UNION CORP, SC 14D1, 1997-12-24

UNION CORP
SC 14D1, 1997-12-24
CONSUMER CREDIT REPORTING, COLLECTION AGENCIES

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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14D-1

TENDER OFFER STATEMENT

Pursuant to Section 14(d)(1) of the Securities Exchange Act of 1934

THE UNION CORPORATION

Name of Subject Company

OUTSOURCING SOLUTIONS INC.

SHERMAN ACQUISITION CORPORATION

(Bidders)

COMMON STOCK, PAR VALUE $0.50 PER SHARE

(Title of Class of Securities)

906072103

(CUSIP Number of Class of Securities)

TIMOTHY G. BEFFA

OUTSOURCING SOLUTIONS INC.

390 SOUTH WOODS MILL ROAD

SUITE 150

CHESTERFIELD, MO 63017

(314) 576-0022

(Name, Address and Telephone Number of Person Authorized

to Receive Notices and Communications on Behalf of Bidders)

COPY TO:

FRANK L. SCHIFF, ESQ.

WHITE & CASE

1155 AVENUE OF THE AMERICAS

NEW YORK, NEW YORK 10036

(212) 819-8200

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CALCULATION OF FILING FEE

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Transaction valuation* $205,732,453 Amount of Filing Fee** $41,146.49
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*For purposes of calculating the filing fee only. This calculation assumes the
purchase of 6,531,189 shares of common stock, par value $0.50 per share, at a
price per share of $31.50.

** 1/50 of 1% of Transaction Valuation

/ / Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form or
schedule and the date of its filing.

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Amount Previously Paid: Filing Party:
Form or Registration No.: Date Filed:
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ITEM 1. SECURITY AND SUBJECT COMPANY.

(a) The name of the subject company is The Union Corporation, a Delaware
corporation (the "Company"), and the address of its principal executive offices
is 211 King Street, Suite 100, Charleston, South Carolina 29401.

(b) This Statement relates to the offer by Sherman Acquisition Corporation,
a Delaware corporation (the "Purchaser"), to purchase all the outstanding shares
of common stock, par value $0.50 per share, of the Company (collectively with
the associated Rights issued pursuant to the Rights Agreement, dated as of March
14, 1988, between the Company and First National Bank of Boston, as Rights
Agent, as amended, the "Shares") at a price of $31.50 per Share, net to the
seller in cash (the "Offer Price"), without interest thereon, upon the terms and
subject to the conditions set forth in the Offer to Purchase dated December 24,
1997 (the "Offer to Purchase") and in the related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute the
"Offer"), copies of which are attached hereto as Exhibits (a)(1) and (a)(2),
respectively. Information concerning the number of outstanding Shares is set
forth in the "Introduction" of the Offer to Purchase and is incorporated herein
by reference.

(c) Information concerning the principal market in which the Shares are
traded and the high and low sales prices of the Shares for each quarterly period
during the past two years is set forth in Section 6 ("Price Range of Shares;
Dividends") of the Offer to Purchase and is incorporated herein by reference.

ITEM 2. IDENTITY AND BACKGROUND.

(a)-(d); (g) This Statement is being filed by the Purchaser, a Delaware
corporation, and Outsourcing Solutions Inc., a Delaware corporation ("Parent").
The Purchaser is a direct wholly-owned subsidiary of Parent. Information
concerning the principal businesses and the addresses of the principal offices
of the Purchaser and Parent is set forth in Section 8 ("Certain Information
Concerning the Purchaser and Parent") of the Offer to Purchase and is
incorporated herein by reference. The name, business addresses, present
principal occupations or employment, material occupations, positions and offices
or employment during the last five years of the members of the Board of
Directors and the executive officers of Parent, and the directors and executive
officers of the Purchaser, are set forth in Schedule I to the Offer to Purchase
and are incorporated herein by reference.

(e); (f) During the last five years, neither of the Purchaser nor Parent
and, to the knowledge of the Purchaser and Parent, none of the members of the
Board of Directors or the executive officers of Parent, and none of the members
of the Board of Directors or executive officers of the Purchaser, has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or was a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction as a result of which any such
person was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting activities subject to, federal or state securities
laws or finding any violation of such law.

ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.

(a)-(b) The information set forth in Sections 10 ("Background of the Offer;
Contacts with the Company") and 11 ("Purpose of the Offer; Plans for the
Company; Merger Agreement") of the Offer to Purchase is incorporated herein by
reference.

ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.

(a)-(c) The information set forth in Section 9 ("Source and Amount of
Funds") of the Offer to Purchase and the document attached as Exhibit (b)(1)
hereto are incorporated herein by reference.

2
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ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.

(a)-(g) The information set forth in the "Introduction" and Sections 11
("Purpose of the Offer; Plans for the Company; Merger Agreement") and 13
("Effect of the Offer on the Market for the Shares; Exchange Listing and
Exchange Act Registration") of the Offer to Purchase is incorporated herein by
reference.

ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.

(a)-(b) None of the persons named in Item 2 hereof or any of their
affiliates or majority-owned subsidiaries beneficially own shares of the
Company.

ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE SUBJECT COMPANY'S SECURITIES.

The information set forth in the "Introduction" and Sections 10 ("Background
of the Offer; Contacts with the Company") and 11 ("Purpose of the Offer; Plans
for the Company; Merger Agreement") of the Offer to Purchase is incorporated
herein by reference.

ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.

The information set forth in Section 16 ("Fees and Expenses") of the Offer
to Purchase is incorporated herein by reference.

ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.

The information set forth in Section 8 ("Certain Information Concerning the
Purchaser and Parent") of the Offer to Purchase is incorporated herein by
reference.

ITEM 10. ADDITIONAL INFORMATION.

(a) The information set forth in the "Introduction" and Section 11 ("Purpose
of the Offer; Plans for the Company; Merger Agreement") of the Offer to Purchase
are incorporated herein by reference.

(b)-(c) The information set forth in the "Introduction" and Section 15
("Certain Legal Matters; Regulatory Approvals") of the Offer to Purchase is
incorporated herein by reference.

(d) The information set forth in Sections 9 ("Source and Amount of Funds")
and 13 ("Effect of the Offer on the Market for the Shares; Listing and Exchange
Act Registration") of the Offer to Purchase is incorporated herein by reference.

(e) Not applicable.

(f) The information set forth in the Offer to Purchase, the Letter of
Transmittal and the Share Purchase Agreement and Plan of Merger dated as of
December 22, 1997 among Parent, the Purchaser and the Company, copies of which
are attached hereto as Exhibits (a)(1), (a)(2) and (c)(2), respectively, is
incorporated herein by reference.

3
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ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.

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Exhibit (a)(1) Offer to Purchase.

Exhibit (a)(2) Letter of Transmittal with respect to the Shares.

Exhibit (a)(3) Form of letter, dated December 24, 1997, to brokers, dealers, commercial
banks, trust companies and other nominees.

Exhibit (a)(4) Form of letter to be used by brokers, dealers, commercial banks, trust
companies and nominees to their clients.

Exhibit (a)(5) Guidelines for Substitute Form W-9.

Exhibit (a)(6) Press Release, dated December 23, 1997.

Exhibit (a)(7) Form of newspaper advertisement, dated December 24, 1997.

Exhibit (a)(8) Notice of Guaranteed Delivery.

Exhibit (b)(1) Commitment Letter dated December 22, 1997 to Parent from Goldman Sachs
Credit Partners L.P. and The Chase Manhattan Bank and Chase Securities Inc.

Exhibit (c)(1) Confidentiality Agreement, dated August 18, 1997, between Parent and the
Company.

Exhibit (c)(2) Share Purchase Agreement and Plan of Merger, dated as of December 22, 1997,
by and among Parent, the Purchaser and the Company.

Exhibit (c)(3) Agreement dated as of December 22, 1997 among Parent, Purchaser and the
Stockholders named therein.

Exhibit (d) None.

Exhibit (e) Not applicable.

Exhibit (f) None.
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4
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SIGNATURE

After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.

OUTSOURCING SOLUTIONS INC.

BY: /S/ TIMOTHY G. BEFFA
-----------------------------------------
Name: Timothy G. Beffa
Title: PRESIDENT AND CHIEF EXECUTIVE
OFFICER

SHERMAN ACQUISITION CORPORATION

BY: /S/ TIMOTHY G. BEFFA
-----------------------------------------
Name: Timothy G. Beffa
Title: PRESIDENT

Dated: December 24, 1997

5
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EXHIBIT
NUMBER DESCRIPTION
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Exhibit (a)(1) Offer to Purchase.

Exhibit (a)(2) Letter of Transmittal with respect to the Shares.

Exhibit (a)(3) Form of letter, dated December 24, 1997, to brokers, dealers, commercial banks, trust
companies and other nominees.

Exhibit (a)(4) Form of letter to be used by brokers, dealers, commercial banks, trust companies and nominees
to their clients.

Exhibit (a)(5) Guidelines for Substitute Form W-9.

Exhibit (a)(6) Press Release, dated December 23, 1997.

Exhibit (a)(7) Form of newspaper advertisement, dated December 24, 1997.

Exhibit (a)(8) Notice of Guaranteed Delivery.

Exhibit (b)(1) Commitment Letter dated December 22, 1997 to Parent from Goldman Sachs Credit Partners L.P.
and The Chase Manhattan Bank and Chase Securities Inc.

Exhibit (c)(1) Confidentiality Agreement, dated August 18, 1997, between Parent and the Company.

Exhibit (c)(2) Share Purchase Agreement and Plan of Merger, dated as of December 22, 1997, by and among
Parent, the Purchaser and the Company.

Exhibit (c)(3) Agreement dated as of December 22, 1997 among Parent, Purchaser and the Stockholders named
therein.

Exhibit (d) None.

Exhibit (e) Not applicable.

Exhibit (f) None.
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OFFER TO PURCHASE FOR CASH
ALL OF THE OUTSTANDING SHARES OF COMMON STOCK
OF
THE UNION CORPORATION
AT
$31.50 NET PER SHARE
BY
SHERMAN ACQUISITION CORPORATION
A WHOLLY-OWNED SUBSIDIARY
OF
OUTSOURCING SOLUTIONS INC.

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON JANUARY 23, 1998, UNLESS THE OFFER IS EXTENDED.

THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY
TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A
NUMBER OF SHARES (AS DEFINED HEREIN) WHICH CONSTITUTES AT LEAST 66 2/3% OF THE
TOTAL VOTING POWER OF ALL SHARES OF CAPITAL STOCK OF THE UNION CORPORATION
OUTSTANDING ON A FULLY DILUTED BASIS, (II) THE EXPIRATION OR TERMINATION OF ANY
APPLICABLE WAITING PERIOD (AND ANY EXTENSION THEREOF) UNDER THE HART-SCOTT-
RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED AND (III) OUTSOURCING
SOLUTIONS INC. ("PARENT") RECEIVING THE FINANCING NECESSARY FOR IT AND SHERMAN
ACQUISITION CORPORATION TO CONSUMMATE THE OFFER AND THE OTHER TRANSACTIONS
CONTEMPLATED BY THE MERGER AGREEMENT (AS DEFINED HEREIN) IN ACCORDANCE WITH THE
TERMS OF THE BANK COMMITMENT LETTER DATED DECEMBER 22, 1997, TO PARENT FROM
GOLDMAN SACHS CREDIT PARTNERS L.P., THE CHASE MANHATTAN BANK AND CHASE
SECURITIES INC. THE OFFER IS ALSO SUBJECT TO OTHER TERMS AND CONDITIONS. SEE
SECTION 14.

THE BOARD OF DIRECTORS OF THE UNION CORPORATION (THE "COMPANY") HAS
UNANIMOUSLY APPROVED EACH OF THE OFFER AND THE MERGER (AS DEFINED HEREIN),
UNANIMOUSLY DETERMINED THAT EACH OF THE OFFER AND THE MERGER IS FAIR TO, AND IN
THE BEST INTERESTS OF, THE SHAREHOLDERS OF THE COMPANY AND UNANIMOUSLY
RECOMMENDS THAT SHAREHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT
TO THE OFFER.

IMPORTANT

Any shareholder desiring to tender all or any portion of the shares of
common stock, par value $0.50 per share (collectively with the associated Rights
(the "Rights") issued pursuant to the Rights Agreement, dated as of March 14,
1988, between the Company and First National Bank of Boston, as Rights Agent, as
amended (the "Rights Agreement"), the "Shares"), of the Company owned by such
shareholder should either (i) complete and sign the Letter of Transmittal or a
facsimile thereof in accordance with the instructions in the Letter of
Transmittal and mail or deliver it together with the certificate(s) evidencing
tendered Shares, and any other required documents, to the Depositary (as defined
herein) or tender such Shares pursuant to the procedures for book-entry transfer
set forth in Section 3 or (ii) request such shareholder's broker, dealer,
commercial bank, trust company or other nominee to effect the transaction for
such shareholder. Any shareholder whose Shares are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee must contact
such broker, dealer, commercial bank, trust company or other nominee if such
shareholder desires to tender such Shares.
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Any shareholder who desires to tender Shares and whose certificates
evidencing such Shares are not immediately available, or who cannot comply with
the procedures for book-entry transfer described in this Offer to Purchase on a
timely basis, may tender such Shares by following the procedures for guaranteed
delivery set forth in Section 3.

Questions and requests for assistance may be directed to the Information
Agent or the Dealer Managers at their respective addresses and telephone numbers
set forth on the back cover of this Offer to Purchase. Additional copies of this
Offer to Purchase, the Letter of Transmittal or other related tender offer
materials may be obtained from the Information Agent or from brokers, dealers,
commercial banks or trust companies.

THE DEALER MANAGERS FOR THE OFFER ARE:

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LA ZARD FRERES & CO. LLC GOLDMAN, SACHS & CO.
30 Rockefeller Plaza 85 Broad Street
59th Floor New York, New York 10004
New York, New York 10020 (212) 902-1000
(212) 632-6717

The date of this Offer to Purchase is December 24, 1997.
</TABLE>
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TABLE OF CONTENTS

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PAGE
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INTRODUCTION...................................................................................................... 1

THE TENDER OFFER.................................................................................................. 4

1. Terms of the Offer..................................................................................... 4
2. Acceptance for Payment and Payment for Shares.......................................................... 5
3. Procedures for Tendering Shares........................................................................ 6
4. Withdrawal Rights...................................................................................... 9
5. Certain United States Federal Income Tax Consequences.................................................. 9
6. Price Range of Shares; Dividends....................................................................... 11
7. Certain Information Concerning the Company............................................................. 11
8. Certain Information Concerning the Purchaser and Parent................................................ 13
9. Source and Amount of Funds............................................................................. 14
10. Background of the Offer; Contacts with the Company..................................................... 15
11. Purpose of the Offer; Plans for the Company; Merger Agreement.......................................... 18
12. Dividends and Distributions............................................................................ 28
13. Effect of the Offer on the Market for the Shares; Exchange Listing and Exchange Act Registration....... 29
14. Conditions of the Offer................................................................................ 30
15. Certain Legal Matters; Regulatory Approvals............................................................ 31
16. Fees and Expenses...................................................................................... 35
17. Miscellaneous.......................................................................................... 35

SCHEDULE I: INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND THE PURCHASER..............
I-1
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To the Holders of Common Stock of
THE UNION CORPORATION:

INTRODUCTION

Sherman Acquisition Corporation, a Delaware corporation (the "Purchaser")
and wholly-owned subsidiary of Outsourcing Solutions Inc., a Delaware
corporation ("Parent"), hereby offers to purchase all outstanding shares of
common stock, par value $0.50 per share (collectively with the associated Rights
issued pursuant to the Rights Agreement, dated as of March 14, 1988, between the
Company and First National Bank of Boston, as Rights Agent, as amended (the
"Rights Agreement"), the "Shares") of The Union Corporation, a Delaware
corporation (the "Company"), at a price of $31.50 per Share, net to the seller
in cash, without interest thereon (the "Offer Price"), upon the terms and
subject to the conditions set forth in this Offer to Purchase and in the related
Letter of Transmittal (which, as may be amended and supplemented from time to
time, together constitute the "Offer").

Tendering shareholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Shares pursuant to the
Offer. The Purchaser will pay all charges and expenses of Lazard Freres & Co.
LLC ("Lazard Freres") and Goldman, Sachs & Co. ("Goldman Sachs"), as Dealer
Managers (the "Dealer Managers"), ChaseMellon Shareholder Services, L.L.C., as
Depositary (the "Depositary"), and MacKenzie Partners, Inc., as Information
Agent (the "Information Agent"), in each case incurred in connection with the
Offer. See Section 16.

THE BOARD OF DIRECTORS OF THE COMPANY (THE "UNION BOARD") HAS UNANIMOUSLY
APPROVED EACH OF THE OFFER AND THE MERGER, UNANIMOUSLY DETERMINED THAT EACH OF
THE OFFER AND THE MERGER IS FAIR TO, AND IN THE BEST INTERESTS OF, THE
SHAREHOLDERS OF THE COMPANY AND UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS ACCEPT
THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.

THE COMPANY HAS ADVISED PARENT THAT CIBC OPPENHEIMER CORP. ("OPPENHEIMER"),
THE FINANCIAL ADVISOR TO THE COMPANY, HAS DELIVERED TO THE UNION BOARD ITS
WRITTEN OPINION DATED DECEMBER 22, 1997 THAT, AS OF SUCH DATE AND BASED UPON ITS
REVIEW AND ANALYSIS AND SUBJECT TO THE LIMITATIONS SET FORTH THEREIN, THE OFFER
PRICE TO BE RECEIVED BY THE SHAREHOLDERS OF THE COMPANY PURSUANT TO THE OFFER
AND THE MERGER, IS FAIR, FROM A FINANCIAL POINT OF VIEW, TO SUCH SHAREHOLDERS. A
COPY OF THE OPINION OF OPPENHEIMER, WHICH SETS FORTH THE ASSUMPTIONS MADE,
FACTORS CONSIDERED AND SCOPE OF REVIEW UNDERTAKEN BY OPPENHEIMER, IS CONTAINED
IN THE COMPANY'S SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9 (THE
"SCHEDULE 14D-9"), WHICH IS BEING MAILED TO SHAREHOLDERS CONCURRENTLY HEREWITH.
SHAREHOLDERS ARE URGED TO READ THE FULL TEXT OF THAT OPINION.

The Offer is being made pursuant to a Share Purchase Agreement and Plan of
Merger, dated as of December 22, 1997 (the "Merger Agreement"), by and among
Parent, the Purchaser and the Company. The Merger Agreement provides, among
other things, that as soon as practicable after the purchase of Shares pursuant
to the Offer and the satisfaction of the other conditions set forth in the
Merger Agreement and in accordance with the relevant provisions of the General
Corporation Law of the State of Delaware (the "DGCL"), the Purchaser will be
merged with and into the Company (the "Merger"). Following consummation of the
Merger, the Company will continue as the surviving corporation (the "Surviving
Corporation") and will be a wholly-owned subsidiary of Parent. At the effective
time of the Merger (the "Effective Time"), each Share issued and outstanding
immediately prior to the Effective Time (other than Shares held by any
subsidiary of the Company or in the treasury of the Company, or by Parent, the
Purchaser or any other subsidiary of Parent, which Shares will be cancelled, and
other than Shares, if any, held by shareholders who perfect their appraisal
rights under the DGCL) will be converted into the right to receive the Offer
Price, without interest (the "Merger Consideration"). The Merger Agreement is
more fully described in Section 11.

1
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The consummation of the Merger is subject to the satisfaction or waiver of
certain conditions, including, if required by law, the approval and adoption of
the Merger Agreement by the requisite vote of the shareholders of the Company.
See Section 11. Under the DGCL, except as otherwise described below, unless
otherwise required by its certificate of incorporation, the affirmative vote of
the holders of at least a majority of the outstanding Shares is required to
approve and adopt the Merger Agreement and the Merger. The Certificate of
Incorporation of the Company requires an affirmative vote of the holders of at
least 66 2/3% of the total voting power of all shares of capital stock of the
Company outstanding to approve and adopt the Merger Agreement and the Merger.
Consequently, if the Purchaser acquires at least 66 2/3% of the then outstanding
Shares, the Purchaser will have sufficient voting power to approve and adopt the
Merger Agreement and the Merger even if no other shareholder votes in favor of
the Merger.

THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A
NUMBER OF SHARES WHICH, TOGETHER WITH SHARES OWNED BY PARENT OR THE PURCHASER
(OR ANY AFFILIATE OF PARENT OR THE PURCHASER), CONSTITUTES AT LEAST 66 2/3% OF
THE TOTAL VOTING POWER OF ALL SHARES OF CAPITAL STOCK OF THE COMPANY OUTSTANDING
ON A FULLY DILUTED BASIS (THE "MINIMUM CONDITION"), THE EXPIRATION OR
TERMINATION OF ANY APPLICABLE WAITING PERIOD (AND ANY EXTENSION THEREOF) UNDER
THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED (THE "HSR
ACT"), AND THE RULES AND REGULATIONS THEREUNDER (THE "HSR CONDITION") AND THE
PARENT RECEIVING THE FINANCING NECESSARY FOR IT AND THE PURCHASER TO CONSUMMATE
THE OFFER AND THE OTHER TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT IN
ACCORDANCE WITH THE TERMS OF THE BANK COMMITMENT LETTER (THE "BANK COMMITMENT
LETTER"), DATED DECEMBER 22, 1997, TO PARENT FROM GOLDMAN SACHS CREDIT PARTNERS
L.P., THE CHASE MANHATTAN BANK AND CHASE SECURITIES INC. (THE "FINANCING
CONDITION"). THE OFFER IS ALSO SUBJECT TO OTHER TERMS AND CONDITIONS. SEE
SECTION 14.

The Company has informed the Purchaser that, as of December 22, 1997, there
were 5,802,641 Shares issued and outstanding (excluding Shares held in the
Company's treasury), 728,548 Shares reserved for issuance upon the exercise of
outstanding options granted under the Company's stock option plans and 2,944,837
Shares held in the Company's treasury. As a result, as of such date, the Minimum
Condition would be satisfied if the Purchaser acquired 4,354,126 Shares in the
Offer. The Company has been advised, and has informed Parent, that all of its
directors and executive officers intend to tender pursuant to the Offer all
Shares owned of record or beneficially by such directors and executive officers.
Purchaser and Parent have entered into an agreement whereby such directors and
executive officers have agreed to tender their Shares in the Offer. See Section
11.

The Company has informed the Purchaser that, effective December 22, 1997,
the Rights Agreement was further amended (the "Amendment") pursuant to the
Merger Agreement to provide that (i) so long as the Merger Agreement has not
been terminated pursuant to its terms or at any time after the acquisition of
Shares pursuant to the Offer, neither Parent nor any of its affiliates will
become an Acquiring Person nor will a Distribution Date (as such terms are
defined in the Rights Agreement) be deemed to occur, in each case, solely as a
result of the execution, delivery and performance of the Merger Agreement or the
announcement, making or consummation of the Offer, the acquisition of the Shares
pursuant to the Offer or the Merger, the consummation of the Merger or any other
transactions contemplated by the Merger Agreement and (ii) the Rights will
expire immediately after the acquisition of Shares pursuant to the Offer. In
accordance with the terms of the Merger Agreement, the Union Board has taken
action to cause the Rights to be redeemed immediately prior to, and subject to,
the acceptance for payment and purchase of not less than two-thirds of the
outstanding Shares pursuant to the Offer.

2
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Pursuant to the terms of Parent's existing amended and restated credit
agreement (as further amended as contemplated by the Bank Commitment Letter, the
"Parent's Second Amended and Restated Credit Agreement"), upon consummation of
the Offer, if requested by the Agents thereunder, Parent shall grant to the
collateral agent thereunder (the "Collateral Agent"), a first priority security
interest in the Shares acquired in the Offer to the extent such Shares can be
pledged in accordance with applicable law. Upon consummation of the Merger,
Parent shall grant to the Collateral Agent a first priority security interest in
all of the stock (to the extent not previously granted as described above) and
assets of the Company, including the shares of stock and assets of the Company's
subsidiaries. In addition, upon consummation of the Offer, Parent intends to
cause the Company and its subsidiaries to guarantee the Parent's obligations
under the Parent's Second Amended and Restated Credit Agreement and the
Indenture governing the Parent's 11% Series B Senior Subordinated Notes due 2006
(the "Notes") as required by the Parent's Second Amended and Restated Credit
Agreement and the Notes.

THIS OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ CAREFULLY AND IN THEIR ENTIRETY BEFORE ANY
DECISION IS MADE WITH RESPECT TO THE OFFER.

3
<PAGE>
THE TENDER OFFER

1. TERMS OF THE OFFER. Upon the terms and subject to the conditions of the
Offer (including, if the Offer is extended or amended, the terms and conditions
of any extension or amendment), the Purchaser will accept for payment and pay
for all Shares validly tendered prior to the Expiration Date (as hereinafter
defined) and not withdrawn in accordance with Section 4. The term "Expiration
Date" means 12:00 Midnight, New York City time, on January 23, 1998, unless and
until the Purchaser, in its sole discretion (but subject to the terms of the
Merger Agreement), shall have extended the period of time during which the Offer
is open, in which event the term "Expiration Date" shall mean the latest time
and date at which the Offer, as so extended by the Purchaser, shall expire.

The Offer is conditioned upon, among other things, satisfaction of the
Minimum Condition, the HSR Condition and the Financing Condition. The Offer is
also subject to certain other conditions set forth in Section 14 below. If these
or any of the other conditions referred to in Section 14 are not satisfied or
any of the events specified in Section 14 have occurred or are determined by the
Purchaser to have occurred prior to the Expiration Date, the Purchaser reserves
the right (but is not obligated) to (i) decline to purchase any of the Shares
tendered in the Offer and terminate the Offer, and return all tendered Shares to
the tendering shareholders, (ii) waive or amend any or all conditions to the
Offer, to the extent permitted by applicable law and the provisions of the
Merger Agreement, and, subject to complying with applicable rules and
regulations of the Securities and Exchange Commission (the "Commission"),
purchase all Shares validly tendered or (iii) subject to the limitations
described below, extend the Offer and, subject to the right of shareholders to
withdraw Shares until the Expiration Date, retain the Shares which have been
tendered during the period or periods for which the Offer is extended.

Subject to the applicable rules and regulations of the Commission and to
applicable law, the Purchaser expressly reserves the right, in its sole
discretion (but subject to the terms and conditions of the Merger Agreement), at
any time and from time to time, to extend for any reason the period of time
during which the Offer is open, including upon the occurrence of any of the
events specified in Section 14, and thereby delay acceptance for payment of, or
payment for, any Shares, by giving oral or written notice of such extension to
the Depositary. There can be no assurance that the Purchaser will exercise its
right to extend the Offer. During any such extension, all Shares previously
tendered and not withdrawn will remain subject to the Offer, subject to the
rights of a tendering shareholder to withdraw its Shares. See Section 4.

Subject to the applicable rules and regulations of the Commission, the
Purchaser also expressly reserves the right, in its sole discretion (but subject
to the terms and conditions of the Merger Agreement), at any time and from time
to time, (i) to delay acceptance for payment of, or, regardless of whether such
Shares were theretofore accepted for payment, payment for, any Shares pending
receipt of any regulatory approval specified in Section 15 or in order to comply
in whole or in part with any other applicable law, (ii) to terminate the Offer
and not accept for payment (or pay for) any Shares if any of the conditions
referred to in Section 14 are not satisfied or any of the events specified in
Section 14 have occurred and (iii) to waive any condition or otherwise amend the
Offer in any respect by giving oral or written notice of such delay,
termination, waiver or amendment to the Depositary and by making a public
announcement thereof.

Parent and the Purchaser expressly reserve the right to modify the terms of
the Offer, including, without limitation, to extend the Offer beyond any
scheduled expiration date; PROVIDED, however, that without the prior written
consent of the Company, the Purchaser will not (i) reduce the number of Shares
sought in the Offer, (ii) reduce the Offer Price, (iii) modify or add to the
conditions of the Offer referred to in Section 14, (iv) change the form of
consideration payable in the Offer, (v) reduce, or except as otherwise
permitted, extend, the time period during which the Offer shall remain open or
(vi) make any other change in the terms of the Offer which is materially adverse
to any holder of Shares.

The Purchaser acknowledges that (i) Rule 14e-1(c) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), requires the Purchaser to
pay the consideration offered or return the

4
<PAGE>
Shares tendered promptly after the termination or withdrawal of the Offer and
(ii) the Purchaser may not delay acceptance for payment of, or payment for
(except as provided in clause (i) of the first sentence of the second preceding
paragraph), any Shares upon the occurrence of any of the conditions specified in
Section 14 without extending the period of time during which the Offer is open.

Any such extension, delay, termination, waiver or amendment will be followed
as promptly as practicable by public announcement thereof, with such
announcement in the case of an extension to be made no later than 9:00 a.m., New
York City time, on the next business day after the previously scheduled
expiration date. Subject to applicable law (including Rules 14d-4(c), 14d-6(d)
and 14e-1 under the Exchange Act, which require that material changes be
promptly disseminated to shareholders in a manner reasonably designed to inform
them of such changes) and without limiting the manner in which the Purchaser may
choose to make any public announcement, the Purchaser shall have no obligation
to publish, advertise or otherwise communicate any such public announcement
other than by issuing a press release to the Dow Jones News Service or as
otherwise required by law.

If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer, the Purchaser will extend the Offer to the extent required by Rules
14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act. The minimum period during
which an offer must remain open following material changes in the terms of the
offer or information concerning the offer, other than a change in price or a
change in the percentage of securities sought, will depend upon the facts and
circumstances then existing, including the relative materiality of the changed
terms or information. With respect to a change in price or a change in the
percentage of securities sought, a minimum period of ten business days is
generally required to allow for adequate dissemination to shareholders and
investor response.

The Company has provided the Purchaser with the Company's shareholder list
and security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase, the related Letter of Transmittal and
other relevant materials will be mailed to record holders of Shares whose names
appear on the Company's shareholder list and will be furnished, for subsequent
transmittal to beneficial owners of Shares, to brokers, dealers, commercial
banks, trust companies and similar persons whose names, or the names of whose
nominees, appear on the shareholder list or, if applicable, who are listed as
participants in a clearing agency's security position listing.

2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES. Upon the terms and
subject to the conditions of the Offer (including, if the Offer is extended or
amended, the terms and conditions of any such extension or amendment), the
Purchaser will purchase by accepting for payment, and will pay for, all Shares
validly tendered on or prior to the Expiration Date (and not properly withdrawn
in accordance with Section 4) promptly after the later to occur of (i) the
Expiration Date and (ii) the satisfaction or waiver of the conditions set forth
in Section 14. Subject to applicable rules of the Commission and the terms of
the Merger Agreement, the Purchaser expressly reserves the right, in its
discretion, to delay acceptance for payment of, or payment for, Shares pending
receipt of any regulatory approvals specified in Section 15.

In all cases, payment for Shares purchased pursuant to the Offer will be
made only after timely receipt by the Depositary of (i) the certificates
evidencing such Shares (the "Share Certificates") or timely confirmation of a
book-entry transfer (a "Book-Entry Confirmation") of such Shares, if such
procedure is available, into the Depositary's account at The Depository Trust
Company or The Philadelphia Depository Trust Company (each a "Book-Entry
Transfer Facility" and, collectively, the "Book-Entry Transfer Facilities")
pursuant to the procedures set forth in Section 3, (ii) the Letter of
Transmittal (or facsimile thereof), properly completed and duly executed with
any required signature guarantees, or an Agent's Message (as defined below) in
connection with a book-entry transfer and (iii) any other documents required by
the Letter of Transmittal.

The term "Agent's Message" means a message, transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary forming a part of a
Book-Entry Confirmation, which states that such Book-

5
<PAGE>
Entry Transfer Facility has received an express acknowledgement from the
participant in such Book-Entry Transfer Facility tendering the Shares that such
participant has received and agrees to be bound by the terms of the Letter of
Transmittal and that the Purchaser may enforce such agreement against such
participant.

For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment (and thereby purchased) Shares validly tendered and not properly
withdrawn if, as and when the Purchaser gives oral or written notice to the
Depositary of the Purchaser's acceptance for payment of such Shares. Payment for
Shares accepted pursuant to the Offer will be made by deposit of the purchase
price therefor with the Depositary, which will act as agent for tendering
shareholders for the purpose of receiving payments from the Purchaser and
transmitting payments to such tendering shareholders whose Shares have been
accepted for payment. Under no circumstances will interest on the purchase price
for Shares be paid by the Purchaser, regardless of any delay in making such
payment. Upon the deposit of funds with the Depositary for the purpose of making
payments to tendering shareholders, the Purchaser's obligation to make such
payment shall be satisfied, and tendering shareholders must thereafter look
solely to the Depositary for payment of amounts owed to them by reason of the
acceptance for payment of Shares pursuant to the Offer.

If any tendered Shares are not accepted for payment for any reason pursuant
to the terms and conditions of the Offer, or if Share Certificates are submitted
evidencing more Shares than are tendered, Share Certificates evidencing
unpurchased Shares will be returned, without expense to the tendering
shareholder (or, in the case of Shares tendered by book-entry transfer into the
Depositary's account at a Book-Entry Transfer Facility pursuant to the procedure
set forth in Section 3, such Shares will be credited to an account maintained at
such Book-Entry Transfer Facility), as promptly as practicable following the
expiration, termination or withdrawal of the Offer.

If, prior to the Expiration Date, the Purchaser increases the consideration
to be paid per Share pursuant to the Offer, the Purchaser will pay such
increased consideration for all such Shares purchased pursuant to the Offer,
whether or not such Shares were tendered prior to such increase in
consideration.

3. PROCEDURES FOR TENDERING SHARES.

VALID TENDER OF SHARES. In order for Shares to be validly tendered pursuant
to the Offer, the Letter of Transmittal (or facsimile thereof), properly
completed and duly executed, with any required signature guarantees, or an
Agent's Message in connection with a book-entry delivery of Shares, and any
other required documents, must be received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase prior to the
Expiration Date and either (i) the Share Certificates evidencing tendered Shares
must be received by the Depositary at such address or Shares must be tendered
pursuant to the procedure for book-entry transfer described below and a
Book-Entry Confirmation must be received by the Depositary, in either case prior
to the Expiration Date, or (ii) the tendering shareholder must comply with the
guaranteed delivery procedures described below.

THE METHOD OF DELIVERY OF SHARE CERTIFICATES AND ALL OTHER REQUIRED
DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY, IS AT
THE OPTION AND RISK OF THE TENDERING SHAREHOLDER, AND THE DELIVERY WILL BE
DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.

BOOK-ENTRY TRANSFER. The Depositary will establish an account with respect
to the Shares at each Book-Entry Transfer Facility for purposes of the Offer
within two business days after the date of this Offer to Purchase, and any
financial institution that is a participant in any of the Book-Entry Transfer
Facilities' systems may make book-entry delivery of Shares by causing a
Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account at a Book-Entry Transfer Facility in accordance with such Book-Entry
Transfer Facility's procedures for transfer. However, although delivery of
Shares may be effected through

6
<PAGE>
book-entry transfer at a Book-Entry Transfer Facility, the Letter of Transmittal
or a facsimile thereof, with any required signature guarantees, or an Agent's
Message, and any other required documents, must, in any case, be transmitted to
and received by the Depositary at one of its addresses set forth on the back
cover of this Offer to Purchase prior to the Expiration Date, or the tendering
shareholder must comply with the guaranteed delivery procedures described below.
DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH THE
BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE
DEPOSITARY.

SIGNATURE GUARANTEE. Signatures on all Letters of Transmittal must be
guaranteed by a financial institution (including most banks, savings and loan
associations and brokerage houses) which is a participant in the Security
Transfer Agents Medallion Program, the New York Stock Exchange Medallion
Signature Guarantee Program or the Stock Exchange Medallion Program (each an
"Eligible Institution"), unless the Shares tendered thereby are tendered (i) by
a registered holder of Shares who has not completed either the box entitled
"Special Delivery Instructions" or the box entitled "Special Payment
Instructions" on the Letter of Transmittal, or (ii) for the account of an
Eligible Institution. See Instruction 1 of the Letter of Transmittal.

If a Share Certificate is registered in the name of a person other than the
signer of the Letter of Transmittal, or if payment is to be made, or a Share
Certificate not accepted for payment or not tendered is to be returned, to a
person other than the registered holder(s), then the Share Certificate must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name(s) of the registered holder(s) appear on the Share
Certificate, with the signature(s) on such Share Certificate or stock powers
guaranteed as described above. See Instructions 1 and 5 of the Letter of
Transmittal.

GUARANTEED DELIVERY. If a shareholder desires to tender Shares pursuant to
the Offer and such shareholder's Share Certificates are not immediately
available or time will not permit all required documents to reach the Depositary
prior to the Expiration Date or the procedure for book-entry transfer cannot be
completed on a timely basis, such Shares may nevertheless be tendered if all the
following conditions are satisfied:

(i) the tender is made by or through an Eligible Institution;

(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Purchaser herewith, is
received by the Depositary as provided below prior to the Expiration Date;
and

(iii) the Share Certificates for all tendered Shares, in proper form for
transfer, or a Book-Entry Confirmation, together with a properly completed
and duly executed Letter of Transmittal (or facsimile thereof) with any
required signature guarantee (or, in the case of a book-entry transfer, an
Agent's Message) and any other documents required by such Letter of
Transmittal, are received by the Depositary within three New York Stock
Exchange ("NYSE") trading days after the date of execution of the Notice of
Guaranteed Delivery.

Any Notice of Guaranteed Delivery may be delivered by hand or transmitted by
telegram, facsimile transmission or mail to the Depositary and must include a
guarantee by an Eligible Institution in the form set forth in the Notice of
Guaranteed Delivery.

Notwithstanding any other provision hereof, payment for Shares purchased
pursuant to the Offer will, in all cases, be made only after timely receipt by
the Depositary of (i) the Share Certificates evidencing such Shares, or a
Book-Entry Confirmation of the delivery of such Shares, (ii) a properly
completed and duly executed Letter of Transmittal or facsimile thereof (or, in
the case of a book-entry transfer, an Agent's Message) and (iii) any other
documents required by the Letter of Transmittal.

DETERMINATION OF VALIDITY. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any
tendered Shares pursuant to any of the procedures described above will

7
<PAGE>
be determined by the Purchaser, in its sole discretion, whose determination will
be final and binding on all parties. The Purchaser reserves the absolute right
to reject any or all tenders of any Shares determined by it not to be in proper
form or if the acceptance for payment of, or payment for, such Shares may, in
the opinion of the Purchaser's counsel, be unlawful. The Purchaser also reserves
the absolute right, in its sole discretion, to waive any of the conditions of
the Offer (subject to the terms of the Merger Agreement) or any defect or
irregularity in any tender with respect to Shares of any particular shareholder,
whether or not similar defects or irregularities are waived in the case of other
shareholders. No tender of Shares will be deemed to have been validly made until
all defects and irregularities have been cured or waived.

The Purchaser's interpretation of the terms and conditions of the Offer
(including the Letter of Transmittal and the instructions thereto) will be final
and binding.

APPOINTMENT AS PROXY. By executing a Letter of Transmittal as set forth
above, a tendering shareholder irrevocably appoints designees of the Purchaser
as such shareholder's proxies, each with full power of substitution, to the full
extent of such shareholder's rights with respect to the Shares tendered by such
shareholder and accepted for payment by the Purchaser (and any and all non-cash
dividends, distributions, rights, other Shares or other securities issued or
issuable in respect of such Shares on or after December 22, 1997). All such
proxies shall be considered coupled with an interest in the tendered Shares.
This appointment will be effective if, when, and only to the extent that, the
Purchaser accepts such Shares for payment pursuant to the Offer. Upon such
acceptance for payment, all prior proxies given by such shareholder with respect
to such Shares and other securities will, without further action, be revoked,
and no subsequent proxies may be given. The designees of the Purchaser will,
with respect to the Shares and other securities for which the appointment is
effective, be empowered to exercise all voting and other rights of such
shareholder as they in their sole discretion may deem proper at any annual,
special, adjourned or postponed meeting of the Company's shareholders, by
written consent or otherwise, and the Purchaser reserves the right to require
that, in order for Shares or other securities to be deemed validly tendered,
immediately upon the Purchaser's acceptance for payment of such Shares the
Purchaser must be able to exercise full voting rights with respect to such
Shares and other securities.

UNITED STATES FEDERAL INCOME TAX BACKUP WITHHOLDING. Under the United
States federal income tax backup withholding rules, unless an exemption applies
under the applicable law and regulations, 31% of the gross proceeds payable to a
shareholder or other payee pursuant to the Offer must be withheld and remitted
to the United States Internal Revenue Service ("IRS"), unless the shareholder or
other payee provides its taxpayer identification number (employer identification
number or social security number) to the Depository (as payor) and certifies
under penalties of perjury that such number is correct. Therefore, each
tendering shareholder should complete and sign the Substitute Form W-9 included
as part of the Letter of Transmittal so as to provide the information and
certification necessary to avoid backup withholding, unless such shareholder
otherwise establishes to the satisfaction of the Depository that it is not
subject to backup withholding. If the Depository is not provided with the
correct taxpayer identification number, the U.S. Holder (as defined in Section 5
herein) also may be subject to a penalty imposed by the IRS. If withholding
results in an overpayment of taxes, a refund may be obtained.

TO PREVENT UNITED STATES FEDERAL INCOME TAX BACKUP WITHHOLDING EQUAL TO 31%
OF THE GROSS PAYMENTS MADE TO STOCKHOLDERS FOR SHARES PURCHASED PURSUANT TO THE
OFFER, EACH STOCKHOLDER WHO DOES NOT OTHERWISE ESTABLISH AN EXEMPTION FROM SUCH
BACKUP WITHHOLDING MUST PROVIDE THE DEPOSITORY WITH THE STOCKHOLDER'S CORRECT
TAXPAYER IDENTIFICATION NUMBER AND PROVIDE CERTAIN OTHER INFORMATION BY
COMPLETING THE SUBSTITUTE FORM W-9 INCLUDED AS PART OF THE LETTER OF
TRANSMITTAL. FOR A DISCUSSION OF CERTAIN UNITED STATES FEDERAL INCOME TAX
CONSEQUENCES TO TENDERING SHAREHOLDERS, SEE SECTION 5 OF THIS OFFER TO PURCHASE.

The Purchaser's acceptance for payment of Shares tendered pursuant to the
Offer will constitute a binding agreement between the tendering shareholder and
the Purchaser upon the terms and subject to the conditions of the Offer.

8
<PAGE>
4. WITHDRAWAL RIGHTS. Tenders of Shares made pursuant to the Offer are
irrevocable except that such Shares may be withdrawn at any time prior to the
Expiration Date and, unless theretofore accepted for payment by the Purchaser
pursuant to the Offer, may also be withdrawn at any time after February 22,
1998, or at such later time as may apply if the Offer is extended.

If the Purchaser extends the Offer, is delayed in its acceptance for payment
of Shares or is unable to accept Shares for payment pursuant to the Offer for
any reason, then, without prejudice to the Purchaser's rights under the Offer,
the Depositary may, nevertheless, on behalf of the Purchaser, retain tendered
Shares, and such Shares may not be withdrawn except to the extent that tendering
shareholders are entitled to withdrawal rights as described in this Section 4.
Any such delay will be an extension of the Offer to the extent required by law.

For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase. Any
such notice of withdrawal must specify the name of the person who tendered the
Shares to be withdrawn, the number of Shares to be withdrawn and the name of the
registered holder, if different from that of the person who tendered such
Shares. If Share Certificates evidencing Shares to be withdrawn have been
delivered or otherwise identified to the Depositary, then, prior to the physical
release of such Share Certificates, the serial numbers shown on such Share
Certificates must be submitted to the Depositary and the signature(s) on the
notice of withdrawal must be guaranteed by an Eligible Institution, unless such
Shares have been tendered for the account of an Eligible Institution. If Shares
have been tendered pursuant to the procedure for book-entry transfer as set
forth in Section 3, any notice of withdrawal must also specify the name and
number of the account at the Book-Entry Transfer Facility to be credited with
the withdrawn Shares.

All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser, in its sole
discretion, whose determination will be final and binding. None of Parent, the
Purchaser, the Depositary, the Dealer Managers or any other person will be under
any duty to give notification of any defects or irregularities in any notice of
withdrawal or incur any liability for failure to give any such notification.

Any Shares properly withdrawn will thereafter be deemed to not have been
validly tendered for purposes of the Offer. However, withdrawn Shares may be
re-tendered at any time prior to the Expiration Date by following one of the
procedures described in Section 3.

5. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES. The following is
a general discussion of certain U.S. federal income tax consequences of the
receipt of cash by a holder of Shares pursuant to the Offer or the Merger.
Except as specifically noted, this discussion applies only to a U.S. Holder (as
defined herein). This summary does not address any tax consequences of the
Merger to U.S. Holders who exercise appraisal rights under Delaware law. It
applies only to U.S. Holders that hold Shares as capital assets and does not
address aspects of U.S. federal income tax law that may be applicable to
shareholders that are subject to special tax rules, including, without
limitation, insurance companies, tax-exempt organizations, financial
institutions, dealers in securities or currencies, persons who acquired Shares
pursuant to an exercise of employee stock options or rights which were or are
subject to forfeiture restrictions or otherwise as compensation, persons who
hold Shares as a position in a "straddle" or as part of a "hedging" or
"conversion" transaction for U.S. federal income tax purposes and persons that
have a "functional currency" other than the U.S. dollar. Also, this summary does
not address state, local or foreign tax consequences of the Offer or the Merger.
Consequently, each holder should consult such holder's own tax advisor as to the
specific tax consequences of the Offer or the Merger to such holder.

For purposes of this discussion, a "U.S. Holder" means a holder of Shares
that for U.S. federal income tax purposes is (i) a citizen or resident of the
United States, (ii) a partnership or corporation created in or under the laws of
the United States or any political subdivision thereof or therein, (iii) an
estate the income of which is subject to United States federal income taxation
regardless of its source, or

9
<PAGE>
(iv) a trust if (x) a court within the United States is able to exercise primary
supervision over the administration of the trust and (y) one or more United
States persons have the authority to control all substantial decisions of the
trust. Notwithstanding the preceding sentence, to the extent provided in U.S.
Treasury Regulations, certain trusts in existence on August 20, 1996, and
treated as U.S. persons prior to such date, that elect to continue to be treated
as U.S. persons will also be treated as U.S. Holders. A Non-U.S. Holder is a
holder of Shares that is not a U.S. Holder.

The receipt of cash for Shares pursuant to the Offer or the Merger by a U.S.
Holder will be a taxable transaction for U.S. federal income tax purposes and
may also be a taxable transaction under applicable state, local or foreign tax
laws. In general, a U.S. Holder will recognize gain or loss for U.S. federal
income tax purposes equal to the difference, if any, between the amount of cash
received by the shareholders pursuant to the Offer or the Merger and such U.S.
Holder's adjusted tax basis in such Shares. Any such gain or loss will be
capital gain or loss. The maximum marginal U.S. federal income tax rate
applicable to such gain will be lower than the maximum marginal U.S. federal
income tax rate applicable to ordinary income if such U.S. Holder's holding
period for such Shares exceeds one (1) year and will be further reduced if such
Shares were held for more than eighteen (18) months. There are limitations on
the deductibility of capital losses.

INFORMATION REPORTING AND BACKUP WITHHOLDING TAX. United States information
reporting will apply to proceeds from the sale of Shares paid by a United States
payor to a U.S. Holder (other than an "exempt recipient," including a
corporation, a payee that is a Non-U.S. Holder that provides an appropriate
certification and certain other persons). As noted in Section 3, a United States
payor will be required to withhold 31% of any such payment within the United
States to a holder (other than an "exempt recipient") if such holder fails to
furnish its correct taxpayer identification number and to certify under
penalties of perjury that such holder is not subject to backup withholding tax
by submitting a completed Substitute Form W-9 to the Depositary or otherwise
fails to comply with such backup withholding requirements. Accordingly, each
shareholder should complete, sign and submit the Substitute Form W-9 included as
part of the Letter of Transmittal in order to avoid the imposition of such
backup withholding tax.

THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION PURPOSES ONLY AND IS BASED UPON THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED TO THE DATE HEREOF, EXISTING AND PROPOSED U.S. TREASURY
REGULATIONS PROMULGATED THEREUNDER, RULINGS AND JUDICIAL DECISIONS NOW IN
EFFECT, CHANGES TO ANY OF WHICH COULD AFFECT THE TAX CONSEQUENCES DESCRIBED
HEREIN AND COULD BE MADE ON A RETROACTIVE BASIS. SHAREHOLDERS ARE URGED TO
CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF THE
OFFER AND THE MERGER TO THEM, INCLUDING THE APPLICATION AND EFFECT OF THE
ALTERNATIVE MINIMUM TAX, STATE, LOCAL AND FOREIGN TAX LAWS.

10
<PAGE>
6. PRICE RANGE OF SHARES; DIVIDENDS. The Shares are traded on the NYSE
under the symbol "UCO". The following table sets forth, for fiscal years 1996
and 1997, the high and low sales prices per Share on the NYSE as reported in the
Company's Annual Report on Form 10-K for the fiscal year ended June 30, 1997 and
for the specified periods in fiscal year 1998, the high and low sales prices per
share on the NYSE as reported by the Dow Jones News Service.
<TABLE>
<CAPTION>
FISCAL YEAR 1996 QUARTER ENDING: HIGH LOW DIVIDENDS
- ------------------------------------------------------------ --------- --------- -------------
<S> <C> <C> <C>
September 30, 1995.......................................... 16.50 14.38 --
December 30, 1995........................................... 18.75 15.25 --
March 31, 1996.............................................. 21.25 16.25 --
June 30, 1996............................................... 22.13 17.63 --

FISCAL YEAR 1997 QUARTER ENDING: HIGH LOW DIVIDENDS
- ------------------------------------------------------------ --------- --------- -------------
<S> <C> <C> <C>
September 30, 1996.......................................... 25.38 19.88 --
December 31, 1996........................................... 23.75 20.50 --
March 31, 1997.............................................. 24.75 20.88 --
June 30, 1997............................................... 26.44 18.75 --
<CAPTION>

FISCAL YEAR 1998 QUARTER ENDING: HIGH LOW DIVIDENDS
- ------------------------------------------------------------ --------- --------- -------------
<S> <C> <C> <C>
September 30, 1997.......................................... 26.75 22.13 --
October 1, 1997
through December 22, 1997................................. 28.50 22.75 --
</TABLE>

Under the terms of the Company's existing credit agreement, the Company is
precluded from paying cash dividends on its common stock.

On December 22, 1997, the last full trading day prior to the public
announcement of the Offer and Merger, the closing sale price of the Shares on
the NYSE was $27.50 per Share. SHAREHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET
QUOTATION FOR THE SHARES.

7. CERTAIN INFORMATION CONCERNING THE COMPANY. The information concerning
the Company contained in this Offer to Purchase, including financial
information, has been taken from or based upon publicly available documents and
records on file with the Commission and other public sources. Neither Parent nor
the Purchaser assumes any responsibility for the accuracy or completeness of the
information concerning the Company contained in such documents and records or
for any failure by the Company to disclose events which may have occurred or may
affect the significance or accuracy of any such information but which are
unknown to Parent or the Purchaser.

The Company's operations are currently comprised of five financial services
companies, which furnish a broad range of credit and receivables management
outsourcing services, such as credit authorization, customer service, credit
usage management, management and collection of accounts receivable, and a
variety of related inbound and outbound call-center services, to both large and
small businesses. The Company employed approximately 2,000 persons at September
12, 1997.

The Company is a Delaware corporation. The address of its principal
executive offices is 211 King Street, Suite 100, Charleston, South Carolina
29401. The telephone number of the Company at such offices is (805) 958-5800.

11
<PAGE>
FINANCIAL INFORMATION. Set forth below is certain selected consolidated
financial information relating to the Company and its subsidiaries, which has
been excerpted or derived from the financial statements contained in the
Company's Annual Report on Form 10-K for the fiscal year ended June 30, 1997 and
its Quarterly Report on Form 10-Q for the quarter ended September 30, 1997. More
comprehensive financial information is included in these reports and other
documents filed by the Company with the Commission. The financial information
that follows is qualified in its entirety by reference to these reports and
other documents, including the financial statements and related notes contained
therein and should be read in conjunction with the financial information and
accompanying notes set forth in the Company's 1997 Annual Report to
Shareholders, which is incorporated by reference in the Company's Annual Report
on Form 10-K for the fiscal year ended June 30, 1997, and the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1997, which is
incorporated herein by reference. These reports and other documents may be
inspected at, and copies may be obtained from, the same places and in the manner
set forth under "--Available Information".

<TABLE>
<CAPTION>
THREE
MONTHS ENDED
FISCAL YEAR ENDED JUNE 30, SEPTEMBER 30,
---------------------------------------------------------- ----------------------
1993 1994 1995 1996 1997 1996 1997
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

Operating revenues.................... $ 80,499 $ 92,109 $ 97,649 $ 103,732 $ 121,709 $ 28,741 $ 31,429
Total operating costs and expense..... 72,871 84,167 87,342 92,125 107,508 25,999 28,200
---------- ---------- ---------- ---------- ---------- ---------- ----------
Operating income...................... 7,628 7,942 10,307 11,607 14,201 2,742 3,229
Interest expense...................... (687) (1,048) (1,450) (1,475) (1,417) (350) (366)
Interest income....................... 1,074 723 1,242 1,509 1,673 389 606
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income from continuing operations
before income taxes................. 8,015 7,617 10,099 11,641 14,457 2,781 3,469
Provision for income taxes............ 3,345 3,138 4,392 5,122 6,361 1,224 1,526
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income from continuing operations..... 4,670 4,479 5,707 6,519 8,096 1,557 1,943
Discontinued operations loss provision
(net of tax benefits of $935 and
$2,800)............................. -- -- (5,200) (2,065) -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income before cumulative effect of
change in accounting for income
taxes............................... 4,670 4,479 507 4,454 8,096 1,557 1,943
Cumulative effect of change in
accounting for income taxes......... -- 1,068 -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income............................ $ 4,670 $ 5,547 $ 507 $ 4,454 $ 8,096 $ 1,557 $ 1,943
---------- ---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ---------- ----------

Per common share:
Income from continuing operations..... $ .71 $ .72 $ 1.01 $ 1.13 $ 1.37 $ 0.26 $ 0.33
Discontinued operations loss
provision........................... -- -- (.92) (.36) -- -- --
Cumulative effect of change in
accounting for income taxes......... -- .17 -- -- -- -- --
Net income (primary).................. $ .71 $ .89 $ .09 $ .77 $ 1.37 $ 0.26 $ 0.33

At Period End:
Total assets.......................... $ 110,085 $ 110,195 $ 113,163 $ 122,986 $ 126,019 $ 117,759 $ 128,980
Long-term debt (excluding current
portion)............................ $ 21,036 $ 20,973 $ 20,763 $ 20,634 $ 20,379 $ 20,566 $ 20,331
</TABLE>

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

Note: The fiscal 1993 amounts include the results of Allied Bond & Collection
Agency, Inc. following its acquisition in December 1992.

12
<PAGE>
During the course of discussions between Parent and the Company that led to
the execution of the Merger Agreement (see "Background of the Offer; Contacts
with the Company"), the Company provided Parent with certain non-public business
and financial information about the Company. The Company does not as a matter of
course make public any forecasts as to future performance or earnings, and the
information set forth below is included in this Offer to Purchase only because
such information was provided to Parent prior to the commencement of the Offer.
The forecasted financial information set forth below was not prepared with a
view to public disclosure or compliance with published guidelines of the
Commission or the guidelines established by the American Institute of Certified
Public Accountants regarding forecasts. None of Parent, the Purchaser or the
Company, nor any of their respective officers, directors or financial advisors,
assumes any responsibility for the accuracy of this information. This
information is based upon a variety of assumptions relating to the business of
the Company, which may not be realized and is subject to significant
uncertainties and contingencies, all of which are difficult to predict and many
of which are beyond the control of the Company. There can be no assurance that
the forecasted results will be realized, and actual results may vary materially
and adversely from those shown.

The Company provided Parent with the Company's forecasted results for Fiscal
Year 1998 (based on actual Company results for the four months ended October 31,
1997 and the forecasted results for the period from November 1, 1997 through
June 30, 1998), which forecasted operating revenue of $143,883,000, operating
expense of $95,326,000, total selling, general and administrative expenses of
$30,325,000 and operating income $18,232,000. The Company forecasted net
interest income of $1,210,000 and net income of $10,888,000 or $1.81 per common
share on a fully diluted basis.

AVAILABLE INFORMATION. The Company is subject to the information and
reporting requirements of the Exchange Act and is required to file reports and
other information with the Commission relating to its business, financial
condition and other matters. Information, as of particular dates, concerning the
Company's directors and officers, their remuneration, stock options granted to
them, the principal holders of the Company's securities, any material interests
of such persons in transactions with the Company and other matters is required
to be disclosed in proxy statements and other reports distributed to the
Company's shareholders and filed with the Commission. These reports, proxy
statements and other information should be available for inspection at the
public reference facilities of the Commission located in Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, and also should be available for
inspection and copying at prescribed rates at the following regional offices of
the Commission: Seven World Trade Center, New York, New York 10048; and 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of this material may
also be obtained by mail, upon payment of the Commission's customary fees, from
the Commission's principal office at 450 Fifth Street, N.W., Washington, D.C.
20549. Electronic filings filed through the Commission Electronic Data
Gathering, Analysis and Retrieval system ("EDGAR") are publicly available
through the Commission's home page on the Internet at http:// www.sec.gov. Such
material can also be obtained at the office of The National Association of
Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006-1506.

8. CERTAIN INFORMATION CONCERNING THE PURCHASER AND PARENT.

THE PURCHASER. The Purchaser, a newly incorporated Delaware corporation,
has not conducted any business other than in connection with the Offer and the
Merger Agreement. All of the issued and outstanding shares of capital stock of
the Purchaser are owned by Parent. The principal offices of the Purchaser are
located at 390 South Woods Mill Road, Suite 150, Chesterfield, Missouri 63017.
The telephone number of the Purchaser at such office is (314) 576-0022.

PARENT. Parent was formed in September 1995 and is a leading provider of
accounts receivable management services in the United States. Since 1995, Parent
has acquired Account Portfolios, Inc., Continental Credit Services, Inc., A.M.
Miller & Associates, Inc., Payco American Corporation, North Shore Agencies,
Inc. and Accelerated Bureau of Collections, Inc. through a combination of
investor equity, bank financing, seller financing and issuance of subordinated
notes. Parent, through its subsidiaries,

13
<PAGE>
provides (i) contingent fee services, which involves collecting on delinquent
consumer accounts for a fixed percentage of realized collections or a fixed fee
per account, (ii) portfolio purchasing services, which involves acquiring
portfolios of non-performing consumer receivables from credit grantors, and
service such portfolios, retaining all amounts collected, and (iii) other
related outsourcing services, including contract management of accounts
receivable, billing and teleservicing.

As of December 10, 1997, the Parent employed approximately 5,200 persons.

The name, business address, present principal occupation or employment and
five-year employment history of each of the directors and the executive officers
of Parent and the Purchaser are set forth in Schedule I hereto.

FINANCIAL INFORMATION. The consolidated Financial Statements of Parent and
its subsidiaries for the period from September 21, 1995 to December 31, 1995 and
the year ended December 31, 1996 and the Notes thereto and Management's
Discussion and Analysis of Financial Condition and Results of Operations
included in the Parent's Registration Statement filed with the Commission on
Form S-4 (File No. 333-24715) and the unaudited quarterly consolidated financial
statements for the quarters ended March 31, 1997, June 30, 1997 and September
30, 1997, and the related Management's Discussion and Analysis of Financial
Condition and Results of Operations, included in the Parent's Quarterly Reports
on Form 10-Q for the quarters ended March 31, 1997, June 30, 1997 and September
30, 1997 are incorporated herein by reference. The Parent is subject to the
information and reporting requirements of the Exchange Act and is required to
file reports and other information with the Commission relating to its business,
financial condition and other matters. These reports and other information
should be available for inspection at the public reference facilities of the
Commission located in Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, and also should be available for inspection and copying at prescribed
rates at the following regional offices of the Commission: Seven World Trade
Center, New York, New York 10048; and 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of this material may also be obtained by mail,
upon payment of the Commission's customary fees, from the Commission's principal
office at 450 Fifth Street, N.W., Washington, D.C. 20549. Electronic filings
filed through the EDGAR system are publicly available through the Commission's
home page on the Internet at http://www.sec.gov. Such material can also be
obtained at the office of The National Association of Securities Dealers, Inc.,
1735 K Street, N.W., Washington, D.C. 20006-1506.

9. SOURCE AND AMOUNT OF FUNDS. The total amount of funds required by the
Purchaser to purchase all of the outstanding Shares pursuant to the Offer and
the Merger and to pay related costs and expenses is estimated to be
approximately $206 million.

THE CONSUMMATION OF THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THE
PURCHASER AT OR PRIOR TO THE EXPIRATION DATE OBTAINING SUFFICIENT FINANCING TO
ENABLE IT TO PURCHASE ALL OF THE OUTSTANDING SHARES, TO REFINANCE CERTAIN
INDEBTEDNESS AND TO PAY RELATED COSTS AND EXPENSES. SEE SECTION 14.

The funds required by the Purchaser in connection with the Offer are
expected to be provided from borrowings by Parent under an additional $225.0
million term loan facility (the "Additional Bank Financing") as part of the
$470.0 million secured amended and restated credit facility expected to be
arranged by Goldman Sachs Credit Partners L.P. ("GSCP"), The Chase Manhattan
Bank ("Chase") and Chase Securities Inc. ("CSI") (each a "Bank" and collectively
the "Banks").

Parent has received the Bank Commitment Letter from the Banks in which (i)
each of GSCP and Chase commits to make available one-half of the Additional Bank
Financing required by Parent, (ii) GSCP and Chase agree to act as
co-administrative agents with respect to the Additional Bank Financing and (iii)
GSCP and CSI agree to act as arranging agents in connection with the Additional
Bank Financing. A copy of the Bank Commitment Letter is attached hereto as
Exhibit (b)(1). The commitments and agreements contained in the Bank Commitment
Letter are subject to a number of terms and conditions which are set forth in
the Bank Commitment Letter, including (i) the absence of any material adverse

14
<PAGE>
change in the business, condition, results of operations, assets, liabilities,
or prospects of the Company or Parent, (ii) the satisfactory negotiation,
execution and delivery of the loan documentation, (iii) receipt of all necessary
governmental, third party and shareholder approvals, (iv) no Event of Default or
Potential Event of Default (each as defined in the Company's existing credit
facility) having occurred and be continuing, (v) Purchaser shall have acquired a
number of Shares not less than the Minimum Condition pursuant to the Offer and
(vi) receipt of all necessary lender consents to amend the Parent's existing
credit facility. Outstanding term loans and revolving facilities under the
Parent's existing credit facility, which will be amended and restated as
contemplated by the Bank Commitment Letter, will remain outstanding.

Loans under the Additional Bank Financing will mature on October 15, 2004
and will amortize in quarterly installments through such date. Loans under the
Additional Bank Financing will bear interest, at the Parent's option, (a) at a
base rate equal to the greater of the federal funds rate plus 0.25% or Chase's
customary base rate, plus 2.00% or (b) at the reserve adjusted Eurodollar rate
plus 3.00%. The making of an advance under the Additional Bank Financing is
subject to customary conditions to drawing. Pursuant to the terms of Parent's
Second Amended and Restated Credit Agreement, upon consummation of the Offer, if
requested by the Agents thereunder, Parent shall grant to the Collateral Agent a
first priority security interest in the Shares acquired in the Offer to the
extent such Shares can be pledged in compliance with applicable law. Upon
consummation of the Merger, Parent shall grant to the Collateral Agent a first
priority security interest in all of the stock (to the extent not previously
granted as described above) and assets of the Company, including the shares of
stock and assets of the Company's subsidiaries. In addition, upon consummation
of the Offer, Parent intends to cause the Company and its subsidiaries to
guarantee the indebtedness under the Parent's Second Amended and Restated Credit
Agreement as required thereunder.

The foregoing summaries of the Additional Bank Financing and the Bank
Commitment Letter are qualified in their entirety by reference to the text of
the Bank Commitment Letter, a copy of which has been filed as an exhibit to the
Schedule 14D-1 and are incorporated herein by reference. The Bank Commitment
Letter may be inspected at, and copies may be obtained from, the same places and
in the manner set forth in Section 8 under "--Available Information".

The margin regulations promulgated by the Board of Governors of the Federal
Reserve System (the "Federal Reserve Board") place restrictions on the amount of
credit that may be extended for the purposes of purchasing margin stock
(including the Shares) if such credit is secured directly or indirectly by
margin stock. The Purchaser believes that the financing of the acquisition of
the Shares will be in full compliance with the margin regulations.

Parent currently has not made any plans or arrangements to either refinance
or repay the loans under the Parent's Second Amended and Restated Bank Facility.

10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY.

In June 1995 (prior to the formation of Parent) representatives of
Oppenheimer, financial advisor to the Company, contacted David E. King of McCown
De Leeuw & Co. ("MDC") regarding the possibility of entering into a transaction
between MDC and the Company. MDC was in the process of forming Parent and
indicated its interest in considering such a transaction. In July 1995, MDC and
the Company entered into a Confidentiality Agreement pursuant to which the
Company provided certain data to MDC. Subsequently, MDC and its legal advisors
met with legal advisors for the Company to discuss certain environmental and
other matters. After these preliminary contacts, MDC indicated a preliminary
interest in entering into a business combination in respect of the Company.
After considering the MDC proposal, the Company indicated that it was inadequate
and discussions between the parties were terminated without any further
discussions.

15
<PAGE>
During the following year, Mr. King had several conversations with
representatives of Oppenheimer discussing Parent's potential interest in the
Company if suitable terms could be agreed upon. These conversations were
inconclusive and no substantive discussions resulted therefrom.

In June 1996, representatives of Oppenheimer contacted Parent to inform
Parent that the Company was again evaluating strategic options available to it.
Parent indicated its continued interest in investigating the possibility of
entering into a business combination with the Company, if appropriate terms
could be agreed upon. Parent and the Company then entered into a Confidentiality
Agreement in June, 1996. In October 1996, Mr. King, together with
representatives of Parent's senior management met with senior executives of the
Company. At this meeting, the Company provided Parent with information regarding
its business affairs and financial condition and engaged in discussions
regarding the affairs of the Company. Parent and its representatives conducted
additional due diligence during October 1996 and indicated an interest in
acquiring all of the outstanding capital stock of the Company at a price range
of $22.00 to $25.00 per share. The Company stated that this offer was too low
and that the Company intended to explore opportunities with another party.

In January 1997, representatives of Lazard Freres approached Parent and
indicated that the Company's proposed transaction with a third party had not
been consummated as a result of disagreements over the price to be paid and
certain other terms of the proposed transaction. Lazard Freres indicated that it
believed that the Company might be interested in exploring a possible business
combination with Parent and proposed arranging a meeting between Parent and the
Company to discuss the matter. Subsequent to this meeting, Parent began formally
to consult with Lazard Freres with respect to the potential acquisition of the
Company. Lazard Freres' engagement as a financial advisor was confirmed by
letters dated August 4, 1997 and December 19, 1997. Goldman Sachs was engaged as
a financial advisor in August, 1997 and its engagement was confirmed by letters
dated August 6, 1997 and December 22, 1997.

On May 6, 1997, a meeting arranged by Lazard Freres took place among Mr.
King, Melvin L. Cooper, the Company's Chairman of the Board, and representatives
of Lazard Freres discussing the possible interest of Parent in acquiring
Company.

During the period from May 6 to July 21, 1997, representatives of Lazard
Freres and Parent had several additional conversations in which they discussed
Parent's interest in acquiring the Company. In addition, representatives of
Lazard Freres engaged in certain preliminary discussions with representatives of
Oppenheimer and with Mr. Cooper in order to determine if a mutually acceptable
transaction was possible.

On July 21, 1997, representatives of Lazard Freres met with Mr. King to
discuss steps that would need to be taken to proceed with Parent's possible
acquisition of the Company.

On August 18, 1997, the Company and Parent entered into a new
Confidentiality Agreement. On that same day, Mr. Cooper, Nicholas P. Gill, the
Company's Chief Financial Officer, Gordon Dunn, a director of the Company, other
senior management of the Company and representatives of Oppenheimer met with Mr.
King, Tyler T. Zachem, a director of Parent, Timothy G. Beffa, Chief Executive
Officer of the Company, and representatives of Lazard Freres and Goldman Sachs
to discuss various business valuation issues regarding the Company. At the
meeting, Mr. King indicated that Parent might be willing to propose an
acquisition of the Company to the board of directors of the Company at a price
of $28.50 per share in cash. He stated that such proposal, if made, would be
subject to, among other things, receipt of adequate financing and the
satisfactory completion of customary legal, environmental, tax, accounting and
business due diligence.

During the period from August 18 to September 17, 1997, representatives of
Lazard Freres and Oppenheimer had several additional telephone conversations in
which they discussed Parent's interest in acquiring the Company and the terms on
which such an acquisition could be successfully consummated.

16
<PAGE>
On September 17, 1997, Mr. King and Mr. Cooper met to discuss further a
possible business combination. Mr. Cooper described the terms on which he
believed the board of directors of the Company might be willing to consider a
possible transaction. Additionally, Messrs. King and Cooper discussed certain
environmental issues arising from the discontinued operations of the Company.

On September 23, 1997, Parent delivered a letter to the Company expressing
its interest in acquiring all of the outstanding capital stock of the Company at
a price of $31.50 in cash, subject to, among other things, completion of
satisfactory due diligence, and requesting an exclusive review period to
complete such due diligence.

On October 6, 1997, Mr. King, representatives of Parent's legal advisors,
Mr. Cooper and representatives of the Company's legal advisors met to discuss
the structure of a proposed transaction and to commence formal negotiations in
connection with the proposed acquisition.

On October 7, 1997, representatives of Parent met with representatives of
the Company to discuss the Company's existing and potential environmental
liabilities.

On October 9, 1997, Mr. King and representatives of Parent's legal advisors
met with certain senior officers of the Company and representatives of the
Company's legal advisors to discuss the Merger Agreement and other issues
related to the proposed acquisition, including the structure of the proposed
transaction, termination fees and insurance.

From October 14 to October 22, 1997, the Company's legal advisors conducted
legal due diligence at the offices of the Company's legal advisors.

On October 21, 1997, Mr. King and representatives of Parent's legal advisors
met with certain senior officers of the Company and representatives of the
Company's legal advisors to discuss the Merger Agreement including the
termination fee, certain insurance issues and the conditions of the Offer.

During the period between October 9 and November 4, 1997, representatives of
Parent's legal advisors met with and had several conversations with
representatives of the Company's environmental counsel. Parent also continued
its legal due diligence review of the Company.

On November 4, 1997, senior officers of the Company and its legal advisors
met with Mr. Beffa, Mr. Zachem and Parent's legal and financial advisors to
discuss environmental matters related to the Company. At this time Parent
expressed its continuing concern regarding these matters and indicated that, if
such matters were not resolved to its satisfaction that it might seek to reduce
the price to be paid in the Offer. Mr. Cooper indicated that the Company would
not be favorably disposed to a price reduction and urged Parent to finalize its
due diligence.

On November 14, 1997, Mr. King and Mr. Cooper met and Mr. King informed Mr.
Cooper that Parent would not request a price reduction. The Company and Parent
signed a letter agreeing to extend the exclusivity period of Parent's due
diligence review until December 31, 1997. On November 21, 1997, certain senior
officers of the Company and representatives of the Company's legal advisors met
with Parent and its legal advisors to continue to negotiate the Merger
Agreement, including certain environmental and tax issues and the amount of the
termination fee. Beginning the week of November 24, 1997, Parent and
representatives of Parent's accountants and other consultants commenced business
due diligence with respect to the Company.

On December 3, 1997, senior officers of the Company made presentations
regarding the business and affairs of the Company to Parent and its legal and
financial advisors. During the week of December 8, 1997, Parent and its
consultants conducted site visits to various offices of the Company in relation
to its business due diligence. On December 12, 1997, Mr. King met with Mr.
Cooper to discuss the status of the transaction and to discuss certain severance
arrangements. On December 15 and 16, 1997, Parent's legal advisors discussed the
terms of the Merger Agreement by telephone with the Company's legal advisors.

17
<PAGE>
Parent was informed that the Union Board met on December 17, 1997, and
discussed the Merger Agreement and the transactions contemplated thereby.

On December 18, 1997, the Board of Directors of Parent and Purchaser met to
authorize the making of the Offer and the execution of the Merger Agreement.

On December 22, 1997, Parent's and Company's legal advisors had discussions
to finalize the terms of the Merger Agreement. Parent has been informed that the
Union Board met on December 22, 1997, and unanimously approved the Offer, the
Merger and the Merger Agreement. The Merger Agreement was then executed by
Parent, the Purchaser and the Company on the same day.

11. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY; MERGER AGREEMENT.

PURPOSE OF THE OFFER. The purpose of the Offer, the Merger and the Merger
Agreement is to enable Parent to acquire control of the Union Board and the
entire equity interest in the Company. Upon consummation of the Merger, the
Company will become a wholly-owned subsidiary of Parent. The Offer is being made
pursuant to the Merger Agreement.

PLANS FOR THE COMPANY. The Merger Agreement provides that, promptly upon
the acceptance for payment of, and payment by the Purchaser (the "Share
Purchase") in accordance with the Offer for, Shares equal to at least two-thirds
of the outstanding Shares pursuant to the Offer on a fully diluted basis, the
Purchaser shall be entitled to designate up to such number of directors on the
Union Board, rounded up to the next whole number, as will give the Purchaser,
subject to compliance with Section 14(f) of the Exchange Act, representation on
the Union Board equal to at least that number of directors which equals the
product of the total number of directors on the Union Board (giving effect to
the directors elected pursuant to this sentence) multiplied by a fraction, the
numerator of which shall be the number of Shares so accepted for payment and
paid for or otherwise acquired or owned by Purchaser or Parent and the
denominator of which shall be the number of Shares then outstanding, and the
Company and the Union Board shall, at such time, take any and all such action
needed to cause the Purchaser's designees to be appointed to the Union Board
(including to cause directors to resign). Promptly upon the Share Purchase, the
Company and the Union Board shall take such further action as may be requested
by Purchaser to cause Purchaser's designees to constitute at least a majority of
the Board of Directors of each direct or indirect Subsidiary of the Company
(other than Allied Bond & Collection Agency, Inc.). See "--Merger Agreement--The
Union Board". The Purchaser expects that such representation would permit the
Purchaser to exert substantial influence over the Company's conduct of its
business and operations.

Under the DGCL, if the Purchaser acquires, pursuant to the Offer or
otherwise, at least 90% of the outstanding Shares, the Purchaser will be able to
approve the Merger without a vote of the Company's shareholders. In such event,
Parent, the Purchaser and the Company intend to cause the Merger to become
effective as soon as reasonably practicable after such acquisition, without a
meeting of the Company's shareholders. If, however, the Purchaser does not
acquire at least 90% of the outstanding Shares, pursuant to the Offer or
otherwise, and a vote of the Company's shareholders is required under the DGCL,
a significantly longer period of time would be required to effect the Merger.
Melvin L. Cooper, William B. Hewitt and Nicholas P. Gill, who are the Chairman
of the Board, President and Chief Executive Officer and Executive Vice President
of the Company, respectively, have indicated to the Parent that they intend to
resign from their positions as officers of the Company upon the Share Purchase.
Parent and the Purchaser currently intend to cause the Company's operations to
continue to be run and managed by its remaining existing management. Parent will
continue to evaluate the business and operations of the Company during the
pendency of the Offer and after the consummation of the Offer and the Merger and
will make such changes as it deems appropriate under the circumstances then
existing. Such changes could include, among other things, changes in the
Company's corporate structure, capitalization or dividend policy.

18
<PAGE>
Pursuant to the terms of Parent's Second Amended and Restated Credit
Agreement, upon consummation of the Offer, if requested by the Agents
thereunder, Parent shall grant to the Collateral Agent a first priority security
interest in the Shares acquired in the Offer to the extent such Shares can be
pledged in accordance with applicable law. Upon consummation of the Merger,
Parent shall grant to the Collateral Agent a first priority security interest in
all of the stock (to the extent not previously granted as described above) and
assets of the Company, including the shares of stock and assets of the Company's
subsidiaries. In addition, upon consummation of the Offer, Parent intends to
cause the Company and its subsidiaries to guarantee the Parent's obligations
under the Parent's Second Amended and Restated Credit Agreement and the
Indenture governing the Parent's Notes as required by the Parent's Second
Amended and Restated Credit Agreement and the Notes.

Except as otherwise discussed in this Offer to Purchase, neither Parent nor
the Purchaser have any present plans or proposals that would result in an
extraordinary corporate transaction, such as a merger, reorganization,
liquidation, or sale or transfer of a material amount of assets of the Company
or any of its subsidiaries, or in any other material changes to the Company's
capitalization, dividend policy, corporate structure or business.

TENDER AGREEMENTS. As a condition to the execution of the Merger Agreement,
Parent required that the directors and executive officers of the Company enter
into an agreement with Parent and the Purchaser (the "Tender Agreement" pursuant
to which they have agreed to tender (and not to withdraw) all Shares (including
the Rights associated therewith and any Shares acquired by such person after the
date of the Tender Agreement) in the Offer. As of December 22, 1997, such
individuals owned an aggregate of 238,216 shares of common stock of the Company,
or approximately 3.6% of the outstanding shares on a fully diluted basis on such
date.

Each director and executive officer has agreed that until the first to occur
of the Effective Time of the Merger and the termination of the Tender Agreement,
at any meeting of the stockholders of the Company or in connection with any
written consent of stockholders of the Company, each such director and executive
officer has agreed that he shall vote (or cause to be voted) all Shares held by
such director and executive officer (i) in favor of the Merger and each of the
other actions contemplated thereby, (ii) against any action that would result in
a breach by the Company of any covenant, representation, warranty or other
obligation of the Company under the Merger Agreement, and (iii) against certain
other actions, including any action that could reasonably be expected to or is
intended to interfere with, delay or otherwise adversely affect the Share
Purchase, the Merger, or any transactions contemplated by the Merger Agreement.

Additionally, each director and executive officer has agreed that until the
termination of the Tender Agreement, no such person shall, directly or
indirectly: (i) offer for sale, sell, transfer, pledge, encumber, assign or
otherwise dispose of, or enter into any agreement, arrangement or understanding
with respect to, or consent to the offer for sale, transfer, tender, pledge,
encumbrance, assignment or other disposition of, any or all of such
stockholder's Shares or any interest in those Shares, (ii) except as
contemplated by the Tender Agreement, grant any proxies or powers of attorney,
deposit any Shares into a voting trust or enter into a voting agreement with
respect to any Shares, or (iii) take any action that would have the effect of
preventing or disabling such stockholders from performing its obligations under
the Tender Agreement. The Tender Agreement will terminate upon the termination
of the Merger Agreement.

MERGER AGREEMENT. THE FOLLOWING IS A SUMMARY OF THE MATERIAL TERMS OF THE
MERGER AGREEMENT. THE SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE
MERGER AGREEMENT WHICH IS INCORPORATED HEREIN BY REFERENCE AND A COPY OF WHICH
HAS BEEN FILED WITH THE COMMISSION AS AN EXHIBIT TO THE SCHEDULE 14D-1. THE
MERGER AGREEMENT MAY BE INSPECTED AT, AND COPIES MAY BE OBTAINED FROM, THE SAME
PLACES AND IN THE MANNER SET FORTH IN SECTION 7 UNDER "--AVAILABLE INFORMATION".

19
<PAGE>
THE OFFER. The Merger Agreement provides that, subject to the terms and
conditions thereof, the Purchaser will commence the Offer. Parent and the
Purchaser expressly reserve the right to waive any of the conditions described
in Section 14 hereof, to increase the Offer Price payable in the Offer, and to
make any other change in the terms and conditions of the Offer; provided,
however, that, without the written consent of the Company, no change may be made
which (A) decreases the Offer Price payable in the Offer, (B) reduces the number
of Shares to be purchased in the Offer, (C) imposes conditions to the Offer in
addition to the conditions described in Section 14 hereof, (D) amends or changes
the terms and conditions of the Offer in any manner materially adverse to the
holders of Shares (other than Parent and Purchaser and its subsidiaries), (E)
changes the consideration payable in the Offer to anything other than all cash,
(F) reduces the time period during which the Offer shall remain open or (G)
except as provided in the next sentence, extends the time period during which
the Offer shall remain open. Notwithstanding the foregoing, Parent and Purchaser
may, without the consent of the Company, (i) extend the Offer beyond the
scheduled expiration date and any subsequent scheduled expiration date (but not
beyond the date 120 days after commencement of the Offer), if at such date any
of the conditions described in Section 14 hereof shall not be satisfied or
waived, and (ii) extend the Offer for any period required by any rule,
regulation, interpretation or position of the SEC (but not beyond the date 120
days after commencement of the Offer). Subject to the terms and conditions set
forth in the Merger Agreement (including the rights to terminate, extend or
modify the Offer) and the terms and conditions of the Offer, Parent agrees to
cause the Purchaser to consummate the Offer.

In the Merger Agreement, the Company consented to the Offer and the Merger
and represented that (a) the Union Board has by unanimous vote (i) determined
that each of the Offer and the Merger is fair to and in the best interests of
the holders of Shares, (ii) approved the Offer and the Merger and adopted the
Merger Agreement in accordance with the provisions of the DGCL, (iii)
recommended acceptance of the Offer and approval and adoption of the Merger
Agreement by the shareholders of the Company and (iv) taken all other action
necessary to render (x) Section 203 of the DGCL and other state takeover
statutes, (y) Article FIFTH of the Company's Certificate of Incorporation
(except for the requirement that the Merger be approved by the holders of not
less than two-thirds of the outstanding Shares), and (z) the Rights Agreement
inapplicable to the Offer and Merger, and (b) Oppenheimer has delivered to the
Union Board its opinion that the consideration to be received by the holders of
Shares pursuant to the Offer and the Merger is fair, from a financial point of
view, to holders of such Shares. The Merger Agreement provides that the Schedule
14D-9 shall contain the recommendation of the Union Board as described in clause
(a) hereof.

THE MERGER. The Merger Agreement provides that, subject to the terms and
conditions thereof, and in accordance with the DGCL, the Purchaser shall be
merged with and into the Company as soon as practicable following the
fulfillment or waiver of the conditions set forth in the Merger Agreement which
are described below. Following the Merger, the separate corporate existence of
the Purchaser will cease and the Company will continue as the surviving
corporation (the "Surviving Corporation").

In the Merger, each Share then issued and outstanding (other than (i) any
Shares that 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 the Purchaser), all of which Shares
will be cancelled and none of which shall receive any payment with respect
thereto, and (ii) Shares held by shareholders who perfect their appraisal rights
under the DGCL) will by virtue of the Merger and without any action on the part
of Parent, the Purchaser, the Company or the holder thereof, be cancelled and
converted into and represent the right to receive an amount in cash, without
interest, equal to the Offer Price.

On the date and time on which the Merger becomes effective (the "Effective
Time"), each share of common stock, par value $0.01 per share, 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
common stock, $0.50 par value, of the Surviving Corporation.

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The Merger Agreement provides that the respective obligations of Parent and
the Purchaser, on the one hand, and the Company, on the other hand, 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:

(i) to the extent required by applicable law, the Merger Agreement and
the Merger shall have been approved and adopted by holders of the requisite
number of outstanding Shares of the Company entitled to vote in accordance
with applicable law (if required by applicable law) and the Company's
Certificate of Incorporation and By-Laws;

(ii) any waiting period (and any extension thereof) under the HSR Act
applicable to the Merger shall have expired or been terminated;

(iii) 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
transactions contemplated thereby 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; and

(iv) 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 purchase of the Shares illegal.

THE UNION BOARD. The Merger Agreement provides that, promptly upon the
acceptance for payment of, and payment by the Purchaser in accordance with the
Offer for, Shares equal to at least a two-thirds of the outstanding Shares
pursuant to the Offer on a fully diluted basis, the Purchaser shall be entitled
to designate up to such number of directors on the Union Board, rounded up to
the next whole number, as will give the Purchaser, subject to compliance with
Section 14(f) of the Exchange Act, representation on the Union Board equal to at
least that number of directors which equals the product of the total number of
directors on the Union Board (giving effect to the directors elected pursuant to
this sentence) multiplied by a fraction, the numerator of which shall be the
number of Shares so accepted for payment and paid for or otherwise acquired or
owned by the Purchaser or Parent and the denominator of which shall be the
number of Shares then outstanding, and the Company and Union Board shall, at
such time, take any and all such action needed to cause the Purchaser's
designees to be appointed to the Union Board (including to cause directors to
resign). Promptly upon the Share Purchase, the Company and the Union Board shall
take such further action as may be requested by Purchaser to cause Purchaser's
designees to constitute at least a majority of the Board of Directors of each
direct or indirect subsidiary of the Company (other than Allied Bond &
Collection Agency, Inc.). Subject to applicable law, the Company has agreed to
take all action requested by Parent which is reasonably necessary to effect any
such election, including mailing to its shareholders an information statement
containing the information required by Section 14(f) of the Exchange Act and
Rule 14f-1 promulgated thereunder; and the Company agrees to make such mailing
with the mailing of the Schedule 14D-9 so long as Purchaser shall have provided
to the Company on a timely basis all information required to be included in the
information statement with respect to the Purchaser's designees. In furtherance
thereof, the Company will increase the size of Union's Board, or use its
reasonable efforts to secure the resignation of directors, or both, as is
necessary to permit the Purchaser's designees to be elected to the Union Board.
Upon the Share Purchase, all directors of the Company other than Purchaser's
designees and two directors of the Company, and unless otherwise agreed, all
officers of the Company, shall resign.

SHAREHOLDERS' MEETING. Pursuant to the Merger Agreement, promptly following
the Share Purchase, if required by the DGCL in order to consummate the Merger,
the Company has agreed that, acting through the Union Board, it shall, in
accordance with applicable law, duly call, convene and hold a special meeting of
its shareholders (the "Shareholders' Meeting") for the purpose of voting upon
the Merger Agreement and the Merger and that the Merger Agreement and the Merger
shall be submitted at such special

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<PAGE>
meeting. The Merger Agreement provides that if shareholder approval of the
Merger is required by law, as promptly as practicable following the Share
Purchase, the Company will prepare and file a preliminary proxy statement with
the Commission and will use its 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). Promptly following the Share Purchase, if required by the
DGCL in order to consummate the Merger, the Company will cause the definitive
proxy statement to be mailed to the shareholders 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 has agreed in
the Merger Agreement to use its reasonable best efforts to solicit from its
shareholders proxies, and shall take all other action necessary and advisable,
to secure the vote of shareholders required by applicable law to obtain the
approval for the Merger Agreement and the Merger. Subject to the provisions of
the Merger Agreement relating to the Company's obligation, except under limited
circumstances, not to solicit other offers, the Company agrees that it will
include in the proxy statement the recommendation of the Union Board that
holders of Shares approve and adopt the Merger Agreement and approve the Merger.
If the Purchaser acquires at least two-thirds of the then outstanding Shares,
the Purchaser will have sufficient voting power to approve the Merger, even if
no other shareholder votes in favor of the Merger. If the Purchaser acquires at
least 90% of the outstanding Shares, the Company has agreed, subject to certain
conditions, to take all necessary and appropriate action to cause the Merger to
become effective as soon as reasonably practicable after such acquisition,
without a meeting of the Corporation's shareholders, in accordance with Section
253 of the DGCL.

INTERIM OPERATIONS. The Merger Agreement provides that, except as otherwise
consented to or approved in writing by Parent (which consent or approval shall
not be unreasonably withheld), during the period commencing on the date of the
Merger Agreement until the Closing (as defined in the Merger Agreement) or the
Merger Agreement shall have been terminated pursuant to the terms thereof, (a)
the Company and each of its subsidiaries will conduct their respective
businesses substantially in the same manner as heretofore conducted and neither
the Company nor any of its subsidiaries will engage in any transaction or
activity, enter into any agreement or make any commitment (or materially amend
certain material contracts), except (i) as previously disclosed to the Parent
and Purchaser in the Merger Agreement, (ii) in the ordinary course of business
and consistent with past practices or pursuant to an agreement to which the
Company or any of such subsidiaries is a party (including transactions in the
call center outsourcing business), (iii) as contemplated by the Merger
Agreement, or (iv) which would not be reasonably likely to have a material
adverse effect on the Company and its subsidiaries, taken as a whole, (b) except
as otherwise permitted by the Merger Agreement, neither the Company nor its
subsidiaries will intentionally take any action that would cause, or
intentionally omit to take any reasonable action that in all likelihood would
prevent, any of the representations and warranties contained in the Merger
Agreement which are qualified as to materiality to fail to be true and correct
in any respect or any representation or warranty not so qualified to fail to be
true and correct in all material respects, as if such representations and
warranties were deemed to be made at and as of the Closing (except to the extent
any such representation or warranty was expressly made only as of a different
date), (c) neither the Company nor any of its subsidiaries shall, except as
provided in the Merger Agreement or as disclosed in the Merger Agreement (i)
acquire (by merger, consolidation or acquisition of stock or assets) any
corporation, partnership or other business organization or division thereof,
make any material investment in any other entity which is not a wholly owned
affiliate of the Company or relinquish any material contract rights; (ii)
acquire (including by lease) any material assets or properties or dispose of,
mortgage or encumber any of its material assets or properties (except in each
case in the ordinary course of business and consistent with past practice or
pursuant to an agreement to which the Company or any subsidiary is a party on
the date hereof); (iii) make or commit to make any capital expenditures in
excess of $150,000; (iv) make any change in accounting principles (except as may
be required by generally accepted accounting principles or

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<PAGE>
Commission regulations, in which event, the Company will fully disclose any such
change and the reason(s) therefor); (v) sell or pledge or agree to sell or
pledge any stock owned by it in any of its subsidiaries; (vi) except to the
extent required under existing employee and director benefit plans, agreements
or arrangements as in effect on the date of the Merger Agreement, increase the
compensation or fringe benefits of any of its directors, officers or employees,
except for increases in salary, wages or commissions of employees of the Company
or its subsidiaries who are not officers of the Company in the ordinary course
of business in accordance with past practice, or grant any severance or
termination pay not currently required to be paid under existing severance plans
or agreements or enter into any employment, consulting or severance agreement or
arrangement with any present or former director, officer or other employee of
the Company or any of its subsidiaries, or establish, adopt, enter into or amend
or terminate any collective bargaining, bonus, profit sharing, thrift,
compensation, stock option, restricted stock, pension, retirement, deferred
compensation, employment, termination, severance or other plan, agreement,
trust, fund, policy or arrangement for the benefit of any directors, officers or
employees; (vii) except for transactions between the Company and subsidiaries or
in the ordinary course of business, transfer, lease, license, guarantee, sell,
mortgage, pledge, dispose of, encumber or subject to any lien, any material
assets or incur or modify any indebtedness or other liability (other than
indebtedness incurred under the Amended and Restated Credit Agreement dated
December 31, 1994, between the Company and Bank of Boston, Connecticut (the
"Existing Credit Facility"); PROVIDED that there shall not be any material
increase in the amounts outstanding under the Existing Credit Facility, other
than in the ordinary course of business, or otherwise as an accommodation,
except for guarantees by the Company of obligations of subsidiaries or
guarantees by subsidiaries of the Company of obligations of other subsidiaries
of the Company, become responsible for the obligations of any person or, other
than in the ordinary course of business consistent with past practice, make any
loan or other extension of credit except for intercompany transactions between
Company and subsidiaries and between subsidiaries; (viii) agree to the
settlement of any material claim or litigation including, but not limited to,
claims or litigation in respect of, related to or arising out of any
environmental laws or matters; (ix) make any material tax election or settle or
compromise any material tax liability; (x) permit any insurance policy naming it
as beneficiary or a loss payable payee to be cancelled without notice to Parent,
except for the cancellation of insurance policies required to be maintained by
third parties for the benefit of the Company or any subsidiary of which such
cancellation neither the Company nor any subsidiary has notice; (xi) adopt a
plan of complete or partial liquidation, dissolution, merger, consolidation,
restructuring, recapitalization or other reorganization of the Company or any of
its subsidiaries not constituting an inactive subsidiary (other than the
Merger); or (xii) agree, in writing or otherwise, to take any of the foregoing
actions, (d) neither the Company nor any of its subsidiaries will (i) change or
amend its Certificate of Incorporation or By-Laws, (ii) issue or sell any shares
of its capital stock (other than shares issuable upon exercise of currently
outstanding options), nor issue options (other than automatic issuances pursuant
to the terms of a plan in effect on the date hereof or pursuant to the terms of
any existing employment agreement), warrants to purchase, or rights to subscribe
to, any shares of its capital stock, or enter into any arrangement or contract
with respect thereto, or (iii) make any other material changes in its capital
structure, other than dividends and other intercompany transfers in the ordinary
course of business between any wholly-owned subsidiary and the Company or
between wholly-owned subsidiaries, (e) except as previously disclosed, the
Company will use all reasonable efforts to preserve the business, business
organization and goodwill of the Company and each of its subsidiaries, keep in
place their present executive officers and key employees, and preserve their
present relationships with persons having business dealings with them, (f) the
Company will use all commercially reasonable efforts to maintain, and will cause
each of its subsidiaries to maintain, insurance substantially at current levels
on all property, real, personal and mixed, owned or leased by them, (g) the
Company will duly file all reports required to be filed by it with the
Commission pursuant to the Exchange Act and submit copies thereof to Parent
simultaneously with the following thereof, (h) the Company shall not redeem the
Rights or amend (other than to delay the Distribution Date (as defined therein)
or to render the Rights inapplicable to the Offer and the Merger) or terminate
the Rights Agreement prior to the Effective Time without the consent of Parent
unless required to do so by a court of competent

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<PAGE>
jurisdiction, and (i) prior to the Closing, the Company will not declare, pay or
set aside for payment any dividend or distributions, including a distribution of
rights, in respect of its capital stock or redeem, purchase or otherwise acquire
any shares of its capital stock, except as contemplated by the Merger Agreement,
in connection with the cancellation or exercise of stock options, or any such
dividends, distributions or payments made by or to any subsidiary.

NO SOLICITATION. The Merger Agreement provides that the Company and its
affiliates and each of their respective officers, directors, employees,
representatives and agents shall immediately upon the execution of the Merger
Agreement cease any discussions or negotiations with any other parties that may
be ongoing with respect to any Acquisition Proposal (as defined below). Neither
the Company nor any of its affiliates shall, directly or indirectly, take (and
the Company shall not authorize or permit its affiliates, 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 making of any 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 or
disclose any information to, any person or entity (other than Parent or the
Purchaser or their representatives) 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 (except as allowed therein) that would make the
Rights Agreement, Section 203 of the DGCL or the provisions of Article FIFTH of
the Company's Certificate of Incorporation inapplicable to an Acquisition
Proposal) that constitutes, or may reasonably be expected to lead to, any
Acquisition Proposal, PROVIDED, however, that the Company, in response to an
unsolicited Acquisition Proposal and in compliance with certain disclosure
obligations contained in the Merger Agreement, as more fully described in the
next succeeding paragraph, may participate in discussions or negotiations with
or furnish information to any third party which proposes a transaction which the
Union Board reasonably determines will result in a Superior Proposal (as defined
below) if the Union Board believes (and has been advised in writing by
independent outside counsel) that failing to take such action would constitute a
breach of its fiduciary duties under applicable law. In addition, neither the
Union Board nor any committee thereof shall (x) withdraw or modify, or propose
to withdraw or modify, in a manner adverse to Parent or the Purchaser the
approval and recommendation of the Offer and the Merger Agreement or (y) approve
or recommend, or propose to approve or recommend, any Acquisition Proposal,
PROVIDED that the Company may recommend to its shareholders an Acquisition
Proposal and in connection therewith withdraw or modify its approval or
recommendation of the Offer or the Merger if (i) the Union Board has determined
that the Acquisition Proposal is a Superior Proposal, (ii) all the conditions to
the Company's right to terminate the Merger Agreement in accordance with the
terms thereof have been satisfied (including the expiration of the three
business day period described therein and the payment of the Termination Fee (as
defined below) and all other amounts required to be paid pursuant thereto),
(iii) simultaneously with such withdrawal, modification or recommendation, the
Merger Agreement is terminated in accordance with its terms and (iv) the
Acquisition Proposal does not provide for any breakup fee or other inducement to
the acquiror other than reimbursement of out-of-pocket expenses incurred in
connection with such Acquisition Proposal.

In addition to the obligations of the Company set forth in the preceding
paragraph, on the date of receipt thereof, the Company has agreed, pursuant to
the Merger Agreement, to advise Parent of any request for information or
Acquisition Proposal, or any inquiry or proposal with respect to any Acquisition
Proposal and the material terms and conditions of such request or takeover
proposal.

"Acquisition Proposal", as used herein, shall mean any inquiry, proposal or
offer from any person relating to any direct or indirect acquisition or purchase
of a substantial amount of assets of the Company or any of its subsidiaries or
of over 10% of any class of equity securities of the Company or any of its
subsidiaries, any tender offer or exchange offer that if consummated would
result in any person beneficially owning 10% or more of any class of equity
securities of the Company or any of its subsidiaries, any

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<PAGE>
merger, consolidation, business combination, sale of substantially all the
assets, recapitalization, liquidation, dissolution or similar transaction
involving the Company or any of its subsidiaries, other than the transactions
contemplated by the Merger Agreement, or any other transaction the consummation
of which could reasonably be expected to impede, interfere with, prevent or
materially delay the Offer or the Merger or which would reasonably be expected
to dilute materially the benefits to Parent of the transactions contemplated by
the Merger Agreement. As used herein, "Superior Proposal" shall mean a bona fide
proposal made by a third party to acquire all of the outstanding shares of the
Company pursuant to a tender offer, a merger or a sale of all of the assets of
the Company (x) on terms which a majority of the members of the Union Board
determines in its good faith reasonable judgment (based on the advice of
independent outside financial and legal advisors) to be more favorable to the
Company and its shareholders than the transactions contemplated by the Merger
Agreement, (y) for which in the good faith reasonable judgment of the Union
Board adequate financing or other consideration is then available and (z) which
does not provide for any breakup fee or other inducement to the acquiror other
than reimbursement of documented out-of-pocket expenses incurred in connection
with the Superior Proposal. Any actions permitted under, and taken in compliance
with, this provision of the Merger Agreement shall not be deemed a breach of any
other covenant or agreement of such party contained in the Merger Agreement.

DIRECTORS' AND OFFICERS' INSURANCE AND INDEMNIFICATION. Parent has agreed
in the Merger Agreement that from and after the Share Purchase, Parent shall
cause the Company to (i) maintain in effect in the Certificate of Incorporation
of the Company the provisions with respect to the indemnification set forth in
Article SEVENTH of the Certificate of Incorporation of the Company as in effect
on the date of the Share Purchase, which provisions shall not be amended,
repealed or otherwise modified for a period of six (6) years from the Effective
Time in any manner that would adversely affect the rights thereunder of
individuals (or their estates) who at the date of the Merger Agreement and/or
the Share Purchase are or were directors, officers, employees or agents of the
Company or its subsidiaries, unless such modification is required by law and
(ii) maintain in effect for a period of six (6) years from the date of the Share
Purchase each indemnification agreement in effect (as of such date) between the
Company or any of its subsidiaries and officers and directors of the Company and
its subsidiaries, which indemnification agreement shall not be amended or
modified during such period in any manner that would adversely affect the rights
of the individual who is a party thereto. In addition, prior to the Share
Purchase, the Company will purchase a six year "tail" insurance policy
substantially identical to the Company's current directors' and officers'
liability insurance with specified coverage amounts and reinstatement options
covering those persons who are covered on the date of the Merger Agreement by
the Company's directors' and officers' liability insurance policy.

COMPENSATION AND BENEFITS. Parent has agreed that, until the first
anniversary of the Effective Time, (a) Parent shall ensure that all employees
and officers of the Company and its subsidiaries receive compensation and
benefits in the aggregate substantially comparable to the compensation and
benefits received by such individuals immediately prior to the date of the
Merger Agreement, it being understood that, notwithstanding the foregoing,
following the Effective Time, Parent may terminate the employment of any
employee (subject to the payment of severance benefits payable to the employee
in connection with such termination), and (b) Parent shall keep in effect all
severance policies that are applicable to employees and officers of the Company
immediately prior to the date of the Merger Agreement. In addition, Parent has
agreed pursuant to the Merger Agreement that, following the Effective Time, (x)
Parent will ensure that no employee welfare benefit plan adopted by the Company
or its subsidiaries shall have any preexisting condition limitations, (y) Parent
shall honor all premiums and deductibles paid by the employees, officers and
directors of the Company and subsidiaries under all Employee Benefit Plans (as
defined in the Merger Agreement) up to (and including) the Effective Time, and
(z) for purposes of eligibility and vesting, Parent shall honor all service
credit accrued by the employees, officers and directors of the Company and its
subsidiaries under all Employee Benefit Plans up to (and including) the
Effective Time.

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<PAGE>
OPTIONS. As soon as practicable following the date of the Merger Agreement,
the Union Board has agreed that it shall adopt appropriate resolutions and cause
the Company to take all actions necessary to obtain the consent of each holder
of an outstanding option to purchase Shares (an "Option") to the effect that,
upon the Share Purchase, each Option, whether or not then vested or exercisable,
shall no longer be exercisable for the purchase of Shares but shall entitle each
holder thereof, in cancellation and settlement therefor, to a payment in cash
(subject to any applicable withholding taxes, the "Cash Payment"), equal to the
product of (x) the total number of Shares subject to such Option as to which
such Option could have been exercised and (y) the excess of the Offer Price over
the exercise price per Share subject to such Option, each such Cash Payment to
be paid to each holder (or, without duplication, the beneficial owner) of an
outstanding Option on the date of the Share Purchase.

Pursuant to the Merger Agreement, all stock option plans of the Company
("Stock Plans") shall terminate as of the Effective Time and the provisions in
any other Employee Benefit Plan 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. The Company shall
ensure that following the Effective Time no holder of an Option or any
participant in any Stock Plan shall have any right thereunder to acquire any
capital stock of the Company, Parent or the Surviving Corporation. The Company
will ensure that neither the Company nor any of its subsidiaries is or will be
bound by any Options, other options, warrants, rights or agreements which would
entitle any Person, other than Parent or its affiliates, to own any capital
stock of the Surviving Corporation or any of its subsidiaries or to receive any
payment in respect thereof.

COOPERATION. Pursuant to the Merger Agreement, each of the Company and
Parent will cooperate with each other and each such party shall take all
reasonable actions that may be necessary or desirable to consummate the
transactions contemplated pursuant to the Merger Agreement, including, but not
limited to, furnishing to each other, or reviewing, the information relating to
each of them required by applicable statutes, rules and regulations for the
purpose of preparing the Offer Documents (as defined in the Merger Agreement),
any federal and state securities law filings and any filings under the HSR Act.
Prior to the execution of the Merger Agreement, Parent will provide the Company
with a copy in draft form of the Offer Documents and will make available a final
copy of the Offer Documents prior to filing with the Commission. Each party
covenants that all such information furnished to the other or reviewed by it
will be true and correct in all material respects to the knowledge of such
party. Parent and the Company will promptly notify the other party hereto of any
comments or requests for additional information from the Commission or state
securities law administrators or relating to any filing under the HSR Act
relating to the Offer, and will upon request supply the other parties hereto
with copies of all correspondence between them or their representatives and the
Commission or members of its staff or state securities law administrators with
respect to the transactions contemplated hereby or relating to any filing under
the HSR Act relating thereto.

FILINGS; CONSENTS; REMOVAL OF OBLIGATIONS. Pursuant to the Merger
Agreement, each of the Company, Parent and Purchaser agrees to exert all
reasonable efforts to consummate the Offer and the Merger at the earliest
practicable time, including, without limitation, (i) preparing and filing all
requisite applications, documents and notifications (including filing with the
Federal Trade Commission (the "FTC") and the United States Department of Justice
("DOJ") the Notification and Report Forms under the HSR Act and cooperating with
each other with respect to the filing of any additional information with respect
thereto) in connection with the transaction contemplated therein required by
applicable law, (ii) responding as promptly as practicable to all inquiries in
connection therewith, (iii) removing or satisfying, if reasonably practicable,
any objections to the validity or legality of the Share Purchase, and (iv)
satisfying the conditions to the consummation of the Share Purchase set forth in
the Merger Agreement.

REPRESENTATIONS AND WARRANTIES. In the Merger Agreement, the Company has
made customary representations and warranties to Parent and the Purchaser with
respect to, among other things, its

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<PAGE>
organization, corporate authority, capitalization, the Rights Agreement,
financial statements, public filings, conduct of business, compliance with laws,
consent and approvals, opinions of financial advisors, vote required,
undisclosed liabilities, litigation, environmental matters and the absence of
any material adverse changes in the Company since June 30, 1997.

TERMINATION AND ABANDONMENT. The Merger Agreement may be terminated prior
to the Share Purchase and the Merger may be abandoned, after the Share Purchase:
(a) by mutual written consent of the Company, on the one hand, and of Parent and
the Purchaser, on the other hand; (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 acceptance for payment of,
or payment for, the Shares pursuant to the Offer and such order, decree or
ruling or other action shall have become final and nonappealable; (c) by Parent,
on the one hand, or the Company, on the other hand, if the Share Purchase shall
not have occurred within 120 days after commencement of the Offer unless the
Share Purchase shall not have occurred because of a material breach of any
representation, warranty, obligation, covenant, agreement or condition set forth
in the Merger Agreement on the part of the party seeking to terminate the Merger
Agreement; (d) by the Parent, in the event of a breach by the Company of any
representation, warranty, covenant or agreement contained in the Merger
Agreement which (A) would give rise to the failure of a condition set forth in
clause (iv)(d) or (f) of the conditions set forth in Section 14 hereof and (B)
cannot or has not been cured prior to the earlier of (i) 15 days after the
giving of written notice of such breach to the Company and (ii) two business
days prior to the date on which the Offer expires; (e) by either Parent, on the
one hand, or the Company, on the other hand, if the Union Board determines that
an Acquisition Proposal constitutes a Superior Proposal and the Union Board
believes (and has been advised by independent outside 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 duties; provided,
however the Company may not terminate the Merger Agreement in this manner unless
and until three days have elapsed following delivery to Parent of a written
notice of such determination by the Union Board and during such three day period
the Company has fully cooperated with the Parent, including, without limitation,
informing the Parent of the terms and conditions of such Superior Proposal with
the intent of enabling both parties to agree to a modification of the terms and
conditions of the Merger Agreement so that the transactions contemplated hereby
may be effected; and PROVIDED further that at the end of such three day period
the Union Board determines that the Acquisition Proposal constitutes a Superior
Proposal and the Union Board continues to believe (and has again been advised by
independent outside 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 duties; PROVIDED FURTHER that the Merger Agreement shall
not terminate in this manner unless (i) prior to such termination Parent has
received the fees and expenses set forth in the Merger Agreement and described
under "--Payment of Certain Fees and Expenses Upon Termination" below by wire
transfer in same day funds and (ii) simultaneously with such termination the
Company enters into a definitive acquisition, merger or similar agreement to
effect the Superior Proposal which acquisition agreement (x) permits the Company
to terminate the acquisition agreement in the event the Union Board determines
to effect a transaction with Parent and (y) does not provide for a break up fee
or other inducement to the acquiror other than reimbursement of documented
out-of-pocket expenses incurred in connection with such Superior Proposal; or
(f) by the Company, in the event of a breach by Parent or the Purchaser of any
representation, warranty, covenant or agreement contained in the Merger
Agreement which cannot or has not been cured within 15 days after the giving of
written notice of such breach to Parent and the Purchaser, except in any case
where such breaches are not reasonably likely to affect adversely Parent's or
the Purchaser's ability to complete the Offer and/or the Merger.

The Merger Agreement provides that, in the event of termination pursuant to
the provisions described above by Parent or the Purchaser, 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 the Merger Agreement shall become void and have no

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effect, and there shall be no liability thereunder on the part of Parent, the
Purchaser or the Company, except that certain provisions of the Merger Agreement
relating to confidentiality and certain fees and expenses shall survive any
termination of the Merger Agreement. Nothing in this provision shall relieve any
party to the Merger Agreement of liability for breach of the Merger Agreement.

PAYMENT OF CERTAIN FEES AND EXPENSES UPON TERMINATION. Except as provided
in the next succeeding sentence, all costs and expenses incurred in connection
with the Merger Agreement and the consummation of the transactions contemplated
thereby shall be paid by the party incurring such costs and expenses. If the
Merger Agreement is terminated: (i) by Parent because of an event set forth in
clause (iv) (e) of Section 14 hereof; (ii) by Parent or the Company as set forth
under clause (e) of "--Termination and Abandonment" above; or (iii) by the
Company as set forth under clause (c) of "--Termination and Abandonment" above,
if, prior to such termination, the Company shall have directly or indirectly
notified any of its stockholders that a third party has made an Acquisition
Proposal or a third party shall have announced an Acquisition Proposal, and
within twelve months after such termination, the Company or any of its
subsidiaries 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 which would give the acquirors not less
than 10% of the issued Shares, a tender offer or exchange offer or similar
transaction involving the Company or one or more of its subsidiaries accounting
for more than 10% of the Company's consolidated income in its prior fiscal year
(a "Third Party Acquisition"), or a Third Party Acquisition occurs, involving
any such party (or any affiliate or associate thereof) (x) with whom the Company
or any subsidiary (or their respective representatives) during the term of the
Merger Agreement had any discussions with respect to a Third Party Acquisition,
(y) to whom the Company or any subsidiary (or any of their respective
representatives) 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 had submitted a proposal or who
expressed any interest publicly or to the Company or any subsidiary (or their
respective representatives) in a Third Party Acquisition, which Third Party
Acquisition contemplates a direct or indirect consideration for Shares in excess
of the Merger Consideration, in the case of each of clauses (x), (y) and (z)
prior to such termination; then the Company shall (except as required to be
earlier paid in accordance with the Merger Agreement) pay to Parent in same day
funds $7.7 million, which shall be deemed to include reimbursement for all
out-of-pocket fees and expenses incurred by Parent or on its behalf in
connection with the transactions contemplated hereby.

12. DIVIDENDS AND DISTRIBUTIONS. As described above, the Merger Agreement
provides that prior to the Effective Time, the Company and each of its
subsidiaries will not declare, pay or set aside for payment any dividend or
distributions, including a distribution of rights, in respect of its capital
stock or redeem, purchase or otherwise acquire any shares of its capital stock,
except as contemplated by the Merger Agreement, in connection with the
cancellation or exercise of stock options, or any such dividends, distributions
or payments made by or to any subsidiary. Under the terms of the Company's
current financing, the Company is precluded from paying cash dividends on its
common stock.

If, on or after December 22, 1997, the Company should redeem, purchase or
otherwise acquire any shares of its capital stock except as provided above,
then, the Purchaser, in its sole discretion, may make such adjustments as it
deems appropriate in the Offer Price and other terms of the Offer, including,
without limitation, the number of securities offered to be purchased.

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If, on or after December 22, 1997, the Company should declare, pay, set
aside or make any cash dividend or make other distributions or payments with
respect to any shares of its capital stock, or issue with respect to any shares
of its capital stock any rights to acquire any of the foregoing, payable or
distributable to shareholders of record on a date prior to the transfer of the
Shares purchased pursuant to the Offer to the Purchaser on the Company's stock
transfer records, then, subject to the provisions of Section 14 hereof, (a) the
Offer Price may, in the sole discretion of the Purchaser, be reduced by the
amount of any such cash dividend or cash distribution and (b) the whole of any
such noncash dividend, distribution or issuance to be received by the tendering
shareholders will (i) be received and held by the tendering shareholders for the
account of the Purchaser and will be required to be promptly remitted and
transferred by each tendering shareholder to the Depositary for the account of
the Purchaser, accompanied by appropriate documentation of transfer, or (ii) at
the direction of the Purchaser, be exercised for the benefit of the Purchaser,
in which case the proceeds of each exercise will promptly be remitted to the
Purchaser. Pending such remittance and subject to applicable law, the Purchaser
will be entitled to all rights and privileges as owner of any such noncash
dividend, distribution, issuance or proceeds and may withhold the entire Offer
Price or deduct from the Offer Price the amount or value thereof, as determined
by the Purchaser in its sole discretion.

In accordance with the terms of the Merger Agreement, the Union Board has
taken action to cause the Rights to be redeemed immediately prior to, and
subject to, the acceptance for payment and purchase of not less than the
two-thirds of the outstanding Shares pursuant to the Offer (the proceeds of any
such redemption of Rights associated with the Shares tendered in the Offer to be
for the account of the Purchaser in accordance with clause (b)(ii) of the
immediately preceding paragraph). Pursuant to the terms of the Merger Agreement
and except as described in the preceding sentence, the Company is prohibited
from taking any of the actions described in the preceding paragraphs and nothing
herein shall constitute a waiver by the Purchaser or Parent of any of its rights
under the Merger Agreement or a limitation of remedies available to the
Purchaser or Parent for any breach of the Merger Agreement, including
termination thereof.

13. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; EXCHANGE LISTING AND
EXCHANGE ACT REGISTRATION. The purchase of Shares pursuant to the Offer will
reduce the number of Shares that might otherwise trade publicly and could reduce
the number of holders of Shares, which could adversely affect the liquidity and
market value of the remaining Shares held by the public.

The extent of the public market for the Shares and, according to the
published guidelines of the National Association of Securities Dealers, Inc.,
the continued trading of the Shares on the NYSE, after commencement of the
Offer, will depend upon the number of holders of Shares remaining at that time,
the interest in maintaining a market in the Shares on the part of securities
firms, the possible termination of registration of the Shares under the Exchange
Act, as described below, and other factors.

The Company has informed the Purchaser that, as of December 22, 1997,
5,802,641 Shares were outstanding. If, as a result of the purchase of Shares
pursuant to the Offer or otherwise, trading of the Shares on the NYSE is
discontinued, the liquidity of and market for the Shares could be adversely
affected. The Purchaser cannot predict whether or to what extent the reduction
in the number of Shares that might otherwise trade publicly would have an
adverse or beneficial effect on the market price for or marketability of the
Shares or whether it would cause future prices to be greater or less than the
Offer Price.

The Shares are currently "margin securities," as such term is defined under
the rules of the Federal Reserve Board, which has the effect, among other
things, of allowing brokers to extend credit on the collateral of such
securities. Depending upon factors similar to those described above regarding
listing and market quotations, following the Offer it is possible that the
Shares might no longer constitute "margin securities" for purposes of the margin
regulations of the Federal Reserve Board, in which event such Shares could no
longer be used as collateral for loans made by brokers.

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<PAGE>
THE SHARES ARE CURRENTLY REGISTERED UNDER THE EXCHANGE ACT. Such
registration may be terminated upon application of the Company to the Commission
if the Shares are not listed on a national securities exchange and there are
fewer than 300 record holders of the Shares. The termination of registration of
the Shares under the Exchange Act would substantially reduce the information
required to be furnished by the Company to holders of Shares and to the
Commission and would make certain provisions of the Exchange Act, such as the
short-swing profit recovery provisions of Section 16(b) of the Exchange Act, the
requirement of furnishing a proxy statement in connection with shareholders'
meetings pursuant to Section 14(a) of the Exchange Act and the requirements of
Rule 13e-3 under the Exchange Act with respect to "going private" transactions,
no longer applicable to the Shares. In addition, "affiliates" of the Company and
persons holding "restricted securities" of the Company may be deprived of the
ability to dispose of such securities pursuant to Rule 144 promulgated under the
Securities Act. If registration of the Shares under the Exchange Act were
terminated, the Shares would no longer be "margin securities" or eligible for
listing on the NYSE. It is the present intention of the Purchaser to cause the
Company to make an application for termination of registration of the Shares as
soon as possible after successful completion of the Offer.

14. CONDITIONS OF THE OFFER. Notwithstanding any other provision of the
Offer or the Merger Agreement, the Purchaser shall not be required to accept for
payment or, subject to any applicable rules and regulations of the Commission,
including Rule 14e-1(c) under the Exchange Act (relating to the Purchaser's
obligation to pay for or return tendered Shares promptly after termination or
withdrawal of the Offer), pay for any Shares tendered if (i) there shall not
have been validly tendered and not withdrawn prior to the expiration of the
Offer a number of Shares which represent two-thirds of the total voting power of
all shares of capital stock of the Company outstanding on a fully diluted basis,
(ii) any applicable waiting period (and any extension thereof) under the HSR Act
shall not have expired or been terminated, (iii) Parent shall not have received
financing necessary for it and Purchaser to consummate the Offer and the other
transactions contemplated by the Merger Agreement in accordance with the Bank
Commitment Letter or (iv) if, at any time on or after the date of the Merger
Agreement and at or before the time of payment for any such Shares (whether or
not any Shares have theretofore been accepted for payment or paid for pursuant
to the Offer) any of the following shall occur:

(a) there shall be instituted or pending any action or proceeding by any
government or governmental authority or agency, domestic or foreign, or by
any other person, domestic or foreign, before any court or governmental
authority or agency, domestic or foreign, (i) challenging or seeking to, or
which could reasonably be expected to make illegal, impede, delay or
otherwise directly or indirectly materially restrain, prohibit or make more
costly the Offer or the Merger or seeking to obtain material damages, (ii)
seeking to prohibit or materially limit the ownership or operation by Parent
or the Purchaser of all or any material portion of the business or assets of
the Company and its subsidiaries taken as a whole or to compel Parent or the
Purchaser to dispose of or hold separately all or any material portion of
the business or assets of Parent or the Company and its subsidiaries taken
as a whole, or seeking to impose any material limitation by reason of the
transactions contemplated by the Merger Agreement on the ability of Parent
or the Purchaser to conduct its business or own such assets, (iii) seeking
to impose limitations on the ability of Parent or the Purchaser effectively
to exercise full rights of ownership of the Shares, including, without
limitation, the right to vote any Shares acquired or owned by the Purchaser
or Parent on all matters properly presented to the Company's shareholders,
(iv) seeking to require divestiture by Parent or the Purchaser of any
Shares, (v) otherwise directly or indirectly relating to the Offer or the
Merger and which could reasonably be expected to materially adversely affect
Company or any of its subsidiaries or Parent or Purchaser or (vi) otherwise
having a Material Adverse Effect (as defined in the Merger Agreement) on the
Company and its subsidiaries taken as a whole;

(b) there shall be any action taken, or any statute, rule, regulation,
legislation, interpretation, judgment, order or injunction proposed,
enacted, enforced, promulgated, amended, issued or deemed

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<PAGE>
applicable to (i) Parent, the Purchaser, the Company or any subsidiary or
(ii) the Offer or the Merger, by any legislative body, court, government or
governmental, administrative or regulatory authority or agency, domestic or
foreign, other than the routine application of the waiting period provisions
of the HSR Act to the Offer or to the Merger, which could reasonably be
expected to directly or indirectly result in any of the consequences
referred to in clauses (i) through (vi) of paragraph (a) above;

(c) any change (other than as a result of general economic conditions)
shall have occurred, or Parent shall have become aware of any fact, that is
reasonably likely to have a Material Adverse Effect on the Company and its
subsidiaries taken as a whole;

(d) any of the representations or warranties made by the Company in the
Merger Agreement that are qualified as to materiality shall be untrue or
incorrect in any respect or any of such representations and warranties that
are not so qualified shall be untrue or incorrect in any material respect as
of the date of the Merger Agreement or immediately prior to the Share
Purchase;

(e) the Union Board shall have withdrawn, modified or amended in any
respect adverse to Parent or the Purchaser its recommendation of the Offer
or the Merger, or shall have resolved to do so;

(f) the Company shall have failed to perform in any material respect any
material obligation or to comply in any material respect with any material
agreement or material covenant of the Company to be performed or complied
with by it under the Merger Agreement; or

(g) the Merger Agreement shall have been terminated in accordance with
its terms,

which, in the reasonable judgment of the Purchaser, makes it inadvisable to
proceed with such acceptance for payment or payment.

The foregoing conditions (including those set forth in clauses (i)-(iv)
above) are for the sole benefit of Parent and the Purchaser and may be asserted
by Parent or the Purchaser, or may be waived by Parent or the Purchaser, in
whole or in part at any time and from time to time in its sole discretion. The
failure by Parent or the Purchaser at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right and each such right shall
be deemed an ongoing right which may be asserted at any time and from time to
time.

15. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS.

GENERAL. Except as otherwise disclosed herein, neither the Purchaser nor
Parent is aware of (i) any license or regulatory permit that appears to be
material to the business of the Company and its subsidiaries, taken as a whole,
that might be adversely affected by the acquisition of Shares by the Purchaser
pursuant to the Offer or the Merger or (ii) any approval or other action by any
governmental, administrative or regulatory agency or authority, domestic or
foreign, that would be required for the acquisition or ownership of Shares by
the Purchaser as contemplated herein. Should any such approval or other action
be required, the Purchaser currently contemplates that it would seek such
approval or action. The Purchaser's obligation under the Offer to accept for
payment and pay for Shares is subject to certain conditions. See Section 14.
While the Purchaser does not currently intend to delay the acceptance for
payment of Shares tendered pursuant to the Offer pending the outcome of any such
matter, there can be no assurance that any such approval or action, if needed,
would be obtained or would be obtained without substantial conditions or that
adverse consequences might not result to the business of the Company, the
Purchaser or Parent or that certain parts of the businesses of the Company, the
Purchaser or Parent might not have to be disposed of in the event that such
approvals were not obtained or any other actions were not taken.

APPRAISAL RIGHTS. In connection with the Merger, holders of Shares of the
Company will be entitled to appraisal rights under Section 262 of the DGCL
("Section 262"). All references in Section 262 and in this summary to a
"stockholder" are to the record holder of the Shares of the Company as to which
appraisal

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<PAGE>
rights are asserted. A person having a beneficial interest in Shares of the
Company that are held of record in the name of another person, such as a broker
or nominee, must act promptly to cause the record holder to follow the steps
summarized below properly and in a timely manner to perfect whatever appraisal
rights the beneficial owner may have.

The following discussion is not a complete statement of the law relating to
appraisal rights and is qualified in its entirety by reference to Section 262.
THIS DISCUSSION SHOULD BE REVIEWED CAREFULLY BY ANY HOLDER WHO WISHES TO
EXERCISE STATUTORY APPRAISAL RIGHTS OR WHO WISHES TO PRESERVE THE RIGHT TO DO SO
BECAUSE FAILURE STRICTLY TO COMPLY WITH THE PROCEDURES SET FORTH HEREIN AND
THEREIN WILL RESULT IN THE LOSS OF APPRAISAL RIGHTS.

Under the DGCL, if the Purchaser acquires, pursuant to the Offer or
otherwise, at least 90% of the then outstanding Shares, the Purchaser will be
able to approve and adopt the Merger Agreement and the Merger without a vote of
the Company's shareholders. In such event, within ten days of the Effective
Date, the Company shall notify all holders of Shares who did not tender such
Shares in the Offer or the Merger. Each such shareholder electing to demand
appraisal of his or her shares shall deliver to the Company, within 20 days of
the mailing of such notice, a written demand for appraisal of his or her Shares.
Such demand must reasonably inform the Company of the identity of the
stockholder and that such stockholder intends thereby to demand the appraisal of
his or her Shares. Additionally, appraisal rights will not be available under
Section 262 if the stockholder does not continuously hold through the Effective
Time his or her Shares with respect to which he or she demands appraisal.

If the Minimum Condition is satisfied but the Purchaser has not acquired 90%
of the then outstanding Shares, under the DGCL, the Merger Agreement and Merger
must be approved by a vote of the Company's stockholders. Each stockholder of
the Company electing to demand appraisal of his or her Shares shall deliver to
the Company, before the taking of the vote on the Merger at a special meeting, a
written demand for appraisal of his or her Shares of the Company. Such demand
must reasonably inform the Company of the identity of the stockholder and that
such stockholder intends thereby to demand the appraisal of his or her Shares of
the Company. This written demand for appraisal of the Shares of the Company must
be in addition to and separate from any proxy or vote against the Merger. Voting
against, abstaining from voting or failing to vote on the Merger will not
constitute a demand for appraisal within the meaning of Section 262. Any
stockholder electing to demand his appraisal rights will not be granted
appraisal rights under Section 262 if such stockholder has either voted in favor
of the Merger or consented thereto in writing (including by granting a proxy or
by returning a signed proxy without specifying a vote against the Merger or a
direction to abstain from such vote). Additionally, appraisal rights will not be
available under Section 262 if the stockholder does not continuously hold
through the Effective Time his or her Shares of the Company with respect to
which he or she demands appraisal.

A demand for appraisal must be executed by or for the stockholder of record,
fully and correctly, as such stockholder's name appears on the certificate or
certificates representing Shares of the Company. If the Shares of the Company
are owned of record in a fiduciary capacity, such as by a trustee, guardian or
custodian, such demand must be executed by the fiduciary. If the Shares of the
Company are owned of record by more than one person, as in a joint tenancy or
tenancy in common, such demand must be executed by all joint owners. An
authorized agent, including an agent for two or more joint owners, may execute
the demand for appraisal for a stockholder of record; however, the agent must
identify the record owner and expressly disclose the fact that, in exercising
the demand, such person is acting as agent for the record owner.

A record owner, such as a broker, who holds Shares of the Company as a
nominee for others, may exercise appraisal rights with respect to the Shares of
the Company held for all or less than all beneficial owners of Shares of the
Company as to which such person is the record owner. In such case the written
demand must set forth the number of Shares of the Company covered by such
demand. Where the number

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of Shares of the Company is not expressly stated, the demand will be presumed to
cover all Shares of the Company outstanding in the name of such record owner.
Beneficial owners who are not record owners and who intend to exercise appraisal
rights should instruct the record owner to comply strictly with the statutory
requirements with respect to the exercise of appraisal rights.

A stockholder who elects to exercise appraisal rights must mail or deliver
his or her written demand to the Secretary of the Company at 211 King Street,
Suite 100, Charleston, South Carolina 29401. The written demand for appraisal
must specify the stockholder's name and mailing address, the number of Shares of
the Company owned, and that the stockholder is thereby demanding appraisal of
his or her Shares of the Company. Within ten days after the Effective Time, the
Company must provide notice to all stockholders who have complied with Section
262 and have not voted in favor of or consented to the adoption of the Merger
Agreement.

Within 120 days after the Effective Time, either the Company or any
stockholder who has complied with the required conditions of Section 262 may
file a petition in the Delaware Court of Chancery (the "Delaware Chancery
Court") demanding a determination of the value of the Shares of the Company of
the dissenting stockholders. If a petition for an appraisal is timely filed,
after a hearing on such petition, the Delaware Chancery Court will determine
which stockholders are entitled to appraisal rights and will appraise the Shares
of the Company owned by such stockholders, determining the fair value of such
Shares of the Company, exclusive of any element of value arising from the
accomplishment or expectation of the Merger, together with a fair rate of
interest to be paid, if any, upon the amount determined to be the fair value. In
determining such fair value, the Delaware Chancery Court is to take into account
all relevant factors.

Stockholders considering seeking appraisal should have in mind that the
"fair value" of their Shares of the Company determined under Section 262 could
be more than, the same as or less than the Offer Price, and that opinions of
investment banking firms as to fairness, from a financial point of view, are not
opinions as to fair value under Section 262. The cost of the appraisal
proceeding may be determined by the Delaware Chancery Court and taxed against
the parties as the Delaware Chancery Court deems equitable in the circumstances.
Upon application of a dissenting stockholder, the Delaware Chancery Court may
order that all or a portion of the expenses incurred by any dissenting
stockholder in connection with the appraisal proceeding, including, without
limitation, reasonable attorneys' fees and the fees and expenses of experts, be
charged pro rata against the value of all Shares of the Company entitled to
appraisal.

Any stockholder who has duly demanded appraisal in compliance with Section
262 will not, from and after the Effective Time, be entitled to vote for any
purpose the Shares of the Company subject to such demand or to receive payment
of dividends or other distributions on such Shares of the Company, except for
dividends or distributions payable to stockholders of record at a date prior to
the Effective Time.

At any time within 60 days after the Effective Time, any stockholder shall
have the right to withdraw his or her demand for appraisal and to accept the
terms offered in the Offer; after this period, the stockholder may withdraw his
or her demand for appraisal only with the consent of the Company. If no petition
for appraisal is filed with the Delaware Chancery Court within 120 days after
the Effective Time, stockholders' rights to appraisal shall cease, and all
holders of Shares of the Company shall be entitled to receive the Offer Price.
Inasmuch as the Company has no obligation to file such a petition, and has no
present intention to do so, any stockholder who desires such a petition to be
filed is advised to file it on a timely basis. However, no petition timely filed
in the Delaware Chancery Court demanding appraisal shall be dismissed as to any
stockholder without the approval of the Delaware Chancery Court, and such
approval may be conditioned upon such terms as the Delaware Chancery Court deems
just.

THE FOREGOING SUMMARY OF THE RIGHTS OF OBJECTING SHAREHOLDERS DOES NOT
PURPORT TO BE A COMPLETE STATEMENT OF THE PROCEDURES TO BE FOLLOWED BY
SHAREHOLDERS DESIRING TO EXERCISE ANY AVAILABLE DISSENTERS' RIGHTS. The
preservation and exercise of dissenters' rights require strict adherence to the
applicable provisions of the DGCL.

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THE PROVISIONS OF SECTION 262 ARE COMPLEX AND TECHNICAL IN NATURE.
SHAREHOLDERS DESIRING TO EXERCISE DISSENTERS' RIGHTS MAY WISH TO CONSULT
COUNSEL, SINCE THE FAILURE TO COMPLY STRICTLY WITH THESE PROVISIONS WILL RESULT
IN THE LOSS OF THEIR DISSENTERS' RIGHTS.

GOING PRIVATE TRANSACTIONS. Rule 13e-3 under the Exchange Act is applicable
to certain "going-private" transactions. The Purchaser does not believe that
Rule 13e-3 will be applicable to the Merger, unless, among other things, the
Merger is completed more than one year after termination of the Offer. If
applicable, Rule 13e-3 would require, among other things, that certain financial
information regarding the Company and certain information regarding the fairness
of the Merger and the consideration offered shareholders of the Company therein
be filed with the Commission and disclosed to shareholders of the Company prior
to consummation of the Merger.

ANTITRUST. Under the HSR Act, certain mergers and acquisitions may not be
consummated unless certain information has been furnished to the Antitrust
Division and the FTC and certain waiting period requirements have been
satisfied. The acquisition of Shares by the Purchaser pursuant to the Offer is
subject to the HSR Act requirements.

Under the provisions of the HSR Act applicable to the purchase of Shares
pursuant to the Offer, such purchase may not be made until the expiration of a
15-calendar day waiting period following the required filing of a Notification
and Report Form under the HSR Act by Parent, unless early termination of the
waiting period is granted or Parent receives a request for additional
information or documentary material prior thereto. If either the FTC or the
Antitrust Division were to request additional information or documentary
material from Parent prior to the expiration of the 15-day waiting period, the
waiting period would be extended and would expire at 11:59 P.M., New York City
time, on the tenth calendar day after the date of substantial compliance by
Parent with such request. Thereafter, the waiting period could be extended only
by court order or by consent of Parent. If the acquisition of Shares is delayed
pursuant to a request by the FTC or the Antitrust Division for additional
information or documentary material pursuant to the HSR Act, the purchase of and
payment for Shares pursuant to the Offer will be deferred until 10 days after
the request is substantially complied with, unless the waiting period is
terminated sooner by the FTC or the Antitrust Division or extended by court
order or by consent of a party. See Section 2. Only one extension of such
waiting period pursuant to a request for additional information or documentary
material is authorized by the rules promulgated under the HSR Act, except by
court order or by consent. Although the Company is required to file certain
information and documentary material with the Antitrust Division and the FTC in
connection with the Offer, neither the Company's failure to make such filings
nor a request to the Company from the Antitrust Division or the FTC for
additional information or documentary material will extend the waiting period.
However, if the Antitrust Division or the FTC raises substantive issues in
connection with a proposed transaction, the parties frequently engage in
negotiations with the relevant governmental agency concerning possible means of
addressing these issues and may agree to delay consummation of the transaction
while such negotiations continue.

The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed acquisition of Shares by
the Purchaser pursuant to the Offer. At any time before or after the Purchaser's
purchase of Shares, either the Antitrust Division or the FTC could take such
action under the antitrust laws as it deems necessary or desirable in the public
interest, including seeking to enjoin the acquisition of Shares pursuant to the
Offer or seeking divestiture of Shares acquired by the Purchaser or divestiture
of substantial assets of Parent, the Company or any of their respective
subsidiaries. State attorneys general may also bring legal action under the
antitrust laws, and private parties may bring such action under certain
circumstances. Parent and the Purchaser believe that the acquisition of Shares
by the Purchaser will not violate the antitrust laws. Nevertheless, there can be
no assurance that a challenge to the Offer on antitrust grounds will not be made
or, if a challenge is made, what the result will be. See Section 14 for certain
conditions to the Offer, including conditions with respect to litigation and
certain governmental actions.

34
<PAGE>
16. FEES AND EXPENSES. Except as set forth below, neither Parent nor the
Purchaser will pay any fees or commissions to any broker, dealer or other person
for soliciting tenders of Shares pursuant to the Offer.

Pursuant to an engagement letters with Parent, Lazard Freres and Goldman
Sachs have been retained to act as financial advisors to Parent in connection
with its effort to acquire the Company. Parent has agreed to pay Lazard Freres
and Goldman Sachs an aggregate of $1.5 million for their services. In addition,
Parent has agreed to reimburse Lazard Freres and Goldman Sachs for all
reasonable out-of-pocket expenses incurred by them, including the reasonable
fees of its counsel. Furthermore, Parent has agreed to indemnify Lazard Freres
and Goldman Sachs and certain related persons against certain liabilities and
expenses. In the event that the Merger is not consummated and Parent receives
the termination fee contemplated by the Merger Agreement, Parent will be
obligated to pay a portion of such fee to Lazard Freres and Goldman Sachs. In
addition to these fees, a research analyst employed by Lazard Freres, who had
been previously employed by Oppenheimer, will be entitled to 10% of any net fee
paid by the Company to Oppenheimer.

Lazard Freres and Goldman Sachs are acting as the Dealer Managers in
connection with the Offer. Lazard Freres and Goldman Sachs will not be entitled
to any additional fees for their services as Dealer Managers.

The Purchaser and Parent have also retained Chase Mellon Shareholder
Services, L.L.C. as the Depositary. The Depositary has not been retained to make
solicitations or recommendations in its role as Depositary. The Depositary will
receive reasonable and customary compensation for its services, will be
reimbursed for certain reasonable out-of-pocket expenses and will be indemnified
against certain liabilities and expenses in connection therewith, including
certain liabilities under the federal securities laws.

In addition, the Purchaser and Parent have retained MacKenzie Partners, Inc.
to act as the Information Agent in connection with the Offer. The Information
Agent will receive reasonable and customary compensation for its services, will
be reimbursed for certain reasonable out-of-pocket expenses and will be
indemnified against certain liabilities and expenses in connection therewith,
including certain liabilities under the federal securities laws.

Brokers, dealers, commercial banks and trust companies will be reimbursed by
the Purchaser for customary mailing and handling expenses incurred by them in
forwarding offering material to their customers.

17. MISCELLANEOUS. The Purchaser is not aware of any jurisdiction where the
making of the Offer is prohibited by any administrative or judicial action
pursuant to any valid state statute. If the Purchaser becomes aware of any valid
state statute prohibiting the making of the Offer or the acceptance of the
Shares pursuant thereto, the Purchaser will make a good faith effort to comply
with such state statute. If, after such good faith effort, the Purchaser cannot
comply with any such state statute, the Offer will not be made to (nor will
tenders be accepted from or on behalf of) the holders of Shares in such state.
In any jurisdiction where the securities, blue sky or other laws require the
Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be
made on behalf of the Purchaser by one or more registered brokers or dealers
which are licensed under the laws of such jurisdiction.

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF PARENT OR THE PURCHASER NOT CONTAINED IN THIS OFFER
TO PURCHASE OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.

Parent and the Purchaser have filed with the Commission the Schedule 14D-1,
together with exhibits, pursuant to Rule 14d-3 of the General Rules and
Regulations under the Exchange Act, furnishing certain additional information
with respect to the Offer, and may file amendments thereto. The Schedule 14D-1
and any amendments thereto, including exhibits, may be inspected at, and copies
may be obtained from, the same places and in the manner set forth in Section 7
under "--Available Information".

SHERMAN ACQUISITION CORPORATION

December 24, 1997

35
<PAGE>
SCHEDULE I

INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE
OFFICERS OF PARENT AND THE PURCHASER

1. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT.

Set forth below is the name, present principal occupation or employment and
material occupations, positions, offices or employments for the past five years
of each directors and each executive officer of Parent. The current business
address for each individual listed below is 390 South Woods Mill Road, Suite
150, Chesterfield, MO 63017, unless otherwise set forth herein. Each such person
is a citizen of the United States.

<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT; MATERIAL POSITIONS
NAME HELD DURING THE PAST FIVE YEARS
- ------------------------------------- --------------------------------------------------------------------------
<S> <C>

Jeffrey E. Stiefler.................. Chairman of the Board of Directors of Parent since January 1996. From June
1993 to September 1995, Mr. Stiefler was President and Director of
American Express Company, where he had previously served in various
capacities since 1983, including President and Chief Executive Officer of
IDS Financial Services. Prior to joining Parent, Mr. Stiefler held various
positions with the Meritor Financial Group, including Chairman of the
Meritor Savings Bank Florida and the Meritor Savings Bank Washington,
D.C., and Citicorp, including Vice President and Regional Business Manager
of the New York Banking Division and Senior Vice President and Regional
Business Manager of Nationwide Financial Services. Mr. Stiefler is an
Operating Partner of McCown De Leeuw & Co. Mr. Stiefler currently serves
as a director of National Computer Systems and chairman of International
Data Response Corporation.

Timothy G. Beffa..................... President, Chief Executive Officer and Director of Parent since August
1996. From August 1995 until August 1996, Mr. Beffa served as President
and Chief Operating Officer of DIMAC Corporation ("DIMAC") and DIMAC
DIRECT Inc. ("DDI"), divisions of Heritage Media Corp., and as a director
of DDI. From 1989 until August 1995, Mr. Beffa had served as a Vice
President of DIMAC and as Senior Vice President and Chief Financial
Officer of DDI. Prior to joining DIMAC, Mr. Beffa was Vice President of
Administration and Controller for the International Division of Pet
Incorporated, a food and consumer products company, where previously he
had been Manager of Financial Analysis. Mr. Beffa currently serves as a
director of AmeriComm Holdings Inc.
</TABLE>

I-1
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT; MATERIAL POSITIONS
NAME HELD DURING THE PAST FIVE YEARS
- ------------------------------------- --------------------------------------------------------------------------
<S> <C>
David E. De Leeuw Director of Parent since September 1995. Mr. De Leeuw is a managing
general partner of MDC Management Company III, L.P., which is the general
partner of McCown De Leeuw & Co. III, L.P. and McCown De Leeuw & Co.
(Europe) III, L.P., a managing general partner of MDC Management Company
IIIA, L.P., which is the general partner of McCown De Leeuw & Co. III
(Asia), L.P. and a member of Gamma Fund, LLC. Mr. De Leeuw currently
serves as a director of Vans, Inc., AmeriComm Holdings Inc., Nimbus CD
International, Inc., Aurora Foods Inc. and American Residential Investment
Trust.

David E. King........................ Secretary, Treasurer and Director of Parent since September 1995. Mr. King
is a general partner of MDC Management Company III, L.P., which is the
general partner of McCown De Leeuw & Co. III, L.P. and McCown De Leeuw &
Co. (Europe) III, L.P., a general partner of MDC Management Company IIIA,
L.P., which is the general partner of McCown De Leeuw & Co. III (Asia),
L.P. and a member of Gamma Fund, LLC. Mr. King has been associated with
McCown De Leeuw & Co. since 1990. He currently serves as a director of
AmeriComm Holdings, Inc., International Data Response Corporation, Fitness
Holdings Inc., Sarcom, Inc. and RSP Manufacturing Corporation.

Tyler T. Zachem...................... Vice President and Director of Parent since September 1995. Mr. Zachem is
a principal of MDC Management Company III, which is the general partner of
McCown De Leeuw & Co. III, L.P. and McCown De Leeuw & Co. (Europe) III,
L.P. and a principal of MDC Management Company IIIA, L.P., which is the
general partner of McCown De Leeuw & Co. III (Asia), L.P. Mr. Zachem has
been associated with McCown De Leeuw & Co. since July 1993. Mr. Zachem
previously worked at McKinsey & Co. and McDonald & Company. Mr. Zachem
currently serves as a director of RSP Manufacturing Corporation, The Brown
Schools, Inc., Aurora Foods Inc. and Papa Gino's, Inc.

David G. Hanna....................... Director of Parent since September 1995. Mr. Hanna served as President of
Account Portfolios, L.P. from November 1992 to September 1995 and as
President of Account Portfolios, Inc. ("API") from September 1995 to
September 1996. From 1989 to November 1992, Mr. Hanna served as President
of the Governmental Division of Nationwide Credit, Inc. David G. Hanna is
the brother of Frank J. Hanna, III. Mr. Hanna is currently a director of
The Button Gwinnett Financial Corp.
</TABLE>

I-2
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT; MATERIAL POSITIONS
NAME HELD DURING THE PAST FIVE YEARS
- ------------------------------------- --------------------------------------------------------------------------
<S> <C>
Frank J. Hanna, III.................. Director of Parent since September 1995. Mr. Hanna founded Account
Portfolios, L.P. in July 1989, and served as its Chief Executive Officer
until its acquisition by Parent in September 1995. From September 1995 to
September 1996, Mr. Hanna served as Chief Executive Officer of API. From
February 1988 to January 1990, Mr. Hanna served as Group Vice President of
Nationwide Credit Inc., a large accounts receivable management company.
Frank J. Hanna, III is the brother of David G. Hanna. Mr. Hanna currently
serves as a director of Cerulean Companies, Inc.

Peter C. Rosvall..................... Executive Vice President and Director of Parent since January 1996. From
June 1980 until its acquisition by Parent in January 1996, Mr. Rosvall
served as President of Continental Credit Services, Inc.

Dennis G. Punches.................... Director of Parent since November 1996. From May 1988 to October 1988 and
January 1990 to November 1996, Mr. Punches served as Chairman of the Board
of Directors of Payco American Corporation. From October 1988 to January
1990, Mr. Punches served as Co-Chairman of the Board of Directors of Payco
American Corporation. From 1969 to January 1990, Mr. Punches served as
President and Chief Executive Officer of Payco American Corporation. Mr.
Punches is currently a director of Analysis & Technology Corp. and Intrum
Justicia B.V.

Nathan W. Pearson Jr................. Director of Parent since September 1997. Mr. Pearson is an operating
affiliate of McCown De Leeuw & Co. Mr. Pearson has been affiliated with
McCown De Leeuw since 1997. Since 1996, Mr. Pearson has been Managing
Director of Commonwealth Holdings, a private investment firm. From 1988 to
1995, Mr. Pearson was Executive Vice President and Chief Financial Officer
of Broadcasting Partners, Inc., a radio broadcasting leveraged buyout
organization and since 1995, Mr. Pearson has been a principal of
investment and management at Broadcasting Partners LLC. Prior to joining
Broadcasting Partners, Inc., Mr. Pearson was a management consultant with
McKinsey and Company Inc. from 1982 to 1988.

Daniel J. Dolan...................... Executive Vice President and Chief Financial Officer since October 1997.
From June 1974 to September 1997, Mr. Dolan was a member of Ernst & Young
LLP. For the last eleven years at Ernst & Young LLP, Mr. Dolan was a
partner, primarily serving large multi-national clients in the service and
manufacturing industries.
</TABLE>

2. DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER.

Set forth below is the name, present principal occupation or employment and
material occupations, positions, officers or employment for the past five years
of each director and executive officer of the Purchaser. Each person identified
below is employed by the Purchaser and has held such position since the

I-3
<PAGE>
formation of the Purchaser in December, 1997. The principal address of the
Purchaser and the current business address for each individual listed below is
the same as set forth above for Parent.

Timothy G. Beffa..................... See Above.
Director and President

David E. King........................ See Above.
Director, Vice President and Secretary

Tyler T. Zachem...................... See Above.
Director, Vice President and Treasurer
</TABLE>

3. OWNERSHIP OF SHARES BY DIRECTORS AND EXECUTIVE OFFICERS.

None

I-4
<PAGE>
Facsimile copies of the Letter of Transmittal, properly completed and duly
signed, will be accepted. The Letter of Transmittal, certificates for the Shares
and any other required documents should be sent by each shareholder of the
Company or his broker, dealer, commercial bank, trust company or other nominee
to the Depositary as follows:

THE DEPOSITARY FOR THE OFFER IS:

CHASEMELLON SHAREHOLDER SERVICES, L.L.C.

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

<TABLE>
<S> <C> <C>
BY MAIL: BY HAND: BY OVERNIGHT:
ChaseMellon Shareholder ChaseMellon Shareholder ChaseMellon Shareholder
Services, L.L.C. Services, L.L.C. Services, L.L.C.
Post Office Box 3301 120 Broadway -13th Floor 85 Challenger Road
South Hackensack, NJ 07606 New York, NY 10271 Mail Drop--Reorg Dept.
Attn: Reorganization Attn: Reorganization Ridgefield Park, NJ 07660
Department Department Attn: Reorganization
Department
</TABLE>

<TABLE>
<S> <C>
FACSIMILE TRANSMISSION: CONFIRMATION OF FAX:

(201) 329-8936 (201) 296-4860
</TABLE>

Any questions or requests for assistance or additional copies of the Offer
to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery or
other tender offer materials may be directed to the Information Agent or the
Dealer Manager at their respective telephone numbers and addresses listed below.
A shareholder may also contact a broker, dealer, commercial bank or trust
company or other nominee for assistance concerning the Offer.

THE INFORMATION AGENT FOR THE OFFER IS:

[LOGO]

156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
or
CALL TOLL-FREE (800) 322-2885

THE DEALER MANAGERS FOR THE OFFER ARE:

<TABLE>
<S> <C>
LA ZARD FRERES & CO. LLC GOLDMAN, SACHS & CO.
30 Rockefeller Plaza 85 Broad Street
59th Floor New York, New York 10004
New York, New York 10020 (212) 902-1000
(212) 632-6717
</TABLE>

<PAGE>
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS)
OF

THE UNION CORPORATION
PURSUANT TO THE OFFER TO PURCHASE, DATED DECEMBER 24, 1997
BY
SHERMAN ACQUISITION CORPORATION
A WHOLLY-OWNED SUBSIDIARY
OF
OUTSOURCING SOLUTIONS INC.

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, JANUARY 23, 1998, UNLESS THE OFFER IS EXTENDED.

THE DEPOSITARY FOR THE OFFER IS:

CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
------------------------

<TABLE>
<S> <C> <C>
BY MAIL: BY HAND: BY OVERNIGHT:
ChaseMellon Shareholder ChaseMellon Shareholder ChaseMellon Shareholder
Services, L.L.C. Services, L.L.C. Services, L.L.C.
Post Office Box 3301 120 Broadway-13th Floor 85 Challenger Road
South Hackensack, NJ 07606 New York, NY 10271 Mail Drop--Reorg. Dept.
Attn: Reorganization Attn: Reorganization Ridgefield Park, NJ 07660
Department Department Attn: Reorganization
Department
</TABLE>

FACSIMILE TRANSMISSION:

(201) 329-8936

CONFIRMATION OF FAX:

(201) 296-4860
<TABLE>
<S> <C> <C> <C>
DESCRIPTION OF SHARES TENDERED

<CAPTION>
NAME(S) AND ADDRESS(ES) OF
REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK,
EXACTLY AS NAME(S) APPEAR(S) SHARES TENDERED
ON THE CERTIFICATES) (ATTACH ADDITIONAL LIST IF NECESSARY)
<S> <C> <C> <C>
<CAPTION>
TOTAL NUMBER OF
SHARE SHARES NUMBER OF
CERTIFICATE EVIDENCED BY SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
<S> <C> <C> <C>
Total Shares...................
* Need not be completed by shareholders tendering by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares evidenced by any Share Certificate(s)
delivered to the Depositary are being tendered. See Instruction 4.
</TABLE>
<PAGE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION TO A NUMBER
OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.

THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.

This Letter of Transmittal is to be completed by shareholders if
certificates evidencing Shares (as defined below) are to be forwarded herewith
or, unless an Agent's Message (as defined in the Offer to Purchase) is utilized,
if tenders of Shares are to be made by book-entry transfer to the account
maintained by the Depositary at The Depository Trust Company ("DTC") or The
Philadelphia Depository Trust Company ("PDTC") (each a "Book-Entry Transfer
Facility" and collectively, the "Book-Entry Transfer Facilities"), pursuant to
the procedures set forth in Section 3 of the Offer to Purchase. Shareholders who
tender Shares by book-entry transfer are referred to herein as "Book-Entry
Shareholders" and other shareholders are referred to herein as "Certificate
Stockholders." Delivery of documents to a Book-Entry Transfer Facility does not
constitute delivery to the Depositary for the Offer (as defined herein).

Stockholders whose certificates evidencing Shares ("Share Certificates") are
not immediately available or who cannot deliver their Share Certificates and all
other documents required hereby to the Depositary on or prior to the Expiration
Date (as defined in Section 1 of the Offer to Purchase), or who cannot comply
with the book-entry transfer procedures on a timely basis, may nevertheless
tender their Shares according to the guaranteed delivery procedure set forth in
Section 3 of the Offer to Purchase. See Instruction 2.

/ / CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE
ACCOUNT MAINTAINED BY THE DEPOSITARY WITH ONE OF THE BOOK-ENTRY TRANSFER
FACILITIES AND COMPLETE THE FOLLOWING:
Name of Tendering Institution: _____________________________________________

CHECK BOX OF APPLICABLE BOOK-ENTRY TRANSFER FACILITY:

DTC / / PDTC / / (check one)
Account Number: ____________________________________________________________
Transaction Code Number: ___________________________________________________

/ / CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s): ___________________________________________
Window Ticket Number (if any): _____________________________________________
Date of Execution of Notice of Guaranteed Delivery: ________________________
Name of Institution which Guaranteed Delivery: _____________________________

IF DELIVERED BY BOOK-ENTRY TRANSFER, CHECK BOX OF APPLICABLE BOOK-ENTRY
TRANSFER FACILITY:

DTC / / PDTC / / (check one)
Account Number: ____________________________________________________________
Transaction Code Number: ___________________________________________________
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY

Ladies and Gentlemen:

The undersigned hereby tenders to Sherman Acquisition Corporation, a
Delaware corporation (the "Purchaser") and a wholly-owned subsidiary of
Outsourcing Solutions Inc., a Delaware corporation ("Parent"), the
above-described shares of common stock, par value $0.50 per share (collectively
with the associated Rights (the "Rights") issued pursuant to the Rights
Agreement, dated as of March 14, 1988, between the Company and First National
Bank of Boston, as Rights Agent, as amended (the "Rights Agreement"), the
"Shares"), of The Union Corporation, a Delaware corporation (the "Company"),
pursuant to the Purchaser's offer to purchase all of the outstanding Shares at a
price of $31.50 per Share, net to the seller in cash, upon the terms and subject
to the conditions set forth in the Offer to Purchase dated December 24, 1997
(the "Offer to Purchase"), receipt of which is hereby acknowledged, and in this
Letter of Transmittal (which together with the Offer to Purchase constitutes the
"Offer").

Upon the terms and conditions of the Offer, subject to, and effective upon,
acceptance for payment of and payment for the Shares tendered herewith in
accordance with the terms of the Offer, the undersigned hereby sells, assigns
and transfers to, or upon the order of, the Purchaser, all right, title and
interest in and to all of the Shares that are being tendered hereby and any and
all dividends, distributions, rights, other Shares and other securities issued
or issuable in respect thereof on or after December 22, 1997 (collectively,
"Distributions"), and appoints the Depositary the true and lawful agent and
attorney-in-fact of the undersigned with respect to such Shares and all
Distributions with full power of substitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest) to (a) deliver such
Share Certificates (as defined herein) and all Distributions or transfer
ownership of such Shares and all Distributions on the account books maintained
by a Book-Entry Transfer Facility, together in either such case with all
accompanying evidences of transfer and authenticity, to or upon the order of the
Purchaser, (b) present such Shares and all Distributions for transfer on the
books of the Company and (c) receive all benefits and otherwise exercise all
rights of beneficial ownership of such Shares and all Distributions, all in
accordance with the terms and the conditions of the Offer.

The undersigned hereby irrevocably appoints the designees of the Purchaser,
and each of them, the attorneys-in-fact and proxies of the undersigned, each
with full power of substitution, to vote in such manner as each such attorney
and proxy or any substitute thereof shall deem proper in the sole discretion of
such attorney-in-fact and proxy or such substitute and otherwise act (including
pursuant to written consent) with respect to all of the Shares tendered hereby
and all Distributions which have been accepted for payment by the Purchaser
prior to the time of such vote or action, which the undersigned is entitled to
vote at any meeting of shareholders (whether annual or special and whether or
not an adjourned meeting) of the Company or otherwise. This proxy and power of
attorney is coupled with an interest in the Shares and is irrevocable and is
granted in consideration of, and is effective upon, the acceptance for payment
of such Shares and all Distributions by the Purchaser in accordance with the
terms of the Offer. Such acceptance for payment shall revoke any other proxy
granted by the undersigned at any time with respect to such Shares and all
Distributions and no subsequent proxies will be given (or, if given, will not be
deemed effective) with respect thereto by the undersigned. The undersigned
understands that in order for Shares to be deemed validly tendered pursuant to
the Offer, immediately upon the Purchaser's acceptance of such Shares and all
Distributions for payment the Purchaser or its designee must be able to exercise
full voting rights with respect to such Shares and all Distributions, including,
without limitation, voting at any meeting of the Company's shareholders then
scheduled.

The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Shares tendered
hereby (and all Distributions) and that, when the same are accepted for payment
by the Purchaser, the Purchaser will acquire good, marketable and unencumbered
title thereto, free and clear of all liens, restrictions, charges and
encumbrances, and the same will not be subject to any adverse claim. The
undersigned will, upon request, execute and deliver any additional documents
deemed by the Depositary or the Purchaser to be necessary or desirable to
complete the sale, assignment, and transfer of the Shares tendered hereby (and
all Distributions). In addition, the undersigned shall promptly remit and
transfer to the Depositary for the account of the Purchaser any and all
Distributions in respect of the Shares tendered hereby, accompanied by
appropriate documentation of transfer; and pending such remittance or
appropriate assurance thereof, the Purchaser shall be entitled to all rights and
privileges as owner of any such Distributions and may withhold the entire
purchase price or deduct from the purchase price the amount or value thereof, as
determined by the Purchaser in its sole discretion.

No authority herein conferred or agreed to be conferred shall be affected
by, and all such authority shall survive, the death or incapacity of the
undersigned. All obligations of the undersigned hereunder shall be binding upon
the heirs, personal representatives, successors and assigns of the undersigned.
Subject to the withdrawal rights set forth in Section 4 of the Offer to
Purchase, the tender of Shares hereby made is irrevocable.

The undersigned understands that tenders of Shares pursuant to any of the
procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto will constitute the undersigned's acceptance of the terms
and conditions of the Offer. The Purchaser's acceptance for payment of such
Shares will constitute a binding agreement between the undersigned and the
Purchaser upon the terms and subject to the conditions set forth in the Offer.
The undersigned recognizes that under certain circumstances set forth in the
Offer to Purchase, the Purchaser may not be required to accept for payment any
of the Shares tendered hereby.
<PAGE>
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or return any Share
Certificates not tendered or not accepted for payment in the name(s) of the
registered holder(s) appearing under "Description of Shares Tendered."
Similarly, unless otherwise indicated under "Special Delivery Instructions,"
please mail the check for the purchase price and/or return any Share
Certificates not tendered or not accepted for payment (and accompanying
documents, as appropriate) to the address(es) of the registered holder(s)
appearing under "Description of Shares Tendered." In the event that both the
Special Delivery Instructions and the Special Payment Instructions are
completed, please issue the check for the purchase price and/or issue any Share
Certificates not so tendered or accepted for payment in the name of, and deliver
said check and/or return such certificates to, the person or persons so
indicated. The undersigned recognizes that the Purchaser has no obligation,
pursuant to the Special Payment Instructions, to transfer any Shares from the
name of the registered holder thereof if the Purchaser does not accept for
payment any of the Shares so tendered.
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)

To be completed ONLY if certificate(s) for Shares not tendered or not
purchased and/or the check for the purchase price of Shares purchased are to be
issued in the name of someone other than the undersigned.

Issue check and/or certificate(s) to:
Name: __________________________________________________________________________
(PLEASE PRINT)
Address: _______________________________________________________________________
_______________________________________________________________________________
(INCLUDE ZIP CODE)
_______________________________________________________________________________
TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER
(SEE SUBSTITUTE FORM W-9 ON REVERSE)
Credit unpurchased Shares delivered by book-entry transfer to the Book-Entry
Transfer account at:
DTC ____________________________________________________________________________
PDTC ___________________________________________________________________________
(ACCOUNT NUMBER)

SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)

To be completed ONLY if certificate(s) for Shares not tendered or not
purchased and/or the check for the purchase price of Shares purchased are to be
sent to someone other than the undersigned, or to the undersigned at an address
other than that shown above.

Mail check and/or certificates to:

Name: __________________________________________________________________________
(PLEASE PRINT)

Address: _______________________________________________________________________

_______________________________________________________________________________
(INCLUDE ZIP CODE)

_______________________________________________________________________________
TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER
(SEE SUBSTITUTE FORM W-9 ON REVERSE)

IMPORTANT
SHAREHOLDER(S) SIGN HERE
(SEE INSTRUCTIONS 1 AND 5)
(PLEASE COMPLETE SUBSTITUTE FORM W-9 CONTAINED HEREIN)

Signature(s) of Holder(s):

Dated: , 199

(Must be signed by the registered holder(s) exactly as names(s) appear(s) on
share certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificate(s) and documents
transmitted with this Letter of Transmittal. If signature is by trustees,
executors, administrators, guardians, attorneys-in-fact, officers of
corporations or other persons acting in a fiduciary or representative capacity,
please provide the following information and see Instruction 5.)

NAME(S): _______________________________________________________________________
(PLEASE PRINT)

CAPACITY (FULL TITLE): _________________________________________________________

ADDRESS: _______________________________________________________________________

_______________________________________________________________________________
(INCLUDE ZIP CODE)

<TABLE>
<S> <C>
(AREA CODE AND TELEPHONE NO.) (TAX IDENTIFICATION AND SOCIAL SECURITY NO.)
</TABLE>

GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)

Authorized Signature: __________________________________________________________

Name: __________________________________________________________________________
(PLEASE TYPE OR PRINT)

Title: _________________________________________________________________________

Name of Firm: __________________________________________________________________

Address: _______________________________________________________________________
(INCLUDE ZIP CODE)

Area Code and Telephone Number: ________________________________________________

Dated: _________________________________________________________________________
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER

1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a financial
institution (including most banks, savings and loan associations and brokerage
houses) which is a participant in the Security Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Signature Guarantee Program or
the Stock Exchange Medallion Program (an "Eligible Institution"). Signatures on
this Letter of Transmittal need not be guaranteed (a) if this Letter of
Transmittal is signed by the registered holder(s) of the Shares (which term, for
purposes of this document, shall include any participant in one of the
Book-Entry Transfer Facilities whose name appears on a security position listing
as the owner of Shares) tendered herewith and such holder(s) have not completed
either the instruction entitled "Special Payment Instructions" or the
instruction entitled "Special Delivery Instructions" on this Letter of
Transmittal or (b) if such Shares are tendered for the account of an Eligible
Institution. See Instruction 5 of this Letter of Transmittal.

2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARE CERTIFICATES OR BOOK-ENTRY
CONFIRMATIONS. This Letter of Transmittal is to be used either if Share
Certificates are to be forwarded herewith or, unless an Agent's Message is
utilized, if tenders are to be made pursuant to the procedures for tender by
book-entry transfer set forth in Section 3 of the Offer to Purchase. Share
Certificates evidencing all physically tendered Shares or confirmation of any
book-entry transfer into the Depositary's account at one of the Book-Entry
Transfer Facilities of Shares tendered by book-entry transfer, as well as this
Letter of Transmittal or a facsimile thereof, properly completed and duly
executed with any required signature guarantees, or an Agent's Message, and any
other documents required by this Letter of Transmittal, must be received by the
Depositary at one of its addresses set forth herein on or prior to the
Expiration Date (as defined in Section 1 of the Offer to Purchase).

Shareholders whose Share Certificates are not immediately available or who
cannot deliver their Share Certificates and all other required documents to the
Depositary on or prior to the Expiration Date or who cannot complete the
procedures for book-entry transfer on a timely basis may nevertheless tender
their Shares by properly completing and duly executing a Notice of Guaranteed
Delivery pursuant to the guaranteed delivery procedure set forth in Section 3 of
the Offer to Purchase. Pursuant to such procedure: (i) such tender must be made
by or through an Eligible Institution; (ii) a properly completed and duly
executed Notice of Guaranteed Delivery substantially in the form provided by the
Purchaser must be received by the Depositary on or prior to the Expiration Date;
and (iii) Share Certificates or confirmation of any book-entry transfer into the
Depositary's account at Book-Entry Transfer Facilities of Shares tendered by
book-entry transfer, as well as a Letter of Transmittal (or facsimile thereof),
properly completed and duly executed with any required signature guarantees (or,
in the case of book-entry delivery, an Agent's Message), and all other documents
required by this Letter of Transmittal, must be received by the Depositary
within three New York Stock Exchange trading days after the date of execution of
such Notice of Guaranteed Delivery.

If Share Certificates are forwarded to the Depositary in multiple
deliveries, a properly completed and duly executed Letter of Transmittal (or
facsimile hereof) must accompany each such delivery.

THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES AND
ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER
FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING SHAREHOLDER. DELIVERY
WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF SUCH
DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ASSURE TIMELY DELIVERY.

NO ALTERNATIVE, CONDITIONAL OR CONTINGENT TENDERS WILL BE ACCEPTED AND NO
FRACTIONAL SHARES WILL BE PURCHASED. ALL TENDERING SHAREHOLDERS, BY EXECUTION OF
THIS LETTER OF TRANSMITTAL OR A FACSIMILE HEREOF, WAIVE ANY RIGHT TO RECEIVE ANY
NOTICE OF THE ACCEPTANCE OF THEIR SHARES FOR PAYMENT.

3. INADEQUATE SPACE. If the space provided under "Description of Shares
Tendered" is inadequate, the Share Certificate numbers and/or the number of
Shares should be listed on a separate schedule and attached hereto.

4. PARTIAL TENDERS (APPLICABLE TO CERTIFICATE SHAREHOLDERS ONLY). If fewer
than all the Shares evidenced by any Share Certificate submitted are to be
tendered, fill in the number of Shares which are to be tendered in the box
entitled "Number of Shares Tendered." In such cases, new Share Certificate(s)
evidencing the remainder of the Shares that were evidenced by Share
Certificate(s) delivered to the Depositary will be sent to the person signing
this Letter of Transmittal, unless otherwise provided in the box entitled
"Special Delivery Instructions" on this Letter of Transmittal, as soon as
practicable after the Expiration Date. All Shares represented by Share
Certificates delivered to the Depositary will be deemed to have been tendered
unless otherwise indicated.

5. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holders of the Shares
tendered hereby, the signature must correspond with the names as written on the
face of the certificates without alteration, enlargement or any change
whatsoever.
<PAGE>
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.

If any of the tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of Shares.

If this Letter of Transmittal or any Share Certificate or stock power is
signed by a trustee, executor, administrator, attorney-in-fact, officer of a
corporation or other person acting in fiduciary or representative capacity, such
person should so indicate when signing, and proper evidence satisfactory to the
Purchaser of such person's authority so to act must be submitted.

If this Letter of Transmittal is signed by the registered holder(s) of the
Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment is to be made to, or Share
Certificates evidencing Shares not tendered or purchased are to be issued in the
name of, a person other than the registered holder(s). Signatures on such
certificates or stock powers must be guaranteed by an Eligible Institution.

If this Letter of Transmittal is signed by a person other than the
registered holder of the Shares tendered hereby, the Share Certificate(s) must
be endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name or names of the registered holder or holders appear(s) on
such Share Certificate(s). Signatures on such Share Certificates or stock powers
must be guaranteed by an Eligible Institution.

6. STOCK TRANSFER TAXES. Except as otherwise provided in this Instruction
6, the Purchaser will pay or cause to be paid any stock transfer taxes with
respect to the transfer and sale of purchased Shares to it or its order pursuant
to the Offer. If, however, payment of the purchase price of any Shares purchased
is to be made to, or, in the circumstances permitted hereby, if Share
Certificates for Shares not tendered or purchased are to be registered in the
name of, any person other than the registered holder, or if tendered Share
Certificates are registered in the name of any person other than the person(s)
signing this Letter of Transmittal, the amount of any stock transfer taxes
(whether imposed on the registered holder or such person) payable on account of
the transfer to such person will be deducted from the purchase price if
satisfactory evidence of the payment of such taxes, or exemption therefrom, is
not submitted.

Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the Share Certificates listed in this
Letter of Transmittal.

7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check for the purchase
price is to be issued in the name of, and/or Share Certificates for Shares not
tendered or not accepted for payment are to be issued or returned to, a person
other than the signer of this Letter of Transmittal or if a check and/or such
Share Certificates are to be mailed to someone other than the signer of this
Letter of Transmittal or to an address other than that shown above, the
appropriate boxes on this Letter of Transmittal should be completed.

8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions or requests for
assistance may be directed to, or additional copies of the Offer to Purchase,
this Letter of Transmittal, the Notice of Guaranteed Delivery and other tender
offer materials may be obtained from, the Information Agent or the Dealer
Managers at their respective addresses set forth below or from your broker,
dealer, commercial bank or trust company.

9. SUBSTITUTE FORM W-9. Under the United States federal income tax backup
withholding rules, unless an exemption applies under the applicable law and
regulations, 31% of the gross proceeds payable to a shareholder or other payee
pursuant to the Offer must be withheld and remitted to the United States
Treasury, unless the shareholder or other payee provides his or her taxpayer
identification number ("TIN") (employer identification number or social security
number) to the Depositary and certifies that such number is correct. Therefore,
each tendering shareholder should complete and sign the Substitute Form W-9
included as part of the Letter of Transmittal so as to provide the information
and certification necessary to avoid backup withholding, unless such shareholder
otherwise establishes to the satisfaction of the Depositary that it is not
subject to backup withholding. Certain shareholders (including, among others,
all corporations and certain foreign shareholders) are not subject to these
backup withholding and reporting requirements. In order for a foreign
shareholder to qualify as an exempt recipient, that shareholder should submit an
IRS Form W-8 or a Substitute Form W-8, signed under penalties of perjury,
attesting to that shareholder's exempt status. Such statements can be obtained
from the Depositary. Failure to provide the information on the form may subject
the tendering shareholder to 31% U.S. federal income tax withholding on the
payment of the purchase price. If the tendering shareholder has not been issued
a TIN and has applied for a number or intends to apply for a number in the near
future, such shareholder should write "Applied For" in the space for the TIN in
Part 1 of the Substitute Form W-9, sign and date the form and provide it to the
Depositary. Notwithstanding that "Applied For" is written on Part 1 and the
certification is completed, the Depositary will withhold 31% of all payments
made prior to the time a properly certified TIN is provided.
<PAGE>
10. LOST OR DESTROYED CERTIFICATES. If any Share Certificates have been
lost or destroyed, the stockholder should promptly notify the Company's transfer
agent, Boston EquiServe at (800) 733-5001. The stockholder will then be
instructed as to the procedure to be followed in order to replace the Share
Certificates. This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost or destroyed Share
Certificates have been followed.

IMPORTANT: THIS LETTER OF TRANSMITTAL OR A FACSIMILE HEREOF OR AN AGENT'S
MESSAGE TOGETHER WITH SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER
AND ALL OTHER REQUIRED DOCUMENTS OR THE NOTICE OF GUARANTEED DELIVERY MUST BE
RECEIVED BY THE DEPOSITARY ON OR PRIOR TO THE EXPIRATION DATE. SHAREHOLDERS ARE
ENCOURAGED TO RETURN A COMPLETED SUBSTITUTE FORM W-9 WITH THEIR LETTER OF
TRANSMITTAL.
<PAGE>
IMPORTANT TAX INFORMATION

The shareholder is required to give the Depositary the social security
number or employer identification number of the record holder of the Shares
tendered hereby. If Shares are registered in more than one name or are not in
the name of the actual owner, consult the enclosed Guidelines for Certification
of Taxpayer Identification Number on Substitute Form W-9 for additional guidance
on which number to report.

TO BE COMPLETED BY ALL TENDERING SHAREHOLDERS
(SEE INSTRUCTION 9)

<TABLE>
<S> <C> <C>
PAYER'S NAME: CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
SUBSTITUTE PART 1--PLEASE PROVIDE
FORM W-9 YOUR TIN AT RIGHT AND SOCIAL SECURITY NUMBER
Department of the CERTIFY BY SIGNING AND OR
Treasury DATING BELOW
Internal Revenue Service EMPLOYEE IDENTIFICATION NUMBER
PART 2--For Payees exempt from Backup Withholding: Write Taxpayer PAYER'S REQUEST FOR ("TIN")
Identification Certification "Exempt" in this Part 2, enter your X
correct TIN in Part 1 and sign and date this form.
PART 3--CERTIFICATION--Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting
for a number to be issued to me), and
(2) I am not subject to backup withholding because (i) I am exempt from backup withholding, (ii) I
have not been notified by the Internal Revenue Service (the "IRS") that I am subject to backup
withholding as a result of a failure to report all interest or dividends, or (iii) the IRS has
notified me that I am no longer subject to backup withholding.
CERTIFICATION INSTRUCTIONS--You must cross out item (2) in Part 2 above if you have been notified by
the IRS that you are subject to backup withholding because of under-reporting interest or dividends
on your tax return.
</TABLE>

The Internal Revenue Service does not require your consent to any provision
of this document other than the certificates required to avoid backup
withholding.
SIGNATURE:____________________________________________________ DATE: _____
NAME (PLEASE PRINT):____________________________________________________________
ADDRESS:________________________________________________________________________
CITY, STATE AND ZIP CODE:_______________________________________________________

NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT IN
BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE
OFFER. PLEASE REVIEW THE ENCLOSED "GUIDELINES FOR CERTIFICATIONS OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9" FOR ADDITIONAL
DETAILS.
<PAGE>
THE INFORMATION AGENT FOR THE OFFER IS:

[LOGO]

156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
or
Call Toll-Free (800) 322-2885

THE DEALER MANAGERS FOR THE OFFER ARE:

<TABLE>
<S> <C>
LA ZARD FRERES & CO. LLC GOLDMAN, SACHS & CO.
30 Rockefeller Plaza
59th Floor 85 Broad Street
New York, New York 10020 New York, New York 10004
(212) 632-6717 (212) 902-1000
</TABLE>

<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OF THE OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS)
OF

THE UNION CORPORATION
AT
$31.50 NET PER SHARE

BY
SHERMAN ACQUISITION CORPORATION
A WHOLLY-OWNED SUBSIDIARY
OF
OUTSOURCING SOLUTIONS INC.

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON JANUARY 23, 1998 UNLESS THE OFFER IS EXTENDED.

DECEMBER 24, 1997

To Brokers, Dealers & Commercial Banks:

We have been appointed by Sherman Acquisition Corporation, a Delaware
corporation (the "Purchaser") and a wholly-owned subsidiary of Outsourcing
Solutions Inc., a Delaware corporation ("Parent"), to act as Dealer Manager in
connection with the Purchaser's offer to purchase for cash all of the
outstanding shares of common stock, par value $0.50 per share (collectively with
the associated Rights (the "Rights") issued pursuant to the Rights Agreement,
dated as of March 14, 1988 (as amended, the "Rights Agreement"), between the
Company and First National Bank of Boston as Rights Agent, the "Shares"), of The
Union Corporation, a Delaware corporation (the "Company") for $31.50 per Share,
net to the seller in cash, upon the terms and subject to the conditions set
forth in the Offer to Purchase dated December 24, 1997 (the "Offer to Purchase")
and in the related Letter of Transmittal (which together with the Offer to
Purchase constitute the "Offer"), copies of which are enclosed herewith. Please
furnish copies of the enclosed materials to those of your clients for whose
accounts you hold Shares in your name or in the name of your nominee.

Enclosed herewith for your information and forwarding to your clients are
copies of the following documents:

1. The Offer to Purchase dated December 24, 1997.

2. The Letter of Transmittal to tender Shares for your use and for the
information of your clients. Facsimile copies of the Letter of Transmittal may
be used to tender Shares.

3. A letter to stockholders of the Company from Melvin L. Cooper, Chairman
of the Board and Chief Executive Officer of the Company, together with a
Solicitation/Recommendation Statement on Schedule 14D-9 filed with the
Securities and Exchange Commission by the Company and mailed to stockholders of
the Company.

4. The Notice of Guaranteed Delivery for Shares to be used to accept the
Offer if neither of the two procedures for tendering Shares set forth in the
Offer to Purchase can be completed on a timely basis.

5. A printed form of letter which may be sent to your clients for whose
accounts you hold Shares registered in your name or in the name of your nominee,
with space provided for obtaining such clients' instructions with regard to the
Offer.
<PAGE>
6. Guidelines of the Internal Revenue Service for Certification of Taxpayer
Identification Number on Substitute Form W-9.

7. A return envelope addressed to ChaseMellon Shareholder Services, L.L.C.,
the Depositary.

WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE.

THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON JANUARY 23, 1998 UNLESS THE OFFER IS EXTENDED.

Please note the following:

1. The tender price is $31.50 per Share, net to the seller in cash, as set
forth in the Introduction to the Offer to Purchase.

2. The Offer is subject to (a) there being validly tendered and not
properly withdrawn prior to the Expiration Date (as defined in the Offer to
Purchase) a number of Shares which, together with Shares owned by Parent or the
Purchaser (or any affiliate of Parent or the Purchaser), constitutes at least
66 2/3% of the total voting power of all shares of capital stock of the Company
outstanding on a fully diluted basis, (b) the expiration or termination of any
applicable waiting period (and any extension thereof) under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rule
and regulation thereunder, (c) the Parent receiving the financing necessary for
it and the Purchaser to consummate the Offer and the other transactions
contemplated by the Merger Agreement (as defined in the Offer to Purchase) in
accordance with the terms of the bank commitment letter, dated December 22,
1997, to Parent from Goldman Sachs Credit Partners L.P., The Chase Manhattan
Bank and Chase Securities Inc. and (d) certain other conditions set forth in the
Merger Agreement. See the Introduction and Sections 1 and 14 of the Offer to
Purchase.

3. The Offer is being made for all of the outstanding Shares.

4. Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as otherwise provided in Instruction 6 of the Letter of
Transmittal, transfer taxes on the purchase of Shares by the Purchaser pursuant
to the Offer. However, federal income tax backup withholding at a rate of 31%
may be required, unless an exemption is available or unless the required tax
identification information is provided. See Instruction 9 of the Letter of
Transmittal.

5. The Offer and withdrawal rights will expire at 12:00 midnight, New York
City time, on January 23, 1998 unless the Offer is extended.

6. The board of directors of the Company has unanimously approved each of
the Offer and the Merger (as defined in the Offer to Purchase), unanimously
determined that each of the Offer and the Merger is fair to, and in the best
interests of, the shareholders of the Company and unanimously recommends that
the shareholders accept the Offer and tender their Shares pursuant to the Offer.

7. Notwithstanding any other provision of the Offer, payment for Shares
accepted for payment pursuant to the Offer will in all cases be made only after
timely receipt by the Depositary of (a) certificates evidencing such Shares (the
"Share Certificates") pursuant to the procedures set forth in Section 3 of the
Offer to Purchase, or a timely Book-Entry Confirmation (as defined in the Offer
to Purchase) with respect to such Shares, (b) the Letter of Transmittal or a
facsimile thereof, properly completed and duly executed, with any required
signature guarantees or an Agent's Message (as defined in the Offer to Purchase)
in connection with a book-entry transfer, and (c) any other documents required
by the Letter of Transmittal. Accordingly, payment may not be made to all
tendering shareholders at the same time depending upon when Share Certificates
are actually received by the Depositary.

In order to take advantage of the Offer, (i) a duly executed and properly
completed Letter of Transmittal or a facsimile thereof and any required
signature guarantee or other required documents should be sent to the Depositary
and (ii) Share Certificates representing the tendered Shares or a timely

2
<PAGE>
Book-Entry Confirmation should be delivered to the Depositary in accordance with
the instructions set forth in the Letter of Transmittal and the Offer to
Purchase.

If holders of Shares wish to tender, but it is impracticable for them to
forward their Share Certificates or other required documents or complete the
procedures for book-entry transfer prior to the Expiration Date, a tender may be
effected by following the guaranteed delivery procedures specified in Section 3
of the Offer to Purchase.

Neither Parent nor the Purchaser will pay any fees or commissions to any
broker, dealer or other person for soliciting tenders of Shares pursuant to the
Offer (other than the Dealer Managers, their affiliates, the Depositary and the
Information Agent as described in the Offer to Purchase). The Purchaser will,
however, upon request, reimburse you for customary mailing and handling expenses
incurred by you in forwarding any of the enclosed materials to your clients. The
Purchaser will pay or cause to be paid any transfer taxes payable on the
transfer of Shares to it, except as otherwise provided in Instruction 6 of the
Letter of Transmittal.

Any inquiries you may have with respect to the Offer should be addressed to
either Lazard Freres & Co. LLC at 30 Rockefeller Plaza, 59th Floor, New York,
New York 10020, telephone number (212) 632-6717, or to Goldman, Sachs & Co. at
85 Broad Street, New York, New York 10004, telephone number (212) 902-1000, the
Dealer Managers for the Offer, or to MacKenzie Partners, Inc., the Information
Agent for the Offer, at 156 Fifth Avenue, New York, New York 10010, telephone
number (212) 929-5500 or (800) 322-2885.

Requests for copies of the enclosed materials may also be directed to the
Dealer Managers or to the Information Agent at the above addresses and telephone
numbers.

Very truly yours,

Lazard Freres & Co. LLC Goldman, Sachs & Co.

NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON THE AGENT OF THE PURCHASER, THE COMPANY, THE DEALER
MANAGERS, THE DEPOSITARY, THE INFORMATION AGENT OR ANY AFFILIATE OF ANY OF THEM,
OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENT OR USE ANY DOCUMENT
ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED
DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.

<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OF THE OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS)
OF

THE UNION CORPORATION
AT
$31.50 NET PER SHARE

BY
SHERMAN ACQUISITION CORPORATION, INC.
A WHOLLY-OWNED SUBSIDIARY
OF
OUTSOURCING SOLUTIONS INC.

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON JANUARY 23, 1998 UNLESS THE OFFER IS EXTENDED.

To Our Clients:

Enclosed for your consideration are the Offer to Purchase, dated December
24, 1997 (the "Offer to Purchase"), and the related Letter of Transmittal (which
together constitute the "Offer") relating to the offer by Sherman Acquisition
Corporation, a Delaware corporation (the "Purchaser") and a wholly-owned
subsidiary of Outsourcing Solutions Inc. ("Parent"), a Delaware corporation, to
purchase all the outstanding shares of common stock, par value $0.50 per share
(collectively with the associated Rights (the "Rights") issued pursuant to the
Rights Agreement, dated as of March 14, 1988 (as amended, the "Rights
Agreement"), between the Company and First National Bank of Boston, as Rights
Agent, the "Shares"), of The Union Corporation, a Delaware corporation (the
"Company"), at a purchase price of $31.50 per Share, net to the seller in cash,
upon the terms and subject to the conditions set forth in the Offer. Holders of
Shares whose certificates evidencing such Shares (the "Share Certificates") are
not immediately available or who cannot deliver their Share Certificates and all
other required documents to ChaseMellon Shareholder Services, L.L.C. as
depositary (the "Depositary") or complete the procedures for book-entry transfer
prior to the Expiration Date (as defined in the Offer to Purchase) must tender
their Shares according to the guaranteed delivery procedures set forth in
Section 3 of the Offer to Purchase.

We are (or our nominee is) the holder of record of Shares held by us for
your account. A tender of such Shares can be made only by us as the holder of
record and pursuant to your instructions. The Letter of Transmittal is furnished
to you for your information only and cannot be used by you to tender Shares held
by us for your account.

Accordingly, we request instruction as to whether you wish to have us tender
on your behalf any or all Shares held by us for your account pursuant to the
terms and conditions set forth in the Offer.

Please note the following:

1. The tender price is $31.50 per Share, as set forth in the Introduction
to the Offer to Purchase.

2. The Offer is subject to (a) there being validly tendered and not
properly withdrawn prior to the Expiration Date a number of Shares which,
together with Shares owned by Parent or the Purchaser (or any affiliate of
Parent or the Purchaser), constitutes at least 66 2/3% of the total voting power
of all shares of capital stock of the Company outstanding on a fully diluted
basis, (b) the expiration or termination of any applicable waiting period (and
any extension thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations thereunder, (c) the Parent
receiving the financing necessary for it and the Purchaser to consummate the
Offer and the other transactions contemplated by the Merger Agreement (as
defined in the Offer to Purchase) in accordance with the
<PAGE>
terms of the bank commitment letter, dated December 22, 1997, to Parent from
Goldman Sachs Credit Partners L.P., The Chase Manhattan Bank and Chase
Securities Inc. and (d) certain other conditions as set forth in the Merger
Agreement. See the Introduction and Sections 1 and 14 of the Offer to Purchase.

3. The Offer is being made for all of the outstanding Shares.

4. Tendering shareholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, transfer taxes on the purchase of Shares by the Purchaser pursuant
to the Offer. However, federal income tax backup withholding at a rate of 31%
may be required, unless an exemption is provided or unless the required taxpayer
identification information is provided. See Instruction 9 of the Letter of
Transmittal.

5. The Offer and withdrawal rights will expire at 12:00 midnight, New York
City time, on January 23, 1998 unless the Offer is extended.

6. The board of directors of the Company has unanimously approved each of
the Offer and the Merger (as defined in the Offer to Purchase), unanimously
determined that each of the Offer and the Merger is fair to, and in the best
interests of, the Company's shareholders and unanimously recommends that the
Company's shareholders accept the Offer and tender their Shares pursuant
thereto.

7. Notwithstanding any other provision of the Offer, payment for Shares
accepted for payment pursuant to the Offer will in all cases be made only after
timely receipt by the Depositary of (a) Share Certificates pursuant to the
procedures set forth in Section 3 of the Offer to Purchase, or a timely Book-
Entry Confirmation (as defined in the Offer to Purchase) with respect to such
Shares, (b) the Letter of Transmittal (or facsimile thereof), properly completed
and duly executed, with any required signature guarantees or an Agent's Message
(as defined in the Offer to Purchase) in connection with a book-entry transfer,
and (c) any other documents required by the Letter of Transmittal. Accordingly,
payment may not be made to all tendering shareholders at the same time depending
upon when Share Certificates are actually received by the Depositary.

If you wish to have us tender any or all of the Shares held by us for your
account, please so instruct us by completing, executing, detaching and returning
to us the instruction form set forth herein. If you authorize the tender of your
Shares, all such Shares will be tendered unless otherwise specified below. AN
ENVELOPE TO RETURN YOUR INSTRUCTIONS TO US IS ENCLOSED. YOUR INSTRUCTIONS SHOULD
BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF
PRIOR TO THE EXPIRATION DATE.

The Purchaser is not aware of any state where the making of the Offer is
prohibited by administrative or judicial action pursuant to any valid state
statute. If the Purchaser becomes aware of any valid state statute prohibiting
the making of the Offer or the acceptance of Shares pursuant thereto, the
Purchaser will make a good faith effort to comply with such state statute or
seek to have such statute declared inapplicable to the Offer. If, after such
good faith effort, the Purchaser cannot comply with such state statute, the
Offer will not be made to (nor will tenders be accepted from or on behalf of)
the holders of Shares in such state. In any jurisdiction where the securities,
blue sky or other laws require the Offer to be made by a licensed broker or
dealer, the Offer shall be deemed to be made on behalf of the Purchaser by
Lazard Freres & Co. LLC, Goldman, Sachs & Co. or one or more registered brokers
or dealers licensed under the laws of such jurisdiction.

2
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE OFFER
TO PURCHASE FOR CASH ALL OF THE OUTSTANDING
SHARES OF COMMON STOCK

OF
THE UNION CORPORATION

The undersigned acknowledge(s) receipt of your letter, the enclosed Offer to
Purchase, dated December 24, 1997, and the related Letter of Transmittal (which
together constitute the "Offer") in connection with the offer by Sherman
Acquisition Corporation, a Delaware corporation (the "Purchaser") and a
wholly-owned subsidiary of Outsourcing Solutions Inc., a Delaware corporation,
to purchase all outstanding shares of common stock, par value $0.50 per share
(collectively with the associated Rights (the "Rights") issued pursuant to the
Rights Agreement, dated as of March 14, 1988 (as amended, the "Rights
Agreement"), between the Company and First National Bank of Boston as Rights
Agent, collectively, the "Shares") of The Union Corporation, a Delaware
corporation.

This will instruct you to tender to the Purchaser the number of Shares
indicated below (or if no number is indicated below, all Shares) which are held
by you for the account of the undersigned, upon the terms and subject to the
conditions set forth in the Offer.

NUMBER OF SHARES TO BE TENDERED:*
Shares ___________________
Account Number: ___________________
Dated: ___________________, 199 ____

SIGN HERE
_________________________________

Signature(s)
_________________________________

Please Type or Print Name(s)
_________________________________

Please Type or Print
Address(es) Here
_________________________________

Area Code and Telephone Number
_________________________________

Taxpayer Identification or
Social Security Number(s)

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

* Unless otherwise indicated, it will be assumed that all Shares held by us
for your account are to be tendered.

<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9

GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER--Social Security numbers have nine digits separated by two hyphens: i.e.,
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e., 00-0000000. The table below will help determine the number to
give the payer.
<TABLE>
<CAPTION>
- -----------------------------------------------------
GIVE THE
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- -----------------------------------------------------
<S> <C> <C>
1. An individual's The individual
account
2. Two or more The actual owner of
individuals (joint the account or, if
account) combined funds, the
first individual on
the account(1)
3. Husband and wife The actual owner of
(joint account) the account or, if
joint funds, either
person(1)
4. Custodian account of The minor(2)
a minor (Uniform
Gift to Minors Act)
5. Adult and minor The adult or, if the
(joint account) minor is the only
contributor, the
minor(1)
6. Account in the name The ward, minor, or
of guardian or incompetent
committee for a person(3)
designated ward,
minor, or
incompetent person
7. a. The usual The
revocable savings grantor-trustee(1)
trust account
(grantor is also
trustee)
b. So-called trust
account that is The actual owner(1)
not a legal or
valid trust under
State law
8. Sole proprietorship The Owner(4)
account
- -----------------------------------------------------

<CAPTION>
GIVE THE EMPLOYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
<S> <C> <C>
- -----------------------------------------------------
9. A valid trust, Legal entity (5)
estate, or pension
trust
10. Corporate account The corporation
11. Religious, The organization
charitable, or
educational
organization account
12. Partnership The partnership
13. Association, club, The organization
religious,
charitable,
educational or other
tax-exempt
organization
14. A broker or The broker or
registered nominee nominee
15. Account with the The public entity
Department of
Agriculture in the
name of a public
entity (such as a
State or local
government, school
district or prison)
that receives
agricultural program
payments
</TABLE>

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

(1) List first and circle the name of the person whose number you furnish.

(2) Circle the minor's name and furnish the minor's social security number.

(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.

(4) Show the individual name of the owner but you may also enter your business
or "doing business as" name. You may use either your social security number
or employer identification number.

(5) List first and circle the name of the legal trust, estate, or pension trust.
(Do not furnish the identifying number of the personal representative or
trustee unless the legal entity itself is not designated in the account
title.)

NOTE: If no name is circled when there is more than one name listed, the number
will be considered to be that of the first name listed.
<PAGE>
HOW TO OBTAIN A NUMBER

If you do not have a taxpayer identification number ("TIN"), apply for one
immediately. To apply, obtain Form SS-5, Application for a Social Security
Number Card (for individuals), from your local office of the Social Security
Administration, Form SS-4, Application for Employer Identification Number (for
business and other entities); or Form W-7, Application for IRS Individual
Taxpayer Identification Number (for certain resident aliens) at your local IRS
office.

To complete Form W-9, if you do not have a TIN, check the box marked "Awaiting
TIN" in the space for the TIN in Part 3, sign and date the form, and give it to
the requester. Generally, you will then have 60 days to obtain a TIN and furnish
it to the requester. If the requester does not receive your TIN within 60 days,
backup withholding, if applicable, will begin and continue until you furnish
your TIN to the requester. For reportable payments, the payer must exercise one
of the following options concerning backup withholding during the 60-day period.
Under option (1), a payer must backup withhold on any withdrawals you make from
your account after 7 business days after the requester receives this form back
from you. Under option (2), the payer must backup withhold on any reportable
payments made to your account, regardless of whether you make any withdrawals.
The backup withholding under option (2) must begin no later than 7 business days
after the requester receives this form back. Under option (2), the payer is
required to refund the amounts withheld if your certified TIN is received within
the 60-day period and you were not subject to backup withholding during that
period.

NOTE: Checking the box marked "Awaiting TIN" on the form means that you have
already applied for a TIN OR that you intend to apply for one in the near
future.

As soon as you receive your TIN, complete another Substitute Form W-9, include
your TIN, sign and date the form, and give it to the requester.

For interest, dividends and broker transactions, you must sign the certification
or backup withholding will apply. If you are subject to backup withholding and
you are merely providing your correct TIN to a payer, you must cross out item 2
in the certification before signing the form.

PAYEES EXEMPT FROM BACKUP WITHHOLDING

The following is a list of payees exempt from backup withholding and for which
no information reporting is required:

(1) A corporation.

(2) A financial institution.

(3) An organization exempt from tax under Section 501(a) of the Internal Revenue
Code of 1986, as amended (the "Code"), or an individual retirement arrangement
(IRA) or custodial account under Section 403(b)(7) if the account satisfies the
requirements of Section 401(f)(2).

(4) The United States or any agency or instrumentality thereof.

(5) A State, the District of Columbia, a possession of the United States or any
subdivision or instrumentality thereof.

(6) A foreign government, a political subdivision of a foreign government or any
agency or instrumentality thereof.

(7) An international organization or any agency or instrumentality thereof.

(8) A dealer in securities or commodities required to register in the United
States or a possession of the United States.

(9) A real estate investment trust.

(10) A common trust fund operated by a bank under Section 584(a) of the Code.

(11) A trust exempt from tax under Section 664, or a non-exempt trust described
in section 4947(a)(1) of the Code.

(12) An entity registered at all times during the tax year under the Investment
Company Act of 1940.

(13) A foreign central bank of issue.

(14) A futures commission merchant registered with the Commodity Futures Trading
Commission.

(15) A middleman known in the investment community as a nominee or listed in the
most recent publication of the American Society of Corporate Secretaries, Inc.,
Nominee List.

Exempt Payees Described Above Should File W-9 To Avoid Erroneous Backup
Withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDENTIFICATION
NUMBER, WRITE "EXEMPT" IN PART 2 OF THE FORM, SIGN AND DATE THE FORM AND RETURN
IT TO THE PAYER.

PRIVACY ACT NOTICE--Section 6109 of the Code requires recipients of dividends,
interest or other payments to give taxpayer identification numbers to payers who
must report the payments to the IRS. The IRS uses the numbers for identification
purposes. The IRS may also provide this information to the Department of Justice
for civil and criminal litigation and to cities, states, and the District of
Columbia to carry out their tax laws. Payers must be given the numbers whether
or not recipients are required to file tax returns. Payers generally must
withhold 31% of taxable interest, dividend and certain other payments to a payee
who does not furnish a taxpayer identification number to a payer. Certain
penalties may also apply.

PENALTIES

(1) PENALTY FOR FAILURE TO FURNISH TIN.--If you fail to furnish your taxpayer
identification number to the payer, you are subject to a penalty of $50 for each
such failure unless your failure is due to reasonable cause and not to willful
neglect.

(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.

(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.

(4) MISUSE OF TINS.--If the requestor discloses or uses TINs in violation of
Federal law, the requestor may be subject to civil and criminal penalties.

FOR ADDITIONAL INFORMATION CONTACT YOUR TAX ADVISOR OR THE IRS

<PAGE>
Exhibit 99(a)(6)

OUTSOURCING SOLUTIONS INC. AGREES TO ACQUIRE
THE UNION CORPORATION FOR APPROXIMATELY $190 MILLION,
CREATING ONE OF THE LARGEST RECEIVABLES MANAGEMENT
COMPANIES IN THE COUNTRY

ST. LOUIS, Mo. (December 23, 1997)--Outsourcing Solutions Inc. and The
Union Corporation (NYSE:UCO), Charleston, S.C., announced today that they
have entered into a definitive Merger Agreement whereby OSI will tender for
all of the outstanding capital stock of Union for $31.50 per share, or
approximately $190 million. The Board of Directors of Union has unanimously
approved the tender offer and the merger, and has recommended that all
shareholders of Union accept the offer. The transaction is subject to certain
conditions, including Hart-Scott-Rodino clearance and the completion of
committed financing.

With this acquisition, OSI, a McCown De Leeuw & Co. portfolio company,
will become one of the largest receivables management company in the United
States with pro forma 1997 revenue of approximately $450 million. The
combination of OSI and Union will create a receivables management company that
is capable of offering services across the entire spectrum of the receivables
management market, from credit usage and management, to outsourcing of
pre-charge-off receivables, to contingent collection of delinquent debts, to
purchasing portfolios of charged-off debt.

Union, which posted $121.7 million in revenue in the year ended June 30,
1997, operates in three primary market segments through its Transworld
Systems division, the largest collection agency serving small businesses;
Allied Bond & Collection Agency and Capital Credit Corporation, both
contingent collection agencies; and Interactive Performance and High
Performance Services, units which provide leading-edge credit usage and
receivables management outsourcing services to major corporations.

Timothy G. Beffa, OSI's president and chief executive officer, noted the
excellent strategic fit of the acquisition. "This transaction is a significant
step in OSI's strategy toward creating the leading full-service receivables
management firm," he said. "The addition of Union will expand our ability to
provide superior service to clients in all the major credit-granting
industries."

Union chairman Melvin L. Cooper and president and chief executive
officer William B. Hewitt echoed Beffa's comments. "The combination of OSI
and Union creates an entity with the broadest capabilities to serve the needs
of credit grantors nationwide, given the depth and breadth of our human,
financial and information resources," they said.

OSI was formed in September 1995 by McCown De Leeuw & Co., a private
equity firm with offices in New York City and Menlo Park, California, to
become one of the leading companies is the highly fragmented and rapidly
consolidating collections industry. OSI serves credit grantors in a wide
range of industries including banking, retailing, health care, government and
education, direct marketing, telecommunications and utilities.

The Union transaction represents OSI's seventh acquisition since its
formation and its third in the last months. In November, OSI acquired
Accelerated Bureau of Collections, Englewood, Colorado, an agency that
specializes in contingent collections, primarily for bank card issuers. In
October, OSI acquired North Shore Agency, Inc., Great Neck, N.Y., one of the
largest providers of letter series collection and billing services to direct
marketers, utilities and cable companies. Earlier acquisitions include
Account Portfolios Inc., Atlanta, a portfolio purchasing firm; The
Continental Alliance, Seattle, a contingent collection agency; A.M. Miller,
Minneapolis, a contingent collection agency, and Payco American Corp.,
Milwaukee, a multi-line firm providing contingent collections and outsourcing
services to credit grantors in a wide range of industries.

###
<PAGE>
For more information, contact:

Timothy G. Beffa, President and CEO, OSI
314-514-2600
Daniel J. Dolan, Executive Vice President and Chief Financial Officer, OSI
314-514-2614
Peter D. Waldstein, Senior Vice President, Corporate Development, OSI
314-514-2603
Melvin L. Cooper, Chairman of the Board, Union
212-751-6422
William B. Hewitt, President and CEO, Union
803-958-3801
Nicholas P. Gill, Executive Vice President, Treasurer, Secretary and Chief
Financial Officer, Union
203-629-0505

<PAGE>
THIS ANNOUNCEMENT IS NEITHER AN OFFER TO PURCHASE NOR A SOLICITATION OF AN OFFER
TO SELL SHARES. THE OFFER IS MADE SOLELY BY THE OFFER TO
PURCHASE DATED DECEMBER 24, 1997 AND THE RELATED LETTER OF TRANSMITTAL AND IS
BEING MADE TO ALL HOLDERS OF SHARES. THE PURCHASER
IS NOT AWARE OF ANY STATE WHERE THE MAKING OF THE OFFER IS PROHIBITED BY
ADMINISTRATIVE OR JUDICIAL ACTION PURSUANT TO ANY VALID STATE
STATUTE. IF THE PURCHASER BECOMES AWARE OF ANY VALID STATE STATUTE PROHIBITING
THE MAKING OF THE OFFER OR THE ACCEPTANCE OF SHARES
PURSUANT THERETO, THE PURCHASER WILL MAKE A GOOD FAITH EFFORT TO COMPLY WITH
SUCH STATE STATUTE OR SEEK TO HAVE SUCH STATUTE
DECLARED INAPPLICABLE TO THE OFFER. IF, AFTER SUCH GOOD FAITH EFFORT, THE
PURCHASER CANNOT COMPLY WITH SUCH STATE STATUTE,
THE OFFER WILL NOT BE MADE TO (NOR WILL TENDERS BE ACCEPTED FROM OR ON BEHALF
OF) THE HOLDERS OF SHARES IN SUCH STATE.
IN ANY JURISDICTION WHERE THE SECURITIES, BLUE SKY OR OTHER LAWS REQUIRE THE
OFFER TO BE MADE BY A LICENSED BROKER
OR DEALER, THE OFFER SHALL BE DEEMED TO BE MADE ON BEHALF OF THE PURCHASER BY
LAZARD FRERES & CO. LLC ("LAZARD FRERES"), GOLDMAN, SACHS & CO. ("GOLDMAN
SACHS") OR
ONE OR MORE REGISTERED BROKERS OR DEALERS LICENSED UNDER THE LAWS OF SUCH
JURISDICTION.

Notice of Offer to Purchase for Cash
All of the Outstanding Shares of Common Stock
of
THE UNION CORPORATION
at
$31.50 Net Per Share
by
Sherman Acquisition Corporation
A Wholly-Owned Subsidiary
of
OUTSOURCING SOLUTIONS INC.

Sherman Acquisition Corporation, a Delaware corporation (the "Purchaser")
and a wholly-owned subsidiary of Outsourcing Solutions Inc., a Delaware
corporation ("Parent"), is offering to purchase all outstanding shares of common
stock, par value $0.50 per share (collectively with the associated Rights issued
pursuant to the Rights Agreement, dated as of March 14, 1988, between the
Company and First National Bank of Boston, as Rights Agent, as amended, the
"Shares"), of The Union Corporation, a Delaware corporation (the "Company"), at
a price of $31.50 per Share, net to the seller in cash without interest thereon,
upon the terms and subject to the conditions set forth in the Offer to Purchase
dated December 24, 1997 and the related Letter of Transmittal (which, as may be
amended and supplemented from time to time, together constitute the "Offer").

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON
JANUARY 23, 1998, UNLESS THE OFFER IS EXTENDED.

THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY
TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION DATE (DEFINED BELOW)
A NUMBER OF SHARES WHICH CONSTITUTES AT LEAST 66 2/3% OF THE TOTAL VOTING POWER
OF ALL SHARES OF CAPITAL STOCK OF THE UNION CORPORATION OUTSTANDING ON A FULLY
DILUTED BASIS, (II) THE EXPIRATION OR TERMINATION OF ANY APPLICABLE WAITING
PERIOD (AND ANY EXTENSION THEREOF) UNDER THE HART-SCOTT-RODINO ANTITRUST
IMPROVEMENTS ACT OF 1976, AS AMENDED, AND (III) PARENT RECEIVING THE FINANCING
NECESSARY FOR IT AND THE PURCHASER TO CONSUMMATE THE OFFER AND THE OTHER
TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT (AS DEFINED BELOW) IN
ACCORDANCE WITH THE TERMS OF THE BANK COMMITMENT LETTER DATED DECEMBER 22, 1997
TO PARENT FROM GOLDMAN SACHS CREDIT PARTNERS L.P., THE CHASE MANHATTAN BANK AND
CHASE SECURITIES INC. SEE THE INTRODUCTION AND SECTION 1 OF THE OFFER TO
PURCHASE.

<PAGE>
The Offer is being made pursuant to the Share Purchase Agreement and Plan of
Merger, dated as of December 22, 1997 (the "Merger Agreement"), among Parent,
the Purchaser and the Company. The Merger Agreement provides, among other
things, that as soon as practicable after the purchase of Shares pursuant to the
Offer and the satisfaction of other conditions set forth in the Merger Agreement
and in accordance with the General Corporation Law of the State of Delaware (the
"DGCL"), the Purchaser will be merged with and into the Company (the "Merger").
Following the consummation of the Merger, the Company will continue as the
surviving corporation and will be a direct wholly-owned subsidiary of Parent. At
the effective time of the Merger (the "Effective Time"), each outstanding Share
issued and outstanding immediately prior to the Effective Time (other than
Shares held by any subsidiary of the Company or in the treasury of the Company,
or by Parent, the Purchaser or any other subsidiary of Parent, which Shares will
be cancelled, and other than Shares, if any, held by shareholders who perfect
their appraisal rights under the DGCL) will be converted into the right to
receive $31.50 in cash, without interest.

THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED EACH OF THE
OFFER AND THE MERGER, UNANIMOUSLY DETERMINED THAT EACH OF THE OFFER AND THE
MERGER IS FAIR TO, AND IN THE BEST INTERESTS OF, THE SHAREHOLDERS OF THE COMPANY
AND UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS ACCEPT THE OFFER AND TENDER THEIR
SHARES PURSUANT TO THE OFFER.

For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment (and thereby purchased) Shares validly tendered and not properly
withdrawn if, as, and when the Purchaser gives oral or written notice to the
depositary (the "Depositary") of its acceptance for payment of such Shares.
Payment for Shares accepted pursuant to the Offer will be made by deposit of the
purchase price therefor with the Depositary, which will act as agent for
tendering shareholders for the purposes of receiving payments from the Purchaser
and transmitting payments to tendering shareholders whose Shares have
theretofore been accepted for payment. In all cases, payment for Shares
purchased pursuant to the Offer will be made only after timely receipt by the
Depositary of (i) the certificates for such Shares or timely Book-Entry
Confirmation (as defined in Section 2 of the Offer to Purchase) of such Shares,
if such procedure is available, into the Depositary's account at The Depository
Trust Company or the Philadelphia Depository Trust Company pursuant to the
procedures set forth in Section 3 of the Offer to Purchase, (ii) the Letter of
Transmittal or facsimile thereof, properly completed and duly executed with all
required signature guarantees or Agent's Message (as defined in Section 2 of the
Offer to Purchase) in connection with a book-entry transfer, and (iii) all other
documents required by the Letter of Transmittal. Under no circumstances will
interest on the purchase price for Shares be paid by the Purchaser, regardless
of any delay in making such payment.

The term "Expiration Date" shall mean 12:00 midnight, New York City time, on
January 23, 1998, unless and until Purchaser in its sole discretion (but subject
to in the terms of the Merger Agreement), shall have extended the period of time
during which the Offer is open, in which event the term "Expiration Date" shall
mean the latest time and date at which the Offer, as so extended by the
Purchaser, shall expire. Subject to the applicable rules and regulations of the
Securities and Exchange Commission and to applicable law, the Purchaser
expressly reserves the right, in its sole discretion (but subject to the terms
of the Merger Agreement), at any time or from time to time, to extend for any
reason the period of time during which the Offer is open, including the
occurrence of any of the events specified in Section 14 of the Offer to
Purchase, by giving oral or written notice of such extension to the Depositary.
Any such extension will be followed by a public announcement thereof by no later
than 9:00 a.m., New York City time, on the next business day after the
previously scheduled Expiration Date. During any such extension, all Shares
previously tendered and not withdrawn will remain subject to the Offer, subject
to the right of a tendering shareholder to withdraw such shareholder's Shares.
Without limiting the manner in which the Purchaser may choose to make any public
announcement, the Purchaser will have no obligation to publish, advertise or
otherwise communicate any such announcement other than by issuing a press
release to the Dow Jones News Service or as otherwise may be required by law.

Tenders of Shares made pursuant to the Offer are irrevocable except that
such Shares may be withdrawn any time prior to the Expiration Date and, unless
theretofore accepted for payment by the Purchaser pursuant to the Offer, may
also be withdrawn at any time after February 22, 1998, or at such later time as
may apply if the Offer is extended. For a withdrawal to be effective, a written,
telegraphic or facsimile transmission notice of withdrawal must be timely
received by the Depositary at one of its addresses set forth below. Any such
notice of withdrawal must specify the name of the person who tendered the Shares
to be withdrawn, the number of Shares to be withdrawn and the name of the
registered holder, if different from that of the person who tendered such
Shares. If certificates evidencing Shares to be withdrawn have been delivered or
otherwise identified to the Depositary, then, prior to the physical release of
such certificates, the serial numbers shown on such certificate evidencing the
Shares must be submitted to the Depositary and the signature on the notice of
withdrawal must be guaranteed by an Eligible Institution (as defined in Section
3 of the Offer to Purchase), unless such Shares have been tendered for the
account of an Eligible Institution. If Shares have been tendered pursuant to the
procedure for book-entry transfer set forth in Section 3 of the Offer to
Purchase, any notice of withdrawal must also specify the name and number of the
account at the applicable Book-Entry Transfer Facility (as defined in Section 2
of the Offer to Purchase) to be credited with the withdrawn Shares. All
questions as to the form and validity (including time of receipt) of notices of
withdrawal will be determined by the Purchaser, in it sole discretion, whose
determination will be final and binding. Any Shares properly withdrawn will
thereafter be deemed to not have been validly tendered for purposes of the
Offer. However, withdrawn Shares may be re-tendered at any time prior to the
Expiration Date by following any of the procedures described in Section 3 of the
Offer to Purchase.

2
<PAGE>
The Company has provided the Purchaser with the Company's shareholder list
and security position listings for the purpose of disseminating the Offer to
holders of Shares. The Offer to Purchase, the related Letter of Transmittal and
any other relevant materials will be mailed to record holders of Shares whose
names appear on the Company's shareholder list and will be furnished, for
subsequent transmittal to beneficial owners of Shares, to brokers, dealers,
commercial banks, trust companies and similar persons whose names, or the names
of whose nominees, appear on the shareholder list or, if applicable, who are
listed as participants in a clearing agency's security position listing.

The information required to be disclosed by paragraph (e)(1)(vii) of Rule
14d-6 under the Securities Exchange Act of 1934, as amended, is contained in the
Offer to Purchase and is incorporated herein by reference.

THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.

Requests for copies of the Offer to Purchase, the related Letter of
Transmittal and other tender offer documents may be directed to the Information
Agent as set forth below, and copies will be furnished promptly at the
Purchaser's expense. Questions or requests for assistance may be directed to the
Information Agent or the Dealer Managers as set forth below. Neither of Parent,
or the Purchaser will pay any fees or commissions to any broker or dealer or
other person (other than the Dealer Managers, the Depositary and the Information
Agent) in connection with the solicitation of tenders of shares pursuant to the
Offer.

The Information Agent for the Offer is:

[LOGO]

156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call collect)
or
Toll Free (800) 322-2885

The Dealer Managers for the Offer are:

<TABLE>
<S> <C>
LAZARD FRERES & CO. LLC GOLDMAN, SACHS & CO.
30 Rockefeller Plaza 85 Broad Street
59th Floor New York, New York 10004
New York, New York 10020 (212) 902-1000
(212) 632-6717
</TABLE>

December 24, 1997

<PAGE>
NOTICE OF GUARANTEED DELIVERY

FOR TENDER OF SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS)
OF

THE UNION CORPORATION
(NOT TO BE USED FOR SIGNATURE GUARANTEES)

This Notice of Guaranteed Delivery, or one substantially equivalent hereto,
must be used to accept the Offer (as defined below) if (i) certificates ("Share
Certificates") representing shares of common stock, par value $0.50 per share,
of The Union Corporation, a Delaware corporation (the "Company"), including the
associated Rights (the "Rights") issued pursuant to the Rights Agreement, dated
as of March 14, 1988 (as amended, the "Rights Agreement"), between the Company
and First National Bank of Boston as Rights Agent, are not immediately
available, (ii) time will not permit Share Certificates and all other required
documents to reach ChaseMellon Shareholder Services, L.L.C. (the "Depositary")
on or prior to the Expiration Date (as defined in Section 1 of the Offer to
Purchase (as defined below)), or (iii) the procedure for delivery by book-entry
transfer cannot be completed on a timely basis. This Notice of Guaranteed
Delivery may be delivered by hand or mail or sent by facsimile transmission to
the Depositary. See Section 3 of the Offer to Purchase.

THE DEPOSITARY FOR THE OFFER IS:

CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
------------------------

<TABLE>
<S> <C> <C>
BY MAIL: BY HAND: BY OVERNIGHT:

ChaseMellon Shareholder ChaseMellon Shareholder ChaseMellon Shareholder
Services, L.L.C. Services, L.L.C. Services, L.L.C.
Post Office Box 3301 120 Broadway--13th Floor 85 Challenger Road
South Hackensack, NJ 07606 New York, NY 10271 Mail Drop--Reorg Dept.
Attn: Reorganization Attn: Reorganization Ridgefield Park, NJ 07660
Department Department Attn: Reorganization
Department
</TABLE>

<TABLE>
<S> <C>
FACSIMILE TRANSMISSION: CONFIRMATION OF FAX:

(201) 329-8936 (201) 296-4860
</TABLE>

DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION TO A
NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.

This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an Eligible Institution under the instructions thereto, such
signature guarantee must appear in the applicable space provided in the
signature box on the Letter of Transmittal.
<PAGE>
LADIES AND GENTLEMEN:

The undersigned hereby tenders to Sherman Acquisition Corporation, a
Delaware corporation (the "Purchaser") and a wholly-owned subsidiary of
Outsourcing Solutions Inc. ("Parent"), a Delaware corporation, upon the terms
and subject to the conditions set forth in the Offer to Purchase, dated December
24, 1997 (the "Offer to Purchase"), and in the related Letter of Transmittal
(which together constitute the "Offer"), receipt of each of which is hereby
acknowledged, the number of Shares indicated below pursuant to the guaranteed
delivery procedures set forth in Section 3 of the Offer to Purchase.

- -------------------------------------------
Number of Shares: ____________________________________________________________
Account Number: ______________________________________________________________

Certificate No(s). (if available):
______________________________________________________________________________
______________________________________________________________________________

If Share(s) will be tendered by book-entry
transfer check one box :
/ / The Depository Trust Company
/ / The Philadelphia Depository Trust
Company
Account Number: ______________________________________________________________
Date:__________________________________________________________________, 199__
- -------------------------------------------
- -------------------------------------------

Name(s) of Record Holder(s):

______________________________________________________________________________

Address(es): _________________________________________________________________

______________________________________________________________________________

Area Code and Telephone Number(s):

______________________________________________________________________________

______________________________________________________________________________
SIGNATURE(S)

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

2
<PAGE>
GUARANTEE

(NOT TO BE USED FOR SIGNATURE GUARANTEE)

The undersigned, a financial institution which is a participant in the
Security Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program,
guarantees to deliver to the Depositary, at one of its addresses set forth
above, Share Certificates evidencing the Shares tendered hereby, in proper form
for transfer, or confirmation of book-entry transfer of such Shares, into the
Depositary's account at The Depository Trust Company or The Philadelphia
Depository Trust Company, in each case with delivery of a Letter of Transmittal
(or facsimile thereof) properly completed and duly executed, with any required
signature guarantees or an Agent's Message (as defined in the Offer to Purchase)
in the case of a book-entry delivery, and any other required documents, all
within three New York Stock Exchange trading days after the date of execution of
this Notice of Guaranteed Delivery.

- -------------------------------------------
Name of Firm: ________________________________________________________________
Address: _____________________________________________________________________
ZIP CODE

Area Code and
Telephone Number: ____________________________________________________________

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

______________________________________________________________________________
AUTHORIZED SIGNATURE

Title: _______________________________________________________________________

Dated: _______________________________________________________________ , 199__

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

NOTE: DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE OF GUARANTEED DELIVERY.
SHARE CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.

<PAGE>

EXHIBIT 99(b)(1)

GOLDMAN SACHS CREDIT THE CHASE MANHATTAN BANK
PARTNERS L.P. CHASE SECURITIES INC.
85 BROAD STREET 270 PARK AVENUE
NEW YORK, NEW YORK 10004 NEW YORK, NEW YORK 10017

PERSONAL AND CONFIDENTIAL

December 22, 1997

Outsourcing Solutions Inc.
Suite 150
390 South Woods Mill Road
Chesterfield, Missouri 63017

Attention: Mr. Timothy G. Beffa

Re: OUTSOURCING SOLUTIONS INC.
AMENDED AND RESTATED CREDIT AGREEMENT

Gentlemen:

Reference is made to that certain Amended and Restated Credit Agreement dated as
of October 8, 1997, as amended to the date hereof (as so amended, the "EXISTING
CREDIT AGREEMENT"), among Outsourcing Solutions Inc. ("COMPANY"), the lenders
party thereto (the "EXISTING LENDERS"), The Chase Manhattan Bank ("CHASE") and
Goldman Sachs Credit Partners L.P. ("GSCP"), as Co-Administrative Agents, GSCP
and Chase Securities Inc. ("CSI"), as Arranging Agents, and SunTrust Bank,
Atlanta, as Collateral Agent.

You have advised us that Company intends to acquire (the "ACQUISITION") the
outstanding capital stock of The Union Corporation, a Delaware corporation
("UNION"), through a tender offer (the "TENDER OFFER") by a newly formed, wholly
owned Subsidiary ("MERGER SUB") of Company for up to 100% of the shares of Union
(the "SHARES"), followed by a merger of Merger Sub with and into Union (the
"MERGER") in which Union will be the surviving corporation and in which any
Shares not tendered in the Tender Offer will be cancelled in exchange for cash
consideration. We understand that the Tender Offer will be conditioned on, among
other things, the tender and purchase of at least 66-2/3% of the Shares (the
"MINIMUM SHARES"). Upon the consummation of the Acquisition and the

<PAGE>
Outsourcing Solutions Inc.
December 22, 1997
Page 2

Merger, Union will be a wholly owned subsidiary of Company. You have delivered
to us on the date hereof a fully executed copy of a merger agreement between
Company and Union providing for the Merger and have advised us that the merger
agreement and the Merger on the terms set forth in such merger agreement have
been approved by the Board of Directors of Union.

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
Company and to pay costs and expenses related to the Acquisition, the Company
desires to obtain up to $225,000,000 in additional senior bank financing (the
"ADDITIONAL BANK FINANCING") pursuant to an amendment and restatement of the
Existing Credit Agreement (the Existing Credit Agreement, as so amended and
restated, being the "AMENDED AND RESTATED CREDIT AGREEMENT") which would
restructure the credit facilities available under the Existing Credit Agreement
(the "EXISTING BANK FACILITIES") so as to consist of the existing two term loan
facilities of $62,500,000 and $124,921,708, respectively, a third term loan
facility of up to $225,000,000 (collectively, the "TERM LOAN FACILITIES"), and
the existing revolving credit facility of up to $58,000,000 with a sublimit for
letters of credit of $15,000,000 (the "REVOLVING CREDIT FACILITY"; together with
the Term Loan Facilities, the "AMENDED AND RESTATED BANK FACILITIES"). The
proceeds from the up to $225,000,000 of additional Term Loan Facilities are
expected to be used, to pay the consideration for the Shares pursuant to the
Tender Offer and the Merger and to pay related transaction costs and to repay
amounts outstanding under the Revolving Credit Facility, in each case in the
amounts set forth on SCHEDULE I to Annex B hereto.

Each of GSCP and Chase is pleased to confirm its commitment to provide up to
one-half of the $470,421,708 of Amended and Restated Bank Facilities, consisting
of (a) GSCP's $19,283,967.81 and Chase's $19,004,510.47 of commitments and
outstanding loans under the Existing Credit Agreement, (b) an additional
$225,000,000 of commitments in respect of the Additional Bank Financing, and (c)
in the event Existing Lenders constituting Requisite Lenders (as defined in the
Existing Credit Agreement) fail to consent to the Amended and Restated Bank
Facilities, the amount (the "BACKSTOPPED EXISTING BANK FACILITIES AMOUNT") of
the Existing Bank Facilities (as defined in the attached Annex B) which would,
when added to the amount of the Existing Bank Facilities held by Existing
Lenders which have consented to the Amended and Restated Bank Facilities, be
sufficient, if voted to approve the Amended and Restated Bank Facilities, to
provide the approval of Requisite Lenders to the Amended and Restated Bank
Facilities, in each case under 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, GSCP and Chase will act as Co-Administrative

<PAGE>
Outsourcing Solutions Inc.
December 22, 1997
Page 3

Agents, and GSCP and CSI will act as Arranging Agents, in connection with the
Amended and Restated Bank Facilities.

Our commitments are subject, in our respective reasonable discretion, to the
condition that there shall not have been, since the date of the most recent
audited financial statements of Company and its subsidiaries and of Union and
its subsidiaries provided to GSCP, Chase and CSI, any material adverse change in
the business, condition (financial or otherwise) results of operations, assets,
liabilities, financial performance or prospects of Company and its subsidiaries
or Union and its subsidiaries which in any such case GSCP, Chase or CSI, in
their respective judgment, reasonably deems material. Our commitments are also
subject, in our respective reasonable discretion, to the satisfactory
negotiation, execution and delivery of appropriate loan documents relating to
the Amended and Restated Bank Facilities, including, without limitation, an
amended and restated credit agreement, guaranties, security agreements, pledge
agreements, real property security agreements, opinions 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.

The terms of this Commitment Letter are intended as an outline of certain of the
material terms of the Amended and Restated Bank 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 GSCP and/or Chase
may reasonably determine to be appropriate in the context of the proposed
transactions.

Each of GSCP and Chase intends and reserves the right to syndicate the Amended
and Restated Bank Facilities to the Existing Lenders and the New Lenders (as
defined in the attached Annex B). GSCP, Chase and CSI will coordinate all
aspects of the syndication of the Amended and Restated Bank Facilities,
including determining the selection of potential New Lenders, the timing of all
offers to Existing Lenders and potential New 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 Company's consent not to be unreasonably withheld).

You agree to cooperate with GSCP, Chase and CSI in connection with (i) the
preparation of an information package regarding the business, operations and
prospects of Company and Union, including, without limitation, the delivery of
all information relating to the transactions contemplated hereunder prepared by
or on behalf of Company or Union deemed reasonably necessary by GSCP, Chase or
CSI to complete the syndication of the

<PAGE>
Outsourcing Solutions Inc.
December 22, 1997
Page 4

Amended and Restated Bank Facilities and (ii) the presentation of such
information package in bank meetings and other communications with Lenders in
connection with the syndication of the Amended and Restated Bank Facilities. You
shall be solely responsible for the contents of any such information package and
presentation and you acknowledge that GSCP, Chase and CSI 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 GSCP, Chase, CSI 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 statement of a material
fact or omit to state a material fact necessary to make the statements contained
therein, in light of the circumstances under which they were made, 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 that this Commitment Letter and any written or oral advice provided
by GSCP, Chase or CSI in connection with this arrangement is exclusively for the
information of Company and may not be disclosed to any third party (other than
Union and its advisors) 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 GSCP 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 GSCP, Chase and CSI may from time to time effect
transactions, for its own account or the account of customers, and hold
positions in loans or options on loans of Company, Union and other companies
that may be the subject of this arrangement. In addition, Goldman, Sachs & Co.,
an affiliate of GSCP, and CSI 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 Company
and other companies that may be the subject of this arrangement. In addition,
GSCP,

<PAGE>
Outsourcing Solutions Inc.
December 22, 1997
Page 5

Chase and CSI may employ the services of its affiliates in providing
services hereunder and may exchange with such affiliates information concerning
Company, Union and other companies that may be the subject of this arrangement,
and such affiliates shall be entitled to the benefits afforded to GSCP, Chase
and CSI hereunder.

Our commitments hereunder shall terminate on the earlier of (x) 60 days from the
date of this Commitment Letter and (y) the date of termination of your agreement
with Union with respect to the Acquisition, unless the closing of the Amended
and Restated Bank Facilities, on the terms and subject to the conditions
contained herein, shall have been consummated by such date.

The obligations of GSCP, Chase and CSI hereunder are several obligations and the
failure of GSCP, Chase or CSI, 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 GSCP, Chase and CSI hereunder may be enforced independently.

[Remainder of page intentionally left blank]

<PAGE>
Outsourcing Solutions Inc.
December 22, 1997
Page 6

Please confirm that the foregoing is in accordance with your understanding by
signing and returning to GSCP, Chase and CSI the enclosed copy of this
Commitment Letter, on or before the close of business on December 22, 1997,
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,

GOLDMAN SACHS CREDIT PARTNERS L.P.

By: /s/ STEPHEN KING
-----------------------------
Authorized Signatory

THE CHASE MANHATTAN BANK

By: /s/ THOMAS H. KOZLARK
-----------------------------
Name: Thomas H. Kozlark
Title: Vice President

CHASE SECURITIES INC.

By: /s/ J. MATTHEW LYNESS
-----------------------------
Name: J. Matthew Lyness
Title: Vice President

<PAGE>
Outsourcing Solutions Inc.
December 22, 1997
Page 7

ACCEPTED AS OF THE DATE ABOVE:

OUTSOURCING SOLUTIONS INC.

By: /s/ TYLER T. ZACHEM
---------------------------
Name: Tyler T. Zachem
Title: Vice President

<PAGE>

ANNEX A

In the event that GSCP, Chase or CSI becomes involved in any capacity in any
action, proceeding or investigation brought by or against any person, including,
without limitation, stockholders of Company or of Union, 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"), Company
periodically will reimburse GSCP and/or Chase and/or CSI, as the case may be,
for its reasonable legal and other expenses (including the cost of any
investigation and preparation) incurred in connection therewith; PROVIDED,
HOWEVER, that if GSCP, Chase or CSI is found in any such action, proceeding or
investigation to have acted with gross negligence or bad faith in performing the
services which are the subject of the Letter, GSCP, Chase or CSI, as the case
may be, shall repay such portion of such reimbursed amounts that is attributable
to expenses incurred in relation to the act or omission of GSCP, Chase or CSI,
as the case may be, which is the subject of such finding. Company also will
indemnify and hold GSCP, Chase and CSI 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, damage or liability results from
the gross negligence or bad faith of GSCP and/or Chase and/or CSI, 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 GSCP and/or Chase and/or
CSI, as the case may be, or insufficient to hold it harmless, then Company shall
contribute to the amount paid or payable by GSCP and/or Chase and/or CSI, 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
Company and its stockholders on the one hand and GSCP and/or Chase and/or CSI,
as the case may be, on the other hand in the matters contemplated by the Letter
as well as the relative fault of Company and GSCP and/or Chase and/or CSI, as
the case may be, with respect to such loss, claim, damage or liability and any
other relevant equitable considerations. The reimbursement, indemnity and
contribution obligations of Company under this paragraph shall be in addition to
any liability which Company may otherwise have, shall extend upon the same terms
and conditions to any affiliate of GSCP or Chase and/or CSI (including without
limitation Goldman, Sachs & Co.) and the partners, directors, agents, employees
and controlling persons (if any), of GSCP and/or Chase and/or CSI, 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
Company, GSCP, Chase, CSI any such affiliate and any such person. Company also
agrees that none of GSCP, Chase, CSI or any of their respective affiliates,
partners, directors, agents, employees or controlling persons shall have any
liability to Company, any person asserting claims on behalf of or in right of
Company 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 Company result
from the gross negligence or bad faith of GSCP and/or Chase and/or CSI, as the
case may be, in performing the services that are the subject of the Letter.

Annex A-1
<PAGE>

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 laws.

Annex A-2
<PAGE>

ANNEX B

SUMMARY OF TERMS AND CONDITIONS OF THE AMENDED AND RESTATED BANK FACILITIES

Outsourcing Solutions Inc. (the "BORROWER") proposes to acquire (the
"ACQUISITION") all of the outstanding capital stock of The Union Corporation
("UNION") through a tender offer (the "TENDER OFFER") by a newly formed, wholly
owned Subsidiary ("MERGER Sub") of the Borrower for up to 100% of the shares of
Union (the "SHARES"), followed by a merger of Merger Sub with and into Union
(the "MERGER") in which Union will be the surviving corporation and in which any
Shares not tendered in the Tender Offer will be cancelled in exchange for cash
consideration. In order to complete the Acquisition, to refinance certain
indebtedness of Company, to pay fees and expenses related to such transactions
and to finance the continuing operations of the Borrower and its subsidiaries
after the Acquisition, the Borrower proposes (i) to maintain the Existing Bank
Facilities (as defined below), and (ii) to borrow additional term loans in an
aggregate principal amount of up to $225,000,000.

Set forth below is a Summary of Terms and Conditions outlining certain terms of
the Amended and Restated Bank 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.

I. THE AMENDED AND RESTATED BANK FACILITIES

BORROWER: Outsourcing Solutions Inc.

GUARANTORS: Each of the Borrower's subsidiaries shall guaranty (the
"GUARANTEES") all obligations under the Amended and
Restated Bank Facilities.

CO-ADMINISTRATIVE Goldman Sachs Credit Partners L.P. ("GSCP") and The
AGENTS: Chase Manhattan Bank ("CHASE").

ARRANGING GSCP and Chase Securities Inc. ("CSI"). Collectively,
AGENTS: the Co-Administrative Agents and the Arranging Agents are
referred to herein as the "AGENTS".

LENDERS: GSCP, Chase, the other Existing Lenders and other financial
institutions (the "NEW LENDERS")(collectively, the "LENDERS").

Annex B-1
<PAGE>

AMOUNT OF AMENDED The Amended and Restated Bank Facilities shall consist
AND RESTATED BANK of up to $470,421,708 of senior secured bank financing
FACILITIES: (the "AMENDED AND RESTATED BANK FACILITIES") to include:

(i) $62,500,000 of existing senior term loans (the
"TRANCHE A TERM LOANS");

(ii) $124,921,708 of existing senior term loans and
(the "TRANCHE B TERM LOANS");

(iii) up to $225,000,000 of additional senior term loans
(the "TRANCHE C TERM LOANS"; collectively, the Tranche A
Term Loans, the Tranche B Term Loans and the Tranche C
Term Loans are referred to herein as the "TERM LOAN
FACILITIES"); and

(iv) the existing $58,000,000 senior revolving credit
facility (the "REVOLVING CREDIT FACILITY"; collectively,
the Tranche A Term Loans, the Tranche B Term Loans and
the Revolving Credit Facility are referred to herein as
the "EXISTING BANK FACILITIES" ).

AVAILABILITY: TERM LOAN FACILITIES - The Tranche A Term Loans and Tranche B
Term Loans shall be maintained as Tranche A Term Loans and
Tranche B Term Loans, respectively, under the Amended and
Restated Credit Agreement. One drawing may be made of the
Tranche C Term Loans on the Effective Date; a portion of the
Tranche C Term Loans not to exceed an amount equal to
one-third (1/3) of the aggregate consideration for the Shares
(such portion being the "DELAYED-DRAW TERM LOAN ") will be
available on a delayed-draw basis, for a period not to exceed
120 days after the Effective Date, to pay that portion of the
consideration for the Shares and related fees and expenses
that become due and payable upon consummation of the Merger.

REVOLVING CREDIT FACILITY - Loans made under the
Revolving Credit Facility under the Existing Credit
Agreement shall be maintained as loans under the
Revolving Credit Facility under the Amended and Restated
Credit Agreement. After the Effective Date, amounts
under the Revolving Credit Facility

Annex B-2
<PAGE>

may be borrowed until the maturity date of the Revolving
Credit Facility.

PURPOSE/USE OF To finance the consideration for the Shares acquired in
PROCEEDS OF the Acquisition, to refinance certain borrowings under
ADDITIONAL BANK the Revolving Credit Facility and to pay fees and
FINANCING: expenses associated therewith, in each case in the amounts set
forth on SCHEDULE I annexed to this Annex B.

MATURITIES: Tranche A Term Loans: October 15, 2001
Tranche B Term Loans: October 15, 2003
Tranche C Term Loans: October 15, 2004
Revolving Credit Facility: October 15, 2001

EFFECTIVE DATE: The date (the "EFFECTIVE DATE") on or before
February 15, 1998 on which the initial borrowings of the
Tranche C Term Loans under the Amended and Restated Bank
Facilities are made.

AMORTIZATION: As contained in the Existing Credit Agreement for the
Tranche A Term Loans and Tranche B Term Loans. The
Tranche C Term Loans shall be amortized in installments
in the amounts and on the dates indicated below:

SCHEDULED
DATE REPAYMENT OF
TRANCHE C TERM
LOANS

April 15, 1998 $ 250,000
July 15, 1998 $ 250,000
October 15, 1998 $ 250,000
January 15, 1999 $ 250,000
April 15, 1999 $ 250,000
July 15, 1999 $ 250,000
October 15, 1999 $ 250,000

Annex B-3
<PAGE>

January 15, 2000 $ 250,000
April 15, 2000 $ 250,000
July 15, 2000 $ 250,000
October 15, 2000 $ 250,000
January 15, 2001 $ 250,000
April 15, 2001 $ 250,000
July 15, 2001 $ 250,000
October 15, 2001 $ 250,000
January 15, 2002 $ 250,000
April 15, 2002 $ 250,000
July 15, 2002 $ 250,000
October 15, 2002 $ 250,000
January 15, 2003 $ 250,000
April 15, 2003 $ 250,000
July 15, 2003 $ 250,000
October 15, 2003 $ 250,000
January 15, 2004 $ 54,750,000
April 15, 2004 $ 54,750,000
July 15, 2004 $ 54,750,000
October 15, 2004 $ 55,000,000

LETTERS OF
CREDIT: At the Borrower's option, a portion of the Revolving Credit
Facility not to exceed $15,000,000 will be made available for
the issuance of letters of credit on the terms and subject to
the conditions contained in the Existing Credit Agreement.

INTEREST RATE: All amounts outstanding under the Amended and Restated Bank
Facilities shall bear interest, at the Borrower's option
(provided that the Borrower may not select the reserve
adjusted Eurodollar Rate with respect to the Tranche C Term
Loans until after the Effective Date), as follows:

A. With respect to the Tranche A Term Loans:

(i) at the Base Rate plus 1.50% per annum; or

Annex B-4
<PAGE>

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

B. With respect to the Tranche B Term Loans:

(i) at the Base plus 2.00% per annum; or

(ii) at the reserve adjusted Eurodollar Rate plus
3.00% per annum.

C. With respect to the Tranche C Term Loans:

(i) at the Base plus 2.00% per annum; or

(ii) at the reserve adjusted Eurodollar Rate plus
3.00% per annum.

D. With respect to loans made under the Revolving Credit
Facility:

(i) at the Base 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 basis for 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.

The interest rates set forth above with respect to the Tranche
A Term Loans and loans made under the Revolving Credit
Facility shall be reduced upon attainment by the Borrower of

Annex B-5
<PAGE>

certain performance tests as contained in the Existing Credit
Agreement.

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 and six months) for loans bearing
interest with reference to the reserve adjusted Eurodollar
Rate ( "EURODOLLAR RATE LOANS ") (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 (or a 365
or 366-day year, as the case may be, for Loans bearing
interest with reference to the Base Rate).

INTEREST RATE Within 180 days following the Effective Date, the
PROTECTION: Borrower will obtain interest rate protection through interest
rate swaps, caps or other agreements reasonably satisfactory
to the Co-Administrative Agents.

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 Credit Facility
(reduced by the amount of letters of credit issued and
outstanding) and any unfunded portion of the Term Loan
Facilities shall accrue from the Effective Date and shall be
payable quarterly in arrears on the unused portion of the
Revolving Credit Facility and such unfunded portion of the
Term Loan Facilities.

LETTER OF CREDIT As contained in the Existing Credit Agreement.
FEES:

VOLUNTARY The Amended and Restated Bank Facilities may be prepaid
PREPAYMENTS: in whole or in part without premium or penalty (except for
breakage costs, if any, with respect to Eurodollar Rate Loans

Annex B-6
<PAGE>

which are prepaid prior to the last day of the related
interest period). Voluntary prepayments of the Term Loan
Facilities shall be applied ratably among the Term Loan
Facilities and to scheduled amortization payments pro rata.

MANDATORY As contained in the Existing Credit Agreement (with such
PREPAYMENTS: modifications thereto as may be agreed upon).

SECURITY: The Amended and Restated Bank Facilities and each Guarantee
shall continue to 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; PROVIDED that security interests in
real property assets shall be excepted if the Agents shall
determine in their reasonable discretion that the costs of
obtaining such a security interest are excessive in relation
to the value of the security to be afforded thereby. In
addition, the Amended and Restated Bank Facilities shall be
secured by a first priority security interest in 100% of the
stock of each domestic subsidiary of the Borrower (65% of each
foreign subsidiary) and all intercompany debt (it being
understood that after consummation of the Tender Offer but
prior to the Merger, the Amended and Restated Bank Facilities
(i) shall be secured by a first priority security interest in
the Shares acquired in the Tender Offer only to the extent
such Shares can be pledged in compliance with applicable
margin regulations, and (ii) shall not be secured by any
assets of Union). All security arrangements shall be in form
and substance reasonably satisfactory to the Agents.

REPRESENTATIONS
AND As contained in the Existing Credit Agreement (with such
WARRANTIES: modifications thereto as may be agreed upon to account for the
Acquisition).

COVENANTS: As contained in the Existing Credit Agreement (with such
modifications thereto as may be agreed upon to account for the
Acquisition).

Annex B-7
<PAGE>

EVENTS OF
DEFAULT: As contained in the Existing Credit Agreement (with such
modifications thereto as may be agreed upon to account for the
Acquisition, including without limitation an Event of Default
for failure to consummate the Merger within 120 days of the
Effective Date).

II. CONDITIONS TO CLOSING OF THE AMENDED AND RESTATED BANK FACILITIES

CONDITIONS
PRECEDENT 1. SATISFACTORY DOCUMENTATION. The definitive
TO INITIAL documentation evidencing the Amended and Restated Bank
BORROWINGS: Facilities shall be prepared by counsel to the Agents
and shall be in form and substance reasonably
satisfactory to the Agents and Requisite Lenders.

2. NO EVENT OF DEFAULT UNDER EXISTING CREDIT
Agreement. No Event of Default or Potential Event of
Default under (and as defined in) the Existing Credit
Agreement shall have occurred and be continuing.

3. APPROVALS. All required approvals shall have been
obtained with respect to the amendments to the Existing
Credit Agreement being effected pursuant to the Amended
and Restated Credit Agreement. The Borrower and its
subsidiaries shall have obtained all third party
consents, waivers, amendments, approvals and the like
that may be necessary under the Borrower's existing
contracts and agreements (including any subordinated
Indebtedness) in connection with the borrowings under
the Amended and Restated Bank Facilities and all related
transactions, and the Borrower and its subsidiaries
shall otherwise be in material compliance with such
agreements.

4. ACQUISITION. The documentation (other than the merger
agreement) relating to the Acquisition (including the
Tender Offer and the Merger) (the "ACQUISITION
DOCUMENTS") shall be in form and substance reasonably
satisfactory to the Agents and shall be in full force
and effect. Without limiting the generality of the
foregoing, the Agents shall be reasonably satisfied with
(i) the amount and terms of any debt of Union not repaid
or not proposed to be repaid concurrently with the
consummation

Annex B-8
<PAGE>

of the Acquisition and/or the Merger, and (ii) the
aggregate consideration paid in connection with the
Acquisition by the Borrower and its subsidiaries.

5. CONSUMMATION OF TENDER OFFER. Merger Sub shall have
acquired not less than the Minimum Shares pursuant to
the Tender Offer, and all other aspects of the Tender
Offer shall have been consummated pursuant to the
Acquisition Documents, no provision of which shall have
been amended, supplemented, waived or otherwise modified
in any material respect without the prior written
consent of the Agents.

6. TRANSACTION EXPENSES. The Agents shall have
received satisfactory evidence that the fees and
expenses to be incurred in connection with the
Acquisition and the related financings will not exceed
an amount acceptable to Agents.

7. SECURITY. The Collateral Agent (as defined in the
Existing Credit Agreement), 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 Agents.

8. NO MATERIAL ADVERSE CHANGE. (i) Since December 31,
1996, 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 the Borrower and its subsidiaries, and
(ii) since June 30, 1997, 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 Union and its
subsidiaries, which, in the case of clauses (i) and
(ii), the Agents, in their reasonable judgment, deem
material.

9. FINANCIAL STATEMENTS. The Lenders shall have
received, and Requisite Lenders shall be satisfied with,
the audited financial statements for (i) the Borrower
and its subsidiaries for the period ended December 31,
1996,

Annex B-9
<PAGE>

and (ii) Union and its subsidiaries for the period
ended June 30, 1997, and, in the case of clauses (i) and
(ii), unaudited financial statements for the most
recently concluded monthly period starting from the
respective dates of the most recent audits.

10. CONSENTS AND APPROVALS. All necessary governmental,
third party and shareholder approvals in connection with
the Amended and Restated Bank Facilities, the
transactions contemplated by the Amended and Restated
Bank Facilities, the Acquisition, the Tender Offer, the
Merger 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.

11. 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.

12. SOLVENCY OPINION AND OTHER REPORTS. Lenders shall
have received (i) an opinion from an independent
valuation consultant or appraiser satisfactory to the
Agents and (ii) a certificate from the chief financial
officer of the Borrower, in each case in form and
substance satisfactory to the Agents, to the effect
that, after giving effect to the Acquisition, the Merger
and contemplated borrowings of the full amounts
applicable thereto which will be available under the
Amended and Restated Bank Facilities, the Borrower and
its subsidiaries 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.

13. CUSTOMARY CLOSING DOCUMENTS. All documents required
to be delivered under the definitive financing
documents, including customary legal opinions, corporate
records

Annex B-10
<PAGE>

and documents from public officials and
officers' certificates, shall have been delivered.

CERTAIN
CONDITIONS Conditions precedent to the funding of the Delayed-Draw
PRECEDENT TO Term Loan will include, without limitation, the
FUNDING OF following:
DELAYED-DRAW
TERM LOAN: 1. CONSUMMATION OF MERGER. The Merger shall have
been consummated pursuant to the Acquisition Documents,
no provision of which shall have been amended,
supplemented, waived or otherwise modified in any
material respect without the prior written consent of
the Agents. Upon consummation of the Merger, all of the
shares of Union shall be owned by the Borrower.

2. SECURITY. The Collateral Agent (as defined in the
Existing Credit Agreement), for the benefit of the
Lenders, shall have been granted perfected first
priority security interests in (i) 100% of the stock of
Union and (ii) all assets of Union (subject to the
limitations set forth in the first sentence under the
heading "Security"), in each case to the extent such
security interests shall not previously have been
granted.

3. AGGREGATE ACQUISITION CONSIDERATION. After giving
effect to the consummation of the Merger and the payment
of any portion of the aggregate consideration for the
Shares (and any related transaction fees and expenses)
that become due and payable thereupon, the aggregate
amount of the consideration paid for the Shares (and all
such transaction fees and expenses) shall not exceed
$205,000,000.

CONDITIONS TO
ALL BORROWINGS: The conditions to all borrowings will include requirements
relating to prior written notice of 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.

Annex B-11
<PAGE>

III. MISCELLANEOUS

SYNDICATION, Any loans made pursuant to the Amended and Restated
ASSIGNMENTS AND Credit Agreement on the Effective Date (including loans
PARTICIPATIONS: made under the Existing Credit Agreement and maintained as
loans under the Revolving Credit Facility) shall be made by
Existing Lenders and New Lenders in such respective amounts as
shall result in the outstanding loans of all Lenders
reflecting their respective pro rata shares of the commitments
thereunder.

The Lenders may assign all or, in an amount of not less than
$5 million, any part of their share of the Amended and
Restated Bank Facilities to 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 Amended and Restated Bank
Facilities.

REQUISITE
LENDERS: As contained in the Existing Credit Agreement, being Lenders
holding 51% of total commitments or exposure under the Amended
and Restated Bank Facilities, except that (x) any amendment
which would disproportionately affect the holders of the
Tranche A Term Loans, Tranche B Term Loans, the Tranche C Term
Loans or the loans under the Revolving Credit 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, changes to the percentage specified in the definition
of Requisite Lenders and certain other matters set forth in
the Existing Credit Agreement, Requisite Lenders will be
defined as Lenders holding 100% of total commitments or
exposure under the Amended and Restated Bank Facilities.

Annex B-12
<PAGE>

TAXES, RESERVE All payments are to be made free and clear of any taxes
REQUIREMENTS AND (other than franchise taxes and taxes on overall net
INDEMNITIES: income), imposts, assessments, withholdings or other
deductions whatsoever. Foreign Lenders shall furnish to Chase
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 Rate or
the Eurodollar Rate.

INDEMNITY: The Borrower will provide standard indemnification for the
Agents and Lenders.

GOVERNING LAW AND The Borrower will submit to the non-exclusive
JURISDICTION: jurisdiction and venue of the federal and state courts 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 Amended and
Restated Bank Facilities. It is not intended to be a definitive list of all of
the requirements of the Lenders in connection with the Amended and Restated Bank
Facilities.

Annex B-13
<PAGE>

SCHEDULE I

SOURCES AND USES OF FUNDS FOR ACQUISITION

PROJECT YANKEE
- --------------------------------------------------------------------------------------------------------------------------
(DOLLARS IN THOUSANDS)

SOURCES AND USES
-----------------------------------------------------------------------------------------------------------------

SOURCES OF FUNDS AMOUNT USES OF FUNDS AMOUNT
---------------- ------ ------------- ------
<S> <C> <C> <C>
Additional Financing $225,000 Cash to Shareholders of Yankee $192,971
-------- Trans. Fees and Expenses (includ. Financing Fees) 13,031
Refinance OSI Revolver 18,998
------

TOTAL SOURCES OF FUNDS $225,000 TOTAL USES OF FUNDS $225,000
-------- --------
-------- --------
</TABLE>

Schedule I-1

<PAGE>

Exhibit 99.(c)(1)

[FORM OF LETTERHEAD OF THE UNION CORPORATION]

August 18, 1997

Mr. Timothy G. Beffa
Outsourcing Solutions Inc.
Suite 150
390 South Woodsmill Road
Chesterfield, MO 63017

CONFIDENTIALITY AGREEMENT

Dear Mr. Beffa:

In connection with your consideration and evaluation of a
possible business combination with The Union Corporation and its subsidiaries
(together, the "Company"), you have requested information concerning the Company
which is either non-public, confidential or proprietary in nature. As a
condition to your being furnished such information, you agree to treat any
information (including all data, reports, interpretations, electronic images,
computer software, forecasts and records) concerning the Company which is
furnished to you by or on behalf of the Company and analyses, compilations,
studies or other documents, whether prepared by you or others, which contain or
reflect such information (herein collectively referred to as the "Information")
in accordance with the provisions of this letter. Information does not include
information which (i) was or becomes generally available to the public other
than as a result of a disclosure by you or your directors, officers, employees,
agents, or advisors (including, but not limited to, attorneys, accountants and
financial advisors) (such agents and advisors collectively referred to as
"representatives"), or (ii) was or becomes available to you from a source other
than the Company or their advisors, provided that such source was not known to
you to be subject to a confidentiality agreement with the Company, or (iii) was
within your possession prior to its being furnished to you by or on behalf of
the Company, provided that the source of such

<PAGE>

Mr. Timothy G. Beffa
Page 2

information was not subject to a confidentiality agreement with the Company
in respect thereof.

In consideration of the furnishing of the Information, you agree that
the Information will be used solely for the purpose set forth herein and in
accordance with the terms of this Confidentiality Agreement, and that such
Information will be kept confidential by you and your representatives for three
years from the date of this Confidentiality Agreement provided, however, that
(i) any such Information may be disclosed to your directors, officers and
employees and representatives who need to know such Information for the purpose
set forth herein (it being understood that such directors, officers, employees
and representatives shall be informed by you of the confidential nature of such
Information and shall be directed by you to treat such Information
confidentially and shall assume the same obligations as you under this
agreement), and (ii) any disclosure of such Information may be made to which the
Company consents in writing. You shall be responsible for any breach of this
agreement by your directors, officers, employees or representatives.

In addition, without the prior written consent of the Company, you
will not, and will direct such directors, officers, employees and
representatives not to, disclose to any person either the existence of this
agreement or the fact that discussions or negotiations are taking place or have
taken place or may take place concerning one or more business combinations
involving the Company and you, or any of the terms, conditions, or other facts
with respect to any such possible business combinations, including the status
thereof. The term "person" as used in this letter shall be broadly interpreted
to include without limitation any corporation, company, group, partnership, or
individual.

You hereby acknowledge that the Information is being furnished to
you in further consideration of your agreement that for a period of two years
from the date of this Confidentiality Agreement without the prior written
consent of the Company: (1) neither you nor any of your affiliates or
related persons (including any person or entity directly or indirectly
controlled by or under common control with you) will make any public
announcement with respect to or submit any proposal, written or otherwise, to
the Company or its directors, shareholders or representatives for a
transaction (including, but not limited to, acquiring the Company through
merger or otherwise, acquiring a controlling interest in the Company or to
otherwise engage in or propose a business combination with the Company, or
attempt to exercise control over the Board of Directors of the Company or
nominate or solicit proxies for any director other than directors nominated
by the Company, unless requested by the Company to do so) between you (or any
of your affiliates) and the Company or any of its security holders, nor will
you, directly or indirectly, by purchase or otherwise, through your
affiliates or otherwise, along or with others, acquire, offer to acquire, or
agree to acquire, any voting securities or direct or indirect rights or
options to acquire any voting securities of the Company; (ii) you will not
solicit for hire or hire any

<PAGE>

Mr. Timothy G. Beffa
Page 3

employee of the Company, or cause any individual subject to an independent
contractor agreement with the Company to breach or void such independent
contractor agreement, provided that you shall not be precluded from such
solicitation or hiring if such employee or individual (a) initiated
discussions with you without any direct or indirect solicitation from you,
(b) responded to a general solicitation by you or (c) has been terminated by
the Company prior to commencement of discussions with you; (iii) you will not
take any action which might require the Company or any of its affiliates to
make a public announcement regarding the possibility of a merger,
consolidation, business combination or other similar transaction; and (iv)
you will indemnify any director, officer, employee or representative of the
Company and any "controlling person" thereof as such term is defined in the
Securities Act of 1933, for any liability, damage, or expense arising under
federal and state securities laws from an actual or alleged breach of this
agreement by you or your directors, officers, employees, representatives or
affiliates.

Upon the Company's request, you shall promptly return to the company
or destroy (with such destruction certified in writing to the Company) the
Information (whether prepared by the Company or otherwise) and will not retain
any copies, extracts or other reproductions in whole or in part of such written
material. All documents, memoranda, notes and other writings whatsoever,
prepared by you or your advisors based on the information contained in the
Information shall be destroyed, and such destruction shall be certified in
writing in the Company.

Although the Company and the Company's affiliates or representatives
have endeavored to include in the Information, information known to the Company
and the Company's affiliates or representatives which the Company and any of the
Company's affiliates or representatives believe to be relevant for the purpose
of your evaluation, you understand that the Company and the Company's affiliates
and representatives do not make any representation or warranty as to the
accuracy or completeness of the Information. You agree that you assume full
responsibility for all conclusions you derive from the Information and that
neither the Company, nor any of the Company's affiliates or representatives,
shall have any liability to you or any of your representatives resulting from
the use of the Information supplied by the Company or any of the Company's
affiliates or representatives, and that you shall be entitled to rely solely on
the representations and warranties made to you by the Company in any definitive
agreement regarding a possible business combination.

In the event you are required by legal or regulatory process to
disclose any of the Information or the existence of this agreement, you shall
provide the Company with prompt notice of such requirement so that the Company
may seek a protective order or other appropriate remedy or waive compliance with
the provisions of this agreement. In the event that a protective order or other
remedy is obtained, you shall use all reasonable efforts to assure that all
Information disclosed will be covered by such order or other remedy.

<PAGE>

Mr. Timothy G. Beffa
Page 4

Whether such protective order or other remedy is obtained or the Company
waives compliance with the provisions of this agreement, you will disclose
only that portion of the Information which you are legally required to
disclose.

This agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York without regard to the conflict
of laws provisions thereof and may not be assigned without the Company's prior
written consent. This Confidentiality Agreement supersedes all prior agreements
between the parties, oral or written, concerning the disclosure and treatment of
the Information.

It is further understood and agreed that no failure or delay by the
Company in exercising any right, power or privilege hereunder shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise of any right, power, or privilege. Furthermore, you
agree that the Company shall be entitled, without limitation of any other
remedies to which it may be entitled by law, to injunctive relief, to specific
enforcement of this Confidentiality Agreement, and to damages in the event of
any violations of this Confidentiality Agreement.

You also acknowledge that this Confidentiality Agreement is not
intended nor shall it be construed to constitute an offer to acquire the Company
or any of its securities, under applicable laws, rules or regulations nor does
it evidence any decision by the Company to seek a merger, acquisition or
business combination involving the Company or any of its subsidiaries with or by
any person.

If you are in agreement with the foregoing, please so indicate by
signing and returning one copy of this letter to the Company whereupon this
letter will constitute your agreement with respect to the subject matter
thereof.

Very truly yours,

THE UNION CORPORATION

By: /s/ MELVIN L. COOPER
-------------------------
Melvin L. Cooper
Chairman

<PAGE>

Mr. Timothy G. Beffa
Page 5

Accepted and agreed to as of
the date first written above:

OUTSOURCING SOLUTIONS INC.

By: /s/ TIMOTHY G. BEFFA
-------------------------------
Name: Timothy G. Beffa
Title: President and Chief
Executive Officer

ALS:bb

<PAGE>

EXHIBIT 99(c)(2)

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

SHARE PURCHASE AGREEMENT AND PLAN OF MERGER

BY AND AMONG

OUTSOURCING SOLUTIONS INC.

SHERMAN ACQUISITION CORPORATION

AND

THE UNION CORPORATION

Dated as of December 22, 1997

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

<PAGE>

TABLE OF CONTENTS

<TABLE>

<S> <C> <C>
ARTICLE I - THE TENDER OFFER . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

SECTION 1.1. The Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.3. Composition of the Board of Directors. . . . . . . . . . . . . 5
SECTION 1.4. Stock Options and Other Plans . . . . . . . . . . . . . . . . . 5

ARTICLE II - THE MERGER AND RELATED MATTERS. . . . . . . . . . . . . . . . . . . . 6

SECTION 2.1. The Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.2. Conversion of Stock.. . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.3. Dissenting Stock. . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.4. Surrender of Certificates . . . . . . . . . . . . . . . . . . . 8
SECTION 2.5. Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.6. No Further Rights of Transfers. . . . . . . . . . . . . . . . . 10
SECTION 2.7. Certificate of Incorporation of the Surviving
Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.9. Directors and Officers of the Surviving Corporation . . . . . . 10
SECTION 2.10. Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.11. Proxy Statement, Schedule 14D-9 and
Schedule 14D-1. . . . . . . . . . . . . . . . . . . . . . . . . 11

ARTICLE III - REPRESENTATIONS AND WARRANTIES OF THE CORPORATION. . . . . . . . . . 12

SECTION 3.1. Corporate Existence and Power . . . . . . . . . . . . . . . . . 12
SECTION 3.2. Corporate Authorization . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.3. Consents and Approvals; No Violations . . . . . . . . . . . . . 13
SECTION 3.4. Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . 13
SECTION 3.5. Capitalization. . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.6. Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.7. SEC Filings . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 3.8. Financial Statements. . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.9. No Undisclosed Liabilities. . . . . . . . . . . . . . . . . . . 16
SECTION 3.10. Absence of Certain Changes. . . . . . . . . . . . . . . . . . . 16
SECTION 3.11. Title to Properties; Encumbrances . . . . . . . . . . . . . . . 17
SECTION 3.12. Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 3.13. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 3.14. Employee Benefit Plans. . . . . . . . . . . . . . . . . . . . . 20
SECTION 3.15. Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 3.16. Environmental Matters . . . . . . . . . . . . . . . . . . . . . 22
SECTION 3.17. Proprietary Rights. . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 3.18. Material Contracts and Leases . . . . . . . . . . . . . . . . . 25
SECTION 3.19. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 3.20. Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 3.21. Voting Requirements . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 3.22. Rights Agreement. . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 3.23. Customers Relations . . . . . . . . . . . . . . . . . . . . . . 27
</TABLE>

A-i

<PAGE>

<TABLE>

<S> <C> <C>
ARTICLE IV - REPRESENTATIONS AND WARRANTIES
OF PARENT AND SUB . . . . . . . . . . . . . . . . . . . . . . . 28

SECTION 4.1. Corporate Existence and Power . . . . . . . . . . . . . . . . . 28
SECTION 4.2. Corporate Authorization . . . . . . . . . . . . . . . . . . . . 28
SECTION 4.3. Consents and Approvals. . . . . . . . . . . . . . . . . . . . . 28
SECTION 4.4. No Violation. . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 4.5. Financial Statements. . . . . . . . . . . . . . . . . . . . . . 29
SECTION 4.6. Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 4.7. Offer Documents; Other Information. . . . . . . . . . . . . . . 30
SECTION 4.8. Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . 30

ARTICLE V - CONDUCT OF BUSINESS BY THE CORPORATION
PENDING THE CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . 30

SECTION 5.1. Regular Course of Business. . . . . . . . . . . . . . . . . . . 30
SECTION 5.2. Charter Documents and Capital Changes . . . . . . . . . . . . . 32
SECTION 5.3. Organization and Good Will. . . . . . . . . . . . . . . . . . . 33
SECTION 5.4. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 5.5. Compliance With Laws. . . . . . . . . . . . . . . . . . . . . . 33
SECTION 5.6. SEC Reports . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 5.7. Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 5.8. Shareholder Approval. . . . . . . . . . . . . . . . . . . . . . 33
SECTION 5.9. No Solicitation of Other Offers . . . . . . . . . . . . . . . . 34
SECTION 5.10. Notification of Certain Matters . . . . . . . . . . . . . . . . 36
SECTION 5.11. Rights Agreement. . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 5.12. Properties; Material Contracts. . . . . . . . . . . . . . . . . 37
SECTION 5.13. Dividends, Etc. . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 5.14. Full Access . . . . . . . . . . . . . . . . . . . . . . . . . . 37

ARTICLE VI - COVENANTS OF PARTIES. . . . . . . . . . . . . . . . . . . . . . . . . 38

SECTION 6.1. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 6.2. Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 6.3. Filings; Consents; Removal of Objections. . . . . . . . . . . . 40
SECTION 6.4. Public Announcements. . . . . . . . . . . . . . . . . . . . . . 40
SECTION 6.5. Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 6.6. Indemnification and Insurance . . . . . . . . . . . . . . . . . 41
SECTION 6.7. Resignation of Directors. . . . . . . . . . . . . . . . . . . . 42
SECTION 6.8. Confidentiality Agreement . . . . . . . . . . . . . . . . . . . 42
SECTION 6.9. Certain Actions of Parent and Sub . . . . . . . . . . . . . . . 42

ARTICLE VII - CONDITIONS TO CONSUMMATION OF THE MERGER . . . . . . . . . . . . . . 43

SECTION 7.1. Conditions Precedent to Obligations of Parent, Sub and the
Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . 43

ARTICLE VIII - TERMINATION AND ABANDONMENT . . . . . . . . . . . . . . . . . . . . 44

SECTION 8.1. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 8.2. Effect of Termination . . . . . . . . . . . . . . . . . . . . . 45
</TABLE>

A-ii

<PAGE>

<TABLE>

<S> <C> <C>
ARTICLE IX - MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

SECTION 9.1. Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 9.2. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 9.3. Termination of Representations and Warranties . . . . . . . . . 48
SECTION 9.4. Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 9.5. Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 9.6. Successors and Assigns. . . . . . . . . . . . . . . . . . . . . 48
SECTION 9.7. Governing Law and Forum . . . . . . . . . . . . . . . . . . . . 49
SECTION 9.8. Counterparts; Effectiveness . . . . . . . . . . . . . . . . . . 49
SECTION 9.9. Entire Agreement; Schedules and Exhibits. . . . . . . . . . . . 49
SECTION 9.10. Headings and Table of Contents. . . . . . . . . . . . . . . . . 49

ARTICLE X - DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

ANNEX I to Share Purchase Agreement and Plan of Merger

Conditions to the Share Purchase . . . . . . . . . . . . . . . . . . . . . . .A-I
</TABLE>

A-iii

<PAGE>

SHARE PURCHASE AGREEMENT AND PLAN OF MERGER

This Share Purchase Agreement and Plan of Merger (this "Agreement") dated
as of December 22, 1997 is made by and among Outsourcing Solutions, Inc., a
Delaware corporation ("Parent"), Sherman Acquisition Corporation, a Delaware
corporation and a direct wholly-owned subsidiary of Parent ("Sub"), and The
Union Corporation, a Delaware corporation (the "Corporation"). Capitalized
terms used herein and not otherwise defined in the Preamble or in Articles I
through IX of this Agreement shall have the respective meanings ascribed to such
terms in Article X hereto.

PREAMBLE

WHEREAS, the Boards of Directors of Parent, Sub and the Corporation have
each determined that it is in the best interests of their respective
stockholders for Parent to acquire up to all of the issued and outstanding
Common Stock, par value $.50 per share, of the Corporation (the "Corporation
Stock") (all issued and outstanding shares of Corporation Stock being
hereinafter collectively referred to as the "Shares") upon the terms and subject
to the conditions set forth herein; and

WHEREAS, in furtherance thereof, it is proposed that Sub shall make a cash
tender offer (the "Offer") to acquire all of the issued and outstanding Shares
for $31.50 per share (such amount, or any greater amount per Share paid pursuant
to the Offer, being hereinafter referred to as the "Per Share Amount"), net to
the seller in cash, in accordance with the terms provided herein and in the
Offer; and

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

WHEREAS, the Directors of the Corporation have unanimously determined that
each of the Offer and the Merger are fair to, and in the best interests of, the
holders of Common Stock, approved the Offer and the Merger and recommended the
acceptance of the Offer and approval and adoption of this Agreement by the
shareholders of the Corporation; and

NOW, THEREFORE, in consideration of the mutual covenants, representations
and warranties herein set forth, and the mode of carrying the same into effect,
the parties hereto hereby agree as follows:

<PAGE>

ARTICLE I - THE TENDER OFFER

SECTION 1.1. THE OFFER. (a) Provided that this Agreement shall not have
been terminated in accordance with Article VIII hereof and so long as none of
the events set forth in Annex I hereto (the "Tender Offer Conditions") shall
have occurred and be continuing and shall not have been waived by Parent, Parent
shall cause Sub to commence (within the meaning of Rule 14d-2 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules
and regulations thereunder) the Offer for all issued and outstanding Shares as
promptly as reasonably practicable after the date hereof, but in no event later
than five (5) business days after the date of this Agreement. The Offer shall
remain open for a period of not less than twenty (20) business days. The
obligation of Sub to accept for payment Shares tendered pursuant to the Offer
shall be subject to the satisfaction of the Tender Offer Conditions. Parent and
Sub expressly reserve the right to waive any such condition, to increase the Per
Share Amount payable in the Offer, and to make any other change in the terms and
conditions of the Offer; provided, however, that, without the written consent of
the Corporation, no change may be made which (A) decreases the Per Share Amount
payable in the Offer, (B) reduces the number of Shares to be purchased in the
Offer, (C) imposes conditions to the Offer in addition to the Tender Offer
Conditions, (D) amends or changes the terms and conditions of the Offer in any
manner materially adverse to the holders of Shares (other than Parent and Sub
and its subsidiaries), (E) changes the consideration payable in the Offer to
anything other than all cash, (F) reduces the time period during which the Offer
shall remain open or (G) except as provided in the next sentence, extends the
time period during which the Offer shall remain open. Notwithstanding the
foregoing, Parent and Sub may, without the consent of the Corporation, (i)
extend the Offer beyond the scheduled expiration date and any subsequent
scheduled expiration date (but not beyond the date referred to in Section 8.1(c)
hereof), if at such date any of the Tender Offer Conditions shall not be
satisfied or waived, until such time as such conditions are satisfied or waived,
and (ii) extend the Offer for any period required by any rule, regulation,
interpretation or position of the SEC (but not beyond the date referred to in
Section 8.1(c) hereof). The Per Share Amount shall be net to the seller in
cash, upon the terms and subject to the Tender Offer Conditions. Following the
satisfaction or waiver of the Tender Offer Conditions, Sub shall accept for
payment and pay for (hereinafter referred to as the "Share Purchase"), in
accordance with the terms of the Offer, all Shares validly tendered pursuant to
the Offer and not withdrawn, as soon as it is permitted to do so pursuant to the
Exchange Act or other applicable law or regulation, whichever is later.

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<PAGE>

(b) As soon as practicable on the date of the commencement of the Offer,
Parent and Sub shall file with the United States Securities and Exchange
Commission (the "SEC") a Tender Offer Statement on Schedule 14D-1 (together with
all amendments and supplements thereto, the "Schedule 14D-1") with respect to
the Offer. The Schedule 14D-1 will contain an offer to purchase (the "Offer to
Purchase") and form of the related letter of transmittal and any summary
advertisement (which Schedule 14D-1, Offer to Purchase and other documents,
together with any supplements or amendments thereto, are referred to herein
collectively as the "Offer Documents"). The Corporation and its counsel shall
be given the opportunity to review and comment upon the Offer Documents prior to
their filing with the SEC. Parent, Sub and the Corporation agree promptly to
correct any information provided by any of them for use in the Offer Documents
that shall have become false or misleading in any material respect, and Parent
and Sub further agree to take all steps necessary to cause the Schedule 14D-1 as
so corrected to be filed with the SEC and the other Offer Documents as so
corrected to be disseminated to holders of Shares, in each case as and to the
extent required by applicable federal securities laws. Parent and Sub each
agree to provide the Corporation and its counsel with any comments either of
them, or their counsel, may receive from the SEC or its staff with respect to
the Offer Documents promptly after the receipt of such comments and shall
provide the Corporation and its counsel an opportunity to participate, including
by way of discussions with the SEC or its staff, in their response to such
comments.

SECTION 1.2. CORPORATE ACTION. (a) The Corporation hereby approves of
and consents to the Offer and the Merger and represents that (i) its Board of
Directors, at a meeting duly called, has unanimously (A) determined that this
Agreement and the transactions contemplated hereby are fair to and in the best
interests of the holders of Shares, (B) approved and adopted this Agreement and
the transactions contemplated hereby and recommends that the stockholders of the
Corporation accept the Offer, and (C) taken all other applicable action
necessary to render, so long as this Agreement remains in effect, (x) Section
203 of the General Corporation Law of the State of Delaware (the "DGCL") and
other state takeover statutes; (y) Article FIFTH of the Corporation's
Certificate of Incorporation (except for the requirement that the Merger be
approved by the holders of not less than two-thirds of the outstanding Shares),
and (z) the Rights Agreement dated as of March 14, 1988, as amended (the "Rights
Agreement"), inapplicable to the Offer and the Merger; and (ii) CIBC Oppenheimer
Corp. has delivered to the Board of Directors of the Corporation its written
opinion that the consideration to be received by the holders of Shares pursuant
to the Offer and the Merger is fair to the holders of Shares from a financial
point of view and Corporation has delivered to Parent a copy of said opinion.

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<PAGE>

(b) The Corporation shall file with the SEC as soon as practicable on the
date of the commencement of the Offer a Solicitation/Recommendation Statement on
Schedule 14D-9 (together with all amendments and supplements thereto, the
"Schedule 14D-9") containing, subject to the terms of this Agreement, the
recommendation of the Corporation's Board of Directors described in Section
1.2(a) and shall disseminate the Schedule 14D-9 as required by Rule 14d-9
promulgated under the Exchange Act. Parent and Sub and their counsel shall be
given the opportunity to review and comment upon the Schedule 14D-9 prior to its
filing with the SEC. The Corporation, Parent and Sub each agree promptly to
correct any information provided by any of them for use in the Schedule 14D-9
that shall have become false or misleading in any material respect, and the
Corporation further agrees to take all steps necessary to cause the Schedule
14D-9 as so corrected to be filed with the SEC and to be disseminated to holders
of Shares, in each case as and to the extent required by applicable federal
securities laws. The Corporation agrees to provide Parent and its counsel with
any comments the Corporation or its counsel may receive from the SEC or its
staff with respect to the Schedule 14D-9 promptly after the receipt of such
comments and shall provide Parent and its counsel an opportunity to participate,
including by way of discussions with the SEC or its staff, in the response of
the Corporation to such comments.

(c) The Corporation has furnished Parent with mailing labels and a list
containing the names and addresses of all record holders of Shares and will,
upon request, furnish Parent with all other available listings or computer files
containing names, addresses and security position listings of any record holders
or beneficial owners of Shares, each as of a recent date. The Corporation shall
furnish Parent with such additional information, including updated lists and
files of stockholders and security position listings, and such other related
assistance Parent or its agents may reasonably request to carry out the
transactions contemplated hereby. Subject to the requirements of applicable
law, and except for such steps as are necessary to disseminate the Offer
Documents and any other documents necessary to consummate the Share Purchase,
Parent shall hold in confidence the information contained in any of such lists
and files, shall use such information only in connection with the Offer (and the
Merger) and, if this Agreement shall be terminated, shall deliver to the
Corporation all copies of such information then in its possession. The
Corporation has been advised that each of its directors and the executive
officers intends to tender pursuant to the Offer all shares of Common Stock
owned of record and beneficially by him or her.

4
<PAGE>

SECTION 1.3. COMPOSITION OF THE BOARD OF DIRECTORS. Promptly upon the
Share Purchase, Sub shall be entitled to designate such number of directors on
the Board of Directors of the Corporation, rounded up to the next whole number,
as will give Sub, subject to compliance with Section 14(f) of the Exchange Act,
representation on such Board of Directors equal to at least that number of
directors which equals the product of the total number of directors on the Board
of Directors (giving effect to the directors elected pursuant to this sentence)
multiplied by a fraction, the numerator of which shall be the number of shares
of Common Stock so accepted for payment and paid for or otherwise acquired or
owned by Sub or Parent and the denominator of which shall be the number of
shares of Common Stock then outstanding, and the Corporation and its Board of
Directors shall, at such time, take any and all such action needed to cause
Sub's designees to be appointed to the Corporation's Board of Directors
(including to cause directors to resign). Promptly upon the Share Purchase,
Corporation and its Board of Directors shall take such further action as may be
requested by Sub to cause Sub's designees to constitute at least a majority of
the Board of Directors of each direct or indirect Subsidiary of the Corporation
(other than Allied Bond & Collection Agency, Inc.). Subject to applicable law,
the Corporation shall take all action requested by Parent which is reasonably
necessary to effect any such election, including mailing to its shareholders an
Information Statement containing the information required by Section 14(f) of
the Exchange Act and Rule 14f-1 promulgated thereunder, and the Corporation
agrees to make such mailing with the mailing of the Schedule 14D-9 so long as
Sub shall have provided to the Corporation on a timely basis all information
required to be included in such Information Statement with respect to Sub's
designees. In furtherance thereof, the Corporation will increase the size of
the Corporation's Board of Directors, or use its reasonable efforts to secure
the resignation of directors, or both, as is necessary to permit Sub's designees
to be elected to the Corporation's Board of Directors. Upon the Share Purchase
(as defined in Section 1.1 hereof) all directors of the Corporation, other than
Sub's designees and two directors of Corporation, and, unless otherwise agreed,
all officers of the Corporation shall resign.

SECTION 1.4. STOCK OPTIONS AND OTHER PLANS. (a) As soon as practicable
following the date hereof, the Board of Directors of the Corporation shall adopt
appropriate resolutions and cause the Corporation to take all actions necessary
to obtain the consent of each holder of an outstanding option to purchase Shares
("Options") to the effect that, upon the Share Purchase, each Option, whether or
not then vested or exercisable, shall no longer be exercisable for the purchase
of Shares but shall entitle each holder thereof, in cancellation and settlement
therefor, to a payment in cash (subject to any applicable withholding taxes, the
"Cash Payment"), equal to the product of

5
<PAGE>

(x) the total number of shares of Common Stock subject to such Option as to
which such Option could have been exercised and (y) the excess of the Per Share
Amount over the exercise price per share of Common Stock subject to such Option,
each such Cash Payment to be paid to each holder (or, without duplication, the
beneficial owner) of an outstanding Option on the date of the Share Purchase;
and

(b) All stock option plans of the Corporation ("Stock Plans") shall
terminate as of the Effective Time and the provisions in any other Employee
Benefit Plan providing for the issuance, transfer or grant of any capital stock
of the Corporation or any interest in respect of any capital stock of the
Corporation shall be deleted as of the Effective Time, and the Corporation shall
ensure that following the Effective Time no holder of an Option or any
participant in any Stock Plan shall have any right thereunder to acquire any
capital stock of the Corporation, Parent or the Surviving Corporation. The
Corporation will ensure that neither the Corporation nor any of its Subsidiaries
is or will be bound by any Options, other options, warrants, rights or
agreements which would entitle any Person, other than Parent or its affiliates,
to own any capital stock of the Surviving Corporation or any of its Subsidiaries
or to receive any payment in respect thereof. Notwithstanding the foregoing,
the holders of Options who did not receive the Cash Payment on the date of the
Share Purchase shall thereafter be entitled to receive the Cash Payment in
cancellation and settlement of such Options as provided in the preceding
paragraph (a).

ARTICLE II - THE MERGER AND RELATED MATTERS

SECTION 2.1. THE MERGER. (a) Subject to the terms and conditions of this
Agreement, at the time of the Closing (as defined in Section 2.11 hereof), a
certificate of merger (the "Certificate of Merger") shall be duly prepared,
executed and acknowledged by Sub and the Corporation in accordance with the DGCL
and shall be filed on the Closing Date (as defined in Section 2.11 hereof). The
Merger shall become effective upon the filing of the Certificate of Merger with
the Secretary of State of the State of Delaware in accordance with the
provisions and requirements of the DGCL. The date and time when the Merger
shall become effective is hereinafter referred to as the "Effective Time".

(b) At the Effective Time, Sub shall be merged with and into the
Corporation and the separate corporate existence of Sub shall cease, and the
Corporation shall continue as the surviving corporation under the laws of the
State of

6
<PAGE>

Delaware under the name of "The Union Corporation" (the "Surviving
Corporation").

SECTION 2.2. CONVERSION OF STOCK. At the Effective Time:

(a) Each share of Common Stock then issued and outstanding other than
(i) any shares of Common Stock which are held by any Subsidiary of the
Corporation or in the treasury of the Corporation, or which are held,
directly or indirectly, by Parent or any direct or indirect subsidiary of
Parent (including Sub), all of which shall be cancelled and none of which
shall receive any payment with respect thereto and (ii) shares of Common
Stock held by Dissenting Shareholders (as defined in Section 2.3 hereof)
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 the Per Share Amount (the
"Merger Consideration"); and

(b) Each share of common stock, par value $0.01 per share, of Sub
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 common stock, $0.50 par value, of the Surviving
Corporation.

SECTION 2.3. DISSENTING STOCK. Notwithstanding anything in this Agreement
to the contrary but only to the extent required by DGCL, shares of Common Stock
that are issued and outstanding immediately prior to the Effective Time and are
held by holders of Common Stock who comply with all the provisions of Delaware
law concerning the right of holders of Common Stock to dissent from the Merger
and require appraisal of their shares of Common Stock ("Dissenting
Shareholders") shall not be converted into the right to receive the Merger
Consideration but shall become the right to receive such consideration as may be
determined to be due such Dissenting Shareholder pursuant to the laws of the
State of Delaware; PROVIDED, HOWEVER, that (i) if any Dissenting Shareholder
shall subsequently deliver a written withdrawal of his or her demand for
appraisal (with the written approval of the Surviving Corporation, if such
withdrawal is not tendered within 60 days after the Effective Time), or (ii) if
any Dissenting Shareholder fails to establish and perfect his or her entitlement
to appraisal rights as provided by applicable law, then such Dissenting
Shareholder or Shareholders, as the case may be, shall forfeit the right to
appraisal of such shares and such

7
<PAGE>

shares shall thereupon be deemed to have been converted into the right to
receive, as of the Effective Time, the Merger Consideration, without interest.
The Corporation shall give Parent and Sub (A) prompt notice of any written
demands for appraisal, withdrawals of demands for appraisal and any other
related instruments received by the Corporation, and (B) the opportunity to
direct all negotiations and proceedings with respect to demands for appraisal.
The Corporation will not voluntarily make any payment with respect to any
demands for appraisal and will not, except with the prior written consent of
Parent, settle or offer to settle any demand.

SECTION 2.4. SURRENDER OF CERTIFICATES. (a) Concurrently with or prior
to the Effective Time, Parent shall designate a bank or trust company located in
the United States 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 were held by any Subsidiary of the
Corporation or in the treasury of the Corporation or which are held directly or
indirectly by Parent or any direct or indirect subsidiary of Parent (including
Sub)) 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
II. Upon the surrender for cancellation to the Paying Agent of such
Certificates, 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
entitled thereto the Merger Consideration deliverable in respect thereto. 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 II. 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 Certificate
surrendered in exchange therefor are registered, it shall be a condition to the
payment of the Merger Consideration that the Certificates so surrendered 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

8
<PAGE>

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 II,
provided that, the Person to whom the Merger Consideration is paid shall, as a
condition precedent to the payment thereof, give the Surviving Corporation a
bond in such sum as it may direct or otherwise indemnify the Surviving
Corporation in a manner satisfactory to it against any claim that may be made
against the Surviving Corporation with respect to the Certificate claimed to
have been lost, stolen or destroyed.

SECTION 2.5. PAYMENT. Concurrently with or immediately prior to the
Effective Time, Parent or Sub 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 Subsidiary of the
Corporation or in the treasury of the Corporation or which are held directly or
indirectly by Parent or any direct or indirect subsidiary of Parent (including
Sub) or a Person known at the time of such deposit to be a Dissenting
Shareholder) 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 only 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 &
Poor's Ratings Group or certificates of deposit, bank repurchase agreements or
bankers' acceptances of a commercial bank having at least $100,000,000 in assets
(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 2.2(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 return to Parent all cash, certificates and other instruments in its
possession that constitute any portion of the Payment Fund (other than net
earnings on the Payment Fund which shall be paid to Parent), and the Paying
Agent's duties shall

9
<PAGE>

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.

SECTION 2.6. NO FURTHER RIGHTS OF TRANSFERS. At and after the Effective
Time, each holder of a Certificate shall cease to have any rights as a
shareholder of the Corporation, except for, in the case of a holder of a
Certificate (other than shares to be cancelled pursuant to Section 2.2(a) hereof
and other than shares held by Dissenting Shareholders), the right to surrender
his or her Certificate in exchange for payment of the Merger Consideration or,
in the case of a Dissenting Shareholder, to perfect his or her right to receive
payment for his or her shares pursuant to Delaware law if such holder has
validly perfected and not withdrawn his or her right to receive payment for his
or her shares, 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 II. At the close of business on
the day of the Effective Time the stock ledger of the Corporation with respect
to Common Stock shall be closed.

SECTION 2.7. CERTIFICATE OF INCORPORATION OF THE SURVIVING CORPORATION.
The Certificate of Incorporation of the Corporation, as in effect immediately
prior to the Effective Time, shall be the Certificate of Incorporation of the
Surviving Corporation and shall be amended such that it is substantially in the
form of the Amended and Restated Certificate of Incorporation attached hereto as
Exhibit 2.7.

SECTION 2.8. BY-LAWS OF THE SURVIVING CORPORATION. The By-Laws of Sub, as
in effect immediately prior to the Effective Time, shall be the By-Laws of the
Surviving Corporation.

SECTION 2.9. DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION. At the
Effective Time, the directors of Sub 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 Certificate of
Incorporation and By-Laws of the Surviving Corporation, until the next annual
shareholders' meeting of the Surviving Corporation

10
<PAGE>

and until their respective successors shall be duly elected or appointed and
qualified. At the Effective Time, the officers of the Corporation immediately
prior to the Effective Time shall, subject to the applicable provisions of the
Certificate 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.

SECTION 2.10. 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 Article VII hereof is fulfilled or waived (subject to applicable law)
but in no event later than the fifth business day thereafter, or at such other
time and place and on such other date as Parent and the Corporation shall
mutually agree (the "Closing Date").

SECTION 2.11. PROXY STATEMENT, SCHEDULE 14D-9 AND SCHEDULE 14D-1. The
definitive proxy statement and related materials, if required, to be furnished
to the holders of Common Stock in connection with the Merger pursuant to Section
5.7 hereof (the "Proxy Statement") will comply in all material respects with the
Exchange Act and the rules and regulations thereunder and any other applicable
laws. If at any time prior to the Effective Time any event occurs which should
be described in an amendment or supplement to the Proxy Statement, the
Corporation will file and disseminate, as required, an amendment or supplement
which complies in all material respects with the Exchange Act and the rules and
regulations thereunder and any other applicable laws. None of the information
supplied by the Corporation for inclusion or incorporation by reference in (i)
the Offer Documents or (ii) the Proxy Statement, will, in the case of the Offer
Documents, at the respective times the Offer Documents are filed with the SEC,
or, in the case of the Proxy Statement, at the date such information is supplied
and at the Effective Time, contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements made,
in light of the circumstance under which they are made, not misleading. None of
the information in the Schedule 14D-9, at the respective times the Schedule 14D-
9 is filed with the SEC, will contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of
the circumstances under which they are made, not misleading. Notwithstanding
the foregoing, no representation or warranty is made by Corporation with respect
to any information with respect to Parent, Sub or their officers, directors or
affiliates provided to the Corporation by Parent or Sub in writing for inclusion
in the Schedule 14D-9. The Schedule 14D-9 will comply in all material respects
with the Exchange Act and the rules and regulations thereunder and any other
applicable laws. If at any time prior to the expiration or termination of the
Offer any event occurs which should be described in an

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<PAGE>

amendment or supplement to the Schedule 14D-9 or any amendment or supplement
thereto, the Corporation will file and disseminate, as required, an amendment or
supplement which complies in all material respects with the Exchange Act the
rules and regulations thereunder and any other applicable laws. Prior to its
filing with the SEC, the amendment or supplement shall be delivered to Parent
and Sub and their counsel.

ARTICLE III - REPRESENTATIONS AND WARRANTIES OF THE CORPORATION

The Corporation represents and warrants to Parent and Sub that:

SECTION 3.1. CORPORATE EXISTENCE AND POWER. The Corporation is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all corporate power, authority and legal right
to conduct its business as it is now being conducted and to own the properties
and assets it now owns. Except as shown in Paragraph 3.1 of the Disclosure
Letter ("DL") heretofore prepared by the Corporation and delivered to Parent,
the Corporation is duly qualified or licensed to do business as a foreign
corporation and is in good standing in every jurisdiction, both domestic and
foreign, where the character of the property owned or leased by it or the nature
of its activities makes such qualification necessary, except where the continued
failure to be so qualified or licensed is not reasonably likely to have a
Material Adverse Effect on the Corporation. The Corporation has previously
delivered to Purchaser true and correct copies of the Corporation's Certificate
of Incorporation and By-Laws, as currently in effect.

SECTION 3.2. CORPORATE AUTHORIZATION. The Corporation has full corporate
power and authority to enter into this Agreement and, subject to obtaining the
necessary approval of the Merger by its stockholders, to carry out the
transactions contemplated hereby. The Board of Directors of the Corporation has
taken all actions required by applicable law and its Certificate of
Incorporation and By-Laws to authorize the execution and delivery by the
Corporation of this Agreement and, subject to obtaining the approval of the
Merger by the holders of not less than two-thirds of the outstanding shares, the
performance by the Corporation of the transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by the Corporation
and no other corporate action is necessary in connection therewith (other than
the approval of the Merger by the holders of a two- thirds of the outstanding
shares of Common Stock entitled to vote), and this Agreement (assuming the due
authorization, execution and delivery hereof by Parent and Sub) is a legal,
valid and binding obligation of the Corporation enforceable against it in
accordance with its terms,

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except to the extent that enforcement may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws affecting creditors' rights
generally and by general equitable principles (regardless of whether enforcement
is sought in equity or at law).

SECTION 3.3. 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) the requirements of the Exchange Act
relating to the Proxy Statement (if required) and the Offer are met, (iii) the
filing of the Certificate of Merger and other appropriate merger documents, if
any, as required by DGCL are made and (iv) approval of the Merger by holders
two-thirds of the outstanding shares of Common Stock entitled to vote, if
required by the DGCL, is received, the execution and delivery of this Agreement
by the Corporation and the consummation by the Corporation of the transactions
contemplated hereby will not: (1) violate any provision of the Certificate of
Incorporation or By-Laws of the Corporation or the comparable governing
documents of any of its Subsidiaries, in each case, as amended; (2) violate any
statue, ordinance, rule, regulation, order or decree of any court or of any
governmental or regulatory body, agency or authority applicable to the
Corporation or any of its Subsidiaries or by which any of their respective
properties or assets may be bound; (3) except as set forth in DL 3.3, 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) except as
set forth in DL 3.3, 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 mortgage, pledge, lien, security
interest, encumbrance or charge of any kind (each an "Encumbrance") upon any of
the properties or assets of the Corporation 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 Corporation or any of its
Subsidiaries is a party, or by which it or any of their respective properties or
assets are bound or subject, except for in the case of clauses (3) and (4) above
for any such filing, permit, consent, approval, violation, breach or Encumbrance
which would not reasonably be expected to (a) have a Material Adverse Effect on
the Corporation and its Subsidiaries, taken as a whole, or (b) prevent or
materially delay consummation of the transactions contemplated by this
Agreement.

SECTION 3.4. COMPLIANCE WITH LAWS. Subject to Section 3.16 and except as
set forth in DL 3.4, the Corporation and its Subsidiaries are in compliance with
all applicable laws, regulations, orders, judgements and decrees (including, but
not

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limited to, the Fair Debt Collection Practices Act and any state or local
counterpart or equivalent) except where the failure to so comply would not be
reasonably likely to (i) have a Material Adverse Effect on the Corporation and
its Subsidiaries taken as a whole or (ii) prevent or materially delay
consummation of the transactions contemplated by this Agreement.

SECTION 3.5. CAPITALIZATION. The authorized capital stock of the
Corporation consists of 15,000,000 shares of common stock, par value $.50 per
share, and 500,000 shares of preferred stock, par value $.50 per share. As of
December 22, 1997, there were issued and outstanding 5,802,641 shares of such
common stock (not including 2,944,837 shares held in the Corporation's
treasury), all of which are of one class, and no shares of such preferred stock.
All issued and outstanding shares of Corporation 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. As of December 22,
1997, 728,548 shares of Corporation Stock were issuable upon exercise of Options
to purchase such stock, which
Options were issued pursuant to the Stock Plans (as defined in Section 1.4),
which plans are listed in DL 3.5(i). Except as set forth in this Section, in DL
3.5(i) or in the Rights Agreement, as of the date hereof there are no, and at
the Effective Time there will be no, (i) other outstanding shares of, (ii)
securities of the Corporation convertible into or exchangeable for, (iii)
options or other rights (including any pre-emptive rights) to acquire from the
Corporation, or (iv) other contracts, understandings, arrangements or
obligations (whether or not contingent) providing for the issuance or sale by
the Corporation, directly or indirectly, of, any capital stock or other equity
or debt security of the Corporation. As of the date hereof, except as set forth
in DL 3.5(i) or in connection with the exercise of any Options, there are no,
and at the Effective Time there will be no, outstanding contractual obligations
of the Corporation to repurchase, redeem or otherwise acquire any outstanding
shares of Corporation Stock or other securities issued by the Corporation.

SECTION 3.6. SUBSIDIARIES. Attached hereto as DL 3.6 is a true and
complete list of each subsidiary of the Corporation (the "Subsidiaries"), and
except as set forth on DL 3.6, each of the Subsidiaries is duly incorporated and
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, with full corporate power and authority to
conduct its business as it is now conducted and to own the properties and assets
it now owns. Except as set forth in DL 3.6, each of the Subsidiaries is duly
qualified or licensed to do business as a foreign corporation and is in good
standing in every jurisdiction, both domestic and foreign, where the character
of the property owned or leased by it or the nature of its activities makes such
qualification necessary, except where

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<PAGE>

the failure to be so qualified or licensed is not reasonably likely to have a
Material Adverse Effect on the Corporation and its Subsidiaries, taken as a
whole. All Subsidiaries are wholly owned, directly or indirectly, by the
Corporation. Except for the Subsidiaries or as set forth in DL 3.6, the
Corporation does not own, directly or indirectly, securities or other ownership
interests in any other entity and except as set forth in DL 3.6, neither the
Corporation nor any of its Subsidiaries is subject to any obligation or
requirement to provide funds for or to make any investment (in the form of a
loan, capital contribution or otherwise) to or in any entity other than a
Subsidiary. All of the shares of capital stock of the Subsidiaries have been
duly authorized and validly issued, are fully paid and nonassessable, are not
subject to, nor were they issued in violation of, any preemptive rights, and are
owned, directly or indirectly, by the Corporation free and clear of all
Encumbrances, options or claims whatsoever. No shares of capital stock of any
of the Subsidiaries are reserved for issuance and there are no outstanding or
authorized options, warrants, rights, subscriptions, claims of any character,
agreements, obligations, rights of redemption, convertible or exchangeable
securities, or other commitments, contingent or otherwise, relating to the
capital stock of any Subsidiary, pursuant to which such Subsidiary is or may
become obligated to issue any shares of capital stock of such Subsidiary or any
securities convertible into, exchangeable for, or evidenced in the right to
subscribe for, any shares of such Subsidiary. Except as set forth in DL
3.6(ii), there are no restrictions of any kind which prevent the payment of
dividends by any of the Subsidiaries.

SECTION 3.7. SEC FILINGS. (a) The Corporation has previously delivered to
Parent a true, correct and complete copy of the Corporation's Annual Reports on
Form 10-K for the years ended June 30, 1996 and June 30, 1997 (the "Corporation
10-Ks"), the Corporation's proxy statement relating to its annual meeting of
stockholders to be held on November 19, 1997, all other reports or registration
statements filed by the Corporation with the SEC since June 30, 1996, and all
amendments and supplements to the foregoing (the "Corporation Filings"). Each
of the Corporation Filings has been timely filed, subject to any allowable
extensions, and was prepared in all material respects in accordance with the
requirements of the Securities Act or a material 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. The Corporation Filings constitute all of the documents required to
be filed by the Corporation with the SEC since June 30, 1996.

(b) None of the information supplied to Parent by the Corporation for
inclusion in the Offer Documents will, at the respective times such Offer
Documents or any amendments or

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<PAGE>

supplements thereto are filed with the SEC or are first published, sent or given
to stockholders, as the case may be, contain any untrue statement of material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.

SECTION 3.8. FINANCIAL STATEMENTS. The financial statements (including
the notes thereto) (the "Corporation Financial Statements") of the Corporation
and its Subsidiaries included in the Corporation Filings fairly present, in all
material respects, the consolidated financial position of the Corporation and
its Subsidiaries as of the respective dates thereof and the consolidated results
of its operations, cash flows and stockholders' equity for the respective
periods then ended, all in conformity with generally accepted accounting
principles applied on a consistent basis ("GAAP"), except as indicated in the
notes thereto.

SECTION 3.9. NO UNDISCLOSED LIABILITIES. Except as set forth in DL 3.9
(the "Corporation Disclosed Liabilities"), the Corporation has no liabilities,
claims or other obligations (absolute, accrued, or contingent) (herein referred
to as the "Corporation Liabilities") except (a) Corporation Liabilities which
are accrued or otherwise reflected on the Corporation Financial Statements or
disclosed in the notes thereto, (b) Corporation Liabilities incurred in the
ordinary course of business since June 30, 1997 (the "Balance Sheet Date"), (c)
Corporation Liabilities which are otherwise disclosed in the Corporation
Filings, (d) Corporation Liabilities otherwise permitted by this Agreement, and
(e) Corporation Liabilities which would not reasonably be expected to have a
Material Adverse Effect.

SECTION 3.10. ABSENCE OF CERTAIN CHANGES. Except as set forth in DL 3.10,
since the Balance Sheet Date, neither the Corporation nor any of the
Subsidiaries has:

(a) suffered any Material Adverse Effect;

(b) except for transactions contemplated by this Agreement, made any
declaration, setting aside or payment of any dividend or other distribution with
respect to its capital stock, except dividends from Subsidiaries to Corporation;

(c) made any change in accounting principles except for the adoption
of such accounting principles which have, pursuant to the rules of the
Financial Accounting Standards Board or the SEC, become effective for the
Corporation's fiscal year ending June 30, 1998;

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<PAGE>

(d) granted any general increase in the compensation of its directors,
officers or employees or any increase in compensation payable to or to be
payable to any such director, officer, or employee, except for increases in the
ordinary course of business and consistent with past practice or as previously
disclosed to Parent;

(e) made any capital expenditures (other than (i) capital expenditures
in the ordinary course of business and consistent with past practice, (ii) as
provided in Section 5.1(b)(iii), and (iii) as otherwise provided in any Material
Contracts listed in DL 3.18);

(f) incurred any material increase in net borrowings outstanding under
the Amended and Restated Credit Agreement by and between the Corporation and The
First National Bank of Boston (now, Bank of Boston Connecticut) dated as of
December 31, 1994, as amended by the Amendment dated October 23, 1996 (the
"Credit Agreement") or incurred any other indebtedness (except in each case in
the ordinary course of business);

(g) taken any action referred to in Sections 5.1, 5.2 and 5.13, except
as permitted thereby; or

(h) agreed, whether in writing or otherwise, to take any action
described in this Section, except as otherwise contemplated herein.

SECTION 3.11. TITLE TO PROPERTIES; ENCUMBRANCES.
Except as set forth in DL 3.11:

(a) the Corporation and each of the Subsidiaries have good and
marketable title to their respective material properties and assets reflected on
the Corporation's balance sheet included in the Corporation's Form 10-K, for the
fiscal year ending June 30, 1997 (the "1997 10-K"), except for (i) assets
related to capitalized leases and (ii) properties and assets sold or disposed of
since the Balance Sheet Date in the ordinary course of business;

(b) none of the properties or assets of the Corporation or any of the
Subsidiaries is subject to any mortgage, pledge, lien, security interest,
encumbrance or charge of any kind (collectively referred to herein as "Liens")
except the following (herein called "Permitted Liens"): (i) Liens reflected on
the Corporation Financial Statements (including the notes thereto), (ii) public
or statutory Liens or liens of lessors, carriers, warehousemen, mechanics,
suppliers, materialmen, repairmen or other like Liens arising in the ordinary
course of business, (iii) Liens incurred or deposits made in connection with
workers' compensation, unemployment insurance and other types of social security
benefits, (iv) Liens

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<PAGE>

which individually or in the aggregate do not materially detract from the value,
use or enjoyment of such properties or assets or otherwise would have a Material
Adverse Effect on the business operations of the Corporation and the
Subsidiaries, taken as a whole; and (v) Liens with respect to taxes, assessments
and charges not yet due or the validity of which are being contested in good
faith by appropriate actions.

SECTION 3.12. LITIGATION. Subject to Section 3.16 and except as set forth
in DL 3.12 or as disclosed in the Corporation Filings, there are no actions,
suits, proceedings or investigations pending or, to the knowledge of the
Corporation, threatened against the Corporation or any of the Subsidiaries
before any court or arbitrator or any governmental body, agency or official
which (i) are reasonably likely, individually or in the aggregate, to have a
Material Adverse Effect on the Corporation and the Subsidiaries, taken as a
whole, (ii) question or challenge the validity of this Agreement or the
transactions contemplated hereby, or (iii) would be reasonably likely to prevent
or materially delay consummation of the transactions contemplated hereby.

SECTION 3.13. TAXES. Except as set forth in DL 3.13 or where such failure
to duly file or pay would not be reasonably likely to have a Material Adverse
Effect on the Corporation and its Subsidiaries, taken as a whole:

(i) TAX RETURNS. The Corporation and each of its Subsidiaries has timely
filed or caused to be timely filed with the appropriate taxing authorities all
Federal and other returns, statements, forms and reports for Taxes (as
hereinafter defined) ("Returns") that are required to be filed by, or with
respect to, the Corporation and such Subsidiaries. The Returns reflect
accurately all liability for Taxes of the Corporation and such Subsidiaries for
the periods covered thereby. "Taxes" means all taxes, assessments, charges,
duties, fees, levies or other governmental charges, including, 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;

(ii) PAYMENT OF TAXES. All Taxes and Tax liabilities of the Corporation
and its Subsidiaries have been timely paid or

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<PAGE>

adequately disclosed and fully provided for as a liability on the consolidated
financial statements of the Corporation and its Subsidiaries in accordance with
GAAP; and

(iii) OTHER TAX MATTERS. (A) DL 3.13(iii)(A) sets forth (1) each taxable
year or other taxable period of the Corporation 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, to the knowledge
of the Corporation, 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, (2) the most recent taxable year or other taxable period for which
an audit or other examination relating to Federal income taxes of the
Corporation and its Subsidiaries has been finally completed and the disposition
of such audit or examination, (3) the taxable years or other taxable periods of
the Corporation 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, (4) the amount of any proposed adjustments (and the
principal reason therefor) relating to any Returns for Tax liability of the
Corporation or any of its Subsidiaries which have been proposed or assessed by
any taxing authority and (5) a list of all notices received by the Corporation
or any of its Subsidiaries from any taxing authority relating to any issue which
could affect the Tax liability of the Corporation or any of its Subsidiaries,
which issue has not been finally determined and which, if determined adversely
to the Corporation or any such subsidiaries, could result in a Tax liability.

(B) Except as shown in DL 3.13(iii)(B), neither the Corporation nor
any of its Subsidiaries has been included in any "consolidated," "unitary" or
"combined" Return (other than Returns which include only the Corporation and any
Subsidiaries of the Corporation) 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.

(C) All Taxes which the Corporation 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.

(D) Except as previously disclosed to Parent, the Corporation is not a
party to any agreement that would require it to make any payment that would
constitute an "excess parachute

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payment" for purposes of Sections 280G and 4999 of the Internal Revenue Code of
1986, as amended (the "Code").

(E) There are no tax sharing, allocation, indemnification or similar
agreements or arrangements in effect as between the Corporation, any Subsidiary,
or any predecessor or affiliate thereof and any other party under which Parent,
Sub or the Corporation (or any of its Subsidiaries) could be liable for any
Taxes or other claims of any other party under such agreements or arrangements.

(F) No indebtedness of the Corporation or any of its Subsidiaries
consists of "corporate acquisition indebtedness" within the meaning of Section
279 of the Code.

(G) Neither the Corporation nor any of its Subsidiaries will be
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
Corporation or any of its Subsidiaries after the date hereof and during the
period ending at the time of the Share Purchase, and the Internal Revenue
Service has not initiated or proposed any such adjustment or change in
accounting method.

SECTION 3.14. EMPLOYEE BENEFIT PLANS. Set forth in DL 3.14 is an accurate
and complete list of each domestic and foreign employee benefit plan, 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"), whether or not
subject to ERISA, and each stock option, stock appreciation right, restricted
stock, incentive, bonus, profit-sharing, savings, deferred compensation, health,
medical, life, disability, accident, supplemental unemployment or retirement,
employment, severance or salary or benefits continuation plan, program,
arrangement or agreement maintained by the Corporation or any of its
Subsidiaries or affiliates (including, for this purpose and for the purpose of
all of the representations in this Section 3.14, any predecessors to the
Corporation or to any such Subsidiaries or affiliates and all employers (whether
or not incorporated) that would be treated together with the Corporation and/or
any of its Subsidiaries as a single employer within the meaning of Section 414
of the Code, or to which the Corporation or any such Subsidiary or affiliate
contributes (or has any obligation to contribute), has any liability or is a
party (collectively, the "Employee Benefit Plans"). Except to the extent that
any breach of the following representations could not reasonably be expected to
have a Material Adverse Effect on the Corporation or as disclosed in DL 3.14,(i)
each Employee Benefit Plan (and each related trust, insurance contract or fund)
is in compliance with applicable law (including, without limitation, ERISA and
the Code) and has been administered and operated in all respects in accordance
with its terms;(ii) except as set forth

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<PAGE>

in DL 3.14, each Employee Benefit 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 no event has
occurred and no condition exists which could reasonably be expected to result in
the revocation of any such determination;(iii) no complete or partial
termination of any Employee Benefit Plan covered by Title IV of ERISA has
occurred and no proceedings have been instituted to terminate or appoint a
trustee to administer any such Employee Benefit Plan, and no such Employee
Benefit Plan has been the subject of a "reportable event" (as defined in Section
4043 of ERISA) for which the 30-day notice requirement has not been waived by
the Pension Benefit Guaranty Corporation (the "PBGC"); (iv)neither the
Corporation nor any of its Subsidiaries has incurred any unsatisfied liability
to the PBGC with respect to any Employee Benefit Plan which is an "employee
pension benefit plan" (within the meaning of Section 3(2) of ERISA), including,
without limitation, any liability under Section 4069 of ERISA or any penalty
imposed under Section 4071 of ERISA, or otherwise incurred any liability under
Title IV of ERISA or Chapter 43 of the Code with respect to any such Employee
Benefit Plan, and no event has occurred and no condition or circumstance has
existed that would give rise to any such liability;(v) no Employee Benefit Plan
subject to Section 412 of the Code or Section 302 of ERISA has incurred any
accumulated funding deficiency within the meaning of such sections of the Code
or ERISA or obtained or applied for a waiver of any minimum funding standards or
an extension of any amortization period under Section 412 of the Code or Section
303 or 304 of ERISA;(vi) the actuarial present value of the accumulated plan
benefits under any Employee Benefit Plan that is an "employee pension benefit
plan" (within the meaning of Section 3(2) of ERISA), whether or not vested and
determined in accordance with PBGC actuarial methods, factors and assumptions
applicable to such a plan terminating on the Closing Date, does not exceed the
fair value of the assets allocable thereto;(vii) no Employee Benefit Plan is a
"multi-employer plan" (as defined in the Code or Section 4001(a)(3) of ERISA) or
a "multiple employer plan" (within the meaning of the Code or ERISA) and neither
the Corporation nor any Subsidiary contributes to or has contributed to, or had
any liability or obligation with respect to any multi-employer plan;(viii) full
payment has been timely made of all amounts which the Corporation or any of its
Subsidiaries is required under applicable law or under any Employee Benefit Plan
or related agreement to have paid as of the last day of the most recent fiscal
year, of such Employee Benefit Plan or related agreement ended prior to the date
hereof, and the Corporation and its Subsidiaries have made adequate provisions,
in accordance with GAAP, in their financial statements for all obligations and
liabilities under all Employee Benefit Plans that have accrued but have not been
paid because they are not yet due under the terms of any such Employee Benefit
Plan, related agreement, or applicable law;(ix) neither the Corporation nor

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<PAGE>

any of its Subsidiaries have any unfunded liabilities pursuant to any Employee
Benefit Plan which is an "employee pension benefit plan" (within the meaning of
Section 3(2) of ERISA) that is not intended to be qualified under Section 401(a)
of the Code; (x) the applicable requirements of Part 6 of Subtitle B of Title I
of ERISA and Section 4980B of the Code have been met with respect to each
Employee Benefit Plan that is a "group health plan" (as such term is defined in
Section 607(1) of ERISA or Section 5000(b)(1) of the Code);(xi) no Employee
Benefit Plan provides for post-employment or retiree health, life insurance or
other welfare benefits which could result in a material liability of the
Corporation or any Subsidiary;(xii) neither the Corporation nor any Subsidiary,
nor any of their respective directors, officers or employees, or, to
Corporation'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 transaction, act or omission to act in
connection with any Employee Benefit Plan that could reasonably be expected to
result in the imposition of a penalty or fine pursuant to Section 502 of ERISA,
damages pursuant to Section 409 of ERISA or a tax pursuant to Section 4975 of
the Code;(xiii) no plan or agreement to which the Corporation or any Subsidiary
is a party or by which it may be bound will or may, by reason of the execution
of this Agreement and the consummation of the transactions contemplated hereby
(either alone or upon the occurrence of any additional or subsequent event),
result in any payment, "parachute payment" (as such term is defined in Section
280G of the Code), severance, bonus, retirement or job security or similar-type
benefit, or increase any benefits or accelerate the payment or vesting of any
benefits to any employee or former employee or director of the Corporation or
any Subsidiary, and no Employee Benefit Plan provides for the payment of
severance, termination, change in control or similar-type payments or benefits;
and (xiv) no liability, claim, action, audit, examination or litigation is
pending or, to the Corporation's knowledge, threatened with respect to any
Employee Benefit Plan (other than routine claims for benefits payable in the
ordinary course).

SECTION 3.15. BROKERS. There is no investment banker, broker, finder or
other intermediary other than CIBC Oppenheimer Corp. which or who has been
retained by, or is authorized to act for, the Corporation in connection with the
transactions contemplated by this Agreement or is otherwise entitled to payment
of any fee or commission.

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SECTION 3.16. ENVIRONMENTAL MATTERS.

(a) PROVISION CONTROLS. Anything elsewhere in this Agreement to the
contrary notwithstanding, this Section 3.16 contains the entire agreement and
understanding of the parties relating to environmental representations and
warranties concerning the Corporation and the Subsidiaries.

(b) ENVIRONMENTAL DISCLOSURES. DL 3.16 sets forth all environmental
matters that are within the scope of the specific categories set forth below
which, individually or in the aggregate, could reasonably be expected to have a
Materially Adverse Effect on the Corporation and the Subsidiaries taken as a
whole:

(1) all permits, licenses and other authorizations possessed by the
Corporation and the Subsidiaries issued under Federal, state or local laws
relating to pollution or protection of worker or public health, safety or the
environment (collectively, the "Environmental Permits"), whether based on
statute, regulation, common law, equity or any other legal theory (the
"Environmental Laws") including, but not limited to, those relating to
emissions, discharges, releases or threatened releases of hazardous substances,
pollutants, contaminants, or hazardous or toxic material or wastes into ambient
air, surface water, groundwater or land ("Releases"). Each of such Releases and
violations of an Environmental Law is referred to herein as an "Environmental
Incident";

(2) to the knowledge of the Corporation, all violations by the
Corporation or any Subsidiary of the terms and conditions of any Environmental
Permits or Environmental Laws or of any other limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations, schedules and
timetables contained in Environmental Laws; applicable orders, agreements,
variances, injunctions, decrees, writs, judgments, awards or arbitration awards
relating thereto; and all past or present events, conditions, circumstances,
activities, practices, incidents, actions or plans concerning the business or
operations of the Corporation or any of its Subsidiaries or any entity that was
formerly a subsidiary or a controlled affiliate of the Corporation which may
give rise to any legal liability of the Corporation or any of its Subsidiaries
under any Environmental Law or otherwise from any claim, action, suit,
proceeding, hearing or investigation in connection with any Environmental
Incident;

(3) all orders (including, without limitations, decrees, writs,
judgments, awards or notice or demand letters) or agreements issued, entered,
promulgated or approved by any Person under or in connection with Environmental
Laws which bind, restrict, obligate, or otherwise apply to the Corporation or
any

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of the Subsidiaries or any of their respective properties or assets, which
remain in effect or which were issued or effective during the five years prior
to the date of this Agreement;

(4) all actions, claims, suits, proceedings or investigations under
any Environmental Laws either pending or, to the knowledge of the Corporation,
threatened against the Corporation or any of the Subsidiaries or any of their
respective properties or assets before any court or arbitrator or any
Governmental Authority;

(5) all agreements (including, but not limited to, consent orders and
agreements among potentially responsible parties) to which the Corporation or
any of the Subsidiaries is a party and which relate to benefits (including, but
not limited to, indemnification) or obligations of the Corporation or any of the
Subsidiaries in connection with Environmental Laws or any Environmental
Incident, and any effect that the transactions contemplated by this Agreement
will have on the benefits (including, without limitation, indemnification)
granted to the Corporation or any of the Subsidiaries under any such agreements
including any assignments or approvals required in connection with such
benefits;

(6) any Owned Real Property or Leased Real Property, whether or not
set forth in DL 3.11, that is subject to any applicable law that conditions,
restricts, prohibits, or requires any notification or disclosure in connection
with the transactions contemplated hereby for environmental reasons
("Environmental Property Transfer or Disclosure Law"). To the extent an
Environmental Property Transfer or Disclosure Law is applicable to any such
Owned Real Property or Leased Real Property in connection with the transactions
contemplated hereby, as and when appropriate the Corporation will take (or
cooperate with Parent in taking), such action as is necessary to fully comply
with the requirements of such laws; and

(7) any proceeding or investigation concerning criminal violations of
any Environmental Law to which the Corporation and its Subsidiaries or any
entity that was formerly a subsidiary or controlled affiliate of the
Corporation, are, or have been, subject at any time during the past 10 years.

Anything elsewhere in this Agreement to the contrary notwithstanding,
the Corporation retains the right, with prior notice to Parent, to take only the
actions and make only the payouts set forth in DL 3.16A, if required, with
respect to environmental matters.

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SECTION 3.17. PROPRIETARY RIGHTS. Except as set forth in DL 3.17, as of
the date hereof the Corporation has received no notice that it or any of its
Subsidiaries has infringed, and to the knowledge of the Corporation neither it
nor any of its Subsidiaries is now infringing, on any patent, trade name,
trademark, service mark, copyright, trade secret, technology, know-how or
process (collectively, the "Proprietary Rights") belonging to any other person,
which infringement, in the aggregate, would have a Material Adverse Effect on
the Corporation and its Subsidiaries, taken as a whole. Except as set forth in
DL 3.17, (i) the Corporation is not aware of any infringement by any third party
of any Proprietary Rights of the Corporation or any of its Subsidiaries, and
(ii) neither the Corporation nor any of its Subsidiaries is a party to any
material license, agreement or arrangement with respect to any Proprietary
Rights. DL 3.17 lists all the Proprietary Rights owned by the Corporation or
any of the Subsidiaries that are composed of registered patents, trade names,
trademarks, service marks or copyrights that are material to its business and
sets forth, if and as applicable, the registration number, country, application,
registration and expiration dates, and class with respect to such Proprietary
Rights.

SECTION 3.18. MATERIAL CONTRACTS AND LEASES. The list of agreements set
forth in DL 3.18 includes all the Material Contracts (as defined below) that the
Corporation or any of the Subsidiaries is party to, or is bound by. For
purposes of this Agreement, a "Material Contract" shall mean (i) any contract,
lease or other agreement (except for purchase orders entered into in the
ordinary course of business and contracts and agreements cancelable by the
Corporation or any of its Subsidiaries at will or on notice of 30 days or less)
to which the Corporation or any of its Subsidiaries is a party or by which the
Corporation or any of its Subsidiaries is bound, which by its terms calls for
the payment by either party to such contract or agreement of $250,000 or more in
any fiscal year or is material to the business, operations or financial
condition of the Corporation and its subsidiaries, taken as a whole,(ii) any
material agreement, contract or commitment not in the ordinary course of
business, (iii)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,(iv) any agreement, contract or commitment to be
performed relating to capital expenditures in excess of $100,000 in any calendar
year, or in the aggregate requiring expenditures in excess of $1,000,000,(v) any
material 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,
intercompany transfers, and operating leases),(vi) 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 individual and $100,000 in the

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aggregate to all employees), 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 or commission
arrangements with employees entered into in the ordinary course of business
consistent with past practice),(vii) 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 Corporation or any Subsidiary),(viii) any management service,
consulting or any other similar type of contract (other than contingent fee
agreements with collection attorneys), involving payments of more than $150,000
annually, unless terminable by the Corporation or Subsidiary on not more than 90
days notice,(ix) any agreement, contract or commitment limiting the ability of
the Corporation or any of its Subsidiaries to engage in any line of business or
to compete with any Person,(x) any warranty, guaranty or other similar
undertaking with respect to a contractual performance extended by the
Corporation or any of its Subsidiaries other than in the ordinary course of
business, or (xi) any agreement, contract or commitment to employ any of its
officers or employees, and (xii) any material amendment, modification or
supplement in respect of any of the foregoing. Neither the Corporation nor any
of its Subsidiaries is in default under any Material Contract, except for such
defaults which will not, individually or in the aggregate, have a Material
Adverse Effect on the Corporation and its Subsidiaries, taken as a whole.
Except as shown in DL 3.18, no approval or consent of, or notice to, any person
is needed in order that each such Material Contract shall continue in full force
and effect in accordance with its terms without penalty, acceleration or rights
of early termination by reason of the consummation of the transactions
contemplated by this Agreement.

SECTION 3.19. INSURANCE. DL 3.19 sets forth a list of all material
policies of insurance maintained on the date hereof by the Corporation and each
of its Subsidiaries with respect to their respective businesses, which policies
are currently in full force and effect. As of the date hereof, except as set
forth in DL 3.19, neither the Corporation nor any of its Subsidiaries has
received notice of cancellation or refusal to renew with respect to any
insurance policy set forth in DL 3.19.

SECTION 3.20. LABOR RELATIONS. Neither the Corporation nor any of its
Subsidiaries is currently party to any collective bargaining agreement with
respect to any of its employees. The Corporation has previously furnished or
made available to Parent a true, complete and correct copy of the handbooks and
administrative policies and practices relating to employees of the Corporation
and its Subsidiaries and any other material agreement regarding its relationship
with the

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Corporation's employees or those of its Subsidiaries. Except as set forth in DL
3.20 and except for any violations which, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect, each of the
Corporation and its Subsidiaries is in substantial compliance with all federal,
state or other applicable laws 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. Except as disclosed in DL 3.20 or in the
Corporation Filings, there exist no employment, consulting, severance,
indemnification agreements or deferred compensation agreements between the
Corporation and any director, officer or employee of the Corporation or any
agreement that would give any Person the right to receive any payment from the
Corporation as a result of the Offer or the Merger.

SECTION 3.21. VOTING REQUIREMENTS. After the Share Purchase, the
affirmative vote of the holders of two-thirds of the outstanding shares of
Corporation Common Stock entitled to be cast approving this Agreement is the
only vote of the holders of any class or series of the Corporation's capital
stock necessary to approve this Agreement and the transactions contemplated by
this Agreement.

SECTION 3.22. RIGHTS AGREEMENT. The Corporation and the Board of
Directors of the Corporation have taken and will maintain in effect during the
term of this Agreement all necessary action to (i) render the Rights Agreement
inapplicable with respect to the Offer, the Merger and the other transactions
contemplated by this Agreement, and (ii) ensure that (x) neither Parent, nor
Sub, nor any of their Affiliates, or Associates (each as defined in the Rights
Agreement) is considered to be an Acquiring Person (as defined in the Rights
Agreement) and (y) the provisions of the Rights Agreement, including the
occurrence of a Distribution Date (as defined in the Rights Agreement), are not
and shall not be triggered by reason of the announcement or consummation of the
Offer, the Merger or the other transactions contemplated by this Agreement. The
Corporation has delivered to Parent a complete and correct copy of the Rights
Agreement as amended and supplemented to the date of this Agreement. The Board
of Directors of the Corporation, at a meeting duly called and held, has resolved
that the Rights shall be redeemed immediately prior to, and subject to, the
acceptance for payment and purchase of not less than two-thirds of the
outstanding Shares pursuant to the Offer in accordance with the terms of this
Agreement.

SECTION 3.23. CUSTOMERS RELATIONS. Except as disclosed on DL 3.23, none
of the top twenty customers of the Corporation (based on the Corporation's
consolidated revenues for the fiscal year ended June 30, 1997) has notified the
Corporation or any of its Subsidiaries that it intends to either (i)

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terminate or modify in a manner materially adverse to the Corporation or any of
its Subsidiaries its contractual arrangements with the Corporation or any of its
Subsidiaries or (ii) substantially curtail the amount of business it currently
does with the Corporation or any of its Subsidiaries.

SECTION 3.24. OPINION OF FINANCIAL ADVISOR. The Corporation has received
the opinion of CIBC Oppenheimer Corp., to the effect that, as of the date of
this Agreement, the consideration to be received in the Offer and the Merger by
the Corporation's shareholders is fair to the Corporation's shareholders form a
financial point of view, and a complete and correct signed copy of such opinion
has been, or promptly upon receipt thereof will be, delivered to Parent.

ARTICLE IV - REPRESENTATIONS AND WARRANTIES
OF PARENT AND SUB

Each of Parent and Sub represents and warrants to the Corporation that:

SECTION 4.1. CORPORATE EXISTENCE AND POWER. Each of Parent and Sub is a
corporation duly organized, validly existing and in good standing under the laws
of Delaware, and each has all corporate power, authority and legal right to
conduct its business as it is now being conducted and to own the properties and
assets it now owns. Parent and Sub have delivered to Corporation true, compete
and correct copies of their respective certificates of incorporation and
by-laws.

SECTION 4.2. CORPORATE AUTHORIZATION. Each of Parent and Sub (a) has full
corporate power and authority to enter into this Agreement and to carry out the
transactions contemplated hereby, (b) has taken all action required by
applicable law and its Certificate of Incorporation and By-Laws, including the
authorization of this Agreement and the transactions contemplated hereby by
their respective Boards of Directors and (if required) stockholders, to
authorize the execution and delivery of this Agreement and the performance by
Parent and Sub of the transactions contemplated hereby, (c) has duly and validly
executed and delivered this Agreement and no other corporate action is necessary
in connection therewith. This Agreement (assuming the due authorization,
execution and delivery hereof by the Corporation) is a legal, valid and binding
obligation of each of Parent and Sub enforceable against each of them in
accordance with its terms, except to the extent that enforcement may be limited
by applicable bankruptcy, insolvency, reorganization or other similar laws
affecting creditors' rights generally and by general equitable principles
(regardless of whether enforcement is sought in equity or at law).

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SECTION 4.3. CONSENTS AND APPROVALS. Except as contemplated by Section
4.6 hereof and except for the requirements of the federal and state securities
laws and the HSR Act, and assuming the filing of the Certificate of Merger and
other appropriate merger documents, if any, as required by the laws of the State
of Delaware, no consent, approval or authorization of, or declaration, filing or
registration with, any United States or foreign governmental or regulatory
authority or any other person or entity is required to be made or obtained by
Parent or any of its affiliates in connection with the execution, delivery and
performance of this Agreement or the consummation of the transactions
contemplated hereby.

SECTION 4.4. NO VIOLATION. The execution, delivery and performance of
this Agreement by Parent and Sub and the consummation of the transactions
contemplated hereby (a) will not violate any provision of the respective
Certificates of Incorporation or By-Laws of Parent or Sub or any of their
affiliates, (b) except as set forth in the Disclosure Letter heretofore prepared
by Parent and delivered to the Corporation, will not violate, or be in conflict
with, or constitute a default under any material contract, lease, loan
agreement, license, permit or other agreement to which Parent or any of its
affiliates is a party, or by which Parent or any of its affiliates is bound or
to which it or any of them is subject and (c) will not violate any law,
judgment, decree, order, regulation or rule of any court or governmental
authority by which Parent or any of its affiliates is bound or any of their
respective properties is subject, except in any case where the violation or
default would not materially adversely affect Parent's or Sub's ability to
consummate the transactions contemplated by this Agreement (including, without
limitation, its ability to complete the Share Purchase pursuant to the Offer).

SECTION 4.5. FINANCIAL STATEMENTS. The audited financial statements
(including the notes thereto, the "Parent Audited Financial Statements") of
Parent for its most recently completed fiscal year, a copy of which has
previously been delivered to the Corporation, present fairly, in all material
respects, the consolidated financial position of Parent and its subsidiaries as
of the date thereof and their consolidated results of operations, cash flows and
stockholders' equity for the period then ended, all in conformity with GAAP.
The unaudited financial statements (including the notes thereto) of Parent for
the period ended June 30, 1997, a copy of which has been previously delivered to
the Corporation, were prepared in a manner consistent with the basis of
presentation used in the Parent Audited Financial Statements and in accordance
with GAAP, and fairly present, in all material respects, the consolidated
financial position of Parent and its subsidiaries as at and for the periods
indicated, subject to normal recurring year-end adjustments.

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SECTION 4.6. FINANCING. Parent and Sub have obtained letters (copies of
which have been delivered to the Corporation) from responsible financial
institutions providing for, subject to certain conditions set forth therein,
commitments to provide all funds necessary, together with funds available to the
Parent and Sub, to consummate the transactions contemplated hereby.

SECTION 4.7. OFFER DOCUMENTS; OTHER INFORMATION. None of the information
contained in any of the Offer Documents (excluding information described therein
as being supplied by the Corporation with respect to itself) will, at the
respective times such Offer Documents or any amendments or supplements thereto
are filed with the SEC or are first published, sent or given to stockholders, as
the case may be, contain any untrue statement of material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading.

SECTION 4.8. LITIGATION. There are no actions, suits, proceedings or
investigations pending or, to the knowledge of Parent or Sub, threatened against
Parent or Sub or any of their affiliates before any court or arbitrator or any
governmental body, agency or official which are reasonably likely, individually
or in the aggregate, to materially adversely affect Parent's or Sub's ability to
consummate the transactions contemplated hereby or which questions or challenges
the validity of this Agreement or the transactions contemplated hereby.

ARTICLE V - CONDUCT OF BUSINESS BY THE CORPORATION PENDING THE CLOSING

From the date hereof until immediately after the Closing (or, if sooner,
the termination of this Agreement), and except as otherwise consented to or
approved by Parent in writing, which consent or approval shall not be
unreasonably withheld or delayed:

SECTION 5.1. REGULAR COURSE OF BUSINESS. (a) The Corporation will, and
will cause its Subsidiaries to, conduct business substantially in the same
manner as heretofore conducted and neither the Corporation nor any of its
Subsidiaries will engage in any transaction or activity, enter into any
agreement or make any commitment (or materially amend any Material Contract
existing on the date hereof), except (i) as set forth on DL 5.1(a),(ii) in the
ordinary course of business and consistent with past practices or pursuant to an
agreement to which the Corporation or any of such Subsidiaries is a party on the
date hereof (it being understood that transactions in the call center
outsourcing business shall be deemed to be within the ordinary

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course of business of the Corporation and any Subsidiary which is engaged in
such business as of the date hereof),(iii) as contemplated by this Agreement, or
(iv) which would not be reasonably likely to have a Material Adverse Effect.
Except as otherwise permitted by this Agreement, the Corporation will not, and
will cause the Subsidiaries not to, intentionally take any action that would
cause, or intentionally omit to take any reasonable action that in all
likelihood would prevent, any of the representations and warranties contained in
Article III which are qualified as to materiality to fail to be true and correct
in any respect or any representation or warranty not so qualified to fail to be
true and correct in all material respects, as if such representations and
warranties were deemed to be made at and as of the Closing (except to the extent
any such representation or warranty was expressly made only as of a different
date).

(b) Without limiting the generality of subsection (a) of this Section, the
Corporation will not, and will not permit any Subsidiary to, except pursuant to
this Agreement or as otherwise permitted by DL 5.1(b): (i) acquire (by merger,
consolidation or acquisition of stock or assets) any corporation, partnership or
other business organization or division thereof, make any material investment in
any other entity which is not a wholly owned affiliate of the Corporation or
relinquish any material contract rights; (ii) acquire (including by lease) any
material assets or properties or dispose of, mortgage or encumber any of its
material assets or properties (except in each case in the ordinary course of
business and consistent with past practice or pursuant to an agreement to which
the Corporation or any Subsidiary is a party on the date hereof); (iii) make or
commit to make any capital expenditures in excess of $150,000, (iv) make any
change in accounting principles (except as may be required by generally accepted
accounting principles or SEC regulations, in which event, the Corporation will
fully disclose any such change and the reason(s) therefor); (v) sell or pledge
or agree to sell or pledge any stock owned by it in any of its Subsidiaries;
(vi) except to the extent required under existing employee and director benefit
plans, agreements or arrangements as in effect on the date of this Agreement,
increase the compensation or fringe benefits of any of its directors, officers
or employees, except for increases in salary, wages or commissions of employees
of the Corporation or its Subsidiaries who are not officers of the Corporation
in the ordinary course of business in accordance with past practice, or grant
any severance or termination pay not currently required to be paid under
existing severance plans or agreements or enter into any employment, consulting
or severance agreement or arrangement with any present or former director,
officer or other employee of the Corporation or any of its subsidiaries, or
establish, adopt, enter into or amend or terminate any collective bargaining,
bonus, profit sharing, thrift, compensation, stock option, restricted stock,
pension, retirement, deferred compensation, employment, termination,

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severance or other plan, agreement, trust, fund, policy or arrangement for the
benefit of any directors, officers or employees; (vii) except for transactions
between the Corporation and Subsidiaries or in the ordinary course of business,
transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of,
encumber or subject to any lien, any material assets or incur or modify any
indebtedness or other liability (other than indebtedness incurred under the
Amended and Restated Credit Agreement dated December 31, 1994, between the
Corporation and Bank of Boston, Connecticut (the "Existing Credit Facility");
PROVIDED that there shall not be any material increase in the amounts
outstanding under the Existing Credit Facility, other than in the ordinary
course of business, or otherwise as an accommodation, except for guarantees by
Corporation of obligations of Subsidiaries or guarantees by Subsidiaries of
obligations of Subsidiaries, become responsible for the obligations of any
person or, other than in the ordinary course of business consistent with past
practice, make any loan or other extension of credit except for intercompany
transactions between Corporation and Subsidiaries and between Subsidiaries;
(viii) agree to the settlement of any material claim or litigation (including,
but not limited to, any claim or litigation in respect of, related to or arising
out of any Environmental Law, Environmental Permit or Pollution Incident); (ix)
make any material tax election or settle or compromise any material tax
liability; (x) permit any insurance policy naming it as beneficiary or a loss
payable payee to be cancelled without notice to Parent, except for the
cancellation of insurance policies required to be maintained by third parties
for the benefit of the Corporation or any Subsidiary of which such cancellation
neither the Corporation nor any Subsidiary has notice; (xi) adopt a plan of
complete or partial liquidation, dissolution, merger, consolidation,
restructuring, recapitalization or other reorganization of the Corporation or
any of its Subsidiaries not constituting an inactive Subsidiary (other than the
Merger); or (xii) agree, in writing or otherwise, to take any of the foregoing
actions.

SECTION 5.2. CHARTER DOCUMENTS AND CAPITAL CHANGES. Except as expressly
authorized by this Agreement or required by Section 1.2, neither the Corporation
nor any of its Subsidiaries will (a) change or amend its Certificate of
Incorporation, By-Laws or the Certificate of Incorporation or By-Laws of any of
its Subsidiaries, (b) issue or sell any shares of its capital stock (other than
shares issuable upon exercise of currently outstanding options), nor issue
options (other than automatic issuances pursuant to the terms of a plan in
effect on the date hereof or pursuant to the terms of any existing employment
agreement), warrants to purchase, or rights to subscribe to, any shares of its
capital stock, or enter into any arrangement or contract with respect thereto,
or (c) make any other material changes in its capital structure, other than
dividends and other

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intercompany transfers, allocations and transactions in the ordinary course of
business between any wholly-owned Subsidiary and the Corporation or any other
wholly-owned Subsidiary.

SECTION 5.3. ORGANIZATION AND GOOD WILL. Except as set forth in DL 5.3,
the Corporation will use all reasonable efforts to preserve the business,
business organization and good will of the Corporation and each of its
Subsidiaries, keep in place their present executive officers and key employees,
and preserve their present relationships with persons having business dealings
with them.

SECTION 5.4. INSURANCE. The Corporation will use all commercially
reasonable efforts to maintain, and cause each of its Subsidiaries to maintain,
insurance substantially at current levels on all property, real, personal and
mixed, owned or leased by them.

SECTION 5.5. COMPLIANCE WITH LAWS. The Corporation will use its best
efforts to duly comply, and cause each of its Subsidiaries to duly comply, in
all material respects with all laws applicable to them and their respective
properties, operations, business and employees, except where the failure to do
so is not reasonably likely to have a Material Adverse Effect on the
Corporation.

SECTION 5.6. SEC REPORTS. The Corporation will duly file all reports
required to be filed by it with the SEC pursuant to the Exchange Act and will
submit copies thereof to Parent simultaneously with the time of filing thereof.

SECTION 5.7. PROXY STATEMENT. If shareholder approval of the Merger is
required by law, as promptly as practicable following the Share Purchase, the
Corporation will prepare and file a preliminary Proxy Statement with the SEC and
will use its best efforts to respond to the comments of the SEC 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). Promptly following the Share Purchase, if required by the DGCL in
order to consummate the Merger, the Corporation will cause the definitive Proxy
Statement to be mailed to the shareholders of the Corporation 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.

SECTION 5.8. SHAREHOLDER APPROVAL. (a) Promptly following the Share
Purchase, if required by DGCL in order to consummate the Merger, the
Corporation, acting through its Board of Directors, shall, in accordance with
applicable law, duly

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<PAGE>

call, convene and hold a special meeting of the holders of Common Stock for the
purpose of voting upon this Agreement and the Merger and the Corporation agrees
that this Agreement and the Merger shall be submitted at such special meeting.
The Corporation shall use its reasonable best efforts to solicit from its
shareholders proxies, and shall take all other action necessary and advisable,
to secure the vote of shareholders required by applicable law to obtain the
approval for this Agreement and the Merger. Subject to Section 5.9 of this
Agreement, the Corporation agrees that it will include in the Proxy Statement
the recommendation of its Board of Directors that holders of Common Stock
approve and adopt this Agreement and approve the Merger. Parent will cause all
shares of Common Stock owned by Parent and its subsidiaries to be voted in favor
of the Merger.

(b) Notwithstanding the foregoing, in the event that Sub shall acquire at
least 90% of the outstanding Corporation Common Stock, the Corporation agrees,
subject to Article VII, to take all necessary and appropriate action to cause
the Merger to become effective as soon as reasonably practicable after such
acquisition, without a meeting of the Corporation's shareholders, in accordance
with Section 253 of the DGCL.

SECTION 5.9. NO SOLICITATION OF OTHER OFFERS. (a) The Corporation and its
affiliates and each of their respective officers, directors, employees,
representatives and agents shall immediately cease any discussions or
negotiations with any other parties that may be ongoing with respect to any
Acquisition Proposal (as defined below). Neither the Corporation nor any of its
affiliates, shall, directly or indirectly, take (and the Corporation shall not
authorize or permit its or its affiliates, 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 making of any 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 or disclose any information to, any
Person (other than Parent or Sub or their representatives) 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 (except as required
by Section 1.2) that would make the Rights Agreement, Section 203 of the DGCL or
the provisions of Article FIFTH of the Corporation's Certificate of
Incorporation inapplicable to an Acquisition Proposal) that constitutes, or may
reasonably be expected to lead to, any Acquisition Proposal, PROVIDED, HOWEVER,
that the Corporation, in response to an unsolicited Acquisition Proposal and in
compliance with its obligations under Section 5.9(b) hereof, may participate in
discussions or negotiations with or furnish information to any third party which
proposes a transaction which the Board of

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Directors of the Corporation reasonably determines will result in a Superior
Proposal if the Board of Directors believes (and has been advised in writing by
independent outside counsel) that failing to take such action would constitute a
breach of its fiduciary duties under applicable law. In addition, neither the
Board of Directors of the Corporation nor any Committee thereof shall (x)
withdraw or modify, or propose to withdraw or modify, in a manner adverse to
Parent or Sub the approval and recommendation of the Offer and this Agreement or
(y) approve or recommend, or propose to approve or recommend, any Acquisition
Proposal, provided that the Corporation may recommend to its shareholders an
Acquisition Proposal and in connection therewith withdraw or modify its approval
or recommendation of the Offer or the Merger if (i) the Board of Directors of
the Corporation has determined that the Acquisition Proposal is a Superior
Proposal, (ii) all the conditions to the Corporation's right to terminate this
Agreement in accordance with Section 8.1(e) have been satisfied (including the
expiration of the three day period described therein and the payment of all
amounts required pursuant to Section 9.1), (iii) simultaneously with such
withdrawal, modification or recommendation, this Agreement is terminated in
accordance with Section 8.1(e) and (iv) the Acquisition Proposal does not
provide for any breakup fee or other inducement to the acquiror other than
reimbursement of out of pocket expenses incurred in connection with such
Acquisition Proposal. Any actions permitted under, and taken in compliance
with, this Section 5.9 shall not be deemed a breach of any other covenant or
agreement contained in this Agreement.

"Acquisition Proposal" shall mean any inquiry, proposal or offer from any
Person relating to any direct or indirect acquisition or purchase of a
substantial amount of assets of the Corporation or any of its Subsidiaries or of
over 10% of any class of equity securities of the Corporation or any of its
Subsidiaries, any tender offer or exchange offer that if consummated would
result in any person beneficially owning 10% or more of any class of equity
securities of the Corporation or any of its Subsidiaries, any merger,
consolidation, business combination, sale of substantially all the assets,
recapitalization, liquidation, dissolution or similar transaction involving the
Corporation or any of its Subsidiaries, other than the transactions contemplated
by this Agreement, or any other transaction the consummation of which could
reasonably be expected to impede, interfere with, prevent or materially delay
the Offer or the Merger or which would reasonably be expected to dilute
materially the benefits to Parent of the transactions contemplated hereby.
"Superior Proposal" shall mean a BONA FIDE proposal made by a third party to
acquire all of the outstanding shares of the Corporation pursuant to a tender
offer, a merger or a sale of all of the assets of the Corporation (x) on terms
which a majority of the members of the Board of Directors of the Corporation
determines in its good faith reasonable judgement

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(based on the advice of independent outside financial and legal advisors) to be
more favorable to the Corporation and its shareholders than the transactions
contemplated hereby, (y) for which in the good faith reasonable judgement of the
Board of Directors adequate financing or other consideration is then available
and (z) which does not provide for any breakup fee or other inducement to the
acquiror other than reimbursement of documented out-of-pocket expenses incurred
in connection with the Superior Proposal.

(b) In addition to the obligations of the Corporation set forth in
paragraph (a), on the date of receipt thereof, the Corporation shall advise
Parent of any request for information or any Acquisition Proposal, or any
inquiry or proposal with respect to any Acquisition Proposal, and the material
terms and conditions of such request or takeover proposal.

(c) Immediately following the Share Purchase, the Corporation will request
each person who has heretofore executed a confidentiality agreement in
connection with its consideration of acquiring the Corporation or any portion
thereof (the "Confidentiality Agreements") to return all confidential
information heretofore furnished to such person by or on behalf of the
Corporation.

SECTION 5.10. NOTIFICATION OF CERTAIN MATTERS. The Corporation shall give
prompt notice to Parent of: (a) any notice of, or other communication relating
to, a default or event that, with notice or lapse of time or both, would become
a default, received by the Corporation 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 Corporation or any of its Subsidiaries is a party or is
subject; and (b) any change or occurrence in the Corporation and its
Subsidiaries taken as a whole which has had a Material Adverse Effect on the
Corporation and its Subsidiaries, taken as a whole, or the occurrence of any
event which is reasonably likely to result in such a Material Adverse Effect.
Each of the Corporation 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.

SECTION 5.11. RIGHTS AGREEMENT. The Corporation shall not redeem the
Rights or amend (other than to delay the Distribution Date (as defined therein)
or to render the Rights inapplicable to the Offer and the Merger) or terminate
the Rights Agreement prior to the Effective Time without the consent of the
Parent unless required to do so by a court of competent jurisdiction.

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SECTION 5.12. PROPERTIES; MATERIAL CONTRACTS. The Corporation will use,
and will cause its Subsidiaries to use, all reasonable efforts to (a) maintain
and keep their respective properties in their current condition in all material
respects, except for ordinary wear and tear and damage due to casualty or other
extraordinary occurrence, and (b) perform in all material respects their
respective obligations under the Material Contracts.

SECTION 5.13. DIVIDENDS, ETC. Prior to the Closing, the Corporation will
not declare, pay or set aside for payment any dividend or distributions,
including a distribution of rights, in respect of its capital stock or redeem,
purchase or otherwise acquire any shares of its capital stock, except as
contemplated by this Agreement, in connection with the cancellation or exercise
of stock options, or any such dividends, distributions or payments made by or to
any Subsidiary.

SECTION 5.14. FULL ACCESS. The Corporation will, until the Closing afford
to Parent, its counsel, accountants and other authorized representatives, full
and complete access, upon reasonable notice and in a reasonable manner, to the
offices, properties, books and records of the Corporation and each of its
Subsidiaries in order that Parent may have full opportunity to make such
reasonable investigations as it shall desire as to the business and affairs of
the Corporation and its Subsidiaries. The Corporation will also cause its
officers, accountants and attorneys to furnish, upon reasonable notice and in a
reasonable manner, such additional financial and operating data and other
information as Parent shall from time to time reasonably request. Parent shall,
and shall cause its directors, officers, employees, partners, agents, counsel,
accountants and other authorized representatives and any proposed lender,
placement agent or underwriter to, keep confidential any and all information
(whether in writing or otherwise) obtained or developed pursuant to this
Agreement in accordance with the provisions of Section 6.1 hereof.

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ARTICLE VI - COVENANTS OF PARTIES

The Corporation hereby covenants and agrees with Parent and Sub, and Parent
and Sub hereby covenant and agree with the Corporation, that:

SECTION 6.1. CONFIDENTIALITY. (a) Until the Closing Time, or, in the
event of the termination of this Agreement pursuant to Article VIII, for a
period of three years from the date of such termination, the Corporation, Parent
and Sub and their respective affiliates, consultants, advisors, officers,
employees, directors and agents ("Representatives") shall hold in strictest
confidence and not divulge, use or make available to any other person any
information of the other obtained from any investigation of the other in
connection with the transactions contemplated hereby (including all data,
reports, interpretations, electronic images, computer software, forecasts and
records), or given to them by the other or by others performing services for
them or the other or in a confidential relationship with the other (herein
collectively referred to as "Information"), except to the extent (i) such party
is compelled to disclose such Information by judicial or administrative process
or, in the opinion of its counsel, by other requirements of law (provided such
disclosing party provides the other parties hereto with prompt notice of such
proposed disclosure so that such other parties may seek a protective order or
other appropriate remedy), (ii) such Information becomes generally available to
the public other than as a result of a breach of this Section or is otherwise
available from third parties not under a duty to keep such Information
confidential, (iii) such Information was at the time of its disclosure to such
person previously known to it, (iv) such disclosure is permitted by Section 6.4
(relating to public announcements) or otherwise pursuant to this Agreement, or
(v) such Information is divulged to such party's Representatives (provided that
each such person agrees to be bound by the provisions of this Section). Neither
Parent, Sub nor the Corporation, nor any of their respective Representatives,
will misuse to the detriment of the other, any Information obtained from the
other. If the Share Purchase does not occur, upon the request of the
Corporation or Parent and Sub, the party to whom such request is made shall as
directed by the requesting party destroy or return to the requesting party any
and all copies of written Information covered by this Section furnished to such
non-requesting party or its representatives by, or on behalf of, the requesting
party or otherwise obtained, prepared or developed by or on behalf of the
non-requesting party, and such destruction shall be certified in writing to the
requesting party.

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(b) For a period of three years from the date of the termination of this
Agreement, if the Share Purchase does not occur, Parent (and any affiliate
thereof) will not (i) solicit for hire or employ any person who on the date
hereof or on the date of such termination was an employee of the Corporation or
any of its Subsidiaries or (ii) cause any individual engaged as an independent
contractor by the Corporation or any of its Subsidiaries to breach or void such
individual's independent contractor agreement with the Corporation.

(c) Contemporaneous with the Share Purchase, Parent shall make or cause
the Corporation and each of its Subsidiaries to make, by certified or bank check
or other means acceptable to the payee thereof, all payments which are required
to be made on or after such time under any agreement in effect on the date
hereof between the Corporation or any of such Subsidiaries and (i) any officer
or other employee thereof as a result of a "change of control" (as defined in
any such agreement) having occurred or as a result of the termination of such
officer's or employee's employment, whether voluntary or otherwise, and (ii) all
non-employee directors of the Company with respect to deferred compensation,
including, without limitation the severance, bonus and other payments listed in
DL 6.1, which amounts have been reviewed and approved by Parent and Sub.

SECTION 6.2. COOPERATION. The Corporation and Parent will cooperate with
each other and each such party shall take all reasonable actions that may be
necessary or desirable to consummate the transactions contemplated pursuant to
this Agreement, including, but not limited to, furnishing to each other, or
reviewing, the information relating to each of them required by applicable
statutes, rules and regulations for the purpose of preparing the Offer
Documents, any federal and state securities law filings and any filings under
the HSR Act. Prior to the execution of this Agreement, Parent will provide the
Corporation with a copy in draft form of the Offer Documents and will make
available a final copy of the Offer Documents prior to filing with the SEC.
Each party covenants that all such information furnished to the other or
reviewed by it will be true and correct in all material respects to the
knowledge of such party. Parent and the Corporation will promptly notify the
other party hereto of any comments or requests for additional information from
the SEC or state securities law administrators or relating to any filing under
the HSR Act relating to the Offer, and will upon request supply the other
parties hereto with copies of all correspondence between them or their
representatives and the SEC or members of its staff or state securities law
administrators with respect to the transaction contemplated hereby or relating
to any filing under the HSR Act relating thereto.

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SECTION 6.3. FILINGS; CONSENTS; REMOVAL OF OBJECTIONS. Each party hereto
agrees to exert all reasonable efforts to consummate the Offer and the Merger at
the earliest practicable time, including, without limitation, (i) preparing and
filing all requisite applications, documents and notifications (including filing
with the FTC and the DOJ the Notification and Report Forms under the HSR Act and
cooperating with each other with respect to the filing of any additional
information with respect thereto) in connection with the transaction
contemplated herein required by applicable law, (ii) responding as promptly as
practicable to all inquiries in connection therewith, (iii) removing or
satisfying, if reasonably practicable, any objections to the validity or
legality of the Share Purchase, and (iv) satisfying the conditions to the
consummation of the Share Purchase set forth herein.

SECTION 6.4. PUBLIC ANNOUNCEMENTS. Parent, Sub and the Corporation will
consult with each other before issuing any press release or making any public
statement with respect to the Offer or this Agreement and, except as may be
required by applicable law or the NYSE Rules, will not issue any such press
release or make any such public statement without the prior consent of the other
party hereto, which consent will not be unreasonably withheld or delayed.

SECTION 6.5. EMPLOYEE BENEFITS. (a) Until the first anniversary of the
Effective Time, Parent shall ensure that all employees and officers of the
Corporation and Subsidiaries receive compensation and benefits in the aggregate
substantially comparable to the compensation and benefits received by such
individuals immediately prior to the date hereof. Notwithstanding the
foregoing, following the Effective Time, the Parent may terminate the employment
of any employee (subject to the payment of severance benefits payable to the
employee in connection with such termination).

(b) Until the first anniversary of the Effective Time, Parent shall keep in
effect all severance policies that are applicable to employees and officers of
the Corporation and its Subsidiaries immediately prior to the date hereof.

(c) Following the Effective Time, (i) Parent shall ensure that no employee
welfare benefit plan adopted by the Corporation or the Subsidiaries shall have
any preexisting condition limitations and (ii) Parent shall honor all premiums
and deductibles paid by the employees, officers and directors of the Corporation
and Subsidiaries under all Employee Benefit Plans up to (and including) the
Effective Time.

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(d) Following the Effective Time, for purposes of eligibility and vesting,
Parent shall honor all service credit accrued by the employees, officers and
directors of the Corporation and Subsidiaries under all Employee Benefit Plans
up to (and including) the Effective Time.

SECTION 6.6. INDEMNIFICATION AND INSURANCE. (a) From and after the Share
Purchase, Parent shall cause the Corporation to (i) maintain in effect in the
Certificate of Incorporation of the Corporation the provisions with respect to
the indemnification set forth in Article VII of the Certificate of Incorporation
of the Corporation as in effect at the Share Purchase, which provisions shall
not be amended, repealed or otherwise modified for a period of six (6) years
from the Effective Time in any manner that would adversely affect the rights
thereunder of individuals (or their estates) who at the date of this Agreement
and/or as of the closing of the Share Purchase are or were directors, officers,
employees or agents of the Corporation or its Subsidiaries, unless such
modification is required by law and (ii) maintain in effect for a period of six
(6) years from the Share Purchase each Indemnification Agreement in effect (as
of such date) between the Corporation or any of its Subsidiaries and officers
and directors of the Corporation and its Subsidiaries, which Indemnification
Agreement shall not be amended or modified during such period in any manner that
would adversely affect the rights of the individual who is a party thereto.

(b) Prior to the Share Purchase, the Corporation shall purchase a six year
"tail" insurance policy with its current carrier substantially identical in all
respects to the Corporation's current directors' and officers' liability
insurance coverage (and providing coverage for an amount not less than
$30,000,000 and providing for two reinstatement options, exercisable at any time
during such six year tail period of $30,000,000) covering those persons who are
currently covered on the date of this Agreement by the Corporation's directors'
and officers' liability insurance policy (a copy of which has been heretofore
delivered to Parent) (the "Indemnified Parties").

(c) In the event the Corporation or Parent or any of their respective
successors or assigns (i) consolidates with or merges into any other person and
shall not be the continuing or surviving corporation or entity of such
consolidation or merger or (ii) transfers all or substantially all of its
properties and assets to any person, then and in each such case, proper
provisions shall be made so that the successors and assigns of the Corporation
or Parent, as the case may be, shall assume the obligations set forth in this
Section.

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(d) Notwithstanding the foregoing, nothing herein shall be construed to
relieve Parent or the Corporation of their respective obligations to any
Indemnified Party pursuant to this Section, and each of the Indemnified Parties
shall be entitled to enforce such obligations (including the right to
indemnification) directly against the Parent or the Corporation without first
making any claim with respect thereto against any applicable successor or
assign.

(e) This Section 6.6 shall survive the consummation of the Share Purchase
and the Merger, if necessary, is intended to benefit the Corporation and the
Indemnified Parties, and shall be binding on all successors and assigns of the
Corporation and the Parent. Parent shall cause the Corporation to honor its
obligations pursuant to this Section 6.6 from and after the Share Purchase.

SECTION 6.7. RESIGNATION OF DIRECTORS. The Corporation shall cause each
of the persons who are members of the Board of Directors of the Corporation or
of the Board of Directors of the Subsidiaries (other than Allied Bond &
Collection Agency, Inc.) immediately prior to the Closing to deliver their
resignations as directors of the Corporation and such Subsidiaries, which
resignations shall be effective as of the Closing.

SECTION 6.8. CONFIDENTIALITY AGREEMENT. Purchaser and the Corporation
hereby agree that as of the date hereof the Confidentiality Agreement dated
August 18, 1997 between Purchaser and the Corporation shall in all respects be
terminated.

SECTION 6.9. CERTAIN ACTIONS OF PARENT AND SUB. Parent and Sub will not
take any action, or omit to take any reasonable action, which in all likelihood
would (i) have a Material Adverse Effect on the ability of Parent or Sub to
consummate the transactions contemplated hereby, or (ii) cause any of the
representations and warranties contained in Article IV which are qualified as to
materiality to fail to be true and correct in any respect or any such
representation or warranty which is not so qualified to fail to be true and
correct in all material respects, as if such representations and warranties were
made at and as of the Closing, except to the extent any such representation or
warranty was expressly made only as of a different date.

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ARTICLE VII - CONDITIONS TO CONSUMMATION OF THE MERGER

SECTION 7.1. CONDITIONS PRECEDENT TO OBLIGATIONS OF PARENT, SUB AND THE
CORPORATION. The respective obligations of Parent and Sub, on the one hand, and
the Corporation, on the other hand, 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:

(a) APPROVAL OF CORPORATION'S SHAREHOLDERS. To the extent required
by applicable law, this Agreement and the Merger shall have been approved
and adopted by holders of the requisite number of outstanding shares of the
Common Stock of the Corporation entitled to vote in accordance with
applicable law (if required by applicable law) and the Corporation's
Certificate of Incorporation and By-Laws;

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

(c) 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 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; and

(d) 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 purchase of the
Common Stock illegal.

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ARTICLE VIII - TERMINATION AND ABANDONMENT

SECTION 8.1. TERMINATION. This Agreement may be terminated prior to the
Share Purchase and the Merger may be abandoned after the Share Purchase:

(a) by mutual written consent of the Corporation, on the one hand,
and of Parent and Sub, on the other hand;

(b) by either Parent, on the one hand, or the Corporation, 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 acceptance for payment of, or
payment for shares of Common Stock pursuant to the Offer and such order,
decree or ruling or other action shall have become final and nonappealable;

(c) by Parent, on the one hand, or the Corporation, on the other
hand, if the Share Purchase shall not have occurred within 120 days after
commencement of the Offer, unless the Share Purchase shall not have
occurred because of a material breach of any representation, warranty,
obligation, covenant, agreement or condition set forth in this Agreement on
the part of the party seeking to terminate this Agreement;

(d) by the Parent, in the event of a breach by the Corporation of any
representation, warranty, covenant or agreement contained in this Agreement
which (A) would give rise to the failure of a condition set forth in
paragraph (d) or (f) of Annex I to this Agreement, and (B) cannot or has
not been cured prior to the earlier of (i) 15 days after the giving of
written notice of such breach to the Corporation and (ii) two business days
prior to the date on which the Offer expires;

(e) by either Parent, on the one hand, or the Corporation, on the
other hand, if the Board of Directors of the Corporation determines that an
Acquisition Proposal constitutes a Superior Proposal and the Board believes
(and has been advised by independent outside 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 duties; PROVIDED,
HOWEVER, the Corporation may not terminate this Agreement pursuant

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to this Section 8.1(e) unless and until three days have elapsed following
delivery to Parent of a written notice of such determination by the Board
of Directors and during such three day period the Corporation has fully
cooperated with the Parent, including, without limitation, informing the
Parent of the terms and conditions of such Superior Proposal with the
intent of enabling both parties to agree to a modification of the terms and
conditions of this Agreement so that the transactions contemplated hereby
may be effected; and PROVIDED FURTHER that at the end of such three day
period the Board of Directors of the Corporation determines that the
Acquisition Proposal constitutes a Superior Proposal and the Board
continues to believe (and has again been advised by independent outside
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 duties; PROVIDED FURTHER that this Agreement shall not terminate
pursuant to this Section 8.1(e) unless (i) prior to such termination Parent
has received all fees and expenses set forth in Section 9.1 by wire
transfer in same day funds and (ii) simultaneously with such termination
the Corporation enters into a definitive acquisition, merger or similar
agreement to effect the Superior Proposal which acquisition agreement (x)
permits the Corporation to terminate the acquisition agreement in the event
the Board of Directors of the Corporation determines to effect a
transaction with Parent and (y) does not provide for breakup fee or other
inducement to the acquiror other than reimbursement of documented out of
pocket expenses incurred in connection with such Superior Proposal;

(f) by the Corporation, in the event of a breach by the Parent or Sub
of any representation, warranty, covenant or agreement contained in this
Agreement which cannot or has not been cured within 15 days after the
giving of written notice of such breach to the Parent and Sub, except, in
any case where such failure is not reasonably likely to affect adversely
Parent's or Sub's ability to complete the Offer and/or Merger.

SECTION 8.2. EFFECT OF TERMINATION. In the event of the termination of
this Agreement pursuant to Section 8.1 hereof by Parent or Sub, on the one hand,
or the Corporation, 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, Sub or
the Corporation, except that Sections 6.1, 6.4, 9.1 and this Section

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8.2 hereof shall survive any termination of this Agreement. Nothing in this
Section 8.2 shall relieve any party to this Agreement of liability for breach of
this Agreement.

ARTICLE IX - MISCELLANEOUS

SECTION 9.1. FEES AND EXPENSES. (a) Except as provided in paragraph (b)
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) If this Agreement is terminated:

(i) by Parent because of an event set forth in clause (iv)(e) of
Annex I of this Agreement; or

(ii) by Parent or the Corporation in accordance with the terms of
Section 8.1(e) of this Agreement; or

(iii) by the Corporation pursuant to Section 8.1(c), if, prior to such
termination, the Corporation shall have directly or indirectly notified any of
its stockholders that a third party has made an Acquisition Proposal or a third
party shall have announced an Acquisition Proposal, and within twelve months
after such termination, the Corporation or any of its Subsidiaries 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 which would give the acquirors not less than 10% of the issued Shares, a
tender offer or exchange offer or similar transaction involving the Corporation
or one or more of its Subsidiaries accounting for more than 10% of the
Corporation's consolidated income in its prior fiscal year (a "Third Party
Acquisition"), or a Third Party Acquisition occurs within twelve months after
the Corporation's termination of this Agreement pursuant to Section 8.1(c),
involving any such party (or any affiliate or associate thereof) (x) with whom
the Corporation or any Subsidiary (or their respective representatives) during
the term of this Agreement had any discussions with respect to a Third Party
Acquisition, (y) to whom the Corporation or any Subsidiary (or any of their
respective representatives) 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 Corporation or any Subsidiary (or their
respective representatives) 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

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Consideration, in the case of each of clauses (x), (y) and (z) prior to such
termination;

then the Corporation shall (except as required to be earlier paid in accordance
with Section 8.1(e)) pay to Parent in same day funds Seven Million Seven Hundred
Thousand Dollars ($7,700,000.00), which shall be deemed to include reimbursement
for all out-of-pocket fees and expenses incurred by Parent or on its behalf in
connection with the transactions contemplated hereby.

SECTION 9.2. NOTICES. All notices, requests and other communications to
any party hereunder shall be in writing and shall be given by personal delivery,
reputable overnight courier service, certified mail (postage prepaid, return
receipt requested), facsimile (with a copy sent via prepaid first class mail) or
first class mail, as follows:

If to the Corporation, to:

The Union Corporation
211 King Street
Suite 100
Charleston, South Carolina 29401
Attention: William B. Hewitt, President
and Chief Executive Officer
Fax: (803) 958-3850

with a copy to:

Zimet, Haines, Friedman & Kaplan
460 Park Avenue
New York, New York 10022
Attention: Robert H. Haines, Esq.
Fax: (212) 223-1151

If to Parent and Sub, to:

c/o Outsourcing Solutions Inc.
390 South Woods Mill Road
Suite 150
Chesterfield, MO 63017
Attention: Timothy G. Beffa, President
and Chief Executive Officer
Fax: (314) 576-1867

with a copy to:

White & Case
1155 Avenue of the Americas
New York, New York 10036
Attention: Frank L. Schiff, Esq.
Fax: (212) 819-7817

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or to such other address as such party may hereafter specify by notice to the
other party hereto delivered in accordance with this Section. Each such notice,
request or other communication shall be effective (a) if personally delivered,
when presented, (b) if by reputable overnight courier, the next business day
following the delivery thereof to such courier (or such later date as is
demonstrated by a BONA FIDE receipt therefor), (c) if given by certified mail
(postage prepaid, return receipt requested), three business days after deposit
in the mails, (d) if given by facsimile, when the appropriate answerback or
other confirmation of receipt is received, or (e) if given by any other means,
when received.

SECTION 9.3. TERMINATION OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties contained herein shall terminate at the Share
Purchase and neither the Corporation nor any officer, director, employee,
stockholder, fiduciary or agent of the Corporation shall be under any liability
or obligation whatsoever with respect to any such representation or warranty
after such time. This Section shall not limit any covenant or agreement of the
parties hereto which by its terms contemplates performance after the Share
Purchase.

SECTION 9.4. AMENDMENTS. Subject to applicable law, this Agreement may be
amended, modified or supplemented only by the mutual written agreement of the
parties hereto at any time prior to the Effective Time with respect to any of
the terms contained herein; except that Sections 6.1(c), 6.5 and 6.6 above may
not be amended or supplemented to the detriment of any intended third party
beneficiary thereof without the express written consent of such beneficiary.

SECTION 9.5. WAIVERS. At any time prior to the Closing, Parent, on the
one hand, and the Corporation, on the other hand, may (a) extend the time for
the performance of any agreement of the other party hereto, (b) waive any
inaccuracy in the representations and warranties of the other party contained
herein or in any document delivered pursuant hereto or (c) waive compliance with
any agreement of the other party or any condition contained herein (unless
pursuant hereto such condition may not be waived) to be satisfied by such other
party. Any agreement on the part of any party to any such extension, and any
such waiver, shall be effective only if set forth in a writing signed on behalf
of such party and delivered to the other party hereto.

SECTION 9.6. SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; PROVIDED, that no party may assign or
otherwise transfer any of its rights or obligations under this Agreement without
the prior written consent of the other party hereto and any attempt to so assign
such right or obligation shall be void AB INITIO.

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This Agreement shall be binding upon and is solely for the benefit of the
parties hereto and their respective permitted successors and assigns, and
nothing in this Agreement is intended to confer upon any other person any rights
or remedies of any nature whatsoever under or by reason of this Agreement,
except that (i) in the event that the Share Purchase shall be consummated, then
from and after the Share Purchase the provisions of Sections 6.1(c), 6.5 and 6.6
shall inure to the benefit of the employees, option holders and other persons
specified therein, who, as the intended beneficiaries of such Sections, shall
each be entitled to enforce his or her rights under such Sections and (ii) the
provisions of Section 6.6 shall inure to the benefit of the Indemnified Parties,
who, as the intended beneficiaries of such Section 6.6, shall each be entitled
to enforce his or her rights under such Section.

SECTION 9.7. GOVERNING LAW AND FORUM. This Agreement shall be construed
in accordance with the laws of the State of New York applicable to contracts
made and to be performed entirely therein, except that, with respect to matters
of corporate law, Delaware law shall apply.

SECTION 9.8. COUNTERPARTS; EFFECTIVENESS. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
force and effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received counterparts hereof signed by the other parties hereto.

SECTION 9.9. ENTIRE AGREEMENT; SCHEDULES AND EXHIBITS. This Agreement,
including the Schedules and Annex I hereto (which are hereby made a part of this
Agreement), contains all of the terms, conditions and representations and
warranties agreed upon by the parties relating to the subject matter of this
Agreement and supersedes all prior and contemporaneous agreements, negotiations,
correspondence, undertakings and communications of the parties, oral or written,
respecting such subject matter.

SECTION 9.10. HEADINGS AND TABLE OF CONTENTS. The headings in this
Agreement and the Table of Contents are included herein for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.

49
<PAGE>

ARTICLE X - DEFINITIONS

For purposes of this Agreement, the following terms shall have the
respective meanings ascribed to such terms in this Article.

(a) "Balance Sheet Date" shall have the meaning ascribed to such term in
Section 3.9.

(b) "Cash Payment" shall have the meaning ascribed to such term in Section
1.4.

(d) "Certificates" shall have the meaning ascribed to such term in Section
2.4.

(e) "Closing" shall have the meaning ascribed to such term in Section
2.10.

(f) "Closing Date" shall have the meaning ascribed to such term in Section
2.10.

(g) "Code" shall mean the Internal Revenue Code of 1986, as amended, and
the rules and regulations promulgated thereunder.

(h) "Corporation Filings" shall have the meaning ascribed to such term in
Section 3.7.

(i) "Corporation Financial Statements" shall have the meaning ascribed to
such term in Section 3.8.

(j) "Corporation Stock" shall have the meaning ascribed to such term in
the preamble to this Agreement.

(k) "Corporation 10-Ks" shall have the meaning ascribed to such term in
Section 3.7.

(l) "Credit Agreement" shall have the meaning ascribed to such term in
Section 3.10.

(m) "DGCL" shall have the meaning ascribed to such term in Section 1.2.

(n) "DL" is the Disclosure Letter.

(o) "DOJ" shall mean the United States Department of Justice.

(p) "Dissenting Shareholders" shall have the meaning ascribed to such term
in Section 2.3.

50
<PAGE>

(q) "Effective Time" shall have the meaning ascribed to such term in
Section 2.1.

(r) "ERISA" shall have the meaning ascribed to such term in Section 3.14.

(s) "Exchange Act" shall have the meaning ascribed to such term in Section
1.1.

(t) "FTC" shall mean the Federal Trade Commission.

(u) "GAAP" shall have the meaning ascribed to such term in Section 3.8.

(v) "HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended.

(w) "Material Adverse Effect" shall mean any change in or effect on the
applicable corporation that either is, or in all reasonable likelihood will be,
materially adverse to the business, operations, financial condition, results of
operations, assets, liabilities or reserves of such corporation and its
subsidiaries, taken as a whole.

(x) "Material Contracts" shall have the meaning ascribed to such term in
Section 3.18.

(y) "Merger" shall have the meaning ascribed to such term in the preamble
of this Agreement.

(z) "Merger Consideration" shall have the meaning ascribed to such term in
Section 2.2.

(aa) "NYSE Rules" shall mean the rules and regulations promulgated by the
New York Stock Exchange, Inc.

(bb) "Offer" shall have the meaning ascribed to such term in the preamble
of this Agreement.

(cc) "Offer Documents" shall have the meaning ascribed to such term in
Section 1.1(b).

(dd) "Options" shall have the meaning ascribed to such term in Section 1.4.

(ee) "Parent Audited Financial Statements" shall have the meaning ascribed
to such term in Section 4.5.

(ff) "Paying Agent" shall have the meaning ascribed to such term in Section
2.4.

(gg) "Person" shall mean and include an individual, a partnership, a joint
venture, a corporation, a limited liability company, a trust, an unincorporated
organization, a group and a government or other department or agency thereof.

51
<PAGE>

(hh) "Per Share Amount" shall have the meaning ascribed to such term in the
preamble to this Agreement.

(ii) "Proxy Statement" shall have the meaning ascribed to such term in
Section 2.11.

(jj) "Rights Agreement" shall have the meaning ascribed to such term in
Section 1.2.

(kk) "Schedule 14D-1" shall have the meaning ascribed to such term in
Section 1.1(b).

(ll) "Schedule 14D-9" shall have the meaning ascribed to such term in
Section 1.2(b).

(mm) "SEC" shall mean the United States Securities and Exchange Commission.

(nn) "Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.

(oo) "Share Purchase" shall have the meaning ascribed to such term in
Section 1.1.

(pp) "Shares" shall have the meaning ascribed to such term in the preamble
to this Agreement.

(qq) "Subsidiaries" shall have the meaning ascribed to such term in Section
3.6.

(rr) "Surviving Corporation" shall have the meaning ascribed to such term
in Section 2.1(b).

52
<PAGE>

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

ATTEST: THE UNION CORPORATION

By: /s/ MELVIN S. COOPER
- ----------------------------- ----------------------------------
Name: Name: Melvin S. Cooper
Title: Title: Chairman of the Board

ATTEST: OUTSOURCING SOLUTIONS INC.

By: /s/ TYLER T. ZACHEM
- ----------------------------- ----------------------------------
Name: Name: Tyler T. Zachem
Title: Title: Vice President

ATTEST: SHERMAN ACQUISITION CORPORATION

By: /s/ TYLER T. ZACHEM
- ----------------------------- ----------------------------------
Name: Name: Tyler T. Zachem
Title: Title: Vice President and Treasurer

<PAGE>

ANNEX I
TO SHARE PURCHASE AGREEMENT AND PLAN OF MERGER

CONDITIONS TO THE SHARE PURCHASE

The capitalized terms used in this Annex I shall have the meanings set
forth in the Agreement to which it is annexed.

Notwithstanding any other provision of the Offer or the Agreement, Sub
shall not be required to accept for payment or, subject to any applicable rules
and regulations of the SEC, including Rule 14e-1c under the Exchange Act, pay
for any shares of Common Stock tendered pursuant to the Offer and may terminate
the Offer or amend the Offer as and to the extent provided in Section 1.1 of the
Agreement and may postpone the acceptance of, and payment for, shares of Common
Stock, if (i) there shall not have been validly tendered and not withdrawn prior
to the expiration of the Offer a number of shares of Common Stock which
represent two-thirds of the total voting power of all shares of capital stock of
the Corporation outstanding on a fully-diluted basis, (ii) any applicable
waiting period under the HSR Act shall not have expired or been terminated,
(iii) Parent shall not have received financing necessary for it and Sub to
consummate the Offer and the other transactions contemplated by the Agreement in
accordance with the terms of the bank commitment letter dated December 22, 1997,
to Parent from The Chase Manhattan Bank, Chase Securities Inc. and Goldman Sachs
Credit Partners L.P. or (iv) if, at any time on or after the date of the
Agreement and at or before the Share Purchase any of the following shall occur:

A-I
<PAGE>

(a) there shall be instituted or pending any action or proceeding by
any government or governmental authority or agency, domestic or foreign, or
by any other Person, domestic or foreign, before any court or governmental
authority or agency, domestic or foreign, (i) challenging or seeking to, or
which could reasonably be expected to make illegal, impede, delay or
otherwise directly or indirectly materially restrain, prohibit or make more
costly the Offer or the Merger or seeking to obtain material damages, (ii)
seeking to prohibit or materially limit the ownership or operation by
Parent or Sub of all or any material portion of the business or assets of
the Corporation or any of its Subsidiaries taken as a whole or to compel
Parent or Sub to dispose of or hold separately all or any material portion
of the business or assets of Parent or Sub or the Corporation or any of its
Subsidiaries taken as a whole or seeking to impose any material limitation
by reason of the transactions contemplated by the Agreement on the ability
of Parent or Sub to conduct its business or own such assets, (iii) seeking
to impose limitations on the ability of Parent or Sub effectively to
exercise full rights of ownership of the shares of Common Stock, including,
without limitation, the right to vote any shares of Common Stock acquired
or owned by Sub or Parent on all matters properly presented to the
Corporation's shareholders, (iv) seeking to require divestiture by Parent
or Sub of any shares of Common Stock, (v) otherwise directly or indirectly
relating to the Offer or the Merger and which, could reasonably be expected
to materially adversely affect the Corporation or any of its Subsidiaries
or Sub or Parent, or (vi) otherwise having a Material Adverse Effect on the
Corporation and its Subsidiaries taken as a whole;

(b) there shall be any action taken, or any statute, rule,
regulation, legislation, interpretation, judgment, order or injunction
proposed, enacted, enforced, promulgated, amended, issued or deemed
applicable to (i) Parent, Sub, the Corporation or any Subsidiary of the
Corporation or (ii) the Offer or the Merger, by any legislative body,
court, government or governmental, administrative or regulatory authority
or agency, domestic or foreign, other than the routine application of the
waiting period provisions of the HSR Act to the Offer or to the Merger,
which could reasonably be expected to directly or indirectly, result in any
of the consequences referred to in clauses (i) through (vi) of paragraph
(a) above;

A-II

<PAGE>

(c) any change (other than as a result of general economic
conditions) shall have occurred, or Parent shall have become aware of any
fact, that is reasonably likely to have a Material Adverse Effect on the
Corporation and its Subsidiaries taken as a whole;

(d) any of the representations or warranties made by the Corporation
in the Agreement that are qualified as to materiality shall be untrue or
incorrect in any respect or any of such representations and warranties that
are not so qualified shall be untrue or incorrect in any material respect
as of the date of this Agreement or immediately prior to the Share
Purchase;

(e) the Corporation's Board of Directors shall have withdrawn,
modified or amended in any respect adverse to Parent or Sub its
recommendation of the Offer or the Merger, or shall have resolved to do so;

(f) the Corporation shall have failed to perform in any material
respect any material obligation or to comply in any material respect with
any material agreement or material covenant of the Corporation to be
performed or complied with by it under this Agreement; or

(g) the Agreement shall have been terminated in accordance with its
terms;

which, in the reasonable judgment of Sub, makes it inadvisable to proceed with
such acceptance for payment or payment.

The foregoing conditions (including those set forth in clauses (i)-(iv)
above) are for the sole benefit of the Parent and Sub and may be asserted by any
of them, or may be waived by the Parent or Sub, in whole or in part at any time
and from time to time in its sole discretion. The failure by the Parent or Sub
at any time to exercise any of the foregoing rights shall not be deemed a waiver
of any such right and each such right shall be deemed an ongoing right which may
be asserted at any time and from time to time.

A-III

<PAGE>

THE UNION CORPORATION

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

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

ARTICLE I

CORPORATE NAME

The name of the Corporation is THE UNION CORPORATION (hereinafter
called the "Corporation").

ARTICLE II

REGISTERED OFFICE; REGISTERED AGENT

The address of the current registered office is 1013 Centre Road, City
of Wilmington, County of New Castle, Delaware 19805-1297. The name of the
current registered agent is CSC The United States Corporation Company.

ARTICLE III

CORPORATE PURPOSE

The purpose of the Corporation is to engage, directly or indirectly,
in any lawful act or activity for which corporations may be organized under the
General Corporation Law of the State of Delaware as from time to time in effect.

<PAGE>

ARTICLE IV

CAPITAL STOCK

The total authorized capital stock of the Corporation shall be 100
shares of Common Stock, all of which are $0.01 par value.

ARTICLE V

BOARD OF DIRECTORS

The business of the Corporation shall be managed under the direction
of the Board of Directors except as otherwise provided by law. The number of
Directors of the Corporation shall be fixed from time to time by, or in the
manner provided in, the By-Laws. Election of Directors need not be by written
ballot unless the By-Laws of the Corporation shall so provide.

ARTICLE VI

BY-LAWS

The Board of Directors may make, alter or repeal the By-Laws of the
Corporation except as otherwise provided in the By-Laws adopted by the
Corporation's stockholders.

ARTICLE VII

INDEMNIFICATION

To the fullest extent permitted by the Delaware General Corporation
Law as the same exists or may hereafter be amended, a

-2-

<PAGE>

director of this Corporation shall not be liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as director.
Without limiting the foregoing in any respect, a director of this Corporation
shall not be personally liable to the Corporation or its stockholders for
monetary damages for breach of fiduciary duty as director, except for liability
(i) for any breach of the director's duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174 of
the Delaware General Corporation Law, or (iv) for any transaction from which the
director derived an improper personal benefit.

A. RIGHT TO INDEMNIFICATION. (1) Each person who was or is made
party or is threatened to be made a party to or is involved in any action, suit
or proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was a director or officer
of the Corporation, including service with respect to employee benefit plans,
whether the basis of such proceeding is alleged action in an official capacity
as a director, officer, employee or agent or in any other capacity while serving
as a director, officer, employee or agent, shall be indemnified and held
harmless by the Corporation to the fullest

-3-

<PAGE>

extent authorized by the Delaware General Corporation Law, as the same exists or
may hereafter be amended (but, in case of any such amendment, only to the extent
that such amendment permits the Corporation to provide broader indemnification
rights than said law permitted the Corporation to provide prior to such
amendment), against all expense, liability and loss (including attorneys' fees,
judgments, fines, ERISA exercise taxes or penalties and amounts paid or to be
paid in settlement) reasonably incurred or suffered by such person in connection
therewith and such indemnification shall continue as to a person who has ceased
to be a director, officer, employee or agent and shall inure to the benefit of
his or her heirs, executors, and administrators, and (2) the Corporation may
indemnify and hold harmless in such manner any person who was or is made a party
or is threatened to be made a party to a proceeding by reason of the fact that
he, she or a person of whom he or she is the legal representative, is or was
serving at the request of the Corporation as a director, officer, employee or
agent of another corporation or a partnership, joint venture, trust or other
enterprise; provided, however, that except as provided in Section B of this
Article, the Corporation shall indemnify any such person seeking indemnification
in connection with a proceeding (or part thereof) initiated by such person only
if such proceeding (or part thereof) was authorized by the board of directors of
the Corporation. In the event a director or officer of the Corporation shall
serve as a director, officer, employee

-4-

<PAGE>

or agent of any corporation, partnership, joint venture, trust or other
enterprise in which the Corporation maintains an investment, it shall be
conclusively presumed for purposes of the indemnification provided for in
subsection (2) above that such service has been undertaken at the request of the
Corporation. The foregoing presumption shall apply regardless of whether such
director or officer is serving such entity at the request of a third party or
that his or her service with such entity was commenced prior to the
effectiveness of this article of the certificate of incorporation or prior to
his or her becoming an officer or director of the Corporation. The right to
indemnification conferred in subsection (1) above shall be a contract right
based upon an offer from the Corporation which shall be deemed to be accepted by
such person's service or continued service with the Corporation for any period
after the adoption of this article of the certificate of incorporation and shall
include the right to be paid by the Corporation the expenses incurred in
defending any such proceeding in advance of its final disposition; provided,
however, that, if the Delaware General Corporation Law requires, the payment of
such expenses incurred by a director or officer in his or her capacity as a
director or officer (and not in any other capacity in which service was or is
rendered by such person while a director or officer, including, without
limitation, service to an employee benefit plan) in advance of the final
disposition of a proceeding, shall be made only upon delivery to the Corporation

-5-

<PAGE>

of an undertaking, by or on behalf of such director or officer, to repay all
amounts so advanced if it shall ultimately be determined that such director or
officer is not entitled to be indemnified under this Section or otherwise. The
Corporation may, by action of its board of directors, provide indemnification to
employees or agents of the Corporation with the same scope and effect as the
foregoing indemnification of directors and officers.

B. RIGHT OF CLAIMANT TO BRING SUIT. If a claim under Section A(1)
of this Article is not paid in full by the Corporation within thirty days after
a written claim has been received by the Corporation, the claimant may at any
time thereafter bring suit against the Corporation to recover the unpaid amount
of the claim and, if successful in whole or in part, the claimant shall be
entitled to be paid also the expenses (including attorneys' fees) of prosecuting
such claim. It shall be a defense to any such action (other than an action
brought to enforce a claim for expenses incurred in defending any proceeding in
advance of its final disposition where the required undertaking, if any is
required, has been rendered to the Corporation) that the claimant has not met
the standards of conduct which make it permissible under the Delaware General
Corporation Law for the Corporation to indemnify the claimant for amount
claimed, but the burden of proving such defense shall be on the Corporation.
Neither the failure of the Corporation

-6-

<PAGE>

(including its board of directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he or she has met the applicable standard of conduct set forth in the
Delaware General Corporation Law, nor an actual determination by the Corporation
(including its board of directors, independent legal counsel, or its
stockholders) that the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that the claimant has
not met the applicable standard of conduct.

C. NONEXCLUSIVITY OF RIGHTS. The right to indemnification and the
payment of expenses incurred in defending a proceeding in advance of its final
disposition conferred in this Section shall not be exclusive of any other right
which any person may have or hereafter acquire under any statute, provision of
the certificate of incorporation, by-law, agreement, vote of stockholders or
disinterested directors or otherwise.

D. INSURANCE. The Corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust or other
enterprise against any such expense, liability or loss, whether or not the
Corporation would have the power to indemnify such

-7-

<PAGE>

person against such expense, liability or loss under the liability Delaware
General Corporation Law.

ARTICLE VIII

AMENDMENT

The Corporation reserves the right to amend, alter, change or repeal
any provision contained in this Certificate of Incorporation in the manner now
or hereafter prescribed by statute, and all rights conferred upon stockholders
herein are granted subject to this reservation.

IN WITNESS WHEREOF, The Union Corporation has caused this certificate
to be signed by [__________], its Chairman of the Board of Directors and
attested by [__________], its Secretary, this __th day _________, 19__.

THE UNION CORPORATION

By:
--------------------------------
Name:
Title: Chairman of the
Board of Directors

-8-

<PAGE>
Exhibit 99.(c)(3)

AGREEMENT

AGREEMENT dated as of December 22, 1997, among OUTSOURCING SOLUTIONS
INC., a Delaware corporation ("Parent"), SHERMAN ACQUISITION CORPORATION, a
Delaware corporation and a wholly owned subsidiary of Parent ("Sub"), and the
other parties signatory hereto (each a "Stockholder" and collectively, the
"Stockholders").

W I T N E S S E T H :

WHEREAS, contemporaneously herewith, Parent, Sub and The Union
Corporation, a Delaware corporation (the "Company"), have entered into a Share
Purchase Agreement and Plan of Merger (as such agreement may hereafter be
amended from time to time, the "Merger Agreement"; capitalized terms used and
not defined herein have the respective meanings ascribed to them in the Merger
Agreement), pursuant to which Parent shall cause Sub to make an offer to
purchase all of the issued and outstanding shares of Company Common Stock (the
"Offer") and Sub will be merged with and into the Company (the "Merger");

WHEREAS, in furtherance thereof, as soon as practicable (and not later
than five business days) after the execution and delivery of the Merger
Agreement, Sub shall commence the Offer; and

WHEREAS, as an inducement and a condition to entering into the Merger
Agreement, Parent has required that the Stockholders agree, and the Stockholders
have each agreed, to enter into this Agreement;

NOW, THEREFORE, in consideration of the foregoing and the mutual
premises, representations, warranties, covenants and agreements contained
herein, the parties hereto, intending to be legally bound, hereby agree as
follows:

1. Definitions. For purposes of this Agreement:

(a) "Company Common Stock" shall mean at any time the common stock,
$0.50 par value, of the Company.

(b) "Person" shall mean an individual, corporation, partnership,
joint venture, association, trust, unincorporated organization or other entity.

<PAGE>

2. Tender of Shares.

(a) Each Stockholder hereby agrees to validly tender (and not to
withdraw) pursuant to and in accordance with the terms of the Offer (provided
that the Offer is not amended in a manner prohibited by the Merger Agreement),
in a timely manner for acceptance by Sub in the Offer, the number of shares of
Company Common Stock set forth opposite such Stockholder's name on Schedule I
hereto and the Rights (as defined in the Rights Agreement) associated with such
shares (the "Existing Shares" and, together with any shares of Company Common
Stock acquired by such Stockholder after the date hereof and prior to the
termination of this Agreement (and any Rights associated therewith) whether upon
the exercise of options, warrants or rights, the conversion or exchange of
convertible or exchangeable securities, or by means of purchase, dividend,
distribution or otherwise and acquired by such Stockholder solely in its
capacity as a stockholder, the "Shares"), owned by such Stockholder. Each
Stockholder hereby acknowledges and agrees that Parent's obligation to accept
for payment and pay for Company Common Stock in the Offer, including the Shares,
is subject to the terms and conditions of the Offer. Each Stockholder shall be
entitled to receive the highest price paid by Sub pursuant to the Offer.

(b) Each Stockholder hereby agrees to permit Parent and Sub to
publish and disclose in the Offer Documents and, if approval of the stockholders
of the Company is required under applicable law, the Proxy Statement (including
all documents and schedules filed with the SEC) its identity and ownership of
Company Common Stock and the nature of its commitments, arrangements and
understandings under this Agreement.

3. Provisions Concerning Company Common Stock. Each Stockholder
hereby agrees that during the period commencing on the date hereof and
continuing until the first to occur of (i) the Effective Time and (ii) the
termination of this Agreement pursuant to Section 8, at any meeting of the
holders of Company Common Stock, however called, or in connection with any
written consent of the holders of Company Common Stock, such Stockholder shall
vote (or cause to be voted) the Shares owned by such Stockholder whether issued,
heretofore owned or hereafter acquired, (i) in favor of the Merger and each of
the other actions contemplated by the Merger Agreement and this Agreement and
any actions required in furtherance thereof and hereof; (ii) against any action
or agreement that would result in a breach in any respect of any

2
<PAGE>

covenant, representation or warranty or any other obligation or agreement of
the Company under the Merger Agreement or this Agreement; and (iii) except as
otherwise agreed to in writing in advance by Parent, against the following
actions (other than the Merger and the transactions contemplated by the
Merger Agreement): (A) any extraordinary corporate transaction, such as a
merger, consolidation or other business combination involving the Company or
its subsidiaries; (B) a sale, lease or transfer of a material amount of
assets of the Company or its subsidiaries, or a reorganization,
recapitalization, dissolution or liquidation of the Company or its
subsidiaries; (C) (1) any change in a majority of the persons who constitute
the board of directors of the Company; (2) any change in the present
capitalization of the Company or any amendment of Company's Certificate of
Incorporation or By-laws; (3) any other material change in the Company's
corporate structure or business; or (4) any other action involving the
Company or its subsidiaries which is intended, or could reasonably be
expected, to impede, interfere with, delay, postpone, or materially adversely
affect the Share Purchase, the Merger and the transactions contemplated by
this Agreement and the Merger Agreement. No Stockholder shall enter into any
agreement or understanding with any Person or entity the effect of which
would be to violate the provisions and agreements contained in this Section 3.

4. Representations and Warranties of the Stockholders. Each
Stockholder, as to itself, hereby severally represents and warrants to Parent as
follows:

(a) Ownership of Shares. Such Stockholder is the record and
beneficial owner of the number of Shares set forth opposite such
Stockholder's name on Schedule I hereto. On the date hereof, the Existing
Shares set forth opposite such Stockholder's name on Schedule I hereto
constitute all of the Shares owned by such Stockholder on the date hereof.
Except as set forth on Schedule I, such Stockholder has sole voting power and
sole power to issue instructions with respect to the matters set forth in
Sections 2 and 3 hereof, sole power of disposition, sole power of conversion,
sole power to demand appraisal rights and sole power to agree to all of the
matters set forth in this Agreement, in each case with respect to all of the
Existing Shares set forth opposite such Stockholder's name on Schedule I
hereto, with no limitations, qualifications or restrictions on such rights,
subject to applicable securities laws and the terms of this Agreement. Other
than this Agreement and the Merger Agreement, there is no option, warrant,
right, call, proxy, agreement, commitment

<PAGE>

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 Existing Shares, any interest therein or any rights with
respect thereto, or related to the voting, disposition or control of the
Existing Shares, or (ii) obligates such Shareholder to grant, offer or enter
into any of the foregoing.

(b) Power; Binding Agreement. Except as set forth on Schedule I,
such Stockholder has the legal capacity, power and authority to enter into and
perform all of such Stockholder's obligations under this Agreement. The
execution, delivery and performance of this Agreement by such Stockholder will
not violate any other agreement to which such Stockholder is a party including,
without limitation, any voting agreement, stockholders agreement or voting
trust. This Agreement has been duly and validly executed and delivered by such
Stockholder and constitutes a valid and binding agreement of such Stockholder,
enforceable against such Stockholder 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. There
is no beneficiary or holder of a voting trust certificate or other interest of
any trust of which such Stockholder is trustee whose consent is required for the
execution and delivery of this Agreement or the consummation by such Stockholder
of the transactions contemplated hereby.

(c) No Conflicts. Except for (i) filings and approvals under the
HSR Act or the Antitrust Laws, if applicable, (A) no filing with, and no
permit, authorization, consent or approval of, any state or federal public
body or authority is necessary for the execution of this Agreement by such
Stockholder and the consummation by such Stockholder of the transactions
contemplated hereby and (B) none of the execution and delivery of this
Agreement by such Stockholder, the consummation by such Stockholder of the
transactions contemplated hereby or compliance by such Stockholder with any
of the provisions hereof shall (1) result in a violation or breach of, or
constitute (with or without notice or lapse of time or both) a default (or
give rise to any third party right of termination, cancellation, material
modification or acceleration) under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement or other instrument or
obligation of any kind to which such Stockholder is a party or by which such
Stockholder may be

<PAGE>

bound, or (2) violate any order, writ, injunction, decree, judgment, order,
statute, rule or regulation applicable to such Stockholder.

(d) No Encumbrances. Such Stockholder's Shares and the certificates
representing such Shares are now, and at all times during the term hereof will
be, held by such Stockholder, or by a nominee or custodian for the benefit of
such Stockholder, free and clear of all liens, claims, security interests,
proxies, voting trusts or agreements, understandings or arrangements or any
other encumbrances whatsoever, except for any such encumbrances or proxies
arising hereunder. The transfer by such Stockholder of its Shares to Sub in the
Offer shall pass to and unconditionally vest in Sub good and valid title to all
Shares, free and clear of all claims, liens, restrictions, security interests,
pledges, limitations and encumbrances whatsoever.

(e) Reliance by Parent. Such Stockholder understands and
acknowledges that Parent is entering into, and causing Sub to enter into, the
Merger Agreement in reliance upon such Stockholder's execution and delivery of
this Agreement.

5. Covenants of the Stockholders. Each Stockholder covenants and
agrees as follows:

(a) Restriction on Transfer, Proxies and Non-Interference. Beginning
on the date hereof and ending on the date this Agreement shall terminate
pursuant to Section 8 hereof, such Stockholder shall not (i) except as
contemplated by the Offer, directly or indirectly, offer for sale, sell,
transfer, tender, pledge, encumber, assign or otherwise dispose of, or enter
into any contract, option or other arrangement or understanding with respect to
or consent to the offer for sale, transfer, tender, pledge, encumbrance,
assignment or other disposition of, any or all of such Stockholder's Shares or
any interest therein; (ii) except as contemplated by this Agreement, grant any
proxies or powers of attorney, deposit any Shares into a voting trust or enter
into a voting agreement with respect to any Shares; or (iii) take any action
that would make any representation or warranty of such Stockholder contained
herein untrue or incorrect or have the effect of preventing or disabling such
Stockholder from performing such Stockholder's obligations under this Agreement.

<PAGE>

(b) Waiver of Appraisal Rights. Such Stockholder hereby irrevocably
waives any rights of appraisal or rights to dissent from the Merger that such
Stockholder may have.

(c) Stop Transfer; Changes in Shares. Such Stockholder agrees with,
and covenants to, Parent that such Stockholder shall not request that the
Company register the transfer (book-entry or otherwise) of any certificate or
uncertificated interest representing any of such Stockholder's Shares, unless
such transfer is made in compliance with the Offer and this Agreement. In the
event of a stock dividend or distribution, or any change in the Company Common
Stock by reason of any stock dividend, split-up, recapitalization, combination,
exchange of shares or the like, the term "Shares" shall be deemed to refer to
and include the Shares as well as all such stock dividends and distributions and
any shares into which or for which any or all of the Shares may be changed or
exchanged and the Purchase Price shall be approximately adjusted. Such
Stockholder shall be entitled to receive any cash dividend paid by the Company
during the term of this Agreement until its Shares are purchased in the Offer.

6. Fiduciary Duties. Notwithstanding anything in this Agreement to
the contrary, the covenants and agreements set forth herein shall not prevent
any Stockholder from taking any action, subject to the applicable provisions of
the Merger Agreement, while acting in his capacity as a director of the Company.

7. Miscellaneous.

(a) Further Assurances. From time to time, at the other party's
request and without further consideration, each of the parties hereto shall
execute and deliver such additional documents and take all such further lawful
action as may be necessary or desirable to consummate and make effective, in the
most expeditious manner practicable, the transactions contemplated by this
Agreement.

(b) Entire Agreement. This Agreement and the Merger Agreement
constitute the entire agreement between the parties with respect to the subject
matter hereof and supersedes all other prior agreements and understanding, both
written and oral, between the parties with respect to the subject matter hereof.

<PAGE>

such Stockholder's Shares and shall be binding upon any person or entity to
which legal or beneficial ownership of such Shares shall pass, whether by
operation of law or otherwise, including, without limitation, such
Stockholder's heirs, guardians, administrators or successors. Notwithstanding
any transfer of Shares, the transferor shall remain liable for the
performance of all obligations under this Agreement of the transferor.

(d) Assignment. This Agreement shall not be assigned by operation of
law or otherwise without the prior written consent of the other party provided
that Parent may assign, at its sole discretion, its rights and obligations
hereunder to any direct or indirect wholly-owned subsidiary of Parent, although
no such assignment shall relieve Parent of its obligations hereunder if such
assignee does not perform such obligations and provided further that, in the
event of a Stockholder's death or incapacity, such Stockholder's rights
hereunder shall inure to his heirs, guardians, administrators or successors.

(e) Amendments, Waivers, Etc. This Agreement may not be amended,
changed, supplemented, waived or otherwise modified or terminated, except upon
the execution and delivery of a written agreement executed by the parties.

(f) Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, telegram, telex
or telecopy, or by mail (registered or certified mail, postage prepaid, return
receipt requested) or by any courier service, such as Federal Express, providing
proof of delivery. All communications hereunder shall be delivered to the
respective parties at the following addresses:

If to a Stockholder: At the address set forth on Schedule I hereto

copy to: Zimet, Haines, Friedman & Kaplan
460 Park Avenue
New York, New York 10022

Attention: Robert H. Haines, Esq.

<PAGE>

If to Parent or Sub:

Outsourcing Solutions Inc.
390 South Woods Mill Road
Suite 150
Chesterfield, Missouri 63017

Attention: Timothy G. Beffa

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

Attention: Frank L. Schiff, Esq.

or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.

(g) Severability. Whenever possible, each provision or portion of
any provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.

(h) Specific Performance. Each of the parties hereto recognizes and
acknowledges that a breach by it of any covenants or agreements contained in
this Agreement will cause the other party to sustain damages for which it would
not have an adequate remedy at law for money damages, and therefore each of the
parties hereto agrees that in the event of any such breach the aggrieved party
shall be entitled to the remedy of specific performance of such covenants and
agreements and injunctive and other equitable relief in addition to any other
remedy to which it may be entitled, at law or in equity.

(i) Remedies Cumulative. All rights, powers and remedies provided
under this Agreement or otherwise available in respect hereof at law or in
equity shall be cumulative and not alternative, and the exercise of any
thereof by any party

<PAGE>

shall not preclude the simultaneous or later exercise of any other such
right, power or remedy by such party.

(j) No Waiver. The failure of any party hereto to exercise any
right, power or remedy provided under this Agreement or otherwise available in
respect hereof at law or in equity, or to insist upon compliance by any other
party hereto with its obligations hereunder, and any custom or practice of the
parties at variance with the terms hereof shall not constitute a waiver by such
party of its right to exercise any such or other right, power or remedy or to
demand such compliance.

(k) No Third Party Beneficiaries. This Agreement is not intended to
be for the benefit of, and shall not be enforceable by, any person or entity who
or which is not a party hereto.

(l) Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Delaware, without giving effect to the
principles of conflicts of law thereof.

(m) Jurisdiction. Each party hereby irrevocably submits to the
exclusive jurisdiction of the United States District Court for the Southern
District of New York or any court of the State of New York located in the City
of New York in any action, suit or proceeding arising in connection with this
Agreement, and agrees that any such action, suit or proceeding shall be brought
only in such court (and waives any objection based on forum non conveniens or
any other objection to venue therein); provided, however, that such consent to
jurisdiction is solely for the purpose referred to in this paragraph (m) and
shall not be deemed to be a general submission to the jurisdiction of said
Courts or in the States of Delaware or New York other than for such purposes.
EACH PARTY HERETO HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN CONNECTION WITH
ANY SUCH ACTION, SUIT OR PROCEEDING.

(n) Descriptive Headings. The descriptive headings used herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.

(o) Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but all of which, taken
together, shall constitute one and the same Agreement.

<PAGE>

8. Termination. This Agreement shall terminate upon the termination
of the Merger Agreement pursuant to Section 8.1 and no party shall have any
rights or obligations hereunder and this Agreement shall become null and void
and have no effect.

<PAGE>

IN WITNESS WHEREOF, Parent, Sub and the Stock-holders have caused this
Agreement to be duly executed as of the day and year first above written.

OUTSOURCING SOLUTIONS INC.

By /s/ TYLER T. ZACHEM
-------------------------------
Name: Tyler T. Zachem
Title: Vice President

SHERMAN ACQUISITION CORPORATION

By /s/ TYLER T. ZACHEM
-------------------------------
Name: Tyler T. Zachem
Title: Vice President and Treasurer

<PAGE>

STOCKHOLDERS:

/s/ MELVIN L. COOPER
-----------------------------------
MELVIN L. COOPER

IRA MLC TRUST

By /s/ MELVIN L. COOPER
--------------------------------
Name: Melvin L. Cooper
Title: Trustee

MELVIN L. COOPER AND HARRY R.
HAUSER, TRUSTEE, THE MLC
TRUST U/A 10/20/92

By /s/ MELVIN L. COOPER
--------------------------------
Name: Melvin L. Cooper
Title: Trustee

/s/ GORDON S. DUNN
------------------------------------
GORDON S. DUNN

/s/ WILLIAM B. HEWITT
------------------------------------
WILLIAM B. HEWITT

/s/ ROBERT A. KERR
------------------------------------
ROBERT A. KERR

<PAGE>

BEAUFORT IRREVOCABLE TRUST
NUMBER ONE

By /s/ ROBERT A. KERR
--------------------------------
Name: Robert A. Kerr
Title: Co-Trustee

/s/ TWYLIAH H. KERR
------------------------------------
TWYLIAH H. KERR

ROBERT A. KERR KEOGH PLAN

By /s/ ROBERT A. KERR
--------------------------------
Name: Robert A. Kerr

/s/ GEORGE M. MACAULAY
------------------------------------
GEORGE M. MACAULAY

MR. AND MRS. GEORGE MACAULAY, JT

By /s/ GEORGE M. MACAULAY JANET S. MACAULAY
----------------------------------------
Name: George M. Macaulay, Janet S. Macaulay
Title: Trustees

TSI MONEY PURCHASE PENSION
PLAN FBO GEORGE MACAULAY

By /s/ GEORGE M. MACAULAY
--------------------------------
Name: George M. Macaulay

<PAGE>

/s/ JAMES C. MILLER III
------------------------------------
JAMES C. MILLER III

/s/ MR. AND MRS. JAMES MILLER III
------------------------------------
MR. AND MRS. JAMES MILLER III

/s/ HERBERT R. SILVER
------------------------------------
HERBERT R. SILVER

/s/ MRS. H. SILVER
------------------------------------
MRS. H. SILVER

/s/ NICHOLAS P. GILL
------------------------------------
NICHOLAS P. GILL

/s/ SHELDON ZUCKER
------------------------------------
SHELDON ZUCKER

/s/ BERNARD SILVER
------------------------------------
BERNARD SILVER

/s/ HERBERT A. DENTON
------------------------------------
HERBERT A. DENTON

/s/ ROBERT A. MARSHALL
------------------------------------
ROBERT A. MARSHALL

<PAGE>

/s/ JAMES M. McCORMICK
------------------------------------
JAMES M. McCORMICK

<PAGE>

SCHEDULE I

Table of stock Ownership of Executive Officers and Directors

Name Shares
- ---- ------

- --------------------------------------------------------------------------------
Melvin L. Coop -0-
- --------------------------------------------------------------------------------
IRA MLC Trust 5,800
- --------------------------------------------------------------------------------
Melvin L. Cooper and Harry R. Hauser,
Trustee, The MLC Trust U/A 10/20/92 109,476
- --------------------------------------------------------------------------------
Gordon S. Dunn 10,000
- --------------------------------------------------------------------------------
William B. Hewitt 60,000
- --------------------------------------------------------------------------------
Robert A. Kerr 12,790
- --------------------------------------------------------------------------------
Beaufort Irrevocable Trust 900
Number One
- --------------------------------------------------------------------------------
Twyliah H. Kerr 2,000
- --------------------------------------------------------------------------------
Robert A. Kerr Keogh Plan 1,000
- --------------------------------------------------------------------------------
George M. Macaulay -0-
- --------------------------------------------------------------------------------
Mr. and Mrs. George Macaulay, JT 2,400
- --------------------------------------------------------------------------------
TSI Money Purchase Pension Plan 1,650
FBO George Macaulay
- --------------------------------------------------------------------------------
James C. Miller III -0-
- --------------------------------------------------------------------------------
Mr. and Mrs. James Miller III 5,700
- --------------------------------------------------------------------------------
Herbert R. Silver 13,000
- --------------------------------------------------------------------------------
Mrs. H. Silver 1,000
- --------------------------------------------------------------------------------
Nicholas P. Gill 4,500
- --------------------------------------------------------------------------------
Sheldon Zucker 1,000
- --------------------------------------------------------------------------------
Bernard Silver 7,000
- --------------------------------------------------------------------------------
Herbert A. Denton -0-
- --------------------------------------------------------------------------------
Robert A. Marshall -0-
- --------------------------------------------------------------------------------
James M. McCormick -0-
- --------------------------------------------------------------------------------