FIRST AMENDMENT TO OUTSOURCING SOLUTIONS INC.
                     1995 STOCK OPTION AND STOCK AWARD PLAN


     This First Amendment (this  "Amendment") to the Outsourcing  Solutions Inc.
1995 Stock Option and Stock Award Plan (the "Plan"),  is made as of the 18th day
of  December,  1997.  Terms  which are  defined  in the Plan shall have the same
meanings when used herein unless otherwise defined

                                    RECITALS


     WHEREAS, the Company has established the Plan to for the purposes set forth
therein;

     WHEREAS,  the  Company  desires  to amend  the  Plan to allow  non-employee
directors to participate  in the Plan upon the terms and conditions  hereinafter
set forth.

     NOW, THEREFORE, IT IS AGREED:

          1. Section 4 of the Plan shall be amended by deleting  that section in
its entirety and inserting in lieu thereof the following:

          "4.  Eligibility.  Key salaried  employees,  including  officers,  and
     consultants of the Company and its  subsidiaries are eligible to be granted
     options  and  awarded  restricted  stock  under the Plan and to have  their
     bonuses  payable in stock.  In  addition,  directors  (whether  or not also
     employees) of the Company shall also be eligible to be granted  options and
     awarded  restricted  stock under the Plan. The employees,  consultants  and
     directors  who shall  receive  awards or  options  under the Plan  shall be
     selected from time to time by the Committee,  in its sole discretion,  from
     among those eligible,  which may be based upon information furnished to the
     Committee by the Company's  management,  and the Committee shall determine,
     in its sole discretion,  the number of shares to be covered by the award or
     awards and by the option or options  granted to each such person  selected.
     Such key salaried employees,  consultants and directors who are selected to
     participate  in the Plan  shall  be  referred  to  collectively  herein  as
     "Participants."

          2. As used in the Plan and any documents  referring thereto,  the term
"Plan" on and  subsequent  to the date  hereof  shall  mean the Plan as  amended
hereby.

          3. This Amendment shall be limited  precisely as written and shall not
be deemed to (i) be a consent to any waiver or  modification  of any other terms
and  conditions  of the Plan or (ii)  prejudice  any right or  rights  which the
Company may now have or may have in the future under or in  connection  with the
Plan. Except as expressly  amended hereby,  the terms and provisions of the Plan
shall remain in full force and effect.

          4. This  Amendment  shall be governed by, and  construed in accordance
with, the law of the State of Delaware.