
Company shall adopt amendments to the stock option plans of the Company (the
"Stock Plans") to provide that in the event of a merger pursuant to which the
stockholders of the Company receive cash for their shares, the holders of
outstanding options to purchase Common Stock (the "Options") heretofore
granted under the Stock Plans shall be entitled, upon exercise of the Options
on or after the effective date of such merger, only to receive the same cash
consideration per share with respect to each share subject to such Options as
received by the stockholders in connection with such merger, without interest
(subject to any applicable withholding taxes, the "Cash Payment").  Except for
any benefits due participants under the Company's Common Share Equivalent
Plan, any then outstanding stock appreciation rights or limited stock appre-
ciation rights shall be cancelled as of immediately prior to the Effective
Time without any payment therefor.  All vested benefits as of the Effective
Time pursuant to the Company's Common Share Equivalent Plan shall be paid in
cash at the Effective Time whether or not payment would otherwise then be due.
As provided herein, the Stock Plans and any other plan, program or arrangement
providing for the issuance or grant of any other interest in respect of the
capital stock of the Company or any subsidiary (collectively with the Stock
Plans, referred to as the "Stock Incentive Plans") shall terminate as of the
Effective Time.  The Company will use its reasonable best efforts to obtain
all necessary consents to ensure that upon the Effective Time, the holders of
Options, all of which shall become fully vested as of the Effective Time,
shall surrender the same in cancellation and settlement thereof for a cash
consideration equal to the Cash Payment, less the exercise price of such
related Options.

          (b)     All Stock Plans shall terminate as of the Effective Time and
the provisions in any other Employee Benefit Plan (as defined in Section 2.11)
providing for the issuance, transfer or grant of any capital stock of the
Company or any interest in respect of any capital stock of the Company shall
be deleted as of the Effective Time, and the Company shall use its best
efforts to ensure that following the Effective Time no holder of an Option or
any participant in any Stock Plans shall have any right thereunder to acquire
any capital stock of the Company, Parent or the Surviving Corporation.

          1.07  Articles of Incorporation of the Surviving Corporation.
                ------------------------------------------------------
          The Articles of Incorporation of the Company, as in effect
immediately prior to the Effective Time, shall be the Articles of
Incorporation of the Surviving Corporation.

          1.08  By-Laws of the Surviving Corporation.
                ------------------------------------
          The By-Laws of the Company, as in effect immediately prior to the
Effective Time, shall be the By-Laws of the Surviving Corporation.

          1.09  Directors and Officers of the Surviving Corporation.
                ---------------------------------------------------
          At the Effective Time, the directors of Purchaser immediately prior
to the Effective Time shall be the directors of the Surviving Corporation,
each of such directors to hold office, subject to the applicable provisions of
the Articles of Incorporation and By-Laws of the Surviving Corporation, until
the next annual stockholders' meeting of the Surviving Corporation and until
their respective successors shall be duly elected or appointed and qualified. 
At the Effective Time, the officers of the Company immediately prior to the
Effective Time shall, subject to the applicable provisions of the Articles of
Incorporation and By-Laws of the Surviving Corporation, be the officers of the
Surviving Corporation until their respective successors shall be duly elected
or appointed and qualified.
5
          1.10  Closing.
                -------
          The closing of the Merger (the "Closing") shall take place at the
offices of White & Case, 1155 Avenue of the Americas, New York, New York, as
soon as practicable after the last of the conditions set forth in Articles V
and VI hereof is fulfilled or waived (subject to applicable law) but in no
event later than February 12, 1997, or at such other time and place and on
such other date as Parent and the Company shall mutually agree (the "Closing
Date").


                            ARTICLE II

           REPRESENTATIONS AND WARRANTIES OF THE COMPANY

          2.  Representations and Warranties of the Company.
              ---------------------------------------------
          The Company hereby represents and warrants to Parent and Purchaser
as follows:

          2.01  Due Organization, Good Standing and Corporate Power.
                ---------------------------------------------------  
          The Company is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Wisconsin.  The Company has
the requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted.  The Company
is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which the character or location of the
properties owned, leased or operated by the Company or the nature of the
business conducted by the Company makes such qualification necessary, except
where the failure to be so duly qualified would not have a material adverse
effect on the business, properties, assets, liabilities, operations, financial
condition, results of operations or prospects of the Company and its
subsidiaries (as hereinafter defined) taken as a whole (a "Material Adverse
Effect").

          2.02  Authorization and Validity of Agreement.
                ---------------------------------------
          The Company has full corporate power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and, subject to
requisite approval by the holders of its Common Stock of this Agreement and
the Merger, to consummate the transactions contemplated hereby.  The
execution, delivery and performance of this Agreement by the Company, and the
consummation by it of the transactions contemplated hereby, have been duly
authorized and approved by its Board of Directors and the Special Committee
and no other corporate action on the part of the Company is necessary to
authorize the execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby (other
than the approval of this Agreement and the Merger by the holders of a
majority of the shares of Common Stock). This Agreement has been duly executed
and delivered by the Company, and assuming the valid authorization, execution
and delivery of this Agreement by Parent and Purchaser, is a valid and binding
obligation of the Company enforceable against the Company in accordance with
its terms, except to the extent that its enforceability may be subject to
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting the enforcement of creditors' rights generally and by general equi-
table principles.

          2.03  Capitalization.
                --------------
          The authorized capital stock of the Company consists of 50,000,000
shares of Common Stock, $0.10 par value, and 500,000 shares of preferred
stock, no par value (the "Preferred Stock").  As of August 9, 1996, (i)
10,155,085 shares of Common Stock were issued and outstanding, (ii) 610,426
shares of Common Stock were reserved for issuance pursuant to outstanding
options granted under the Stock Plans, (iii) no shares of Preferred Stock were
issued and outstanding, and (iv) no shares of Common Stock were held in the 
6
Company's treasury.  All issued and outstanding shares of Common Stock have
been duly authorized and validly issued and are fully paid and nonassessable,
and are not subject to, nor were they issued in violation of, any preemptive
rights.  Except as set forth in this Section 2.03 or on Schedule 2.03 
                                                        -------------
previously delivered to Parent, (i) there are no shares of capital stock of
the Company authorized, issued or outstanding and (ii) there are not as of the
date hereof, and at the Effective Time there will not be, any outstanding or
authorized options, warrants, rights, subscriptions, claims of any character,
agreements, obligations, convertible or exchangeable securities, or other
commitments, contingent or otherwise, relating to Common Stock or any other
shares of capital stock of the Company, pursuant to which the Company is or
may become obligated to issue shares of Common Stock, any other shares of its
capital stock or any securities convertible into, exchangeable for, or
evidencing the right to subscribe for, any shares of the capital stock of the
Company.  The Company has no authorized or outstanding bonds, debentures,
notes or other indebtedness the holders of which have the right to vote (or
convertible or exchangeable into or exercisable for securities having the
right to vote) with the stockholders of the Company or any of its subsidiaries
on any matter.  

          2.04  Subsidiaries and Investments.
                ----------------------------
          Set forth on Schedule 2.04 previously delivered to Parent is a list 
                       -------------
of each corporation, partnership and other business entity in which the
Company owns, directly or indirectly, any equity security or other equity
interest and which is controlled, directly or indirectly, by the Company (a
"subsidiary").  Except as set forth on Schedule 2.04 each subsidiary is a 
                                       -------------
corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation (as set forth on Schedule 2.04),
                                                               -------------
and has all requisite power to own its property and to carry on its business
as now being conducted.  Set forth on Schedule 2.04 is a list of jurisdictions
                                      -------------  
in which each subsidiary is qualified as a foreign corporation.  Such
jurisdictions are the only jurisdictions in which the character or location of
the properties owned or leased by each subsidiary, or the nature of the
business conducted by each subsidiary, makes such qualification necessary,
except where the failure to be so qualified would not have a Material Adverse
Effect.  All of the outstanding shares of capital stock and other equity
interests of each subsidiary have been duly authorized and validly issued, are
fully paid and nonassessable, and, except as set forth on Schedule 2.04, are 
                                                          ------------- 
owned, of record and beneficially, by the Company or a subsidiary, free and
clear of all liens, encumbrances, restrictions and claims of every kind. 
Except as disclosed on Schedule 2.04, no shares of capital stock and other 
                       -------------
equity interests of any subsidiary are reserved for issuance and there are no
outstanding options, warrants, rights, subscriptions, claims, agreements,
obligations, convertible or exchangeable securities or other commitments,
contingent or otherwise, relating to the capital stock of any subsidiary or
pursuant to which any subsidiary is or may become obligated to issue or
exchange any shares of capital stock or other equity interests.  Neither the
Company nor any subsidiary owns, directly or indirectly, any capital stock or
other equity or ownership or proprietary interest in any corporation, partner-
ship, association, trust, joint venture or other entity except as set forth on
Schedule 2.04.
- - -------------

          2.05  Consents and Approvals; No Violations.
                -------------------------------------
          Assuming (i) the filings required under the Hart-Scott-Rodino Anti-
trust Improvements Act of 1976, as amended (the "HSR Act"), are made and the
waiting period thereunder has been terminated or has expired, (ii) the filings
required to be made with the Securities and Exchange Commission (the 

7
"Commission") in connection or in compliance with the Securities Exchange Act
of 1934, as amended (the "Exchange Act") and the rules and regulations of the
Commission are made, (iii) such filings are made and approvals received as may
be required pursuant to any applicable state securities, "blue sky" or anti-
takeover laws, (iv) the filing of the Articles of Merger as required by the
WBCL, the filing of the Certificate of Merger as required by the DGCL and the
filing of other appropriate merger documents is made, (v) the valid
authorization, execution and delivery of this Agreement by Parent and
Purchaser and (vi) requisite approval of the Merger by the holders of Common
Stock is received, the execution and delivery of this Agreement by the Company
and the consummation by the Company of the transactions contemplated hereby
will not:  (1) violate any provision of the Articles of Incorporation or the
By-Laws of the Company or any of its subsidiaries; (2) violate any statute,
ordinance, rule, regulation, order or decree of any court or of any
governmental or regulatory body, agency or authority applicable to the Company
or any of its subsidiaries or by which any of their respective properties or
assets may be bound; (3) require any filing with, or permit, consent or
approval of, or the giving of any notice to, any governmental or regulatory
body, agency or authority; or (4) result in a violation or breach of, conflict
with, constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, cancellation, payment or
acceleration) under, or result in the creation of any lien, security interest,
charge or encumbrance upon any of the properties or assets of the Company or
any of its subsidiaries under, any of the terms, conditions or provisions of
any note, bond, mortgage, indenture, license, franchise, permit, agreement,
lease, franchise agreement or other instrument or obligation to which the
Company or any of its subsidiaries is a party, or by which it or any of their
respective properties or assets may be bound except for in the case of clauses
(3) and (4) above for such filing, permit, consent or approval listed on
Schedule 2.05 to be delivered to Parent within ten days after the date of this
- - -------------
Agreement, the absence of which, and violations, breaches, defaults, conflicts
and Encumbrances of which, in the aggregate, would not have a Material Adverse
Effect.

          2.06  Company Reports and Financial Statements.
                ----------------------------------------
          Since December 31, 1992 the Company has filed all forms, reports and
documents with the Commission required to be filed by it pursuant to the
federal securities laws and the Commission rules and regulations thereunder,
and all forms, reports and documents filed with the Commission have complied
in all material respects with all applicable requirements of the federal
securities laws and the Commission rules and regulations promulgated
thereunder.  The Company has, prior to the date of this Agreement, made
available to Parent true and complete copies of all forms, reports,
registration statements and other filings filed by the Company with the
Commission since December 31, 1992 (such forms, reports, registration
statements and other filings, together with any exhibits, any amendments
thereto and information incorporated by reference therein, are sometimes col-
lectively referred to as the "Commission Filings").  As of their respective
dates, the Commission Filings did not contain any untrue statement of a mate-
rial fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.  Each of the consolidated balance sheets
as of the end of the fiscal years ended December 31, 1993, December 31, 1994
and December 31, 1995 and the consolidated statements of earnings,
consolidated statements of stockholders' equity and consolidated statements of
cash flows for the fiscal years ended December 31, 1993, December 31, 1994 and
December 31, 1995 included in the Commission Filings, were prepared in accor-
dance with generally accepted accounting principles (as in effect from time to
time) applied on a consistent basis (except as may be indicated therein or in
the notes or schedules thereto) and fairly present in all material respects
the consolidated financial position of the Company and its consolidated
subsidiaries as of the dates thereof and the results of their operations and
cash flows for the periods then ended.  The consolidated balance sheet as of
March 31, 1996 and the consolidated statement of earnings, consolidated
statement of stockholders' equity and consolidated statement of cash flows for
8
the fiscal quarter then ended included in the Commission Filings were prepared
in accordance with generally accepted accounting principles (except as
permitted by Regulation S-X adopted by the Commission) applied on a consistent
basis (except as may be indicated therein or in the notes thereto) and fairly
present in all material respects the consolidated financial position of the
Company and its consolidated subsidiaries as of March 31, 1996 and the results
of operations and cash flows for the fiscal quarter then ended.

          2.07  Absence of Certain Changes.
                --------------------------
          Except as previously disclosed in the Commission Filings or in
Schedule 2.07 previously delivered to Parent, since December 31, 1995 (i) 
- - -------------
there has not been any material adverse change in the business, operations,
financial condition or results of operations of the Company and its subsidi-
aries taken as a whole; (ii) the businesses of the Company and each of its
subsidiaries have been conducted only in the ordinary course; (iii) neither
the Company nor any of its subsidiaries has, outside the ordinary course of
business, incurred any material liabilities (direct, contingent or otherwise)
or engaged in any material transaction or entered into any material agreement;
(iv) the Company and its subsidiaries have not increased the compensation of
any officer or granted any general salary or benefits increase to their
employees other than in the ordinary course of business; (v) neither the
Company nor any of its subsidiaries has taken any action referred to in
Section 4.03 hereof except as permitted or required thereby; (vi) there has
been no declaration, setting aside or payment of any dividend or other
distribution with respect to the capital stock of the Company; and (vii) there
has been no change by the Company in accounting principles, practices or
methods.

          2.08  Title to Properties; Encumbrances.
                ---------------------------------
          Except to the extent that any breach of the representations set
forth in this Section could not reasonably be expected to have a Material
Adverse Effect: the Company and each of its subsidiaries has good title to (i)
all its tangible properties and assets (real and personal), including, without
limitation, all the properties and assets reflected in the consolidated
balance sheet as of December 31, 1995 except as  indicated  in the notes
thereto and except for properties and assets reflected in the consolidated
balance sheet as of December 31, 1995 which have been sold or otherwise
disposed of in the ordinary course of business, and (ii) all the tangible
properties and assets purchased by the Company and any of its subsidiaries
since December 31, 1995 except for such properties and assets which have been
sold or otherwise disposed of in the ordinary course of business, in each case
subject to no encumbrance, lien, charge or other restriction of any kind or
character ("Encumbrances"), except for (a) Encumbrances reflected in the
consolidated balance sheet as of December 31, 1995, (b) Encumbrances for
current taxes, assessments or governmental charges or levies on property not
yet due and delinquent, (c) Encumbrances arising by operation of law and (d)
Encumbrances described on Schedule 2.08 previously delivered to Parent 
                          -------------
(Encumbrances of the type described in clauses (a), (b), (c) and (d) above are
hereinafter sometimes referred to as "Permitted Encumbrances").

          2.09  Compliance with Laws.
                --------------------
          Except as set forth on Schedule 2.09 previously delivered to Parent,
                                 -------------
each of the Company and its subsidiaries is in compliance with all applicable
laws, regulations, orders, judgments and decrees (including, without
limitation, the Fair Debt Collection Practices Act and any state or local
counterpart or equivalent) except for such noncompliances as could not
reasonably be likely to have a Material Adverse Effect.

          2.10  Litigation.
                ---------- 
          Except as disclosed in the Commission Filings or as set forth in
Schedule 2.10 previously delivered to Parent, there is no action, suit, 
- - -------------
9
proceeding at law or in equity, or any arbitration or any administrative or
other proceeding by or before (or, to the knowledge of the Company, any
investigation by) any governmental or other instrumentality or agency,
pending, or, to the knowledge of the Company, threatened, against or affecting
the Company or any of its subsidiaries, or any of their properties or rights
which could materially and adversely affect the right or ability of the
Company or any of its subsidiaries to carry on its business as now conducted,
which could reasonably be likely to have a Material Adverse Effect or which
could reasonably be expected to prevent or materially delay consummation of
the transactions contemplated by this Agreement, and the Company knows of no
valid basis for any such action, proceeding or investigation. Except as set
forth in Schedule 2.10, none of the Company or any of its subsidiaries is 
         -------------
subject to any judgment, order or decree entered in any lawsuit, proceeding or
administrative action in which the Company or any of its subsidiaries is a
party which could reasonably be likely to have a Material Adverse Effect. 
There are no such suits, actions, claims, proceedings or investigations
pending or, to the knowledge of the Company, threatened, seeking to prevent or
challenging the transactions contemplated by this Agreement.  

          2.11  Employee Benefit Plans.
                ----------------------

          (a)     Schedule 2.11 previously delivered to Parent contains an 
                  -------------

accurate and complete list of all domestic and foreign (1) "employee benefit
plans," within the meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended, and the rules and regulations thereunder
("ERISA"); (2) bonus, stock option, stock purchase, restricted stock,
incentive, profit-sharing, pension or retirement, deferred compensation,
medical, life, disability, accident, leave and supplemental retirement benefit
plans, programs, arrangements, commitments and/or practices (whether or not
insured); (3) employment, termination, and severance contracts or agreements;
and (4) consulting agreements in excess of $60,000 or not terminable by the
Company upon less than ninety days' notice; for active, retired or former
employees or directors that have been established, maintained or contributed
to since January 1, 1993 (or with respect to which an obligation to contribute
has been undertaken) or with respect to which any potential liability is borne
by the Company and/or any of its subsidiaries (including, for this purpose and
for the purpose of all of the representations in this Section 2.11, any
predecessors to the Company or to any of its subsidiaries and all employers
(whether or not incorporated) that are or were by reason of common control
treated together with the Company and/or any of its subsidiaries as a single
employer within the meaning of Section 414 of the Internal Revenue Code of
1986, as amended, and the rules and regulations thereunder (the "Code")
("Plans").

          (b)  Except to the extent that any breach of the representations set
forth in this sentence could not reasonably be expected to have a Material
Adverse Effect: (1) each Plan is in compliance with applicable law and has
been administered and operated in accordance with its terms; (2) each Plan
which is intended to be "qualified" within the meaning of Section 401(a) of
the Code has received a favorable determination letter from the Internal
Revenue Service and, to the knowledge of the Company, no event has occurred
and no condition exists which could reasonably be expected to result in the
revocation of any such determination; (3) no Plan is subject to Section 412 of
the Code or Section 302 or Title IV of ERISA and neither the Company nor any
of its subsidiaries has ever contributed to or had any obligation to
contribute to (or borne any liability with respect to) any "multiemployer
plan" (as defined in Section 4001(a)(3) of ERISA); (4) neither the Company nor
any of its subsidiaries nor, to the Company's knowledge, any other
"disqualified person" or "party in interest" (as defined in Section 4975(e)(2)
of the Code and Section 3(14) of ERISA, respectively) has engaged in any
transactions in connection with any Plan that could reasonably be expected to
result in the imposition of a penalty pursuant to Section 502(i) of ERISA,
damages pursuant to Section 409 of ERISA or a tax pursuant to Section 4975(a)
of the Code; and (5) no liability, claim, action or litigation, has been made,
10
commenced or is expected or, to the Company's knowledge, threatened with
respect to any Plan (other than for benefits payable in the ordinary course).

          (c)  The Company has delivered or caused to be delivered to Parent
and its counsel true and complete copies of all material documents in
connection with each Plan, including, without limitation (where applicable):
(1) all Plans as in effect on the date hereof, together with all amendments
thereto, including, in the case of any Plan not set forth in writing, a
written description thereof; (2) all current summary plan descriptions,
summaries of material modifications, and material communications; (3) all
current trust agreements, declarations of trust and other documents
establishing other funding arrangements (and all amendments thereto and the
latest financial statements thereof); (4) the most recent Internal Revenue
Service determination letter obtained with respect to each Plan intended to be
qualified under Section 401(a) of the Code or exempt under Section 501(a) of
the Code; (5) the most recently filed Internal Revenue Service Form 5500 for
each Plan required to file such Form; (6) the most recently prepared financial
statements; and (7) all material agreements and contracts relating to each
Plan.

          2.12  Taxes.
                -----
          (a)  Tax Returns.  The Company and each of its subsidiaries, has 
               -----------
timely filed or caused to be timely filed with the appropriate taxing
authorities all Federal and other material returns, statements, forms and
reports for Taxes (as hereinafter defined) ("RETURNS") that are required to be
filed by, or with respect to, the Company and such subsidiaries.  The Returns
reflect accurately all material liability for Taxes of the Company and such
subsidiaries for the periods covered thereby.  "TAXES" means all taxes,
assessments, charges, duties, fees, levies or other governmental charges, in-
cluding, without limitation, all Federal, state, local, foreign and other
income, franchise, profits, capital gains, capital stock, transfer, sales,
use, occupation, property, excise, severance, windfall profits, stamp,
license, payroll, withholding and other taxes, assessments, charges, duties,
fees, levies or other governmental charges of any kind whatsoever (whether
payable directly or by withholding and whether or not requiring the filing of
a Return), all estimated taxes, deficiency assessments, additions to tax,
penalties and interest and shall include any liability for such amounts as a
result either of being a member of a combined, consolidated, unitary or
affiliated group or of a contractual obligation to indemnify any person or
other entity.

          (b)     Payment of Taxes.
                  ----------------
          All material Taxes and Tax liabilities of the Company and its
subsidiaries  have been timely paid or adequately disclosed and fully provided
for as a liability on the financial statements of the Company and its
subsidiaries in accordance with generally accepted accounting principles.

          (c)     Other Tax Matters.
                  -----------------
          (i) Schedule 2.12 previously delivered to Parent sets forth (A) each
              -------------
taxable year or other taxable period of the Company or any of its subsidiaries
for which an audit or other examination of Taxes by the appropriate tax
authorities of any nation, state or locality is currently in progress (or
scheduled to be conducted) together with the names of the respective tax
authorities conducting (or scheduled to conduct) such audits or examinations
and a description of the subject matter of such audits or examinations, (B)
the most recent taxable year or other taxable period for which an audit or
other examination relating to Federal income taxes of the Company and its
subsidiaries has been finally completed and the disposition of such audit or
examination, (C) the taxable years or other taxable periods of the Company or
any of its subsidiaries which will not be subject to the normally applicable
statute of limitations by reason of the existence of circumstances that would
cause any such statute of limitations for applicable Taxes to be extended, (D)
the amount of any proposed adjustments (and the principal reason therefor)
relating to any Returns for Tax liability of the Company or any of its 
11
subsidiaries which have been proposed or assessed by any taxing authority and
(E) a list of all notices received by the Company or any of its subsidiaries
from any taxing authority relating to any issue which could affect the Tax
liability of the Company or any of its subsidiaries, which issue has not been
finally determined and which, if determined adversely to the Company or any
such subsidiaries, could result in a material Tax liability.

          (ii)  Except as provided on Schedule 2.12, neither the Company nor 
                                      -------------
any of its subsidiaries has been included in any "consolidated," "unitary" or
"combined" Return (other than Returns which include only the Company and any
subsidiaries of the Company) provided for under the law of the United States,
any foreign jurisdiction or any state or locality with respect to Taxes for
any taxable period for which the statute of limitations has not expired. 

          (iii)  All material Taxes which the Company or any of its
subsidiaries is (or was) required by law to withhold or collect have been duly
withheld or collected, and have been timely paid over to the proper
authorities to the extent due and payable.

          (iv)  Except as previously disclosed to Parent, the Company is not a
party to any agreement that would require it to make any payment that would
constitute an "excess parachute payment" for purposes of Sections 280G and
4999 of the Internal Revenue Code of 1986, as amended (the "CODE").

          (v)  There are no tax sharing, allocation, indemnification or
similar agreements or arrangements in effect as between the Company, any
subsidiary, or any predecessor or affiliate thereof and any other party under
which Parent, Purchaser or the Company (or any of its subsidiaries) could be
liable for any Taxes or other claims of any party other than the Company or
any subsidiary of the Company.

          (vi)  No indebtedness of the Company or any of its subsidiaries
consists of "corporate acquisition indebtedness" within the meaning of Section
279 of the Code.

          (vii)  Neither the Company nor any of its subsidiaries has been
required to include in income any adjustment pursuant to Section 481 of the
Code by reason of a voluntary change in accounting method initiated by the
Company or any of its subsidiaries, and the Internal Revenue Service has not
initiated or proposed any such adjustment or change in accounting method.

          2.13  Liabilities.
                -----------
          Neither the Company nor any of its subsidiaries has outstanding any
material claims, liabilities or indebtedness, contingent or otherwise, except
as set forth in the consolidated balance sheet as of December 31, 1995, or
referred to in the footnotes thereto, other than liabilities incurred subse-
quent to December 31, 1995 in the ordinary course of business.  Neither the
Company nor any of its subsidiaries is in default in respect of the terms and
conditions of any indebtedness or other agreement, except for such defaults
which are not likely to result in a Material Adverse Effect.

          2.14  Licenses; Intellectual Property.
                -------------------------------    
          The Company and its subsidiaries each possess, or own sufficient
legal rights to, all licenses, patents, trade names, trademarks and service
marks (each a "License") necessary for the ownership or use of the Company's
and each subsidiary's properties and the conduct of their businesses as
presently conducted, except for which the failure to own or possess could not
reasonably be likely to result in a Material Adverse Effect.  Except as set
forth on Schedule 2.14 previously delivered to Parent, all such Licenses are 
         -------------
in full force and effect and, since January 1, 1993, neither the Company nor
any of its subsidiaries has received any written notice of any event, inquiry,
investigation or proceeding threatening the validity of any such License.  To
the Company's knowledge, neither the Company nor any of its subsidiaries has
infringed, or is now infringing, on any License or other right belonging to
any other Person.
12
          2.15  Broker's or Finder's Fee.
                ------------------------ 
          Except for William Blair & Company, L.L.C. (whose fees and expenses
will be paid by the Company in accordance with the Company's agreement with
such firm, a true and correct copy of which has been previously delivered to
Parent by the Company), no agent, broker, Person or firm acting on behalf of
the Company is, or will be, entitled to any broker's, finder's or other
similar fee from any of the parties hereto, or from any Person controlling,
controlled by, or under common control with any of the parties hereto, in
connection with this Agreement or any of the transactions contemplated hereby,
based upon arrangements made by the Company.

          2.16  Environmental Laws and Regulations.
                ----------------------------------
Except as set forth on Schedule 2.16 previously delivered to Parent:
                       -------------
          (a)  Neither the Company nor any of its subsidiaries has generated,
used, treated or stored any Hazardous Materials (as hereinafter defined) on
any Company Property (as hereinafter defined) and to the Company's knowledge,
no Hazardous Materials have been generated, used, treated or stored on or
released or disposed on any Company Property except in each case where the
failure to be in compliance with Environmental Laws (as hereinafter defined)
could not reasonably be expected to have a Material Adverse Effect.

          (b)  The Company and its subsidiaries are in compliance with
Environmental Laws and the requirements of permits issued under such
Environmental Laws with respect to any Company Property except where the
failure to be in such compliance could not reasonably be expected to have a
Material Adverse Effect.

          (c)  There are no pending or, to the Company's knowledge, threatened
Environmental Claims (as hereinafter defined) against the Company or its
subsidiaries or any Company Property.

          (d)  For purposes of this Section 2.16, the following definitions
shall apply:

          "Company Property" means any real property and improvements owned,
leased, used, operated or occupied by the Company and its subsidiaries.

          "Hazardous Materials" means (a) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is friable, urea formaldehyde
foam insulation, transformers or other equipment that contain dielectric fluid
containing levels of polychlorinated biphenyls, and radon gas; and (b) any
chemicals, materials or substances defined as or included in the definition of
"hazardous substances," "hazardous wastes," "hazardous materials," "extremely
hazardous wastes," "restricted hazardous wastes," "toxic substances," "toxic
pollutants," or words of similar import, under any applicable Environmental
Law.

          "Environmental Law" means any federal, state or local statute, law,
rule, regulation, ordinance, code, policy or rule of common law (and in each
case as may have been amended) in effect as of the date of this Agreement, and
any judicial or administrative interpretation thereof as of the date as of
this Agreement, including any judicial or administrative order, consent decree
or judgment, relating to the environment, health, safety or Hazardous
Materials, including the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, 42 U.S.C. par. 6901 et seq.; the Resource
                                               -- ---
Conservation and Recovery Act, 42 U.S.C. par. 9601 et seq.; the Federal Water
                                                   -- ---
Pollution Control Act, 33 U.S.C. par. 1251 et seq.; the Toxic Substances
                                           -- ---
Control Act, 15 U.S.C. par. 2601 et seq.; the Clean Air Act, 42 U.S.C.
                                 -- ---  
par. 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. par. 300f
          -- ---                     
et seq.; the Oil Pollution Act of 1990, 33 U.S.C. par. 2701 et seq.;
- - -- ---                                                      -- ---
13
and their state and local counterparts and equivalents.

          "Environmental Claims" means administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of
non-compliance or violation, investigations or proceedings relating in any way
to any Environmental Law or any permit issued under any such Law (hereafter
"Claims"), including (a) Claims by governmental or regulatory authorities for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, and (b) Claims by any third
party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from Hazardous Materials or
arising from alleged injury or threat of injury to health, safety or the
environment.

          2.17  Real Property; Leases.
                ---------------------   
          Except as set forth on Schedule 2.17 previously delivered to Parent,
                                 -------------
neither the Company nor any of its subsidiaries owns any real property. 
Schedule 2.17 also contains a list of all leases of real property to which the
- - -------------
Company or any subsidiary is a party requiring an annual aggregate payment of
at least $25,000.  Except as otherwise set on Schedule 2.17, each such lease 
                                              -------------
set forth on Schedule 2.17 is in full force and effect; all rents and 
             -------------
additional rents due to date from the Company and its subsidiaries on each
such lease have been paid; neither the Company nor any of its subsidiaries has
received notice that it is in material default under any such lease; and 
except as set forth on Schedule 2.17, there exists, with respect to the 
                       -------------
Company and its subsidiaries, and to the Company's knowledge with respect to
any party other than the Company or its subsidiaries, no event, occurrence,
condition or act (including the consummation of the Merger) which, with the
giving of notice, the lapse of time or the happening of any further event or
condition, would become a default by the Company or any of its subsidiaries
under such lease, except for such defaults which could not reasonably be
expected to result in a Material Adverse Effect.

          2.18  Material Contracts.
                ------------------
          Except as set forth on Schedule 2.17 and Schedule 2.18 previously 
                                 -------------     -------------
delivered to Parent, neither the Company nor any of its subsidiaries has or is
bound by:

          (a)  any agreement, contract or commitment that involves the
performance of services by it of an amount or value (as measured by the
revenue derived therefrom during 1995) in excess of $2,000,000 annually,
unless terminable by the Company on not more than 90 days notice, 

          (b)  any material agreement, contract or commitment not in the
ordinary course of business,

          (c)  any agreement, indenture or other instrument which contains
restrictions with respect to payment of dividends or any other distribution in
respect of its capital stock,

          (d)  any agreement, contract or commitment to be performed relating
to capital expenditures in excess of $500,000,

          (e)  any agreement, indenture or instrument relating to
indebtedness for borrowed money or the deferred purchase price of property
(excluding trade payables in the ordinary course of business, intercompany
indebtedness and leases for telephones, copy machines, facsimile machines and
other office equipment),

          (f)  any loan or advance to (other than advances to employees in
the ordinary course of business in amounts of $25,000 or less to any 
14
individual and $100,000 in the aggregate or advances against future
collections entered into in the ordinary course of business not in excess of
$500,000 to any one client or $2,000,000 in the aggregate), or investment in
(other than investments in subsidiaries), any Person, or any agreement,
contract or commitment relating to the making of any such loan, advance or
investment or any agreement, contract or commitment involving a sharing of
profits (except for bonus arrangements with employees entered into in the
ordinary course of business consistent with past practice),

          (g)  any guarantee or other contingent liability in respect of any
indebtedness or obligation of any Person (other than in the ordinary course of
business and other than with respect to any indebtedness or obligation of the
Company or any subsidiary),

          (h)  any management service, consulting or any other similar type
of contract (other than contingent fee agreements with collection attorneys),
involving payments of more than $60,000 annually, unless terminable by the
Company on not more than 90 days notice, 

          (i)  any agreement, contract or commitment limiting the ability of
the Company or any of its subsidiaries to engage in any line of business or to
compete with any Person,

          (j)  any warranty, guaranty or other similar undertaking with
respect to a contractual performance extended by the Company or any of its
subsidiaries other than in the ordinary course of business, or

          (k)  any material amendment, modification or supplement in respect
of any of the foregoing.

          Except as otherwise set forth on Schedule 2.18, each contract or 
                                           ------------- 
agreement set forth on Schedule 2.18 is in full force and effect and there 
                       -------------
exists no default or event of default or event, occurrence, condition or act
(including the consummation of the Merger) on the part of the Company or any
subsidiary or, to the knowledge of the Company, on the part of any other
Person which, with the giving of notice, the lapse of time or the happening of
any other event or condition, would become a default or event of default
thereunder, except for such default or event of default which could not
reasonably be likely to result in a Material Adverse Effect.

          2.19  Employment Relations.
                --------------------
          Except as set forth on Schedule 2.19 previously delivered to Parent 
                                 -------------
and except for any violations or breaches which, singly or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect:

          (a)  The Company and each of its subsidiaries is in compliance with
all Federal, state or other applicable laws, domestic or foreign, respecting
employment and employment practices, terms and conditions of employment and
wages and hours, and has not, and is not, engaged in any unfair labor
practice;

          (b)  no unfair labor practice complaint against the Company or any
of its subsidiaries is pending before the National Labor Relations Board;

          (c)     there is no labor strike, dispute, slowdown or stoppage
actually pending or threatened against or involving the Company or any of its
subsidiaries;

          (d)     neither the Company nor any of its subsidiaries is a party
to any collective bargaining agreement and no collective bargaining agreement
is currently being negotiated by the Company or any of its subsidiaries; and

15
          (e)     no claim in respect of the employment of any employee has
been asserted or, to the knowledge of the Company, threatened, against the
Company or any of its subsidiaries.

          2.20  Customers Relations.
                -------------------
          None of the top twenty customers of the Company (based on the
Company's 1995 consolidated revenues) has notified the Company or any of its
subsidiaries that it intends to either (i) terminate or modify in a manner
adverse to the Company or any of its subsidiaries its contractual arrangements
with the Company or any of its subsidiaries or (ii) substantially curtail the
amount of business it currently does with the Company or any of its
subsidiaries.

          2.21  Voting Requirements.
                ------------------- 
          The affirmative vote of the holders of a majority of all the shares
of Common Stock entitled to be cast approving this Agreement is the only vote
of the holders of any class or series of the Company's capital stock necessary
to approve this Agreement and the transactions contemplated by this Agreement.

Sections 180.1130-1133 of the WBCL are inapplicable to the transactions
contemplated by this Agreement.  This representation is made in reliance upon,
and assumes the accuracy of, the Parent's and Purchaser's representation made
in Section 3.05 of this Agreement.

          2.22  Opinion of Financial Advisor.
                ----------------------------
          The Company has received the opinion of William Blair & Company,
L.L.C., to the effect that, as of the date of this Agreement, the considera-
tion to be received in the Merger by the Company's stockholders is fair to the
Company's stockholders from a financial point of view, and a complete and
correct signed and correct signed copy of such opinion has been, or promptly
upon receipt thereof will be, delivered to Parent.

          2.23  State Anti-Takeover Statutes.
                ----------------------------
          The Company has taken all necessary action to render Sections
180.1140-1145 and Section 180.1150 of the WBCL inapplicable to the
transactions contemplated by this Agreement.


                            ARTICLE III

              REPRESENTATIONS OF PARENT AND PURCHASER

          3.  Representations and Warranties of Parent and Purchaser.
              ------------------------------------------------------         
          Each of Parent and Purchaser represents and warrants to the Company
as follows:

          3.01  Due Organization; Good Standing and Corporate Power.
                ---------------------------------------------------
          Each of Parent and Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.

          3.02  Authorization and Validity of Agreement.
                ---------------------------------------
          Each of Parent and Purchaser has full corporate power and authority
to execute and deliver this Agreement, to perform its obligations hereunder
and to consummate the transactions contemplated hereby.  The execution,
delivery and performance of this Agreement by Parent and Purchaser, and the
consummation by each of them of the transactions contemplated hereby, have
been duly authorized by the Boards of Directors of Parent and Purchaser and,
to the extent legally required, by their respective stockholders.  No other
corporate action on the part of either of Parent or Purchaser is necessary to
authorize the execution, delivery and performance of this Agreement by each of
Parent and Purchaser and the consummation of the transactions contemplated 

16
hereby.  This Agreement has been duly executed and delivered by each of Parent
and Purchaser and is a valid and binding obligation of each of Parent and
Purchaser, enforceable against each of Parent and Purchaser in accordance with
its terms, except that such enforcement may be limited by applicable bank-
ruptcy, insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally, and general equitable principles.

          3.03  Consents and Approvals; No Violations.
                -------------------------------------
          Assuming (i) the filings required under the HSR Act are made and the
waiting period thereunder has been terminated or has expired, (ii) filings
required to be made with the Commission in connection or in compliance with
the Exchange Act and the rules and regulations of the Commission are made,
(iii) the filing of the Articles of Merger as required by the WBCL, the filing
of the Certificate of Merger as required by the DGCL and the filing of other
appropriate merger documents, if any, is made and (iv) the valid
authorization, execution and delivery of this Agreement by the Company, the
execution and delivery of this Agreement by Parent and Purchaser and the
consummation by Parent and Purchaser of the transactions contemplated hereby
will not:  (1) violate any provision of the Certificate of Incorporation or
By-Laws of Parent or Purchaser; (2) violate any statute, ordinance, rule,
regulation, order or decree of any court or of any governmental or regulatory
body, agency or authority applicable to Parent or Purchaser or by which either
of their respective properties or assets may be bound; (3) require any filing
with, or permit, consent or approval of, or the giving of any notice to any
governmental or regulatory body, agency or authority; or (4) result in a
violation or breach of, conflict with, constitute (with or without due notice
or lapse of time or both) a default (or give rise to any right of termination,
cancellation or acceleration) under, or result in the creation of any lien,
security interest, charge or encumbrance upon any of the properties or assets
of Parent or Purchaser under, any of the terms, conditions or provisions of
any note, bond, mortgage, indenture, license, franchise, permit, agreement,
lease or other instrument or obligation to which Parent or Purchaser is a
party, or by which they or their respective properties or assets may be bound,
except for in the case of clauses (3) and (4) above, such filing, permit,
consent, approval or violation which would not reasonably be expected to
prevent or materially delay the consummation of the transactions contemplated
by this Agreement.

          3.04  Broker's or Finder's Fee.
                ------------------------

          No agent, broker, Person or firm acting on behalf of Parent or
Purchaser is, or will be, entitled to any fee, commission or broker's or
finder's fees from the Company or any stockholder of the Company in connection
with this Agreement or any of the transactions contemplated hereby.

          3.05  Ownership of Company's Common Stock.
                -----------------------------------
          Neither Parent nor Purchaser is a "significant shareholder", as
defined in Section 180.1130 of the WBCL, of the Company and neither Parent nor
Purchaser is an affiliate, as defined in Section 180.0103 of the WBCL, of a
significant shareholder of the Company.

17
                            ARTICLE IV

                TRANSACTIONS PRIOR TO CLOSING DATE

          4.01  Access to Information Concerning Properties and Records.
                -------------------------------------------------------
          During the period commencing on the date hereof and ending on the
Closing Date, the Company shall, and shall cause each of its subsidiaries to,
upon reasonable notice, afford Parent and Purchaser, and their respective
counsel, accountants, consultants and other authorized representatives, full
access during normal business hours to the employees, properties, books and
records of the Company and its subsidiaries in order that they may have the
opportunity to make such investigations as they shall desire of the affairs of
the Company and its subsidiaries; provided that such investigations shall be
conducted so as to minimize disturbances to the operation of the Company's
business. The Company shall furnish reasonably promptly to Parent and
Purchaser (a) a copy of each report, schedule, registration statement and
other document filed by it or its subsidiaries during such period pursuant to
the requirements of Federal or state securities laws and (b) all other
information concerning its or its subsidiaries' business, properties and
personnel as Parent and Purchaser may reasonably request.  The Company agrees
to cause its officers and employees to furnish such additional financial and
operating data and other information and respond to such inquiries as Parent
or Purchaser shall from time to time reasonably request.

          4.02  Confidentiality.
                ---------------
          Information obtained by Parent and Purchaser pursuant to Section
4.01 hereof shall be subject to the provisions of the Confidentiality
Agreement between the Company and Account Portfolios, Inc. dated November 9,
1995 (the "Confidentiality Agreement"), to which Parent made itself subject
pursuant to a letter agreement dated May 3, 1996.

          4.03  Conduct of the Business of the Company.
                --------------------------------------
          During the period from the date of this Agreement to the Closing
Date, the Company shall, and shall cause each of its subsidiaries to, conduct
its operations only according to its ordinary and usual course of business;
use its reasonable efforts to (i) preserve intact its business organizations,
(ii) keep available the services of its officers and employees and (iii)
maintain satisfactory relationships with licensors, suppliers, distributors,
customers, landlords, employees, agents and others having business
relationships with it.  Notwithstanding the immediately preceding sentence,
prior to the Closing Date, except as may be first approved in writing by
Parent or as is otherwise permitted or required by this Agreement, the Company
shall, and shall cause each of its subsidiaries to:

          (a)  maintain its Articles of Incorporation, by-laws and other
organizational documents, as applicable, in its form on the date of this
Agreement, 

          (b)  other than in the ordinary course of business consistent with
past practice, refrain from paying or increasing any bonuses, salaries, or
other compensation to any director, officer, employee or stockholder or
entering into any employment, severance, or similar agreement with any
director, officer, or employee, 

          (c)  refrain from the adopting or, other than in the ordinary
course of business consistent with past practice, increasing of any profit
sharing, bonus, deferred compensation, savings, insurance, pension,
retirement, or other employee benefit plan for or with any of its employees
except as required by law, 


          (d)  refrain from entering into any material contract or commitment
except material contracts and commitments in the ordinary course of business, 

          (e)  refrain from increasing its indebtedness for borrowed money
except current borrowings in the ordinary course, 
18
          (f)  refrain from cancelling or waiving any claim or right of
substantial value which individually or in the aggregate is material, 

          (g)  refrain from declaring or paying any dividends in respect of
its capital stock or redeeming, purchasing or otherwise acquiring any of its
capital stock, 

          (h)  refrain from making any material change in accounting methods
or practices, except as required by law or generally accepted accounting
principles, 

          (i)  refrain from issuing or selling any shares of capital stock or
any other securities except pursuant to outstanding options, or issuing any
securities convertible into, or options, warrants or rights to purchase or
subscribe to, or entering into any arrangement or contract with respect to the
issue and sale of, any shares of its capital stock or any other securities, or
making any other changes in its capital structure, 

          (j)  refrain from selling, leasing or otherwise disposing of any
material asset or property other than sales in the ordinary course of business
consistent with past practice, 

          (k)  refrain from making any capital expenditure or commitment
therefor, except in the ordinary course of business, 

          (l)  refrain from writing off as uncollectible any notes or
accounts receivable, except write-offs in the ordinary course of business
consistent with past practice, 

          (m)  refrain from purchasing or otherwise acquiring portfolios of
loans, notes, accounts receivable, mortgages or other indebtedness, for a
purchase price in excess of $500,000 for any such portfolio, and 

          (n)  refrain from agreeing in writing to do any of the foregoing.

          4.04  Proxy Statement.
                ---------------
          As promptly as practicable, the Company will prepare and file a
preliminary Proxy Statement with the Commission and will use its reasonable
best efforts to respond to the comments of the Commission in connection
therewith and to furnish all information required to prepare the definitive
Proxy Statement (including, without limitation, financial statements and
supporting schedules and certificates and reports of independent public
accountants). The Company will cause the definitive Proxy Statement to be
mailed to the stockholders of the Company and, if necessary, after the
definitive Proxy Statement shall have been so mailed, promptly circulate
amended, supplemental or supplemented proxy material and, if required in
connection therewith, resolicit proxies.  The Company will not use any proxy
material in connection with the meeting of its stockholders without Parent's
prior approval, which shall not be unreasonably withheld.

          4.05  Stockholder Approval.
                --------------------
          The Company, acting through its Board of Directors, shall, in
accordance with applicable law, call a special meeting of the holders of Com-
mon Stock for the purpose of voting upon this Agreement and the Merger and the
Company agrees that this Agreement and the Merger shall be submitted at such
special meeting.  The Company shall use its reasonable efforts to solicit from
its stockholders proxies, and shall take all other action necessary and
advisable, to secure the vote of stockholders required by applicable law to
obtain the approval for this Agreement.  Subject to Section 4.07 of this
Agreement, the Company agrees that it will include in the Proxy Statement the

19
recommendation of its Board of Directors that holders of Common Stock approve
and adopt this Agreement and approve the Merger.  

          4.06  Reasonable Best Efforts.
                -----------------------  
          Each of the Company, Parent and Purchaser shall, and the Company
shall cause each of its subsidiaries to, cooperate and use their respective
reasonable best efforts to take, or cause to be taken, all appropriate action,
and to make, or cause to be made, all filings necessary, proper or advisable
under applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement, including, without limitation,
their respective reasonable best efforts to obtain, prior to the Closing Date,
all licenses, permits, consents, approvals, authorizations, qualifications and
orders of governmental authorities and parties to contracts with the Company
and its subsidiaries as are necessary for consummation of the transactions
contemplated by this Agreement and to fulfill the conditions to the Merger.

          4.07  No Solicitation of Other Offers.
                -------------------------------
          (a)  Neither the Company nor any of its subsidiaries shall, directly
or indirectly, take (and the Company shall not authorize or permit its or its
subsidiaries' officers, directors, employees, representatives, consultants,
investment bankers, attorneys, accountants or other agents or affiliates, to
so take) any action to (i) encourage, solicit or initiate the submission of
any Acquisition Proposal (as hereinafter defined), (ii) enter into any
agreement with respect to any Acquisition Proposal or (iii) participate in any
way in discussions or negotiations with, or, furnish any information to, any
Person (other than the Company, Parent or Purchaser) in connection with, or
take any other action to facilitate any inquiries or the making of any
proposal (including without limitation by taking any action that would make
Section 180.1141 of the WBCL inapplicable to an Acquisition Proposal) that
constitutes, or may reasonably be expected to lead to, any Acquisition
Proposal, provided, however, that the Company may participate in discussions 
          --------  -------
or negotiations with or furnish information to any third party which proposes
a transaction which the Board of Directors of the Company reasonably believes
will result in a Superior Proposal if the Board of Directors determines, in
its good faith judgment (and has been advised by independent legal counsel),
that failing to take such action would constitute a breach of its fiduciary
obligations under applicable law.  In addition, neither the Board of Directors
of the Company nor the Special Committee shall withdraw or modify, or propose
to withdraw or modify, in a manner adverse to Parent the approval and
recommendation of the Merger and this Agreement or approve or recommend, or
propose to approve or recommend, any Acquisition Proposal; provided that the
Board of Directors of the Company and the Special Committee may recommend to
its shareholders an Acquisition Proposal and in connection therewith withdraw
or modify its approval or recommendation of this Agreement and the Merger if
(i) the Board of Directors of the Company and the Special Committee have
determined that such Acquisition Proposal is a Superior Proposal, (ii) all the
conditions to the Company's right to terminate this Agreement in accordance
with Section 7.01(d) have been satisfied (including the payment of the amounts
required by Section 8.01) and (iii) this Agreement is terminated in accordance
with Section 7.01(d).  Any actions permitted under, and taken in compliance
with, this Section 4.07 shall not be deemed a breach of any covenant or
agreement of such party contained in this Agreement.

          "Acquisition Proposal" shall mean any proposed merger or other
business combination, sale or other disposition of any material amount of
assets, sale of shares of capital stock, tender offer or exchange offer or
similar transactions involving the Company or any of its subsidiaries. 
"Superior Proposal" shall mean a bona fide proposal made by a third party to
acquire not less than 80% of the outstanding shares of the Company pursuant to
a tender offer, a merger or a sale of all or substantially all of the assets
of the Company on terms which a majority of the members of the Board of
Directors of the Company determines in its good faith judgment to be more
favorable to the Company's stockholders than the transactions contemplated
hereby.

20
          (b)  In addition to the obligations of the Company set forth in
paragraph (a), on the date of receipt thereof the Company shall advise Parent
of any request for information or of any Acquisition Proposal, or any proposal
with respect to any Acquisition Proposal, the material terms and conditions of
such request or takeover proposal, and the identity of the person making any
such takeover proposal or inquiry.  The Company will keep Parent fully
informed in all material respects of the status and details (including
amendments or proposed amendments) of any such request, takeover proposal or
inquiry and keep Parent fully informed in all material respects as to the
details of any information requested of or provided by the Company and as to
the details of all discussions or negotiations with respect to any such
request, takeover proposal or inquiry.

          (c)  Immediately following the Closing, the Company will request
each person which has heretofore executed a confidentiality agreement in
connection with its consideration of acquiring the Company or any portion
thereof to return all confidential information heretofore furnished to such
person by or on behalf of the Company.

          4.08  Notification of Certain Matters.
                -------------------------------
          The Company shall give prompt notice to Parent of:  (i) the
occurrence, or non-occurrence, of any event known to the Company, the
occurrence, or non-occurrence, of which would reasonably be expected to cause
any representation or warranty of the Company contained in this Agreement to
be untrue or inaccurate in any material respect, (ii) any failure of the
Company to comply with or satisfy any covenants, condition or agreement to be
complied with or satisfied by it hereunder, (iii) any notice of, or other
communication relating to, a material default or event that, with notice or
lapse of time or both, would become a material default, received by the
Company or any of its subsidiaries subsequent to the date of this Agreement
and prior to the Effective Time, under any material contract to which the
Company or any of its subsidiaries is a party or is subject, and (iv) the
occurrence of any event known to the Company which has resulted in or could
reasonably be expected to result in a Material Adverse Effect.  Each of the
Company and Parent shall give prompt notice to the other party of any notice
or other communication from any third party alleging that the consent of such
third party is or may be required in connection with the transactions
contemplated by this Agreement.

          4.09  HSR Act.
                -------
          The Company and Parent shall, as soon as practicable, file
Notification and Report Forms under the HSR Act with the Federal Trade
Commission (the "FTC") and the Antitrust Division of the Department of Justice
(the "Antitrust Division") and shall use their reasonable best efforts to
respond as promptly as practicable to all inquiries received from the FTC or
the Antitrust Division for additional information or documentation.

          4.10  Directors' and Officers' Insurance; Indemnification.
               ----------------------------------------------------  
           a)     The Articles of Incorporation and the by-laws of the
Surviving Corporation (or Purchaser if this Agreement shall be amended to
provide that Purchaser is the Surviving Corporation) shall contain the
provisions with respect to indemnification and exculpation from liability set
forth in the Company's Articles of Incorporation and by-laws on the date of
this Agreement, which provisions shall not be amended, repealed or otherwise
modified for a period of six years from the Effective Time in any manner that
would adversely affect the rights thereunder of individuals who on or prior to
the Effective Time were directors, officers, employees or agents of the
Company, unless such modification is required by law.

          (b)     For three years from the Effective Time, the Surviving
Corporation shall either (x) maintain in effect the Company's current 
21
directors' and officers' liability insurance policy covering those persons who
are currently covered on the date of this Agreement by such policy (a copy of
which has been heretofore delivered to Parent) (the "Indemnified Parties"); 
                                                     --------------------
provided, however, that in no event shall the Surviving Corporation be 
- - -------   -------
required to expend in any one year an amount in excess of 150% of the annual
premiums currently paid by the Company for such insurance which the Company
represents to be $44,500 for the twelve month period ended November 25, 1996
(the "Current Premium"); and provided further, that if the annual premiums of 
                             ----------------
such insurance coverage exceed 150% of the Current Premium, the Surviving
Corporation may, at its option, terminate the existing policy and obtain a
policy with the greatest coverage available for a cost not exceeding 150% of
the Current Premium and containing terms and conditions which are no less
advantageous in any material respect to the Company's current and past
directors and officers and provided that said substitution does not result in
any gaps or lapses in coverage with respect to matters occurring prior to the
Effective Time; provided further, that the Surviving Corporation may 
                ----------------
substitute for such Company policy, a policy with at least the same coverage
containing terms and conditions which are no less advantageous in any material
respect to the Company's current and past directors and officers and provided
that said substitution does not result in any gaps or lapses in coverage with
respect to matters occurring prior to the Effective Time or (y) cause Parent's
directors' and officers' liability insurance then in effect to cover those
persons who are covered on the date of this Agreement by the Company's
directors' and officers' liability insurance policy, but only if Parent's
policy provides at least the same coverage containing terms and conditions
which are no less advantageous in any material respect to the Company's
current and past directors and officers and provided that said substitution
does not result in any gaps or lapses in coverage with respect to matters
occurring prior to the Effective Time.


                             ARTICLE V

                      CONDITIONS PRECEDENT TO
                    OBLIGATIONS OF THE COMPANY

          5.  Conditions Precedent to Obligations of the Company.
              --------------------------------------------------
          The obligations of the Company to effect the Merger are subject to
the satisfaction or waiver (subject to applicable law) at or prior to the
Effective Time of each of the following conditions:

          5.01  Truth of Representations and Warranties. 
                ---------------------------------------
          The representations and warranties of Parent and Purchaser contained
in this Agreement shall be true and correct in all material respects on and as
of the Closing Date with the same effect as though such representations and
warranties had been made on and as of such date.

          5.02  Performance of Agreements. 
                -------------------------
          All of the agreements of Parent and Purchaser to be performed prior
to the Closing pursuant to the terms of this Agreement shall have been duly
performed in all material respects.

          5.03  Approval of Company's Stockholders.
                ----------------------------------   
          This Agreement and the Merger shall have been approved and adopted
by the holders of the outstanding Common Stock in accordance with the
requirements of the WBCL.

22
          5.04  HSR Act.
                -------
          Any waiting period (and any extension thereof) under the HSR Act
applicable to the Merger shall have expired or been terminated.

          5.05  Injunction.
                ----------
          No preliminary or permanent injunction or other order shall have
been issued by any court or by any governmental or regulatory agency, body or
authority which prohibits the consummation of the Merger and the other
transactions contemplated by this Agreement and which is in effect at the
Effective Time; provided, however, that, in the case of a decree, injunction 
                --------  -------
or other order, each of the parties shall have used reasonable efforts to
prevent the entry of any such injunction or other order and to appeal as
promptly as possible any decree, injunction or other order that may be
entered.

          5.06  Statutes.
                --------
          No statute, rule, regulation, executive order, decree or order of
any kind shall have been enacted, entered, promulgated or enforced by any
court or governmental authority which prohibits the consummation of the Merger
or has the effect of making the consummation of the Merger illegal.

          5.07  Financing.  
                ---------   
          Parent shall have received financing necessary to enable it and
Purchaser to consummate the transactions contemplated by this Agreement in
accordance with the terms contained in the "highly confident" letters dated
August 12, 1996 to Parent from Goldman, Sachs & Co. and Chase Securities Inc.
and the commitment letter dated August 7, 1996 to Parent from Pearl Street
L.P., The Chase Manhattan Bank and Chase Securities Inc.

          5.08  Third Party Consents; Governmental Approvals.  
                --------------------------------------------   
          All consents, approvals or waivers, if any, required in connection
with the consummation of the transactions contemplated by this Agreement shall
have been received. All of the consents, approvals, authorizations, exemptions
and waivers from governmental agencies that shall be required in order to
enable Company to consummate the transactions contemplated hereby shall have
been obtained.

          5.09  Certificates.
                ------------
          The Company shall have received a certificate of Parent executed on
its behalf by an executive officer of Parent to the effect that the conditions
set forth in Sections 5.01, 5.02 and 5.07 hereof have been satisfied.


                            ARTICLE VI

                      CONDITIONS PRECEDENT TO
                OBLIGATIONS OF PARENT AND PURCHASER

          6.  Conditions Precedent to Obligations of Parent and Purchaser.  
              -----------------------------------------------------------
The obligations of Parent and Purchaser to effect the Merger are subject to
the satisfaction or waiver (subject to applicable law) at or prior to the
Effective Time of each of the following conditions:

          6.01  Truth of Representations and Warranties.
                ---------------------------------------
          The representations and warranties of the Company contained in this
Agreement shall be true and correct on and as of the Closing Date with the
same effect as though such representations and warranties had been made on and
as of such date, except where the failure of such representations and
warranties to be true and correct shall not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.
23
          6.02  Performance of Agreements.  
                -------------------------   
          All of the agreements of the Company to be performed prior to the
Closing pursuant to the terms of this Agreement shall have been duly performed
in all material respects.

          6.03  No Material Adverse Effect. 
                --------------------------
          Prior to the Closing there shall have been no Material Adverse
Effect.

          6.04  Approval of Company's Stockholders.
                ---------------------------------- 

          This Agreement and the Merger shall have been approved and adopted
by the holders of the outstanding Common Stock in accordance with the
requirements of the WBCL.

          6.05  HSR Act.  
                -------
          Any waiting period (and any extension thereof) under the HSR Act
applicable to the Merger shall have expired or been terminated.

          6.06  Injunction.
                ----------
          No preliminary or permanent injunction or other order shall have
been issued by any court or by any governmental or regulatory agency, body or
authority which prohibits the consummation of the Merger and the other
transactions contemplated by this Agreement and which is in effect at the
Effective Time; provided, however, that, in the case of a decree, injunction 
                --------  -------  
or other order, each of the parties shall have used reasonable efforts to
prevent the entry of any such injunction or other order and to appeal as
promptly as possible any decree, injunction or other order that may be
entered.

          6.07  Statutes.
                --------
          No statute, rule, regulation, executive order, decree or order of
any kind shall have been enacted, entered, promulgated or enforced by any
court or governmental authority which prohibits the consummation of the Merger
or has the effect of making the consummation of the Merger illegal.

          6.08  Financing.
                --------- 
          Parent shall have received financing necessary to enable it and
Purchaser to consummate the transactions contemplated by this Agreement in
accordance with the terms contained in the "highly confident" letters dated
August 12, 1996 to Parent from Goldman, Sachs & Co. and Chase Securities Inc.
and the commitment letter dated August 7, 1996 to Parent from Pearl Street
L.P., The Chase Manhattan Bank and Chase Securities Inc.

          6.09  Third Party Consents; Governmental Approvals.
                --------------------------------------------
          All consents, approvals or waivers, if any, required in connection
with the consummation of the transactions contemplated by this Agreement shall
have been received.  All of the consents, approvals, authorizations,
exemptions and waivers from governmental agencies that shall be required in
order to enable Parent and Purchaser to consummate the transactions
contemplated hereby shall have been obtained.

          6.10  Certificates. 
                ------------
          Parent and Purchaser shall have received a certificate of the
Company executed on its behalf by an executive officer of the Company to the
effect that the conditions set forth in Sections 6.01 and 6.02 hereof have
been satisfied.
24
          6.11  Amendment of Stock Plans and Consents to Cancellation of 
                --------------------------------------------------------
                Options.
                -------
          The Board of Directors of the Company shall have amended the Stock
Plans in accordance with Section 1.06 hereof, and the Company shall, as
provided in such Section, have obtained all necessary consents to ensure that,
upon the Effective Time, the holders of Options shall surrender the same in
cancellation and settlement thereof for  a cash consideration equal to the
Cash Payment, less the exercise price of such related Options.  After the
Effective Time, the Surviving Corporation shall have no obligation to issue,
transfer or sell any shares of common stock of the Surviving Corporation
pursuant to any Employee Benefit Plan.


                            ARTICLE VII

                    TERMINATION AND ABANDONMENT

          7.01  Termination.
                -----------
          This Agreement may be terminated and the transactions contemplated
hereby may be abandoned, at any time prior to the Effective Time, whether
before or after approval of the Merger by the Company's stockholders:

          (a)  by mutual written consent of the Company and Parent;

          (b)  by either Parent, on the one hand, or the Company, on the other
hand, if any governmental or regulatory agency shall have issued an order,
decree or ruling or taken any other action permanently enjoining, restraining
or otherwise prohibiting the consummation of the Merger and such order, decree
or ruling or other action shall have become final and nonappealable;

          (c) by either Parent, on the one hand, or the Company, on the other
hand, if the Merger shall not have been consummated by February 12, 1997, or
by the Company if the Merger shall not have been consummated within 60 days
after approval of this Agreement and the Merger by the Company's stockholders,
unless the Merger shall not have been consummated because of an intentional or
willful material breach of any representation or warranty on the part of the
Company set forth in this Agreement or because of a material breach of any
covenant or agreement on the part of the Company set forth in this Agreement
which the Company has failed to cure within ten days after written notice
thereof by Parent to the Company;

          (d)  by either Parent, on the one hand, or the Company, on the other
hand, if the Board of Directors of the Company and if required the Special
Committee, determines in its good faith judgment that an Acquisition Proposal
will result in a Superior Proposal and the Board determines in its good faith
judgment (and has been advised by independent legal counsel) that a failure to
terminate this Agreement and enter into an agreement to effect the Superior
Proposal would constitute a breach of its fiduciary obligations under
applicable law; provided, however the Company may not terminate this Agreement
pursuant to this Section 7.01(d) unless (i) the Company has given reasonably
prompt written notice to Parent of the receipt of such Acquisition Proposal
and following such notification by the Company of Parent of receipt of such
Acquisition Proposal the Company keeps Parent reasonably informed of the terms
and conditions of such Acquisition Proposal (and any modification thereto),
and the identity of the Person making such Proposal, (ii) prior to or
simultaneously with such termination the Company has paid the $4,800,000
amount set forth in Section 8.01 by wire transfer in same day funds to the
account identified in Schedule 7.01(d) previously delivered to the Company and
                      ----------------  
(iii) prior to or simultaneously with such termination the Company enters into
a definitive acquisition, merger or similar agreement to effect the Superior
Proposal;


25
          (e)     by Parent if (i) there shall have been a breach of any
representation or warranty on the part of the Company contained in this
Agreement which would reasonably be expected to have a Material Adverse
Effect, (ii) there shall have been a material breach of any covenant or
agreement on the part of the Company contained in this Agreement and the
Company has failed to cure such breach within ten days after written notice
thereof from Parent, or (iii) the Board of Directors of the Company or the
Special Committee shall have withdrawn or modified in a manner adverse to
Parent its approval or recommendation of this Agreement or the Merger and
shall not have reinstated such approval or recommendation within three
business days thereof or the Company shall have entered into a definitive
acquisition, merger or similar agreement to effect a Superior Proposal; or

          (f)     by the Company if (i) any of the representations and
warranties of Parent or Purchaser contained in this Agreement were untrue or
incorrect in any material respect when made or have since become, and at the
time of termination remain, incorrect in any material respect, or (ii) Parent
or Purchaser shall have breached or failed to comply in any material respect
with any of their respective obligations under this Agreement.

          7.02  Effect of Termination.
                ---------------------
          In the event of the termination of this Agreement pursuant to
Section 7.01 hereof by Parent, on the one hand, or the Company, on the other
hand, written notice thereof shall forthwith be given to the other party or
parties specifying the provision hereof pursuant to which such termination is
made, and this Agreement shall become void and have no effect, and there shall
be no liability hereunder on the part of Parent, Purchaser or the Company,
except that Sections 4.02, 8.01 and this Section 7.02 hereof shall survive any
termination of this Agreement. 


                           ARTICLE VIII

                           MISCELLANEOUS

          8.01  Fees and Expenses.
                -----------------
          (a)  Except as provided in paragraphs (b) or (c) below, all costs
and expenses incurred in connection with this Agreement and the consummation
of the transactions contemplated hereby shall be paid by the party incurring
such costs and expenses.

          (b) (i) If this Agreement is terminated (A) by the Company pursuant
to Section 7.01(c) under circumstances where the conditions to the Company's
obligations set forth in Sections 5.01, 5.02 and 5.04 through 5.08, inclusive,
have been satisfied and prior to such termination, the Company shall have
notified its stockholders that a third party has made a Superior Proposal or a
third party shall have publicly announced a proposal which may represent a
Superior Proposal, or (B) by Parent pursuant to Section 7.01(e)(i) or (ii) as
a result of an intentional or willful breach, and within twelve months after
such termination, the Company enters into an agreement with respect to any
merger or any other business combination, sale or other disposition of any
material amount of assets, sale of shares of capital stock, tender offer or
exchange offer or similar transaction involving the Company or any of its
subsidiaries (a "Third Party Acquisition"), or a Third Party Acquisition
occurs, involving any party (or any affiliate or associate thereof) (x) with
whom the Company (or its agents) during the term of this Agreement had any
discussions with respect to a Third Party Acquisition, (y) to whom the Company
(or its agents) during the term of this Agreement furnished information with
respect to or with a view toward a Third Party Acquisition, or (z) who during
the term of this Agreement had submitted a proposal or expressed any interest
publicly or to the Company in a Third Party Acquisition, which Third Party
Acquisition contemplates a direct or indirect consideration for shares of
Common Stock in excess of the Merger Consideration, in the case of each of
clauses (x), (y) and (z) prior to such termination or (ii) if this Agreement
is terminated (A) by the Company in accordance with Section 7.01(d), or (B) by

26
Parent pursuant to Section 7.01(e)(iii), then the Company shall pay to Parent
in same day funds, within two business days following such termination (except
as required to be earlier paid in accordance with Section 7.01(d)) an amount
(reduced by any amount or reimbursement paid pursuant to Section 8.01(c))
equal to $4,800,000 plus, within two business days of being furnished with
appropriate documentation, reimbursement for the out-of-pocket fees and
expenses reasonably incurred by Parent in connection with the Merger and the
transactions contemplated thereby (not to exceed $1,500,000 in the aggregate).

          (c)     If Parent terminates this Agreement pursuant to Section
7.01(e)(i) or (ii) as a result of an intentional or willful breach, then the
Company shall pay to Parent in same day funds, within two business days
following such termination $1,000,000, plus, within two business days of being
furnished with appropriate documentation, reimbursement for the out-of-pocket
fees and expenses reasonably incurred by Parent in connection with the Merger
and the transactions contemplated thereby (not to exceed $1,500,000 in the
aggregate).

          8.02  Representations and Warranties.
                ------------------------------
          The respective representations and warranties of the Company, on the
one hand, and Parent and Purchaser, on the other hand, contained herein or in
any certificates or other documents delivered prior to or at the Closing shall
not be deemed waived or otherwise affected by any investigation made by any
party. Each and every such representation and warranty shall expire with, and
be terminated and extinguished as of the Effective Time and thereafter none of
the Company, Parent or Purchaser or their respective officers, directors,
employees and agents shall be under any liability whatsoever with respect to
any such representation or warranty.

          8.03  Extension; Waiver.
                -----------------
          At any time prior to the Effective Time, the parties hereto, by
action taken by or on behalf of the Board of Directors of the Company and the
Special Committee and the Board of Directors of Parent or Purchaser, may (i)
extend the time for the performance of any of the obligations or other acts of
the other parties hereto, (ii) waive any inaccuracies in the representations
and warranties contained herein by any other applicable party or in any
document, certificate or writing delivered pursuant hereto by any other
applicable party or (iii) waive compliance with any of the agreements or
conditions contained herein.  Any agreement on the part of any party to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party.

          8.04  Public Announcements.
                --------------------
          The Company, on the one hand, and Parent and Purchaser, on the other
hand, agree to consult promptly with each other prior to issuing any press
release or otherwise making any public statement with respect to the trans-
actions contemplated hereby, and shall not issue any such press release or
make any such public statement prior to such consultation and review by the
other party of a copy of such release or statement, unless such party has been
advised by counsel that such release or statement is required by applicable
law.

          8.05  Notices.
                -------
          All notices, requests, demands, waivers and other communications
required or permitted to be given under this Agreement shall be in writing and
shall be deemed to have been duly given if delivered in person or mailed,
certified or registered mail with postage prepaid, or sent by telex, telegram
or telecopier, as follows:

27
     (a)  if to the Company, to it at:

          Payco American Corporation
          180 North Executive Drive
          Brookfield, Wisconsin  53005
               
          Attention:  Dennis G. Punches

          with a copy to:

          Hecht & Lentz
          333 Bridge, N.W., Suite 330
          Grand Rapids, Michigan  49504

          Attention:  David M. Hecht, Esq.

     (b)  if to Parent, to it at:

          OSI Holdings Corp.
          300 Galleria Parkway, Suite 690
          Atlanta, Georgia  30339

          Attention:  David B. Kreiss

          with a copy to:

          McCown De Leeuw & Co.
          101 East 52nd Street
          31st Floor
          New York, New York  10022

          Attention:  David E. King

          with a further copy to:

          White & Case
          1155 Avenue of the Americas
          New York, New York  10036

          Attention:  Frank L. Schiff, Esq.

     (c)  if to Purchaser, to it at:

          c/o OSI Holdings Corp.
          300 Galleria Parkway, Suite 690
          Atlanta, Georgia  30339

          Attention:  David B. Kreiss

          with a copy to:

          McCown De Leeuw & Co.
          101 East 52nd Street
          31st Floor
          New York, New York  10022

          Attention:  David E. King

          with a further copy to:

          White & Case
          1155 Avenue of the Americas
          New York, New York  10036

          Attention:  Frank L. Schiff, Esq.

28
or to such other Person or address as any party shall specify by notice in
writing to each of the other parties. All notices, requests, demands, waivers
and communications shall be deemed received as follows; (i) if sent by prepaid
registered or certified mail, return receipt requested, on the earlier of the
date shown on the receipt or three (3) days after being deposited with the
U.S. Postal Service; (ii) if placed for delivery with a recognized overnight
courier service, on the regularly scheduled date for delivery established by
such courier service; (iii) if delivered by hand, when delivered. 

          8.06  Entire Agreement.
                ----------------
          This Agreement, the schedules previously delivered to Parent and the
Company, the Confidentiality Agreement and other documents referred to herein
or delivered pursuant hereto, collectively contain the entire understanding of
the parties hereto with respect to the subject matter contained herein and
supersede all prior agreements and understandings, oral and written, with
respect thereto.

          8.07  Binding Effect; Benefit; Assignment.
                -----------------------------------
          This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns, but
neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any of the parties hereto without the prior
written consent of the other parties.  Nothing in this Agreement, expressed or
implied, is intended to confer on any Person other than the parties hereto or
their respective successors and permitted assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement.

          8.08  Amendment and Modification.  
                --------------------------
          Subject to applicable law, this Agreement may be amended, modified
and supplemented in writing by the parties hereto in any and all respects
before the Effective Time (notwithstanding any stockholder approval), by
action taken by the Board of Directors of the Company and the Special
Committee and the Board of Directors of Parent and Purchaser or by the
respective officers authorized by them; provided, however, that after any such
                                        --------  -------
stockholder approval, no amendment shall be made which by law requires further
approval by such stockholders without such further approval.

          8.09  Further Actions.
                ---------------  
          Each of the parties hereto agrees that, subject to the provisions of
this Agreement and to its legal obligations, it will use its reasonable best
efforts to fulfill all conditions precedent specified herein, to the extent
that such conditions are within its control, and to do all things reasonably
necessary to consummate the transactions contemplated hereby.

          8.10  Headings.
                --------
          The descriptive headings of the several Articles and Sections of
this Agreement are inserted for convenience only, do not constitute a part of
this Agreement and shall not affect in any way the meaning or interpretation
of this Agreement.

          8.11  Counterparts.
                ------------
          This Agreement may be executed in several counterparts, each of
which shall be deemed to be an original, and all of which together shall be
deemed to be one and the same instrument.

          8.12  Applicable Law.
                --------------
          This Agreement and the legal relations between the parties hereto
shall be governed by and construed in accordance with the laws of the State of
Wisconsin, without regard to the conflict of laws rules thereof.

29
          8.13  Severability.
                ------------
          If any term, provision, covenant or restriction contained in this
Agreement is held by a court of competent jurisdiction or other authority to
be invalid, void, unenforceable or against its regulatory policy, the
remainder of the terms, provisions, covenants and restrictions contained in
this Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.

          8.14  Certain Definitions .
                --------------------
          "Person" shall mean and include an individual, a partnership, a
joint venture, a corporation, a trust, an unincorporated organization, a group
and a government or other department or agency thereof. "Knowledge of the
Company", "known to the Company" or words of similar import mean the actual
knowledge of any executive officer or director of the Company. "Notice to the
Company", "notice received by the Company" or words of similar import shall
mean written notice received by any executive officer or director of the
Company.


          IN WITNESS WHEREOF, each of Parent, Purchaser and the Company have
caused this Agreement to be executed by their respective officers thereunto
duly authorized, all as of the date first above written.


                              OSI HOLDINGS CORP.


                              By: DAVID E. KING              
                                 --------------------------
                                Name:  David E. King
                              Title: Secretary and
                                     Treasurer
   

                              BOXER ACQUISITION CORP.


                              By: DAVID E. KING             
                                  --------------------------  
                                 Name: David E. King
                                 Title: President


                              PAYCO AMERICAN CORPORATION


                              By:  DENNIS G. PUNCHES             
                                ---------------------------   
                                Name: Dennis G. Punches
                                Title: Chairman 




                                                  ANNEX B
                                                  -------
                             AGREEMENT

     THIS AGREEMENT, dated as of August 12, 1996, is made by and between
____________ (the "Shareholder") and Boxer Acquisition Corp., a Delaware
corporation (the "Purchaser").

     WHEREAS, contemporaneously herewith, the Purchaser, OSI Holdings Corp.,
the Purchaser's parent corporation ("Parent"), and Payco American Corporation,
a Wisconsin corporation (the "Company"), have executed and delivered an
Agreement and Plan of Merger, dated as of the date hereof (as may be amended
or supplemented from time to time, the "Merger Agreement"); and

     WHEREAS, capitalized terms not otherwise defined herein shall have the
respective meanings set forth in the Merger Agreement; and

     WHEREAS, the Shareholder owns, of record and beneficially, [___] shares
of common stock of the Company (the "Shares", which term shall include for the
purposes of this Agreement all other shares of common stock of the Company
acquired or otherwise received by the Shareholder on or after the date of this
Agreement); and

     WHEREAS, in order to induce the Purchaser to execute the Merger
Agreement, the Shareholder has agreed to vote in favor of the Merger as herein
provided.

     NOW, THEREFORE, the parties hereto agree as follows:

     1.     Voting of Shares.
            ----------------
     Unless (i) the Board of Directors of the Company or the Special Committee
of the Board of Directors of the Company has withdrawn or modified in a manner
adverse to Parent its approval or recommendation of this Agreement or the
Merger and (ii) as a result thereof the Merger Agreement has been terminated,
the Stockholder hereby agrees to vote the Shares in favor of the Merger.

     2.     Representations and Warranties of the Shareholder.
            -------------------------------------------------
     The Shareholder hereby represents and warrants to the Purchaser that:

     (a)     The Shareholder is the sole record and beneficial owner of the
Shares and no other person has a right to acquire or direct the disposition,
or holds a proxy or other right to vote or direct the voting, of such Shares. 
Other than this Agreement and the Merger Agreement, there is no option,
warrant, right, call, proxy, agreement, commitment or understanding of any
nature whatsoever, fixed or contingent, that directly or indirectly (i) calls
for the sale, pledge or other transfer or disposition of any of the Shares,
any interest therein or any rights with respect thereto, or related to the
voting, disposition or control of the Shares, or (ii) obligates the
Shareholder to grant, offer or enter into any of the foregoing.

     (b)     The Shareholder has the full legal power and authority to enter
into this Agreement, and this Agreement has been duly and validly executed and
delivered by the Shareholder and constitutes a valid and binding obligation of
the Shareholder, enforceable against the Shareholder in accordance with its
terms, except as such enforcement may be limited by bankruptcy, insolvency and
other similar laws affecting creditors' rights generally or by general
principles of equity.

     3.     Representations and Warranties of the Purchaser.
            -----------------------------------------------

       The Purchaser represents and warrants to the Shareholder that:

     (a)     It has the full corporate power to execute, deliver and perform
this Agreement and to consummate the transactions contemplated hereby.

     (b)     It has taken all corporate action necessary to authorize the
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby; and that this Agreement has been duly
and validly executed and delivered by the Purchaser and constitutes a valid
and binding obligation of the Purchaser, except as such enforcement may be
limited by bankruptcy, insolvency and other similar laws affecting creditors'
rights generally or by general principles of equity.

     4.     Binding Effect; Assignment.
            -------------------------- 
     This Agreement shall inure to the benefit of and be binding upon the
parties and their respective heirs, personal representatives, successors and
permitted assigns.

     5.     Specific Performance.
            --------------------
     The parties hereto agree that if for any reason the Shareholder fails to
perform any of the Shareholder's obligations under this Agreement, the
Purchaser would be irreparably damaged and money damages would not constitute
an adequate remedy.  Accordingly, the Purchaser shall be entitled to specific
performance and injunctive and other equitable relief to enforce the
performance of such obligations by the Shareholder.  This provision is without
prejudice to any other rights the Purchaser may have against the Shareholder
for failure to perform any of the Shareholder's obligations under this
Agreement.

     6.     Governing Law.
            -------------
     This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware, without regard to the law of conflicts of laws
thereof.

     7.     Counterparts.
            ------------
     This Agreement may be executed in one or more counterparts, all of which
together shall constitute a single agreement.

     IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be signed as of the date first above written.


                              _______________________________
                              


                              BOXER ACQUISITION CORP.


                              By:____________________________

                                                        ANNEX C
                                                              -------   
 
                    [William Blair & Co. letterhead]

                            August 13, 1996

Board of Directors
Payco American Corporation
180 North Executive Drive
Brookfield, WI 53005

Gentlemen:

You have requested our opinion as to the fairness, from a financial point of
view, to the Shareholders of Payco American Corporation ( the "Company") of
the consideration to be received pursuant to the terms of the Agreement and
Plan of Merger dated as of August 13, 1996 (the "Merger Agreement") by and
among, OSI Holdings Corp, Boxer Acquisition Corporation, and the Company. The
terms of the Merger Agreement contemplate an aggregate consideration of
approximately $145 million or $14.00 per share to the Shareholders of the
Company ( the "Consideration").

In connection with our review of the proposed transaction (the "Transaction")
and the preparation of our opinion herein, we have examined: (a) a draft of
the Merger Agreement; (b) audited financial statements of the Company for each
of the five fiscal years ended December 31, 1995; (c) the unaudited financial
statements of the Company for the quarters ended March 31, 1996, and June 30,
1996; (d) certain internal financial information and forecasts for the
Company, prepared by management of the Company; (e) certain other publicly
available information on the Company. We have also held discussions with
members of the senior management of the Company to discuss the foregoing, and
have considered other matters which we have deemed relevant to our inquiry.

Although we have no reason to believe that any of the financial or other
information on which we have relied is not accurate or complete, we have
assumed the accuracy and completeness of all such information and have not
attempted to verify independently any of such information, nor have we made or
obtained an independent appraisal of the assets of the Company. With respect
to financial forecasts, we have assumed that such forecasts have been
reasonably prepared on bases reflecting the best currently available estimates
and judgments of the Company's management, as the case may be, as to the
respective future financial performance of the Company. Our opinion herein is
based upon circumstances existing and disclosed to us and can be evaluated as
of August 13, 1996.

  [italics] 222 West Adams Street Chicago, Illinois 60606
                  (312) 236-1600[italics]


In rendering our opinion, we have assumed that the Transaction will be
consummated on the terms described in the Agreement, without any waiver of any
material terms or conditions by the Company.

In conducting our investigation and analyses and in arriving at our opinion
expressed herein, we have taken into account such accepted financial and
investment banking procedures and considerations as we have deemed relevant,
including (a) historical revenues, operating earnings, operating cash flows,
net income and capitalization, as to the Company and certain publicly held
companies; (b) the current financial position and results of operations of the
Company; (c) the historical market prices and trading volume of the Common
Stock of the Company; (d) financial information concerning selected actual and
proposed business combinations which we believe to be relevant; and (e) the
general condition of the securities markets. We were not requested to, nor did
we, seek alternative participants for the proposed Transaction.

William Blair & Company has been engaged in the investment banking business
since 1935. We undertake the valuation of investment securities in connection
with public offerings, private placements, business combinations, estate and
gift tax valuations and similar transactions. For our services, including the
rendering of this opinion, the Company will pay us a fee and indemnify us
against certain liabilities.

Based upon and subject to the foregoing, it is our opinion as investment
bankers that, as of date hereof, the Consideration is fair, from a financial
point of view, to the Shareholders of the Company.

                                   Very truly yours,

                                 /s/ WILLIAM BLAIR & CO.
                                    ---------------------
                                    William Blair & Co.


                                                 ANNEX D
                                                       -------
                           CONSULTING AGREEMENT


          This Agreement is made as of the 12th day of August, 1996 between
Payco American Corporation, a Wisconsin corporation, with offices at 180 North
Executive Drive, Brookfield, Wisconsin 53005-6066 (the "Company"), and Dennis
G. Punches, an individual residing in the State of Florida (the
"Consultant").

                          R E C I T A L S
                          ---------------  
          WHEREAS, the Consultant is a founder and long-time employee of the
Company and is presently serving as Chairman of the Board of Directors of the
Company;

          WHEREAS, during the term of his employment with the Company, the
Consultant has actively established and maintained relationships with the
Company's key customers and strategic partners; 

          WHEREAS, the Consultant possesses an intimate knowledge of the
business and affairs of the Company and its policies, procedures, methods and
personnel;

          WHEREAS, OSI Holdings Corp., Boxer Acquisition Corp. and the Company
have executed and delivered an Agreement and Plan of Merger, dated as of the
date hereof (the "Merger Agreement");

          WHEREAS, the Company desires to secure the continued services of the
Consultant on behalf of the Company after consummation of the transactions
contemplated by the Merger Agreement, and the Consultant desires to continue
providing such services to 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.     Engagement, Duties.
                 ------------------    
     The Company hereby engages the Consultant to provide such advisory and
consulting services to the Company as shall be mutually agreed between the
Consultant and the Company from time to time, and the Consultant accepts such
engagement for the term specified in Section 2 below (the "Term").  

          2.     Effectiveness; Term.
                 -------------------
     The Term shall begin at the Effective Time (as defined in the Merger
Agreement) and continue until the third anniversary date of the Effective
Time, unless earlier terminated by either party with thirty days notice to the
other.

          3.     Fee.
                 ---
     During the Term, the Company shall pay to the Consultant $150,000 on the
third anniversary date of the Effective Time.


          4.     Expenses.
                 --------
     The Consultant 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 Company policy and upon receipt of appropriate
documentation.

          5.     Independent Contractor.
                 ----------------------
     It is the express intention of the parties that Consultant is an
independent contractor and not an employee, agent, joint venturer or partner
of the Company.  Nothing in this contract shall be interpreted or construed as
creating or establishing a relationship of employer and employee between the
Company and Consultant or any employee or agent of Consultant.

          6.     Secret Processes and Confidential Information.
                 ---------------------------------------------
     For the Term and thereafter, (a) the Consultant 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 Consultant will not use, directly or
indirectly, any confidential information for the benefit of anyone other than
the Company; provided, however, that the Consultant 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 Consultant.  All new processes,
techniques, know-how, inventions, plans, products, patents and devices
developed, made or invented by the Consultant, alone or with others, while a
consultant of the Company, shall be and become the sole property of the
Company, unless released in writing by the Company, and the Consultant hereby
assigns any and all rights therein or thereto to the Company.

          During the term of this Agreement and thereafter, the Consultant
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 the Consultant 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 the Company and not retained by the Consultant upon
termination of this Agreement for any reason whatsoever.


          7.     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 Consultant:

                    c/o Payco American Corporation
                    180 North Executive Drive
                    Brookfield, Wisconsin  53005-6066

          If to the Company:

                    Payco American Corporation
                    180 North Executive Drive
                    Brookfield, Wisconsin  53005-6066

          With a copy to:

                    McCown De Leeuw & Co.
                    101 East 52nd Street
                    31st Floor
                    New York, New York  10022
                    Attention:  David E. King

The Company shall give the Consultant written notice of any default under this
Agreement and afford the Consultant fifteen days to cure such default.

          8.     General.
                 -------
          (a)     Governing Law; Jurisdiction.
                  ---------------------------
     The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of New York 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 New York or in the United States
District Court for the Southern District of New York, 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 Consultant 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 Consultant initiates an
action or claim to enforce any provision or term of this Agreement, the costs
and expenses (including attorney's fees) 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 principle
claims.

          (d)     Binding Effect.
                  --------------
     This Agreement is for the engagement of the Consultant, 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 engagement hereunder, this Agreement shall
continue for so long as any obligations remain under this Agreement.

          (g)     Survival.
                  --------
     The covenants set forth in Section 6 of this Agreement shall survive and
shall continue to be binding upon the Consultant as set forth in such Sections
notwithstanding the termination of this Agreement for any reason whatsoever. 
The covenants set forth in Section 6 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 the Consultant
against Company, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by Company of any or all covenants.

          (h)     Remedies.
                  -------- 
     The parties recognize that the performance of the obligations under
Section 6 of this Agreement by the Consultant is special, unique and
extraordinary in character, and that in the event of the breach by the
Consultant of the terms and conditions of Section 6 of this Agreement, the
Company or any of its Affiliates shall be entitled to (a) institute and
prosecute proceedings in any court of competent jurisdiction to enforce the
specific performance hereof by the Consultant or to enjoin the Consultant from
engaging in any activities prohibited hereunder or (b) pursue any other remedy
available at law or in equity.

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

                                     PAYCO AMERICAN CORPORATION
                              
                                    By:  /S/ WILLIAM W. KAGEL
                                             ___________________
                                     Name:   William W. Kagel
                                     Title:  Senior Vice-President

                                     CONSULTANT

                                     /S/ DENNIS G. PUNCHES
                                     ------------------------
                                     Dennis G. Punches


                                                           ANNEX E
                                                           -------

                     COVENANT NOT-TO-COMPETE AGREEMENT
                     ---------------------------------

          THIS COVENANT NOT-TO-COMPETE AGREEMENT, dated August 12, 1996, is
made between Payco American Corporation, a Wisconsin corporation, with offices
at 180 North Executive Drive, Brookfield, Wisconsin 53005-6066 (the
"Company"), and Dennis G. Punches, an individual residing in the State of
Florida ("Punches").

                               R E C I T A L S
                               ---------------    
          WHEREAS, Punches is a founder and long-time employee of the Company
and is presently serving as Chairman of the Board of Directors of the Company;

          WHEREAS, during the term of his employment with the Company, Punches
has actively established and maintained relationships with the Company's key
customers and strategic partners; 

          WHEREAS, Punches possesses an intimate knowledge of the business and
affairs of the Company and its policies, procedures, methods and personnel;

          WHEREAS OSI Holdings Corp., Boxer Acquisition Corp. and the Company
have entered into an Agreement and Plan of Merger, dated as of the date hereof
(the "Merger Agreement"), pursuant to which Boxer Acquisition Corp. will be
merged with and into the Company;

          WHEREAS, Punches is willing to enter into the Consulting Agreement
dated as of the date hereof pursuant to which the Company will secure the
continued services of Punches on behalf of the Company;

          WHEREAS, in order to provide reasonable assurances and to induce the
Company to enter into the Consulting Agreement with Punches, the Company and
Punches have agreed to enter into this Agreement for the consideration called
for hereby.

          NOW, THEREFORE, the parties hereto hereby agrees as follows:

          1.     Covenant Not-to-Compete.  (a) Punches covenants and agrees 
                 -----------------------
that he will not:

          (i)     for a period of three (3) years from the Effective Time (as
defined in the Merger Agreement), within North America (including Canada,
Mexico and Puerto Rico) and any other 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 as of the date of this Agreement, 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 currently conducted by the Company or any of its Affiliates; provided,
however, that Punches shall be permitted to serve as a member of the
Supervisory Board of Intrum Justitia.  For these purposes, ownership of
securities of 5% 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;
or

          (ii) other than Robert Duersten and Beverly Wortman, employ, solicit
for employment or otherwise contract for the services of any employee of the
Company or any of its Affiliates at the time of this Agreement or who shall
subsequently become an employee of the Company or any of its Affiliates.

          (b) For the purposes of this Section 1, 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.

          2.     Effectiveness; Consideration for Covenant.
                 -----------------------------------------
  This Agreement shall be effective at the Effective Time.  In consideration
for Punches' entering into the foregoing covenant, the Company will pay to
Punches $3,000,000 at the Effective Time.

          3.     Severability.
                 ------------
     It is the desire and intent of the parties to this Agreement that the
provisions of Section 1 shall be enforced to the fullest extent permissible
under the laws and public policies applied in each jurisdiction in which
enforcement is sought.  If any particular provision or portion of Section 1
shall be adjudicated to be invalid or unenforceable, Section 1 shall be deemed
amended to delete therefrom such provision or portion adjudicated to be
invalid or unenforceable, such amendment to apply only with respect to the
operation of Section 1 in the particular jurisdiction in which such
adjudication is made.

          4.     General.
                 -------
          (a)     Governing Law; Jurisdiction.
                  ---------------------------
     The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of New York 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 New York or in the United States
District Court for the Southern District of New York, 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.
                  -------------
     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 Punches initiates an action or
claim to enforce any provision or term of this Agreement, the costs and
expenses (including attorney's fees) 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 principle
claims.

          (d)     Binding Effect.
                  -------------- 
      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.
                  --------
     This Agreement shall continue for so long as any obligations remain under
this Agreement.

          (g)     Survival.
                  --------
     The covenants set forth in Section 1 of this Agreement shall survive and
shall continue to be binding upon Punches as set forth in such Section.  The
existence of any claim or cause of action by Punches against the Company,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Company of any or all covenants.

          (h)     Remedies.
                  --------
     The parties recognize that the performance of the obligations under
Section 1 of this Agreement by Punches is special, unique and extraordinary in
character, and that in the event of the breach by Punches of the terms and
conditions of Section 1 of this Agreement, the Company or any of its
Affiliates shall be entitled to (a) institute and prosecute proceedings in any
court of competent jurisdiction to enforce the specific performance hereof by
Punches or to enjoin Punches from engaging in any activities prohibited
hereunder or (b) pursue any other remedy available at law or in equity.

          (i)     Notices.
                  -------
     The Company shall give Punches written notice of any default under this
Agreement and afford Punches 15 days to cure such default.

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

                              PAYCO AMERICAN CORPORATION
                              
                              
                              By: /s/ WILLIAM W. KAGEL
                                 ---------------------
                                 Name: William W. Kagel
                                 Title: Senior Vice-President
                                
                                 /s/DENNIS G. PUNCHES
                                 ------------------------
                                    Dennis G. Punches
 
<PAG>

                                                     ANNEX F
                                                     -------
                        EMPLOYMENT AGREEMENT


          This Agreement is made as of the 13th day of August, 1996
between Payco American Corporation, a Wisconsin corporation, with
offices at 180 North Executive Drive, Brookfield, Wisconsin 53005-6066
(the "Company"), and __________, an individual residing in the
State of Wisconsin (the "Employee").

                          R E C I T A L S
                          ---------------

          WHEREAS, the Employee has been and is presently in the
employ of the Company and is presently serving as _________ and
_______________________ of the Company;

          WHEREAS, the Employee possesses an intimate knowledge of
the business and affairs of the Company and its policies,
procedures, methods and personnel;

          WHEREAS, OSI Holdings Corp., Boxer Acquisition Corp. and
the Company have executed and delivered an Agreement and Plan of
Merger, dated as of the date hereof (the "Merger Agreement");

          WHEREAS, the Company desires to secure the continued
services and employment of the Employee on behalf of the Company,
and the Employee desires to continue in the employment of 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 _________ and _____
_________________ of the Company, and the Employee accepts such
employment for the term of the employment specified in Section 3
below.  During the Employment Term, the Employee shall serve as
_________ and _______________________ of the Company, performing
such duties as shall be reasonably required of an executive-level
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 Company.

          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.     Effectiveness; Employment Term.
                 ------------------------------
     This Agreement shall become effective at the Effective Time (as
defined in the Merger Agreement) and continue until the first
anniversary date of the Effective Time, unless earlier terminated
pursuant to Section 7 below (the "Employment Term").

          4.     Compensation.
                 ------------
          (a)     Salary.
                  ------
     During the Employment Term, the Company shall pay the Employee
a base salary, payable in equal monthly installments, subject to
withholding and other applicable taxes, at an annual rate of ___
____________________________________ ($_______). In addition,
the Employee will be entitled to receive such Employee's bonus 
compensation, or portion thereof, for the Company's 1996 year in
accordance with the past practices of the Company, (ii) if applicable,
the Employee shall be entitled to receive such Employer's ratable
percentage of bonus compensation, if any, for the Company's 1997 year.

         (b)     Medical and Dental Health Benefits.
                  ----------------------------------
     During the Employment Term, Employee shall be entitled to
medical and dental heath benefits in accordance with the Company's
established policies for key employees.

          (c)     Vacation; Sick Leave.
                  --------------------
  During the Employment Term, Employee shall be entitled to vacation
and sick leave in accordance with the Company's established policies
for 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 Company 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 shall automatically
terminate at the end of the Employment Term, as provided in Section
3.  The employment of the Employee hereunder may also 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 if the subject of a criminal
proceeding could reasonably result in a conviction for a felony
involving moral turpitude, fraud or misrepresentation, (iv) gross
breach of his fiduciary obligations to the Company or any
subsidiary, (v) a breach of his covenant not to compete, or (vi) any
chemical dependence which materially affects the performance of his
duties and responsibilities to the Company or any subsidiary.


          8.     Severance.  
                 ---------

               (a)     Termination Without "Cause".
                       --------------------------
     If the Employee's employment is terminated by the Company
without "cause", the Employee shall be entitled to receive his salary,
and any unpaid bonus as provided in Section 4(a), for the period from
the date of termination until the first anniversary of the Effective
Time (the "Severance Period"), provided that if at any time during the
                                -------- ----
Severance Period the  Employee shall obtain other employment, the
Company's obligation to pay severance under this Section 8(a) shall
automatically be reduced from the date of commencement of such other
employment until the termination of the Severance Period to an
amount equal to the ratable difference between the Employee's salary
and any unpaid bonus under Section 4(a) and the base salary earned by
Employee in such other employment.  The Employee shall not be an employee
of the Company during the Severance Period, and except for such severance
payment or as otherwise required by law, shall not be entitled to
any compensation or benefits under Section 4(a), 4(c) or 4(d) with
respect to the Severance Period or bonus under Section 4(b) with
respect to either the Severance Period.

               (b)     Termination "For Cause".
                       ----------------------
     If the Employee's employment is terminated by the Company "for
cause", the Employee shall not be entitled to severance
compensation.

          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:

                    c/o Payco American Corporation
                    180 North Executive Drive
                    Brookfield, Wisconsin  53005-6066

          If to the Company:

                    Payco American Corporation
                    180 North Executive Drive
                    Brookfield, Wisconsin  53005-6066

          With a copy to:

                    McCown De Leeuw & Co.
                    101 East 52nd Street
                    31st Floor
                    New York, New York  10022
                    Attention:  David E. King

          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 New
York 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 New York or in the United States District Court for
the Southern District of New York, 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, the costs and expenses (including attorney's fees) 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 principle claims.

          (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 Section 6 of this Agreement shall
survive and shall continue to be binding upon Employee as set forth
in such Sections notwithstanding the termination of this Agreement
for any reason whatsoever.  The covenants set forth in Section 6 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.

          (h)     Remedies.
                  --------
     The parties recognize that the performance of the obligations
under Section 6 of this Agreement by the Employee is special, unique
and extraordinary in character, and that in the event of the breach
by the Employee of the terms and conditions of Section 6 of this
Agreement, the Company or any of its Affiliates shall be entitled to
(a) institute and prosecute proceedings in any court of competent
jurisdiction to enforce the specific performance hereof by the
Employee or to enjoin the Employee from engaging in any activities
prohibited hereunder or (b) pursue any other remedy available at law
or in equity.

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

                              PAYCO AMERICAN CORPORATION
                              

                                 ------------------------
                              By:
                                 Name:
                                 Title:
                              
                              
                              EMPLOYEE
                              
                              
                                 ------------------------
                                                     

 
                                                           ANNEX G
                                                           -------

                 COVENANT NOT-TO-COMPETE AGREEMENT
                 ---------------------------------

          THIS COVENANT NOT-TO-COMPETE AGREEMENT, dated August 12, 1996, is
made between Payco American Corporation, a Wisconsin corporation, with offices
at 180 North Executive Drive, Brookfield, Wisconsin, 53005-6066, (the
"Company"), and __________, an individual residing in the State of Wisconsin 
(the "Employee").

                          R E C I T A L S
                          ---------------

          WHEREAS OSI Holdings Corp., Boxer Acquisition Corp. and the Company
have entered into an Agreement and Plan of Merger, dated as of the date hereof
(the "Merger Agreement"), pursuant to which Boxer Acquisition Corp. will be
merged with and into the Company;

          WHEREAS, the Employee has been and is presently in the employ of the
Company;

          WHEREAS, the Employee possesses an intimate knowledge of the
business and affairs of the Company and its policies, procedures, methods and
personnel;

          WHEREAS, the Employee is willing to enter into the Employment
Agreement dated as of the date hereof whereby the Company has secured the
continued services and employment of the Employee on behalf of the Company;

          WHEREAS, in order to provide reasonable assurances and to induce the
Company to enter into the Employment Agreement with Employee, the Company and
Employee have agreed to enter into this Agreement for consideration called for
hereby;

          NOW, THEREFORE, the parties hereto hereby agrees as follows:

          1.     Covenant Not-to-Compete.  (a)  The Employee covenants and 
                 -----------------------
agrees that he will not:

          (i)     for a period of one (1) year from the Effective Time (as
defined in the Merger Agreement), 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 currently
conducted by the Company or any of its Affiliates.  For these purposes,
ownership of securities of 5% 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; or

          (ii) employ, solicit for employment or otherwise contract for the
services of any employee of the Company or any of its Affiliates at the time
of this Agreement, or who shall subsequently become an employee of the Company
or any of its Affiliates.

          (b) For the purposes of this Section 1, 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.

          2.     Effectiveness; Consideration for Covenant.
                 -----------------------------------------
     This Agreement shall become effective at the Effective Time.  In
consideration for Employee's entering into the foregoing covenant, the Company
will pay to the Employee $ _________ at the Effective Time.

          3.     Severability.
                 ------------
     It is the desire and intent of the parties to this Agreement that the
provisions of Section 1 shall be enforced to the fullest extent permissible
under the laws and public policies applied in each jurisdiction in which
enforcement is sought.  If any particular provision or portion of Section 1
shall be adjudicated to be invalid or unenforceable, Section 1 shall be deemed
amended to delete therefrom such provision or portion adjudicated to be
invalid or unenforceable, such amendment to apply only with respect to the
operation of Section 1 in the particular jurisdiction in which such
adjudication is made.


          4.     General.
                 -------

          (a)     Governing Law; Jurisdiction.
                  ---------------------------     
     The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of New York 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 New York or in the United States
District Court for the Southern District of New York, 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.
                  -------------
     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, the costs and
expenses (including attorney's fees) 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 principle
claims.

          (d)     Binding Effect. 
                  --------------    
    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.
                  --------  
     This Agreement shall continue for so long as any obligations remain under
this Agreement.

          (g)     Survival.
                  --------
     The covenants set forth in Section 1 of this Agreement shall survive and
shall continue to be binding upon Employee as set forth in such Section.  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.

          (h)     Remedies.
                  --------
     The parties recognize that the performance of the obligations under
Section 1 of this Agreement by the Employee is special, unique and
extraordinary in character, and that in the event of the breach by the
Employee of the terms and conditions of Section 1 of this Agreement, the
Company or any of its Affiliates shall be entitled to (a) institute and
prosecute proceedings in any court of competent jurisdiction to enforce the
specific performance hereof by the Employee or to enjoin the Employee from
engaging in any activities prohibited hereunder or (b) pursue any other remedy
available at law or in equity.

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

                              PAYCO AMERICAN CORPORATION
                              
                              
                              
                              By:
                                ---------------------
                                 Name:
                                 Title:
                              
                              
                              EMPLOYEE
                              
                              
                              
                               -----------------------                        


                                                             ANNEX H
                                                             -------
                  [Goldman Sachs & Co letterhead]






August 12, 1996


OSI Holdings Corp.
101 East 52nd Street
31st Floor
New York, New York 10022

Attention:       Mr. David King
                 Director

Ladies and Gentlemen:

You have advised us that OSI Holdings Corp. (the "Company") has an interest in
acquiring all of the outstanding capital stock of Payco American Corporation
("Target") in a negotiated merger transaction (the " Transaction").  We
understand that the total funding needs in connection with the Transaction and
the refinancing of the outstanding debt of the Company will be approximately
$255 million.  We further understand that the arrangements required to finance
the proposed purchase and repayment of debt and to pay related fees and
expenses are expected to consist of: (i) an initial borrowing by the Company
of approximately $150 million under a senior bank facility of $200 million
(the "Bank Facility"); (ii) the private placement or public offering of
approximately $100 million of senior subordinated notes of the Company, which
will be guaranteed by the Company's subsidiaries on a senior subordinated
basis (the "Senior Subordinated Notes"); and (iii) approximately $5 million of
cash on hand.  Following the Transaction, the Company will not have any debt
except as described in this paragraph.

Pursuant to an engagement letter dated June 10, 1996, you have engaged
Goldman, Sachs & Co. ("Goldman Sachs") to act as financial advisor to the
Company in connection with the possible acquisition of Target.  By accepting
this letter, you agree that the provisions relating to our indemnity in such
engagement letter and the other matters as set forth in Annex A thereto shall
apply in connection with this letter.

Based on the information that you have provided to us to date and our analysis
of the current market for securities issued for acquisition financing, we are
pleased to inform you that we are highly confident of our ability to sell or
place the Senior Subordinated Notes to finance a portion of the financing of
the Transaction as described above, subject to the matters set forth in the
following paragraph.

Our ability to consummate the sale or placement of the Senior Subordinated
Notes is subject to: (i) the terms and conditions of the Senior Subordinated
Notes and all other debt and equity financing for the Transaction (including
any debt to be assumed) and all existing debt of the Company, if any, and all
related documentation being reasonably satisfactory in form and substance to
Goldman Sachs; (ii) the execution and delivery of documentation with respect
to the Transaction and all related transactions in form and substance
reasonably satisfactory to Goldman Sachs; (iii) the absence of any material
adverse change in the business, condition (financial or otherwise), results of
operations, assets, liabilities or prospects of the Company or Target, as
determined by Goldman Sachs in its sole discretion; (iv) the receipt of all
necessary governmental, regulatory and third party approvals and consents in
connection with the Transaction; (v) the execution and delivery of

documentation with respect to the Senior Subordinated Notes and the offering
and sale thereof (including, but not limited to, the underwriting agreement,
purchase agreement or placement agreement) that is in form and substance
reasonably satisfactory to Goldman Sachs; (vi) our continuing due diligence
investigation not disclosing any facts that would materially alter our current
view with respect to any aspect of the Company or Target; (vii) the receipt of
audited, unaudited and pro forma financial statements for the Company that
meet the requirements for a registration statement on form S-1 and that are
consistent with the financial results outlined in the presentation made to
Goldman Sachs dated July 25, 1996; (viii) there having not occurred any
disruption or adverse change, as determined by Goldman Sachs in its sole
discretion, in the market for new issuances of high yield debt securities or
in the securities markets in general; (iv) our having reasonable time to
market the Senior Subordinated Notes with the assistance of management of the
Company and Target, based on our experience in comparable transactions sold in
comparable markets; (x) the capitalization of the Company being as described
in the first paragraph of this letter; (xi) satisfaction of all conditions
precedent set forth in the acquisition agreement and the Bank Facility; (xii)
there being at least $50 million of available borrowings under the Bank
Facility immediately after consummation of the Transaction; (xiii) the
completion of an offering circular or prospectus reasonably acceptable to
Goldman Sachs; and (xiv) the absence of any change or proposed change in
United States law that would reasonably be expected to materially adversely
affect the economic consequences that you and your subsidiaries contemplate
deriving from the Transaction.

Please note that this letter is not a commitment to purchase or place the
Senior Subordinated Notes.  Such a commitment would be subject, among other
things, to the execution and delivery by Goldman Sachs of a separate written
agreement.  This letter shall be treated by you as confidential and is being
provided to you solely in connection with the Company's proposed acquisition
of Target and may not be used, circulated, quoted or otherwise referred to in
any document, except with Goldman Sachs' prior written consent. 
Notwithstanding the foregoing, this letter may be shown to Target and its
agents provided that they agree to keep this letter confidential.

This letter shall be governed by and construed in accordance with the laws of
the State of New York, without giving effect to the principles of conflicts of
laws thereof.


We look forward to working with you toward the successful completion of the
proposed financing.

Sincerely yours,


/s/ GOLDMAN, SACHS & CO.
_________________________
Goldman, Sachs & Co.

                                                        ANNEX I
                                                        -------
                        [CHASE letterhead]


August 12, 1996


OSI Holdings Corp.
c/o McCown De Leeuw & Co.
101 East 52nd Street
31st Floor
New York, New York 10022

Attn:  Mr. David King

Ladies and Gentlemen:

You have advised Chase Securities, Inc. ("CSI") that OSI Holdings Corp. (the
"Company") has an interest in acquiring all of the outstanding capital stock
of Payco American Corporation (the "Target") in a negotiated merger
transaction (the "Transaction").  We understand that the total funding needs
in connection with the Transaction and the refinancing of the Company will be
approximately $255 million. We further understand that the arrangements
required to finance the proposed purchase and repayment of debt and to pay
related fees and expense are expected to consist of: (i) an initial borrowing
by the Company of approximately $150 million under a senior credit facility of
$200 million (the "Credit Facility"); (ii) the private placement or public
offering of approximately $100 million of senior subordinated notes of the
Company, which will be guaranteed by the Company's subsidiaries on a senior
subordinated basis (the "Senior Subordinated Notes"); and (iii) approximately
$5 million of cash on hand.  Following the Transaction, the Company will not
have any debt except as described in this paragraph.

Based on this information that you have provided us to date and our
analysis of the current market for securities issued by entities engaged in
similar industries, we are pleased to inform you that we are highly confident
of our ability to sell or place the Senior Subordinated Notes to finance a
portion of the financing of the Transaction as described above, subject to the
matters set forth in the following paragraph.

Our view expressed above is based on the preliminary outline of the
Transaction as currently structured, including our understanding of the
business, tax status, results, operations, condition and prospects of the
Company after giving effect to the Transaction and is based on current general
economic and industry conditions.  Our view is also subject to: (i) the terms
and conditions of the Senior Subordinated Notes and all other debt and equity
financing for the Transaction (including any debt to be assumed) and all
existing debt of the Company, if any, and all related documentation being
reasonably satisfactory in form and substance to CSI; (ii) the execution and
delivery of documentation with respect to the Transaction and all related
transactions in form and substance reasonably satisfactory to CSI; (iii) the
absence of any material adverse changes in the business, condition (financial
or otherwise), results of operation, assets, liabilities or prospects of the
Company or Target, as determined by CSI in its sole discretion; (iv) the
receipt of all necessary governmental, regulatory and third party approvals
and consents in connection with the Transaction; (v) the execution and
delivery of documentation with respect to the Senior Subordinated Notes and
the offering and sale thereof (including, but not limited to, the underwriting
agreement, purchase agreement or placement agreement) that is in form and
substance reasonably satisfactory to CSI; (vi) our continuing due diligence
investigation not disclosing any facts that would materially alter our current
view with respect to the Company or Target; (vi) the receipt of audited
financial statements of the Company covering the three years ended December
31, 1995 that meet the requirements of Regulation S-X and that are consistent
with the financial results outlined in the presentation made at Goldman Sachs
dated July 25, 1996; (viii) there having not occurred any disruption or
adverse change, as determined by CSI in its sole discretion, in the market for

new issuance of high yield debt securities or in the securities market in
general; (iv) our having reasonable time to market the Senior Subordinated
Notes with the assistance of management of the Company and Target, based on
our experience in comparable transactions and in comparable markets; (x)
satisfaction of all conditions precedent set forth in the acquisition
agreement and the Credit Facility; (xi) there being at least $50 million of
available borrowings under the Credit Facility immediately after consummation
of the Transaction; (xii) the completion of an offering circular or prospectus
reasonably acceptable to CSI; and (xiii) the absence of any change or proposed
change in United States law that would reasonably be expected to materially
adversely affect the economic consequences that you and your subsidiaries
contemplate deriving from the Transaction.

This letter is not intended to be, and shall not constitute, a commitment
letter or undertaking by CSI to place or to purchase the Senior Subordinated
Notes.

This letter has been delivered to you for your information and is not to be
distributed or disclosed to, or otherwise relied upon, by any other person
without CSI's consent, except as required by law.  Notwithstanding the
foregoing, this letter may be shown to the Target and its agents provided that
they agree to keep this letter confidential.

                              Very truly yours,

                              CHASE SECURITIES INC.

                              By:  /s/ DAVID FASS
                                 -------------------
                                       David Fass





                                                    ANNEX J
                                                          -------
 
[Pearl Street, L.P.]                    [The Chase Manhattan Bank]



PERSONAL & CONFIDENTIAL
- - -----------------------
August 7, 1996



OSI Holdings Corp.
c/o McCown De Leeuw & Co.
101 East 52nd Street
New York, New York 10022

Attention:  Mr. David King

Gentlemen:

You have advised us that OSI Holdings Corp. ("OSI"), through one or more newly
created entities, intends to acquire (the "Acquisition") all of the capital
stock of Payco American Corporation ("Payco").  You have also advised us that
it is anticipated that, in order to finance the Acquisition (including
transaction costs), to refinance certain existing debt of Payco and OSI and to
provide for OSI's and its subsidiaries' general corporate purposes and
acquisition financing requirements after the Acquisition, you will require up
to $300 million of financing consisting of (i) $200 million of senior secured
credit facilities (the "Senior Facilities") and (ii) $100 million of
subordinated debt (the "Subordinated Debt").  You have further advised us that
the cash purchase price to be paid for the shares of capital stock of Payco in
connection with the Acquisition will not exceed $14.00 per share.

Each of Pearl Street L.P., an affiliate of Goldman, Sachs & Co. ("Pearl
Street"), and The Chase Manhattan Bank ("Chase") is pleased to confirm its
commitment to provide one-half of the $200 million of Senior Facilities on the
terms and subject to the conditions contained in this letter, the attached
Annex A and the attached Annex B (together, the "Commitment Letter").  In
addition, on the terms and subject to the conditions of the Commitment Letter,
Pearl Street and Chase will act as Co-Administrative Agents with respect to
the Senior Facilities and Goldman, Sachs & Co. ("Goldman Sachs") and Chase
Securities, Inc. ("Chase Securities") will act as Arranging Agents in
connection with the Senior Facilities.

The Senior Facilities will consist of a maximum of $150 million of senior
secured term loan facilities (the "Term Facilities") and a $50 million senior
secured revolving credit facility (the "Revolving Facility").  The proceeds
from the Term Facilities, together with the proceeds of the Subordinated Debt
are expected to be used to finance the Acquisition and related transaction
costs.  Amounts under the Revolving Facility are expected to be used for
certain acquisitions and to provide working capital.

Our commitments are subject, in our respective reasonable discretion, to the
following conditions: (i) there shall not have been, since the date of the
financial statements for OSI and Payco furnished to Pearl Street and Chase in
the "OSI Holdings Management Presentation dated July 25, 1996" (the
"Management Presentation"), any material adverse change in the capitalization
or long-term debt of OSI and its subsidiaries or Payco and its subsidiaries
(other than with respect to the repurchase of preferred stock of OSI) or any
material adverse change in the business, condition (financial or otherwise)
results of operations, assets, liabilities, financial performance or prospects
of OSI and its subsidiaries or Payco and its subsidiaries, or (ii) there shall
not have been any disruption or adverse change in the financial or capital
markets generally or in the market for loan syndications in particular, which
in any case under clause (i) or (ii) Pearl Street, Chase or Chase Securities,
in their respect judgment, reasonably deems material.  Our commitments are
also subject to our respective reasonable discretion, to the satisfactory

negotiation, execution and delivery of appropriate loan documents relating to
the Senior Facilities, including without limitation, a credit agreement,
guaranties, security agreements, pledge agreements, real property security
agreements, opinion of counsel and other related definitive documents
(collectively, the "Loan Documents") to be based upon and substantially
consistent with the terms set forth in this Commitment Letter.  We have
reviewed certain information with respect to the business and operations of
OSI and Payco and we are pleased to advise you that we are satisfied with the
results of our due diligence investigation of OSI and Payco to date.  However,
neither we nor our counsel have had an opportunity to complete the due
diligence efforts necessary in connection with the proposed financing and,
therefore, in addition to the foregoing, our commitments are subject, to each
of Pearl Street, Chase and Chase Securities being reasonably satisfied with
the results of its anticipated, but not yet completed, due diligence with
respect to the structure and terms of the Acquisition, and the tax,
accounting, legal, regulatory and other issues relevant to OSI, Payco and
their respective subsidiaries, and the Acquisition and the financing
contemplated hereby.

The terms of this Commitment Letter are intended as an outline of certain of
the material terms of the Senior Facilities, but do not include all of the
terms, conditions, covenants, representations, warranties, default clauses and
other provisions that will be contained in the Loan Documents.  The Loan
Documents shall include, in addition, provisions that are customary or typical
for financings of this type and other provisions that Pearl Street and/or
Chase may reasonably determine to be appropriate in the context of the
proposed transactions.

Each of Pearl Street and Chase intends and reserves the right to syndicate the
Senior Facilities to the Lenders (as defined in the attached Annex B).  Pearl
Street, Goldman Sachs, Chase and Chase Securities will coordinate all aspects
of the syndication of the Senior Facilities, including determining the
selection of potential Lenders, the timing of all offers to potential Lenders,
any designation of agent or other title awarded to a Lender, the acceptance of
commitments, the amounts offered and the compensation provided to each Lender
and the final commitment allocations (with OSI's consent not to be
unreasonably withheld).

You agree to cooperate with Pearl Street, Goldman Sachs, Chase and Chase
Securities in connection with (i) the preparation of an information package
regarding the business, operations and prospects of OSI and Payco, including,
without limitation, the delivery of all information relating to the
transactions contemplated hereunder prepared by or on behalf of OSI or Payco
deemed reasonably necessary by Pearl Street, Goldman Sachs, Chase or Chase
Securities to complete the syndication of the Senior Facilities and (ii) the
presentation of such information package in bank meetings and other
communications with prospective Lenders in connection with the syndication of
the Senior Facilities.  You shall be solely responsible for the contents of
any such information package and presentation and you acknowledge that Pearl
Street, Goldman Sachs, Chase and Chase Securities will be using and relying
upon the information contained in such information package and presentation
without independent verification thereof.  In addition, you represent and
covenant that all information provided directly or indirectly by you to Pearl
Street, Goldman Sachs, Chase, Chase Securities or the Lenders in connection
with the transactions contemplated hereunder is and will be complete and
correct in all material respects and does not and will not contain any untrue
statements of a material fact or omit to state a material fact necessary to
make the statements contained therein not misleading.

In connection with arrangements such as this, it is our policy to receive
indemnification. You agree to the provisions with respect to our indemnity and
other matters set forth in Annex A which is incorporated by reference into
this Commitment Letter.

You also agree to reimburse us for our reasonable out-of-pocket expenses,
including the reasonable fees and disbursements of our attorneys and any other

consultants or advisors that we have retained with your consent (not to be
unreasonably withheld), plus any sales, use or similar taxes (including
additions to such taxes, if any) arising in connection with any matter
referred to in this Commitment Letter (whether incurred before or after the
date hereof).

Please note this Commitment Letter and any written or oral advise provided by
Pearl Street, Goldman Sachs, Chase or Chase Securities in connection with this
arrangement is exclusively for the information of OSI and may not be disclosed
to any third party (other than Payco and its advisors after execution of this
Commitment Letter by you) or circulated or referred to publicly without our
prior written consent, except as required by law.  With respect to any
disclosures required by law, you agree to provide Pearl Street and Chase with
prior notice of your intention to make any such disclosure and an opportunity
to consult with you with respect thereto.  The foregoing agreements regarding
confidentiality shall survive the termination of this Commitment Letter.

As you know, each of Pearl Street and Chase may from time to time effect
transactions, for their own accounts or the account of customers, and hold
positions in loans or options on loans of OSI, Payco and other companies that
may be subject of this arrangement.  In addition, Goldman Sachs and Chase
Securities Inc. are full service securities firms and as such may from time to
time effect transactions, for their own accounts or the accounts of customers,
and hold positions in securities or options on securities of OSI, Payco and
other companies that may be the subject of this arrangement.  In addition,
Pearl Street and Chase may employ the services of its affiliates in providing
services hereunder and may exchange with such affiliates information
concerning OSI, Payco and other companies that may be the subject of this
arrangement, and such affiliates may be entitled to the benefits afforded to
Pearl Street and Chase hereunder.

Our commitments hereunder shall terminate on the earlier of (x) six months
from the date of this Commitment Letter and (y) the date of termination of
your agreement with Payco with respect to the Acquisition, unless the closing
of the Senior Facilities, on the terms and subject to the conditions contained
herein, shall have been consummated by such date.

The obligations of Pearl Street, Chase and Chase Securities hereunder are
several obligations and the failure of Pearl Street, Chase or Chase
Securities, as the case may be, to perform its obligations hereunder shall not
give rise to any liability on the part of any or all of the other Lenders
party to this letter with respect to such failure.  The respective rights of
Pearl Street, Goldman Sachs, Chase and Chase Securities hereunder may be
enforced independently.

Please confirm that the foregoing is in accordance with your understanding by
signing and returning to Pearl Street, Chase and Chase Securities the enclosed
copy of this Commitment Letter, on or before the close of business on August
13, 1996, whereupon this Commitment Letter shall become a binding agreement
between us. If not signed and returned as described in the preceding sentence
by such date, this offer will terminate on such date.  We look forward to
working with you on this assignment.

Very truly yours,

PEARL STREET, L.P.

By:   /s/
   --------------------------
        Authorized Signatory


THE CHASE MANHATTAN BANK

By: /S/ D.DAVEY
   ---------------------------
      Name:   D. Davey
      Title:  Vice President

CHASE SECURITIES, INC.

By: /s/
    -----------------------------
      Name:
      Title
                                   ACCEPTED AS OF THE DATE ABOVE:

                                   OSI HOLDINGS CORP.

                                   By: 
                                       ------------------------------- 
                                       Name:

                                       Title:




                              ANNEX A
                              -------

In the event that Pearl Street or Chase becomes involved in any capacity in
any action, proceeding or investigation brought by or against any person,
including, without limitation, stockholders of OSI or Payco, in connection
with or as a result of either this arrangement or any matter referred to in
this Commitment Letter or any related agreement (collectively, the "Letter"),
OSI periodically will reimburse Pearl Street and/or Chase, as the case may be,
for its reasonable legal and other expenses (including the cost of any
investigation and preparation) incurred in connection therewith.  OSI also
will indemnify and hold Pearl Street and Chase harmless against any and all
losses, claims, damages or liabilities to any such person in connection with
or as a result of either this arrangement or any matter referred to in the
Letter, except to the extent that any such loss, claim, damages or liability
results from the gross negligence or bad faith of Pearl Street or Chase, as
the case may be, in performing the services that are the subject of the
Letter.  If for any reason the foregoing indemnification is unavailable to
Pearl Street or Chase, as the case may be, or insufficient to hold it
harmless, then OSI shall contribute to the amount paid or payable by Pearl
Street or Chase, as the case may be, as a result of such loss, claim, damage
or liability in such proportion as is appropriate to reflect the relative
economic interests of OSI and its stockholders on the one hand and Pearl
Street or Chase, as the case may be, on the other hand in the matters
contemplated by the Letter as well as the relative fault of OSI and Pearl
Street or Chase, as the case may be, with respect to such loss, claim, damage
or liability and any other relative equitable considerations.  The
reimbursement, indemnity and contribution obligations of OSI under this
paragraph shall be in addition to any liability  which OSI may otherwise
have, shall extend upon the same terms and conditions to any affiliate of
Pearl Street or Chase (including without limitation Goldman Sachs and Chase
Securities, Inc.) and the partners, directors, agents, employees, and
controlling persons (if any), of Pearl Street or Chase, as the case may be,
and any such affiliate, and shall be binding upon and inure to the benefit
of any successors, assigns, heirs and personal representatives of OSI, Pearl
Street, Chase or any such affiliate and any such person.  OSI also agrees
that none of Pearl Street, Chase or any of their respective affiliates,
partners, directors, agents, employees or controlling persons shall have any
liability to OSI, any person asserting claims on behalf of or in right of OSI
or any other person in connection with or as a result of either this
arrangement or any matter referred to in the Letter except to the extent that
any losses, claims, damages, liabilities or expenses incurred by OSI result
from the gross negligence or bad faith of Pearl Street or Chase, as the case
may be, in performing the services that are the subject of the Letter.  Any
right to trial by jury with respect to any action or proceeding arising in
connection with or as a result of either this arrangement or any matter
referred to in the Letter is hereby waived by the parties hereto.  The
provisions of this Annex A shall survive any termination or completion of the
arrangement provided by the Letter, and the Letter shall be governed by and
construed in accordance with the laws of the State of New York without regard
to principles of conflicts of law.



                              ANNEX B
                              -------

       SUMMARY OF TERMS AND CONDITIONS OF THE SENIOR FACILITIES


This Summary of Terms and Conditions outlines certain terms of the Senior
Facilities referred to in the Commitment Letter, of which this Annex B is a
part.  Certain capitalized terms used herein are defined in the Commitment
Letter.

BORROWER:             OSI Holdings Corp.
- - ---------

GUARANTORS:           Each of the Borrower's subsidiaries shall guaranty     
- - -----------           (the "Guarantees") all obligations under the Senior     

                      Facilities.

CO-ADMINISTRATIVE     Pearl Street and The Chase Manhattan Bank ("Chase").
- - -----------------
AGENTS:
- - -------

ARRANGING             Goldman Sachs or any of its affiliates and Chase
- - ---------             Securities
AGENTS:
- - -------

LENDERS:              Pearl Street, Chase and/or other financial institutions
- - --------

AMOUNT OF SENIOR      Up to $200 million of senior secured bank financing (the
- - ----------------      "Senior Facilities") to include:
SENIOR FACILITIES:     
- - ------------------
                      (i)   $75 million senior term loan (the "Term Loan A")'
     
                      (ii)  $75 million senior amortization extended term
                            loan (the "Term Loan B" together with the Term    
                            Loan A, the "Term Facilities");
     
                      (iii) $50 million senior revolving credit facility (the 
                            "Revolving Facility")
     
                      Pearl Street and Chase reserve the right to alter the   
                      amounts of the Term Loan A and the Term Loan B, provided
                      that the aggregate amount of the Term Facilities shall
                      be $150 million (any such alteration to be made only
                      after consultation with the Borrower).
     
AVAILABILITY:         Term Facilities - One drawing may be made under each of
- - -------------         the Term Facilities on the Closing Date.
     
                      Revolving Facilities - Amounts available under the
                      Revolving Facility may be borrowed after the Closing
                      Date until the maturity date of the Revolving Facility.
                      The maximum amounts available under the Revolving
                      Facility will be reduced in amounts and on dates to be
                      determined.
     
PURPOSE/USE OF        Term Facilities - To finance the acquisition, to 
- - --------------        refinance certain existing indebtedness and to pay fees
PROCEEDS              and expenses associated therewith.
- - --------
     
                      Revolving Facility -  Up to $10 million of the         
                      Revolving Facility may be used to finance the general
                      corporate purposes of Borrower's subsidiaries. In       
                      addition up to $40 million may be utilized for Permitted
                      Acquisitions (to be defined based upon portfolio        
                      eligibility requirements to be determined (in the case  
                      of portfolio purchases) and subject to satisfaction of  
                      certain pro forma leverage and interest coverage tests)
                      for a period to be determined.  Borrowings for
                      Permitted Acquisitions in excess of $40 million may be
                      permitted, subject to satisfaction by Borrower and its
                      subsidiaries of certain minimum working capital and/or
                      cash availability requirements to be determined.
     
MATURITIES:           Term Loan A            4 years
- - -----------           Term Loan B            6 years
                      Revolving Facility     5 years
     
CLOSING DATE:         The date on or before February 15, 1997 on which the 
- - -------------         initial borrowers under the Senior Facilities are made.
     
AMORTIZATION:         The Term Facilities shall be amortized in equal 
- - -------------         quarterly installments in the aggregate amounts         
                      indicated for each year below:
     
                          Year
                        following
                          the               Term               Term
                      Closing Date          Loan A             Loan B
                      -------------        -------            ------- 
                           1             $12,000,000        $ 1,000,000
                           2             $18,000,000        $ 1,000,000
                           3             $20,000,000        $ 1,000,000
                           4             $25,000,000        $ 2,000,000
                           5                                $30,000,000
                           6                                $40,000,000
     
LETTERS OF CREDIT:  At the Borrower's option, a portion of the Revolving
- - -----------------   Facility not to exceed $5 million will be made available  

                    for the issuance of letters of credit ("Letters of        
                    Credit").
     
     
INTEREST RATE:      All amounts outstanding under the Senior Facilities shall
- - --------------      bear interest, at the Borrower's option (provided that the
                    Borrower may not select the reserve adjusted Eurodollar   
                    Rate until 60 days after the Closing Date), as follows:
     
                     A.     With respect to the Term Loan A:
     
                            (i)   at the Base Rate plus 1.50% per annum; or
     
                            (ii)  at the reserve adjusted Eurodollar Rate
                                  plus 2.5% per annum.
     
                     B.     With respect to the Term Loan B:
     
                            (i)   at the Base Rate plus 2.00% per annum; or
     
                            (ii)  at the reserve adjusted Eurodollar Rate     
                                  plus 3.00% per annum.
     
                     C.     With respect to loans made under the Revolving    
                            Facility:
     
                             (i)     at the Base Rate plus 1.50% per annum; or

                             (ii)    at the reserve adjusted Eurodollar Rate  
                                     plus 2.50% per annum.

                     As used herein, (x) the term "reserve adjusted Eurodollar
                     Rate" shall have meaning customary and appropriate for   
                     financings of this type, and the base of calculating      
                     accrued interest and the interest periods for loans      
                     bearing interest at the reserve adjusted Eurodollar Rate 
                     shall be customary and appropriate for financings of this
                     type and (y) the term Base Rate shall mean, at any time, 
                     the higher of (x) the rate announced by Chase from time  
                     to time as its prime rate for commercial lending and (y) 
                     the federal funds rate plus 1/2 of 1%.  Upon the          
                     occurrence and continuance of an Event of Default,       
                     interest shall accrue at a rate equal to the rate on     
                     loans bearing interest at the rate determined by         
                     reference to the Base Rate plus an additional two        
                     percentage points (2.00%) per annum and shall be payable 
                     on demand.
     
INTEREST PAYMENTS:   Quarterly for loans bearing interest with reference to
- - ------------------   the Base Rate; on the last day of selected interest      
                     periods (which shall be one, two, three or six months)   
                     for loans bearing interest with reference to the reserve 
                     adjusted Eurodollar Rate (and at the end of every three  
                     months, in the case of interest periods of longer than   
                     three months); and upon prepayment, in each case payable 
                     in arrears and computed on the basis of a 360-day year.
   
INTEREST RATE        Within 180 days following the Closing Date, the Borrower
- - -------------        will obtain interest rate protection through interest
PROTECTION:          rate swaps, caps or other agreements satisfactory to the
- - -----------          Arranging Agents against increases in the interest rates 
                     with respect to not less than $50 million of the Term    
                     Facilities for a period and with respect to rates to be  
                     determined.
     
FUNDING PROTECTION:  Customary for transactions of this type, including
- - -------------------  breakage costs, gross-up for withholding, compensation
                     for increased costs and compliance with capital adequacy 
                     and other regulatory restrictions.
     
COMMITMENT FEES:     Commitment fees equal to .50% per annum times the daily
- - ----------------     average unused portion of the Revolving Facility (reduced
                     by the amount of letters of credit issued and            
                     outstanding) shall accrue from the Closing Date and     

                     shall be payable quarterly in arrears on the unused      
                     portion of the Revolving Facility.
     
LETTER OF CREDIT     A fee of 2.50% per annum on the maximum amount which
- - ----------------     may be drawn thereunder shall be payable quarterly with
FEES:                respect to each Letter of Credit.  In addition, a
- - -----                fronting fee of .25% to the maximum amount which may be  
                     drawn under each Letter of Credit shall be payable to the
                     issuer of the Letter of Credit.  In addition, certain    
                     customary fees assessed by the issuing lender shall be   
                     payable.
     
VOLUNTARY            The  Senior Facilities may be prepaid in whole or in
- - ---------            part  without premium or penalty other than the Call
PREPAYMENTS:         Premium set forth below (provided that loans bearing
- - ------------         interest with reference to the reserve adjusted          
                     Eurodollar Rate shall be prepayable only on the last day 
                     of the related period).  Voluntary prepayments of the    
                     Term Facilities shall be applied ratably among the Term  
                     Facilities and to scheduled amortization payments pro    
                     rata.
     
MANDATORY            The Borrower shall make the following mandatory
- - ---------            prepayments (subject to certain exceptions and basket
PREPAYMENTS:         amounts to be negotiated in the definitive Loan
- - ------------         Documents):
    
                     1.     Asset sales - prepayments in the amount of all of
                            -----------
                            the net after tax cash proceeds of the sale or    
                            other disposition of any property or assets of the
                            Borrower or its subsidiaries, other than net cash 
                            proceeds of sales or other dispositions of        
                            inventory in the ordinary course of business,     
                            payable no later than the first Business Day      
                            following the date of receipt;
                         
                     2.     Equity Offerings - prepayments in an amount equal
                            ----------------
                            to 100% of the net cash proceeds received from the
                            issuance of equity securities of the Borrower (but
                            not sales of equity securities of Borrower by     
                            existing shareholders) or its subsidiaries,       
                            payable no later that the first Business Day      
                            following the date of receipt; provided that      
                            exceptions to such prepayment requirement, to be  
                            determined, shall apply to equity offerings (other
                            than public offerings) the proceeds of which are  
                            designated for reinvestment in the businesses of
                            the Borrower and its subsidiaries.
                         
                     3.     Excess Cash Flow - prepayments in an amount equal
                            ----------------
                            to 50% of excess cash flow (to be defined,        
                            including adjustments with respect to that portion
                            of cash flow relating to owned accounts           
                            receivable), payable within 100 days of fiscal    
                            year end, commencing with the fiscal year ending  
                            December 31, 1997; and
                        
                     4.     Insurance/Condemnation Proceeds- prepayments in
                            -------------------------------
                            the amount of all net cash proceeds received from 
                            property and casualty insurance or condemnation   
                            awards, payable no later than the second Business 
                            Day following the date of receipt unless no event 
                            of default has occurred or is continuing and the
                            Borrower uses such proceeds to repair, restore or
                            replace the assets in respect of which such
                            proceeds were received.
  
                    All such prepayment shall be applied without penalty
                    or premium (except for any call premium as set forth
                    below and breakage costs, if any) to repay, first
                    outstanding loans under the Term Facilities and, 
                    second, outstanding loans (and to the permanent
                    reduction of commitments) under the    
                    Revolving Facility.  All mandatory prepayments shall be   
                    applied ratably among the Term Facilities and pro rata to 
                    remaining scheduled amortization payments; provided that, 
                    at the election of the holders of the Term Loan B, the    
                    portion of proceed otherwise applied to prepay the Term   
                    Loan B, may be applied to the prepayment of the Term
                    Loan A.
                    
SECURITY:           The Senior Facilities and each Guarantee will be secured
- - ---------           by first priority security interests in all assets,       
                    including, without limitation, all property, plant and 
                    equipment, intangible assets and other personal, real and 
                    mixed property of the Borrower and its subsidiaries.  In  
                    addition, the Senior Facilities shall be secured by a     
                    first priority security interest in 100% of the stock of  
                    each subsidiary of the Borrower and all intercompany debt.
                    All security arrangements shall be in form and substance  
                    reasonably satisfactory to the Arranging Agents and the   
                    Co-Administrative Agents.
     
REPRESENTATIONS     Customary and appropriate including without
- - ---------------     limitation,  due organization and authorization,
AND WARRANTIES      execution, delivery and enforceability of the Loan
- - --------------      Documents, financial condition, no material adverse
                    change, title to properties, liens, litigation, payment
                    of taxes, no material adverse agreements, compliance with
                    laws, environmental and ERISA matters, consents and
                    approvals and full disclosure.
     
COVENANTS:          Customary and appropriate affirmative and negative
- - ----------          covenants, including, without limitation, financial
                    covenants, related to minimum fixed charge coverage,
                    minimum EBITDA, minimum interest coverage, a leverage
                    test and a limitation on capital expenditures (such
                    financial covenants to be structured in a manner
                    appropriate for credits of this nature).  Other
                    covenants will include, without limitation, limitations
                    on other indebtedness, liens, negative pledge,
                    investments, guarantees, restricted junior payments
                    (dividends, redemptions and payments on subordinated
                    debt), mergers and acquisitions, sales of assets,
                    capital expenditures, portfolio purchases, lease,
                    transactions with affiliates, including exceptions
                    and baskets to be mutually agreed upon.

     
EVENTS OF DEFAULT:  Customary and appropriate including, without
- - -----------------   limitation, failure to make payments when due, defaults
                    under other agreements or instruments of indebtedness,
                    noncompliance with covenants, breaches of
                    representations and warranties, bankruptcy, judgments
                    in excess of specified amounts, ERISA, impairment of
                    security interests in collateral, invalidity of
                    guarantees, and "changes of control" (to be defined
                    in a mutually agreed upon manner).

CONDITIONS          1.     Satisfactory Documentation. The definitive
- - ----------                 --------------------------
PRECEDENT to               documentation evidencing the Senior Facilities
- - ------------               shall be prepared by counsel to the Arranging
INITIAL BORROWINGS:        Agents and shall be in form and substance
- - -------------------        reasonably satisfactory to the Arranging Agents
                           and the Lenders.

                    2.     Acquisition.  Concurrently with the borrowings
                           -----------
                           under the Term Facilities, the Acquisition shall
                           be consummated, and all documentation relating
                           thereto shall be in form and substance, reasonably
                           satisfactory to Arranging Agents.  Without
                           limiting the generality of the foregoing,
                           Arranging Agents shall be reasonably satisfied
                           with the amount and terms of any debt of Payco
                           or OSI not repaid concurrently with the
                           consummation of the Acquisition.
                         
                    3.     Subordinated Debt.  On or prior to the Closing
                           -----------------
                           Date, Borrower shall have received not less than
                           $100 million in gross proceeds from the issuance
                           of unsecured subordinated indebtedness on terms
                           and conditions reasonably satisfactory to
                           Arranging Agents, such amount to be applied in
                           full to fund a portion of the purchase price paid
                           in connection with the Acquisition.
                         
                    4.     Security.  The Co-Administrative Agents, for the
                           ---------
                           benefit of the Lenders, shall have been granted
                           perfected first priority security interests in
                           all assets to the extent described above under
                           the heading "Security" in form and substance
                           reasonably  satisfactory to the Arranging Agents.

                         
                    5.     Environmental Matters.  The Lenders shall have
                           ---------------------- 
                           received information in form, scope and substance
                           reasonably satisfactory to the Arranging Agents
                           and the Lenders concerning any environmental
                           liabilities.
                         
                    6.     No Material Adverse Change.  Since the date of
                           --------------------------
                           the financials contained in the Management
                           Presentation, there shall not have been any
                           adverse change, or any development involving a
                           prospective adverse change, in or affecting the
                           general affairs, management, financial position,
                           shareholders' equity or results of operations of
                           OSI and its subsidiaries, or Payco and its
                           Subsidiaries which the Arranging Agents, or        
                           Lenders, in their reasonable judgment, deem        
                           material.
                         
                    7.     Financial Statements.  The Lenders shall have
                           ---------------------   
                           received and be satisfied with the audited         
                           financial statements for OSI and its subsidiaries  
                           and Payco and its subsidiaries for the period ended
                           December 31, 1995, and the unaudited financial     
                           statements for the most recently concluded monthly 
                           period.
                         
                    8.     Consents and Approvals.  All necessary
                           -----------------------
                           governmental, third party and shareholder approvals
                           in connection with the Senior Facilities, the      
                           transactions contemplated by the Senior Facilities,
                           the Acquisition and otherwise referred to herein   
                           shall have been obtained and remain in effect and  
                           all applicable waiting periods shall have expired  
                           without any action being taken by any applicable   
                           authority.
                         
                    9.     Payments of Amounts Due.  All costs, fees,
                           ------------------------
                           expenses (including, without limitation, legal fees
                           and expenses, title premiums, survey charges and   
                           recording taxes and fees) and other compensation   
                           contemplated hereby payable to the Arranging       
                           Agents, the Co-Administrative Agents or the Lenders
                           shall have been paid to the extent due.
                        
                    10.    Capital Structure; Related Agreements.  All
                           --------------------------------------
                           agreements relating to, and the corporate structure
                           of, OSI, Payco and their respective subsidiaries   
                           and all organizational documents of such entities  
                           and all material contracts, licenses, permits,     
                           franchises, insurance policies and other intangible 
                           rights shall be reasonably satisfactory to the     
                           Arranging Agents.
                        
                    11.    Solvency Opinion and Other Reports.
                           -----------------------------------                
                           Lenders shall have received a certificate from the 
                           chief financial officer of the Borrower, in form   
                           and substance satisfactory to Co-Arranging Agents, 
                           to the effect that, after giving effect to the     
                           Acquisition and contemplated borrowings of the full
                           amounts which will be available under the Senior   
                           Facilities and the Subordinated Debt, the Borrower 
                           on a consolidated basis will not be insolvent or
                           rendered insolvent by the indebtedness incurred in
                           connection therewith, or be left with unreasonably
                           small capital with which to engage in business, or
                           have incurred debts beyond its ability to pay
                           such debts as they mature.
                              
                    12.    Management and Business Plan.  The Arranging
                           ----------------------------- 
                           Agents shall be reasonably satisfied with the      
                           senior management of the Borrower and its          
                           subsidiaries, after giving effect to the           
                           Acquisition, and with the employment contracts with
                           key employees and executives.  The Arranging Agents
                           should have received a business plan submitted by
                           management of Borrower with respect to the
                           incorporation of Payco into the Borrower's
                           existing businesses, in form, scope and substance
                           reasonably satisfactory to the Arranging Agents.

                      13.  Customary Closing Documents.  All documents
                           ---------------------------- 
                           required to be delivered under the definitive      
                           financing documents, including customary legal     
                           opinions, corporate records and documents from     
                           public officials and officers' certificates shall  
                           have been delivered.
                         
CONDITIONS TO ALL   The conditions to all borrowings will include
- - -----------------   requirements relating to prior written notice of
BORROWINGS:         borrowing, the accuracy of representations and warranties,
- - -----------         and the absence of any default or potential event of      
                    default, and will otherwise be customary and appropriate  
                    for financings of this type.
     
ASSIGNMENTS and     The Lenders may assign all or, in an amount of not
- - ---------------     less than $5 million any part of their share of the
PARTICIPATION:      Senior Facilities to affiliates or one or more banks,
- - --------------      financial institutions or other entities that are
                    eligible assignees (to be described in the Loan Documents)
                    which are acceptable to the Co-Administrative Agents,
                    such consent not to be unreasonably withheld, and upon
                    such assignment, such affiliate, bank, financial          
                    institution or entity shall become a Lender for all       
                    purposes of the loan documentation; provided that         
                    assignments made to affiliates and other Lenders shall not
                    be subject to the $5 million minimum assignment           
                    requirement.  The Lenders will have the right to sell     
                    participations, subject to customary limitations on voting
                    rights, in their share of the Senior Facilities.
     
REQUISITE LENDERS:  Lenders holding 51% of total commitments or exposure
- - ------------------  under the Senior Facilities, except that (x) any amendment
                    which would disproportionately affect the holders of the  
                    Term Loan A, Term Loan B or the loans under the Revolving 
                    Facility shall not be effective without the approval of   
                    holders of 51% of such class of holders and (y) with      
                    respect to matters relating to the interest rates,        
                    maturity, amortization, collateral issues, the definition 
                    of Requisite Lenders etc.  Requisite Lenders will be    
                    defined as Lenders holding 100% of total commitments of   
                    exposure, under the Senior Facilities.


TAXES, RESERVE      All payments are to be made free and clear of any taxes
- - --------------      (other than franchise  taxes  and  taxes  on overall net
REQUIREMENTS and    income) imposts, assessments, withholdings or other
- - ----------------    deductions whatsoever, Foreign Lenders shall furnish
INDEMNITIES:        to Agent appropriate certificates or other evidence of
- - ------------        exemption from U.S. federal tax withholding.
                    The Borrower will indemnify the Lenders against all       
                    increased costs of capital resulting from reserve         
                    requirements or otherwise imposed, in each case subject to
                    customary increased costs, capital adequacy and similar   
                    provisions to the extent not taken into account in the    
                    calculation of the Base Rent or the Eurodollar Rate.
     
INDEMNITY:          Borrower will provide standard indemnification for the
- - ----------          Arranging Agents, Co-Administrative Agents and Lenders.
     
GOVERNING LAW and   The  Borrower will submit to the non-exclusive
- - -----------------   jurisdiction and venue of the federal and state courts
JURISDICTION:       of the State of New York and shall waive any right to
- - -------------       trial by jury.  New York law shall govern the Loan        
                    Documents.
     
The foregoing is intended to summarize certain basic terms of the Senior
Facilities.  It is not intended to be a definitive list of all of the
requirements of the Lenders in connection with the Senior Facilities.


                                                PRELIMINARY COPY

 
                      PAYCO AMERICAN CORPORATION
               PROXY FOR SPECIAL MEETING OCTOBER [__], 1996

          THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

     The undersigned hereby constitutes and appoints Dennis G. Punches,
Neal R. Sparby and Susan Mathison, and each or any of them, proxies with
full power of substitution, to vote all stock of Payco American
Corporation, a Wisconsin corporation, which the undersigned is entitled to
vote at the Special Meeting of the Company to be held at its offices
located at 180 North Executive Drive, Brookfield, Wisconsin 53005, on
[_______], October [___], 1996, at 9:00 a.m. local time and at any
adjournment thereof:

     1.     PROPOSAL TO APPROVE AN AGREEMENT AND PLAN OF MERGER, DATED
            AS OF AUGUST 13, 1996, AMONG PAYCO AMERICAN CORPORATION, OSI
            HOLDINGS CORP. AND BOXER ACQUISITION CORP.


        ___   FOR        ___   AGAINST              ___   ABSTAIN



IF YOU SIGN AND RETURN THIS PROXY, THE SHARES REPRESENTED HEREON WILL BE
VOTED
IN ACCORDANCE WITH THE SPECIFICATIONS MADE HEREON.  IF NOT OTHERWISE
SPECIFIED, THE PROXY WILL BE VOTED FOR APPROVAL OF THE MERGER AGREEMENT AND
THE MERGER. THE PROXIES WILL VOTE IN ACCORDANCE WITH THEIR BEST JUDGMENT ON
ANY OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING OR ANY
ADJOURNMENT THEREOF, EXCEPT THAT SHARES REPRESENTED BY PROXIES WHICH HAVE
BEEN VOTED "AGAINST" THE MERGER AGREEMENT AND THE MERGER WILL NOT BE USED
TO VOTE "FOR" POSTPONEMENT OR ADJOURNMENT OF THE SPECIAL MEETING FOR THE
PURPOSE OF ALLOWING ADDITIONAL TIME FOR SOLICITING ADDITIONAL VOTES FOR THE
MERGER AGREEMENT AND THE MERGER.

     The undersigned hereby acknowledges receipt of the Notice of Special
Meeting of Shareholders and Proxy Statement dated September [__], 1996.

                              Date Signed:
                                          -------------------


                              --------------------------------
                              Signature


                              --------------------------------             
                              Signature

                              Please sign exactly as name appears hereon.
                              If stock is held jointly, each holder should
                              sign.  When signing as attorney, executor,  
                              administrator, trustee, guardian, corporate 
                              officer or in any other capacity, please
                              state in full title as such.

YOU ARE REQUESTED TO SIGN, DATE AND PROMPTLY RETURN THIS PROXY IN THE
ENCLOSED
ENVELOPE.