UNITED ROAD SERVICES INC, S-1/A, 1998-04-03

UNITED ROAD SERVICES INC
S-1/A, 1998-04-03
AUTOMOTIVE REPAIR, SERVICES & PARKING

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 3, 1998

REGISTRATION NO. 333-46925

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

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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

AMENDMENT NO. 1

TO
FORM S-1

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

---------------
UNITED ROAD SERVICES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
(STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION)
7549
(PRIMARY STANDARD INDUSTRIAL
CLASSIFICATION CODE NUMBER)
94-3278455
(I.R.S. EMPLOYER
IDENTIFICATION NO.)
8 AUTOMATION LANE
ALBANY, NEW YORK 12205
(518) 446-0140
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
EDWARD T. SHEEHAN
CHIEF EXECUTIVE OFFICER
UNITED ROAD SERVICES, INC.
8 AUTOMATION LANE
ALBANY, NEW YORK 12205
(518) 446-0140
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)

Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]

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

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.

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<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

PROSPECTUS SUBJECT TO COMPLETION, DATED APRIL 3, 1998
, 1998

5,500,000 SHARES

[LOGO] UNITED ROAD SERVICES, INC.

COMMON STOCK

All of the shares of common stock, $0.001 par value per share, offered hereby
are being offered by United Road Services, Inc.

The Company intends to use certain of the net proceeds of the Offering to
acquire seven previously unaffiliated companies. Of the net proceeds of the
Offering, $27.8 million, or approximately 46.4%, will be paid to the owners of
these companies. The Company also will issue 2,375,741 shares of Common Stock
to the owners of these companies and assume aggregate indebtedness of $9.8
million.

Prior to the Offering, there has been no public market for the Common Stock.
It is currently estimated that the initial public offering price will be
between $11.00 and $13.00 per share. See "Underwriting" for information
relating to the factors that will be considered in determining the initial
public offering price.

Application has been made to have the Common Stock approved for listing on
the Nasdaq National Market under the symbol "URSI."

SEE "RISK FACTORS" BEGINNING ON PAGE 8 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.

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<TABLE>
<CAPTION>
PRICE UNDERWRITING PROCEEDS
TO THE DISCOUNTS AND TO THE
PUBLIC COMMISSIONS(1) COMPANY(2)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share.................................... $ $ $
Total(3)..................................... $ $ $
</TABLE>
- --------------------------------------------------------------------------------
(1) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."

(2) Before deducting expenses of the Offering payable by the Company estimated
at $1,500,000.
(3) The Company has granted the Underwriters an option exercisable within 30
days after the date of this Prospectus to purchase up to an aggregate of
825,000 additional shares of Common Stock, on the same terms as set forth
above, at the Price to the Public, less the Underwriting Discounts and
Commissions, solely for the purpose of covering over-allotments, if any. If
such option is exercised in full, the total Price to the Public, Underwriting
Discounts and Commissions and Proceeds to the Company will be $ ,
$ and $ , respectively. See "Underwriting."

The shares of Common Stock are being offered by the several Underwriters
subject to prior sale, when, as and if delivered to and accepted by them,
subject to certain prior conditions. The Underwriters reserve the right to
reject any order in whole or in part. It is expected that delivery of the
shares of Common Stock will be made in New York, New York on or about
, 1998.

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
CREDIT SUISSE FIRST BOSTON
BANCAMERICA ROBERTSON STEPHENS
<PAGE>

[Pictures of various towing and transport vehicles to be portrayed on inside
front cover]

The Company intends to furnish its stockholders with annual reports
containing financial statements for each fiscal year audited by independent
auditors.

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

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON
STOCK. SPECIFICALLY, THE UNDERWRITERS MAY OVERALLOT IN CONNECTION WITH THE
OFFERING AND MAY BID FOR AND PURCHASE SHARES OF THE COMMON STOCK IN THE OPEN
MARKET. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."

2
<PAGE>

PROSPECTUS SUMMARY

United Road Services, Inc. has entered into definitive acquisition agreements
to acquire, in separate transactions, (the "Acquisitions") in exchange for cash
and shares of its common stock, par value $0.001 per share (the "Common
Stock"), all of the outstanding common stock and ownership interests of eight
motor vehicle and equipment towing and transport service companies.
Simultaneously with and as a condition to consummation of the offering made by
this Prospectus (the "Offering"), seven of the eight Acquisitions will be
consummated (each of the seven companies then being acquired being referred to
herein as a "Founding Company" and collectively the "Founding Companies"). The
acquisition of the eighth company, Keystone Towing, Inc. ("Keystone"), requires
municipal approval of a contract assignment and is expected to be consummated
after the Offering is completed. Unless otherwise indicated, all references to
the "Company" herein include the Founding Companies, Keystone and United Road
Services, Inc., collectively, and references herein to United Road Services
mean United Road Services, Inc. prior to consummation of the Acquisitions. For
more information about the Acquisitions, see "Certain Transactions."

The following summary is qualified in its entirety by, and should be read in
conjunction with, the more detailed information and financial statements,
including the related notes thereto, appearing elsewhere in this Prospectus.
Unless otherwise indicated, all share, per share and financial information in
this Prospectus: (i) has been adjusted to give effect to the Acquisitions; (ii)
assumes no exercise of the Underwriters' over-allotment option; (iii) assumes
an initial public offering price of $12.00 per share of Common Stock (the
"Offering Price"), which is the midpoint of the estimated range of the initial
public offering price; and (iv) has been adjusted to give effect to a 3.72-for-
1 split of the Common Stock effected in February 1998 and the amendment and
restatement of the Company's certificate of incorporation in February 1998.

THE COMPANY

United Road Services was formed in July 1997 to become a leading national
provider of motor vehicle and equipment towing and transport services. United
Road Services has entered into definitive acquisition agreements to acquire
eight towing and transport service companies. Upon consummation of the Offering
and the acquisitions of the seven Founding Companies, the Company will be one
of the largest providers of these services in the United States. The Founding
Companies have been in business for periods ranging from ten to 48 years and
operate an aggregate of 16 facilities located in seven states. Combined net
revenue of the Founding Companies increased at a compound annual rate of
approximately 27% from 1995 through 1997.

The Company offers a broad range of towing and transport services, including
towing, impounding and storing motor vehicles, conducting lien sales and
auctions of abandoned vehicles, and transporting new and used vehicles,
insurance salvage vehicles and heavy construction equipment. The Company
derives revenue from towing and transport services based on distance, time or
fixed charges and from related impounding and storage fees. In the event that
impounded vehicles are not claimed by their owners within prescribed time
periods, the Company is paid from the proceeds of lien sales or auctions. The
Company's customers include commercial entities, such as automobile leasing
companies, insurance companies, automobile auction companies, automobile
dealers, repair shops and fleet operators; law enforcement agencies such as
police, sheriff and highway patrol departments; and individual motorists.

3
<PAGE>

unlicensed or uninsured drivers and unregistered vehicles, which results in
higher demand for towing and impounding services; the growing popularity of
leasing which, according to the National Automobile Dealers Association, has
risen from 5% of all new auto sales in 1985 to 30% in 1996, which increases
demand for transport services to move off-lease vehicles to auctions and
dealers for sale; and the increasing mobility of the United States workforce,
which increases demand for automobile transport in connection with career-
related moves.

STRATEGY

OPERATING STRATEGY

Provide High Quality Service. The Company believes that timely,
professional and dependable service is the primary generator of repeat
business in the towing and transport service industry. The Company will
seek to capitalize on the particular strengths of the individual Founding
Companies to offer high quality service to all of its customers. The
Company intends to implement proven practices of the Founding Companies
throughout its operations in areas such as dispatching technology, driver
training and professionalism, preventive maintenance and safety.

Expand Scope of Services and Customer Base. The Company intends to expand
the scope of its services by introducing certain capabilities of the
individual Founding Companies in other markets where the Company believes
such services can be successfully marketed. For example, the Company
intends to provide local vehicle pick-up and delivery services for cross-
country transporters at certain Founding Companies with regional towing
capabilities that have not offered such services to date. Additionally, the
Company intends to capitalize on its lien sale and auction experience by
implementing such practices at selected acquired operations that do not
currently offer them. The Company believes that its size and financial and
other resources will permit it to attract customers and contracts that
require greater towing, transporting and storage capabilities than those
possessed by local owner-operators. The Company intends to utilize its
geographic diversity to pursue additional business from existing customers
that operate on a regional or national basis, such as leasing companies,
insurance companies and automobile auction companies.

4
<PAGE>

facilities, thereby spreading certain fixed costs over a larger vehicle
fleet. The Company also expects to realize cost savings by centralizing
certain administrative functions at its headquarters in Albany, New York,
including insurance, employee benefits, accounting and risk management. In
the future, the Company intends to use its purchasing power to seek
improved pricing in areas such as fuel, vehicles and parts.

Maintain Local Expertise. The Company anticipates that the managements of
the Founding Companies and companies to be acquired in the future will
continue to maintain local control of their daily operations. The Company
believes that this will allow it to take advantage of the local and
regional market knowledge, name recognition and customer relationships
possessed by each acquired company.

ACQUISITION STRATEGY

Enter New Geographic Markets. As part of its "hub-and-spoke" operating
strategy, the Company intends to acquire established, high-quality
companies in markets where it can establish a leading market position to
serve as core businesses into which additional operations may be
consolidated. The Company also intends to acquire transport businesses with
complementary transport routes and capabilities in markets across North
America in order to create an integrated national transport network. The
Company further believes that by virtue of its regional towing and storage
operations it will accumulate significant quantities of vehicles requiring
subsequent delivery to auctions, repair shops or scrap metal facilities, so
that these operations will feed its transport services.

Expand Within Existing Geographic Markets. Once the Company has
established a core presence in a market, it will seek to strengthen its
market position by acquiring additional large companies that offer similar
services. The Company will also pursue "tuck-in" acquisitions of smaller
companies, whose businesses can be integrated into the Company's
operations, thereby utilizing the Company's existing infrastructure over a
broader vehicle fleet and revenue base. In addition, the Company may seek
to vertically integrate its operations by acquiring companies which offer
complementary services that the Company does not currently offer.

THE OFFERING

<TABLE>
<CAPTION>
<S> <C>
Common Stock offered.................. 5,500,000 shares
Common Stock to be outstanding after
the
Offering............................. 10,698,477 shares (1)
Use of proceeds....................... To pay the cash portion of the purchase
price for the Founding Companies and
Keystone, to repay certain outstanding
indebtedness of the Founding Companies and
for general corporate purposes, including
working capital and future acquisitions.
See "Use of Proceeds."
Proposed Nasdaq National Market Sym-
bol.................................. URSI
</TABLE>

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

(1) Includes 2,375,741 shares of Common Stock to be issued in connection
with the acquisitions of the Founding Companies, but excludes 377,624
shares to be issued in connection with the acquisition of Keystone
which is to be consummated after the Offering and 1,069,847 shares of
Common Stock reserved for issuance under the Company's stock option
plan, 255,000 of which are subject to outstanding options. See
"Management--1998 Stock Option Plan."

United Road Services, Inc. was incorporated in July 1997 in Delaware. The
Company's executive offices are located at 8 Automation Lane, Albany, New
York 12205, and its telephone number is (518) 446-0140.

5
<PAGE>

SUMMARY PRO FORMA COMBINED FINANCIAL DATA
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

United Road Services will consummate the acquisitions of the Founding
Companies simultaneously with consummation of the Offering, and expects to
acquire Keystone after completion of the Offering. The unaudited pro forma
combined statement of operations data present financial data for the Company
adjusted to give effect to (i) the acquisitions of the Founding Companies and
consummation of the Offering and application of the net proceeds therefrom as
if they occurred on January 1, 1997, and (ii) certain pro forma adjustments to
the historical statement of operations data described below. The unaudited pro
forma combined statement of operations data as further adjusted give additional
effect to the acquisition of Keystone as if it occurred on January 1, 1997. The
unaudited pro forma combined balance sheet data present financial data for the
Company giving effect to the acquisitions of the Founding Companies as if they
occurred on December 31, 1997. The unaudited pro forma combined as adjusted
balance sheet data give additional effect to the sale of the 5,500,000 shares
of Common Stock offered hereby and the application of the estimated net
proceeds therefrom as if they occurred on December 31, 1997. The unaudited pro
forma combined balance sheet data as further adjusted give additional effect to
the acquisition of Keystone as if it occurred on December 31, 1997. The
unaudited pro forma data is not necessarily indicative of the results the
Company would have obtained had these events actually occurred on such date or
of the Company's future results. See "Selected Financial Data," "Management's
Discussion and Analysis of Financial Condition and Results of Operations," and
the Unaudited Pro Forma Combined Financial Statements of the Company and
historical financial statements for certain of the Founding Companies and
Keystone including, in each case, the Notes thereto, included elsewhere in this
Prospectus.

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1997
---------------------
PRO FORMA
COMBINED
PRO FORMA AS FURTHER
COMBINED ADJUSTED
<S> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net revenue.......................................... $ 42,599 $ 46,542
Cost of revenue...................................... 30,760 33,264
---------- ----------
Gross profit......................................... 11,839 13,278
Selling, general and administrative expenses(1)...... 5,899 6,483
Goodwill amortization(2)............................. 1,111 1,312
---------- ----------
Income from operations............................... 4,829 5,483
Interest expense and other, net...................... 223 180
---------- ----------
Income before income taxes........................... 4,606 5,303
Income tax expense(3)................................ 2,099 2,470
---------- ----------
Net income........................................... $ 2,507 $ 2,833
========== ==========
Net income per share................................. $ 0.31 $ 0.32
========== ==========
Shares used in computing net income per share(4)..... 8,009,579 8,793,250
========== ==========
</TABLE>

<TABLE>
<CAPTION>
AT DECEMBER 31, 1997
------------------------------------
PRO FORMA
PRO FORMA COMBINED
PRO FORMA COMBINED AS FURTHER
COMBINED AS ADJUSTED ADJUSTED
<S> <C> <C> <C>
BALANCE SHEET DATA:
Working capital (deficit)............ $(29,526)(5) $29,854 $ 24,571
Total assets......................... 66,404 96,912 101,993
Long-term obligations, excluding
current installments................ 5,332 5,332 5,697
Stockholders' equity................. 23,438 83,318 86,943
</TABLE>
- --------------------

(1) Includes reduction in salaries, bonuses and benefits to the former owners
to which they have contractually agreed of $2.3 million for the Founding
Companies and $556,000 for Keystone.
(2) Consists of amortization, over a 40-year estimated life, of goodwill to be
recorded as a result of the Acquisitions, which is non-deductible for tax
purposes.
(3) Assumes a corporate income tax rate of 38% and the non-deductibility of
goodwill.

(4) Pro forma combined includes (i) 2,604,000 shares issued to members of
management of United Road Services in connection with the formation of the
Company, (ii) 218,736 shares issued to investors pursuant to subscription
agreements, (iii) 2,375,741 shares to be issued to owners of the Founding
Companies in connection with the acquisitions of the Founding Companies; and
(iv) 2,811,102 of the shares to be issued in the Offering, representing that
portion of the total 5,500,000 shares to be issued in the Offering necessary
to pay the cash portion of the purchase price for the acquisitions of the
Founding Companies and estimated Acquisition and Offering expenses. Pro forma
combined as further adjusted includes all of the previously mentioned shares
and 377,624 shares to be issued to the owner of Keystone in connection with
the Keystone acquisition and 406,047 of the shares to be issued in the
Offering, representing the number of shares necessary to pay the cash portion
of the purchase price for the Keystone acquisition.

(5) Includes $27.8 million payable to owners of the Founding Companies,
representing the cash portion of the purchase price for the acquisitions of
the Founding Companies considered to be paid from a portion of the net
proceeds of the Offering.

6
<PAGE>

SUMMARY INDIVIDUAL COMPANY FINANCIAL DATA

The following table presents summary income statement data for the Founding
Companies and Keystone for each of their three most recent fiscal years. The
historical income statement data shown below do not give effect to the pro
forma adjustments related to contractually agreed upon reductions in salaries,
bonuses and benefits to the former owners of the Founding Companies and
Keystone, or any other pro forma adjustments reflected in the Unaudited Pro
Forma Combined Financial Statements included elsewhere in this Prospectus. See
"The Company," "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and the historical financial statements of the Founding
Companies and Keystone included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
FISCAL YEARS ENDED(1)
----------------------
1995 1996 1997
(IN THOUSANDS)
<S> <C> <C> <C>
NORTHLAND:
Net revenue........................................... $4,671 $6,353 $10,159
Income from operations................................ 324 346 1,438
FALCON:
Net revenue........................................... 4,352 6,203 7,785
Income (loss) from operations......................... (93) 374 215
QUALITY:
Net revenue........................................... 4,396 5,395 6,802
Income from operations................................ 380 986 1,564
CARON:
Net revenue........................................... 4,624 5,575 6,627
Income (loss) from operations......................... 341 253 (188)
ABSOLUTE:
Net revenue........................................... 3,601 3,465 4,780
Income (loss) from operations......................... 56 73 (82)
AUTO SERVICE:
Net revenue........................................... 2,352 2,874 3,310
Income from operations................................ 33 55 181
MILNE:
Net revenue........................................... 2,526 2,756 3,136
Income from operations................................ 32 233 144
KEYSTONE:
Net revenue........................................... 2,968 3,369 3,943
Income from operations................................ 236 303 196
</TABLE>
- --------------------

(1) The fiscal years presented are as follows: Quality--the fiscal years ended
January 31, 1996 and 1997 and the twelve-month period ended December 31, 1997;
Caron--the fiscal years ended September 30, 1995, 1996 and 1997; and Northland,
Falcon, Absolute, Auto Service, Milne and Keystone--the fiscal years ended
December 31.

7
<PAGE>

RISK FACTORS

The shares of Common Stock offered hereby involve a high degree of risk. The
following risk factors should be considered carefully in addition to the other
information in this Prospectus before purchasing the shares of Common Stock
offered hereby. In addition to the historical information contained herein,
the discussion in this Prospectus contains certain forward-looking statements
that involve risks and uncertainties, such as statements of the Company's
plans, objectives, expectations and intentions. The cautionary statements made
in this Prospectus should be read as being applicable to all related forward-
looking statements wherever they appear in this Prospectus. The Company's
actual results could differ materially from those discussed herein. Factors
that could cause or contribute to such differences include those discussed
below, as well as those discussed elsewhere herein.

ABSENCE OF COMBINED OPERATING HISTORY; RISKS OF INTEGRATING FOUNDING COMPANIES

United Road Services was founded in July 1997 but has conducted no
operations and generated no revenues to date. United Road Services has entered
into definitive agreements to acquire the Founding Companies simultaneously
with and as a condition to consummation of the Offering, and to acquire
Keystone promptly after receipt of municipal approval of a contract
assignment. To date, the Founding Companies and Keystone have been operating
as independent entities, and there can be no assurance that the Company will
be able to integrate the operations of these businesses successfully or
institute the necessary systems and procedures, including accounting and
financial reporting systems, to manage the combined enterprise on a profitable
basis. The Company's management group has been assembled only recently, and
there can be no assurance that the management group will be able to manage the
combined entity or to implement effectively the Company's operating strategy
and acquisition program. The Unaudited Pro Forma Combined Financial Statements
included herein cover periods when the Founding Companies, Keystone and United
Road Services were not under common control or management and may not be
indicative of the Company's future financial or operating results. The
inability of the Company to integrate the Founding Companies and Keystone
successfully would have a material adverse effect on the Company's business,
financial condition and results of operations. See "Business--Strategy" and
"Management."

RISKS RELATED TO THE COMPANY'S ACQUISITION STRATEGY

The Company's strategy is to expand its operations significantly through the
acquisition of additional towing and transport service companies. There can be
no assurance that the Company will be able to identify, acquire or manage
profitably additional businesses or integrate successfully any acquired
businesses into the Company without substantial costs, delays or other
operational or financial problems. Further, acquisitions involve a number of
special risks, including failure of the acquired business to achieve expected
results, diversion of management's attention, failure to retain key personnel
of the acquired business and risks associated with unanticipated events or
liabilities, some or all of which could have a material adverse effect on the
Company's business, financial condition and results of operations. The Company
may consider acquiring complementary businesses that provide services that the
Company does not currently provide, and there can be no assurance that these
complementary businesses can be successfully integrated. In addition, there
can be no assurance that the Founding Companies or other companies to be
acquired in the future will achieve anticipated revenues and earnings. See
"Business--Strategy." The Company has entered into a definitive acquisition
agreement with Keystone and its sole stockholder and consummation of this
acquisition is conditioned on, among other things, receipt of municipal
approval of assignment of Keystone's police garage contract. There can be no
assurance that this consent will be obtained. See "Certain Transactions."

RISKS RELATED TO ACQUISITION FINANCING

The timing, size and success of the Company's future acquisition efforts and
the associated capital requirements cannot be predicted at this time. The
Company currently intends to finance future acquisitions by using a
combination of Common Stock, cash and debt. To the extent the Company issues
shares of Common

8
<PAGE>

Stock to finance future acquisitions, the interests of existing stockholders
will be diluted. If the Common Stock does not maintain a sufficient market
value, or if potential acquisition candidates are unwilling to accept Common
Stock as part of the consideration for the sale of their businesses, the
Company may be required to utilize more of its cash resources, if available,
in order to pursue its acquisition program. Upon consummation of the Offering
and application of the proceeds therefrom, the Company expects to have $25.5
million of net proceeds remaining for future acquisitions and working capital.
See "Use of Proceeds." If the Company does not have sufficient cash resources,
its growth could be limited unless it is able to obtain additional capital
through debt or equity financings. There can be no assurance that the Company
will be able to obtain the financing it will need for its acquisition program
on acceptable terms, or at all. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Combined Liquidity and Capital
Resources."

RISKS RELATED TO OPERATING STRATEGY

Key elements of the Company's strategy are to increase the revenue and to
improve the profitability of acquired companies. The Company intends to
increase revenue by continuing to provide high quality service and expanding
its scope of services offered and customer base. The Company's ability to
increase revenue will be affected by various factors, including demand for
towing and transport services, the level of competition, the Company's ability
to expand the range of services offered to existing customers, the Company's
ability to attract new customers and the Company's ability to attract and
retain a sufficient number of qualified personnel. The Company intends to seek
to improve profitability by various means, including a reduction of
duplicative operating costs and overhead, increased asset utilization and
increased purchasing power. The Company's ability to improve profitability
will be affected by various factors, including the costs associated with
centralizing its administrative functions, its ability to benefit from the
elimination of redundant operations, and its ability to benefit from enhanced
purchasing power. Many of these factors are beyond the control of the Company,
and there can be no assurance that the Company's operating strategy will be
successful. See "Business--Strategy."

MANAGEMENT OF GROWTH

The Company's strategy is to expand its operations through acquisitions and
internal growth. Management expects to spend significant time and resources in
evaluating, completing and integrating acquisitions. There can be no assurance
that the Company's systems, procedures and controls will be adequate to
support its operations as they expand. Any future growth will impose
significant added responsibilities on members of senior management, including
the need to recruit and integrate new senior level managers and executives.
There can be no assurance that such additional management will be successfully
recruited and retained by the Company. The Company's failure to manage its
growth effectively, or its inability to attract and retain additional
qualified management, could have a material adverse effect on the Company's
business, financial condition and results of operations.

COMPETITION

The towing and transport service industry is highly fragmented and extremely
competitive. Competition for the delivery of towing and transport services is
based primarily on quality, service, timeliness, price and geographic
proximity. The Company competes with certain large towing and transport
service companies on a regional and local basis, some of which may have
greater financial and marketing resources than the Company. The Company also
competes with thousands of smaller local companies, which may have lower
overhead cost structures than the Company and may, therefore, be able to
provide their services at lower rates than the Company. The Company may also
face competition for acquisition candidates from companies which are
attempting, or may attempt in the future, to consolidate the towing and
transport service industry. Some of the Company's current or future
competitors may be better positioned than the Company to finance acquisitions,
to pay higher prices for acquisition candidates pursued by the Company or to
finance their internal operations. See "Business--Competition."

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NEED FOR INTEGRATED INFORMATION TECHNOLOGY SYSTEMS

Due to the recent formation of the Company, each of the Founding Companies
is currently using the accounting, financial and dispatch systems that it has
in place. The Company is beginning the process of selecting and implementing
systems that will enable it to centralize its accounting and financial
reporting activities at its headquarters in Albany, New York. In addition, the
Company intends to explore the development of a national dispatch system for
its transport operations. The Company estimates that the cost of implementing
the new integrated information system will be approximately $2.0 million. The
Company anticipates that it will need to upgrade and expand its information
technology systems on an ongoing basis as it expands its operations and
completes acquisitions. There can be no assurance that the Company will not
encounter unexpected delays and costs in connection with implementing such
systems or that such systems when installed will function in accordance with
the Company's expectations. See "Business--Dispatch and Information Systems."

DEPENDENCE ON LAW ENFORCEMENT AGENCY RELATIONSHIPS

The Company provides services to a number of law enforcement agencies
pursuant to contracts, which typically have terms of five years or less, and
many of which are subject to competitive bidding upon expiration. Less than 5%
of the Company's combined net revenue in 1997 was received under contracts
subject to competitive bidding. There can be no assurance that these contracts
will be renewed upon expiration or that they will be renewed on terms as
favorable to the Company. With other law enforcement agencies, there is no
formal contract, and there can be no assurance that a particular customer will
continue to use the Company's services or that such customer will not at some
future time implement a competitive bidding process for the provision of such
services. See "Business--Operations and Services Provided."

REGULATION

Towing and transport services are subject to various federal, state and
local laws and regulations regarding equipment, driver certification, training
and recordkeeping, and workplace safety. The Company's vehicles and facilities
are subject to periodic inspection by the United States Department of
Transportation and similar state and local agencies. The Company's failure to
comply with such laws and regulations could subject it to substantial fines
and could lead to the closure of operations that are not in compliance. In
addition, certain government contracting laws and regulations may impact the
Company's ability to acquire complementary businesses in a given city or
county. The Founding Companies have numerous federal, state and local licenses
and permits for the conduct of their respective businesses. While the Company
is not aware of any license or permit that is not transferable or readily
issuable in the Company's name, the Company will be required to effect the
transfer of or apply for such licenses and permits in order to conduct its
business. Any failure by the Company to obtain such licenses and permits or
delay in the Company's receipt of such licenses and permits could have a
material adverse effect on the Company's business, financial condition and
results of operations. See "Business--Government Regulation and Environmental
Matters."

POTENTIAL EXPOSURE TO ENVIRONMENTAL LIABILITIES

The Company's operations are subject to a number of federal, state and local
laws and regulations relating to the storage of petroleum products, hazardous
materials and impounded vehicles, as well as safety regulations relating to
the upkeep and maintenance of Company vehicles. In particular, the Company's
operations are subject to federal, state and local laws and regulations
governing leakage from salvage vehicles, waste disposal, the handling of
hazardous substances, environmental protection, remediation, workplace
exposure and other matters. It is possible that an environmental claim could
be made against the Company or any of the Founding Companies or that one or
more of them could be identified by the Environmental Protection Agency, a
state agency or one or more third parties as a potentially responsible party
under federal or state environmental laws. If the Company or any of the
Founding Companies were to be named a potentially responsible party, the
Company could be forced to incur substantial investigation, legal and
remediation costs, which could have a material adverse effect on the Company's
business, financial condition and results of operations. See "Business--
Government Regulation and Environmental Matters."

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POTENTIAL LIABILITIES ASSOCIATED WITH ACQUISITIONS

The Founding Companies or other companies to be acquired by the Company in
the future may have liabilities that the Company did not or may not discover
during its pre-acquisition due diligence investigations, including liabilities
arising from environmental contamination or non-compliance by prior owners
with environmental laws or regulatory requirements, and for which the Company,
as a successor owner or operator, may be responsible. The businesses acquired
by the Company generally handle and store petroleum and other hazardous
substances at their facilities. In the past, there may have been releases of
these hazardous substances into the soil or groundwater. The Company may be
required under federal, state or local law to investigate and remediate this
contamination, which could have a material adverse effect on the Company's
business, financial condition and results of operations.

LABOR RELATIONS

Although currently no employees of the Company are subject to collective
bargaining agreements, there can be no assurance that some employees of the
Company will not unionize in the future or that the Company will not acquire
companies with unionized employees. If employees of the Company were to
unionize or the Company were to acquire a company with unionized employees,
the Company could incur higher ongoing labor costs and could experience a
significant disruption of its operations in the event of a strike or other
work stoppage, which could have a material adverse effect on the Company's
business, financial condition and results of operations.

LIABILITY AND INSURANCE

The Company is subject to various possible claims, including claims for
personal injury or death caused by accidents involving the Company's vehicles
and service personnel, workers' compensation and other employment related
claims. Although each of the Founding Companies has maintained its own
insurance, the Company expects to obtain insurance on a Company-wide basis,
subject to customary deductibles. Certain types of claims such as claims for
punitive damages or for damages arising from intentional misconduct, which are
often alleged in third-party lawsuits, may not be covered by the Company's
insurance. There can be no assurance that the Company will be able to maintain
adequate levels of insurance on reasonable terms in the future, if at all,
that existing or future claims will not exceed the level of the Company's
insurance, or that the Company will have sufficient capital available to pay
any uninsured claims.

QUARTERLY FLUCTUATIONS OF OPERATING RESULTS

The Company expects to experience significant fluctuations in quarterly
operating results due to a number of factors, including the timing of
acquisitions and related costs; the Company's success in integrating acquired
companies; the loss of significant customers or contracts; the timing of
expenditures for new equipment and the disposition of used equipment; price
changes in response to competitive factors; and general economic conditions.
As a result of these fluctuations, results for any one quarter should not be
relied upon as being indicative of performance in future quarters.

SEASONALITY

The towing and transport service industry is subject to seasonal variations.
Specifically, the demand for towing services is generally highest in extreme
weather, such as heat, cold, rain and snow. Consequently, the summer and
winter seasons tend to be the busiest times. Auto transport tends to be
strongest in the months with the mildest weather, since inclement weather
tends to slow the delivery of vehicles.

START-UP LOSSES

During the period from July 1997 (inception) through December 31, 1997,
United Road Services incurred a net loss of $174,000. In addition United Road
Services estimates it incurred an additional net loss of $230,000 from January
1 to March 31, 1998. United Road Services incurred these losses because it had
no revenues, yet

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it incurred costs relating to its organization, search for acquisition
candidates, and development of the management team and infrastructure required
to support its growth strategy and manage its expanded operations. The
Unaudited Pro Forma Combined Financial Statements included elsewhere herein
give effect to the Acquisitions, as more fully described in the Notes to such
statements. Such pro forma combined results, however, are not necessarily
indicative of the actual results of operations that would have occurred had
the Acquisitions occurred at the beginning of the respective periods presented
or of the results that may occur in the future. There can be no assurance that
the Company will achieve profitability in the near term, if at all.

RELIANCE ON KEY PERSONNEL

The Company is highly dependent upon its senior management team. In
particular, the loss of the services of Edward T. Sheehan or Donald J. Marr
could have a material adverse effect on the Company's business, financial
condition and results of operations. The Company does not presently maintain
"key man" life insurance with respect to members of senior management. In
addition, the Company's operating facilities are managed by regional and local
managers who have an average of 14 years of experience in the towing and
transport service industry and substantial knowledge of the local markets
served, including former owners and employees of the Founding Companies.
Insofar as the Founding Companies' stockholders will receive a significant
portion of the purchase price in shares of Common Stock, the Company's ability
to retain their services may depend, in part, on the Common Stock maintaining
a sufficiently high market price. The loss of one or more of these managers
may have a material adverse effect on the Company's business, financial
condition and results of operations in the event that the Company is unable to
find a suitable replacement in a timely manner.

The timely, professional and dependable service required by the towing and
transport service industry requires an adequate supply of skilled dispatchers,
drivers and support personnel. Accordingly, the Company's success will depend
on its ability to employ, train and retain the personnel necessary to meet the
Company's service requirements. From time to time, and in particular areas,
there are shortages of skilled personnel, and there can be no assurance that
the Company will be able to maintain an adequate skilled labor force necessary
to operate efficiently, that the Company's labor expenses will not increase as
a result of a shortage in the supply of skilled personnel or that the Company
will not have to curtail its planned growth as a result of labor shortages.

CONTROL BY EXISTING MANAGEMENT AND STOCKHOLDERS

Following consummation of the acquisitions of the Founding Companies and the
Offering, the executive officers and directors (including persons who have
agreed to serve as directors) of the Company and the former stockholders of
the Founding Companies, including their respective affiliates, will
beneficially own 4,991,405 shares, or approximately 46.7%, of the outstanding
Common Stock (43.3% if the Underwriters' over-allotment option is exercised in
full), and upon consummation of the Keystone acquisition such officers and
directors and the stockholders of the Founding Companies and Keystone will own
5,369,029 shares, or approximately 48.5%, of the outstanding Common Stock
(45.1% if the Underwriters' over-allotment option is exercised in full).
Accordingly, these persons, if acting in concert, will hold sufficient voting
power to enable them to significantly influence the election of all of the
directors and the outcome of all issues submitted to a vote of the
stockholders of the Company. Such concentration of ownership may have the
effect of delaying, deferring or preventing a change in control of the
Company, including transactions in which the holders of Common Stock might
receive a premium for their shares over prevailing market prices. See
"Principal Stockholders."

SUBSTANTIAL PROCEEDS OF OFFERING PAYABLE TO AFFILIATES

Of the net proceeds of the Offering, $27.8 million, or approximately 46.4%,
will be utilized to pay the cash portion of the purchase price for the
Founding Companies, $12.3 million of which will be paid to individuals who
will become directors or executive officers of the Company or holders of more
than five percent of the Common Stock upon consummation of the Offering. If
the Keystone acquisition is consummated, $32.3 million, or approximately
54.0%, of the net proceeds of the Offering will be paid to the owners of the
Founding Companies and Keystone, of which $16.8 million will be paid to
individuals who will become directors or executive officers of the Company or
holders of more than five percent of the Common Stock. The Company

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<PAGE>

also will assume outstanding indebtedness of the Founding Companies of
approximately $9.8 million upon consummation of the Offering ($10.6 million
including Keystone), of which $1.6 million will be repaid from the net
proceeds of the Offering. In addition, certain owners of the Founding
Companies have guaranteed obligations of the respective Founding Companies.
The Company intends to obtain the release of these guarantees as soon as
practicable following consummation of the Offering. See "Use of Proceeds" and
"Certain Transactions."

BENEFITS TO MANAGEMENT

Members of United Road Services' current management beneficially own in the
aggregate 2,574,000 shares of Common Stock. These stockholders acquired their
Common Stock at a price of $0.03 per share. These parties will own, in the
aggregate, approximately 24.1% of the outstanding Common Stock following
consummation of the Offering, which will have a value of approximately $24.7
million. See "Certain Transactions."

LACK OF SENIOR MANAGEMENT EXPERIENCE IN TOWING AND TRANSPORT SERVICE INDUSTRY

The senior management of United Road Services has no prior experience in the
towing and transport service industry. There can be no assurance that the
Company's senior management will be able to conduct the Company's operations,
to effectively integrate the operations of acquired companies or to hire and
retain personnel with relevant industry experience. A failure by the Company's
senior management to conduct the Company's operations, to effectively
integrate acquired operations or to hire and retain industry personnel could
have a material adverse effect on the Company's business, financial condition
and results of operations.

RECENT LOSSES BY CERTAIN FOUNDING COMPANIES

Certain Founding Companies have incurred net losses in recent periods. While
the historical financial results of the Founding Companies may not be
indicative of the Company's future financial or operating results,
particularly in light of tax structures that have influenced owner
compensation, unprofitable operations of individual Founding Companies in
future periods could have a material adverse effect on the Company's business,
financial condition and results of operations. See "Management's Discussion
and Analysis of Financial Condition and Results of Operation."

EARN-OUT PAYMENTS TO COMPANY OWNERS

The Company may be obligated to make certain earn-out payments to the owners
of individual Founding Companies and Keystone. The provisions call for annual
contingent payments, each equal to 5% of net revenue in excess of specified
net revenue targets, for a period of five years. To the extent any Founding
Company or Keystone meets its net revenue growth target without a
corresponding increase in net income, it could have a material adverse effect
on the Company's business, financial condition and results of operations. See
"Certain Transactions--Organization of the Company."

NO PRIOR PUBLIC MARKET AND DETERMINATION OF OFFERING PRICE; STOCK PRICE
VOLATILITY

Prior to the Offering, there has been no public market for the Common Stock.
Therefore, the Offering Price for the Common Stock was determined by
negotiation between the Company and the Underwriters and may bear no
relationship to the price at which the Common Stock will trade after the
Offering. See "Underwriting" for the factors to be considered in determining
the initial public offering price. The Company has applied to have the Common
Stock approved for listing on the Nasdaq National Market. However, there can
be no assurance that an active trading market will develop subsequent to the
Offering or, if developed, that it will be sustained. After the Offering, the
market price of the Common Stock may be subject to significant fluctuations in
response to numerous factors, including the timing of any acquisitions by the
Company, variations in the Company's annual or quarterly financial results or
those of its competitors, the liquidity of the market for the Common Stock,
investor perceptions of the Company and the towing and transport service
industry in general, changes by financial research analysts in their estimates
of the future earnings of the Company, sales of significant amounts

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<PAGE>

of Common Stock by existing holders, loss of key personnel, conditions in the
economy in general or in the Company's industry in particular, unfavorable
publicity, changes in applicable laws and regulations and other factors. The
market price of the Common Stock may also be affected by the Company's ability
to meet analyst expectations, and the failure to meet such expectations, even
if minor, could have a material adverse effect on the market price of the
Common Stock. In addition, the stock market is subject to extreme price and
volume fluctuations. This volatility has had a significant effect on the
market prices of securities issued by many companies for reasons unrelated to
the operating performance of these companies. In the past, following periods
of volatility in the market price of a company's securities, securities class
action litigation has often been instituted against such a company. Any such
litigation against the Company could result in substantial costs and a
diversion of management's attention and resources, which could have a material
adverse effect on the Company's business, financial condition and results of
operations.

CERTAIN ANTI-TAKEOVER PROVISIONS

Upon consummation of the Offering, the Company's Board of Directors will
have the authority to issue up to 5,000,000 shares of Preferred Stock and to
determine the price, rights, preferences, privileges and restrictions,
including voting rights, of those shares without any further vote or action by
the stockholders. The rights of the holders of Common Stock will be subject
to, and may be adversely affected by, the rights of the holders of any
Preferred Stock that may be issued in the future. The issuance of Preferred
Stock could have the effect of discouraging a third party from attempting to
acquire a majority of the outstanding voting stock of the Company. The Company
has no current plans to issue shares of Preferred Stock.

The Company's Amended and Restated Bylaws and indemnification agreements
provide that the Company will indemnify officers and directors against losses
they may incur in legal proceedings resulting from their service to the
Company. In addition, the Company's Amended and Restated Certificate of
Incorporation provides for a classified Board of Directors and limits the
ability of stockholders to (i) fill vacancies on the Board of Directors, (ii)
call special meetings of the stockholders, (iii) take action by written
consent or (iv) bring certain matters before a meeting of the stockholders
without prior notice to the Company. In addition, Section 203 of the Delaware
General Corporation Law restricts certain business combinations with any
"interested stockholder" as defined by such statute. These provisions are
designed to encourage potential buyers to negotiate with the Board of
Directors and give the Board sufficient opportunity to consider various
alternatives to maximize stockholder value. These provisions are also intended
to discourage certain tactics that may be used in proxy fights. However, each
of these provisions could discourage potential acquisition proposals and could
delay or prevent a change in control of the Company and, as a consequence, may
adversely affect the market price of the Common Stock. Such provisions also
may have the effect of preventing changes in the management of the Company.
See "Description of Capital Stock."

SHARES ELIGIBLE FOR FUTURE SALE

Upon consummation of the acquisitions of the Founding Companies and the
Offering, 10,698,477 shares of Common Stock will be outstanding. The 5,500,000
shares of Common Stock offered hereby (other than shares that may be purchased
by affiliates of the Company) will be freely tradeable without restriction or
further registration under the Securities Act of 1933, as amended (the
"Securities Act"). The remaining shares may not be resold except in
transactions registered under the Securities Act, or pursuant to an available
exemption from registration. Each of the Company, its executive officers and
directors and certain stockholders of the Company has agreed, subject to
certain exceptions described below, not to (i) offer, pledge, sell, contract
to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of, directly or indirectly, any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for Common
Stock or (ii) enter into any swap or other arrangement that transfers all or a
portion of the economic consequences associated with the ownership of any
Common Stock (regardless of whether any of the transactions described in
clause (i) or (ii) is to be settled by the delivery of Common Stock, or such
other securities, in cash or otherwise) for a period of 180 days after the
date of this Prospectus without the prior written consent of Donaldson, Lufkin
& Jenrette Securities Corporation

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<PAGE>

("DLJ") except for issuances of shares of Common Stock by the Company in
connection with future acquisitions. In addition, certain executive officers
and stockholders of the Company and the stockholders of the Founding Companies
receiving Common Stock pursuant to the acquisitions of the Founding Companies,
holding an aggregate of 5,198,477 shares of Common Stock, have agreed with the
Company not to sell, transfer or otherwise dispose of any of their shares of
Common Stock for a period of one year after the date of consummation of the
Offering. In addition, if the Keystone acquisition is consummated, the 377,624
shares issued to the Keystone stockholder will be subject to the same
restrictions.

The Company's existing stockholders have, and the stockholders of the
Founding Companies will receive, certain rights to include their shares in
registrations of Common Stock under the Securities Act that the Company
effects in the future (other than registrations in connection with future
acquisitions or employee benefit plans), including registrations that may
occur within one year after consummation of the Offering. Such stockholders
also have or will receive certain rights commencing two years after
consummation of the Offering to require the Company to effect a registration
of their shares of Common Stock. During the 180-day lockup period described
above, the Company has agreed not to file any registration statement with
respect to, and each of its executive officers, directors and certain
stockholders of the Company has agreed not to make any demand for, or exercise
any right with respect to, the registration of any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for Common
Stock without DLJ's prior written consent, except for the registration of
shares of Common Stock to be issued upon the exercise of stock options under
the Company's stock option plan. After consummation of the Offering, options
to purchase 255,000 shares of Common Stock will be outstanding and an
additional 814,847 shares of Common Stock will be reserved for issuance
pursuant to the Company's 1998 Stock Option Plan. The Company intends to
register under the Securities Act all of the shares of Common Stock underlying
such options. In addition, DLJ has agreed to allow the Company to register
5,000,000 shares of Common Stock under the Securities Act upon consummation of
the Offering for use by the Company in future acquisitions. These shares
generally will be freely tradeable after their issuance.

No prediction can be made as to the effect, if any, that future sales of
shares of Common Stock, or the availability of shares for future sale, will
have on the market price of the Common Stock prevailing from time to time.
Sales of substantial amounts of Common Stock in the market after the Offering
could adversely affect prevailing market prices for the Common Stock and could
adversely affect the trading price of such Common Stock and the Company's
ability to raise additional capital in the future. See "Shares Eligible for
Future Sale."

DILUTION

Upon consummation of the Offering, investors in the Offering will experience
immediate and substantial dilution in the pro forma combined net tangible book
value per share of their Common Stock of $8.37 from the Offering Price of
$12.00 per share. See "Dilution."

ABSENCE OF DIVIDENDS

The Company has never paid any cash dividends and, for the foreseeable
future, intends to retain any future earnings for the development of its
business. See "Dividend Policy."

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THE COMPANY

United Road Services was formed in July 1997 to become a leading national
provider of motor vehicle and equipment towing and transport services. The
Company believes that opportunities exist for successful consolidation in the
towing and transport service industry given the fragmented nature of the
industry and the potential to achieve operating efficiencies, to share
effective service capabilities of acquired operations and to pursue synergies
that arise from integrating distinct capabilities of various businesses within
a single entity. See "Business-Strategy." United Road Services has entered
into definitive acquisition agreements to acquire eight towing and transport
service companies. It will consummate the acquisitions of the Founding
Companies simultaneously with consummation of the Offering. The consideration
to be paid by the Company in connection with the acquisitions of the Founding
Companies consists of approximately $27.8 million in cash, 2,375,741 shares of
Common Stock and the assumption of approximately $9.8 million in outstanding
indebtedness of the Founding Companies. The aggregate consideration for the
Keystone acquisition is $4.5 million in cash, 377,624 shares and the
assumption of $793,000 in outstanding indebtedness. In addition, the Company
will be obligated to make certain earn-out payments to the stockholders of
each Founding Company and Keystone that achieves specified net revenue
targets. The consideration for the Acquisitions was determined by negotiations
among United Road Services and representatives of the Founding Companies and
Keystone. See "Certain Transactions." Giving effect to the Acquisitions
(including Keystone), the Company's combined net revenue would have been $46.5
million and combined pro forma net income would have been $2.8 million in
1997. A brief description of each Founding Company and Keystone is set forth
below.

NORTHLAND AUTO TRANSPORTERS INC. AND NORTHLAND FLEET LEASING, INC.
(COLLECTIVELY, "NORTHLAND") were founded in 1977 and 1992, respectively.
Northland's primary business is transporting vehicles for automobile auction
companies, leasing companies, automobile dealers, manufacturers and
individuals, primarily in the Midwestern United States. Northland has three
facilities in Detroit. It operates 55 vehicles, has 25 employees and 50
independent contractors, and had net revenue of $10.2 million and net income
of $1.1 million in 1997. In 1997, a substantial portion of Northland's net
revenue was derived from two customers, GE Capital and C.T. Services. Upon
consummation of the Offering, the Company expects to sign a three-year
employment agreement with Edward W. Morawski, the founder and President of
Northland, pursuant to which Mr. Morawski will continue to manage Northland.
In addition, Mr. Morawski will become a director of the Company upon
consummation of the Offering.

FALCON TOWING AND AUTO DELIVERY, INC. ("FALCON") was founded in 1985.
Falcon's primary business is transporting vehicles for automobile dealers,
leasing companies, automobile auction companies and long-haul transporters in
the Western United States. Falcon has facilities in Los Angeles, San Francisco
and Phoenix. It operates 49 vehicles, has 72 employees and had net revenue of
$7.8 million and net income of $132,000 in 1997. Upon consummation of the
Offering, the Company expects to sign a three-year employment agreement with
David Floyd, the founder and President of Falcon, pursuant to which Mr. Floyd
will continue to manage Falcon.

SMITH-CHRISTENSEN ENTERPRISES, INC. AND CITY TOWING, INC., EACH OF WHICH
CONDUCTS BUSINESS AS QUALITY TOWING (COLLECTIVELY "QUALITY") were founded in
1988 and 1968, respectively. Quality's primary business is towing, impounding
and storing vehicles for law enforcement agencies and commercial customers in
Southern Nevada. Quality also conducts lien sales of impounded vehicles.
Quality has two facilities in Las Vegas. It operates 40 vehicles, has 100
employees and had net revenue of $6.8 million and net income of $822,000 in
1997. Edward D. Smith, the President of Quality, will become a director of the
Company upon consummation of the Offering.

CARON AUTO WORKS, INC. AND CARON AUTO BROKERS, INC. (COLLECTIVELY, "CARON")
were founded in 1976 and 1993, respectively. Caron's primary businesses are
transporting vehicles for leasing companies, long-haul transporters and
individuals in the Northeastern United States, and towing vehicles for
commercial and private customers in the Hartford, Connecticut region. Caron
has two facilities in East Hartford and facilities in New Jersey and Florida.
It operates 55 vehicles, has 70 employees and 10 independent contractors, and
had net revenue of $6.6 million and a net loss of $81,000 in 1997. Upon
consummation of the Offering, the Company expects to sign a five-year
employment agreement and a five-year consulting agreement with David Caron,
the

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<PAGE>

founder and President of Caron. Pursuant to these agreements, Mr. Caron will
continue to be involved in the management of Caron and will provide
acquisition-related consulting services to the Company.

ABSOLUTE TOWING AND TRANSPORTING, INC. ("ABSOLUTE") was founded in 1988.
Absolute's primary business is towing and transporting insurance salvage
vehicles for insurance companies and automobile auction companies in Southern
California. Absolute has one facility in Los Angeles. It operates 17 vehicles,
has 20 employees and 35 independent contractors, and had net revenue of $4.8
million and a net loss of $64,000 in 1997. In 1997, virtually all of
Absolute's net revenue was derived from one customer, Insurance Auto Auctions.
Upon consummation of the Offering, the Company expects to sign a three-year
consulting agreement with Todd Q. Smart, the founder and President of
Absolute, pursuant to which Mr. Smart will continue to be involved in the
management of Absolute and will provide acquisition-related consulting
services to the Company. Mr. Smart will also become a director of the Company
upon consummation of the Offering.

ASC TRANSPORTATION SERVICES AND AUTO SERVICE CENTER, EACH OF WHICH CONDUCTS
BUSINESS AS ASC TRUCK SERVICE (COLLECTIVELY, "AUTO SERVICE"), were founded in
1993 and 1965, respectively. Auto Service's primary business is towing
vehicles for commercial and individual customers in the Sacramento, California
region. Auto Service has two facilities in Sacramento. It operates 20
vehicles, has 48 employees and had net revenue of $3.3 million and had net
income of $114,000 in 1997. In 1997, a substantial portion of Auto Service's
net revenue was derived from one customer, Automobile Association of America.
Upon consummation of the Offering, the Company expects to sign a three-year
employment agreement with Robert Boxwell, President of Auto Service, pursuant
to which Mr. Boxwell will continue to manage Auto Service.

SILVER STATE TOW & RECOVERY, INC., WHICH CONDUCTS BUSINESS AS MILNE TOW &
TRANSPORT SERVICE ("MILNE") was founded in 1950. Milne's primary business is
towing vehicles and transporting heavy construction equipment for commercial
customers throughout Northern Nevada. Milne has one facility in Reno. It
operates 35 vehicles, has 50 employees and had net revenue of $3.1 million and
had net income of $89,000 in 1997. Upon consummation of the Offering, the
Company expects to sign a two-year consulting agreement with Gene Temen, the
founder and President of Milne, pursuant to which Mr. Temen will continue to
be involved in the management of Milne and will provide acquisition-related
consulting services to the Company.

KEYSTONE TOWING, INC. was founded in 1991. Keystone's primary business is
towing, impounding and storing vehicles for law enforcement agencies and
commercial customers in Southern California. Keystone also conducts lien sales
of impounded vehicles. Keystone has one facility in Los Angeles. It operates
21 vehicles, has 34 employees and had net revenue of $3.9 million and net
income of $239,000 in 1997. In 1997, a substantial portion of Keystone's net
revenue was derived from one customer, Los Angeles Police Department. Upon
consummation of the Keystone acquisition, the Company expects to sign a three-
year consulting agreement with Mark J. Henninger, the founder and President of
Keystone, pursuant to which Mr. Henninger will continue to be involved in the
management of Keystone and will provide acquisition-related consulting
services to the Company. Mr. Henninger will also become a director of the
Company upon consummation of the Keystone acquisition. There can be no
assurance that the Keystone acquisition will be consummated.

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<PAGE>

USE OF PROCEEDS

The net proceeds to the Company from the sale of the 5,500,000 shares of
Common Stock offered hereby are estimated to be approximately $59.9 million
($69.1 million if the Underwriters' over-allotment option is exercised in
full), assuming an Offering Price of $12.00 per share and after deducting
estimated underwriting discounts and commissions and Offering expenses. Of
this amount, approximately $27.8 million will be used to pay the cash portion
of the purchase price for the Founding Companies, $4.5 million will be used to
pay the cash portion of the purchase price for Keystone, and approximately
$500,000 will be used to pay expenses incurred in connection with the
Acquisitions. In connection with the acquisitions of the Founding Companies
and Keystone, the Company will assume outstanding indebtedness of the Founding
Companies in the aggregate amount of $9.8 million and $793,000 of outstanding
indebtedness of Keystone. Assumed indebtedness of $1.6 million will be repaid
from the net proceeds of the Offering, which indebtedness bears interest at a
rate of 10% and matures in March 1999. In addition, certain owners of the
Founding Companies have guaranteed obligations of the respective Founding
Companies. The Company intends to obtain the release of these guarantees as
soon as practicable following consummation of the Offering.

The remaining net proceeds will be used for general corporate purposes,
which are expected to include working capital and future acquisitions. Pending
the foregoing uses, the proceeds will be invested in short-term, investment-
grade, interest-bearing securities. While the Company continuously considers
possible acquisition prospects as part of its growth strategy, the Company
presently has no agreements, arrangements or other understandings to acquire
any companies other than the Founding Companies and Keystone.

DIVIDEND POLICY

The Company has never paid any cash dividends and intends, for the
foreseeable future, to retain any future earnings for the development of its
business. The Company's future dividend policy will be determined by its Board
of Directors on the basis of various factors, including the Company's results
of operations, financial condition, capital requirements and investment
opportunities.

18
<PAGE>

CAPITALIZATION

The following table sets forth, as of December 31, 1997, (i) the actual
capitalization of United Road Services, (ii) the capitalization of the Company
on a pro forma combined basis to give effect to the acquisitions of the
Founding Companies and (iii) the capitalization of the Company on a pro forma
combined basis as further adjusted to give additional effect to consummation
of the acquisition of Keystone, the Offering and application of the estimated
net proceeds therefrom. This table should be read in conjunction with the
Unaudited Pro Forma Combined Financial Statements and Notes thereto appearing
elsewhere in this Prospectus.

<TABLE>
<CAPTION>
AT DECEMBER 31, 1997
---------------------------------------
PRO FORMA
PRO FORMA COMBINED AS
ACTUAL COMBINED FURTHER ADJUSTED
(IN THOUSANDS)
<S> <C> <C> <C>
Short-term obligations, including cur-
rent installments.................... $ 92 $32,407(1) $ 3,463
===== ======= =======
Long-term obligations, excluding cur-
rent installments.................... -- $ 5,332 $ 5,697
----- ------- -------
Stockholders' equity:
Preferred stock, $0.001 par value,
5,000,000 shares authorized; no
shares issued and outstanding........ -- -- --
Common stock, $0.001 par value,
35,000,000 shares authorized;
2,604,000 shares issued and
outstanding actual; 5,198,477 shares
issued and outstanding pro forma
combined; and 11,076,101 shares
issued and outstanding pro forma
combined as further adjusted (2)..... 3 5 11
Additional paid-in capital............ 67 23,607 87,106
Accumulated deficit................... (174) (174) (174)
----- ------- -------
Total stockholders' equity (defi-
cit)............................... (104) 23,438 86,943
----- ------- -------
Total capitalization................ $(104) $28,770 $92,640
===== ======= =======
</TABLE>
- ---------------------

(1) Includes $27.8 million payable to the owners of the Founding Companies,
representing the cash portion of the purchase price for the acquisitions
of the Founding Companies considered to be paid from a portion of the net
proceeds of the Offering.

(2) Excludes 255,000 shares of Common Stock issuable upon exercise of
outstanding stock options.

19
<PAGE>

DILUTION

The deficit in pro forma combined net tangible book value of the Company as
of December 31, 1997 was $20.5 million or $3.95 per share of Common Stock
after giving effect to the acquisitions of the Founding Companies. "Pro forma
combined net tangible book value" per share represents the amount of total
tangible assets of the Company reduced by its total liabilities and divided by
the total number of shares of Common Stock outstanding after giving effect to
the acquisitions of the Founding Companies and the issuance of 218,736 shares
of Common Stock in January 1998. After giving effect to the sale of the
5,500,000 shares of Common Stock offered hereby, and after deducting estimated
underwriting discounts and commissions and Offering expenses, pro forma
combined net tangible book value of the Company at December 31, 1997 would
have been $38.9 million or $3.63 per share. This represents an immediate
increase in pro forma combined net tangible book value of $7.58 per share to
existing stockholders and an immediate dilution of $8.37 per share to new
investors in the Offering (the "New Investors"). The following table
illustrates this per share dilution:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share........... $12.00
Pro forma combined deficit in net tangible book value
per share before the Offering.......................... $(3.95)
Increase attributable to New Investors.................. 7.58
------
Pro forma net tangible book value per share after the Of-
fering................................................... 3.63
------
Dilution per share to New Investors....................... $ 8.37
======
</TABLE>

The following table sets forth, as of December 31, 1997, on a pro forma
combined basis after giving effect to the acquisitions of the Founding
Companies, the issuance of 218,736 shares of Common Stock in January 1998 and
the Offering, the number of shares of Common Stock purchased from the Company,
the total consideration paid and the average price per share paid by existing
stockholders and the New Investors:

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE
------------------ ----------------------- PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Existing stockholders...... 5,198,477 48.6% $(22,136)(1) (50.5)% $(4.26)
New Investors.............. 5,500,000 51.4 66,000 150.5 12.00
---------- ----- -------- ------
Total.................... 10,698,477 100.0% $ 43,864 100.0 %
========== ===== ======== ======
</TABLE>
- ---------------------

(1) Total consideration paid by existing stockholders represents the combined
stockholders' equity of the Founding Companies before pro forma
adjustments, reduced by the cash portion of the consideration payable to
the owners of the Founding Companies in connection with the acquisitions
of the Founding Companies.

20
<PAGE>

SELECTED FINANCIAL DATA

United Road Services has entered into definitive acquisition agreements to
acquire eight towing and transport service companies. It will consummate the
acquisitions of the Founding Companies simultaneously with consummation of the
Offering and expects to acquire Keystone after completion of the Offering. The
following selected historical financial data for United Road Services as of
December 31, 1997 and for the period from July 25, 1997 (inception) to
December 31, 1997 have been derived from the audited financial statements of
United Road Services. The unaudited pro forma combined statement of operations
data for United Road Services present financial data for the Company adjusted
to give effect to (i) the acquisitions of the Founding Companies and
consummation of the Offering and application of the net proceeds therefrom as
if they occurred on January 1, 1997, and (ii) certain pro forma adjustments to
the historical statement of operations data described below. The unaudited pro
forma combined statement of operations data as further adjusted for United
Road Services give additional effect to the acquisition of Keystone as if it
occurred on January 1, 1997. The unaudited pro forma combined balance sheet
data for United Road Services present financial data for the Company giving
effect to the acquisitions of the Founding Companies as if they occurred on
December 31, 1997. The pro forma combined as adjusted balance sheet data for
United Road Services give additional effect to the sale of the 5,500,000
shares of Common Stock offered hereby and the application of the estimated net
proceeds therefrom as if they occurred on December 31, 1997. The unaudited pro
forma combined balance sheet data as further adjusted for United Road Services
give additional effect to the acquisition of Keystone as if it occurred on
December 31, 1997. The unaudited pro forma data is not necessarily indicative
of the results the Company would have obtained had these events actually
occurred on such dates or of the Company's future results. For financial
statement presentation purposes, Northland has been designated the predecessor
entity of the Company. The following selected historical financial data for
Northland as of December 31, 1996 and 1997 and for each of the years in the
three-year period ended December 31, 1997 have been derived from the audited
financial statements of Northland. The following selected financial data is
qualified by reference to, and should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," and the Unaudited Pro Forma Combined Financial Statements of the
Company and historical financial statements for certain of the Founding
Companies and Keystone including, in each case, the Notes thereto, included
elsewhere in this Prospectus.
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1997
----------------------
PRO FORMA
PERIOD FROM COMBINED
JULY 25, 1997 AS
(INCEPTION) TO PRO FORMA FURTHER
DECEMBER 31, 1997 COMBINED ADJUSTED
(DOLLARS IN THOUSANDS,
EXCEPT PER SHARE DATA)
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA--
UNITED ROAD SERVICES:
Net revenue........................ $ -- $ 42,599 $ 46,542
Cost of revenue.................... -- 30,760 33,264
--------- --------- ---------
Gross profit....................... -- 11,839 13,278
Selling, general and administrative
expenses.......................... 174 5,899(1) 6,483(1)
Goodwill amortization(2)........... -- 1,111 1,312
--------- --------- ---------
Income (loss) from operations...... (174) 4,829 5,483
Interest expense and other, net.... -- 223 180
--------- --------- ---------
Income (loss) before income tax.... (174) 4,606 5,303
Income tax expense(3).............. -- 2,099 2,470
--------- --------- ---------
Net income (loss).................. $ (174) $ 2,507 $ 2,833
========= ========= =========
Net income (loss) per share........ $ (0.08) $ 0.31 $ 0.32
========= ========= =========
Shares used in computing net income
(loss) per share.................. 2,055,300(4) 8,009,579(5) 8,793,250(5)
========= ========= =========
</TABLE>

<TABLE>
<CAPTION>
AT DECEMBER 31, 1997
--------------------------------------------------
PRO FORMA PRO FORMA
PRO FORMA COMBINED AS COMBINED AS
ACTUAL COMBINED ADJUSTED FURTHER ADJUSTED
(IN THOUSANDS)
<S> <C> <C> <C> <C>
BALANCE SHEET DATA--UNITED
ROAD SERVICES:
Working capital (deficit)..... $(104) $(29,526)(6) $29,854 $24,571
Total assets.................. 50 66,404 96,912 101,993
Long-term obligations,
excluding current
installments................. -- 5,332 5,332 5,697
Stockholders' equity
(deficit).................... (104) 23,438 83,318 86,943
</TABLE>

21
<PAGE>

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
--------------------------------------
1993 1994 1995 1996 1997
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
HISTORICAL STATEMENT OF OPERATIONS
DATA--NORTHLAND:
Net revenue........................ $4,736 $3,769 $4,671 $6,353 $10,159
Operating income (loss)............ (128) (44) 324 346 1,438
Other income (expense), net........ 199 117 (18) -- (49)
Net income......................... 71 67 275 346 1,054
<CAPTION>
AT DECEMBER 31
--------------------------------------
1993 1994 1995 1996 1997
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
HISTORICAL BALANCE SHEET DATA--
NORTHLAND:
Working capital.................... $ 387 $ 52 $ 375 $ 235 $ 399
Total assets....................... 1,193 2,368 2,653 3,268 5,465
Long-term obligations, excluding
current installments.............. 60 205 257 331 1,074
Stockholders' equity............... 815 1,369 1,645 1,991 3,045
</TABLE>
- ---------------------

(1) Includes a reduction in salaries, bonuses and benefits to the former
owners to which they have contractually agreed of $2.3 million for the
Founding Companies and $556,000 for Keystone.

(2) Consists of amortization, over a 40-year estimated life, of goodwill to be
recorded as a result of the acquisitions, which is non-deductible for tax
purposes.
(3) Assumes a corporate income tax rate of 38% and the non-deductibility of
goodwill.
(4) Represents the actual weighted average outstanding shares.

(5) Pro forma combined includes (i) 2,604,000 shares issued to members of
management of United Road Services in connection with the formation of the
Company, (ii) 218,736 shares issued to investors pursuant to subscription
agreements, (iii) 2,375,741 shares to be issued to owners of the Founding
Companies in connection with the acquisitions of the Founding Companies;
and (iv) 2,811,102 of the shares to be issued in the Offering,
representing that portion of the total 5,500,000 shares to be issued in
the Offering necessary to pay the cash portion of the purchase price for
the acquisitions of the Founding Companies and estimated Acquisition and
Offering expenses. Pro forma combined as further adjusted includes all of
the previously mentioned shares and 377,624 shares to be issued to the
owner of Keystone in connection with the Keystone acquisition and 406,047
of the shares to be issued in the Offering, representing the number of
shares necessary to pay the cash portion of the purchase price for the
Keystone acquisition.

(6) Includes $27.8 million payable to owners of the Founding Companies,
representing the cash portion of the purchase price for the acquisitions
of the Founding Companies considered to be paid from a portion of the net
proceeds of the Offering.

22
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION

The following discussion and analysis should be read in conjunction with the
Founding Companies' Financial Statements and the respective Notes thereto, and
"Selected Financial Data" appearing elsewhere in this Prospectus. In addition
to the historical information contained herein, the discussion in this
Prospectus contains forward-looking statements that involve risks and
uncertainties, such as statements of the Company's plans, objectives,
expectations and intentions. The cautionary statements made in this Prospectus
should be read as being applicable to all related forward-looking statements
wherever they appear in this Prospectus. The Company's actual results could
differ materially from those discussed herein. Factors that could cause or
contribute to such differences include those discussed in "Risk Factors," as
well as those discussed elsewhere herein.

INTRODUCTION

The Company's net revenue is derived from providing a broad range of towing
and transport services. The services offered by the Company include towing,
impounding and storing motor vehicles, conducting lien sales and auctions of
abandoned vehicles, and transporting new and used vehicles, insurance salvage
vehicles and heavy construction equipment. The Company's customers include
commercial entities such as automobile leasing companies, insurance companies,
automobile auction companies, automobile dealers, repair shops and fleet
operators; law enforcement agencies, such as police, sheriff and highway
patrol departments; and individual motorists.

The Company derives revenue from towing and transport services based on
distance, time or fixed charges and related impounding and storage fees. If an
impounded vehicle is not collected within a period prescribed by law
(typically between 30 and 90 days), the Company completes lien proceedings and
sells the vehicle at auction or to a scrap metal facility, depending on the
value of the vehicle. Depending on the jurisdiction, the Company either may
keep all of the proceeds from vehicle sales, or may keep the proceeds up to
the amount of accrued towing and storage fees and remit the remainder to the
law enforcement agency. These services are in some cases provided under
contracts with police, sheriff and highway patrol departments. In other cases,
the Company provides these services to law enforcement agencies without a
long-term contract. Prices charged by the Company for law enforcement towing
and storage of impounded vehicles are limited by contractual provisions or
local regulation.

Costs of revenue consist primarily of salaries and benefits of drivers,
dispatchers, supervisory and other employees, subcontracted services, fuel,
depreciation, repairs and maintenance, insurance, parts and supplies, other
vehicle expenses, and equipment rentals. Selling, general and administrative
expenses consist primarily of compensation and benefits to owners as well as
to sales and administrative employees, fees for professional services,
depreciation of office equipment, advertising and other general office
expenses.

In the case of law enforcement and private impound towing, the Company is
paid by the owner of the impounded vehicle when the owner claims the vehicle
or is paid from the proceeds of lien sales or auctions. With respect to the
Company's other operations, customers are billed upon completion of the
Company's services, with payment due within 30 days. Towing revenue is
recognized at the completion of each towing engagement, storage fees are
accrued over the period the vehicles are held in the impound facility,
transport revenue is recognized upon the delivery of the vehicle or equipment
to its final destination, and revenue from auction sales is recorded when
title to the vehicles has been transferred. Expenses related to the generation
of revenue are recognized as incurred.

The Founding Companies and Keystone have operated throughout the periods
presented as independent, privately owned entities, and their results of
operations reflect different tax structures (S Corporations or C Corporations)
which have influenced the historical level of owner compensation. Gross profit
margins and selling, general and administrative expenses as a percentage of
net revenue may not be comparable among the

23
<PAGE>

individual Founding Companies and Keystone. The owners have agreed to certain
reductions in their compensation and benefits in connection with the
Acquisitions. The aggregate amount of such reductions, had they been in effect
in 1997, is $2.3 million for the Founding Companies and $556,000 for Keystone,
which have been reflected as adjustments in the Unaudited Pro Forma Combined
Statement of Operations (the "Compensation Differential").

The Company anticipates that following the Acquisitions it may realize
savings from (i) consolidation of insurance and employee benefit programs;
(ii) the Company's ability to borrow at the prime rate rather than the
Founding Companies' borrowing rates, which range from 8.0% to 12.5%; (iii)
centralization of other general and administrative functions; and (iv) greater
volume discounts from providers of fuel, equipment, parts and other supplies.
It is anticipated that these savings will be offset by costs related to the
Company's new corporate management and by the costs associated with being a
public company. Certain of these costs will include the establishment of a new
integrated information system that the Company expects will be calendar year
2000 compatible. The Company estimates the cost of implementing the new
integrated information system will be approximately $2.0 million. Otherwise,
the Company believes that neither these savings nor the costs associated
therewith can be quantified because the Acquisitions have not occurred, and
there have been no combined operating results upon which to base any
assumptions. As a result, they have not been included in the financial
information included herein.

The Acquisitions will be accounted for using the purchase method of
accounting. United Road Services has been designated as the "accounting
acquirer" in the Acquisitions. Accordingly, the excess of the fair value of
the consideration paid in the Acquisitions over the fair value of the net
assets acquired by United Road Services of $43.9 million for the Founding
Companies and $8.0 million for Keystone, as well as $500,000 for acquisition
costs, will be recorded as "goodwill." This goodwill will be amortized over
its estimated useful life of 40 years as a non-cash charge to operating
income. The amount of goodwill to be recorded and the related amortization
expense will depend in part on the actual Offering price. See "Certain
Transactions--Organization of the Company."

COMBINED RESULTS OF OPERATIONS--FOUNDING COMPANIES

The combined results of operations of the Founding Companies for the periods
represented do not represent combined results of operations presented in
accordance with generally accepted accounting principles, but are only a
summation of certain data from the statements of operations of the individual
Founding Companies on a historical basis. The combined results also exclude
the effect of certain adjustments and may not be comparable to, and may not be
indicative of, the Company's post-combination results of operations because
(i) the Founding Companies were not under common control or management during
the periods presented; (ii) the Founding Companies used different tax
structures (S Corporations or C Corporations) during the periods presented;
(iii) the Company will incur incremental costs related to its new corporate
management and the costs attributable to being a public company; (iv) the
Company will use the purchase method of accounting to record the Acquisitions,
resulting in goodwill which will be amortized over 40 years; and (v) the
combined results of operations data do not reflect the Compensation
Differential and the potential cost savings, synergies and efficiencies that
may be achieved through the integration of the operations of the Founding
Companies.

The following table sets forth, for the years indicated, certain unaudited
combined results of operations data, and such data as a percentage of combined
net revenue, of the Founding Companies:

24
<PAGE>

<TABLE>
<CAPTION>
YEARS ENDED
-------------------------------------------
1995 1996 1997
------------- ------------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Net revenue....................... $26,521 100.0% $32,621 100.0% $42,599 100.0%
Cost of revenue................... 20,132 75.9 24,767 75.9 31,258 73.4
------- ----- ------- ----- ------- -----
Gross profit...................... 6,389 24.1 7,854 24.1 11,341 26.6
Selling, general and
administrative expenses.......... 5,315 20.0 5,534 17.0 8,244 19.4
------- ----- ------- ----- ------- -----
Income from operations............ 1,074 4.1 2,320 7.1 3,097 7.2
Other expense, net................ 383 1.5 439 1.3 379 0.9
------- ----- ------- ----- ------- -----
Income before income taxes........ 691 2.6 1,881 5.8 2,718 6.3
Income tax expense................ 264 1.0 445 1.4 826 1.9
------- ----- ------- ----- ------- -----
Net income........................ $ 427 1.6% $ 1,436 4.4% $ 1,892 4.4%
======= ===== ======= ===== ======= =====
</TABLE>
Combined Results of Operations for 1997 Compared to 1996

Net Revenue. Net revenue increased $10.0 million, or 30.6%, from $32.6
million in 1996 to $42.6 million in 1997. The increase in net revenue was
primarily attributable to continued growth in demand for the towing,
impounding and transport of vehicles resulting from (i) an increase in the
volume of automobiles on the road, (ii) relocation of vehicles upon completion
of lease programs and (iii) growth of the population in the geographical
service areas of certain of the Founding Companies. All of the Founding
Companies reported an increase in net revenue from 1996 to 1997, ranging from
13.8% at Milne to 59.9% at Northland. The largest net revenue increases were
at Northland, Quality and Falcon.

Gross Profit. Gross profit increased $3.4 million, or 44.4%, from $7.9
million in 1996 to $11.3 million in 1997, due principally to increases in
gross profit of $1.6 million at Northland, $773,000 at Quality and $305,000 at
Absolute. As a percentage of net revenue, gross profit increased from 24.1% in
1996 to 26.6% in 1997.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $2.7 million, or 49.0%, from $5.5 million in
1996 to $8.2 million in 1997. Selling, general and administrative expenses as
a percentage of net revenue increased from 17.0% in 1996 to 19.4% in 1997.
This increase was primarily attributable to an increase in stockholder
compensation and the continued expansion of administrative staff to support
revenue growth.

Other Expense, Net. Other expense, net decreased $60,000 or 13.7%, from
$439,000 in 1996 to $379,000 in 1997. As a percentage of net revenue, other
expense, net decreased from 1.3% in 1996 to 0.9% in 1997.

Income Tax Expense. Income tax expense increased $381,000, or 85.6%, from
$445,000 in 1996 to $826,000 in 1997. As a percentage of net revenue, income
tax expense increased from 1.4% in 1996 to 1.9% in 1997.

Net Income. Net income increased $456,000, or 31.8%, from $1.4 million in
1996 to $1.9 million in 1997. As a percentage of net revenue, net income
remained constant at 4.4% in 1996 and 1997.

Combined Results of Operations for 1996 Compared to 1995

Net Revenue. Net revenue increased $6.1 million, or 23.0%, from $26.5
million in 1995 to $32.6 million in 1996. The increase in net revenue was
primarily attributable to the increased demand for the transport of vehicles
as a result of an increase in the volume of automobiles on the road, the
relocation of vehicles upon completion of lease programs and the overall
growth of the population in certain of the Founding

25
<PAGE>

Companies' geographical service areas. All of the Founding Companies, except
Absolute, reported an increase in net revenue from 1995 to 1996, with
increases ranging from 9.1% at Milne to 42.6% at Falcon. The largest net
revenue increases were at Northland, Falcon and Quality.

Gross Profit. Gross profit increased $1.5 million, or 22.9%, from $6.4
million in 1995 to $7.9 million in 1996. Gross profit as a percentage of net
revenue remained constant at 24.1% in 1995 and 1996.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $219,000, or 4.1%, from $5.3 million in 1995
to $5.5 million in 1996. As a percentage of net revenue, selling, general and
administrative expenses decreased from 20.0% in 1995 to 17.0% in 1996.

Other Expense, Net. Other expense, net increased $56,000 or 14.6%, from
$383,000 in 1995 to $439,000 in 1996. As a percentage of net revenue, other
expense, net decreased from 1.5% in 1995 to 1.3% in 1996.

Income Tax Expense. Income tax expense increased $181,000, or 68.6%, from
$264,000 in 1995 to $445,000 in 1996. As a percentage of net revenue, income
tax expense increased from 1.0% in 1995 to 1.4% in 1996.

Net Income. Net income increased $1.0 million, or 236.3% from $427,000 in
1995 to $1.4 million in 1996. As a percentage of net revenue, net income
increased from 1.6% in 1995 to 4.4% in 1996.

Combined Liquidity and Capital Resources

Upon consummation of the acquisitions of the Founding Companies and the
Offering and application of the estimated net proceeds therefrom, the Company
anticipates that, on a pro forma combined as adjusted basis as of December 31,
1997, it will have approximately $31.7 million of cash and cash equivalents,
$29.9 million of working capital and $8.4 million of outstanding indebtedness.
The Company intends to use $4.5 million of net proceeds of the Offering to pay
the cash portion of the purchase price for Keystone and to assume $793,000 of
outstanding indebtedness in connection with the Keystone acquisition, at which
point working capital would be $24.6 million on a pro forma combined as
adjusted basis as of December 31, 1997. See "Use of Proceeds."

The Founding Companies generated $2.5 million of net cash from operating
activities during 1997, primarily at Northland, Quality and Falcon. Net cash
used in investing activities was $2.3 million, primarily relating to equipment
purchases. Net cash used in financing activities was $37,000 consisting of
reductions in long-term debt and capital lease obligations of $1.9 million,
distributions to stockholders of $39,000, offset by new financing of $1.8
million. At December 31, 1997, the Founding Companies had a working capital
deficit of $1.1 million and total debt (including debt to stockholders) and
capital lease obligations of $6.8 million and $3.4 million, respectively. This
was primarily a reflection of stockholder distributions and the acquisition of
capital lease obligations during 1997.

The Company expects to obtain a credit facility with a group of financial
institutions, for which Bank of America will act as agent, enabling the
Company to borrow up to $50.0 million on a revolving basis (the "Credit
Facility"). The Credit Facility is expected to terminate three years from
closing, at which time all outstanding indebtedness will be due. Borrowings
under the Credit Facility are expected to accrue interest, at the Company's
option, at either (a) the Base Rate (which is equal to the greater of (i) the
Federal Funds Rate plus 0.5% and (ii) Bank of America's reference rate), or
(b) the Eurodollar Rate (which is equal to Bank of America's reserve adjusted
eurodollar rate plus a margin ranging from 1.5% to 2.5% per annum). The Credit
Facility is expected to be used for acquisitions, capital expenditures,
refinancing of outstanding debt and for general corporate purposes. The Credit
Facility is expected to require the Company to comply with various loan
covenants including (i) maintenance of certain financial ratios, (ii)
restrictions on additional indebtedness, and (iii) restrictions on liens,
guarantees, advances and dividends. The Credit Facility is expected to be
subject to customary drawing conditions and consummation of the Offering. To
the extent the Company draws down the Credit Facility to finance capital
expenditures, the Company's interest expense for future periods will increase.

26
<PAGE>

The Company estimates that it will make expenditures of approximately $2.0
million (including costs incurred to date which have not been material) in
order to install an integrated information system. Furthermore, the Company
expects that it will be required to upgrade and expand this system although at
this time the Company cannot quantify the expenditures that will be required
in connection with any such future upgrades or expansion.

The Company anticipates that purchases of new towing and transport vehicles
for the Founding Companies will remain consistent with the prior year. Sources
of liquidity to meet these demands are expected to be generated from earnings
and related cash flow.

The Company intends to pursue acquisition opportunities. The Company expects
to fund future acquisitions as well as its ongoing liquidity needs through the
issuance of additional Common Stock, borrowings, including use of amounts
available under the Credit Facility, and cash flow from operations. On a
combined basis, the Founding Companies made capital expenditures of $3.0
million in 1997.

NORTHLAND COMBINED RESULTS OF OPERATIONS

Northland's primary business is transporting vehicles for automobile auction
companies, leasing companies, automobile dealers, manufacturers and
individuals, primarily in the Midwestern United States. Northland has three
facilities in Detroit. It operates 55 vehicles and has 25 employees and 50
independent contractors.

The following table sets forth selected combined statement of operations
data, and such data as a percentage of net revenue, for the years indicated:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------------------
1995 1996 1997
------------ ------------ -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Net revenue......................... $4,671 100.0% $6,353 100.0% $10,159 100.0%
Cost of revenue..................... 3,683 78.8 5,132 80.8 7,342 72.3
------ ----- ------ ----- ------- -----
Gross profit........................ 988 21.2 1,221 19.2 2,817 27.7
Selling, general and administrative 664 14.2 875 13.8 1,379 13.5
expenses........................... ------ ----- ------ ----- ------- -----
Income from operations.............. 324 7.0 346 5.4 1,438 14.2
Other expense, net.................. 18 0.4 -- -- 49 0.5
------ ----- ------ ----- ------- -----
Income before income taxes.......... 306 6.6 346 5.4 1,389 13.7
Income tax expense.................. 31 0.7 -- -- 335 3.3
------ ----- ------ ----- ------- -----
Net income.......................... $ 275 5.9% $ 346 5.4% $ 1,054 10.4%
====== ===== ====== ===== ======= =====
</TABLE>

Northland Results for 1997 Compared to 1996

Net Revenue. Net revenue increased $3.8 million, or 59.9%, from $6.4 million
in 1996 to $10.2 million in 1997, primarily due to the full year impact of a
service arrangement with a national provider of automobile lease financing and
increased volume from previously existing service arrangements.

Gross Profit. Gross profit increased $1.6 million, or 130.7%, from $1.2
million in 1996 to $2.8 million in 1997. As a percentage of net revenue, gross
profit increased from 19.2% in 1996 to 27.7% in 1997. These increases were due
primarily to the increased volume of business and increased efficiencies
resulting from establishing variable subcontractor and broker arrangements to
service this additional volume.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $504,000, or 57.6%, from $875,000 in 1996 to
$1.4 million in 1997, primarily due to increased officer and office personnel
compensation, which was related to the increase in net revenue. As a
percentage of net revenue, selling, general and administrative expenses
decreased from 13.8% in 1996 to 13.5% in 1997.

27
<PAGE>

Other Expense, Net. Other expense, net increased $49,000 from zero in 1996
to $49,000 in 1997. As a percentage of net revenue, other expense, net
increased from 0.0% in 1996 to 0.5% in 1997. This increase in other expense,
net was primarily attributable to increased interest expense reflecting
additional transportation equipment held under capital lease.

Income Tax Expense. Income tax expense increased from zero in 1996 to
$335,000 in 1997. As a percentage of net revenue, income tax expense increased
from 0.0% in 1996 to 3.3% in 1997.

Net Income. Net income increased $708,000, or 204.6%, from $346,000 in 1996
to $1.1 million in 1997. As a percentage of net revenue, net income increased
from 5.4% in 1996 to 10.4% in 1997.

Northland Results for 1996 Compared to 1995

Net Revenue. Net revenue increased $1.7 million, or 36.0%, from $4.7 million
in 1995 to $6.4 million in 1996, primarily due to the addition of new service
arrangements resulting from the growth of the automobile leasing industry and
relating to the transport of vehicles coming off lease programs.

Gross Profit. Gross profit increased $233,000, or 23.6%, from $988,000 in
1995 to $1.2 million in 1996. As a percentage of net revenue, gross profit
decreased from 21.2% in 1995 to 19.2% in 1996. The decrease as a percentage of
net revenue was primarily due to increased depreciation and increased repair,
maintenance and equipment rental expense, without a proportional increase in
net revenue.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $211,000, or 31.8%, from $664,000 in 1995 to
$875,000 in 1996. As a percentage of net revenue, selling, general and
administrative expenses decreased from 14.2% in 1995 to 13.8% in 1996.

Other Expense, Net. Other expense, net decreased $18,000 from $18,000 in
1995 to zero in 1996. As a percentage of net revenue, other expense, net
decreased from 0.4% in 1995 to 0.0% in 1996. This decrease in other expense,
net was primarily attributable to an increase in interest expense.

Income Tax Expense. Income tax expense decreased from $31,000 in 1995 to
zero in 1996. As a percentage of net revenue, income tax expense decreased
from 0.7% in 1995 to 0.0% in 1996.

Net Income. Net income increased $71,000, or 25.8%, from $275,000 in 1995 to
$346,000 in 1996. As a percentage of net revenue, net income decreased from
5.9% in 1995 to 5.4% in 1996.

Northland Liquidity and Capital Resources

At December 31, 1997, working capital was $399,000 and debt and capital
lease obligations outstanding were $681,000 and $942,000, respectively.

Northland generated $1.0 million in net cash from operating activities in
1997. Net cash used in investing activities was $665,000, which was primarily
for equipment purchases. Net cash used in financing activities consisted of
$398,000 relating to principal payments on debt and capital leases
outstanding.

FALCON RESULTS OF OPERATIONS

Falcon's primary business is transporting vehicles for automobile dealers,
leasing companies, automobile auction companies and long-haul transporters in
the Western United States. Falcon has facilities in Los Angeles, San Francisco
and Phoenix. It operates 49 vehicles and has 72 employees.

28
<PAGE>

The following table sets forth selected statement of operations data, and
such data as a percentage of net revenue, for the years indicated:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------------------
1995 1996 1997
------------- ------------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Net revenue....................... $4,351 100.0% $6,203 100.0% $7,785 100.0%
Cost of revenue................... 3,492 80.2 4,638 74.8 5,956 76.5
------ ----- ------ ----- ------ -----
Gross profit...................... 859 19.8 1,565 25.2 1,829 23.5
Selling, general and
administrative expenses.......... 952 21.9 1,191 19.2 1,614 20.7
------ ----- ------ ----- ------ -----
Income (loss) from operations..... (93) (2.1) 374 6.0 215 2.8
Other income (expense), net....... (39) (0.9) (117) (1.9) 25 0.3
------ ----- ------ ----- ------ -----
Income (loss) before income taxes. (132) (3.0) 257 4.1 240 3.1
Income tax expense................ 15 0.4 94 1.5 108 1.4
------ ----- ------ ----- ------ -----
Net income (loss)................. $ (147) (3.4)% $ 163 2.6% $ 132 1.7%
====== ===== ====== ===== ====== =====
</TABLE>

Falcon Results for 1997 Compared to 1996

Net Revenue. Net revenue increased $1.6 million, or 25.5%, from $6.2 million
in 1996 to $7.8 million in 1997. The growth in revenue was primarily due to
increased volume driven by recent fleet expansion.

Gross Profit. Gross profit increased $264,000, or 16.9%, from $1.6 million
in 1996 to $1.8 million in 1997. As a percentage of net revenue, gross profit
decreased from 25.2% in 1996 to 23.5% in 1997. This decrease as a percentage
of net revenue was the result of increased depreciation, facility and
equipment rental expense and insurance premiums.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $423,000, or 35.5%, from $1.2 million in
1996 to $1.6 million in 1997. As a percentage of net revenue, selling, general
and administrative expenses increased from 19.2% in 1996 to 20.7% in 1997.
These increases were primarily due to increased officer and office personnel
compensation, which was related to an increase in net revenue.

Other Income (Expense), Net. Other income (expense), net changed $142,000
from an expense of $117,000 in 1996 to income of $25,000 in 1997. As a
percentage of net revenue, other income (expense), net changed from an expense
of 1.9% in 1996 to income of 0.3% in 1997. This change in other income
(expense), net was primarily attributable to the increase in gain on sale of
assets.

Income Tax Expense. Income tax expense increased $14,000, or 14.9%, from
$94,000 in 1996 to $108,000 in 1997. As a percentage of net revenue, income
tax expense decreased from 1.5% in 1996 to 1.4% in 1997.

Net Income (Loss). Net income decreased $31,000, or 19.0%, from $163,000 in
1996 to $132,000 in 1997. As a percentage of net revenue, net income decreased
from 2.6% in 1996 to 1.7% in 1997.

Falcon Results for 1996 Compared to 1995

Net Revenue. Net revenue increased $1.9 million, or 42.6%, from $4.4 million
in 1995 to $6.2 million in 1996. This increase was primarily due to the
opening of an additional location in each of 1994 and 1995.

Gross Profit. Gross profit increased $706,000, or 82.2%, from $859,000 in
1995 to $1.6 million in 1996. As a percentage of net revenue, gross profit
increased from 19.8% in 1995 to 25.2% in 1996. These increases were generally
attributable to an increase in revenues from additional locations for which
the start-up costs had been incurred in prior years.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $239,000, or 25.1%, from $952,000 in 1995 to
$1.2 million in 1996. As a percentage of net revenue, selling,

29
<PAGE>

general and administrative expenses decreased from 21.9% in 1995 to 19.2% in
1996. The decrease as a percentage of net revenue was the result of an
increase in revenue without a corresponding increase in overhead.

Other Income (Expense), Net. Other expense, net increased $78,000, or
200.0%, from $39,000 in 1995 to $117,000 in 1996. As a percentage of net
revenue, other expense, net increased from 0.9% in 1995 to 1.9% in 1996. This
change in other expense, net was primarily attributable to an increase in
interest expense.

Income Tax Expense. Income tax expense increased $79,000, or 526.7%, from
$15,000 in 1995 to $94,000 in 1996. As a percentage of net revenue, income tax
expense changed from 0.4% in 1995 to 1.5% in 1996.

Net Income (Loss). Net income (loss) changed $310,000 from a net loss of
$147,000 in 1995 to net income of $163,000 in 1996. As a percentage of net
revenue, net income (loss) changed from a loss of 3.4% in 1995 to income of
2.6% in 1996.

Falcon Liquidity and Capital Resources

At December 31, 1997, working capital deficiency was $837,000. Debt and
capital lease obligations outstanding were $561,000 and $1.1 million,
respectively.

Falcon generated $892,000 in net cash from operating activities in 1997. Net
cash used in investing activities was $778,000, which was related to the
purchase and sale of various equipment. Net cash used in financing activities
was $134,000 consisting of payments on capital lease obligations, partially
offset by proceeds from long term debt.

QUALITY CONSOLIDATED RESULTS OF OPERATIONS

Quality's primary business is towing, impounding and storing vehicles for
law enforcement agencies and commercial customers in Southern Nevada. Quality
also conducts lien sales of impounded vehicles. Quality has two facilities in
Las Vegas. It operates 40 vehicles and has 100 employees.

The following table sets forth selected consolidated statement of operations
data, and such data as a percentage of net revenue, for the periods indicated:

<TABLE>
<CAPTION>
TWELVE-MONTH
PERIOD ENDED
YEARS ENDED JANUARY 31, DECEMBER 31, 1997(1)
---------------------------- --------------------
1996 1997
------------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Net revenue................ $4,396 100.0% $5,395 100.0% $ 6,802 100.0%
Cost of revenue............ 2,579 58.7 3,214 59.6 3,849 56.6
------ ----- ------ ----- ---------- ---------
Gross profit............... 1,817 41.3 2,181 40.4 2,953 43.4
Selling, general and
administrative expenses... 1,437 32.7 1,195 22.2 1,390 20.4
------ ----- ------ ----- ---------- ---------
Income from operations..... 380 8.6 986 18.2 1,563 23.0
Other expense, net......... 284 6.4 194 3.6 300 4.4
------ ----- ------ ----- ---------- ---------
Income before income taxes. 96 2.2 792 14.6 1,263 18.6
Income tax expense......... 104 2.4 277 5.1 441 6.5
------ ----- ------ ----- ---------- ---------
Net income (loss).......... $ (8) (0.2)% $ 515 9.5% $ 822 12.1%
====== ===== ====== ===== ========== =========
</TABLE>
- ---------------------
(1) Quality has a fiscal year end of January 31. The twelve-month period ended
December 31, 1997 includes the results of operations for the month of
January 1997, which are also included in the fiscal year ended January 31,
1997.

30
<PAGE>

Quality Results for Twelve-Month Period Ended December 31, 1997 Compared to
Year Ended January 31, 1997

Net Revenue. Net revenue increased $1.4 million, or 26.1%, from $5.4 million
in the year ended January 31, 1997 to $6.8 million in the twelve-month period
ended December 31, 1997. The increase was due primarily to a rate increase
effected in 1997, and increased service calls arising from the continued
expansion of the population within the geographical service area.

Gross Profit. Gross profit increased $772,000, or 35.4%, from $2.2 million
in the year ended January 31, 1997 to $3.0 million in the twelve-month period
ended December 31, 1997. As a percentage of net revenue, gross profit
increased from 40.4% in the year ended January 31, 1997 to 43.4% in the
twelve-month period ended December 31, 1997. These increases were generally
attributable to increased volume of business that helped to facilitate
favorable economies of scale.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $195,000, or 16.3%, from $1.2 million in the
year ended January 31, 1997 to $1.4 million in the twelve-month period ended
December 31, 1997. As a percentage of net revenue, selling, general and
administrative expenses decreased from 22.2% in the year ended January 31,
1997 to 20.4% in the twelve-month period ended December 31, 1997.

Other Expense, Net. Other expense, net increased $106,000, or 54.6%, from
$194,000 in the year ended January 31, 1997 to $300,000 in the twelve-month
period ended December 31, 1997. As a percentage of net revenue, other expense,
net increased from 3.6% in the year ended January 31, 1997 to 4.4% in the
twelve-month period ended December 31, 1997. This increase in other expense,
net was primarily attributable to a nonrecurring adjustment to insurance
expense.

Income Tax Expense. Income tax expense increased $164,000, or 59.2%, from
$277,000 in the year ended January 31, 1997 to $441,000 in the twelve-month
period ended December 31, 1997. As a percentage of net revenue, income tax
expense increased from 5.1% in the year ended January 31, 1997 to 6.5% in the
twelve-month period ended December 31, 1997.

Net Income (Loss). Net income increased $307,000, or 59.6%, from $515,000 in
the year ended January 31, 1997 to $822,000 in the twelve-month period ended
December 31, 1997. As a percentage of net revenue, net income increased from
9.5% in the year ended January 31, 1997 to 12.1% in the twelve-month period
ended December 31, 1997.

Quality Results for Year Ended January 31, 1997 Compared to Year Ended
January 31, 1996

Net Revenue. Net revenue increased $1.0 million, or 22.7%, from $4.4 million
in 1996 to $5.4 million in 1997. This increase was related primarily to
increased service calls arising from the expansion of the population within
the geographical service area and a rate increase effected in 1996.

Gross Profit. Gross profit increased $364,000, or 20.0%, from $1.8 million
in 1996 to $2.2 million in 1997. As a percentage of net revenue, gross profit
decreased from 41.3% in 1996 to 40.4% in 1997.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses decreased $242,000, or 16.8%, from $1.4 million in
1996 to $1.2 million in 1997. As a percentage of net revenue, selling, general
and administrative expenses decreased from 32.7% in 1996 to 22.2% in 1997. The
decrease as a percentage of net revenue was the result of an increase in
revenue without a corresponding increase in overhead.

Other Expense, Net. Other expense, net decreased $90,000, or 31.7%, from
$284,000 in 1996 to $194,000 in 1997. As a percentage of net revenue, other
expense, net decreased from 6.4% in 1996 to 3.6% in 1997. This decrease in
other expense, net was primarily attributable to a nonrecurring adjustment to
insurance expense.

31
<PAGE>

Income Tax Expense. Income tax expense increased $173,000, or 166.4%, from
$104,000 in 1996 to $277,000 in 1997. As a percentage of net revenue, income
tax expense increased from 2.4% in 1996 to 5.1% in 1997.

Net Income (Loss). Net income (loss) changed $523,000 from a net loss of
$8,000 in 1996 to net income of $515,000 in 1997. As a percentage of net
revenue, net income (loss) changed from a loss of 0.2% in 1996 to income of
9.5% in 1997.

Quality Liquidity and Capital Resources

At December 31, 1997, working capital deficiency was $396,000 and debt
obligations outstanding were $2.7 million.

Quality generated $692,000 in net cash from operating activities in 1997.
Net cash used in investing activities was approximately $473,000, which was
related to the purchase of various equipment. Net cash used in financing
activities was approximately $133,000, consisting primarily of payments on
debt obligations.

CARON COMBINED RESULTS OF OPERATIONS

Caron's primary businesses are transporting vehicles for leasing companies,
long-haul transporters and individuals in the Northeastern United States, and
towing vehicles for commercial and private customers in the Hartford,
Connecticut region. Caron has facilities in East Hartford, New Jersey and
Florida. Caron operates 55 vehicles and has 70 employees and 10 independent
contractors.

The following table sets forth selected combined statement of operations
data, and such data as a percentage of net revenue, for the years indicated:

<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER 30,
-------------------------------------------
1995 1996 1997
------------- ------------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Net revenue...................... $4,624 100.0% $5,575 100.0% $6,627 100.0%
Cost of revenue.................. 4,045 87.5 5,084 91.2 6,304 95.1
------ ----- ------ ----- ------ -----
Gross profit..................... 579 12.5 491 8.8 323 4.9
Selling, general and administra-
tive expenses................... 238 5.1 238 4.3 511 7.7
------ ----- ------ ----- ------ -----
Income (loss) from operations.... 341 7.4 253 4.5 (188) (2.8)
Other income (expense), net...... (44) (1.0) (62) (1.1) 12 0.2
------ ----- ------ ----- ------ -----
Income (loss) before income
taxes........................... 297 6.4 191 3.4 (176) (2.6)
Income tax expense (benefit)..... 103 2.2 62 1.1 (95) (1.4)
------ ----- ------ ----- ------ -----
Net income (loss)................ $ 194 4.2% $ 129 2.3% $ (81) (1.2)%
====== ===== ====== ===== ====== =====
</TABLE>

Caron Results for Year Ended September 30, 1997 Compared to Year Ended
September 30, 1996

Net Revenue. Net revenue increased $1.1 million, or 18.9%, from $5.6 million
in 1996 to $6.6 million in 1997, primarily due to increased volume from a
major automobile leasing customer and general increases in volume in transport
services.

Gross Profit. Gross profit declined $168,000, or 34.2%, from $491,000 in
1996 to $323,000 in 1997. As a percentage of net revenue, gross profit
decreased from 8.8% in 1996 to 4.9% in 1997 as a result of increased costs
relating to investment in, and improvement and maintenance of, facilities and
equipment, many of which were expensed.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $273,000, or 114.7%, from $238,000 in 1996
to $511,000 in 1997. As a percentage of net revenue, selling,

32
<PAGE>

general and administrative expenses increased from 4.3% in 1996 to 7.7% in
1997. These increases resulted primarily from an increase in office and
clerical staff to support business growth.

Other Income (Expense), Net. Other income (expense), net changed $74,000
from an expense of $62,000 in 1996 to income of $12,000 in 1997. As a
percentage of net revenue, other income (expense), net changed from an expense
of 1.1% in 1996 to income of 0.2% in 1997. This change in other income
(expense), net was primarily attributable to the increase in gain on sale of
assets.

Income Tax Expense (Benefit). Income tax expense (benefit) changed $157,000
from a tax expense of $62,000 in 1996 to a tax benefit of $95,000 in 1997. As
a percentage of net revenue, income tax expense (benefit) changed from an
expense of 1.1% in 1996 to a benefit of 1.4% in 1997.

Net Income (Loss). Net income (loss) changed $210,000 from net income of
$129,000 in 1996 to a net loss of $81,000 in 1997. As a percentage of net
revenue, net income (loss) changed from income of 2.3% in 1996 to a loss of
1.2% in 1997.

Caron Results for Year Ended September 30, 1996 Compared to Year Ended
September 30, 1995

Net Revenue. Net revenue increased $951,000, or 20.6%, from $4.6 million in
1995 to $5.6 million in 1996, primarily due to increased demand for transport
services from automobile auction companies.

Gross Profit. Gross profit declined $88,000, or 15.2%, from $579,000 in 1995
to $491,000 in 1996. As a percentage of net revenue, gross profit decreased
from 12.5% to 8.8%, due to costs relating to business expansion.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses remained flat at $238,000. As a percentage of net
revenue, selling, general and administrative expenses decreased from 5.1% in
1995 to 4.3% in 1996.

Other Income (Expense), Net. Other expense, net increased $18,000, or 40.9%,
from $44,000 in 1995 to $62,000 in 1996. As a percentage of net revenue, other
expense, net increased from 1.0% in 1995 to 1.1% in 1996. The change in other
expense, net is primarily attributable to an increase in interest expense.

Income Tax Expense (Benefit). Income tax expense decreased $41,000, or
39.8%, from $103,000 in 1995 to $62,000 in 1996. As a percentage of net
revenue, income tax expense decreased from 2.2% in 1995 to 1.1% in 1996.

Net Income (Loss). Net income decreased $65,000, or 33.5%, from $194,000 in
1995 to 129,000 in 1996. As a percentage of net revenue, net income decreased
from 4.2% in 1995 to 2.3% in 1996.

Caron Liquidity and Capital Resources

At September 30, 1997, working capital deficiency was $199,000 and debt and
capital lease obligations outstanding were $1.5 million and $616,000,
respectively.

Caron used $86,000 net cash in operating activities in 1997. Net cash used
in investing activities was approximately $37,000, of which $333,000 was used
for equipment purchases, offset by $341,000 in proceeds from the sale of
property and equipment. Net cash provided by financing activities was
$201,000, relating primarily to an increase in borrowing.

ABSOLUTE RESULTS OF OPERATIONS

Absolute's primary business is towing and transporting insurance salvage
vehicles for insurance companies and automobile auction companies in Southern
California. Absolute has one facility in Los Angeles. It operates 17 vehicles
and has 20 employees and 35 independent contractors.

33
<PAGE>

The following table sets forth selected statement of operations data, and
such data as a percentage of net revenue, for the years indicated:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------
1996 1997
------------ -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Net revenue......................... $3,465 100.0% $4,780 100.0%
Cost of revenue..................... 2,756 79.5 3,767 78.8
------ ----- ------ -----
Gross profit........................ 709 20.5 1,013 21.2
Selling, general and administrative
expenses........................... 636 18.4 1,095 22.9
------ ----- ------ -----
Income (loss) from operations....... 73 2.1 (82) (1.7)
Other expense, net.................. 4 0.1 6 0.1
------ ----- ------ -----
Income (loss) before income tax..... 69 2.0 (88) (1.8)
Income tax benefit.................. 12 0.4 24 0.5
------ ----- ------ -----
Net income (loss)................... $ 81 2.4% $ (64) (1.3)%
====== ===== ====== =====
</TABLE>

Absolute Results for 1997 Compared to 1996

Net Revenue. Net revenue increased $1.3 million, or 38.0%, from $3.5 million
in 1996 to $4.8 million in 1997. The growth in net revenue was primarily due
to a service arrangement with a national automobile auction company and a
large insurance company. Insurance related transport increased throughout
California due to a new state law requiring evidence of insurance in order to
register or operate a vehicle.

Gross Profit. Gross profit increased $304,000, or 42.9%, from $709,000 in
1996 to $1.0 million in 1997. As a percentage of net revenue, gross profit
increased from 20.5% in 1996 to 21.2% in 1997. These increases were the result
of increased volume of business and favorable economies of scale.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $459,000 or 72.2%, from $636,000 in 1996 to
$1.1 million in 1997. As a percentage of net revenue, selling, general and
administrative expenses increased from 18.4% in 1996 to 22.9% in 1997. These
increases were the result of an increase in officer compensation and increased
staffing to support business growth.

Other Expense, Net. Other expense, net increased $2,000, or 50.0%, from
$4,000 in 1996 to $6,000 in 1997. As a percentage of net revenue, other
expense, net remained constant at 0.1% in 1996 and 1997.

Income Tax Benefit. Income tax benefit increased $12,000, or 100.0%, from
$12,000 in 1996 to $24,000 in 1997. As a percentage of net revenue, income tax
benefit increased from 0.4% in 1996 to 0.5% in 1997.

Net Income (Loss). Net income (loss) changed $145,000 from net income of
$81,000 in 1996 to a net loss of $64,000 in 1997. As a percentage of net
revenue, net income (loss) changed from income of 2.4% in 1996 to a loss of
1.3% in 1997.

Absolute Liquidity and Capital Resources

At December 31, 1997, working capital was $25,000 and debt obligations
outstanding were $312,000.

Absolute used $302,000 net cash in operating activities in 1997. Net cash
used in investing activities was $159,000, which was used for equipment
purchases. Net cash provided by financing activities was $472,000 related
primarily to an increase in borrowings.

34
<PAGE>

AUTO SERVICE CONSOLIDATED RESULTS OF OPERATIONS

Auto Service's primary business is towing vehicles for commercial and
individual customers in the Sacramento, California region. Auto Service has
facilities in Sacramento. It operates 20 vehicles and has 48 employees.

The following table sets forth selected consolidated statement of operations
data, and such data as a percentage of net revenue, for the year indicated:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1997
-----------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Net revenue...................................... $ 3,310 100.0%
Cost of revenue.................................. 2,364 71.4
----------- ----------
Gross profit..................................... 946 28.6
Selling, general and administrative expenses..... 765 23.1
----------- ----------
Income from operations........................... 181 5.5
Other expense, net............................... 18 0.6
----------- ----------
Income before income taxes....................... 163 4.9
Income tax expense............................... 49 1.5
----------- ----------
Net income....................................... $ 114 3.4%
=========== ==========
</TABLE>

Auto Service Liquidity and Capital Resources

At December 31, 1997, working capital deficiency was $57,000 and debt and
capital lease obligations outstanding were $229,000 and $740,000,
respectively.

Auto Service generated $249,000 in net cash from operating activities in
1997. Net cash used in investing activities was approximately $216,000, which
was used for equipment and property purchases. Net cash provided by financing
activities was $30,000.

KEYSTONE RESULTS OF OPERATIONS

Keystone's primary business is towing, impounding and storing vehicles for
law enforcement agencies and commercial customers in Southern California.
Keystone also conducts lien sales of impounded vehicles. Keystone has one
facility in Los Angeles. It operates 21 vehicles and has 34 employees.

The following table sets forth selected statement of operations data, and
such data as a percentage of net revenue, for the years indicated:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------
1996 1997
------------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Net revenue.......................... $3,369 100.0% $3,943 100.0%
Cost of revenue...................... 2,132 63.3 2,607 66.1
------ ----- ------ -----
Gross profit......................... 1,237 36.7 1,336 33.9
Selling, general and administrative
expenses............................ 934 27.7 1,140 28.9
------ ----- ------ -----
Income from operations............... 303 9.0 196 5.0
Other income (expense), net.......... (26) (0.8) 43 1.1
------ ----- ------ -----
Net income........................... $ 277 8.2% $ 239 6.1%
====== ===== ====== =====
</TABLE>

35
<PAGE>

Keystone Results for 1997 Compared to 1996

Net Revenue. Net revenue increased $574,000, or 17.0%, from $3.4 million in
1996 to $3.9 million in 1997. The growth in net revenue was primarily due to
increased law enforcement related activity and increased marketing efforts
commenced in late 1996, as well as an increase in storage fees for impounded
vehicles due to new California legislation enacted in 1996 relating to
mandatory 30-day impounds for vehicles operated by unlicensed and uninsured
motorists.

Gross Profit. Gross profit increased $99,000, or 8.0%, from $1.2 million in
1996 to $1.3 million in 1997. As a percentage of net revenue, gross profit
decreased from 36.7% in 1996 to 33.9% in 1997. The decrease as a percentage of
net revenue was caused primarily by increased depreciation related to
equipment purchases.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $206,000, or 22.1%, from $934,000 in 1996 to
$1.1 million in 1997. As a percentage of net revenue, selling, general and
administrative expenses increased from 27.7% in 1996 to 28.9% in 1997.

Other Income (Expense), Net. Other income (expense), net changed $69,000
from an expense of $26,000 in 1996 to income of $43,000 in 1997. As a
percentage of net revenue, other income (expense), net changed from an expense
of 0.8% in 1996 to income of 1.1% in 1997. This change in other income
(expense), net was primarily attributable to the increase in management fee
income.

Net Income. Net income decreased $38,000, or 13.7%, from $277,000 in 1996 to
$239,000 in 1997. As a percentage of net revenue, net income decreased from
8.2% in 1996 to 6.1% in 1997.

Keystone Liquidity and Capital Resources

At December 31, 1997, working capital deficiency was $602,000 and debt
obligations outstanding were $793,000.

Keystone generated $494,000 in net cash from operating activities in 1997.
Net cash used in investing activities was approximately $361,000, which was
used for the purchase of equipment. Net cash used in financing activities was
approximately $254,000, consisting primarily of a distribution to Keystone's
stockholders.

36
<PAGE>

BUSINESS

United Road Services was formed in July 1997 to become a leading national
provider of motor vehicle and equipment towing and transport services. United
Road Services has entered into definitive acquisition agreements to acquire
eight towing and transport service companies. Upon consummation of the
Offering and the acquisitions of the Founding Companies, the Company will be
one of the largest providers of these services in the United States. The
Founding Companies have been in business for periods ranging from ten to 48
years and operate an aggregate of 16 facilities located in seven states.
Combined net revenue of the Founding Companies increased at a compound annual
rate of approximately 27% from 1995 through 1997.

The Company offers a broad range of towing and transport services, including
towing, impounding and storing motor vehicles, conducting lien sales and
auctions of abandoned vehicles, and transporting new and used vehicles,
insurance salvage vehicles and heavy construction equipment. The Company
derives revenue from towing and transport services based on distance, time or
fixed charges and from impounding and storage services based on daily fees. In
the event that impounded vehicles are not claimed by their owners within
prescribed time periods, the Company is paid from the proceeds of lien sales
or auctions. The Company's customers include commercial entities, such as
automobile leasing companies, insurance companies, automobile auction
companies, automobile dealers, repair shops and fleet operators; law
enforcement agencies such as police, sheriff and highway patrol departments;
and individual motorists.

INDUSTRY OVERVIEW

The Company estimates that the motor vehicle and equipment towing and
transport service industry generated net revenue in excess of $14 billion in
the United States in 1997. Based on available industry data, the Company
believes that the industry is highly fragmented with over 36,000 operating
businesses in the United States, most of which are small, local and owner-
operated, with limited access to capital for modernization and expansion. The
Company believes that recent industry growth has been driven primarily by the
following factors: an increase in the number and average age of registered
vehicles, which increases demand for all types of towing and transport
services; a rise in government mandates (and increased enforcement of such
mandates) against unlicensed or uninsured drivers and unregistered vehicles,
which results in higher demand for towing and impounding services; the growing
popularity of leasing which, according to the National Automobile Dealers
Association, has risen from 5% of all new auto sales in 1985 to 30% in 1996,
which increases demand for transport services to move off-lease vehicles to
auctions and dealers for sale; and the increasing mobility of the United
States workforce, which increases demand for automobile transport in
connection with career-related moves.

The towing and transport service industry includes the following markets:

Law Enforcement Agency Towing. This market involves towing vehicles in
situations where the driver of the vehicle has been arrested or is unlicensed
or uninsured, or where the vehicle has been illegally parked, abandoned,
stolen and recovered, or is unregistered. This market also includes impounding
and storing towed vehicles in secure lots and conducting lien sales and
auctions when owners fail to claim their vehicles within a period prescribed
by law (typically between 30 and 90 days). These services are provided to
police, sheriff and highway patrol departments. Equipment used in this area
consists primarily of light- and medium-duty tow trucks and flatbed trucks.

New and Used Automobile Transport. This market involves transporting new and
used vehicles from factories and ports to automobile dealers, from automobile
auctions to dealers, and between dealers. Significant customers include
automobile manufacturers, leasing companies, insurance companies, automobile
dealers, long-distance transporters, brokers and individuals. Equipment used
in this area consists primarily of four- to ten-car carriers and flatbed
trucks.

37
<PAGE>

Insurance Salvage Towing and Transport. This market involves the towing and
transport of damaged or destroyed vehicles and vehicles otherwise subject to
an insurance claim. These services are generally provided on a contractual
basis to insurance companies and automobile auction companies. Equipment used
in this area consists primarily of flatbed trucks.

Private Impound Towing. This market involves towing, impounding and storing
vehicles illegally parked on private property. These services are similar to
law enforcement agency towing and are generally provided to private customers
such as shopping centers, retailers and hotels. Equipment used in this area
consists primarily of light- and medium-duty tow trucks and flatbed trucks.

Commercial Road Service. This market involves towing for commercial
customers such as automobile dealers and repair shops, as well as providing
towing, recovery and roadside assistance and repair of heavy-duty commercial
vehicles, such as trucks and buses, for commercial fleet operators. Equipment
used in this area ranges from light- and medium-duty trucks used for towing
small vehicles to large and sophisticated recovery vehicles costing up to
$350,000 used for towing trucks and buses.

Municipal Freeway Service Towing. This market involves patrolling a preset
route on heavily-used freeways and towing or otherwise assisting disabled
vehicles. These services are typically provided to local transit districts and
other transportation agencies. Equipment used in this area consists primarily
of light- and medium-duty tow trucks and flatbed trucks.

Heavy Equipment Transport. This market involves transporting heavy equipment
such as tractors and construction equipment from equipment rental yards to job
sites, or from one job site to another. Customers include construction
companies, contractors, municipalities and equipment leasing companies.
Equipment used in this area consists primarily of very large, heavy-duty
flatbed vehicles.

Consumer Road Service. This market involves towing and roadside assistance
and repair of passenger vehicles. Customers include individuals and national
motor clubs, which perform marketing and dispatch operations but typically
utilize independent companies to perform towing services. Equipment used in
this area consists primarily of light- and medium-duty tow trucks and flatbed
trucks.

STRATEGY

The Company believes there are significant opportunities for a national
provider of towing and transport services with high quality service to
increase revenue and profitability by expanding its scope of services and
customer base, achieving operating efficiencies and expanding through
acquisitions. As certain areas within the automobile industry experience
growth and consolidation, such as new and used automobile dealerships, rental
car companies and automobile auction companies, the Company believes the
demand will increase for a provider of towing and transport services with the
resources and geographic coverage to serve the expanding need of these
businesses. The Company further believes that effective implementation of its
operating and acquisition strategies as described below will position it to
secure operating and competitive advantages over smaller competitors. The
Company's management team includes executives with experience in implementing
acquisition programs and effectively integrating acquired businesses and
management of the Founding Companies with significant contacts and experience
in the towing and transport service industry. The Company believes that the
combination of its executive management, the management of the Founding
Companies and the fragmented nature of the industry will provide the Company
with the capability and opportunity to implement an effective consolidation
strategy. The Company expects to obtain a $50.0 million revolving line of
credit from Bank of America to be used, in part, to finance future
acquisitions.

OPERATING STRATEGY

38
<PAGE>

its customers. The Company intends to implement proven practices of the
Founding Companies throughout its operations in areas such as dispatching
technology, driver training and professionalism, preventive maintenance and
safety.

Expand Scope of Services and Customer Base. The Company intends to expand
the scope of its services by introducing certain capabilities of the
individual Founding Companies in other markets where the Company believes such
services can be successfully marketed. For example, the Company intends to
provide local vehicle pick-up and delivery services for cross-country
transporters at certain Founding Companies with regional towing capabilities
that have not offered such services to date. Additionally, the Company intends
to capitalize on its lien sale and auction experience by implementing such
practices at selected acquired operations that do not currently offer them.
The Company believes that its size and financial and other resources will
permit it to attract customers and contracts that require greater towing,
transporting and storage capabilities than those possessed by local owner-
operators. The Company intends to utilize its geographic diversity to pursue
additional business from existing customers that operate on a regional or
national basis, such as leasing companies, insurance companies and automobile
auction companies. The Company also will seek to develop additional
capabilities and services to complement its existing operations. For example,
as a key part of its development of a national network of transport
operations, the Company intends to establish regional marshalling yards, which
will enable the Company to collect vehicles in one location and allocate them
to particular transport vehicles and routes to maximize asset utilization.

Achieve Operating Efficiencies. The Company will seek to achieve operating
efficiencies through improved asset utilization by implementing a "hub-and-
spoke" strategy within identified towing markets, with a centralized hub for
management, dispatch and maintenance operations that supports multiple
satellite truck and impound yards. The Company believes that this strategy
will allow it to provide timely service throughout a particular market, while
also enabling it to consolidate certain duplicative dispatch systems and
facilities, thereby spreading certain fixed costs over a larger vehicle fleet.
The Company also expects to realize cost savings by centralizing certain
administrative functions at its headquarters in Albany, New York, including
insurance, employee benefits, accounting and risk management. In the future,
the Company intends to use its purchasing power to seek improved pricing in
areas such as fuel, vehicles and parts.

Maintain Local Expertise. The Company anticipates that the managements of
the Founding Companies and companies to be acquired in the future will
continue to maintain local control of their daily operations. The Company
believes that this will allow it to take advantage of the local and regional
market knowledge, name recognition and customer relationships possessed by
each acquired company.

ACQUISITION STRATEGY

Enter New Geographic Markets. As part of its "hub-and-spoke" operating
strategy, the Company intends to acquire established, high-quality companies
in markets where it can establish a leading market position to serve as core
businesses into which additional operations may be consolidated. The Company
also intends to acquire transport businesses with complementary transport
routes and capabilities in markets across North America in order to create an
integrated national transport network. The Company further believes that by
virtue of its regional towing and storage operations it will accumulate
significant quantities of vehicles requiring subsequent delivery to auctions,
repair shops or scrap metal facilities, so that these operations will feed its
transport services.

Expand Within Existing Geographic Markets. Once the Company has established
a core presence in a market, it will seek to strengthen its market position by
acquiring additional large companies that offer similar services. The Company
will also pursue "tuck-in" acquisitions of smaller companies, whose businesses
can be integrated into the Company's operations, thereby utilizing the
Company's existing infrastructure over a broader vehicle fleet and revenue
base. In addition, the Company may seek to vertically integrate its operations
by acquiring companies which offer complementary services that the Company
does not currently offer. In cases where acquired companies have developed
local and regional goodwill and cultivated customer relationships, the Company
intends to maintain existing business names and identities.

39
<PAGE>

The Company believes it will be regarded by acquisition candidates as an
attractive acquiror because of: (i) the Company's strategy for creating a
national, comprehensive and professionally managed towing and transport
service company; (ii) the Company's decentralized operating strategy, which
emphasizes an ongoing role for owners, management and key personnel of
acquired businesses, as well as meaningful equity positions for these
individuals which will enable them to participate in the Company's growth;
(iii) the Company's increased visibility and access to financial resources as
a public company; and (iv) the potential for increased profitability of
acquired companies due to centralization of administrative functions, access
to increased marketing resources and purchasing economies.

As consideration for future acquisitions, the Company intends to use a
combination of Common Stock, cash and debt. The consideration for each future
acquisition will vary on a case-by-case basis, with the major factors in
establishing the purchase price being historical operating results, future
prospects of the target and the ability of the target to complement the
services offered by the Company. Promptly after consummation of the Offering,
the Company intends to register 5,000,000 additional shares of Common Stock
under the Securities Act for issuance in future acquisitions. The Company
believes that it can structure acquisitions as tax-free reorganizations by
using its Common Stock as consideration, which it expects will be attractive
to those targeted business owners with a low tax basis in the stock of their
businesses. While the Company continuously considers possible acquisition
prospects as part of its growth strategy, the Company presently has no
agreements, arrangements or other understandings to acquire any companies
other than the Founding Companies and Keystone.

OPERATIONS AND SERVICES PROVIDED

The Company provides a broad range of towing and transport services for a
diverse group of commercial, governmental and individual customers. Towing and
transport services typically begin with a telephone call to the Company
requesting assistance or transport. The call may come from a law enforcement
officer, a commercial fleet dispatcher, a private business or an individual.
The dispatcher records the relevant information regarding the vehicle to be
towed or transported, checks the location and status of the Company's vehicle
fleet, typically using a computerized positioning system, and assigns the job
to a particular vehicle. The driver collects the vehicle and tows or
transports it to one of several locations, depending on the nature of the
customer.

Law Enforcement Agency Towing. The Company provides these towing services to
various law enforcement agencies. In this market, vehicles are typically towed
to a Company facility where the vehicle is impounded and placed in storage.
The vehicle remains in storage until its owner pays the towing fee, which is
typically based on an hourly charge, and any daily storage fees, to the
Company, as well as any fines due to the law enforcement agency. If the
vehicle is not claimed within a period prescribed by law (typically between 30
and 90 days), the Company completes lien proceedings and sells the vehicle at
auction or to a scrap metal facility, depending on the value of the vehicle.
Depending on the jurisdiction, the Company either may keep all of the proceeds
from vehicle sales, or may keep proceeds up to the amount of accrued towing
and storage fees and remit the remainder to the law enforcement agency. These
services are in some cases provided under contracts with police, sheriff and
highway patrol departments, typically for terms of five years or less, that
are terminable for material breach and are typically subject to competitive
bidding upon expiration. In other cases, the Company provides these services
to law enforcement agencies without a long-term contract. Whether pursuant to
a contract or an ongoing relationship, these services are generally provided
by the Company for a designated geographic area, or shared with one or more
other companies on a rotation basis.

New and Used Automobile Transport. The Company provides automobile transport
services to leasing companies, automobile dealers, automobile auction
companies, long-distance transporters, brokers and individuals. Services
typically are provided as needed by particular customers and charged according
to pre-set rates based on mileage. The Company transports large numbers of
vehicles from automobile auctions, where off-lease vehicles are sold, to
individual dealers. In addition, the Company provides transport services for
dealers who transfer new cars from one region to another based on demand. The
Company also provides local collection and delivery support to long-haul
automobile transporters. A significant portion of transport work in the
industry

40
<PAGE>

involves transporting automobiles from factories in the United States to
individual dealerships. The Company currently does not transport vehicles for
major domestic automobile manufacturers because this business is dominated by
a few large carriers with established relationships.

Insurance Salvage Towing and Transport. The Company provides insurance
salvage towing and transport services pursuant to contractual arrangements
with insurance companies and automobile auction companies for a per-vehicle
fee based on the transport distance. This business involves secondary towing
and transport, since the vehicles involved typically have already been towed
to a storage facility. For example, after an accident, the damaged or
destroyed vehicle is usually towed to a garage or impound yard. The Company's
insurance salvage towing and transport operations collect these towed vehicles
and transport them to repair shops, automobile auction companies or scrap
metal facilities at the direction of the customer.

Private Impound Towing. The Company provides private impound towing services
to private customers, such as shopping centers, retailers and hotels, which
engage the Company to tow vehicles that are parked illegally on their
property. As in law enforcement agency towing, revenues are generated by the
Company through the collection of towing and storage fees from vehicle owners,
and from the sale of vehicles that are not claimed.

Commercial Road Service. The Company provides commercial road services to a
broad range of commercial customers, including automobile dealers and repair
shops. The Company typically charges a flat fee and a mileage premium for
these towing services. Commercial road services also include towing and
recovery of heavy-duty trucks, recreational vehicles, buses and other large
vehicles, typically for commercial fleet operators. The Company charges an
hourly rate based on the towing vehicle used for these specialized services.

Heavy Equipment Transport. The Company provides heavy equipment transport
services to construction companies, contractors, municipalities and equipment
leasing companies. Service fees are based on the transport vehicle used and
the transport distance.

Consumer Road Service. The Company also tows disabled vehicles for
individual motorists and national motor clubs. Vehicles are generally towed to
repair facilities for a flat fee paid by either the individual motorist or the
motor club. Consumer road service represents a significant portion of the
towing and transport service industry, but the Company has not focused on this
area to date.

While the Company currently does not provide municipal freeway towing
services, it anticipates that it will do so in the future.

SALES AND MARKETING; CUSTOMERS

The Company believes that the commitment to consistent high quality service
demonstrated by the Founding Companies has produced long-term relationships
with many existing customers and positions the Company to expand market
penetration through the use of enhanced sales and marketing efforts. To date,
the Founding Companies have largely focused on building and maintaining
personal relationships with customers, while also using limited print
advertising in newspapers and industry periodicals. Upon consummation of the
Acquisitions, the Company will continue to focus its marketing efforts on
large governmental and commercial accounts, including leasing companies,
insurance companies and law enforcement agencies. The Company intends to
augment the capabilities and contacts of the owners and general managers of
the Founding Companies with a sales program designed to identify significant
target customers and expand working relationships with existing customers.

Although the Company generally has a diverse customer base, one customer,
Insurance Auto Auctions ("IAA"), accounted for approximately 11% of the
Founding Companies' combined net revenue in 1997. The Company provides towing
and transport services to IAA pursuant to a contract that expires in 1999, but
renews automatically for an additional three-year period, unless either party
elects to the contrary. The contract is terminable by either party at any time
for material breach upon 30 days' prior written notice. The Company

41
<PAGE>

expects that IAA will continue to account for a significant percentage of the
Company's revenue for the foreseeable future. The loss of a significant
customer, including IAA, could have a material adverse effect on the Company's
business, financial condition and results of operations.

DISPATCH AND INFORMATION SYSTEMS

Each of the Founding Companies operates a local dispatch system to assign
individual towing and transport vehicles to particular service calls. Most of
the Founding Companies have computerized positioning systems which identify
and track vehicle location and status, thereby decreasing response times and
increasing asset utilization. Initially, the Company anticipates continuing to
use existing dispatch systems of the Founding Companies for its towing and
transport operations, while exploring possibilities with respect to
implementing a national dispatch system to support its transport operations
and building regional towing dispatch systems in identified markets where the
Company has established a leading market position.

Due to the recent formation of the Company, each of the Founding Companies
is currently using the accounting and financial reporting systems that it has
in place. The Company is beginning the process of selecting and implementing
systems that will enable it to centralize its accounting and financial
reporting activities at its headquarters in Albany, New York. The Company
anticipates that it will need to upgrade and expand its information technology
systems on an ongoing basis as it expands its operations and completes
acquisitions. The Company is not aware of any material systems problems
related to calendar year 2000 at any Founding Company and expects that its new
accounting and financial reporting system will be year 2000 compatible.

COMPETITION

The towing and transport industry is highly fragmented and extremely
competitive. Competition for the delivery of towing and transport services is
based primarily on quality, service, timeliness, price and geographic
proximity. The Company competes with certain large towing and transport
companies on a regional and local basis, some of which may have greater
financial and marketing resources than the Company. The Company also competes
with thousands of smaller local companies, which may have lower overhead cost
structures than the Company and may, therefore, be able to provide their
services at lower rates than the Company. The Company believes that it will be
able to compete effectively because of its high quality service, geographic
scope, broad range of services offered, experienced management and operational
economies of scale. The Company intends to seek to differentiate itself from
its competition in terms of service and quality by investing in training,
systems and equipment and by offering a broad range of products and services,
and in terms of timeliness and geographic proximity by establishing facilities
and vehicles in targeted geographic markets so that the Company will be
positioned to provide timely vehicle response to service calls. The Company
may also face competition for acquisition candidates from companies which are
attempting, or may attempt in the future, to consolidate the towing and
transport service industry. Some of the Company's current or future
competitors may be better positioned than the Company to finance acquisitions,
to pay higher prices for acquisition candidates pursued by the Company or to
finance their internal operations.

GOVERNMENT REGULATION AND ENVIRONMENTAL MATTERS

42
<PAGE>

The Company's operations are subject to a number of federal, state and local
laws and regulations relating to the storage of petroleum products, hazardous
materials and impounded vehicles, as well as safety regulations relating to
the upkeep and maintenance of Company vehicles. In particular, the Company's
operations are subject to federal, state and local laws and regulations
governing leakage from salvage vehicles, waste disposal, the handling of
hazardous substances, environmental protection, remediation, workplace
exposure and other matters. The Company's management believes that the Company
is in substantial compliance with all such laws and regulations and does not
currently anticipate that the Company will be required to expend any
substantial amounts in the foreseeable future in order to meet current
environmental or workplace health and safety requirements. It is possible that
an environmental claim could be made against the Company or any of the
Founding Companies or that one or more of them could be identified by the
Environmental Protection Agency, a state agency or one or more third parties
as a potentially responsible party under federal or state environmental laws.
If the Company or any of the Founding Companies were to be named a potentially
responsible party, the Company could be forced to incur substantial
investigation, legal and remediation costs, which could have a material
adverse effect on the Company's business, financial condition and results of
operations.

SAFETY AND TRAINING

The Company is committed to continuing the Founding Companies' focus and
emphasis on safety and training. The Founding Companies currently utilize a
variety of programs to improve safety, including regular driver training and
certification, drug testing and safety bonuses. The Company plans to adopt
these and other proven practices throughout its operations to ensure that all
employees comply with safety standards established by the Company, its
insurance carriers and federal, state and local laws and regulations. In
addition, the Company intends to continue to promote the Founding Companies'
emphasis on an accident-free environment. The Company believes that its
emphasis on safety and training will assist it in attracting and retaining
quality employees.

FACILITIES AND VEHICLES

The Founding Companies operate 16 facilities that are used to garage, repair
and maintain towing and transport vehicles, impound and store towed vehicles
and conduct lien sales and auctions. All of the Company's facilities are
leased from other parties and, in seven cases, those parties are former owners
or affiliates of the Founding Companies. See "Certain Transactions --
Transactions Involving Certain Directors and Principal Stockholders." Many of
the Company's facilities are capable of being utilized at higher capacities,
if necessary. The Company will seek to consolidate facilities and vehicle
storage capacity in the future.

The Founding Companies operate a fleet of approximately 280 towing and
transport vehicles. The Company believes these vehicles generally are well-
maintained and adequate for its current operations.

RISK MANAGEMENT, INSURANCE AND LITIGATION

The primary liability risks in the Company's operations include bodily
injury, property damage, workers' compensation claims and, potentially,
environmental and land use claims. Although each of the Founding Companies has
maintained its own insurance, the Company expects to obtain insurance on a
Company-wide basis, subject to customary deductibles. The Founding Companies
have been, from time to time, parties to litigation arising in the ordinary
course of their respective businesses, most of which involves claims for
personal injury or property damage incurred in connection with their
operations. The Company is not currently involved in any litigation that the
Company believes will have a material adverse effect on its business,
financial condition or results of operations.

EMPLOYEES

As of December 31, 1997, the Founding Companies had approximately 365
employees and approximately 95 independent contractors. None of the employees
of the Founding Companies are subject to collective bargaining agreements.

43
<PAGE>

MANAGEMENT

DIRECTORS AND OFFICERS

The following table sets forth information concerning those persons who will
serve as the Company's directors and officers upon consummation of the
Offering:

<TABLE>
<CAPTION>
NAME AGE POSITION
<S> <C> <C>
Edward T. Sheehan................ 55 Chairman of the Board, Chief Executive Officer and Secretary
Allan D. Pass.................... 48 Senior Vice President and Chief Operating Officer*
Donald J. Marr................... 39 Senior Vice President and Chief Financial Officer
Mark McKinney.................... 30 Co-Chief Acquisition Officer and Director
Ross Berner...................... 32 Co-Chief Acquisition Officer and Director
Richard P. McGinn, Jr............ 32 Vice President and Corporate Controller
Edward W. Morawski............... 49 Vice President and Director*
Grace M. Hawkins................. 52 Director*
Donald F. Moorehead, Jr.......... 47 Director*
Todd Q. Smart.................... 33 Director*
Edward D. Smith.................. 60 Director*
</TABLE>
- ---------------------
* To be elected as an officer or director of the Company effective upon
consummation of the Offering.

Edward T. Sheehan has served as Chairman of the Board and Chief Executive
Officer since October 1997. Mr. Sheehan was President and Chief Operating
Officer of United Waste Systems, Inc. from December 1992 to August 1997, when
the company was sold to USA Waste Services, Inc. He was Senior Vice President
and Chief Financial Officer of Clean Harbors, Inc., a publicly-held
environmental services company, from September 1990 to April 1992. From 1966
to 1990, Mr. Sheehan held several financial and operating positions with
General Electric Company ("GE"), including Manager--Finance for GE's power
generation service businesses, factory automation operations and Europe,
Africa and Middle East Divisions.

Allan D. Pass, Ph.D will become Senior Vice President and Chief Operating
Officer of the Company upon consummation of the Offering. In 1986, he founded,
and until February 1998 served as the Chief Executive Officer and President
of, National Behavioral Science Consultants, Inc., a consulting firm
specializing in innovative productivity and profitability enhancement and
human resource programs. From September 1991 until June 1995, Dr. Pass also
served as a Corporate Vice President for Chambers Development Corporation.

Donald J. Marr has served as Senior Vice President and Chief Financial
Officer of the Company since January 1998. From 1986 through 1997, he held a
series of management positions with KeyCorp, most recently as Senior Vice
President, Planning and Analysis. From January 1984 to October 1986, he held
various positions at the accounting firm of Coopers & Lybrand. Mr. Marr is a
certified public accountant.

Mark McKinney has been a senior executive officer and director of the
Company since its inception. He currently serves as Co-Chief Acquisition
Officer. From December 1995 to October 1997, Mr. McKinney was a portfolio
manager for Berger Associates, a leading mutual fund company. He was a
portfolio manager for Farmers Insurance Group from April 1992 to December
1995.

Ross Berner has been a senior executive officer and director of the Company
since its inception. He currently serves as Co-Chief Acquisition Officer. From
1992 through 1997, Mr. Berner held various equity sales and trading positions
at Salomon Brothers Inc.

Richard P. McGinn, Jr. has served as Vice President and Corporate Controller
of the Company since January 1998. From August 1996 to December 1997, he
served as Chief Financial Officer and Corporate Controller of Health Research
Inc., a non-profit corporation specializing in grant sponsored research
programs. From 1987 to August 1996, Mr. McGinn held various positions at the
accounting firm of KPMG Peat Marwick llp, including Senior Audit Manager. Mr.
McGinn is a certified public accountant.

44
<PAGE>

Edward W. Morawski will become Vice President and a director of the Company
upon consummation of the Offering. Mr. Morawski founded Northland in 1977 and
has served as its President since inception.

Grace M. Hawkins will become a director of the Company upon consummation of
the Offering. Since 1991, Ms. Hawkins has been President of Lotus
Publications, Inc., a publishing company specializing in marketing for the
transportation industry. From 1985 to 1991, she served as President of T.T.
Publications, Inc., a magazine publisher. She has authored numerous articles
relating to the towing industry.

Donald F. Moorehead, Jr. will become a director of the Company upon
consummation of the Offering. From June 1995 to August 1997, he served as Vice
Chairman and Chief Development Officer of USA Waste Services, Inc., the third
largest solid waste management company in the United States. From October 1990
to June 1995, he served as its Chairman, and from October 1990 to May 1994, he
also served as its Chief Executive Officer. From 1985 to 1990, Mr. Moorehead
was Chairman and Chief Executive Officer of Mid-American Waste Services, Inc.
Mr. Moorehead currently serves as a director of FYI, Inc., a document
reproduction and storage company, and Metal Management, Inc., a scrap metal
recycling company.

Todd Q. Smart will become a director of the Company upon consummation of the
Offering. Mr. Smart will also continue to be involved in the management of
Absolute and will provide acquisition-related consulting services to the
Company upon consummation of the Acquisitions. Mr. Smart founded Absolute in
1988 and has served as its President since inception.

Edward D. Smith will become a director of the Company upon consummation of
the Offering. Mr. Smith has been President of Quality and Vice President of
Nevada Recycling Corporation since 1988.

Mark J. Henninger will become a director of the Company upon consummation of
the Keystone acquisition. Mr. Henninger will also continue to be involved in
the management of Keystone and will provide acquisition-related consulting
services to the Company upon consummation of the Keystone acquisition. Mr.
Henninger founded Keystone in 1991 and has served as its President since
inception.

COMMITTEES OF THE BOARD OF DIRECTORS

The Board of Directors intends to establish an Audit Committee and a
Compensation Committee after the Offering. The Audit Committee will serve to:
(i) make recommendations to the Board of Directors with respect to the
independent auditors who conduct the annual examination of the Company's
accounts; (ii) review the scope of the annual audit and meet periodically with
the Company's independent auditors to review their findings and
recommendations; (iii) approve major accounting policies or changes thereto;
and (iv) periodically review the Company's principal internal financial
controls. The Compensation Committee will serve to review the compensation of
executive officers of the Company and make recommendations regarding such
compensation to the Board of Directors.

COMPENSATION OF DIRECTORS

Certain directors who are not employees or consultants of the Company will
receive (i) upon consummation of the Offering, a one-time grant of options to
purchase 20,000 shares of Common Stock at the initial public offering price
set forth on the cover of this Prospectus and (ii) cash compensation of
approximately $2,500 for each meeting attended. Directors who are employees or
consultants of the Company will not receive additional compensation for
serving as directors. All directors are reimbursed for expenses incurred in
attending meetings of the Board or committees thereof.

EXECUTIVE COMPENSATION; EMPLOYMENT AGREEMENTS; COVENANTS-NOT-TO-COMPETE

The Company was incorporated in July 1997 and has not conducted any
operations to date other than activities related to the Acquisitions and the
Offering. The Company did not pay any of its executive officers compensation
during 1997. The Company anticipates that during 1998 its most highly
compensated executive officers will be Messrs. Sheehan, McKinney, Berner and
Marr and Dr. Pass (collectively, the "Named Executive Officers").

45
<PAGE>

The Company has entered into employment agreements with each of the Named
Executive Officers. Pursuant to such agreements, each executive is entitled to
receive a base salary and will be eligible to receive an annual performance
bonus as determined by the Board of Directors. The annual base salaries of the
executives are as follows: Mr. Sheehan--$200,000; Mr. McKinney--$150,000; Mr.
Berner--$150,000; Dr. Pass--$150,000; and Mr. Marr--$125,000. Each employment
agreement has an initial term of three years (beginning in February 1998 in
the case of Mr. Sheehan and January 1998 in the case of the other Named
Executive Officers), unless terminated by either party prior to the end of
such initial term. Each agreement also may be terminated upon the death or
disability of the executive or for "cause" upon notice by the Company to the
executive. The employment agreements provide that if the executive is
terminated without cause, such executive will be paid a severance amount
payable in accordance with the Company's regular pay schedule equal to the
base salary paid to such executive for the following periods: Mr. Sheehan--six
months; Mr. McKinney--one year; Mr. Berner--one year; Dr. Pass--two years; and
Mr. Marr--one year. For purposes of such severance payments, a voluntary
termination of employment by any of Messrs. McKinney, Berner or Marr or Dr.
Pass within six months after a termination of employment of Mr. Sheehan for
any reason constitutes a termination without cause. Mr. Sheehan's employment
agreement contains a covenant not to solicit employees or customers of the
Company for a period of one year after termination of his employment. The
employment agreements of each of the other Named Executive Officers contain
covenants not to compete with the Company and covenants not to solicit
employees or customers of the Company for a period of one year following
termination of the agreements.

1998 STOCK OPTION PLAN

The Company's 1998 Stock Option Plan (the "1998 Stock Option Plan") is
intended to provide directors, officers, employees and consultants of the
Company with an opportunity to invest in the Company and to advance the
interests of the Company and its stockholders by enabling the Company to
attract and retain qualified personnel. The 1998 Stock Option Plan provides
for the grant of incentive stock options within the meaning of Section 422 of
the Internal Revenue Code of 1986, as amended, and nonqualified stock options.
The maximum number of shares of Common Stock that may be subject to options
granted under the 1998 Stock Option Plan may not exceed, in the aggregate, the
number of shares equal to 10% of the shares of Common Stock outstanding
immediately following consummation of the Offering. Shares of Common Stock
that are attributable to grants that have expired or been terminated,
cancelled or forfeited are available for issuance in connection with future
grants. The Compensation Committee will administer the 1998 Stock Option Plan
and select the individuals who will receive awards and establish the terms and
conditions of such awards.

Options to purchase a total of 215,000 shares of Common Stock at an exercise
price of $9.00 per share have been granted to officers and consultants of the
Company as follows: 90,000 shares to Dr. Pass; 50,000 shares to Mr. Marr;
40,000 shares to Mr. McGinn; and an aggregate of 35,000 shares to two
consultants. Each such option will vest at the rate of 33 1/3% per year,
commencing on January 23, 1999, and will expire ten years from the date of
grant. Upon consummation of the Offering, options to purchase an aggregate of
40,000 shares of Common Stock are expected to be granted to two directors of
the Company at an exercise price equal to the initial public offering price
set forth on the cover page of the Prospectus.

CERTAIN TRANSACTIONS

ORGANIZATION OF THE COMPANY

In connection with the formation of the Company, the Company issued to each
of Messrs. Berner and McKinney 930,000 shares of Common Stock for cash
consideration of $25,000 each. At December 31, 1997, Messrs. Berner and
McKinney had advanced $92,000 to the Company to pay certain expenses incurred
by the Company in connection with the Acquisitions and the Offering. These
advances bear interest at a rate of 8.5% per annum.

In November 1997, the Company issued 744,000 shares of Common Stock to Mr.
Sheehan for cash consideration of $20,000. Mr. Sheehan purchased the shares
under a Stock Purchase and Restriction Agreement

46
<PAGE>

pursuant to which such shares are subject to repurchase by the Company, at the
Company's discretion, at the price paid for such shares in the event that Mr.
Sheehan voluntarily terminates his employment or is discharged for "cause."
This repurchase right will expire with respect to 372,000 shares upon
consummation of the Offering, and with respect to the remaining 372,000 shares
in August 1999.

In January 1998, the Company issued an aggregate of 218,736 shares of Common
Stock to private investors for cash consideration of $735,000, of which Mr.
Moorehead purchased 29,760 shares for $100,000 and Mr. Smith purchased 11,904
shares for $40,000. All of the investors in the January 1998 private
placement, including Mr. Moorehead, have agreed with the Company not to sell
any shares acquired in such private placement for the period ending one year
from the date of this Prospectus.

Simultaneously with consummation of the Offering, each of the Founding
Companies will merge with and into United Road Services. The aggregate
consideration to be paid by United Road Services in the acquisitions of the
Founding Companies is $27.8 million in cash, 2,375,741 shares of Common Stock
and the assumption of approximately $9.8 million in outstanding indebtedness
of the Founding Companies. The Company intends to repay $1.6 million of the
assumed indebtedness from the net proceeds of the Offering. The aggregate
consideration for the Keystone acquisition is $4.5 million in cash, 377,624
shares and the assumption of $793,000 in outstanding indebtedness. In
addition, for each of the years 1998 through 2002 the Company will be required
to make an earn-out payment to the stockholders of each Founding Company and
Keystone that achieves target levels of net revenue. The target level for 1998
is generally 110% of 1997 revenue of the particular company's business and for
the years 1999 through 2002 is 110% of the greater of the prior year's actual
revenue or target revenue. If target revenue is achieved for the particular
year, an initial payment equal to 5% of the excess of actual revenue over the
target level is due. In addition, once the target level of revenue for a
particular year is met, subsequent and equal payments will also be due for
each subsequent year through 2002, provided that the actual revenue for the
respective subsequent year exceeds the actual revenue for the year that the
earn-out was first earned. Any required earn-out payments will be made in the
form of Common Stock of the Company.

The consummation of each Acquisition is subject to customary conditions.
These conditions include, among others, the continuing accuracy on the closing
date of the Acquisitions of the representations and warranties of the Founding
Companies and Keystone and the principal stockholders thereof and of United
Road Services, the performance by each of them of all covenants included in
the agreements relating to the Acquisitions, the receipt of certain
governmental and third party consents and the non-existence of a material
adverse change in the business, financial condition or results of operations
of each Founding Company and Keystone. There can be no assurance that the
conditions to closing of the Acquisitions will be satisfied or waived or that
the Acquisitions will be consummated. Under Keystone's contract to provide
police towing for a specified police district in Los Angeles the consent of
the Los Angeles City Council is required for the Company's succession to such
contract, and the receipt of this consent is required as a condition to the
Company's obligation to consummate the Keystone acquisition. While the Company
expects that the required approval will be obtained, there can be no assurance
that this will be the case or that the Company will acquire Keystone. Either
Keystone and its stockholder or the Company may terminate the Keystone
acquisition agreement if it has not been closed on or before September 1,
1998.

47
<PAGE>

The following table sets forth the consideration to be paid by United Road
Services for each Founding Company and Keystone (without giving effect to any
earn-out payments that may be required) and the total indebtedness which would
have been assumed by the Company had the Acquisitions occurred on December 31,
1997:

<TABLE>
<CAPTION>
SHARES OF TOTAL
NAME CASH COMMON STOCK INDEBTEDNESS
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Northland................................ $ 8,307 692,277 $ 1,623
Falcon................................... 4,282 356,850 1,646
Quality.................................. 5,129 485,750 2,527
Caron.................................... 3,000 250,000 2,125
Absolute................................. 3,567 297,267 312
Auto Service............................. 1,651 137,554 969
Milne.................................... 1,873 156,043 636
------- --------- -------
Total Founding Companies............... 27,809 2,375,741 9,838
Keystone................................. 4,531 377,624 793
------- --------- -------
Total.................................. $32,340 2,753,365 $10,631
======= ========= =======
</TABLE>

In connection with the Acquisitions and as consideration for their interests
in the Founding Companies and Keystone, certain officers, directors, persons
who have agreed to serve as directors and holders of more than five percent of
the outstanding shares of Common Stock of the Company upon consummation of the
Acquisitions will receive cash and shares of Common Stock as follows:

<TABLE>
<CAPTION>
SHARES OF
NAME CASH COMMON STOCK
(IN THOUSANDS)
<S> <C> <C>
Edward W. Morawski............................. $8,307 692,277
Edward D. Smith................................ 410 38,860
Todd Q. Smart.................................. 3,567 297,267
Mark J. Henninger.............................. 4,531 377,624
</TABLE>

Prior to consummation of the Keystone acquisition, Keystone intends to make
a cash distribution in an amount that is expected to be less than $150,000 to
Mr. Henninger to pay taxes on S Corporation earnings. In addition, Keystone
and Absolute intend to distribute to Mr. Henninger and Mr. Smart,
respectively, personal assets not included in the transactions with book
values of $56,000 and $65,000, respectively.

From time to time, Quality advances amounts to, and borrows amounts from,
entities of which Mr. Smith is a shareholder or member. At December 31, 1997,
these entities owed Quality a net amount of approximately $743,000. This
amount, plus accrued interest of approximately $89,000, will be repaid to
Quality prior to consummation of the Offering. Quality and such affiliated
entities have agreed that there will be no further advances subsequent to
December 31, 1997.

Quality has, in the past, paid management fees to Eureka Management LLC
("Eureka"), an entity of which approximately 50% is beneficially owned by Mr.
Smith. Prior to consummation of the Offering, Quality will pay $80,000 to
Eureka for management fees accrued in 1998. Fees paid to Eureka were $200,000
in each of the fiscal years ended January 31, 1996 and 1997.

Pursuant to the agreements entered into in connection with the Acquisitions,
the stockholders of the Founding Companies and Keystone have agreed not to
compete with the Company for a period of five years from the date of
consummation of the Offering in defined businesses and geographic areas.

TRANSACTIONS INVOLVING CERTAIN DIRECTORS AND PRINCIPAL STOCKHOLDERS

Upon consummation of the Absolute and Keystone acquisitions, the Company
will enter into consulting agreements with each of Mr. Smart and Mr.
Henninger, respectively. Pursuant to each agreement, each of

48
<PAGE>

Messrs. Smart and Henninger is entitled to receive from the Company a
consulting fee equal to two percent of the gross revenue of each company that
Mr. Smart or Mr. Henninger, as the case may be, assists the Company in
acquiring, with the fee being based upon such acquired company's gross revenue
for the twelve months immediately preceding the acquisition. Each consulting
agreement is for a term of three years. In addition, upon consummation of the
Offering, the Company will enter into an employment agreement with Mr.
Morawski pursuant to which he will serve as a Vice President of the Company
for a term of three years, with an annual base salary of $150,000. The
employment and consulting agreements described above also contain covenants
not to compete with the Company for one year after the termination of the
agreement.

Mr. Henninger is seeking the award of a contract for police towing in a
police district in Los Angeles. Mr. Smart is seeking a similar award in
another district. If either such award is made, Mr. Henninger or Mr. Smart, as
the case may be, will conduct such operations through a newly formed entity to
be controlled by him. The Company has the option to purchase such entities,
commencing one year after consummation of the Keystone acquisition in the case
of Mr. Henninger and 18 months after consummation of the Absolute acquisition
in the case of Mr. Smart, ending in either case three years after consummation
of the respective acquisition. The purchase price under each of these options
is equal to 13 times the after-tax net income of the entity for the 12-month
period prior to the exercise of the option, which is substantially equal to
the multiple to be paid for Keystone and Absolute. The Henninger option will
terminate if the Keystone acquisition is not completed.

Prior to consummation of the Offering, Quality will (i) form and fund a new
limited liability company, Exodus Holdings LLC ("Exodus") and transfer real
property and related improvements having a book value of approximately
$917,000 to Exodus in consideration of Exodus assuming approximately $200,000
in debt relating to one of the parcels of real property being transferred, and
Quality becoming a member of Exodus with a 98% non-voting interest, and (ii)
transfer all of its interest in Exodus to Mr. Smith and another shareholder of
Quality in redemption of shares representing 2.7% of the outstanding shares of
Quality held by them. Upon consummation of Offering, the Company will lease
the real estate and related property from Exodus pursuant to a five year lease
for an annual rent of approximately $46,000 for the first 30 months and
approximately $70,000 for the final 30 months. In addition, certain
outstanding indebtedness of Quality to its former owner (which totalled
approximately $1.6 million as of December 31, 1997) that is secured by the
capital stock and certain assets of Quality, including certain of the real
property to be transferred to Exodus, will be assumed by the Company in
connection with the Quality acquisition, and will be repaid from the net
proceeds of the Offering.

Quality currently leases certain real property in Las Vegas, Nevada from
Nevada Recycling Corporation, of which Mr. Smith is a 50% shareholder. Amounts
paid pursuant to such leases were approximately $96,000 for the year ended
January 31, 1997 and approximately $108,000 for the twelve-month period ended
December 31, 1997. Upon consummation of the Offering, the Company will lease
such facilities from Nevada Recycling Corporation pursuant to two separate
lease agreements that each have a term of five years and provide for an annual
rent of $96,000 and $12,000, respectively.

Certain stockholders of the Founding Companies who will become directors of
the Company upon consummation of the Offering have guaranteed obligations of
their respective Founding Companies. The Company intends to obtain the release
of these guarantees as soon as practicable following consummation of the
Offering.

COMPANY POLICY

Any future transactions with directors, officers, employees or affiliates of
the Company will be approved in advance by a majority of disinterested members
of the Board of Directors.

49
<PAGE>

PRINCIPAL STOCKHOLDERS

The following table sets forth certain information (after giving effect to
the issuance of shares of Common Stock in connection with the acquisitions of
the Founding Companies) regarding the beneficial ownership of the Company's
Common Stock as of March 31, 1998 prior to the Offering and after giving
effect to the Offering, by (a) each person who is known by the Company to own
beneficially more than five percent of the outstanding shares of Common Stock,
(b) each of the Company's directors and persons who have agreed to serve as
directors of the Company ("director nominees"), (c) each Named Executive
Officer, and (d) all directors, director nominees and executive officers as a
group. Except as otherwise indicated, the Company believes that the beneficial
owners of the securities listed below, based on information provided by such
owners, have sole investment and voting power with respect to the Common Stock
shown below as being beneficially owned by them, subject to community property
laws where applicable. Unless otherwise indicated, the address of each
beneficial owner is c/o United Road Services, Inc., 8 Automation Lane, Albany,
New York 12205.

<TABLE>
<CAPTION>
PERCENT
-----------------
NUMBER OF BEFORE AFTER
NAME SHARES OFFERING OFFERING
<S> <C> <C> <C>
Mark McKinney...................................... 930,000 17.9% 8.7%
Ross Berner........................................ 930,000 17.9 8.7
Edward T. Sheehan(1)............................... 714,000 13.7 6.7
Edward W. Morawski................................. 692,277 13.3 6.5
John David Floyd................................... 356,850 6.9 3.3
Todd Q. Smart...................................... 297,267 5.7 2.8
Edward D. Smith.................................... 50,764 * *
Donald F. Moorehead, Jr............................ 29,760 * *
Allan D. Pass...................................... -- -- --
Donald J. Marr..................................... -- -- --
Grace M. Hawkins................................... -- -- --
All directors, director nominees and executive
officers as a group (10 persons).................. 3,644,068 70.1% 34.1%
</TABLE>
- ---------------------
* Less than one percent.

(1) Includes 10,000 shares held by a child of Mr. Sheehan, as to which shares
Mr. Sheehan disclaims beneficial ownership.

Upon consummation of the Keystone acquisition the Company intends to elect
Mark Henninger to its Board of Directors. Mr. Henninger will receive 377,624
shares of Common Stock upon consummation of the Keystone acquisition, which
would represent 3.4% of the shares of Common Stock outstanding, based on the
number of shares outstanding upon consummation of the Offering plus the shares
issued to Mr. Henninger.

50
<PAGE>

DESCRIPTION OF CAPITAL STOCK

GENERAL

The Company's authorized capital stock consists of 40,000,000 shares of
capital stock consisting of 35,000,000 shares of Common Stock, $0.001 par
value, and 5,000,000 shares of Preferred Stock, $0.001 par value. Upon
consummation of the acquisitions of the Founding Companies and the Offering,
there will be 10,698,477 shares of Common Stock and no shares of Preferred
Stock outstanding. The following discussion of the material features of the
capital stock of the Company is intended as a summary only and is qualified in
its entirety by reference to the Company's Amended and Restated Certificate of
Incorporation and Amended and Restated Bylaws, which are included as exhibits
to the Registration Statement of which this Prospectus is a part.

COMMON STOCK

The holders of Common Stock are entitled to one vote for each share held of
record by them on all matters submitted to a vote of stockholders. Subject to
preferences that may be applicable to any outstanding shares of Preferred
Stock that may be issued, the holders of Common Stock are entitled to receive
ratably such dividends, if any, as may be declared from time to time by the
Board of Directors out of funds legally available for the payment of
dividends. See "Dividend Policy." In the event of a liquidation, dissolution
or winding up of the Company, the holders of Common Stock are entitled to
share ratably in all assets remaining after payment of liabilities and
liquidation preferences of any outstanding shares of Preferred Stock. Holders
of Common Stock have no preemptive rights or rights to convert their Common
Stock into any other securities. There are no redemption or sinking fund
provisions applicable to the Common Stock. All outstanding shares of Common
Stock are fully paid and non-assessable, and the shares of Common Stock to be
issued in the Offering and pursuant to the Acquisitions will be fully paid and
non-assessable.

PREFERRED STOCK

The Company's Board of Directors (the "Board") has the authority, without
action by the stockholders, to designate and issue up to 5,000,000 shares of
Preferred Stock in one or more series and to designate the dividend rate,
voting rights and other rights, preferences and restrictions of each series,
any or all of which may be greater than the rights of the Common Stock. The
Company has no present plans to issue any shares of Preferred Stock.

One of the effects of undesignated Preferred Stock may be to enable the
Board to discourage an attempt to obtain control of the Company by means of a
tender offer, proxy contest, merger or otherwise and to protect the continuity
of the Company's management. The issuance of shares of Preferred Stock may
adversely affect the rights of holders of Common Stock. For example, Preferred
Stock issued by the Company may rank prior to the Common Stock as to dividend
rights, liquidation preference or both, may have full or limited voting rights
and may be convertible into shares of Common Stock. Accordingly, the issuance
of shares of Preferred Stock may discourage bids for the Common Stock or may
otherwise adversely affect the market price of the Common Stock.

CLASSIFIED BOARD OF DIRECTORS; FILLING VACANCIES

The Company's Amended and Restated Certificate of Incorporation (the
"Certificate") provides that the Board shall be divided into three classes and
that the number of directors in each class shall be as nearly equal as is
possible based upon the number of directors constituting the entire Board. The
Certificate effectively provides that the term of office of the first class
will expire at the annual meeting of stockholders following the date of this
Prospectus, the term of office of the second class will expire at the second
annual meeting of stockholders following the date of the Prospectus, and the
term of office of the third class will expire at the third annual meeting of
stockholders following the date of this Prospectus. At each annual meeting of
stockholders, successors to directors of the class whose term expires at such
meeting will be elected to serve for three-year terms and until their
successors are elected and qualified.

The classification of directors has the effect of making it more difficult
for stockholders to change the composition of the Board. At least two annual
meetings of stockholders, instead of one, will generally be required to effect
a change in a majority of the Board. Such a delay may help to provide the
Board with sufficient

51
<PAGE>

time to analyze an unsolicited proxy contest, a tender or exchange offer or
any other extraordinary corporate transaction. However, such classification
provisions could also have the effect of discouraging a third party from
initiating a proxy contest, making a tender offer or otherwise attempting to
obtain control of the Company, even though such an attempt might be beneficial
to the Company and its stockholders. The classification of the Board could
thus increase the likelihood that incumbent directors will retain their
positions.

Under Delaware law, unless otherwise provided in the certificate of
incorporation, directors serving on a classified board may only be removed by
the stockholders for cause. The Certificate does not override this provision.
The Certificate does provide that, subject to the rights of any holders of
Preferred Stock, newly created directorships resulting from an increase in the
authorized number of directors or vacancies on the Board resulting from death,
resignation, retirement, disqualification or removal of directors or any other
cause may be filled only by the Board (and not by the stockholders unless
there are no directors in office), provided that a quorum is then in office
and present, or by a majority of the directors then in office, if less than a
quorum is then in office, or by the sole remaining director. Accordingly, the
Board could prevent any stockholder from enlarging the Board and filling the
new directorships with such stockholder's own nominees.

The provisions of the Certificate governing the removal of directors and the
filling of vacancies may have the effect of discouraging a third party from
initiating a proxy contest, making a tender offer or otherwise attempting to
gain control of the Company, or of attempting to change the composition or
policies of the Board, even though such attempts might be beneficial to the
Company or its stockholders. These provisions of the Certificate could thus
increase the likelihood that incumbent directors will retain their positions.

STOCKHOLDER MEETING PROVISIONS

The Certificate and the Company's Amended and Restated Bylaws (the "Bylaws")
provide that (subject to the rights of any holders of Preferred Stock) (i)
only a majority of the Board or the Chief Executive Officer is able to call a
special meeting of stockholders; and (ii) stockholder action may be taken only
at a duly called and convened annual or special meeting of stockholders and
may not be taken by written consent. These provisions, taken together, prevent
stockholders from forcing consideration by the stockholders of stockholder
proposals over the opposition of the Board, except at an annual meeting.

The Bylaws establish an advance notice procedure for stockholders to make
nominations of candidates for election as director, or to bring other business
before an annual meeting of stockholders of the Company (the "Notice
Procedure").

The Notice Procedure provides that, subject to the rights of any holders of
Preferred Stock, only persons who are nominated by or at the direction of the
Board, any committee appointed by the Board, or by a stockholder who has given
timely written notice to the Secretary of the Company prior to the meeting at
which directors are to be elected will be eligible for election as directors
of the Company. The Notice Procedure provides that at an annual meeting only
such business may be conducted as has been brought before the meeting by, or
at the direction of, the Board, any committee appointed by the Board, or by a
stockholder who has given timely written notice to the Secretary of the
Company of such stockholder's intention to bring such business before such
meeting. Under the Notice Procedure, to be timely, notice of stockholder
nominations or proposals to be made at an annual or special meeting must be
received by the Company not less than 60 days nor more than 90 days prior to
the scheduled date of the meeting (or, if less than 70 days' notice or prior
public disclosure of the date of the meeting is given, then not later than the
15th day following the earlier of (i) the day such notice was mailed or (ii)
the day such public disclosure was made). These notices must contain certain
prescribed information.

The Notice Procedure affords the Board an opportunity to consider the
qualifications of proposed director nominees or the merit of stockholder
proposals, and, to the extent deemed appropriate by the Board, to inform
stockholders about such matters, and also provides a more orderly procedure
for conducting annual meetings of stockholders.

52
<PAGE>

Although the Bylaws do not give the Board any power to approve or disapprove
stockholder nominations for the election of directors or proposals for action,
the foregoing provisions may have the effect of precluding a contest for the
election of directors or the consideration of stockholder proposals and of
discouraging or deterring a third party from conducting a solicitation of
proxies to elect its own slate of directors or to approve its own proposal, if
the proper advance notice procedures are not followed, without regard to
whether consideration of such nominees or proposals might be harmful or
beneficial to the Company and its stockholders.

DELAWARE LAW

The Company is a Delaware corporation and subject to Section 203 of the
Delaware General Corporation Law, an anti-takeover law. In general, Section
203 prevents an "interested stockholder" (defined generally as a person owning
15% or more of a corporation's outstanding voting stock) from engaging in a
"business combination" (as defined) with a Delaware corporation for three
years following the date such person became an interested stockholder, subject
to certain exceptions such as approval of the board of directors and of the
holders of at least two-thirds of the outstanding shares of voting stock not
owned by the interested stockholder. The existence of this provision is
expected to have an anti-takeover effect, possibly inhibiting attempts that
might result in a premium over the market price for the shares of Common Stock
held by stockholders.

LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS

Pursuant to the provisions of the Delaware General Corporation Law, the
Company has adopted provisions in the Certificate which provide that directors
of the Company shall not be personally liable for monetary damages to the
Company or its stockholders for a breach of fiduciary duty as a director,
except for liability as a result of (i) a breach of the director's duty of
loyalty to the Company or its stockholders; (ii) acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law;
(iii) an act related to the unlawful stock repurchase or payment of a dividend
under Section 174 of Delaware General Corporation Law; and (iv) transactions
from which the director derived an improper personal benefit. Such limitation
of liability does not affect the availability of equitable remedies such as
injunctive relief or rescission.

The Bylaws require the Company to indemnify its officers and directors and
permit the Company to indemnify its other agents, by bylaws, agreements or
otherwise, to the fullest extent permitted under Delaware law. The Company
intends to enter into separate indemnification agreements with its directors
and officers which may, in some cases, be broader than the specific
indemnification provisions contained in the Delaware General Corporation Law.
The indemnification agreements may require the Company, among other things, to
indemnify such officers and directors against certain liabilities that may
arise by reason of their status or service as directors or officers (other
than liabilities arising from willful misconduct of a culpable nature), to
advance their expenses incurred as a result of any proceeding against them as
to which they could be indemnified, and to obtain directors' and officers'
insurance if available on reasonable terms.

TRANSFER AGENT

The Company's transfer agent and registrar for its Common Stock is American
Stock Transfer and Trust Company.

53
<PAGE>

SHARES ELIGIBLE FOR FUTURE SALE

Prior to the Offering, there has been no public market for the Common Stock.
Future sales of substantial amounts of Common Stock in the public market could
adversely affect the market price of the Common Stock. Upon consummation of
the Offering and the acquisitions of the Founding Companies, the Company will
have outstanding an aggregate of 10,698,477 shares of Common Stock, assuming
(i) the issuance of 5,500,000 shares of Common Stock in the Offering and (ii)
no exercise of the Underwriters' over-allotment option. Of these shares, the
5,500,000 shares sold in the Offering will be freely tradable without
restriction or further registration under the Securities Act, except for any
shares purchased by affiliates of the Company (whose sales would be subject to
certain limitations and restrictions described below).

In general, under Rule 144 as currently in effect, a person (or persons
whose shares are aggregated) who has beneficially owned shares of Common Stock
for at least one year (including the holding period of any prior owner except
an affiliate) is entitled to sell in "broker's transactions" or to market
makers, within any three-month period commencing 90 days after the date of
this Prospectus, a number of shares that does not exceed the greater of (i)
one percent of the number of shares of Common Stock then outstanding
(approximately 106,980 shares immediately after the Offering) or (ii)
generally, the average weekly trading volume in the Common Stock during the
four calendar weeks preceding the required filing of a Form 144 with respect
to such sale. Sales under Rule 144 are generally subject to the availability
of current public information about the Company. Under Rule 144(k), a person
who is not deemed to have been an affiliate of the Company at any time during
the 90 days preceding a sale, and who has beneficially owned the shares of
Common Stock proposed to be sold for at least two years, is entitled to sell
such shares without having to comply with the manner of sale, public
information, volume limitation or notice filing provisions of Rule 144.

Each of the Company, its executive officers and directors and certain
stockholders of the Company has agreed, subject to certain exceptions
described below, not to (i) offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase or otherwise transfer or dispose of,
directly or indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or (ii) enter
into any swap or other arrangement that transfers all or a portion of the
economic consequences associated with the ownership of any Common Stock
(regardless of whether any of the transactions described in clause (i) or (ii)
is to be settled by the delivery of Common Stock, or such other securities, in
cash or otherwise) for a period of 180 days after the date of this Prospectus
without the prior written consent of DLJ except for issuances of shares of
Common Stock by the Company in connection with future acquisitions. In
addition, certain executive officers and stockholders of the Company and the
stockholders of the Founding Companies receiving Common Stock pursuant to the
acquisitions of the Founding Companies, holding an aggregate of 5,198,477
shares of Common Stock, have agreed with the Company not to sell, transfer or
otherwise dispose of any of their shares of Common Stock for a period of one
year after the date of consummation of the Offering. In addition, if the
Keystone acquisition is consummated, the 377,624 shares issued to the Keystone
stockholder will be subject to the same restrictions.

The Company's existing stockholders have, and the stockholders of the
Founding Companies and Keystone will receive, certain rights to include their
shares in registrations of Common Stock under the Securities Act that the
Company effects in the future (other than registrations in connection with
future acquisitions or employee benefit plans), including registrations that
may occur within one year after consummation of the Offering. Such
stockholders also have certain rights commencing two years after consummation
of the Offering to require the Company to effect a registration of their
shares of Common Stock. During the 180-day lockup period described above, the
Company has agreed not to file any registration statement with respect to, and
each of its executive officers, directors and certain stockholders of the
Company has agreed not to make any demand for, or exercise any right with
respect to, the registration of any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock without DLJ's
prior written consent except for registration of shares of Common Stock to be
issued upon exercise of stock options under the Company's stock option plan.
After consummation of the Offering, options to purchase 255,000 shares of
Common Stock will be outstanding and an additional 814,847 shares of Common
Stock will be reserved for issuance pursuant to the Company's 1998 Stock
Option Plan. The Company intends to register under the Securities Act all of
the shares of Common Stock underlying such options. In addition, DLJ has
agreed to allow the Company to register 5,000,000 shares of Common Stock under
the Securities Act upon consummation of the Offering for use by the Company in
future acquisitions. These shares generally will be freely tradeable after
their issuance.

54
<PAGE>

UNDERWRITING

Subject to the terms and conditions of an Underwriting Agreement dated
, 1998 (the "Underwriting Agreement"), the Underwriters named
below, who are represented by Donaldson, Lufkin & Jenrette Securities
Corporation, Credit Suisse First Boston and BancAmerica Robertson Stephens
(the "Representatives"), have severally agreed to purchase from the Company
the respective number of shares of Common Stock set forth opposite their names
below.

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES
<S> <C>
Donaldson, Lufkin & Jenrette Securities Corporation..............
Credit Suisse First Boston.......................................
BancAmerica Robertson Stephens...................................
-----
Total..........................................................
=====
</TABLE>

The Underwriting Agreement provides that the obligations of the several
Underwriters to purchase and accept delivery of the shares of Common Stock
offered hereby are subject to approval by their counsel of certain legal
matters and to certain other conditions. The Underwriters are obligated to
purchase and accept delivery of all the shares of Common Stock offered hereby
(other than those shares covered by the over-allotment option described below)
if any are purchased.

The Underwriters initially propose to offer the shares of Common Stock in
part directly to the public at the initial public offering price set forth on
the cover page of this Prospectus and in part to certain dealers (including
the Underwriters) at such price less a concession not in excess of $
per share. The Underwriters may allow, and such dealers may re-allow, to
certain other dealers a concession not in excess of $ per share. After
the initial offering of the Common Stock, the public offering price and other
selling terms may be changed by the Representatives at any time without
notice. The Underwriters do not intend to confirm sales to any accounts over
which they exercise discretionary authority.

The Company has granted to the Underwriters an option, exercisable within 30
days after the date of this Prospectus, to purchase, from time to time, in
whole or in part, up to an aggregate of 825,000 additional shares of Common
Stock at the initial public offering price less underwriting discounts and
commissions. The Underwriters may exercise such option solely to cover
overallotments, if any, made in connection with the Offering. To the extent
that the Underwriters exercise such option, each Underwriter will become
obligated, subject to certain conditions, to purchase its pro rata portion of
such additional shares based on such Underwriter's percentage underwriting
commitment as indicated in the preceding table.

The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act, or to contribute
to payments that the Underwriters may be required to make in respect thereof.

Each of the Company, its executive officers and directors and certain
stockholders of the Company has agreed, subject to certain exceptions
described below, not to (i) offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase or otherwise transfer or dispose of,
directly or indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or (ii) enter
into any swap or other arrangement that transfers all or a portion of the
economic consequences associated with the ownership of any Common Stock
(regardless of whether any of the transactions described in clause (i) or (ii)
is to be settled by the delivery of Common Stock, or such other securities, in
cash or otherwise) for a period of 180 days after the date of this Prospectus
without the prior written consent of DLJ, except for issuances of shares of
Common Stock by the Company in connection with future acquisitions. In
addition, certain executive officers and stockholders of the Company and the
stockholders of the Founding Companies receiving Common Stock pursuant to the
acquisitions of the Founding Companies, holding an aggregate of 5,198,477
shares of Common Stock, have agreed with the Company not to sell, transfer or
otherwise dispose of any of their shares of Common Stock for a period of one
year after the date of consummation of the Offering. In addition, if the
Keystone acquisition is consummated, the 377,624 shares issued to the Keystone
stockholder will be subject to the same restrictions.

55
<PAGE>

The Company's existing stockholders have, and the stockholders of the
Founding Companies and Keystone will receive, certain rights to include their
shares in registrations of Common Stock under the Securities Act that the
Company effects in the future (other than registrations in connection with
future acquisitions or employee benefit plans), including registrations that
may occur within one year after consummation of the Offering. Such
stockholders also have certain rights commencing two years after consummation
of the Offering to require the Company to effect a registration of their
shares of Common Stock. During the 180-day lockup period described above, the
Company has agreed not to file any registration statement with respect to, and
each of its executive officers, directors and certain stockholders of the
Company has agreed not to make any demand for, or exercise any right with
respect to, the registration of any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock without DLJ's
prior written consent except for the registration of shares of Common Stock to
be issued upon the exercise of stock options under the Company's stock option
plan. DLJ has agreed to allow the Company to register 5,000,000 shares of
Common Stock under the Securities Act upon consummation of the Offering for
use by the Company in future acquisitions. See "Shares Eligible For Future
Sale."

Prior to the Offering, there has been no established trading market for the
Common Stock. The initial public offering price for the shares of Common Stock
offered hereby will be determined by negotiation among the Company and the
Representatives. The factors to be considered in determining the initial
public offering price include the history of and the prospects for the
industry in which the Company competes, the past and present operations of the
Company, the historical results of operations of the Company, the prospects
for future earnings of the Company, the recent market prices of securities of
generally comparable companies and the general condition of the securities
markets at the time of the Offering.

The Company has applied to have the Common Stock approved for listing on the
Nasdaq National Market under the symbol "URSI."

Other than in the United States, no action has been taken by the Company or
the Underwriters that would permit a public offering of the shares of Common
Stock offered hereby in any jurisdiction where action for that purpose is
required. The shares of Common Stock offered hereby may not be offered or
sold, directly or indirectly, nor may this Prospectus or any other offering
material or advertisements in connection with the offer and sale of any such
shares of Common Stock be distributed or published in any jurisdiction, except
under circumstances that will result in compliance with the applicable rules
and regulations of such jurisdiction. Persons into whose possession this
Prospectus comes are advised to inform themselves about and to observe any
restrictions relating to the Offering and the distribution of this Prospectus.
This Prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any shares of Common Stock offered hereby in any jurisdiction in
which such an offer or a solicitation is unlawful.

In connection with the Offering, the Underwriters may engage in transactions
that stabilize, maintain or otherwise affect the price of the Common Stock.
Specifically, the Underwriters may overallot the Offering, creating a
syndicate short position. The Underwriters may bid for and purchase shares of
Common Stock in the open market to cover such syndicate short position or to
stabilize the price of the Common Stock. In addition, the underwriting
syndicate may reclaim selling concessions from syndicate members if the
syndicate repurchases previously distributed Common Stock in syndicate
covering transactions, in stabilization transactions or otherwise. These
activities may stabilize or maintain the market price of the Common Stock
above independent market levels. The Underwriters are not required to engage
in these activities, and may end any of these activities at any time.

LEGAL MATTERS

The legality of the Common Stock offered hereby will be passed on for the
Company by Howard, Rice, Nemerovski, Canady, Falk & Rabkin, A Professional
Corporation ("Howard, Rice"), San Francisco, California. Certain directors of
Howard, Rice own in the aggregate 9,672 shares of Common Stock of the Company.
Certain legal matters will be passed on for the Underwriters by McDermott,
Will & Emery, Chicago, Illinois.

56
<PAGE>

EXPERTS

The financial statements of United Road Services, Inc., the combined
financial statements of Northland Auto Transporters, Inc. and Northland Fleet
Leasing, Inc., the combined financial statements of Caron Auto Works, Inc. and
Caron Auto Brokers, Inc., the consolidated financial statements of Smith-
Christensen Enterprises, Inc. and subsidiary, the consolidated financial
statements of ASC Transportation Services and subsidiary, and the financial
statements of Falcon Towing and Auto Delivery, Inc., Absolute Towing and
Transporting, Inc., and Keystone Towing, Inc. to the extent and for the
periods indicated in their reports, have been included herein and in the
registration statement in reliance upon the reports of KPMG Peat Marwick LLP,
independent certified public accountants, appearing elsewhere herein, and upon
the authority of said firm as experts in accounting and auditing.

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-1 (together with all
amendments, exhibits, schedules and supplements thereto, the "Registration
Statement") under the Securities Act of 1933, as amended, with respect to the
Common Stock offered hereby. This Prospectus, which forms a part of the
Registration Statement, does not contain all of the information set forth in
the Registration Statement. For further information with respect to the
Company and the Common Stock, reference is made to the Registration Statement.
Statements contained in this Prospectus as to the contents of any contract or
other document are not necessarily complete, and, in each instance, reference
is made to the copy of such contract or document filed as an exhibit to the
Registration Statement, each such statement being qualified in all respects by
such reference to such exhibit. Copies of the Registration Statement may be
examined without charge at the Public Reference Section of the Commission, 450
Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and the Commission's
Regional Offices located at Seven World Trade Center, 13th Floor, New York,
New York 10048 and Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of all or any portion of the Registration
Statement can be obtained from the Public Reference Section of the Commission,
450 Fifth Street, N.W., Washington, D.C. 20549, upon payment of certain fees
prescribed by the Commission. The Commission maintains a World Wide Web site
that contains registration statements, reports, proxy and information
statements and other information regarding registrants (including the Company)
that file electronically with the Commission. The address of such World Wide
Web site is http://www.sec.gov.

57
<PAGE>

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
UNITED ROAD SERVICES, INC. AND FOUNDING COMPANIES AND KEYSTONE UNAUDITED
PRO FORMA COMBINED FINANCIAL STATEMENTS
Unaudited Pro Forma Combined Financial Statements--Basis of Presenta-
tion.................................................................. F-3
Unaudited Pro Forma Combined Balance Sheet............................. F-4
Unaudited Pro Forma Combined Statement of Operations................... F-5
Notes to Unaudited Pro Forma Combined Financial Statements............. F-6
UNITED ROAD SERVICES, INC.
Independent Auditors' Report........................................... F-9
Balance Sheet.......................................................... F-10
Statement of Operations................................................ F-11
Statement of Stockholders' Equity (Deficit)............................ F-12
Statement of Cash Flows................................................ F-13
Notes to Financial Statements.......................................... F-14
FOUNDING COMPANIES
NORTHLAND AUTO TRANSPORTERS, INC. AND NORTHLAND FLEET LEASING, INC.
Independent Auditors' Report........................................... F-16
Combined Balance Sheets................................................ F-17
Combined Statements of Operations...................................... F-18
Combined Statements of Stockholder's Equity............................ F-19
Combined Statements of Cash Flows...................................... F-20
Notes to Combined Financial Statements................................. F-21
FALCON TOWING AND AUTO DELIVERY, INC.
Independent Auditors' Report........................................... F-27
Balance Sheets......................................................... F-28
Statements of Operations............................................... F-29
Statements of Stockholder's Equity..................................... F-30
Statements of Cash Flows............................................... F-31
Notes to Financial Statements.......................................... F-32
SMITH-CHRISTENSEN ENTERPRISES, INC. AND SUBSIDIARY
Independent Auditors' Report........................................... F-37
Consolidated Balance Sheets............................................ F-38
Consolidated Statements of Operations.................................. F-39
Consolidated Statements of Stockholders' Equity........................ F-40
Consolidated Statements of Cash Flows.................................. F-41
Notes to Consolidated Financial Statements............................. F-42
CARON AUTO WORKS, INC. AND CARON AUTO BROKERS, INC.
Independent Auditors' Report........................................... F-49
Combined Balance Sheets................................................ F-50
Combined Statements of Operations...................................... F-51
Combined Statements of Stockholders' Equity............................ F-52
Combined Statements of Cash Flows...................................... F-53
Notes to Combined Financial Statements................................. F-54
</TABLE>

F-1
<PAGE>

<S> <C>
ABSOLUTE TOWING AND TRANSPORTING, INC.
Independent Auditors' Report............................................. F-60
Balance Sheets........................................................... F-61
Statements of Operations................................................. F-62
Statements of Stockholder's Equity....................................... F-63
Statements of Cash Flows................................................. F-64
Notes to Financial Statements............................................ F-65
ASC TRANSPORTATION SERVICES AND SUBSIDIARY
Independent Auditors' Report............................................. F-69
Consolidated Balance Sheet............................................... F-70
Consolidated Statement of Operations..................................... F-71
Consolidated Statement of Stockholders' Deficit.......................... F-72
Consolidated Statement of Cash Flows..................................... F-73
Notes to Consolidated Financial Statements............................... F-74

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

KEYSTONE TOWING, INC.
Independent Auditors' Report............................................. F-79
Balance Sheets........................................................... F-80
Statements of Operations................................................. F-81
Statements of Stockholder's Equity....................................... F-82
Statements of Cash Flows................................................. F-83
Notes to Financial Statements............................................ F-84
</TABLE>

F-2
<PAGE>

UNITED ROAD SERVICES, INC. AND FOUNDING COMPANIES AND KEYSTONE

UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
BASIS OF PRESENTATION

The following unaudited pro forma combined financial statements give effect
to the acquisitions by United Road Services of the outstanding capital stock
of Northland, Falcon, Caron, Quality, Absolute, Auto Service and Milne (each a
"Founding Company" and collectively the "Founding Companies"), as well as the
acquisition of Keystone. The acquisitions of the Founding Companies will occur
simultaneously with and as a condition to consummation of the Offering. The
Keystone acquisition is expected to be consummated after the Offering is
completed. All of these acquisitions will be accounted for using the purchase
method of accounting. United Road Services has been identified as the
accounting acquirer, in accordance with Staff Accounting Bulletin ("SAB") 97
for financial statement presentation purposes since its former common
stockholders will receive the largest portion of the voting rights of the
combined corporation.

The unaudited pro forma combined balance sheet gives effect to the
Acquisitions and the Offering as if they had occurred on December 31, 1997.
The unaudited pro forma combined statement of operations gives effect to these
transactions as if they had occurred on January 1, 1997.

To the extent the owners of the Founding Companies and Keystone have
contractually agreed to reductions in salary, bonuses and benefits, these
reductions have been reflected in the unaudited pro forma combined statements
of operations. With respect to other potential cost savings, United Road
Services has not and cannot quantify these savings until completion of the
Acquisitions. It is anticipated that these savings will be offset in part by
costs related to United Road Services' new corporate management and by the
costs associated with being a public company. However, because these costs
cannot be quantified at this time, they have not been included in the
unaudited pro forma combined financial statements of the Company.

The pro forma adjustments are based on estimates, available information and
certain assumptions, and may be revised, as additional information becomes
available. The pro forma financial information does not purport to represent
what United Road Services' financial position or results of operations would
actually have been had such transactions occurred on these dates and are not
necessarily representative of United Road Services' financial position or
results of operations for any future period. Since the Founding Companies and
Keystone were not under common control or management during the periods
presented, historical combined results may not be comparable to, or indicative
of, future performance. See "Risk Factors" included elsewhere herein. The
unaudited pro forma combined financial statements should be read in
conjunction with the other financial statements and notes thereto included
elsewhere in this Prospectus.

F-3
<PAGE>

UNITED ROAD SERVICES, INC.

UNAUDITED PRO FORMA COMBINED BALANCE SHEET

DECEMBER 31, 1997
(IN THOUSANDS)

<TABLE>
<CAPTION>
UNITED PRO FORMA POST
ROAD ACQUISITION PRO FORMA ACQUISITION
SERVICES NORTHLAND FALCON QUALITY CARON ABSOLUTE ASC MILNE ADJUSTMENTS COMBINED ADJUSTMENTS
-------- --------- ------ ------- ----- -------- ----- ----- ----------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Cash and cash
equivalents...... $ 50 407 4 267 108 11 138 -- 735(a) 1,720 30,008(d)(e)
Accounts
receivable....... -- 1,017 907 354 791 594 230 437 -- 4,330 --
Less: allowance. -- 75 189 76 45 -- -- 21 -- 406 --
----- ----- ----- ----- ----- ----- ----- ----- ------ ------ -------
Accounts
receivable, net.. -- 942 718 278 746 594 230 416 -- 3,924 --
Accounts
receivable from
related parties
and employees.... -- 3 -- 72 57 -- 1 6 -- 139 --
Inventory........ -- -- 26 10 30 -- 18 17 -- 101 --
Notes
receivables...... -- 18 -- -- 44 -- -- -- -- 62 --
Prepaid and other
current assets... -- 131 131 21 5 86 70 19 -- 463 --
----- ----- ----- ----- ----- ----- ----- ----- ------ ------ -------
Total Current
Assets.......... 50 1,501 879 648 990 691 457 458 735 6,409 30,008
Property and
equipment, net... -- 3,924 2,423 2,877 2,279 306 807 715 1,685(b)(c) 15,016 --
Accounts
receivable--
related parties--
non-current...... -- -- -- 831 -- -- -- -- -- 831 --
Other non-current
assets, net...... -- 40 -- 99 23 31 10 -- -- 203 --
Goodwill......... -- -- -- -- -- -- -- -- 43,945(b)(c) 43,945 500(d)
----- ----- ----- ----- ----- ----- ----- ----- ------ ------ -------
Total Assets..... $ 50 5,465 3,302 4,455 3,292 1,028 1,274 1,173 46,365 66,404 30,508
===== ===== ===== ===== ===== ===== ===== ===== ====== ====== =======
LIABILITIES AND
STOCKHOLDERS' EQ-
UITY
Current
installment of
notes payable.... $ -- 347 264 542 263 16 20 170 (170)(b) 1,452 --
Current
installment of
lease
obligations...... -- 148 369 -- 178 -- 248 -- -- 943 --
Borrowings under
lines of credit.. -- -- 47 -- 225 212 -- -- -- 484 --
Payable to
related parties--
current.......... 92 54 -- -- 10 -- -- -- -- 156 --
Accounts payable. 62 188 546 68 333 437 121 134 -- 1,889 --
Income taxes
payable.......... -- 262 207 345 92 -- 62 -- -- 968
Payable to
stockholders..... -- -- -- -- -- -- -- -- 29,372(b)(c) 29,372 (29,372)(e)
Other accrued
liabilities...... -- 103 283 89 88 -- 63 45 -- 671 --
----- ----- ----- ----- ----- ----- ----- ----- ------ ------ -------
Total Current
Liabilities..... 154 1,102 1,716 1,044 1,189 665 514 349 29,202 35,935 (29,372)
Notes payable,
excluding current
installments..... -- 280 250 2,188 1,011 84 209 466 (1,596)(b) 2,892 --
Capital lease
obligations,
excluding current
installments..... -- 794 716 -- 438 -- 492 -- -- 2,440 --
Deferred income
taxes............ -- 244 11 313 54 -- 83 -- 994 (c) 1,699 --
----- ----- ----- ----- ----- ----- ----- ----- ------ ------ -------
Total
Liabilities...... 154 2,420 2,693 3,545 2,692 749 1,298 815 28,600 42,966 (29,372)
Stockholders'
Equity:
Common stock.... 3 2 -- 20 2 43 24 25 (114)(a)(c) 5 6 (d)
Additional paid-
in capital...... 67 -- -- -- 10 -- 33 -- 23,497 (a)(b)(c) 23,607 59,874 (d)
Retained
earnings
(accumulated
deficit)........ (174) 3,043 609 890 618 236 (81) 333 (5,648)(c) (174) --
Treasury stock.. -- -- -- -- (30) -- -- -- 30 (c) -- --
----- ----- ----- ----- ----- ----- ----- ----- ------ ------ -------
Total
Stockholders'
Equity
(deficit)....... (104) 3,045 609 910 600 279 (24) 358 17,765 23,438 59,880
----- ----- ----- ----- ----- ----- ----- ----- ------ ------ -------
Total Liabilities
and Stockholders'
Equity........... $ 50 5,465 3,302 4,455 3,292 1,028 1,274 1,173 46,365 66,404 30,508
===== ===== ===== ===== ===== ===== ===== ===== ====== ====== =======
<CAPTION>
KEYSTONE
-------------------------
PRO FORMA PRO FORMA
COMBINED COMBINED
AS AS FURTHER
ADJUSTED HISTORICALAADJUSTMENTS(F)DJUSTED
--------- -------------------------
<S> <C> <C> <C> <C>
ASSETS
Cash and cash
equivalents...... 31,728 72 (4,681) 27,119
Accounts
receivable....... 4,330 167 -- 4,497
Less: allowance. 406 -- -- 406
--------- ---------- -------------- ----------
Accounts
receivable, net.. 3,924 167 -- 4,091
Accounts
receivable from
related parties
and employees.... 139 3 -- 142
Inventory........ 101 61 -- 162
Notes
receivables...... 62 5 -- 67
Prepaid and other
current assets... 463 98 -- 561
--------- ---------- -------------- ----------
Total Current
Assets.......... 36,417 406 (4,681) 32,142
Property and
equipment, net... 15,016 1,039 208 16,263
Accounts
receivable--
related parties--
non-current...... 831 -- -- 831
Other non-current
assets, net...... 203 82 -- 285
Goodwill......... 44,445 -- 8,027 52,472
--------- ---------- -------------- ----------
Total Assets..... 96,912 1,527 3,554 101,993
========= ========== ============== ==========
LIABILITIES AND
STOCKHOLDERS' EQ-
UITY
Current
installment of
notes payable.... 1,452 279 -- 1,731
Current
installment of
lease
obligations...... 943 -- -- 943
Borrowings under
lines of credit.. 484 73 -- 557
Payable to
related parties--
current.......... 156 76 -- 232
Accounts payable. 1,889 201 -- 2,090
Income taxes
payable.......... 968 -- -- 968
Payable to
stockholders..... -- -- -- --
Other accrued
liabilities...... 671 379 -- 1,050
--------- ---------- -------------- ----------
Total Current
Liabilities..... 6,563 1,008 -- 7,571
Notes payable,
excluding current
installments..... 2,892 365 -- 3,257
Capital lease
obligations,
excluding current
installments..... 2,440 -- -- 2,440
Deferred income
taxes............ 1,699 -- 83 1,782
--------- ---------- -------------- ----------
Total
Liabilities...... 13,594 1,373 83 15,050
Stockholders'
Equity:
Common stock.... 11 20 (20) 11
Additional paid-
in capital...... 83,481 -- 3,625 87,106
Retained
earnings
(accumulated
deficit)........ (174) 134 (134) (174)
Treasury stock.. -- -- -- --
--------- ---------- -------------- ----------
Total
Stockholders'
Equity
(deficit)....... 83,318 154 3,471 86,943
--------- ---------- -------------- ----------
Total Liabilities
and Stockholders'
Equity........... 96,912 1,527 3,554 101,993
========= ========== ============== ==========
</TABLE>
The accompanying notes are an integral part of these unaudited pro forma
combined financial statements

F-4
<PAGE>

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 1997

(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
UNITED PRO FORMA
ROAD ACQUISITION PRO FORMA
SERVICES NORTHLAND FALCON QUALITY CARON ABSOLUTE ASC MILNE ADJUSTMENTS COMBINED
-------- --------- ------ ------- ----- -------- ----- ----- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net revenue...... $ -- 10,159 7,785 6,802 6,627 4,780 3,310 3,136 -- 42,599
Cost of revenue.. -- 7,342 5,956 3,849 6,304 3,767 2,364 1,676 (498)(b) 30,760
----- ------ ----- ----- ----- ----- ----- ----- ------ ------
Gross profit.... -- 2,817 1,829 2,953 323 1,013 946 1,460 498 11,839
Selling general
and
administrative
expenses......... 174 1,379 1,614 1,390 511 1,095 765 1,316 (2,345)(a) 5,899
Goodwill
amortization..... -- -- -- -- -- -- -- -- 1,111 (c) 1,111
----- ------ ----- ----- ----- ----- ----- ----- ------ ------
Income (loss)
from operations.. (174) 1,438 215 1,563 (188) (82) 181 144 1,732 4,829
Other income
(expense):
Interest
expense......... -- (139) (148) (277) (141) (15) (72) (43) 156 (d) (679)
Interest income. -- 36 -- 4 8 -- -- -- -- 48
Gain (loss) on
sale of assets.. -- (35) 99 -- 115 9 19 -- -- 207
Other........... -- 89 74 (27) 30 -- 35 -- -- 201
----- ------ ----- ----- ----- ----- ----- ----- ------ ------
Income (loss)
before income
taxes............ (174) 1,389 240 1,263 (176) (88) 163 101 1,888 4,606
Income tax
expense
(benefit)........ -- 335 108 441 (95) (24) 49 12 1,273 (e) 2,099
----- ------ ----- ----- ----- ----- ----- ----- ------ ------
Net income
(loss)........... $(174) 1,054 132 822 (81) (64) 114 89 615 2,507
===== ====== ===== ===== ===== ===== ===== ===== ====== ======
Basic earnings
per share (f).... -- -- -- -- -- -- -- -- -- $ 0.31
======
Diluted earnings
per share (f).... -- -- -- -- -- -- -- -- -- $ 0.31
======
<CAPTION>
KEYSTONE
--------------------------
PRO FORMA
COMBINED
AS FURTHER
HISTORICAL ADJUSTMENTS (G) ADJUSTED
---------- --------------- ----------
<S> <C> <C> <C>
Net revenue...... 3,943 -- 46,542
Cost of revenue.. 2,607 (103) 33,264
---------- --------------- ----------
Gross profit.... 1,336 103 13,278
Selling general
and
administrative
expenses......... 1,140 (556) 6,483
Goodwill
amortization..... -- 201 1,312
---------- --------------- ----------
Income (loss)
from operations.. 196 458 5,483
Other income
(expense):
Interest
expense......... (71) -- (750)
Interest income. 2 -- 50
Gain (loss) on
sale of assets.. 36 -- 243
Other........... 76 -- 277
---------- --------------- ----------
Income (loss)
before income
taxes............ 239 458 5,303
Income tax
expense
(benefit)........ -- 371 2,470
---------- --------------- ----------
Net income
(loss)........... 239 87 2,833
========== =============== ==========
Basic earnings
per share (f).... -- -- $ 0.32
==========
Diluted earnings
per share (f).... -- -- $ 0.32
==========
</TABLE>

The accompanying notes are an integral part of these unaudited pro forma
combined financial statements

F-5
<PAGE>

UNITED ROAD SERVICES, INC. AND FOUNDING COMPANIES AND KEYSTONE

NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

1. GENERAL:

United Road Services was founded to become a leading national provider of
motor vehicle and equipment towing and transport services. United Road
Services has conducted no operations to date and will acquire the Founding
Companies simultaneously with and as a condition to the consummation of the
Offering and expects to acquire Keystone after the Offering and upon obtaining
municipal approval to a contract assignment.

The historical financial statements reflect the financial position and
results of operations of the Founding Companies and Keystone and were derived
from the respective financial statements of the Founding Companies and
Keystone included elsewhere herein, except for those of Milne, which are
compiled from Milne's accounting records. The information included in these
financial statements for the individual Founding Companies and Keystone is as
of and for the year ended December 31, 1997, with the exception of Caron for
which the information is as of and for the fiscal year ended September 30,
1997.

2. ACQUISITION OF FOUNDING COMPANIES:

Simultaneously with and as a condition to consummation of the Offering,
United Road Services will acquire by merger all of the Founding Companies and
expects to acquire Keystone after the Offering is completed. All of the
acquisitions will be accounted for using the purchase method of accounting
with United Road Services being treated, in accordance with SAB 97, as the
accounting acquirer since its former common shareholders will receive the
largest portion of the voting rights of the combined corporation.

The following table sets forth the consideration to be paid in cash and in
shares of Common Stock to the stockholders of each of the Founding Companies
(without giving effect to any earn-out payments that may be required or any
indebtedness of the Founding Companies that may be assumed by the Company).
For purposes of computing the estimated purchase price for accounting
purposes, the value of the shares of Common Stock was determined using an
estimated fair value of $9.60 per share (or $22.8 million), which represents a
discount of 20% from the assumed initial public offering price of $12.00 due
to restrictions on the sale and transferability of the shares issued. The
total estimated purchase price of $50.6 million for the Acquisitions is based
upon preliminary estimates and is subject to certain purchase price
adjustments at and following closing of the Acquisitions. Additionally, the
Company believes that the final estimated purchase price will not materially
differ from the preliminary estimate.

<TABLE>
<CAPTION>
SHARES OF
CASH COMMON STOCK
---------- ---------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Northland.......................................... $ 8,307 692,277
Falcon............................................. 4,282 356,850
Quality............................................ 5,129 485,750
Caron.............................................. 3,000 250,000
Absolute........................................... 3,567 297,267
Auto Service....................................... 1,651 137,554
Milne.............................................. 1,873 156,043
---------- ------------
Total............................................ $27,809 2,375,741
========== ============
</TABLE>

Additionally, upon consummation of the Keystone acquisition, the stockholder
will receive cash consideration of $4.5 million and 377,624 shares of Common
Stock.

F-6
<PAGE>

UNITED ROAD SERVICES, INC. AND FOUNDING COMPANIES AND KEYSTONE

NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS--(CONTINUED)

3. UNAUDITED PRO FORMA COMBINED BALANCE SHEET ADJUSTMENTS:

(a) Reflects the sale of Common Stock in January 1998.

(b) Reflects the distribution to stockholders of two Founding Companies of
certain assets and liabilities that are specifically excluded from the
transactions.

(c) Reflects the acquisition of the Founding Companies by United Road
Services for a total estimated purchase price of $50.6 million consisting of
$27.8 million in cash and 2,375,741 shares of Common Stock valued at $9.60 per
share (or $22.8 million). The purchase price less the net assets acquired,
including an adjustment for property and equipment to fair market value,
including the resulting tax effect, results in excess purchase price of $43.9
million. Based upon management's preliminary analysis, it is anticipated that
the historical value of the assets and liabilities of the acquired companies,
with the exception of the adjustments made for property and equipment, will
approximate fair value. Management has not identified any other material
tangible or intangible assets to which a portion of the purchase price could
be reasonably allocated. In connection with the Acquisitions, the Company has
agreed to make contingent payments with shares of Common Stock, if earned, to
the former stockholders of the Founding Companies over a five year period
based on formulas in their respective agreements. The target level for 1998 is
generally 110% of 1997 revenue of the particular Founding Company's business
and for the years 1999 through 2002 is 110% of the greater of the prior year's
actual revenue or target revenue. If target revenue is achieved for the
particular year, an initial payment equal to 5% of the excess of actual
revenue over the target level is due. In addition, once the target level of
revenue for a particular year is met, subsequent and equal payments will also
be due for each subsequent year through 2002, provided that the actual revenue
for the respective subsequent year exceeds the actual revenue for the year
that the earn-out was first earned. Amounts earned under the agreements will
be recorded as additional goodwill and amortized over the remaining
amortization period.

(d) Reflects the cash proceeds of $57.8 million from the issuance of
5,500,000 shares of United Road Services Common Stock, net of estimated
offering costs of $6.1 million (based on an assumed initial public offering
price of $12.00 per share), acquisition costs of $500,000 and the repayment of
$1.6 million of debt which will be paid from the proceeds of the Offering.
Offering costs consist primarily of underwriting discounts and commissions,
accounting fees, legal fees and printing expenses. Acquisition costs consist
primarily of legal fees.

(e) Reflects the cash portion of the consideration to be paid to the
stockholders of the Founding Companies in connection with the Acquisitions.

(f) Reflects a $150,000 distribution to Keystone's shareholder to pay taxes
on S Corporation earnings and the acquisition of Keystone by the Company for a
total estimated purchase price of $8.2 million, consisting of $4.5 million in
cash and 377,624 share of Common Stock valued at $9.60 per share (or $3.7
million). The purchase price less the net assets acquired, including an
adjustment for property and equipment to fair market value, including the
resulting tax effect, results in excess purchase price of $8.0 million. Based
upon management's preliminary analysis, it is anticipated that the historical
carrying value of the assets and liabilities of Keystone, with the exception
of the adjustments made for property and equipment, will approximate fair
value. Management has not identified any other material tangible or intangible
assets to which a portion of the purchase price could be reasonably allocated.

In connection with this acquisition, the Company has agreed to make
contingent payments with shares of Common Stock, if earned, to the former
stockholder of Keystone over a five year period based on an agreed formula.
The target level for 1998 is generally 110% of 1997 revenue of Keystone's
business and for the years

F-7
<PAGE>

UNITED ROAD SERVICES, INC. AND FOUNDING COMPANIES AND KEYSTONE

NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS--(CONTINUED)

1999 through 2002 is 110% of the greater of the prior year's actual revenue or
target revenue. If target revenue is achieved for the particular year, an
initial payment equal to 5% of the excess of actual revenue over the target
level is due. In addition, once the target level of revenue for a particular
year is met, subsequent and equal payments will also be due for each
subsequent year through 2002, provided that the actual revenue for the
respective subsequent year exceeds the actual revenue for the year that the
earn-out was first earned.

4. UNAUDITED PROFORMA COMBINED STATEMENTS OF OPERATIONS ADJUSTMENTS:

(a) Reflects $2.3 million of reductions in salaries, bonuses and benefits to
the former stockholders of the Founding Companies to which they have
contractually agreed.

(b) Adjusts the depreciation of vehicles based upon adjusted carrying values
utilizing lives of 10 to 15 years.

(c) Reflects the amortization over a 40-year estimated life of goodwill to
be recorded as a result of the Acquisitions, which is non-deductible for tax
purposes.

(d) Reflects the reduction in interest expense related to $1.6 million of
debt which will be repaid from the net proceeds of the Offering.

(e) Reflects the incremental provision for federal and state income taxes
relating to all entities being combined and other statements of operations
adjustments at an estimated rate of 38%.

(f) The number of shares used in the calculations of basic and diluted
earnings per share have been derived as follows:

<TABLE>
<CAPTION>
PRO FORMA COMBINED
PRO FORMA AS FURTHER
COMBINED ADJUSTED
--------- ------------------
<S> <C> <C>
Shares issued in connection with the formation
of the Company................................ 2,604,000 2,604,000
Shares issued in the Offering.................. 2,811,102 3,217,149
Shares issued in January 1998.................. 218,736 218,736
Shares issued in connection with the
Acquisitions.................................. 2,375,741 2,753,365
--------- ---------
Basic shares estimated to be outstanding....... 8,009,579 8,793,250
Incremental effect of options and warrants on
shares outstanding............................ 54,000 54,000
--------- ---------
Diluted shares estimated to be outstanding..... 8,063,579 8,847,250
========= =========
</TABLE>

(g) Reflects $556,000 of reductions in salaries, bonuses and benefits which
have been contractually agreed.

Adjusts the depreciation of vehicles based upon adjusted carrying values
utilizing lives of 10 to 15 years.

Reflects the amortization over a 40-year estimated life of goodwill to be
recorded as a result of the acquisition of Keystone, which is non-deductible
for tax purposes.

Reflects the incremental provision for federal and state income taxes
relating to the acquisition of Keystone and other statements of operations
adjustments at an estimated rate of 40%.

F-8
<PAGE>

INDEPENDENT AUDITORS' REPORT

The Stockholders and Board of Directors
United Road Services, Inc.:

We have audited the accompanying balance sheet of United Road Services, Inc.
as of December 31, 1997, and the related statement of operations,
stockholders' equity (deficit), and cash flows for the period from July 25,
1997 (inception) through December 31, 1997. These financial statements are the
responsibility of United Road Services, Inc.'s management. Our responsibility
is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of United Road Services, Inc.
as of December 31, 1997, and the results of its operations and its cash flows
for the period from July 25, 1997 (inception) through December 31, 1997 in
conformity with generally accepted accounting principles.

/s/ KPMG Peat Marwick LLP

Albany, New York
February 24, 1998

F-9
<PAGE>

UNITED ROAD SERVICES, INC.

BALANCE SHEET

DECEMBER 31, 1997

<TABLE>
<S> <C>
ASSETS
Current assets:
Cash.............................................................. $ 49,987
---------
Total assets.................................................... $ 49,987
=========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Payable to related parties (note 3)............................... 91,874
Accounts payable.................................................. 62,077
---------
Total current liabilities....................................... 153,951
---------
Stockholders' equity (deficit):
Common stock, $.001 par value. Authorized 35,000,000 common shares
and 5,000,000 preferred shares; issued and outstanding 2,604,000
shares........................................................... 2,604
Additional paid-in capital........................................ 67,396
Accumulated deficit............................................... (173,964)
---------
Total stockholders' equity (deficit)............................ (103,964)
---------
Total liabilities and stockholders' equity (deficit)............ $ 49,987
=========
</TABLE>

See accompanying notes to financial statements.

F-10
<PAGE>

UNITED ROAD SERVICES, INC.

STATEMENT OF OPERATIONS

FOR THE PERIOD FROM JULY 25, 1997 (INCEPTION) THROUGH DECEMBER 31, 1997

<TABLE>
<S> <C>
Revenue............................................................. $ --
Selling, general and administrative expenses........................ 173,964
---------
Loss before income tax.......................................... (173,964)
Income tax benefit.................................................. --
---------
Net loss........................................................ $(173,964)
=========
Net loss per share (note 2)..................................... $ (.08)
=========
</TABLE>

See accompanying notes to financial statements.

F-11
<PAGE>

UNITED ROAD SERVICES, INC.

STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)

FOR THE PERIOD FROM JULY 25, 1997 (INCEPTION) THROUGH DECEMBER 31, 1997

<TABLE>
<CAPTION>
ADDITIONAL TOTAL
COMMON PAID-IN ACCUMULATED STOCKHOLDERS'
STOCK CAPITAL DEFICIT EQUITY (DEFICIT)
------ ---------- ----------- ----------------
<S> <C> <C> <C> <C>
Initial capitalization........... $2,604 67,396 -- 70,000
Net loss--1997................... -- -- (173,964) (173,964)
------ ------ -------- --------
Balance at December 31, 1997..... $2,604 67,396 (173,964) (103,964)
====== ====== ======== ========
</TABLE>

See accompanying notes to financial statements.

F-12
<PAGE>

UNITED ROAD SERVICES, INC.

STATEMENT OF CASH FLOWS

FOR THE PERIOD FROM JULY 25, 1997 (INCEPTION) THROUGH DECEMBER 31, 1997

<TABLE>
<S> <C>
Cash flows from operating activities:
Net loss.......................................................... $(173,964)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Increase in accounts payable.................................... 62,077
Increase in amounts payable to related parties.................. 91,874
---------
Net cash used by operating activities......................... (20,013)
---------
Cash flows from financing activities:
Proceeds from issuance of stock................................... 70,000
---------
Net cash provided by financing activities..................... 70,000
Net increase in cash................................................ 49,987
Cash at beginning of period......................................... --
---------
Cash at end of period............................................... $ 49,987
=========
</TABLE>

See accompanying notes to financial statements.

F-13
<PAGE>

UNITED ROAD SERVICES, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1997

(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Description of Business

United Road Services, Inc. (formerly Towing America, Inc.), a Delaware
corporation was formed in July 1997 to become a leading national provider of
motor vehicles and equipment towing and transport services. United Road
Services, Inc. elected to incorporate under the S-corporation provisions of
the Internal Revenue Code. It is United Road Services, Inc.'s intention to
change its status to a C-corporation effective January 1, 1998. United Road
Services, Inc. intends to acquire eight businesses, (the "Acquisitions"),
seven of which are to close simultaneously with the consummation of an initial
public offering ("Offering") of its common stock and one which is expected to
close after the Offering and, subsequent to the Offering, continue to acquire
similar companies to expand its national operations.

All of United Road Services, Inc.'s activities to date relate to the
Offering and the Acquisitions. United Road Services, Inc. has not yet
conducted any operations relative to its ultimate intended purpose. United
Road Services, Inc. is dependent upon the Offering to execute the pending
Acquisitions. There is no assurance that the pending Acquisitions discussed
below will be completed or that United Road Services, Inc. will be able to
generate future operating revenue. United Road Services, Inc. has an absence
of a combined operating history and future success is dependent upon a number
of factors which include, among others, the ability to integrate operations,
reliance on the identification and integration of satisfactory acquisition
candidates, reliance on acquisition financing, the ability to manage growth
and attract and retain quality management.

(b) Fair Value of Financial Instruments

Due to the short-term nature of various financial instruments the fair value
of United Road Services, Inc.'s financial instruments approximates their
carrying values.

Management of United Road Services, Inc. has made a number of estimates and
assumptions relating to the reporting of assets and liabilities and the
disclosure of contingent assets and liabilities to prepare these financial
statements in conformity with generally accepted accounting principles. Actual
results could differ from those estimates.

(d) Income Taxes

United Road Services, Inc. elected to file federal and State income tax
returns under S-corporation provisions. As such, earnings or losses flow
through to the stockholder level. Accordingly, no income tax expense or
benefit has been recorded by United Road Services, Inc. as of December 31,
1997.

(2) STOCKHOLDER'S EQUITY AND EARNINGS (LOSS) PER SHARE

United Road Services, Inc. effected a 100-for-one stock split on December
18, 1997 for each share of common stock of United Road Services, Inc. ("Common
Stock") then outstanding. In addition United Road Services, Inc. increased
authorized shares of Common Stock to 1,000,000 shares with a $.001 par value.
Subsequently, and pursuant to an amended and restated certificate of
incorporation of United Road Services, Inc., filed on February 23, 1998, the
authorized number of shares have been increased to 40,000,000 (35,000,000
common shares and 5,000,000 preferred shares). Also on February 23, 1998,
United Road Services, Inc. effected a 3.72 for 1 stock split for all
outstanding common shares. Common stock has been retroactively reflected in
the balance sheet, statement of stockholder's equity (deficit) and the
following notes.

F-14
<PAGE>

UNITED ROAD SERVICES, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

On December 18, 1997, United Road Services, Inc. authorized the issuance of
188,976 shares pursuant to the terms and conditions of a subscription
agreement. At December 31, 1997 United Road Services, Inc. had obtained
subscription agreements to purchase all authorized shares. These shares were
issued and fully paid on January 1, 1998 for $3.36 per share.

Loss per share was computed by dividing the net loss by the weighted average
number of shares outstanding after giving effect to the stock-splits referred
to above. The weighted average number of shares used in the computation was
2,055,300.

(3) RELATED PARTY TRANSACTIONS

United Road Services, Inc. is indebted to two of the primary stockholders
under unsecured notes, bearing interest at 8.5% per annum. The notes and
unpaid interest are included in payable to related parties in the accompanying
balance sheet.

(4) SUBSEQUENT EVENTS

United Road Services, Inc. has signed definitive agreements to acquire seven
companies (Founding Companies) to be effective simultaneously with the
Offering and one company, Keystone Towing, Inc., to be acquired after the
Offering. The companies to be acquired are:

Northland Auto Transporters, Inc. and Northland Fleet Leasing, Inc.
Falcon Towing and Auto Delivery, Inc.,
Smith-Christensen Enterprises, Inc. and subsidiary ("City Towing, Inc."
d/b/a Quality Towing)
Caron Auto Works, Inc. and Caron Auto Brokers, Inc.
Absolute Towing and Transporting, Inc.
Keystone Towing, Inc.
ASC Transportation Services and subsidiary ("Auto Service Center" d/b/a ASC
Truck Service)
Milne Tow Service

The aggregate consideration to acquire the Founding Companies is
approximately $27.8 million in cash and 2,375,741 in shares of Common Stock.
Additionally, upon consummation of the Keystone Towing, Inc. acquisition, the
stockholder will receive cash consideration of $4.5 million and 377,624 shares
of Common Stock.

United Road Services, Inc. expects to receive a commitment for a revolving
line of credit of $50 million. The funding is intended to be used for
acquisitions, capital expenditures, refinancing of debt not paid out of the
proceeds of the Offering and for general corporate purposes. The line of
credit is subject to the customary closing conditions and the completion of
the definitive documentation.

Concurrently with the Acquisitions, United Road Services, Inc. may enter
into an agreement with the stockholders to lease the building used in United
Road Services, Inc.'s operation for negotiated amounts and terms.

Prior to the Acquisitions, several Founding Companies and Keystone Towing,
Inc. intend to make distributions of certain net assets not to exceed
approximately $930,000.

In January 1998, United Road Services, Inc. issued 29,760 shares to a member
of the board of directors for a purchase price of $3.36 per share. In
addition, options to purchase 215,000 shares were issued during January and
February 1998 to several employees of United Road Services, Inc. and outside
consultants. Stock options were issued at a price of $9.00 per share and vest
over a three-year period. Additional options to purchase 40,000 shares are
expected to be issued after the consummation of the Offering at the Offering
price per share.

F-15
<PAGE>

INDEPENDENT AUDITORS' REPORT

The Stockholder
Northland Auto Transporters, Inc. and
Northland Fleet Leasing, Inc.:

We have audited the accompanying combined balance sheets of Northland Auto
Transporters, Inc. and Northland Fleet Leasing, Inc. (collectively
"Northland") as of December 31, 1996 and 1997, and the related combined
statements of operations, stockholder's equity, and cash flows for each of the
years in the three-year period ended December 31, 1997. These combined
financial statements are the responsibility of Northland's management. Our
responsibility is to express an opinion on these combined financial statements
based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the combined financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the combined
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall combined financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the combined financial position of Northland
Auto Transporters, Inc. and Northland Fleet Leasing, Inc. as of December 31,
1996 and 1997, and the results of their combined operations and their combined
cash flows for each of the years in the three-year period ended December 31,
1997 in conformity with generally accepted accounting principles.

/s/ KPMG Peat Marwick LLP

Albany, New York
January 28, 1998

F-16
<PAGE>

NORTHLAND AUTO TRANSPORTERS, INC. AND
NORTHLAND FLEET LEASING, INC.

COMBINED BALANCE SHEETS

DECEMBER 31, 1996 AND 1997

<TABLE>
<CAPTION>
1996 1997
ASSETS ---------- ----------
<S> <C> <C>
Current assets:
Cash and cash equivalents.............................. $ 432,949 $ 407,309
Trade accounts receivable, net of allowance for
doubtful accounts of $40,000 in 1996 and $75,000 in
1997.................................................. 416,220 942,432
Accounts receivable from employees..................... 4,955 3,445
Notes receivable....................................... 35,068 17,453
Income tax receivable (note 7)......................... 37,584 --
Prepaid and other current assets (note 2).............. 74,302 113,558
Deferred income taxes (note 7)......................... 9,000 17,000
---------- ----------
Total current assets................................. 1,010,078 1,501,197
Property and equipment, net (notes 3, 5 and 6)........... 2,204,802 3,924,055
Notes receivable......................................... 44,044 31,468
Other assets............................................. 8,862 8,426
---------- ----------
Total assets......................................... $3,267,786 $5,465,146
========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Current installments of notes payable (note 5)......... $ 282,824 $ 346,859
Current installments of obligations under capital
leases (note 6)....................................... 4,408 147,538
Payable to related parties (note 10)................... 159,505 53,849
Accounts payable....................................... 210,998 188,064
Income taxes payable (note 7).......................... -- 261,933
Accrued payroll and related costs...................... 18,062 52,676
Other accrued liabilities (note 4)..................... 98,914 51,300
---------- ----------
Total current liabilities............................ 774,711 1,102,219
Long-term liabilities:
Notes payable, excluding current installments (note 5). 318,382 279,963
Obligations under capital leases, excluding current
installments (note 6)................................. 12,833 793,774
Deferred income taxes (note 7)......................... 171,000 244,000
---------- ----------
Total liabilities.................................... 1,276,926 2,419,956
---------- ----------
Stockholder's equity:
Common stock, $1 par value. Authorized, issued and
outstanding 2,000 shares in 1996 and 1997............. 2,000 2,000
Retained earnings...................................... 1,988,860 3,043,190
---------- ----------
Total stockholder's equity........................... 1,990,860 3,045,190
---------- ----------
Total liabilities and stockholder's equity........... $3,267,786 $5,465,146
========== ==========
</TABLE>

See accompanying notes to combined financial statements.

F-17
<PAGE>

NORTHLAND AUTO TRANSPORTERS, INC. AND
NORTHLAND FLEET LEASING, INC.

COMBINED STATEMENTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997

<TABLE>
<CAPTION>
1995 1996 1997
---------- ---------- -----------
<S> <C> <C> <C>
Net revenue............................... $4,671,164 $6,353,290 $10,159,113
Cost of revenue........................... 3,683,119 5,132,828 7,341,748
---------- ---------- -----------
Gross profit.......................... 988,045 1,220,462 2,817,365
Selling, general and administrative
expenses................................. 663,723 874,559 1,378,872
---------- ---------- -----------
Income from operations................ 324,322 345,903 1,438,493
---------- ---------- -----------
Other income (expense):
Interest expense........................ (48,825) (79,384) (139,099)
Interest income......................... 16,624 37,701 35,723
Gain (loss) on sale of assets........... (14,540) -- (34,568)
Other................................... 29,078 41,282 88,781
---------- ---------- -----------
Income before income taxes............ 306,659 345,502 1,389,330
Income tax expense (benefit) (note 7)..... 31,400 (710) 335,000
---------- ---------- -----------
Net income............................ $ 275,259 $ 346,212 $ 1,054,330
========== ========== ===========
</TABLE>

See accompanying notes to combined financial statements.

F-18
<PAGE>

NORTHLAND AUTO TRANSPORTERS, INC. AND
NORTHLAND FLEET LEASING, INC.

COMBINED STATEMENTS OF STOCKHOLDER'S EQUITY

YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997

<TABLE>
<CAPTION>
TOTAL
COMMON RETAINED STOCKHOLDER'S
STOCK EARNINGS EQUITY
------ ---------- -------------
<S> <C> <C> <C>
Balance at December 31, 1994.................... $2,000 $1,367,389 $1,369,389
Net income--1995................................ -- 275,259 275,259
------ ---------- ----------
Balance at December 31, 1995.................... 2,000 1,642,648 1,644,648
Net income--1996................................ -- 346,212 346,212
------ ---------- ----------
Balance at December 31, 1996.................... 2,000 1,988,860 1,990,860
Net income--1997................................ -- 1,054,330 1,054,330
------ ---------- ----------
Balance at December 31, 1997.................... $2,000 $3,043,190 $3,045,190
====== ========== ==========
</TABLE>

See accompanying notes to combined financial statements.

F-19
<PAGE>

NORTHLAND AUTO TRANSPORTERS, INC. AND
NORTHLAND FLEET LEASING, INC.

COMBINED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997

<TABLE>
<CAPTION>
1995 1996 1997
--------- --------- ----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income................................. $ 275,259 $ 346,212 $1,054,330
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization............ 181,634 224,637 289,479
Deferred income taxes.................... (11,000) (6,000) 65,000
Loss on sale of property and equipment... 14,540 -- 34,568
(Increase) decrease in trade accounts
receivable.............................. (115,982) 138,452 (526,212)
Decrease (increase) in accounts
receivable from employees............... 1,185 (4,100) 1,510
Decrease in income tax receivable........ -- -- 37,584
(Increase) decrease in prepaid and other
current assets.......................... (17,892) 16,331 (39,256)
Increase (decrease) in accounts payable.. 716 23,236 (22,934)
Increase in income taxes payable......... -- -- 261,933
Increase (decrease) in accrued payroll
and related costs....................... (85,348) (14,137) 34,614
(Decrease) increase in amounts payable to
related parties......................... 20,552 16,410 (105,656)
(Decrease) in other accrued liabilities.. 25,946 2,880 (47,614)
--------- --------- ----------
Net cash provided by operating
activities............................ 289,610 743,921 1,037,346
--------- --------- ----------
Cash flows from investing activities:
Purchases of property and equipment........ (229,888) (395,881) (762,597)
Proceeds from sale of equipment............ 53,044 -- 67,656
Decrease in notes receivable............... 8,159 (30,984) 30,191
--------- --------- ----------
Net cash used in investing activities.. (168,685) (426,865) (664,750)
--------- --------- ----------
Cash flows from financing activities:
Proceeds from long-term debt............... -- -- 24,629
Principal payments on long-term debt....... (139,745) (156,620) (317,543)
Principal payments on obligations under
capital leases............................ -- (1,351) (105,322)
--------- --------- ----------
Net cash used in financing activities.. (139,745) (157,971) (398,236)
--------- --------- ----------
Net (decrease) increase in cash........ (18,820) 159,085 (25,640)
Cash and cash equivalents at beginning of
year........................................ 292,684 273,864 432,949
--------- --------- ----------
Cash and cash equivalents at end of year..... $ 273,864 $ 432,949 $ 407,309
========= ========= ==========
Supplemental disclosure of cash flow
information:
Cash paid during the year for:
Interest................................. $ 48,825 $ 79,384 $ 139,099
========= ========= ==========
Income taxes............................. $ 7,024 $ 79,835 $ 6,480
========= ========= ==========
</TABLE>

See accompanying notes to combined financial statements.

F-20
<PAGE>

NORTHLAND AUTO TRANSPORTERS, INC. AND
NORTHLAND FLEET LEASING, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS

DECEMBER 31, 1995, 1996 AND 1997

(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Description of Business

Northland Auto Transporters, Inc. and Northland Fleet Leasing, Inc.
(referred to collectively as "Northland") was founded in 1977. Northland's
primary business is transporting vehicles for auto auctions, leasing
companies, auto dealers, manufacturers and individuals, primarily in the
Midwestern United States. Northland has three facilities in Detroit. It
operates approximately 55 vehicles. Northland Fleet Leasing, Inc. owns a fleet
of trucks and trailers and contracts out work primarily with Northland Auto
Transporters, Inc., and to a limited extent, third party contractors.

(b) Principles of Combination

The combined financial statements include the financial statements of
Northland Auto Transporters, Inc., the auto hauling company, and Northland
Fleet Leasing, Inc., a truck leasing company. Northland Auto Transporters,
Inc. is a C-corporation while Northland Fleet Leasing, Inc. is an S-
corporation. All sales relating to intercompany leasing arrangements have been
eliminated. Both entities have the same management and principal stockholder
ownership.

Northland operates as one segment related to the transportation of vehicles
and equipment for customers.

Northland's revenue is derived from customers who require transportation of
vehicles and equipment. Transport revenue is recognized upon the delivery of
the vehicles to their final destination. Expenses related to the generation of
revenue are recognized as incurred.

(d) Cash and Cash Equivalents

Cash and cash equivalents of $432,949 and $407,309 at December 31, 1996 and
1997, respectively, consist of bank accounts and certificates of deposit with
an initial term of less than three months. For purposes of the statements of
cash flows, Northland considers all highly liquid debt instruments with
original maturities of three months or less to be cash equivalents.

(e) Property and Equipment

Property and equipment are stated at cost. Plant and equipment under capital
leases are stated at the present value of minimum lease payments. Depreciation
is determined for financial statement purposes using the straight-line method
over the estimated useful lives of the individual assets. Accelerated methods
of depreciation have been used for income tax purposes. For financial
statement purposes, Northland provides for depreciation of property and
equipment over the following estimated useful lives.

<TABLE>
<S> <C>
Transportation equipment....................................... 10-20 years
Furniture and Fixtures......................................... 7 years
Office Equipment............................................... 5 years
Automobiles.................................................... 5 years
</TABLE>

F-21
<PAGE>

NORTHLAND AUTO TRANSPORTERS, INC. AND
NORTHLAND FLEET LEASING, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

(f) Fair Value of Financial Instruments

Due to the short-term nature of various financial instruments and the
current incremental borrowing rates available to Northland on bank loans with
similar terms and maturities, the fair value of Northland's financial
instruments approximates their carrying values.

(g) Income Taxes

Income taxes are accounted for under the asset and liability method for
Northland Auto Transporters, Inc. Deferred tax assets and liabilities are
recognized for the future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets and liabilities
and their respective tax bases, and tax credit carryforwards. Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply
to taxable income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period
that includes the enactment date.

Northland Fleet Leasing, Inc. is a subchapter S-corporation. As such, all
taxable events are recorded by the stockholder's currently on his personal tax
returns.

(h) Use of Estimates

Management of Northland has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities to prepare these financial statements in
conformity with generally accepted accounting principles. Actual results could
differ from those estimates.

(2) PREPAID AND OTHER CURRENT ASSETS

Prepaid and other current assets at December 31, 1996 and 1997 consists of:

<TABLE>
<CAPTION>
1996 1997
------- --------
<S> <C> <C>
Prepaid insurance......................................... $14,818 $ 28,172
Prepaid vehicle registration.............................. 25,978 35,778
Deposits on trucks........................................ 12,403 16,633
Miscellaneous advances.................................... 12,716 9,320
Prepaid property and other taxes.......................... 8,387 23,655
------- --------
$74,302 $113,558
======= ========
</TABLE>

(3) PROPERTY AND EQUIPMENT

Property and equipment at December 31, 1996 and 1997 consists of the
following:

<TABLE>
<CAPTION>
1996 1997
---------- ----------
<S> <C> <C>
Transportation equipment........................... $2,745,094 $4,457,178
Furniture and fixtures............................. 123,585 147,035
Office equipment................................... 34,449 34,244
Automobiles........................................ 64,781 126,926
---------- ----------
Total............................................ 2,967,909 4,765,383
Less accumulated depreciation and amortization..... (763,107) (841,328)
---------- ----------
$2,204,802 $3,924,055
========== ==========
</TABLE>

Depreciation of property and equipment in 1995, 1996 and 1997 totaled
$181,198, $224,201 and $289,043, respectively.

F-22
<PAGE>

NORTHLAND AUTO TRANSPORTERS, INC. AND
NORTHLAND FLEET LEASING, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

(4) OTHER ACCRUED LIABILITIES

Other accrued liabilities at December 31, 1996 and 1997 consists of:

<TABLE>
<CAPTION>
1996 1997
------- -------
<S> <C> <C>
Accrued highway use tax.................................... $ 9,487 $14,300
Accrued insurance.......................................... 12,324 6,880
Accrued profit sharing..................................... 64,196 --
Other...................................................... 12,907 30,120
------- -------
$98,914 $51,300
======= =======
</TABLE>

(5) INDEBTEDNESS

Northland's long-term debt consisted of the following at December 31, 1996
and 1997:

<TABLE>
<CAPTION>
1996 1997
--------- ---------
<S> <C> <C>
Note payable to Navistar Financial Corp., payable in
monthly installments of $1,188, including interest at
8.755%, maturing June 2000. Secured by equipment. ... $ 43,095 $ 31,081
Note payable to First of America Bank, payable in
monthly installments of $11,029, including interest
at 8.25%, maturing May 1999. Secured by equipment. .. 288,698 176,248
Note payable to First of America Bank, payable in
monthly principal installments of $7,320, plus
interest at .75% above the prime lending rate (9.0%
and 9.25% at December 31, 1996 and 1997,
respectively), maturing July 1998. Secured by
equipment. .......................................... 141,143 49,628
Note payable to First of America Bank, payable in
monthly installments of $6,290, including interest at
8.25%, maturing October 1998. Secured by equipment. . 128,270 60,948
Note payable to First of America Bank, payable in
monthly principal installments of $6,771, including
interest at the Bank's base lending rate (8.50% at
December 31, 1997), maturing April 10, 2001. secured
by equipment. ....................................... -- 288,656
Various notes payable secured by equipment............ -- 20,261
--------- ---------
Total long-term debt................................ 601,206 626,822
Less installments due within one year................. (282,824) (346,859)
--------- ---------
Long-term debt, excluding current installments...... $ 318,382 $ 279,963
========= =========
</TABLE>

Annual maturities of long-term debt for the next four years are as follows:

F-23
<PAGE>

NORTHLAND AUTO TRANSPORTERS, INC. AND
NORTHLAND FLEET LEASING, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

(6) LEASES

Northland leases equipment under capital leases which expire in stages from
August 2000 to July 2002.

Northland leases its operating facility from a third party under a
cancelable operating lease. Rent expense in 1995, 1996 and 1997 was $40,054,
$58,515 and $41,700, respectively.

Following is a summary of transportation equipment held under capital leases
at December 31, 1996 and 1997:

<TABLE>
<CAPTION>
1996 1997
------- ----------
<S> <C> <C>
Transportation equipment.............................. $18,000 $1,047,298
Less accumulated amortization......................... (3,600) (298,619)
------- ----------
$14,400 $ 748,679
======= ==========
</TABLE>

Future minimum capital lease payments as of December 31, 1997 are:

<TABLE>
<CAPTION>
CAPITAL
YEAR ENDING DECEMBER 31, LEASES
------------------------ ----------
<S> <C>
1998........................................................... $ 213,228
1999........................................................... 216,655
2000........................................................... 214,758
2001........................................................... 210,973
2002........................................................... 298,065
----------
Total........................................................ 1,153,679
Less amount representing interest.............................. (212,367)
----------
Present value of net minimum capital lease payments............ $ 941,312
==========
</TABLE>

(7) INCOME TAXES

Income tax expense (benefit) for the years ended December 31, 1995, 1996 and
1997 consists of:

<TABLE>
<CAPTION>
1995 1996 1997
-------- ------- --------
<S> <C> <C> <C>
Current:
Federal...................................... $ 42,400 $ 5,290 $270,000
Deferred....................................... (11,000) (6,000) 65,000
-------- ------- --------
$ 31,400 $ (710) $335,000
======== ======= ========
</TABLE>

The following table reconciles the expected tax expense at the Federal
statutory tax rate to the effective tax rate.

<TABLE>
<CAPTION>
1995 1996 1997
-------- --------- ---------
<S> <C> <C> <C>
Computed expected tax expense............. $104,264 $ 117,471 $ 472,372
Effect of earnings from S-corporation..... (77,750) (123,441) (141,644)
Non-deductible meals and entertainment
expenses................................. 4,886 5,260 4,272
-------- --------- ---------
$ 31,400 $ (710) $ 335,000
======== ========= =========
</TABLE>

F-24
<PAGE>

NORTHLAND AUTO TRANSPORTERS, INC. AND
NORTHLAND FLEET LEASING, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

The tax effects of temporary differences that give rise to deferred tax
assets and deferred tax liabilities as of December 31, 1996 and 1997 are
presented below:

<TABLE>
<CAPTION>
1996 1997
--------- ---------
<S> <C> <C>
Deferred tax assets:
Allowance for doubtful accounts................... $ 9,000 $ 17,000
Deferred tax liabilities:
Property and equipment, due to differences in
depreciation lives and methods................... (171,000) (244,000)
--------- ---------
Net deferred tax liability...................... $(162,000) $(227,000)
========= =========
</TABLE>

At December 31, 1995, the net deferred tax liability was $168,000.

In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred
tax assets will not be realized. The ultimate realization of deferred tax
assets is dependent upon the generation of future taxable income during the
periods in which those temporary differences become deductible. Management
considers the projected future taxable income and tax planning strategies, as
well as carryback opportunities, in making this assessment. Based upon the
level of historical taxable income, projections for future taxable income and
carryback opportunities over the periods in which the deferred tax assets are
deductible, management believes it is more likely than not Northland will
realize the benefits of these deductible differences. The amount of the
deferred tax asset considered realizable, however, could be reduced in the
near term if estimates of future taxable income are reduced.

(8) NON-CASH TRANSACTIONS

During 1995, 1996 and 1997, Northland leased transportation equipment
totaling $200,000, $360,523 and, $1,347,923 respectively, through capital
leases with several lending institutions.

(9) EMPLOYEE BENEFITS

Northland has a retirement savings plan pursuant to section 401(k) of the
Internal Revenue Code that is available to all employees with at least one
year of service to Northland and that are at least 21 years of age. Eligible
participants may contribute up to 15% of their compensation. Northland
provides discretionary matching contributions to the Plan which amounted to,
$12,985, $64,196 and $0 in 1995, 1996 and 1997, respectively.

(10) RELATED PARTY TRANSACTIONS

Northland has borrowed funds from its principal stockholder and has
outstanding notes payable as of December 31, 1996 and 1997 of $159,505 and
$53,849. Such amounts are included in notes payable on the combined balance
sheets. The notes accrue interest at 8%, compounded monthly.

(11) CONTINGENT LIABILITIES

Various legal claims arise against Northland during the normal course of
business. In the opinion of management, liabilities, if any, arising from
proceedings would not have a material effect on the financial statements.

(12) CONCENTRATION OF BUSINESS RISKS

Two customers, GE Capital and C.T. Services, accounted for a combined 10.7%
and 16.4% of Northland's sales in 1996 and 1997, respectively. The loss of one
or both of these customers could significantly effect the Northland's
performance.

F-25
<PAGE>

NORTHLAND AUTO TRANSPORTERS, INC. AND
NORTHLAND FLEET LEASING, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

(13) ALLOWANCE FOR DOUBTFUL ACCOUNTS

During 1995, 1996 and 1997, Northland recorded provisions for the allowance
for doubtful accounts in the amounts of $32,000, $30,000 and $52,000,
respectively. During 1995, 1996 and 1997, Northland wrote-off an average of
$17,000 in each year.

(14) SUBSEQUENT EVENT

During February 1998, the stockholder entered into a definitive agreement to
sell Northland to United Road Services, Inc. The sales transaction, affected
through a combination of cash and common stock of United Road Services, Inc.,
is contingent and effective upon the initial public offering of the common
stock of United Road Services, Inc. The anticipated selling price of Northland
exceeds its net assets as of December 31, 1997.

F-26
<PAGE>

INDEPENDENT AUDITORS' REPORT

The Stockholder
Falcon Towing and Auto Delivery, Inc.:

We have audited the accompanying balance sheets of Falcon Towing and Auto
Delivery, Inc. ("Falcon") as of December 31, 1996 and 1997, and the related
statements of operations, stockholder's equity, and cash flows for each of the
years in the three-year period ended December 31, 1997. These financial
statements are the responsibility of Falcon's management. Our responsibility
is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Falcon Towing and Auto
Delivery, Inc. as of December 31, 1996 and 1997 and the results of its
operations and its cash flows for each of the years in the three-year period
ended December 31, 1997 in conformity with generally accepted accounting
principles.

/s/ KPMG Peat Marwick LLP

Albany, New York
January 17, 1998

F-27
<PAGE>

FALCON TOWING AND AUTO DELIVERY, INC.

BALANCE SHEETS

DECEMBER 31, 1996 AND 1997

<TABLE>
<CAPTION>
1996 1997
ASSETS ---------- ----------
<S> <C> <C>
Current assets:
Cash................................................... $ 23,505 $ 3,527
Trade accounts receivable, net of allowance for
doubtful accounts of $67,650 in 1996 and $188,500 in
1997.................................................. 476,896 717,560
Inventories............................................ 24,868 26,068
Prepaid and other current assets (note 2).............. 46,537 131,328
---------- ----------
Total current assets................................. 571,806 878,483
Property and equipment, net (notes 3, 5 and 6)........... 1,656,635 2,423,368
---------- ----------
Total assets......................................... $2,228,441 $3,301,851
========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Current installments of long-term debt (note 5)........ $ 123,722 $ 264,081
Current installments of obligations under capital
leases (note 6)....................................... 252,527 368,590
Borrowings under lines of credit (note 5).............. 36,150 47,121
Accounts payable....................................... 178,357 546,301
Accrued payroll and related costs...................... 57,000 67,701
Income taxes payable (note 8).......................... 98,698 207,399
Other accrued liabilities (note 4)..................... 137,600 214,979
---------- ----------
Total current liabilities............................ 884,054 1,716,172
Long-term liabilities:
Long-term debt, excluding current installments (note
5).................................................... 225,386 250,196
Obligations under capital leases, excluding current
installments (note 6)................................. 630,677 716,288
Deferred income taxes (note 8)......................... 11,733 10,555
---------- ----------
Total liabilities.................................... 1,751,850 2,693,211
---------- ----------
Stockholder's equity:
Common stock, no par or stated value.
Authorized 1,000 shares; issued and outstanding 750
shares in 1996 and 1997............................... -- --
Retained earnings...................................... 476,591 608,640
---------- ----------
Total stockholder's equity........................... 476,591 608,640
---------- ----------
Total liabilities and stockholder's equity........... $2,228,441 $3,301,851
========== ==========
</TABLE>

See accompanying notes to financial statements.

F-28
<PAGE>

FALCON TOWING AND AUTO DELIVERY, INC.

STATEMENTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997

<TABLE>
<CAPTION>
1995 1996 1997
---------- ---------- ----------
<S> <C> <C> <C>
Net revenue................................ $4,351,847 $6,203,104 $7,784,766
Cost of revenue............................ 3,492,248 4,638,239 5,955,423
---------- ---------- ----------
Gross profit........................... 859,599 1,564,865 1,829,343
Selling, general and administrative
expenses.................................. 952,260 1,190,631 1,614,386
---------- ---------- ----------
Income (loss) from operations.......... (92,661) 374,234 214,957
---------- ---------- ----------
Other income (expense):
Interest expense......................... (77,176) (129,150) (147,700)
Gain (loss) on sale of equipment......... (417) -- 98,735
Other.................................... 38,508 12,167 73,580
---------- ---------- ----------
Income (loss) before income taxes...... (131,746) 257,251 239,572
Income tax expense (note 8)................ 15,707 94,723 107,523
---------- ---------- ----------
Net income (loss)...................... $ (147,453) $ 162,528 $ 132,049
========== ========== ==========
</TABLE>

See accompanying notes to financial statements.

F-29
<PAGE>

FALCON TOWING AND AUTO DELIVERY, INC.

STATEMENTS OF STOCKHOLDER'S EQUITY

YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997

<TABLE>
<CAPTION>
TOTAL
COMMON RETAINED STOCKHOLDER'S
STOCK EARNINGS EQUITY
------ --------- -------------
<S> <C> <C> <C>
Balance at December 31, 1994.................... $-- $ 461,516 $ 461,516
Net loss--1995.................................. -- (147,453) (147,453)
---- --------- ---------
Balance at December 31, 1995.................... -- 314,063 314,063
Net income--1996................................ -- 162,528 162,528
---- --------- ---------
Balance at December 31, 1996.................... -- 476,591 476,591
Net income--1997................................ -- 132,049 132,049
---- --------- ---------
Balance at December 31, 1997.................... $-- $ 608,640 $ 608,640
==== ========= =========
</TABLE>

See accompanying notes to financial statements.

F-30
<PAGE>

FALCON TOWING AND AUTO DELIVERY, INC.

STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997

<TABLE>
<CAPTION>
1995 1996 1997
--------- --------- ---------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss)........................... $(147,453) $ 162,528 $ 132,049
Adjustments to reconcile net income (loss)
to net cash provided by operating
activities:
Depreciation and amortization............. 343,595 431,828 621,673
Deferred income taxes..................... 15,707 (3,975) (1,178)
(Gain) loss on sale of equipment.......... 417 -- (98,735)
Increase in trade accounts receivable..... (1,169) (236,557) (240,664)
Increase in inventories................... -- -- (1,200)
Increase in prepaid and other current
assets................................... (10,524) (9,236) (84,791)
Increase (decrease) in accounts payable... 104,440 (8,097) 367,944
Increase in accrued payroll and related
costs.................................... 71,443 53,937 10,701
Increase (decrease) in income taxes
payable.................................. (20,542) 98,698 108,701
Increase (decrease) in other accrued
liabilities.............................. 7,434 (12,591) 77,379
--------- --------- ---------
Net cash provided by operating
activities............................. 363,348 476,535 891,879
--------- --------- ---------
Cash flows used in investing activities:
Purchases of property and equipment......... (290,177) (169,861) (919,049)
Proceeds from sale of property and
equipment.................................. -- -- 141,100
--------- --------- ---------
Net cash used in investing activities... (290,177) (169,861) (777,949)
--------- --------- ---------
Cash flows from financing activities:
Proceeds from long-term debt................ 75,047 -- 384,609
Payments on notes payable and capital
leases..................................... (120,031) (282,833) (529,488)
Net borrowings under lines of credit........ (36,066) (2,784) 10,971
--------- --------- ---------
Net cash used in financing activities... (81,050) (285,617) (133,908)
--------- --------- ---------
Net (decrease) increase in cash............... (7,879) 21,057 (19,978)
Cash at beginning of year..................... 10,327 2,448 23,505
--------- --------- ---------
Cash at end of year........................... $ 2,448 $ 23,505 $ 3,527
========= ========= =========
Supplemental disclosure of cash flow
information:
Cash paid during the year for:
Interest.................................... $ 74,280 $ 125,435 $ 144,806
========= ========= =========
Income taxes................................ $ -- 12,591 --
========= ========= =========
</TABLE>

See accompanying notes to financial statements.

F-31
<PAGE>

FALCON TOWING AND AUTO DELIVERY, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1995, 1996 AND 1997

(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Description of Business

Falcon Towing and Auto Delivery, Inc. ("Falcon") was founded in 1983.
Falcon's primary business is transporting vehicles for dealers, leasing
companies, auction companies and long-haul transporters in the Western United
States. Falcon has facilities in Los Angeles, San Francisco and Phoenix. It
operates approximately 50 vehicles.

(b) Revenue Recognition

Falcon operates as one segment related to the transportation of vehicles and
equipment for customers.

Falcon's revenue is derived from customers who require transport of vehicles
and equipment. Transport revenue is recognized upon the delivery of the
vehicles and equipment to their final destination. Expenses related to the
generation of revenue are recognized as incurred.

Inventories, which consist principally of replacement tires and truck parts,
are stated at the lower of cost or market.

(d) Property and Equipment

Property and equipment are stated at cost. Depreciation is determined for
financial statement purposes using the straight-line method over the estimated
useful lives of the individual assets or, for leasehold improvements, over the
terms of the related leases if shorter. Accelerated methods of depreciation
have been used for income tax purposes. For financial statement purposes,
Falcon provides for depreciation of property and equipment over the following
estimated useful lives:

<TABLE>
<S> <C>
Transportation and towing equipment................................ 5 years
Machinery and equipment............................................ 5 years
Leasehold improvements............................................. 5 years
Furniture and fixtures............................................. 5 years
Office equipment................................................... 5 years
</TABLE>

(e) Fair Value of Financial Instruments

Due to the short-term nature of various financial instruments and the
current incremental borrowing rates available to Falcon on bank loans with
similar terms and maturities, the fair value of Falcon's financial instruments
approximates their carrying values.

(f) Income Taxes

Income taxes are accounted for under the asset and liability method.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases, and tax credit carryforwards. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the enactment date.

F-32
<PAGE>

FALCON TOWING AND AUTO DELIVERY, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(g) Use of Estimates

Management of Falcon has made a number of estimates and assumptions relating
to the reporting of assets and liabilities and the disclosure of contingent
assets and liabilities to prepare these financial statements in conformity
with generally accepted accounting principles. Actual results could differ
from those estimates.

(2) PREPAID EXPENSES

Prepaid and other current assets at December 31, 1996 and 1997 consists of:

<TABLE>
<CAPTION>
1996 1997
------- --------
<S> <C> <C>
Prepaid vehicle registration.............................. $ -- $ 64,790
Prepaid insurance......................................... 19,414 27,340
Other..................................................... 27,123 39,198
------- --------
$46,537 $131,328
======= ========
</TABLE>

(3) PROPERTY AND EQUIPMENT

Property and equipment at December 31, 1996 and 1997 consists of the
following:

<TABLE>
<CAPTION>
1996 1997
----------- -----------
<S> <C> <C>
Transportation and towing equipment.............. $ 2,970,070 $ 4,124,483
Machinery and equipment.......................... 70,296 104,411
Leasehold improvements........................... 26,489 43,653
Furniture and fixtures........................... 10,448 14,298
Office equipment................................. 19,225 19,225
Construction-in-progress......................... -- 33,000
----------- -----------
Total.......................................... 3,096,528 4,339,070
Less accumulated depreciation and amortization... (1,439,893) (1,915,702)
----------- -----------
$ 1,656,635 $ 2,423,368
=========== ===========
</TABLE>

Depreciation and amortization of property and equipment in 1995, 1996 and
1997 totaled $343,595, $431,828 and $621,673, respectively.

(4) OTHER ACCRUED LIABILITIES

Other accrued liabilities at December 31, 1996 and 1997 consists of:

<TABLE>
<CAPTION>
1996 1997
-------- --------
<S> <C> <C>
Accrued insurance premiums............................... $ 20,248 $ 17,712
Accrued fuel expenses.................................... 31,827 80,055
Accrued commissions...................................... 43,000 51,000
Accrued vacation......................................... 18,000 21,000
Accrued 401(k) contributions............................. -- 17,983
Other.................................................... 24,525 27,229
-------- --------
$137,600 $214,979
======== ========
</TABLE>

F-33
<PAGE>

FALCON TOWING AND AUTO DELIVERY, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(5) INDEBTEDNESS

Falcon has available a $50,000 line of credit with $36,150 and $47,121
outstanding at December 31, 1996 and 1997, respectively, secured by the assets
of Falcon and a guarantee by Falcon's stockholder. Interest is payable at
11.5%.

Falcon's long-term debt at December 31, 1996 and 1997 consists of:

<TABLE>
<CAPTION>
1996 1997
--------- ---------
<S> <C> <C>
Notes payable to banks payable in monthly
installments ranging from $1,024 to $2,909,
including interest ranging from 9.0% to 10.5%, and
maturing at dates ranging from April, 1998 to
April, 2000. Secured by vehicles and equipment. .. $ 349,108 $ 514,277
Less installments due within one year.............. (123,722) (264,081)
--------- ---------
Long-term debt, excluding current installments..... $ 225,386 $ 250,196
========= =========
</TABLE>

The aggregate maturities of long-term debt subsequent to December 31, 1997
are as follows:

(6) LEASES

Falcon is the lessee of vehicles under a number of capital leases which
expire in stages from April 1999 to November 2000.

Following is a summary of equipment held under capital leases at December
31, 1996 and 1997:

<TABLE>
<CAPTION>
1996 1997
---------- -----------
<S> <C> <C>
Transportation and towing equipment............... $1,612,687 $ 2,124,409
Less accumulated amortization..................... (703,928) (1,036,670)
---------- -----------
$ 908,759 $ 1,087,739
========== ===========
</TABLE>

Falcon leases the land and buildings used for its operations at the El Monte
and Phoenix locations under lease agreements with its sole stockholder. These
agreements provide for annual rental payments of $288,000 beginning December
1996 and $37,000 beginning March 1997 at the El Monte and Phoenix locations,
respectively. Rent paid to the stockholder in 1995, 1996 and 1997 was $0,
$24,000 and $319,000, respectively. Additionally, Falcon has a cancelable
lease for the land and building used for its operations at the Newark, CA
location from an unrelated third party for annual rental payments of
approximately $48,000. The leases are classified as operating leases. Falcon
is responsible for all operating costs related to the properties.

Total rent expense for 1995, 1996 and 1997 was $240,003, $265,103 and
$438,003, respectively.

F-34
<PAGE>

FALCON TOWING AND AUTO DELIVERY, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

Future minimum lease payments under noncancellable operating leases (with
initial or remaining lease terms in excess of one year) and future minimum
capital lease payments as of December 31, 1997 are:

<TABLE>
<CAPTION>
CAPITAL OPERATING
YEAR ENDING DECEMBER 31, LEASES LEASES
------------------------ ---------- ----------
<S> <C> <C>
1998............................................... $ 473,698 $ 325,000
1999............................................... 400,408 325,000
2000............................................... 254,520 325,000
2001............................................... 14,112 277,000
2002............................................... -- 3,100
---------- ----------
Total............................................ 1,142,738 $1,255,100
==========
Less amount representing interest.................. (57,860)
----------
Present value of net minimum capital lease
payments........................................ $1,084,878
==========
</TABLE>

(7) NON-CASH TRANSACTIONS

During 1995, 1996 and 1997, Falcon financed certain purchases of vehicles
and equipment totaling $571,137, $671,086 and $511,722, respectively.

(8) INCOME TAXES

Income tax expense for the years ended December 31, 1995, 1996 and 1997
consists of:

<TABLE>
<CAPTION>
1995 1996 1997
------- ------- --------
<S> <C> <C> <C>
Current:
Federal....................................... $ -- $77,500 $ 86,271
State......................................... -- 21,198 22,430
------- ------- --------
-- 98,698 108,701
Deferred........................................ 15,707 (3,975) (1,178)
------- ------- --------
$15,707 $94,723 $107,523
======= ======= ========
</TABLE>

The following table reconciles the expected tax expense at the Federal
statutory tax rate to the effective tax rate.

<TABLE>
<CAPTION>
1995 1996 1997
-------- -------- --------
<S> <C> <C> <C>
Computed expected tax (benefit) expense...... $(44,794) $ 87,465 $ 81,454
State income taxes (benefit), net of Federal
benefit..................................... (8,087) 13,991 14,803
Non-deductible meals and entertainment
expenses.................................... 1,428 354 2,116
Tax penalties and disallowances.............. -- 5,724 3,898
Net operating loss carryforward for which no
benefit will be derived..................... 73,039 -- --
Basis difference in fixed assets which will
not result in a tax benefit or loss......... (5,879) (12,811) 5,252
-------- -------- --------
$ 15,707 $ 94,723 $107,523
======== ======== ========
</TABLE>

The tax effects of temporary differences that give rise to deferred tax
liabilities as of December 31, 1995, 1996 and 1997 relate to fixed assets
caused by differences in depreciation lives and methods and total $15,707,
$11,733 and $10,555, respectively.

F-35
<PAGE>

FALCON TOWING AND AUTO DELIVERY, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(9) EMPLOYEE BENEFITS

Falcon has a retirement savings plan pursuant to section 401(k) of the
Internal Revenue Code that is available to all employees with at least one
year of service to Falcon and that are at least twenty-one years of age.
Falcon provides matching funds of 25% of eligible contributions to the Plan
which amounted to $0, $0 and $18,000 in 1995, 1996 and 1997, respectively.

(10) RELATED PARTY TRANSACTIONS

Falcon leases land and buildings, located at the El Monte and Phoenix
locations, from the sole stockholder (see note 6).

(11) SUBSEQUENT EVENT

During February 1998, the stockholder entered into a definitive agreement to
sell Falcon to United Road Services, Inc. The sales transaction, affected
through a combination of cash and common stock of United Road Services, Inc.,
is contingent and effective upon the initial public offering of the common
stock of United Road Services, Inc. The anticipated selling price of Falcon
exceeds its net assets as of December 31, 1997.

Concurrently with the acquisition, United Road Services, Inc. will enter
into agreements with the stockholder to lease land and buildings used in
Falcon's operations for negotiated amounts and terms.

F-36
<PAGE>

INDEPENDENT AUDITORS' REPORT

The Stockholders
Smith-Christensen Enterprises, Inc.:

We have audited the accompanying consolidated balance sheets of Smith-
Christensen Enterprises, Inc. and subsidiary (City Towing, Inc. d/b/a Quality
Towing) ("Quality") as of January 31, 1997 and December 31, 1997, and the
related consolidated statements of operations, stockholders' equity, and cash
flows for each of the years ended January 31, 1996 and 1997 and for the
twelve-month period ended December 31, 1997. These consolidated financial
statements are the responsibility of Quality's management. Our responsibility
is to express an opinion on these consolidated financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Smith-Christensen
Enterprises, Inc. and subsidiary (City Towing, Inc. d/b/a Quality Towing) as
of January 31, 1997 and December 31, 1997, and the results of their operations
and their cash flows for each of the years ended January 31, 1996 and 1997 and
for the twelve-month period ended December 31, 1997 in conformity with
generally accepted accounting principles.

/s/ KPMG Peat Marwick LLP

Albany, New York
January 16, 1998

F-37
<PAGE>

SMITH-CHRISTENSEN ENTERPRISES, INC.
AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

JANUARY 31, 1997 AND DECEMBER 31, 1997

<TABLE>
<CAPTION>
JANUARY 31, DECEMBER 31,
1997 1997
----------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash................................................ $ 180,269 266,687
Trade accounts receivable, net of allowance for
doubtful accounts of $26,850 and $75,850 at January
31, 1997 and December 31, 1997, respectively....... 88,518 277,966
Accounts receivable from related parties (note 9)... 10,665 50,151
Due from employees.................................. 19,124 22,053
Inventories......................................... 20,661 9,950
Prepaid expenses (note 2)........................... 30,048 19,680
Other current assets................................ 900 900
---------- ---------
Total current assets.............................. 350,185 647,387
Property, plant and equipment, net (notes 3 and 5).... 2,653,243 2,877,229
Accounts receivable from related parties (note 9)..... 157,294 831,733
Other assets, net (note 4)............................ 118,908 98,905
---------- ---------
Total assets...................................... $3,279,630 4,455,254
========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt (note 5)..... $ 447,875 541,836
Accounts payable.................................... 38,278 68,203
Accrued payroll and related costs................... 28,757 85,563
Income taxes payable (note 7)....................... 60,863 345,339
Other accrued expenses.............................. 5,305 3,110
---------- ---------
Total current liabilities......................... 581,078 1,044,051
---------- ---------
Long-term liabilities:
Long-term debt, excluding current installments (note
5)................................................. 2,415,340 2,188,038
Deferred income taxes (note 7)...................... 193,379 312,721
---------- ---------
Total liabilities................................. 3,189,797 3,544,810
---------- ---------
Stockholders' equity:
Common stock, no par value.
Authorized 2,500 shares; issued and outstanding
2,425 shares....................................... 20,000 20,000
Retained earnings................................... 69,833 890,444
---------- ---------
Total stockholders' equity........................ 89,833 910,444
---------- ---------
Total liabilities and stockholders' equity........ $3,279,630 4,455,254
========== =========
</TABLE>

See accompanying notes to the consolidated financial statements.

F-38
<PAGE>

SMITH-CHRISTENSEN ENTERPRISES, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

THE YEARS ENDED JANUARY 31, 1996 AND 1997 AND THE
TWELVE-MONTH PERIOD ENDED DECEMBER 31, 1997

<TABLE>
<CAPTION>
TWELVE-MONTH
PERIOD ENDED
YEAR ENDED YEAR ENDED DECEMBER 31, 1997
JANUARY 31, 1996 JANUARY 31, 1997 (NOTE 1(B))
---------------- ---------------- -----------------
<S> <C> <C> <C>
Net revenue................ $4,395,762 $5,395,475 $6,802,474
Cost of revenue............ 2,579,463 3,214,772 3,849,138
---------- ---------- ----------
Gross profit........... 1,816,299 2,180,703 2,953,336
Selling, general and
administrative expenses... 1,436,488 1,194,716 1,389,707
---------- ---------- ----------
Income from operations. 379,811 985,987 1,563,629
---------- ---------- ----------
Other income (expense):
Interest expense......... (258,554) (325,370) (277,436)
Interest income.......... -- -- 4,524
Other.................... (25,005) 131,721 (27,375)
---------- ---------- ----------
Income before income
taxes................. 96,252 792,338 1,263,342
Income tax expense (note
7)........................ 103,752 277,623 440,978
---------- ---------- ----------
Net income (loss)...... $ (7,500) $ 514,715 $ 822,364
========== ========== ==========
</TABLE>

See accompanying notes to the consolidated financial statements.

F-39
<PAGE>

SMITH-CHRISTENSEN ENTERPRISES, INC.
AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

THE YEARS ENDED JANUARY 31, 1996 AND 1997 AND THE
TWELVE-MONTH PERIOD ENDED DECEMBER 31, 1997

<TABLE>
<CAPTION>
TOTAL
RETAINED STOCKHOLDERS'
COMMON EARNINGS EQUITY
STOCK (DEFICIT) (DEFICIT)
------- --------- -------------
<S> <C> <C> <C>
Balance at January 31, 1995.................... $20,000 (437,382) (417,382)
Net loss--year ended January 31, 1996.......... -- (7,500) (7,500)
------- -------- --------
Balance at January 31, 1996.................... 20,000 (444,882) (424,882)
Net income--year ended January 31, 1997........ -- 514,715 514,715
------- -------- --------
Balance at January 31, 1997.................... 20,000 69,833 89,833
Net income--twelve-months ended December 31,
1997.......................................... -- 822,364 822,364
Net loss--month of January 1997 (note 1(b)).... -- (1,753) (1,753)
------- -------- --------
Balance at December 31, 1997................... $20,000 890,444 910,444
======= ======== ========
</TABLE>

See accompanying notes to the consolidated financial statements.

F-40
<PAGE>

SMITH-CHRISTENSEN ENTERPRISES, INC.
AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

THE YEARS ENDED JANUARY 31, 1996 AND 1997 AND THE
TWELVE-MONTH PERIOD ENDED DECEMBER 31, 1997

<TABLE>
<CAPTION>
TWELVE-MONTH
YEAR ENDED YEAR ENDED PERIOD ENDED
JANUARY 31, 1996 JANUARY 31, 1997 DECEMBER 31, 1997
---------------- ---------------- -----------------
<S> <C> <C> <C>
Cash flows from operating
activities:
Net income (loss)....... $ (7,500) 514,715 822,364
Adjustments to reconcile
net income (loss) to
net cash provided by
operating activities:
Net loss for the month
of January 1997
(note 1(b)).......... -- -- (1,753)
Depreciation and
amortization......... 237,118 322,628 268,732
Deferred income taxes. 151,090 106,198 119,342
Decrease (increase) in
trade accounts
receivable........... (74,638) 63,597 (189,448)
Increase in due from
related parties...... (6,512) (10,285) (39,486)
Increase in due from
employees............ -- -- (2,929)
Decrease (increase) in
inventories.......... -- (20,661) 10,711
Decrease (increase) in
prepaid expenses..... (29,858) 7,609 10,368
Increase in
receivables from
related parties...... (34,549) (297,009) (674,439)
Increase (decrease) in
accounts payable..... 65,853 (49,744) 29,925
Increase (decrease) in
accrued payroll and
related costs........ 62,316 (58,732) 56,806
Increase (decrease) in
income taxes payable. (30,809) 75,650 284,476
(Decrease) increase in
other accrued
expenses............. 6,130 (1,785) (2,195)
--------- -------- --------
Net cash provided by
operating
activities......... 338,641 652,181 692,474
--------- -------- --------
Cash flows from investing
activities:
Purchases of property,
plant and equipment.... (700,708) (493,663) (472,715)
Purchase of Custom
Towing................. (200,000) -- --
--------- -------- --------
Net cash used in
investing
activities......... (900,708) (493,663) (472,715)
--------- -------- --------
Cash flows from financing
activities:
Proceeds from long-term
debt................... 424,979 -- --
Principal payments on
long-term debt......... -- (104,014) (133,341)
Proceeds from borrowings
under lines of credit.. 150,000 120,000 --
--------- -------- --------
Net cash (used in)
provided by
financing
activities......... 574,979 15,986 (133,341)
--------- -------- --------
Net increase in cash...... 12,912 174,504 86,418
Cash at beginning of year. (7,147) 5,765 180,269
--------- -------- --------
Cash at end of year....... $ 5,765 180,269 266,687
========= ======== ========
Supplemental disclosure of
cash flow information:
Cash paid during the
year for:
Interest.............. $ 258,554 325,370 253,242
========= ======== ========
Income taxes.......... $ 58,439 61,656 37,160
========= ======== ========
</TABLE>

See accompanying notes to the consolidated financial statements.

F-41
<PAGE>

SMITH-CHRISTENSEN ENTERPRISES, INC.
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 1996, JANUARY 31, 1997 AND DECEMBER 31, 1997

(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Description of Business

Smith-Christensen Enterprises, Inc. and its wholly-owned subsidiary City
Towing, Inc.(d/b/a Quality Towing), collectively referred to herein as
"Quality", was founded in 1978. Quality's primary business is towing,
impounding and storing vehicles for municipal, governmental and commercial
customers in Southern Nevada. Quality has two facilities in Las Vegas. It
operates approximately 40 vehicles.

(b) Periods Presented

Because Quality has a fiscal year end of January 31, the statements of
operations, stockholder's equity and cash flows for Quality's most recent
twelve-month period includes the results of operations for the month of
January 1997, which is also included in the prior fiscal year ended January
31, 1997. The following represents the condensed results of operations for the
month of January 1997 which is included in the twelve-month period ended
December 31, 1997 and in the fiscal year ended January 31, 1997:

<TABLE>
<S> <C>
Net revenue..................................................... $440,053
Cost of revenue................................................. 242,564
--------
Gross profit................................................ 197,489
Selling, general and administrative expenses.................... 174,187
--------
Income from operations...................................... 23,302
--------
Other expenses:
Interest expense.............................................. (24,193)
Other......................................................... (862)
--------
Loss before income taxes.................................... (1,753)
Income tax expense.......................................... --
--------
Net loss.................................................... $ (1,753)
========
</TABLE>

The consolidated financial statements include the financial statements of
Smith-Christensen Enterprises, Inc. and its wholly-owned subsidiary City
Towing, Inc. All significant intercompany balances and transactions have been
eliminated in consolidation.

(d) Revenue Recognition

Quality operates as one segment related to the transportation of vehicles
and equipment for customers.

Quality's revenue is derived from customers who require a towing service,
fees related to the storage of vehicles that have been towed, transport of
vehicles and equipment, and auction sales of unclaimed vehicles. Towing
revenue is recognized at the completion of each towing engagement, storage
fees are accrued over the period the vehicles are held in the impound
facility, transport revenue is recognized upon the delivery of the
vehicles/equipment to their final destination, and revenue from auction sales
are recorded when title to the vehicles has been transferred. Expenses related
to the generation of revenue are recognized as incurred.

F-42
<PAGE>

SMITH-CHRISTENSEN ENTERPRISES, INC.
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(e) Inventories

Inventories consist of vehicles that will be offered for auction.
Inventories are stated at the lower of cost or market.

(f) Property, Plant and Equipment

Property, plant and equipment are stated at cost. Depreciation is determined
for financial statement purposes using the straight-line method over the
estimated useful lives of the individual assets or, for leasehold
improvements, over the terms of the related leases if shorter. Accelerated
methods of depreciation have been used for income tax purposes. For financial
statement purposes, Quality provides for depreciation of property and
equipment over the following estimated useful lives:

<TABLE>
<S> <C>
Buildings...................................................... 28-30 years
Leasehold improvements......................................... 15-30 years
Transportation and towing equipment............................ 5-15 years
Office equipment............................................... 3-5 years
Machinery and other equipment.................................. 5 years
</TABLE>

(g) Fair Value of Financial Instruments

Due to the short-term nature of various financial instruments and the
current incremental borrowing rates available to Quality on bank loans with
similar terms and maturities, the fair value of Quality's financial
instruments approximates their carrying values.

(h) Income Taxes

(i) Use of Estimates

Management of Quality has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities to prepare these financial statements in
conformity with generally accepted accounting principles. Actual results could
differ from those estimates.

(2) PREPAID EXPENSES

Prepaid expenses consist of the following:

<TABLE>
<CAPTION>
JANUARY 31, DECEMBER 31,
1997 1997
----------- ------------
<S> <C> <C>
Prepaid insurance................................. $28,010 $19,680
Prepaid interest.................................. 2,038 --
------- -------
$30,048 $19,680
======= =======
</TABLE>

F-43
<PAGE>

SMITH-CHRISTENSEN ENTERPRISES, INC.
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(3) PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consists of the following:

<TABLE>
<CAPTION>
JANUARY 31, DECEMBER 31,
1997 1997
----------- ------------
<S> <C> <C>
Land.............................................. $ 600,000 $ 600,000
Buildings......................................... 156,225 156,225
Leasehold improvements............................ 278,925 278,925
Transportation and towing equipment............... 2,109,893 2,481,396
Office equipment.................................. 123,691 212,066
Machinery and other equipment..................... 112,889 125,726
---------- ----------
Total........................................... 3,381,623 3,854,338
Less accumulated depreciation and amortization.... (728,380) (977,109)
---------- ----------
$2,653,243 $2,877,229
========== ==========
</TABLE>

Depreciation and amortization of property, plant and equipment for the years
ended January 31, 1996 and 1997 and the twelve-month period ended December 31,
1997, totaled $140,910, $224,196, and $271,341, respectively.

(4) OTHER ASSETS

Other assets consist of the following:

<TABLE>
<CAPTION>
JANUARY 31, DECEMBER 31,
1997 1997
----------- ------------
<S> <C> <C>
Metro Contract.................................... $ 705,850 $ 705,850
Non-compete agreement............................. 25,000 25,000
Goodwill.......................................... 225,048 225,048
--------- ---------
Total........................................... 955,898 955,898
Less accumulated amortization..................... (836,990) (856,993)
--------- ---------
$ 118,908 $ 98,905
========= =========
</TABLE>

Metro contract costs, non-compete agreement and goodwill are amortized over
nine, five and fifteen years, respectively. Amortization expense totaled,
$96,208, $98,432 and $20,003 for the years ended January 31, 1996 and 1997 and
the twelve-month period ended December 31, 1997.

F-44
<PAGE>

SMITH-CHRISTENSEN ENTERPRISES, INC.
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(5) INDEBTEDNESS

Quality's long-term debt at January 31, 1997 and December 31, 1997 consisted
of the following:

<TABLE>
<CAPTION>
JANUARY 31, DECEMBER 31,
1997 1997
----------- ------------
<S> <C> <C>
Notes payable to bank, payable in aggregate
monthly installments of $20,312, plus inter-
est ranging from 9% to 9.25% over periods
ranging from 36 to 48 months, maturing be-
tween September 5, 1998 and June, 2001. Se-
cured by vehicles and equipment. ............ $ 428,678 $ 596,105
Note payable to former owner, payable in var-
ied monthly installments, including interest
at 10%, with a final lump sum payment of
$1,396,556, maturing March 1, 1999. Secured
by land, building and the stock of City Tow-
ing, Inc. ................................... 1,682,529 1,562,530
Note payable to former owner, payable in
monthly installments of $3,800, including in-
terest at 9%, maturing July 1, 2003. Secured
by land and building. ....................... 226,489 202,485
Note payable to Navistar, payable in monthly
installments of $1,433, including interest at
10.5%, maturing May 4, 1999. Secured by
equipment. .................................. 35,444 22,540
Notes payable to Navistar, payable in monthly
installments of $6,110 and 2,900, respective-
ly, including interest at 9%, maturing May
12, 1999 and August 11, 1999, respectively.
Secured by equipment. ....................... 240,964 158,685
Note payable to Navistar, payable in monthly
installments of $563, including interest at
11.5%, maturing August 28, 1997. Secured by
equipment. .................................. 3,796 --
Note payable to bank, payable in monthly in-
stallments of $6,716, including interest at
8%, maturing July 1, 2000. Secured by equip-
ment. ....................................... 245,316 187,529
---------- ----------
Total long-term debt........................ 2,863,216 2,729,874
Less installments due within one year......... (447,875) (541,836)
---------- ----------
Long-term debt, excluding current install-
ments...................................... $2,415,341 $2,188,038
========== ==========
</TABLE>
Annual maturities of long-term debt for the next five years and thereafter
are as follows:

<TABLE>
<S> <C>
1998............................................................ $ 541,836
1999............................................................ 1,771,119
2000............................................................ 264,155
2001............................................................ 81,521
2002............................................................ 40,849
Thereafter...................................................... 30,394
----------
$2,729,874
==========
</TABLE>

F-45
<PAGE>

SMITH-CHRISTENSEN ENTERPRISES, INC.
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(6) LEASES

Quality leases land and building used as part of its operations under a
lease agreement with Nevada Recycling Corporation, an affiliated entity owned
by the owners of the stockholder of Quality. The lease is classified as an
operating lease. The agreement provides for monthly rental payments of $8,000
with an automatic renewal for additional consecutive periods of one year
beginning every October, unless either party gives no less than 30 days
written notice of the intent to terminate. Quality is responsible for all
operating costs related to the property.

Rent expense was $96,000 for the years ended January 31, 1996 and 1997 and
the twelve-month period ended December 31, 1997, respectively.

(7) INCOME TAXES

Income tax expense for the years ended January 31, 1997 and 1996 and the
twelve-month period ended December 31, 1997 consists of:

<TABLE>
<CAPTION>
TWELVE-MONTH
YEAR ENDED YEAR ENDED PERIOD ENDED
JANUARY 31, JANUARY 31, DECEMBER 31,
1996 1997 1997
----------- ----------- ------------
<S> <C> <C> <C>
Current:
Federal............................... $(47,338) 171,425 321,636
Deferred.............................. 151,090 106,198 119,342
-------- ------- -------
$103,752 277,623 440,978
======== ======= =======
</TABLE>

The following table reconciles the expected tax expense at the Federal
statutory tax rate to the effective tax rate:

<TABLE>
<CAPTION>
TWELVE-MONTH
YEAR ENDED YEAR ENDED PERIOD ENDED
JANUARY 31, JANUARY 31, DECEMBER 31,
1996 1997 1997
----------- ----------- ------------
<S> <C> <C> <C>
Computed expected tax expense......... $ 32,726 269,395 429,536
Meals and entertainment............... 1,114 6,345 6,341
Non-deductible goodwill............... 5,101 5,101 5,101
Adjustment to prior years' taxes...... 64,811 -- --
Other................................. -- (3,218) --
-------- ------- -------
$103,752 277,623 440,978
======== ======= =======
</TABLE>

F-46
<PAGE>

SMITH-CHRISTENSEN ENTERPRISES, INC.
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The tax effects of temporary differences that give rise to deferred tax
assets and deferred tax liabilities as of January 31, 1997 and the twelve-
month period ended December 31, 1997 are presented below:

<TABLE>
<CAPTION>
TWELVE-MONTH
PERIOD ENDED
JANUARY 31, DECEMBER 31,
1997 1997
----------- ------------
<S> <C> <C>
Deferred tax assets:
Covenant-not-to-compete........................ $ 2,031 3,164
Contract/intangible............................ 13,733 --
-------- -------
Total gross deferred tax assets.............. 15,764 3,164
Less valuation allowance..................... -- --
-------- -------
15,764 3,164
Deferred tax liabilities:
Property and equipment, due to differences in
depreciation lives and methods................ 209,143 315,885
-------- -------
Net deferred tax liability..................... $193,379 312,721
======== =======
</TABLE>

At January 31, 1996, the net deferred tax liability was $299,577 and there
was no recorded valuation allowance.

In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred
tax assets will not be realized. The ultimate realization of deferred tax
assets is dependent upon the generation of future taxable income during the
periods in which those temporary differences become deductible. Management
considers the projected future taxable income and tax planning strategies, as
well as carryback opportunities, in making this assessment. Based upon the
level of historical taxable income, projections for future taxable income and
carryback opportunities over the periods in which the deferred tax assets are
deductible, management believes it is more likely than not Quality will
realize the benefits of these deductible differences. The amount of the
deferred tax asset considered realizable, however, could be reduced in the
near term if estimates of future taxable income are reduced.

(8) NON-CASH TRANSACTIONS

During 1995, Quality financed $331,223 of certain transportation and towing
equipment in connection with the purchase of Custom Towing through a lending
institution.

(9) RELATED PARTY TRANSACTIONS

Accounts receivable from related parties are amounts due from four companies
under the common control of Quality's stockholders. The amounts receivable
totaled $167,959 and $881,884 as of January 31, 1997 and December 31, 1997,
respectively.

Quality leases land and building from an affiliated entity owned by the
owners of the stockholder of Quality (see note 6).

(10) CONTINGENT LIABILITIES

Various legal claims arise against Quality during the normal course of
business. In the opinion of management, liabilities, if any, arising from
proceedings would not have a material effect on the financial statements.

F-47
<PAGE>

SMITH-CHRISTENSEN ENTERPRISES, INC.
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(11) SUBSEQUENT EVENT

During February 1998, the stockholder entered into a definitive agreement to
sell Quality net of land, buildings and leasehold improvements and the note
payable to the former owner of City Towing, in the amount of $202,485 at
December 31, 1997, to United Road Services, Inc. The sales transaction,
affected through a combination of cash and common stock of United Road
Services, Inc., is contingent and effective upon the initial public offering
of the common stock of United Road Services, Inc. Additionally, proceeds of
the initial public offering will be used to pay the note payable to former
owner of $1,562,530 at December 31, 1997. The anticipated selling price of
Quality exceeds its net assets as of December 31, 1997.

Concurrently with the acquisition, United Road Services, Inc. will enter
into agreements with the stockholder to lease land and buildings used in
Quality's operations for negotiated amounts and terms.

F-48
<PAGE>

INDEPENDENT AUDITORS' REPORT

The Stockholders
Caron Auto Works, Inc. and
Caron Auto Brokers, Inc.:

We have audited the accompanying combined balance sheets of Caron Auto
Works, Inc. and Caron Auto Brokers, Inc. (collectively, "Caron") as of
September 30, 1996 and 1997, and the related combined statements of
operations, stockholders' equity, and cash flows for each of the years in the
three-year period ended September 30, 1997. These combined financial
statements are the responsibility of Caron's management. Our responsibility is
to express an opinion on these combined financial statements based on our
audits.

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the combined financial position of Caron
Auto Works, Inc. and Caron Auto Brokers, Inc. as of September 30, 1996 and
1997 and the results of their combined operations and their combined cash
flows for each of the years in the three-year period ended September 30, 1997
in conformity with generally accepted accounting principles.

/s/ KPMG Peat Marwick LLP

Albany, New York
January 16, 1998

F-49
<PAGE>

CARON AUTO WORKS, INC. AND
CARON AUTO BROKERS, INC.

COMBINED BALANCE SHEETS

SEPTEMBER 30, 1996 AND 1997

<TABLE>
<CAPTION>
1996 1997
---------- ----------
<S> <C> <C>
ASSETS
Current assets:
Cash................................................. $ 29,370 $ 108,163
Trade accounts receivable, net of allowance for
doubtful accounts of $26,793 in 1996 and $45,079 in
1997................................................ 633,736 746,332
Accounts receivable from related parties (note 7).... 98,056 49,754
Accounts receivable from employees................... -- 6,500
Notes receivable..................................... -- 44,539
Inventories.......................................... 24,185 30,040
Prepaid and other current assets..................... 38,685 5,142
---------- ----------
Total current assets............................... 824,032 990,470
Property and equipment, net (notes 2, 3 and 4)......... 1,241,097 2,278,962
Other assets........................................... 2,500 22,736
---------- ----------
Total assets....................................... $2,067,629 $3,292,168
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt (note 3)...... $ 83,297 $ 263,093
Current installments of obligations under capital
lease (note 4)...................................... 181,272 177,932
Borrowings under lines of credit (note 3)............ 18,839 225,000
Payable to related parties (note 7).................. 185,920 9,500
Accounts payable..................................... 130,282 332,544
Accrued payroll and related costs.................... 16,058 40,870
Income taxes payable (note 5)........................ 101,128 92,447
Other accrued liabilities............................ 24,021 48,277
---------- ----------
Total current liabilities.......................... 740,817 1,189,663
Long-term liabilities:
Long-term debt, excluding current installments (note
3).................................................. 56,982 1,010,856
Obligations under capital lease, excluding current
installments (note 4)............................... 428,862 437,789
Deferred income taxes (note 5)....................... 160,342 54,019
---------- ----------
Total liabilities.................................. 1,387,003 2,692,327
---------- ----------
Stockholders' equity:
Common stock, $10 par value.
Authorized 10,000 shares; issued and outstanding 200
shares in 1996 and 1997............................. 2,000 2,000
Additional paid-in capital........................... 10,225 10,225
Retained earnings.................................... 698,401 617,616
Less treasury stock, 3,000 common shares in 1996 and
1997, at cost....................................... (30,000) (30,000)
---------- ----------
Total stockholders' equity......................... 680,626 599,841
---------- ----------
Total liabilities and stockholders' equity......... $2,067,629 $3,292,168
========== ==========
</TABLE>

See accompanying notes to combined financial statements.

F-50
<PAGE>

CARON AUTO WORKS, INC. AND
CARON AUTO BROKERS, INC.

COMBINED STATEMENTS OF OPERATIONS

YEARS ENDED SEPTEMBER 30, 1995, 1996 AND 1997

<TABLE>
<CAPTION>
1995 1996 1997
---------- ---------- ----------
<S> <C> <C> <C>
Net revenue................................ $4,624,155 $5,575,257 $6,626,850
Cost of revenue............................ 4,044,834 5,083,883 6,303,546
---------- ---------- ----------
Gross profit........................... 579,321 491,374 323,304
Selling, general and administrative
expenses.................................. 238,006 237,943 511,510
---------- ---------- ----------
Income (loss) from operations.......... 341,315 253,431 (188,206)
---------- ---------- ----------
Other income (expense):
Interest expense......................... (77,693) (108,069) (141,000)
Interest income.......................... 810 5,706 8,360
Gain on sale of assets................... 7,457 16,985 114,966
Other.................................... 25,570 22,526 29,460
---------- ---------- ----------
Income (loss) before income taxes...... 297,459 190,579 (176,420)
Income tax expense (benefit) (note 5)...... 103,020 61,838 (95,635)
---------- ---------- ----------
Net income (loss)...................... $ 194,439 $ 128,741 $ (80,785)
========== ========== ==========
</TABLE>

See accompanying notes to combined financial statements.

F-51
<PAGE>

CARON AUTO WORKS, INC. AND
CARON AUTO BROKERS, INC.

COMBINED STATEMENTS OF STOCKHOLDERS' EQUITY

YEARS ENDED SEPTEMBER 30, 1995, 1996 AND 1997

<TABLE>
<CAPTION>
ADDITIONAL TOTAL
COMMON PAID-IN RETAINED TREASURY STOCKHOLDERS'
STOCK CAPITAL EARNINGS STOCK EQUITY
------ ---------- -------- -------- -------------
<S> <C> <C> <C> <C> <C>
Balance at September 30,
1994...................... $2,000 $10,225 $375,221 $(30,000) $357,446
Net income--1995........... -- -- 194,439 -- 194,439
------ ------- -------- -------- --------
Balance at September 30,
1995...................... 2,000 10,225 569,660 (30,000) 551,885
Net income--1996........... -- -- 128,741 -- 128,741
------ ------- -------- -------- --------
Balance at September 30,
1996...................... 2,000 10,225 698,401 (30,000) 680,626
Net loss--1997............. -- -- (80,785) -- (80,785)
------ ------- -------- -------- --------
Balance at September 30,
1997...................... $2,000 $10,225 $617,616 $(30,000) $599,841
====== ======= ======== ======== ========
</TABLE>

See accompanying notes to combined financial statements.

F-52
<PAGE>

CARON AUTO WORKS, INC. AND
CARON AUTO BROKERS, INC.

COMBINED STATEMENTS OF CASH FLOWS

YEARS ENDED SEPTEMBER 30, 1995, 1996 AND 1997

<TABLE>
<CAPTION>
1995 1996 1997
--------- --------- ---------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss)........................... $ 194,437 $ 128,741 $ (80,785)
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating
activities:
Depreciation and amortization............. 158,790 196,937 213,290
Deferred income taxes..................... 41,924 18,467 (106,323)
Gain on sale of assets.................... (7,457) (16,985) (114,966)
Increase in trade accounts receivable..... (63,618) (119,278) (112,596)
Decrease (increase) in receivables from
related parties.......................... (12,056) (66,885) 48,302
Increase in accounts receivable from
employees................................ -- -- (6,500)
(Increase) decrease in inventories........ 4,705 (23,766) (5,855)
Decrease (increase) in prepaid expenses... 4,758 (19,644) 33,543
(Increase) decrease in other assets....... 191 -- (20,236)
Decrease in amounts payable to related
parties.................................. (10,702) (22,889) (176,420)
Increase (decrease) in accounts payable... (44,731) 16,036 202,262
Increase (decrease) in accrued payroll and
related costs............................ (119,686) (1,670) 24,812
Increase in other accrued liabilities..... 447 86,401 15,575
--------- --------- ---------
Net cash provided by (used in) operating
activities............................. 147,002 175,465 (85,897)
--------- --------- ---------
Cash flows from investing activities:
Purchases of property and equipment......... (142,383) (54,909) (333,277)
Proceeds from sale of assets................ 123,913 56,011 341,196
Increase in notes receivable................ -- -- (44,539)
--------- --------- ---------
Net cash provided by (used in) investing
activities............................. (18,470) 1,102 (36,620)
--------- --------- ---------
Cash flows from financing activities:
Proceeds from long-term debt................ 100,000 70,345 456,500
Principal payments on long-term debt and
capital leases............................. (174,880) (300,175) (461,351)
Borrowings under line of credit, net........ (35,000) 18,839 206,161
--------- --------- ---------
Net cash provided by (used in) financing
activities............................. (109,880) (210,991) 201,310
--------- --------- ---------
Net increase (decrease) in cash............... 18,652 (34,424) 78,793
Cash at beginning of year..................... 45,142 63,794 29,370
--------- --------- ---------
Cash at end of year........................... $ 63,794 $ 29,370 $ 108,163
========= ========= =========
Supplemental disclosure of cash flow
information:
Cash paid during the year for:
Interest.................................. $ 124,505 $ 110,038 $ 143,639
========= ========= =========
Income taxes............................ $ -- $ 61,096 $ 43,371
========= ========= =========
</TABLE>

See accompanying notes to combined financial statements.

F-53
<PAGE>

CARON AUTO WORKS, INC. AND
CARON AUTO BROKERS, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS

SEPTEMBER 30, 1995, 1996 AND 1997

(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Description of Business

Caron Auto Works, Inc. and Caron Auto Brokers, Inc. (collectively, "Caron")
was founded in 1976. Caron's primary businesses are transporting vehicles for
leasing companies, long-haul transporters and individuals in the Northeastern
United States, and towing vehicles for commercial and private customers in the
Hartford, Connecticut region. Caron has two facilities in East Hartford and
facilities in New Jersey and Florida. It operates approximately 55 vehicles.

(b) Principles of Combination

The combined financial statements include the financial statements of Caron
Auto Works, Inc. and Caron Auto Brokers, Inc. All significant intercompany
balances and transactions have been eliminated in combination. Both entities
have the same management and principal stockholder ownership.

Caron operates as one segment related to the transportation of vehicles and
equipment for customers.

Caron's revenue is derived from customers who require a towing service,
transport of vehicles and equipment, fees related to repair of vehicles that
have been towed, and auction sales of unclaimed vehicles. Towing revenue is
recognized at the completion of each towing engagement, transport revenue is
recognized upon the delivery of the vehicles/equipment to their final
destination, repair fees are recorded when the service is performed, and
revenue from auction sales are recorded when title to the vehicles has been
transferred. Expenses related to the generation of revenue are recognized as
incurred.

(d) Inventories

Inventories include spare parts used in the repair of vehicles and are
stated at the lower of cost or market.

(e) Property and Equipment

Property and equipment are stated at cost. Depreciation is determined for
financial statement purposes using the straight-line method over the estimated
useful lives of the individual assets or, for leasehold improvements, over the
terms of the related leases if shorter. Accelerated methods of depreciation
have been used for income tax purposes. For financial statement purposes,
Caron provides for depreciation of property and equipment over the following
estimated useful lives:

<TABLE>
<S> <C>
Automobiles and transportation equipment.......................... 5 years
Furniture and fixtures............................................ 5-7 years
Machinery and equipment........................................... 5-7 years
Leasehold improvements............................................ 7-39 years
</TABLE>

(f) Fair Value of Financial Instruments

Due to the short-term nature of various financial instruments and the
current incremental borrowing rates available to Caron on bank loans with
similar terms and maturities, the fair value of Caron's financial instruments
approximates their carrying values.

F-54
<PAGE>

CARON AUTO WORKS, INC.
AND CARON AUTO BROKERS, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

(g) Income Taxes

(h) Use of Estimates

Management of Caron has made a number of estimates and assumptions relating
to the reporting of assets and liabilities and the disclosure of contingent
assets and liabilities to prepare these financial statements in conformity
with generally accepted accounting principles. Actual results could differ
from those estimates.

(2) PROPERTY AND EQUIPMENT

Property and equipment at September 30, 1996 and 1997 consists of the
following:

<TABLE>
<CAPTION>
1996 1997
---------- ----------
<S> <C> <C>
Vehicles................................................ $ 16,608 $ 42,258
Office equipment........................................ 75,590 112,455
Transportation and towing equipment..................... 1,663,407 2,604,541
Leasehold improvements.................................. 262,276 313,011
---------- ----------
Total................................................. 2,017,881 3,072,265
Less accumulated depreciation and amortization.......... (776,784) (793,303)
---------- ----------
$1,241,097 $2,278,962
========== ==========
</TABLE>

Depreciation and amortization of property and equipment in 1995, 1996 and
1997 totaled $158,790, $196,937 and $213,290, respectively.

(3) INDEBTEDNESS

Caron has available a $250,000 line of credit with Bank of South Windsor,
secured by all corporate assets and a personal guarantee by Caron's primary
stockholder. Interest is payable at the prime lending rate plus 1% (9.5% at
September 30, 1997). Total borrowings under this unsecured line of credit as
of September 30, 1996 and 1997 amounted to $18,839 and $225,000, respectively.

F-55
<PAGE>

CARON AUTO WORKS, INC.
AND CARON AUTO BROKERS, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

Caron's long-term debt at September 30, 1996 and 1997 consists of the
following:

<TABLE>
<CAPTION>
1996 1997
-------- ----------
<S> <C> <C>
Note payable to Savings Bank of Manchester, payable in
monthly principal payments of $1,085, plus interest at
8.25%, maturing September 29, 2000. Secured by a car
and the personal guarantee of the primary stockholder.. $ -- $ 34,500
Note payable to Savings Bank of Manchester, payable in
monthly principal payments of $2,500, plus interest at
prime plus 1% (9.5% at September 30, 1997), maturing on
August 26, 2002. Secured by a car and the personal
guarantee of the primary stockholder................... -- 147,500
Note payable to Savings Bank of Manchester, payable in
monthly installments of $692, including interest at
8.25%, maturing on August 29, 2000. Secured by a car... -- 21,459
Note payable to unrelated individual, payable in monthly
installments of $580, including interest at 12.5%,
maturing on October 31, 2000........................... 22,364 17,947
Note payable to Bank of South Windsor, payable in
monthly installments of $1,633, including interest at
9.5%. Matured in October, 1996. Secured by one tractor
and three trailers..................................... 1,844 --
Note payable to Bank of South Windsor, payable in
monthly principal payments of $1,111, plus interest at
prime plus 1% (9.5% at September 30, 1997), maturing on
April 18, 1999. Secured by assets of Caron and the
personal guarantee of the primary stockholder.......... 34,444 21,111
Note payable to Bank of South Windsor, payable in
monthly installments of $8,904, including interest at
9.25%, maturing on March 27, 2002. Secured by twelve
tractors and twelve trailers and the personal guarantee
of the primary stockholder............................. -- 390,878
Note payable to Peoples Bank, payable in monthly
principal payments of $1,786, plus interest at prime
plus 1.5% (10% at September 30, 1997), maturing August
15, 2004. Secured by the assets of Caron and the
personal guarantee of the primary stockholder and
affiliated companies................................... -- 148,214
Note payable to Bank of South Windsor, payable in
monthly installments of $3,203, including interest at
9.5%. Secured by assets of Caron and the personal
guarantee by the primary stockholder................... 40,498 --
Note payable to Ford Motor Credit Company, payable in
monthly installments of $770, including interest at
10%, maturing November 27, 1998. Secured by a truck.... 24,979 17,924
Note payable to Ford Motor Credit Company, payable in
monthly installments of $959, including interest at
8.5%. Secured by equipment............................. 16,150 --
Note payable to Navistar Financial Corp., payable in
monthly installments ranging from $1,632 to $6,788,
including interest at rates of 9.9% and 10.3%, maturing
between 2001 and 2002. Secured by tractors and
trailers............................................... -- 474,416
-------- ----------
Total long-term debt.................................. 140,279 1,273,949
Less installments due within one year................... (83,297) (263,093)
-------- ----------
Long-term debt, excluding current installments........ $ 56,982 $1,010,856
======== ==========
</TABLE>

F-56
<PAGE>

CARON AUTO WORKS, INC.
AND CARON AUTO BROKERS, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

The aggregate maturities of long-term debt for each of the five years
subsequent to September 30, 1997 are as follows:

<TABLE>
<S> <C>
1998.............................................................. $ 263,093
1999.............................................................. 279,925
2000.............................................................. 285,877
2001.............................................................. 259,616
2002.............................................................. 144,384
Thereafter........................................................ 41,054
----------
$1,273,949
==========
</TABLE>

(4) LEASES

Caron is the lessee for various transportation and towing equipment under
capital leases expiring in 2002.

Following is a summary of equipment held under the capital leases at
September 30, 1996 and 1997:

<TABLE>
<CAPTION>
1996 1997
--------- ---------
<S> <C> <C>
Transportation and towing equipment.................... $ 885,356 $ 741,628
Less accumulated amortization.......................... (186,143) (198,826)
--------- ---------
$ 699,213 $ 542,802
========= =========
</TABLE>

Caron leases the building used for its operations on a month-to-month basis
from its primary stockholder. The lease is classified as an operating lease.
Caron is responsible for all operating costs related to the property. Rent
paid to the stockholder in 1995, 1996 and 1997 was $75,382, $77,181 and
$117,096, respectively.

Total rent expense for 1995, 1996 and 1997 was $84,382, $86,181 and
$126,096, respectively.

Future minimum capital lease payments as of September 30, 1997 are:

<TABLE>
<S> <C>
Year Ending September 30,
1998............................................................ $ 236,171
1999............................................................ 208,828
2000............................................................ 178,665
2001............................................................ 93,094
2002............................................................ 5,644
---------
Total......................................................... 722,402
Less amount representing interest............................... (106,681)
---------
Present value of net minimum capital lease payments........... $ 615,721
=========
</TABLE>

F-57
<PAGE>

CARON AUTO WORKS, INC.
AND CARON AUTO BROKERS, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

(5) INCOME TAXES

Income tax expense (benefit) for the years ended September 30, 1995, 1996
and 1997 consists of:

<TABLE>
<CAPTION>
1995 1996 1997
-------- ------- ---------
<S> <C> <C> <C>
Current:
Federal........................................ $ 38,174 $26,900 $ 5,789
State.......................................... 22,922 16,471 4,899
-------- ------- ---------
61,096 43,371 10,688
Deferred......................................... 41,924 18,467 (106,323)
-------- ------- ---------
$103,020 $61,838 $ (95,635)
======== ======= =========
</TABLE>

The following table reconciles the expected tax expense at the Federal
statutory tax rate to the effective tax rate.

<TABLE>
<CAPTION>
1995 1996 1997
-------- -------- --------
<S> <C> <C> <C>
Computed expected tax expense (benefit)....... $101,136 $ 64,797 $(59,983)
State income taxes, net of Federal benefit.... 15,129 10,871 3,233
Officer's life insurance...................... 427 -- --
Non-deductible meals and entertainment
expenses..................................... 512 998 1,647
Effect of graduated tax rates................. (16,262) (14,980) (34,847)
Other......................................... 2,078 152 (5,685)
-------- -------- --------
$103,020 $ 61,838 $(95,635)
======== ======== ========
</TABLE>

The tax effects of temporary differences that give rise to deferred tax
assets and deferred tax liabilities as of September 30, 1996 and 1997 are
presented below:

<TABLE>
<CAPTION>
1996 1997
--------- ---------
<S> <C> <C>
Deferred tax assets:
Allowance for bad debts............................. $ 10,091 $ 19,830
Net operating loss carryforwards.................... -- 186,261
--------- ---------
Total gross deferred tax asset.................... 10,091 206,091
Less valuation allowance.......................... -- --
--------- ---------
Net deferred tax asset............................ 10,091 206,091
Deferred tax liabilities:
Property and equipment, due to differences in
depreciation lives and methods..................... (170,133) (260,110)
--------- ---------
Net deferred tax liability........................ $(160,342) $ (54,019)
========= =========
</TABLE>

Caron had a net deferred tax liability of $141,875 at September 30, 1995.
The net operating loss carryforward of approximately $465,000 expires in 2017.

F-58
<PAGE>

CARON AUTO WORKS, INC.
AND CARON AUTO BROKERS, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

strategies, as well as carryback opportunities, in making this assessment.
Based upon the level of historical taxable income, projections for future
taxable income and carryback opportunities over the periods in which the
deferred tax assets are deductible, management believes it is more likely than
not Caron will realize the benefits of these deductible differences. The
amount of the deferred tax asset considered realizable, however, could be
reduced in the near term if estimates of future taxable income are reduced.

(6) NON-CASH TRANSACTIONS

During 1997, Caron leased $1,144,108 of various transportation and towing
equipment through several lending institutions (see note 3).

(7) RELATED PARTY TRANSACTIONS

Caron is indebted to the primary stockholder under an unsecured note,
bearing interest at 7% per annum. The note, unpaid interest on the note, and
accrued bonus to the sole stockholder are included in payable to related
parties in the accompanying combined balance sheets.

Included in accounts receivable from related parties are amounts due from
two companies under the common control of Caron's primary stockholder. The
amounts receivable totaled $98,056 and $49,757 as of September 30, 1996 and
1997, respectively.

Caron leases two buildings located in East Hartford, Connecticut, from the
primary stockholder (see note 4).

(8) SUBSEQUENT EVENT

During February 1998, the stockholders entered into a definitive agreement
to sell Caron to United Road Services, Inc. The sales transaction, affected
through a combination of cash and common stock of United Road Services, Inc.,
is contingent and effective upon the initial public offering of the common
stock of United Road Services, Inc. The anticipated selling price of Caron
exceeds its net assets as of September 30 1997.

Concurrently with the acquisition, United Road Services, Inc. will enter
into agreements with the stockholders to lease land and buildings used in
Caron's operations for negotiated amounts and terms.

F-59
<PAGE>

INDEPENDENT AUDITORS' REPORT

The Stockholder
Absolute Towing and Transporting, Inc.:

We have audited the accompanying balance sheets of Absolute Towing and
Transporting, Inc. ("Absolute") as of December 31, 1996 and 1997, and the
related statements of operations, stockholder's equity, and cash flows for the
years then ended. These financial statements are the responsibility of
Absolute's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

As described in Note 6, 99% of Absolute's revenue is derived from one
customer, and all of Absolute's trade accounts receivable at December 31, 1997
are due from this single customer.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Absolute Towing and
Transporting, Inc. as of December 31, 1996 and 1997, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

/s/ KPMG Peat Marwick LLP

Albany, New York
January 28, 1998

F-60
<PAGE>

ABSOLUTE TOWING AND TRANSPORTING, INC.

BALANCE SHEETS

DECEMBER 31, 1996 AND 1997

<TABLE>
<CAPTION>
1996 1997
-------- ----------
<S> <C> <C>
ASSETS
Current assets:
Cash..................................................... $ -- $ 10,935
Trade accounts receivable (note 3)....................... 268,818 593,679
Income taxes receivable (note 5)......................... 9,731 55,324
Prepaid expenses......................................... 23,613 30,587
-------- ----------
Total current assets................................... 302,162 690,525
Property and equipment, net (notes 2 and 3)................ 265,934 306,153
Deferred income taxes (note 5)............................. 6,436 31,331
-------- ----------
Total assets........................................... $574,532 $1,028,009
======== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Current installments of long-term debt (note 3).......... 15,737 16,218
Borrowings under lines of credit (note 3)................ -- 212,403
Book overdraft........................................... 98,012 312,217
Accounts payable......................................... 79,468 124,573
-------- ----------
Total current liabilities.............................. 193,217 665,411
Long-term liabilities:
Long-term debt, excluding current installments (note 3).. -- 83,782
-------- ----------
Total liabilities...................................... 193,217 749,193
-------- ----------
Stockholder's equity:
Common stock, $42.86 par value. Authorized, issued and
outstanding 1,000 shares in 1996 and 1997............... 42,860 42,860
Retained earnings........................................ 338,455 235,956
-------- ----------
Total stockholder's equity............................. 381,315 278,816
-------- ----------
Total liabilities and stockholder's equity............. $574,532 $1,028,009
======== ==========
</TABLE>

See accompanying notes to financial statements.

F-61
<PAGE>

ABSOLUTE TOWING AND TRANSPORTING, INC.

STATEMENTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 1996 AND 1997

<TABLE>
<CAPTION>
1996 1997
---------- ----------
<S> <C> <C>
Net revenue............................................ $3,464,623 $4,779,901
Cost of revenue........................................ 2,756,327 3,766,564
---------- ----------
Gross profit....................................... 708,296 1,013,337
Selling, general and administrative expenses........... 635,595 1,095,416
---------- ----------
Income (loss) from operations...................... 72,701 (82,079)
---------- ----------
Other income (expense):
Interest expense..................................... (1,440) (15,018)
Gain (loss) on sale of assets........................ (2,842) 9,254
---------- ----------
Income (loss) before income taxes.................. 68,419 (87,843)
Income tax benefit (note 5)............................ (12,667) (24,095)
---------- ----------
Net income (loss).................................. $ 81,086 $ (63,748)
========== ==========
</TABLE>

See accompanying notes to financial statements.

F-62
<PAGE>

ABSOLUTE TOWING AND TRANSPORTING, INC.

STATEMENTS OF STOCKHOLDER'S EQUITY

YEARS ENDED DECEMBER 31, 1996 AND 1997

<TABLE>
<CAPTION>
TOTAL
COMMON RETAINED STOCKHOLDER'S
STOCK EARNINGS EQUITY
------- -------- -------------
<S> <C> <C> <C>
Balance at December 31, 1995.................... $42,860 $262,370 $305,230
Distributions to stockholder.................... -- (5,001) (5,001)
Net income--1996................................ -- 81,086 81,086
------- -------- --------
Balance at December 31, 1996.................... 42,860 338,455 381,315
Distributions to stockholder.................... -- (38,751) (38,751)
Net loss--1997.................................. -- (63,748) (63,748)
------- -------- --------
Balance at December 31, 1997.................... $42,860 $235,956 $278,816
======= ======== ========
</TABLE>

See accompanying notes to financial statements.

F-63
<PAGE>

ABSOLUTE TOWING AND TRANSPORTING, INC.

STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 1996 AND 1997

<TABLE>
<CAPTION>
1996 1997
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss)...................................... $ 81,086 $ (63,748)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization........................ 110,327 127,960
Deferred income taxes................................ (24,253) (24,895)
Loss (gain) from sale of property and equipment...... 2,842 (9,254)
Increase in trade accounts receivable................ (75,514) (324,861)
Decrease (increase) in income taxes receivable....... 8,086 (45,593)
Decrease (increase) in prepaid expenses.............. 2,718 (6,974)
Increase in accounts payable......................... 29,252 45,105
--------- ---------
Net cash provided by (used in) operating
activities........................................ 134,544 (302,260)
--------- ---------
Cash flows from investing activities:
Purchases of property and equipment.................... (143,215) (192,675)
Proceeds from sale of property and equipment........... 11,749 33,750
--------- ---------
Net cash used in investing activities.............. (131,466) (158,925)
--------- ---------
Cash flows from financing activities:
Net increase in borrowings under line of credit........ -- 212,403
Increase (decrease) in book overdraft.................. (20,890) 214,205
Proceeds from long-term debt........................... 15,737 100,000
Principal payments on long term debt................... -- (15,737)
Stockholder distributions.............................. (5,001) (38,751)
--------- ---------
Net cash provided by (used in) financing
activities........................................ (10,154) 472,120
--------- ---------
Net (decrease) increase in cash.......................... (7,076) 10,935
Cash at beginning of year................................ 7,076 --
--------- ---------
Cash at end of year...................................... $ -- $ 10,935
========= =========
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest............................................. $ 1,439 $ 15,018
========= =========
Income taxes....................................... $ 3,500 $ 46,393
========= =========
</TABLE>

See accompanying notes to financial statements.

F-64
<PAGE>

ABSOLUTE TOWING AND TRANSPORTING, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1996 AND 1997

(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Description of Business

Absolute Towing and transporting, Inc. ("Absolute") was founded in 1987.
Absolute's primary business is towing and transporting salvage vehicles for
auction companies in Southern California. Absolute has one facility in Los
Angeles. It operates approximately 25 vehicles.

(b) Revenue Recognition

Absolute operates as one segment related to the transportation of vehicles
and equipment for customers.

Absolute's revenue is derived from customers who require a towing service.
Revenue is recognized at the completion of each towing engagement. Expenses
related to the generation of revenue are recognized as incurred.

Property and equipment are stated at cost. Depreciation is determined for
financial statement purposes using the straight line method over the estimated
useful lives of the individual assets or, for leasehold improvements, over the
terms of the related leases, if shorter. Accelerated methods of depreciation
have been used for income tax purposes. For financial statement purposes,
Absolute provides for depreciation of property and equipment over the
following estimated useful lives:

<TABLE>
<S> <C>
Transportation and towing equipment................................ 3-5 years
Leasehold improvements............................................. 5 years
Furniture and fixtures............................................. 5 years
</TABLE>

(d) Fair Value of Financial Instruments

Due to the short-term nature of various financial instruments and the
current incremental borrowing rates available to Absolute on bank loans with
similar terms and maturities, the fair value of Absolute's financial
instruments approximates their carrying values.

(e) Income Taxes

(f) Use of Estimates

Management of Absolute has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities to prepare these financial statements in
conformity with generally accepted accounting principles. Actual results could
differ from those estimates.

F-65
<PAGE>

ABSOLUTE TOWING AND TRANSPORTING, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(2) PROPERTY AND EQUIPMENT

Property and equipment at December 31, 1996 and 1997 consists of the
following:

<TABLE>
<CAPTION>
1996 1997
--------- ----------
<S> <C> <C>
Transportation and towing equipment................... $ 920,210 $ 974,036
Leasehold improvements................................ 3,740 27,110
Furniture and fixtures................................ 1,060 1,060
--------- ----------
Total............................................... 925,010 1,002,206
Less accumulated depreciation and amortization........ (659,076) (696,053)
--------- ----------
$ 265,934 $ 306,153
========= ==========
</TABLE>

Depreciation and amortization of property and equipment in 1996 and 1997
totaled $110,327 and $127,960, respectively.

(3) INDEBTEDNESS

Absolute has a line of credit with a bank in the amount of $300,000, which
bears interest at the bank's prime rate plus 1% (9.5% at December 31, 1997).
This line of credit expires on May 1, 1998. Borrowings under this line of
credit are $212,403 at December 31, 1997 and are secured by accounts
receivable, inventory, and equipment. Additionally, in 1997, Absolute entered
into a revolving credit agreement with a bank that provides for maximum
borrowings of $600,000. Outstanding borrowings bear interest at the bank's
prime rate plus 1% and are payable in 60 monthly installments beginning
December 10, 1998. The credit facility matures November, 1998. There were no
borrowings outstanding at December 31, 1997.

Absolute's long-term debt consisted of the following at December 31, 1996
and 1997:

<TABLE>
<CAPTION>
1996 1997
-------- --------
<S> <C> <C>
Note payable to bank, payable in monthly installments of
$2,125, including interest at 10%, maturing December 1,
2002. Secured by personal property...................... $ 15,737 $100,000
Less installments due within one year.................. (15,737) (16,218)
-------- --------
Long-term debt, excluding current installments....... $ -- $ 83,782
======== ========
</TABLE>

Annual maturities of long-term debt for the next five years are as follows:

(4) LEASES

Absolute leases the building used for its operations under a month-to-month
lease agreement. The lease is classified as an operating lease. The agreement
provides for monthly rental payments of $1,446. Absolute is responsible for
all operating costs related to the property.

Total rent expense for 1996 and 1997 was $24,442 and $18,800, respectively.

F-66
<PAGE>

ABSOLUTE TOWING AND TRANSPORTING, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(5) INCOME TAXES

Income tax expense (benefit) for the years ended December 31, 1996 and 1997
consists of:

<TABLE>
<CAPTION>
1996 1997
-------- --------
<S> <C> <C>
Current:
Federal................................................ $ 10,786 $ --
State.................................................. 800 800
-------- --------
11,586 800
Deferred................................................. (24,253) (24,895)
-------- --------
$(12,667) $(24,095)
======== ========
</TABLE>

The following table reconciles the expected tax expense at the Federal
statutory tax rate to the effective tax rate:

<TABLE>
<CAPTION>
1996 1997
-------- --------
<S> <C> <C>
Computed expected tax expense........................... $ 23,262 $(29,867)
Effect of graduated tax rates........................... (10,018) 6,656
State income taxes, net of Federal benefit.............. 3,695 (1,626)
Los Angeles Revitalization Zone ("LARZ") credit......... (33,371) --
Non-deductible meals and entertainment expenses......... 3,765 742
-------- --------
$(12,667) $(24,095)
======== ========
</TABLE>

The tax effects of temporary differences that give rise to deferred tax
assets and deferred tax liabilities as of December 31, 1996 and 1997 are
presented below:

<TABLE>
<CAPTION>
1996 1997
------- -------
<S> <C> <C>
Deferred tax assets:
Los Angeles Revitalization Zone credit.................. $12,927 $12,927
Net operating loss carryforward......................... -- 20,524
------- -------
Total gross deferred tax assets....................... 12,927 33,451
Less valuation allowance.............................. -- --
------- -------
12,927 33,451
Deferred tax liabilities:
Property and equipment, due to differences in
depreciation lives and methods......................... (6,491) (2,120)
------- -------
Net deferred tax asset................................ $ 6,436 $31,331
======= =======
</TABLE>

At December 31, 1995, the net deferred tax liability was $17,817. The net
operating loss carryforward of approximately $60,400 expires in 2017 and LARZ
credit of approximately $12,900 expires in 2011.

F-67
<PAGE>

ABSOLUTE TOWING AND TRANSPORTING, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

deferred tax assets are deductible, management believes it is more likely than
not Absolute will realize the benefits of these deductible differences. The
amount of the deferred tax asset considered realizable, however, could be
reduced in the near term if estimates of future income are reduced.

(6) CONCENTRATION OF BUSINESS RISKS

For both 1996 and 1997, 99% of Absolute's revenues were derived from one
customer, Insurance Auto Auctions (IAA). The loss of this customer could
significantly effect Absolute's performance.

(7) SUBSEQUENT EVENT

During February 1998, the stockholder entered into a definitive agreement to
sell Absolute to United Road Services, Inc. The sales transaction, affected
through a combination of cash and common stock of United Road Service, Inc., is
contingent and effective upon the initial public offering of the common stock
of United Road Service, Inc. The anticipated selling price of Absolute exceeds
its net assets as of December 31, 1997. Certain of the assets of Absolute, in
the amount of $65,000, will be retained by the stockholder.

F-68
<PAGE>

INDEPENDENT AUDITORS' REPORT

The Stockholder
ASC Transportation Services:

We have audited the accompanying consolidated balance sheet of ASC
Transportation Services and subsidiary (Auto Service Center d/b/a ASC Truck
Service) ("Auto Service") as of December 31, 1997, and the related
consolidated statements of operations, stockholder's deficit, and cash flows
for the year then ended. These consolidated financial statements are the
responsibility of Auto Service's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audit.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of ASC
Transportation Services and subsidiary (Auto Service Center d/b/a ASC Truck
Service) as of December 31, 1997, and the results of their operations and
their cash flows for the year then ended in conformity with generally accepted
accounting principles.

/s/ KPMG Peat Marwick LLP

Albany, New York
February 10, 1998

F-69
<PAGE>

ASC TRANSPORTATION SERVICES AND SUBSIDIARY

CONSOLIDATED BALANCE SHEET

DECEMBER 31, 1997

<TABLE>
<S> <C>
ASSETS
Current assets:
Cash............................................................. $ 138,213
Trade accounts receivable........................................ 225,364
Due from employees............................................... 715
Accounts receivable--other....................................... 4,977
Inventories...................................................... 18,167
Prepaid expenses................................................. 69,535
----------
Total current assets........................................... 456,971
Property and equipment, net (notes 2 and 4)........................ 806,503
Other assets....................................................... 10,986
----------
Total assets................................................... $1,274,460
==========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Current installments of long-term debt (note 3).................. $ 20,275
Current installments of obligations under capital leases (note
4).............................................................. 247,845
Accounts payable................................................. 121,245
Accrued payroll and related costs................................ 45,759
Income taxes payable (note 5).................................... 62,051
Other accrued liabilities........................................ 16,961
----------
Total current liabilities...................................... 514,136
Long-term liabilities:
Long-term debt, excluding current installments (note 3).......... 209,326
Obligations under capital leases, excluding current installments
(note 4)........................................................ 491,680
Deferred income taxes (note 5)................................... 82,965
----------
Total liabilities.............................................. 1,298,107
----------
Stockholders' deficit:
Common stock, no par value. Authorized 10,000 shares; issued and
outstanding 25 shares........................................... 24,000
Additional paid-in capital....................................... 33,325
Accumulated deficit.............................................. (80,972)
----------
Total stockholders' deficit.................................... (23,647)
----------
Total liabilities and stockholders' deficit.................... $1,274,460
==========
</TABLE>

See accompanying notes to the consolidated financial statements.

F-70
<PAGE>

ASC TRANSPORTATION SERVICES AND SUBSIDIARY

CONSOLIDATED STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 1997

<TABLE>
<S> <C>
Net revenue......................................................... $3,310,464
Cost of revenue..................................................... 2,364,355
----------
Gross profit.................................................... 946,109
Selling, general, and administrative expenses....................... 764,778
----------
Income from operations.......................................... 181,331
----------
Other income (expense):
Interest expense.................................................. (71,947)
Gain on sale of assets............................................ 18,670
Other............................................................. 34,834
----------
Income before income taxes...................................... 162,888
Income tax expense (note 5)......................................... 49,096
----------
Net income...................................................... $ 113,792
==========
</TABLE>

See accompanying notes to the consolidated financial statements.

F-71
<PAGE>

ASC TRANSPORTATION SERVICES AND SUBSIDIARY

CONSOLIDATED STATEMENT OF STOCKHOLDER'S DEFICIT

YEAR ENDED DECEMBER 31, 1997

<TABLE>
<CAPTION>
ADDITIONAL TOTAL
COMMON PAID-IN ACCUMULATED STOCKHOLDER'S
STOCK CAPITAL DEFICIT DEFICIT
------- ---------- ----------- -------------
<S> <C> <C> <C> <C>
Balance at December 31, 1996....... $24,000 33,325 (194,764) (137,439)
Net income--1997................... -- -- 113,792 113,792
------- ------ -------- --------
Balance at December 31, 1997....... $24,000 33,325 (80,972) (23,647)
======= ====== ======== ========
</TABLE>

See accompanying notes to the consolidated financial statements.

F-72
<PAGE>

ASC TRANSPORTATION SERVICES AND SUBSIDIARY

CONSOLIDATED STATEMENT OF CASH FLOWS

YEAR ENDED DECEMBER 31, 1997

<TABLE>
<S> <C>
Cash flows from operating activities:
Net income........................................................ $ 113,792
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization................................... 177,150
Deferred income taxes........................................... (6,786)
Gain on sale of property and equipment.......................... (18,670)
Increase in trade accounts receivable........................... (88,313)
Increase in due from employees.................................. (1,376)
Increase in accounts receivable--other.......................... (1,366)
Increase in inventories......................................... (5,006)
Decrease in prepaid expenses.................................... 28,383
Decrease in accounts payable.................................... (11,932)
Increase in accrued payroll and related costs................... 17,020
Increase in income taxes payable................................ 38,517
Increase in other accrued liabilities........................... 7,191
---------
Net cash provided by operating activities..................... 248,604
---------
Cash flows from investing activities:
Purchases of property and equipment............................... (268,647)
Proceeds from sale of property and equipment...................... 52,938
---------
Net cash used in investing activities......................... (215,709)
---------
Cash flows from financing activities:
Proceeds from long-term debt...................................... 240,673
Principal payments on long-term debt and capital leases........... (211,134)
---------
Net cash provided by financing activities..................... 29,539
---------
Net increase in cash................................................ 62,434
Cash at beginning of year........................................... 75,779
---------
Cash at end of year................................................. $ 138,213
=========
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest........................................................ $ 72,183
=========
Income taxes.................................................... $ 17,660
=========
</TABLE>

See accompanying notes to the consolidated financial statements.

F-73
<PAGE>

ASC TRANSPORTATION SERVICES AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 1997

(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Description of Business

ASC Transportation Services and its wholly-owned subsidiary, Auto Service
Center (d/b/a ASC Truck Service), collectively referred to herein as "Auto
Service", and was founded in 1956, is a commercial and police towing company
with two facilities based in Sacramento, California. One facility concentrates
in the towing of commercial and personal vehicles primarily contracting with
law enforcement agencies and motor clubs. The other location concentrates on
the towing of larger commercial vehicles and maintains a repair shop also for
commercial vehicles. It operates approximately 20 vehicles.

(b) Principles of Consolidation

The consolidated financial statements include the financial statements of
ASC Transportation Services and its wholly-owned subsidiary, Auto Service
Center. All significant intercompany balances and transactions have been
eliminated in consolidation.

Auto Service operates as one segment related to the transportation of
vehicles and equipment for customers.

Auto Service's revenue is derived from customers who require a towing
service, transport of vehicles and equipment, and fees related to the repair
of vehicles that have been towed. Towing revenue is recognized at the
completion of each towing engagement, transport revenue is recognized upon the
delivery of the vehicles and equipment to their final destination, and repair
fees are recorded when the service is performed. Expenses related to the
generation of revenue are recognized as incurred.

(d) Inventories

Inventories consist principally of spare parts used for repair and
maintenance. Inventories are stated at the lower of cost or market.

(e) Property and Equipment

Property and equipment are stated at cost. Depreciation is determined for
financial statement purposes using the straight-line method over the estimated
useful lives of the individual assets or, for leasehold improvements, over the
terms of the related leases if shorter. Accelerated methods of depreciation
have been used for income tax purposes. For financial statement purposes, Auto
Service provides for depreciation of property and equipment over the following
estimated useful lives:

<TABLE>
<S> <C>
Transportation and towing equipment............................... 5 years
Machinery and other equipment..................................... 7 years
Leasehold improvements............................................ 7-20 years
Furniture and fixtures............................................ 7 years
</TABLE>

(f) Fair Value of Financial Instruments

Due to the short-term nature of various financial instruments and the
current incremental borrowing rates available to Auto Service on bank loans
with similar terms and maturities, the fair value of Auto Service's financial
instruments approximates their carrying values.

F-74
<PAGE>

ASC TRANSPORTATION SERVICES AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(g) Income Taxes

(h) Use of Estimates

Management of Auto Service has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities to prepare these financial statements in
conformity with generally accepted accounting principles. Actual results could
differ from those estimates.

(2) PROPERTY AND EQUIPMENT

Property and equipment at December 31, 1997 consists of the following:

<TABLE>
<S> <C>
Transportation and towing equipment.............................. $1,425,655
Machinery and other equipment.................................... 169,403
Leasehold improvements........................................... 29,614
Furniture and fixtures........................................... 39,175
----------
Total............................................................ 1,663,847
Less accumulated depreciation and amortization................... (857,344)
----------
$ 806,503
==========
</TABLE>

Depreciation and amortization of property and equipment in 1997 totaled
$177,150.

(3) INDEBTEDNESS

Auto Service's long-term debt consisted of the following at December 31,
1997:

<TABLE>
<S> <C>
Note payable to bank, payable in monthly installments of $1,042,
including interest at 10.5%, maturing August 1998.............. $ 8,333
Note payable to unrelated individuals payable in monthly
installments of $2,794, including interest at 10%, maturing
November 2008. Guaranteed by the owners of Auto Service and
secured by a Pledge Agreement for all authorized shares of
stock of Auto Service.......................................... 221,268
--------
Total long-term debt.......................................... 229,601
Less installments due within one year........................... (20,275)
--------
Long-term debt, excluding current installments................ $209,326
========
</TABLE>

F-75
<PAGE>

ASC TRANSPORTATION SERVICES AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Annual maturities of long-term debt for the next five years and thereafter
are as follows:

<TABLE>
<S> <C>
1998................................................................ $ 20,275
1999................................................................ 13,193
2000................................................................ 14,574
2001................................................................ 16,100
2002................................................................ 17,786
Thereafter.......................................................... 147,673
--------
$229,601
========
</TABLE>

(4) LEASES

Auto Service is obligated under various capital leases for vehicles,
equipment and furniture and fixtures that expire at various dates ranging
between January 1998 to August 2003.

Auto Service is obligated to the stockholder under a capital lease for a
vehicle through December 1999.

Following is a summary of property and equipment held under the capital
leases at December 31, 1997.

<TABLE>
<S> <C>
Transportation and towing equipment.............................. $1,136,544
Other equipment.................................................. 55,350
Furniture and fixtures........................................... 18,240
----------
1,210,134
Less accumulated amortization.................................... (519,886)
----------
$ 690,248
==========
</TABLE>

Auto Service leases the office building and a vehicle used for its
operations from the stockholder. These leases are classified as operating
leases and have been included in the data presented below. The building lease
is for an initial three-year term expiring in May 1998 with an option to renew
for five years. The lease was renewed on January 1997 and expires April 2003.
The vehicle lease has indefinite terms with a 30 day notice. Auto Service is
responsible for all operating costs related to these properties.

Auto Service also leases another building used for its operations from an
unrelated party. This lease is classified as an operating lease and is
included in the data presented below. The lease expires October 2002.

Total rent expense for 1997 was $151,393, including $64,654 paid to the
stockholder.

Future minimum lease payments under noncancelable operating leases (with
initial or remaining lease terms in excess of one year) and future minimum
capital lease payments as of December 31, 1997 are:

<TABLE>
<CAPTION>
CAPITAL OPERATING
LEASES LEASES
-------- ---------
<S> <C> <C>
1998..................................................... $310,859 106,800
1999..................................................... 253,159 106,800
2000..................................................... 132,122 106,800
2001..................................................... 85,626 106,800
2002..................................................... 68,505 98,500
Thereafter............................................... 28,795 19,000
-------- -------
Total.................................................. 879,066 544,700
=======
Less amount representing interest........................ (139,541)
--------
Present value of net minimum capital lease payments...... $739,525
========
</TABLE>

F-76
<PAGE>

ASC TRANSPORTATION SERVICES AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(5) INCOME TAXES

Income tax expense for the year ended December 31, 1997 consists of:

<TABLE>
<S> <C>
Current:
Federal......................................................... $42,934
State........................................................... 12,948
-------
55,882
Deferred.......................................................... (6,786)
-------
$49,096
=======
</TABLE>

The following table reconciles the expected tax expense at the Federal
statutory tax rate to the effective tax rate.

<TABLE>
<S> <C>
Computed expected tax expense.................................... $ 55,382
State income taxes, net of Federal benefit....................... 8,546
Meals and entertainment.......................................... 1,372
Adjustment to prior years' taxes................................. (17,770)
Other............................................................ 1,566
--------
$ 49,096
========
</TABLE>

The tax effects of temporary differences that give rise to deferred tax
liabilities as of December 31, 1997 are presented below:

<TABLE>
<S> <C>
Deferred tax liability:
Property and equipment, due to differences in depreciation lives
and methods.................................................... $82,965
-------
Net deferred tax liability.................................... $82,965
=======
</TABLE>

At December 31, 1996, the net deferred tax liability was $89,751 and there
was no recorded valuation allowance.

In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred
tax assets will not be realized. The ultimate realization of deferred tax
assets is dependent upon the generation of future taxable income during the
periods in which those temporary differences become deductible. Management
considers the projected future taxable income and tax planning strategies, as
well as carryback opportunities, in making this assessment. Based upon the
level of historical taxable income, projections for future taxable income and
carryback opportunities over the periods in which the deferred tax assets are
deductible, management believes it is more likely than not Auto Service will
realize the benefits of these deductible differences. The amount of the
deferred tax asset considered realizable, however, could be reduced in the
near term if estimates of future taxable income are reduced.

(6) NON-CASH TRANSACTIONS

During 1997, Auto Service leased $66,561 of certain vehicles through lending
institutions.

F-77
<PAGE>

ASC TRANSPORTATION SERVICES AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(7) CONCENTRATION OF BUSINESS RISKS

For 1997, 33% of Auto Service's revenues were derived from one customer,
Automobile Association of America (AAA). The loss of this customer could
significantly effect Auto Service's performance.

(8) SUBSEQUENT EVENT

During February 1998, the stockholder entered into a definitive agreement to
sell Auto Service to United Road Services, Inc. The sales transaction,
affected through a combination of cash and common stock of United Road
Service, Inc., is contingent and effective upon the initial public offering of
the common stock of United Road Service, Inc. The anticipated selling price of
Auto Service exceeds its net assets as of December 31, 1997.

Concurrently with the acquisition, United Road Service, Inc. will enter into
agreements with the stockholder to lease land and buildings used in Auto
Service's operations for negotiated amounts and terms.

F-78
<PAGE>

INDEPENDENT AUDITORS' REPORT

The Stockholder
Keystone Towing, Inc.:

We have audited the accompanying balance sheets of Keystone Towing, Inc.
("Keystone") as of December 31, 1996 and 1997, and the related statements of
operations, stockholder's equity, and cash flows for the years then ended.
These financial statements are the responsibility of Keystone's management.
Our responsibility is to express an opinion on these financial statements
based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Keystone Towing, Inc. as
of December 31, 1996 and 1997, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted
accounting principles.

/s/ KPMG Peat Marwick LLP

Albany, New York
January 16, 1998

F-79
<PAGE>

KEYSTONE TOWING, INC.

BALANCE SHEETS

DECEMBER 31, 1996 AND 1997

<TABLE>
<CAPTION>
1996 1997
-------- ----------
<S> <C> <C>
ASSETS
Current assets:
Cash..................................................... $193,165 $ 71,634
Trade accounts receivable................................ 97,368 167,192
Accounts receivable from employees....................... 3,443 2,989
Inventory................................................ 15,000 60,990
Note receivable--other................................... -- 5,000
Prepaid and other current assets (note 2)................ 47,684 98,111
-------- ----------
Total current assets................................... 356,660 405,916
Property and equipment, net (notes 3, 6 and 7)............. 598,850 1,038,776
Other non-current assets (note 4).......................... -- 82,256
-------- ----------
Total assets........................................... $955,510 $1,526,948
======== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Current installments of notes payable (note 6)........... 94,782 278,765
Borrowings under lines of credit (note 6)................ 7,558 73,297
Current installment of note payable to stockholder (notes
6 and 10)............................................... 31,724 35,046
Accounts payable......................................... 88,176 200,779
Accrued payroll and related costs........................ 53,309 52,157
Payable to affiliate (note 10)........................... -- 40,909
Other liabilities (note 5)............................... 301,965 326,778
-------- ----------
Total current liabilities.............................. 577,514 1,007,731
Long-term liabilities:
Notes payable, excluding current installments (note 6)... 156,940 349,982
Note payable to stockholder, excluding current
installments (notes 6 and 10)........................... 50,314 15,268
-------- ----------
Total liabilities...................................... 784,768 1,372,981
-------- ----------
Stockholder's equity:
Common stock, $2.00 par value. Authorized 100,000 shares;
issued and outstanding 10,000 shares in 1996 and 1997... 20,000 20,000
Retained earnings........................................ 150,742 133,967
-------- ----------
Total stockholder's equity............................. 170,742 153,967
-------- ----------
Total liabilities and stockholder's equity............. $955,510 $1,526,948
======== ==========
</TABLE>

See accompanying notes to financial statements.

F-80
<PAGE>

KEYSTONE TOWING, INC.

STATEMENTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 1996 AND 1997

<TABLE>
<CAPTION>
1996 1997
---------- ----------
<S> <C> <C>
Net revenue............................................. $3,369,354 $3,943,073
Cost of revenue......................................... 2,132,646 2,606,452
---------- ----------
Gross profit........................................ 1,236,708 1,336,621
Selling, general and administrative expenses............ 934,105 1,140,252
---------- ----------
Income from operations.............................. 302,603 196,369
---------- ----------
Other income (expense):
Interest expense...................................... (28,067) (71,451)
Interest income....................................... 2,534 1,556
Gain on sale of assets................................ -- 36,275
Other (note 10)....................................... -- 76,312
---------- ----------
Net income.......................................... $ 277,070 $ 239,061
========== ==========
</TABLE>

See accompanying notes to financial statements.

F-81
<PAGE>

KEYSTONE TOWING, INC.

STATEMENTS OF STOCKHOLDER'S EQUITY

YEARS ENDED DECEMBER 31, 1996 AND 1997

<TABLE>
<CAPTION>
TOTAL
COMMON RETAINED STOCKHOLDER'S
STOCK EARNINGS EQUITY
------ --------- -------------
<S> <C> <C> <C>
Balance at December 31, 1995.................... 20,000 $ 88,465 $ 108,465
Net income--1996................................ -- 277,070 277,070
Owner Distribution.............................. -- (214,793) (214,793)
------ --------- ---------
Balance at December 31, 1996.................... 20,000 150,742 170,742
Net income--1997................................ -- 239,061 239,061
Owner distribution.............................. -- (255,836) (255,836)
------ --------- ---------
Balance at December 31, 1997.................... 20,000 $ 133,967 $ 153,967
====== ========= =========
</TABLE>

See accompanying notes to financial statements.

F-82
<PAGE>

KEYSTONE TOWING, INC.

STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 1996 AND 1995

<TABLE>
<CAPTION>
1996 1997
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income............................................. $ 277,070 $ 239,061
Adjustments to reconcile net income to net cash
provided by operating activities, net of effects of
acquisitions:
Depreciation and amortization........................ 155,367 280,075
Gain on sale of assets............................... -- (36,275)
Increase in trade accounts receivable................ (11,892) (69,824)
Decrease (increase) in accounts receivable from
employees........................................... (2,015) 454
Increase in inventory................................ (5,000) (45,990)
(Increase) decrease in prepaid and other current
assets.............................................. 10,619 (50,427)
Increase in accounts payable......................... 48,580 112,603
(Decrease) increase in accrued payroll and related
costs............................................... 16,970 (1,152)
Increase in payable to affiliate..................... -- 40,909
Increase in other liabilities........................ 44,984 24,813
--------- ---------
Net cash provided by operating activities.......... 534,683 494,247
--------- ---------
Cash flows from investing activities:
Purchases of property and equipment.................... (97,818) (396,324)
Proceeds from sale of assets........................... -- 40,000
(Increase) decrease in note receivable--other.......... 24,351 (5,000)
--------- ---------
Net cash used in investing activities.............. (73,467) (361,324)
--------- ---------
Cash flows from financing activities:
Proceeds from long-term debt........................... -- 13,289
Principal payments on long-term debt................... (146,768) (77,646)
Borrowings on line of credit, net...................... 7,557 65,739
Owner distributions.................................... (214,793) (255,836)
--------- ---------
Net cash used in financing activities.............. (354,004) (254,454)
--------- ---------
Net (decrease) increase in cash.......................... 107,212 (121,531)
Cash at beginning of year................................ 85,953 193,165
--------- ---------
Cash at end of year...................................... $ 193,165 $ 71,634
========= =========
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest............................................. $ 28,067 $ 71,451
========= =========
</TABLE>

See accompanying notes to financial statements.

F-83
<PAGE>

KEYSTONE TOWING, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1996 AND 1997

(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Description of Business

Keystone Towing, Inc. ("Keystone") was founded in 1988. Keystone's primary
business is towing, impounding and storing vehicles for municipal,
governmental and commercial customers in Southern California. Keystone has one
facility in Los Angeles. It operates approximately 20 vehicles. Keystone
became an S-corporation under California law on June 3, 1993.

(b) Revenue Recognition

Keystone operates as one segment related to transportation of vehicles and
equipment for customers.

Keystone's revenue is derived from customers who require a towing service,
fees related to the storage of vehicles that have been towed, and auction
sales of unclaimed vehicles. Towing revenue is recognized at the completion of
each towing engagement, storage fees are accrued over the period the vehicles
are held in the impound facility, and revenue from auction sales are recorded
when title to the vehicles has been transferred. Expenses related to the
generation of revenue are recognized as incurred.

Inventories consist primarily of spare parts used for repair and maintenance
of transportation equipment. Inventories are stated at the lower of cost or
market.

(d) Property and Equipment

Property and equipment are stated at cost. Depreciation is determined for
financial statement and tax purposes using the double-declining balance method
over the estimated useful lives of the individual assets or, for leasehold
improvements, over the terms of the related leases if shorter. For financial
statement purposes, Keystone provides for depreciation of property and
equipment over the following estimated useful lives:

(e) Fair Value of Financial Instruments

Due to the short-term nature of various financial instruments and the
current incremental borrowing rates available to Keystone on bank loans with
similar terms and maturities, the fair value of Keystone's financial
instruments approximates their carrying values.

(f) Income Taxes

Effective June 3, 1993, Keystone elected to file its Federal income tax
returns under the S-corporation provisions of the Internal Revenue Code and
was granted S-corporation status for California state tax purposes. In
accordance with the Federal provisions, corporate earnings flow through and
are taxed solely at the stockholder level.

F-84
<PAGE>

KEYSTONE TOWING, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

Under the provisions of the California franchise tax law, S-corporation
earnings are assessed a 1.5% surtax at the corporate level and flow through to
the stockholder to be taxed at the individual level. Accordingly, no income
tax expense has been recorded for the years ended December 31, 1996 and 1997.

(g) Use of Estimates

Management of Keystone has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities to prepare these financial statements in
conformity with generally accepted accounting principles. Actual results could
differ from those estimates.

(2) PREPAID AND OTHER CURRENT ASSETS

Prepaid and other current assets as of December 31, 1996 and 1997 consist
of:

<TABLE>
<CAPTION>
1996 1997
------- -------
<S> <C> <C>
Prepaid insurance........................................... $ 6,750 $13,549
Prepaid vehicle registration................................ -- 22,010
Miscellaneous deposits...................................... 32,304 39,657
Prepaid property taxes...................................... 3,432 2,631
Other....................................................... 5,198 20,264
------- -------
$47,684 $98,111
======= =======
</TABLE>

(3) PROPERTY AND EQUIPMENT

Property and equipment at December 31, 1996 and 1997 consists of the
following:

<TABLE>
<CAPTION>
1996 1997
---------- ----------
<S> <C> <C>
Automobiles and transportation equipment............. $ 578,891 $1,025,234
Furniture and fixtures............................... 129,592 144,361
Machinery and equipment.............................. 240,653 270,163
Leasehold improvements............................... 273,137 460,641
---------- ----------
Total.............................................. 1,222,273 1,900,399
Less accumulated depreciation and amortization....... (623,423) (861,623)
---------- ----------
$ 598,850 $1,038,776
========== ==========
</TABLE>

Depreciation and amortization of property and equipment in 1996 and 1997
totaled $155,367 and $274,259, respectively.

(4) OTHER NON-CURRENT ASSETS

Other non-current assets at December 31, 1997 consist of the following (see
note 8):

<TABLE>
<S> <C>
Goodwill............................................................ $85,572
Covenant-not-to-compete............................................. 2,500
-------
Total............................................................. 88,072
Less accumulated amortization....................................... (5,816)
-------
$82,256
=======
</TABLE>

F-85
<PAGE>

KEYSTONE TOWING, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

Goodwill, which represents the excess of purchase price over the fair value
of net assets acquired, and covenant-not-to-compete are amortized on a
straight-line basis over fifteen and five years, respectively. Amortization
expense for other non-current assets totaled $5,816 in 1997.

(5) OTHER LIABILITIES

Other liabilities at December 31, 1996 and 1997 consist of:

<TABLE>
<CAPTION>
1996 1997
-------- --------
<S> <C> <C>
Retirement savings plan payable........................... $ 70,964 $125,261
Parking and other taxes payable(a)........................ 123,647 107,734
Lien sale payable(b)...................................... 75,299 87,938
Insurance premiums payable................................ 3,745 4,220
Other..................................................... 28,310 1,625
-------- --------
$301,965 $326,778
======== ========
</TABLE>
- --------
(a) Parking and other taxes payable consist primarily of obligations to remit
standard parking fees to the City of Los Angeles.
(b) Lien sale payables arise from Keystone's obligation to remit to the state
a portion of proceeds generated by the sale of cars impounded by Keystone
but left unclaimed.

(6) INDEBTEDNESS

Keystone has available a $75,000 line of credit with a bank, expiring
January 16, 1998. Interest is payable at 10.5%. Total borrowings under this
unsecured line of credit as of December 31, 1996 and 1997 amounted to $7,558
and $73,297, respectively.

Keystone's long-term debt at December 31, 1996 and 1997 consists of:

<TABLE>
<CAPTION>
1996 1997
--------- ---------
<S> <C> <C>
Note payable to stockholder, payable in monthly
installments of $3,208, including interest at 10.06%,
maturing May 1999.................................... $ 82,038 $ 50,314
Notes payable to banks for various property and
equipment, payable in monthly installments ranging
from $427 to $5,527, including interest ranging from
8 1/2% to 11%, and maturing at dates ranging from
January, 1998 to April, 2002. Secured by the related
assets............................................... 209,136 599,407
Borrowings under a capital lease agreement, payable in
monthly installments of $1,492, including interest at
11%, maturing October 1999. Secured by the related
asset ............................................... 42,586 29,340
--------- ---------
Total long-term debt.............................. 333,760 679,061
Less installments due within one year............... (126,506) (313,811)
--------- ---------
Long-term debt, excluding current installments.... $ 207,254 $ 365,250
========= =========
</TABLE>

F-86
<PAGE>

KEYSTONE TOWING, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

Annual maturities for the next five years are as follows:

(7) LEASES

Keystone leases the building used for its operations under a non-cancelable
lease agreement. The lease is classified as an operating lease. The agreement
provides for monthly rental payment of $39,630 through January 2002. Keystone
is responsible for all operating costs related to the property. Total rent
expense, including common area maintenance charges, for 1996 and 1997 was
$488,000 and $504,000, respectively.

Keystone is obligated under a capital lease for transportation equipment
that expires in October 1999. The capital lease obligation is included in the
long-term debt table and schedule of maturities in note 6.

Future minimum lease payments under noncancellable operating leases (with
initial or remaining lease terms in excess of one year) as of December 31,
1997 are:

(8) NON-CASH TRANSACTIONS

During March 1997, Keystone acquired, under the purchase method of
accounting, certain assets of a competitor for consideration of $203,702 in
the form of assumed liabilities of the selling party. The assets acquired were
recorded at their estimated fair value of $115,000. In addition, Keystone
secured a five year non-competition agreement from the selling party valued at
$2,500. The difference between the consideration given and the fair value of
assets acquired was recorded as goodwill in the amount of $85,572 (see note
4).

During 1997, Keystone leased $205,956 of various automobile and
transportation equipment through several lending institutions (see note 6).

(9) EMPLOYEE BENEFITS

Keystone has a retirement savings and disability plan pursuant to section
414(i) of the Internal Revenue Code that is available to all employees who
have at least 1,000 hours of service to Keystone during the plan year and are
employed on the last day of the year. This discretionary contribution plan
allows the employer discretion as to the amount to be contributed each year.
Keystone's contribution payable, included in other accrued liabilities on the
accompanying balance sheet, amounted to $70,964 and $125,261 as of December
31, 1996 and 1997, respectively (see note 5).

F-87
<PAGE>

KEYSTONE TOWING, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(10) RELATED PARTY TRANSACTIONS

Keystone is indebted to the sole stockholder under an unsecured note,
bearing interest at 10.06% per annum (see note 6).

In the normal course of business Keystone performs subcontract towing
services for a related party company owned by another related party. Keystone
recognizes revenue on the towing services performed on behalf of the related
party net of subcontract expenses. The net revenue, recognized on subcontract
towing services performed amounted to approximately $17,000 and $19,000 for
1996 and 1997, respectively, and is included in net revenue on the statements
of operations. Additionally, Keystone recognized management fee income for
services performed on behalf of the related party company. Management fee
income amounted to approximately $0 and $16,000 for 1996 and 1997,
respectively.

The owner of Keystone is also a 10% owner of an Official Police Garage
("OPG"). Keystone recognizes management fee income for services performed on
behalf of the related party company. Management fee income amounted to
approximately $0 and $60,000 for 1996 and 1997, respectively.

The payable to related party of $40,909 on the accompanying balance sheet as
of December 31, 1997 represents miscellaneous obligations to the OPG discussed
above.

(11) CONTINGENT LIABILITIES

Various legal claims arise against Keystone during the normal course of
business. In the opinion of management, liabilities, if any, arising from
proceedings would not have a material effect on the financial statements.

(12) CONCENTRATION OF BUSINESS RISKS

Revenue generated from Keystone's exclusive agreement with the LAPD
discussed in note 1 represented approximately 30% of total revenues in 1996
and 27% in 1997. The loss of such business could significantly effect
Keystone's performance.

(13) SUBSEQUENT EVENT

During February 1998, the stockholder entered into a definitive agreement to
sell Keystone to United Road Services, Inc. The sales transaction, affected
through a combination of cash and common stock of United Road Services, Inc.,
is contingent upon the initial public offering of the common stock of United
Road Services, Inc., and the consent of the Los Angeles City Council under
Keystone's contract to provide police towing for a specified police district
in Los Angeles. The anticipated selling price of Keystone exceeds its net
assets as of December 31, 1997. Prior to the sale of Keystone, the stockholder
intends to take a distribution of not more than $150,000.

F-88
<PAGE>

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

NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS,
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY OF THE UNDERWRITERS. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN THOSE TO
WHICH IT RELATES OR AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, TO
ANY PERSON IN ANY JURISDICTION WHERE SUCH OFFER OR SOLICITATION WOULD BE
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.

-----------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
Prospectus Summary........................................................ 3
Risk Factors.............................................................. 8
The Company............................................................... 16
Use of Proceeds........................................................... 18
Dividend Policy........................................................... 18
Capitalization............................................................ 19
Dilution.................................................................. 20
Selected Financial Data................................................... 21
Management's Discussion and Analysis of Financial Condition and Results of
Operations............................................................... 23
Business.................................................................. 37
Management................................................................ 44
Certain Transactions...................................................... 46
Principal Stockholders.................................................... 50
Description of Capital Stock.............................................. 51
Shares Eligible for Future Sale........................................... 54
Underwriting.............................................................. 55
Legal Matters............................................................. 56
Experts................................................................... 57
Additional Information.................................................... 57
Index to Financial Statements............................................. F-l
</TABLE>

-----------

UNTIL (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS
EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATIONS OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.

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

5,500,000 SHARES

[LOGO] UNITED ROAD
SERVICES INC.

COMMON STOCK

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

PROSPECTUS

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

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION

CREDIT SUISSE FIRST BOSTON

BANCAMERICA ROBERTSON STEPHENS

, 1998

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth the costs and expenses payable by the
Registrant in connection with the sale of the Common Stock being registered
hereby, other than underwriting commissions and discounts.

<TABLE>
<CAPTION>
ITEM AMOUNT
---- ----------
<S> <C>
SEC registration fee......................................... $ 24,256
NASD approval fees and expenses.............................. 8,723
Nasdaq National Market Listing Fee........................... 81,625
Printing and engraving expenses.............................. 200,000*
Legal fees and expenses...................................... 575,000*
Accounting fees and expenses................................. 600,000*
Transfer Agent and Registrar fees............................ 6,500*
Miscellaneous expenses....................................... 3,896
----------
Total...................................................... $1,500,000*
==========
</TABLE>
--------
* Estimated

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS,

The Company has included in its Certificate of Incorporation and Bylaws
provisions to (i) eliminate the personal liability of its directors for
monetary damages resulting from breaches of their fiduciary duty to the extent
permitted by the General Corporation Law of the State of Delaware (the "DGCL")
and (ii) indemnify its directors and officers to the fullest extent permitted
by the DGCL, including circumstances in which indemnification is otherwise
discretionary.

Section 145 of the DGCL permits a corporation, under specified
circumstances, to indemnify its directors, officers, employees or agents
against expenses (including attorneys' fees), judgments, fines and amounts
paid in settlements actually and reasonably incurred by each in connection
with any action, suit or proceeding brought by third parties by reason of the
fact that they were or are directors, officers, employees or agents of the
corporation, if such directors, officers, employees or agents acted in good
faith and in a manner they reasonably believed to be in or not opposed to the
best interests of the corporation and, with respect to any criminal action or
proceeding, had no reason to believe their conduct was unlawful. In a
derivative action, i.e., one by or in the right of the corporation,
indemnification may be made only for expenses (including attorneys' fees)
actually and reasonably incurred by directors, officers, employees or agents
in connection with the defense or settlement of an action or suit, and only
with respect to a matter as to which they shall have acted in good faith and
in a manner they reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification shall be made if
such person shall have been adjudged liable to the corporation, unless and
only to the extent that the court in which the action or suit was brought
shall determine upon application that the defendant directors, officers,
employees or agents are fairly and reasonably entitled to indemnity for such
expenses despite such adjudication of liability.

The Company has entered into Indemnification Agreements with its directors
and certain key officers pursuant to which the Company is generally obligated
to indemnify its directors and such officers to the full extent permitted by
the DGCL as described above.

The Company intends to purchase insurance for its directors and officers
indemnifying them against certain civil liabilities, including liabilities
under the federal securities laws, which might be incurred by them in such
capacity.

II-1
<PAGE>

The Underwriting Agreement (Exhibit 1.1) provides for indemnification by the
Underwriters of the Company, its directors and officers, and by the Company of
the Underwriters, for certain liabilities, including liabilities arising under
the Securities Act of 1933, as amended (the "Securities Act"), and affords
certain rights of contribution with respect thereto.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

The information in this Item 15 gives effect to a 100-for-1 split of the
Common Stock effected on December 29, 1997 and a 3.72-for-1 split of the
Common Stock effected on February 23, 1998.

Since its incorporation in July 1997, the Registrant has issued and sold the
following unregistered securities the purchasers of which were all accredited
investors:

(1) In August 1997, in connection with its formation, the Company issued
930,000 shares of Common Stock to each of Mark McKinney and Ross Berner for
aggregate cash consideration of $50,000.

(2) In November 1997, pursuant to a Stock Purchase and Restriction
Agreement between the Company and Edward T. Sheehan, the Company issued
744,000 shares of Common Stock to Mr. Sheehan for cash consideration of
$20,000.

(3) In January 1998, the Company issued an aggregate of 218,736 shares of
Common Stock to private investors for cash consideration of $735,000. Such
shares were issued pursuant to Subscription Agreements between the Company
and each of the investors.

The sales of the above securities were deemed to be exempt from registration
under the Securities Act in reliance on Section 4(2) of the Securities Act or
Regulation D promulgated thereunder as transactions by an issuer not involving
a public offering. The recipients of securities in each such transaction
represented their intention to acquire the securities for investment only and
not with a view to or for sale in connection with any distribution thereof and
appropriate legends were attached to the share certificates issued in such
transactions.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) EXHIBITS

<TABLE>
<CAPTION>
NUMBER DESCRIPTION OF DOCUMENT
------ -----------------------
<C> <S>
1.1 Form of Underwriting Agreement.*
2.1 Agreement and Plan of Reorganization dated as of February 23, 1998, by
and among the Company, Northland Auto Transporters, Inc. and the
Stockholders named therein.(1)+
2.2 Agreement and Plan of Reorganization dated as of February 23, 1998, by
and among the Company, Northland Fleet Leasing, Inc. and the
Stockholders named therein.(1)+
2.3 Agreement and Plan of Reorganization dated as of February 23, 1998, by
and among the Company, Falcon Towing and Auto Delivery, Inc. and the
Stockholder named therein.(1)+
2.4 Agreement and Plan of Reorganization dated as of February 23, 1998, by
and among the Company, Smith-Christensen Enterprises, Inc. and City
Towing, Inc. and the Stockholder named therein.(1)+
2.5 Agreement and Plan of Reorganization dated as of February 23, 1998, by
and among the Company, Caron Auto Works, Inc. and the Stockholders
named therein.(1)+
2.6 Agreement and Plan of Reorganization dated as of February 23, 1998, by
and among the Company, Caron Auto Brokers, Inc. and the Stockholders
named therein.(1)+
2.7 Agreement and Plan of Reorganization dated as of February 23, 1998, by
and among the Company, Absolute Towing and Transporting, Inc. and the
Stockholder named therein.(1)+
2.8 Agreement and Plan of Reorganization dated as of February 23, 1998, by
and among the Company, Keystone Towing, Inc. and the Stockholder named
therein.(1)+
2.9 Agreement and Plan of Reorganization dated as of February 23, 1998, by
and among the Company, ASC Transportation Services, Auto Service Center
and the Stockholders named therein.(1)+
</TABLE>

II-2
<PAGE>

<TABLE>
<CAPTION>
NUMBER DESCRIPTION OF DOCUMENT
------ -----------------------
<C> <S>
2.10 Agreement and Plan of Reorganization dated as of February 23, 1998, by
and among the Company, Silver State Tow & Recovery, Inc. and the
Stockholder named therein.(1)+
3.1 Amended and Restated Certificate of Incorporation of the Company.+
3.2 Amended and Restated Bylaws of the Company.+
4.1 Specimen Common Stock Certificate.*
5.1 Opinion of Howard, Rice, Nemerovski, Canady, Falk & Rabkin, A
Professional Corporation, as to the validity of the issuance of the
securities registered hereby.*
10.1 United Road Services, Inc. 1998 Stock Option Plan.+
10.2 Form of Stock Purchase and Restriction Agreement between the Company
and Edward Sheehan.+
10.3 Form of Employment Agreement between the Company and Edward T.
Sheehan.+
10.4 Form of Employment Agreement between the Company and Mark McKinney.+
10.5 Form of Employment Agreement between the Company and Ross Berner.+
10.6 Form of Employment Agreement between the Company and Allan D. Pass.+
10.7 Form of Employment Agreement between the Company and Donald J. Marr.+
10.8 Form of Employment Agreement between the Company and Edward Morawski.
10.9 Form of Consulting Agreement between the Company and Todd Q. Smart.
10.10 Form of Consulting Agreement between the Company and Mark Henninger.*
10.11 Form of Promissory Note between the Company and Mark McKinney.+
10.12 Form of Promissory Note between the Company and Ross Berner.+
10.13 Form of Registration Rights Agreement between the Company and
Stockholders named therein.
10.14 Form of Indemnification Agreement.*
10.15 Form of Lease between the Company and Edward Morawski.
10.16 Form of Lease between the Company and Exodus Holdings LLC.
24.1 Consent of Howard, Rice, Nemerovski, Canady, Falk & Rabkin, A
Professional Corporation (included in Exhibit 5.1).
24.2 Consent of KPMG Peat Marwick LLP.
25.1 Powers of Attorney (included on signature page).+
99.1 Consent of Grace M. Hawkins to be named as a director.+
99.2 Consent of Mark Henninger to be named as a director.+
99.3 Consent of Donald F. Moorehead, Jr. to be named as a director.+
99.4 Consent of Edward Morawski to be named as a director.+
99.5 Consent of Todd Q. Smart to be named as a director.+
99.6 Consent of Edward Smith to be named as a director.+
</TABLE>

- --------
*To be filed by amendment.

+Previously filed.
(1) Upon request, the Company will furnish supplementally to the Securities and
Exchange Commission a copy of omitted schedules.

(b) FINANCIAL STATEMENT SCHEDULES

All schedules are omitted because they are inapplicable or the requested
information is shown in the financial statements of the registrant or related
notes thereto.

II-3
<PAGE>

ITEM 17. UNDERTAKINGS.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in Item 14, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement: (i) to include any
prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii)
to reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement; (iii) to include any material information with
respect to the plan of distribution not previously disclosed in the
registration statement or any material change to such information in the
registration statement.

(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.

(4) That for purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in the
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.

(5) That for the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therewith, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.

II-4
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment No. 1 to Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Albany, State of New York, on the 2nd day of April, 1998.

United Road Services, Inc.

By: /s/ Edward T. Sheehan
---------------------------------
EDWARD T. SHEEHAN
CHAIRMAN OF THE BOARD,
CHIEF EXECUTIVE OFFICER
AND SECRETARY

Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.

SIGNATURE TITLE DATE

/s/ Edward T. Sheehan Chairman of the Board
- ------------------------- Chief Executive Officer, April 2, 1998
EDWARD T. SHEEHAN and Secretary (Principal
Executive Officer)

Senior Vice President
/s/ * and Chief Financial April 2, 1998
- ------------------------- Officer (Principal
DONALD J. MARR Financial and Accounting
Officer)

Director
/s/ * April 2, 1998
- -------------------------
ROSS BERNER

Director
/s/ * April 2, 1998
- -------------------------
MARK MCKINNEY

*By: /s/ Edward T.
Sheehan
- -------------------------

EDWARD T. SHEEHAN,
ATTORNEY-IN-FACT

II-5

<PAGE>

EXHIBIT 10.8

EMPLOYMENT AGREEMENT

This Employment Agreement (the "Agreement") by and between United Road
Services, Inc., a Delaware corporation (the "Company"), and Edward W. Morawski
("Founder") is hereby entered into and effective as of the date of the
consummation of the initial public offering of the common stock of the Company.
This Agreement hereby supersedes any other employment agreements or
understandings, written or oral, between the Company and Employee.

R E C I T A L S

The following statements are true and correct:

As of the date of this Agreement, the Company is engaged primarily in
the business of providing towing and transport services.

Founder is employed hereunder by the Company in a confidential
relationship wherein Founder, in the course of his employment with the Company,
has and will continue to become familiar with and aware of information as to the
Company's customers, specific manner of doing business, including the processes,
techniques and trade secrets utilized by the Company, and future plans with
respect thereto, all of which has been and will be established and maintained at
great expense to the Company; this information is a trade secret and constitutes
the valuable goodwill of the Company.

Therefore, in consideration of the mutual promises, terms, covenants and
conditions set forth herein and the performance of each, it is hereby agreed as
follows:

A G R E E M E N T S

1. Employment and Duties. The Company hereby employs Founder as a Vice
---------------------
President of the Company. As such, Founder shall have responsibilities, duties
and authority reasonably accorded to and expected of a Vice President and will
report directly to the Chief Executive Officer of the Company or such other
officer as shall be determined by the Chief Executive Officer of the Company.
Founder hereby accepts this employment upon the terms and conditions herein
contained and agrees to devote his working time, attention and efforts to
promote and further the business of the Company.

-1-
<PAGE>

2. Compensation. For all services rendered by Founder, the Company shall
------------
compensate Founder as follows:

(a) Base Salary. The base salary payable to Founder shall be
-----------
$150,000 per year, payable on a regular basis in accordance with the Company's
standard payroll procedures but not less than monthly. On at least an annual
basis, the board of directors of the Company (the "Board") will review Founder's
performance and may make increases to such base salary if, in its discretion,
any such increase is warranted. Such recommended increase would, in all
likelihood, require approval by the Board or a duly constituted committee
thereof. Founder shall be eligible for such bonuses, if any, as may be granted
to him from time to time by the Board.

(b) Founder Benefits and Other Compensation. Founder will, during
---------------------------------------
the Employment Term, have the right to receive such benefits as are generally
made available to full-time officers of the Company, including the right to
participate in any retirement plan or bonus plan that the Company may create. In
addition, or inclusive of such benefits, the Company will provide Founder with
the following:

(i) the opportunity to apply for coverage under the Company's
medical, life and disability plans, if any. If Founder is accepted for
coverage under such plans, the Company will provide to Founder and his
immediate family such coverage on the same terms as is customarily provided
by the Company to the plan participants as modified from time to time.

(ii) in addition to normal holidays recognized by the Company,
Founder will be entitled to three weeks paid vacation annually or such
other amount as may be afforded officers and key employees generally under
the Company's policies in effect from time to time (pro rated for any year
in which Founder is employed for less than the full year).

3. Term; Termination; Rights on Termination. The term of this Agreement
----------------------------------------
shall begin on the date hereof and continue for three (3) years (the "Initial
Term"), and, unless terminated sooner as herein provided, shall continue
thereafter on a year-to-year basis on the same terms and conditions contained
herein unless either party gives to the other party written notice of nonrenewal
of the Agreement at least ninety (90) days prior to the end of the then-current
term. This Agreement and Founder's employment may be terminated in any one of
the followings ways:

-2-
<PAGE>

(a) Death. The death of Founder shall immediately terminate the
-----
Agreement with no severance compensation due to Founder's estate.

(b) Disability. This Agreement will terminate upon the permanent
----------
disability of Founder. Founder will be deemed permanently disabled for the
purpose of this Agreement if, in the good faith determination of the Board,
based on sound medical advice, Founder has become physically or mentally
incapable of performing his duties hereunder for a continuous period of one
hundred eighty (180) days, in which event Founder will be deemed permanently
disabled upon the expiration of such one hundred eighty (180) day period. Also,
Founder may terminate his employment hereunder if his health should become
impaired to an extent that makes the continued performance of his duties
hereunder hazardous to his physical or mental health or his life, provided that
Founder shall have furnished the Company with a written statement from a
qualified doctor to such effect and provided, further, that, at the Company's
request made within thirty (30) days of the date of such written statement,
Founder shall submit to an examination by a doctor selected by the Company who
is reasonably acceptable to Founder or Founder's doctor and such doctor shall
have concurred in the conclusion of Founder's doctor. In the event this
Agreement is terminated as a result of Founder's permanent disability, Founder
shall receive from the Company, in a lump-sum payment due within thirty (30)
days of the effective date of termination, an amount equal to the difference
between (a) the base salary at the rate then in effect for the lesser of (i)
whatever time period is remaining under the Initial Term of this Agreement and
(ii) one (1) year, minus (b) all payments in respect of Founder's salary payable
to Founder under the Company's disability insurance, if any, for the same
period.

(c) Good Cause. The Company may terminate the Agreement ten (10)
----------
days after written notice to Founder for good cause, which shall be: (1)
Founder's material and irreparable breach of this Agreement; (2) Founder's gross
negligence in the performance or intentional nonperformance (continuing for ten
(10) days after receipt of the written notice) of any of Founder's material
duties and responsibilities hereunder; (3) Founder's dishonesty, fraud or
misconduct with respect to the business or affairs of the Company which
materially and adversely affects the operations or reputation of the Company;
(4) Founder's conviction of a felony crime; (5) chronic alcohol abuse or illegal
drug abuse by Founder; or (6) any other termination in connection with the good
faith determination of the Board that Founder has engaged in any act that has a
material adverse effect on the business, affairs or reputation of the Company.
In the event of a termination for good cause, as enumerated above, Founder shall
have no right to any severance compensation.

-3-
<PAGE>

(d) Without Cause. At any time after the commencement of employment,
-------------
the Company may, without cause, terminate this Agreement and Founder's
employment, effective thirty (30) days after written notice is provided to the
Founder. Should Founder be terminated by the Company without cause, Founder
shall receive from the Company one hundred percent (100%) of Founder's base
salary at the rate then in effect for whatever time period is remaining under
the Initial Term of this Agreement in either of the following payment forms, at
the Company's sole discretion: (x) a discounted lump sum payment due on the
effective date of termination based upon then current prime rate as reported in
the Wall Street Journal, or (y) periodic payments, over the period remaining
-------------------
under the Initial Term of the Agreement, in accordance with the payment schedule
set forth in Section 2(a) above. Notwithstanding the foregoing, the Company
immediately may cease such periodic payments in the event that, following
termination pursuant to this Section 3(d), Founder makes any disparaging remarks
to any third party regarding the Company.

(e) Termination by Founder Without Cause. If Founder resigns or
------------------------------------
otherwise terminates his employment Founder shall receive no severance
compensation.

Upon termination of this Agreement for any reason provided in this
Section 3, Founder shall be entitled to receive all compensation earned and all
benefits and reimbursements vested or due through the effective date of
termination. Additional compensation subsequent to termination, if any, will be
due and payable to Founder only to the extent and in the manner expressly
provided above. All other rights and obligations of the Company and Founder
under this Agreement shall cease as of the effective date of termination, except
that the Company's obligations under paragraph 8 herein and Founder's
obligations under paragraphs 4, 5, 6, 7, 8 and 9 herein shall survive such
termination in accordance with their terms.

4. Return of Company Property. All records, designs, patents, business
--------------------------
plans, financial statements, manuals, memoranda, lists and other property
delivered to or compiled by Founder by or on behalf of the Company or its
representatives, vendors or customers which pertain to the business of the
Company shall be and remain the property of the Company, and be subject at all
times to its discretion and control. Likewise, all correspondence, reports,
records, charts, advertising materials and other similar data pertaining to the
business, activities or future plans of the Company which is collected by
Founder shall be delivered promptly to the Company without request by it upon
termination of Founder's employment.

-4-
<PAGE>

5. Noncompetition. During the term of his employment with the Company
--------------
(including the subsidiaries thereof) and for a period of one (1) year following
the effective date of his termination of employment for any reason whatsoever
(together, the "Noncompetition Period"), Founder agrees to be bound by each of
the provisions set forth in Section 13 of that certain Agreement and Plan of
Reorganization dated of even date herewith by and among the Company and the
"Stockholders" named therein (the "Reorganization Agreement"), to the extent
that such Noncompetition Period extends beyond the five (5) year time period
provided for in the Reorganization Agreement. It is specifically agreed that the
Noncompetition Period shall be computed by excluding from such computation any
time during which Founder is in violation of any provision of this Section 5.

6. Inventions. Founder shall disclose promptly to the Company any and
----------
all significant conceptions and ideas for inventions, improvements and valuable
discoveries, whether patentable or not, which are conceived or made by Founder,
solely or jointly with another, during the period of employment or within one
(1) year thereafter, and which are directly related to the business or
activities of the Company and which Founder conceives as a result of his
employment by the Company. Founder hereby assigns and agrees to assign all his
interests therein to the Company or its nominee. Whenever requested to do so by
the Company, Founder shall execute any and all applications, assignments or
other instruments that the Company shall deem necessary to apply for and obtain
Letters Patent of the United States or any foreign country or to otherwise
protect the Company's interest therein.

7. Trade Secrets. Founder agrees that he will not, during or after the
-------------
term of this Agreement with the Company, disclose the specific terms of the
Company's relationships or agreements with its respective significant vendors or
customers or any other significant and material trade secret of the Company,
whether in existence or proposed, to any person, firm, partnership, corporation
or business for any reason or purpose whatsoever.

8. Indemnification. In the event Founder is made a party to any
---------------
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by the Company
against Founder), by reason of the fact that he is or was performing services
within the course and scope of his employment with the Company under this
Agreement, then the Company shall indemnify Founder against all expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement, as
actually and reasonably incurred by Founder in connection therewith. Without
limiting the requirement above that Founder be performing services within the
course and scope of his employment, activities constituting violations of law or

-5-
<PAGE>

Company policy shall not constitute services within the course and scope of
Founder's employment. In the event that both Founder and the Company are made a
party to the same third-party action, complaint, suit or proceeding, the Company
agrees to engage competent legal representation, and Founder agrees to use the
same representation, provided that if counsel selected by the Company shall have
a conflict of interest that prevents such counsel from representing Founder,
Founder may engage separate counsel and the Company shall pay all attorneys'
fees of such separate counsel.

9. No Prior Agreements. Founder hereby represents and warrants to the
-------------------
Company that the execution of this Agreement by Founder and his employment by
the Company and the performance of his duties hereunder will not violate or be a
breach of any agreement with a former employer, client or any other person or
entity. Further, Founder agrees to indemnify the Company for any claim,
including, but not limited to, attorneys' fees and expenses of investigation, by
any such third party that such third party may now have or may hereafter come to
have against the Company based upon or arising out of any non-competition
agreement, invention or secrecy agreement between Founder and such third party
which was in existence as of the date of this Agreement.

10. Assignment; Binding Effect. Founder understands that he has been
--------------------------
selected for employment by the Company on the basis of his personal
qualifications, experience and skills. Founder agrees, therefore, he cannot
assign all or any portion of his performance under this Agreement. This
Agreement shall be binding upon, inure to the benefit of and be enforceable by
the parties hereto and their respective heirs, legal representatives, successors
and assigns.

11. Complete Agreement. This Agreement is not a promise of future
------------------
employment. Founder has no oral representations, understandings or agreements
with the Company or any of its officers, directors or representatives covering
the same subject matter as this Agreement. This written Agreement is the final,
complete and exclusive statement and expression of the agreement between the
Company and Founder and of all the terms of this Agreement, and it cannot be
varied, contradicted or supplemented by evidence of any prior or contemporaneous
oral or written agreements. This written Agreement may not be later modified
except by a further writing signed by a duly authorized officer of the Company
and Founder, and no term of this Agreement may be waived except by writing
signed by the party waiving the benefit of such term.

-6-
<PAGE>

12. Notice. Whenever any notice is required hereunder, it shall be given
------
in writing addressed as follows:

To the Company: United Road Services, Inc.
8 Automation Lane
Albany, NY 12205

with a copy to: Daniel J. Winnike, Esq.
Howard, Rice, Nemerovski, Canady,
Falk & Rabkin
A Professional Corporation
Three Embarcadero Center, 7th Floor
San Francisco, CA 94111

To Founder: Edward J. Morawski
Northland Auto Transporters, Inc.
31299 Mally Drive
Madison Heights, MI 48071

with a copy to: John Stevens, Esq.
Mathieson, Parr et al.
2555 Crooks
Troy, MI 48084

Notice shall be deemed given and effective three (3) days after the deposit in
the U.S. mail of a writing addressed as above and sent first class mail,
certified, return receipt requested, or when actually received. Either party may
change the address for notice by notifying the other party of such change in
accordance with this Section 12.

13. Severability; Headings. In the event any court of competent
----------------------
jurisdiction shall determine that the scope, time or territorial restrictions
set forth herein are unreasonable, then it is the intention of the parties that
such restrictions be enforced to the fullest extent which the court deems
reasonable, and the Agreement shall thereby be reformed. The paragraph headings
herein are for reference purposes only and are not intended in any way to
describe, interpret, define or limit the extent or intent of the Agreement or of
any part hereof.

-7-
<PAGE>

14. Guarantee. The Company hereby unconditionally guarantees the
---------
performance of the Company's obligations under this Agreement in accordance
with, and subject to, the terms hereof.

15. Governing Law. This Agreement shall in all respects be construed
-------------
according to the laws of the State of New York.

16. Counterparts. This Agreement may be executed simultaneously in two
------------
(2) or more counterparts, each of which shall be deemed an original and all of
which together shall constitute but one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

THE COMPANY

By:
-------------------------------
Edward T. Sheehan
Title: Chief Executive Officer

FOUNDER

-------------------------------
Edward W. Morawski

-8-

<PAGE>

EXHIBIT 10.9

CONSULTING AGREEMENT
--------------------

This Agreement by and between United Road Services, Inc., ("Company") and Todd
Smart ("Consultant") is entered into as of the consummation of the initial
public offering of the Company.

1. Engagement and Scope. The Company hereby engages Consultant and Consultant
--------------------
hereby accepts the engagement upon the terms and conditions hereinafter set
forth. Consultant shall consult, advise and assist the Company with respect to
towing, auto transport and related opportunities and its efforts to identify,
locate, evaluate, and acquire entities or their assets in these businesses.
Consultant shall perform such duties in connection with this engagement as the
Company or corporations affiliated with the Company may reasonably require.
Consultant, along with, Mark Henninger, shall have the exclusive right to
receive bonus compensation fees as provided in Paragraph 3c below for URSI
acquisitions during the term of this Agreement in the geographic area set forth
on Appendix I. In addition, Consultant shall have the exclusive right to
receive bonus compensation fees as provided in Paragraph 3c below for URSI
acquisitions of companies whose primary business is the provision of towing and
transport services for Insurance Auto Auctions.

2. Term. Subject only to the provisions for termination set forth in Paragraph
----
6 below, the term of Consultant's engagement hereunder to acquire towing, auto
transport and related businesses shall be for a period of three years beginning
on the date hereof, which will be automatically renewed for additional one year
terms thereafter unless the Company or Consultant terminates the Agreement with
at least thirty (30) days advance written notice.

3. Compensation.
------------

a. The Company shall reimburse Consultant for all ordinary and necessary
business expenses lawfully and reasonably incurred by Consultant in the
performance of his services pursuant to this Agreement. Such expenses may
include but are not necessarily limited to (i) telephone, photocopying, and
facsimile charges as well as postal and courier charges incurred on behalf of
the Company, (ii) economy class airfare, and (iii) reasonable hotel, meals, and
automobile travel expenses exclusively incurred for the benefit of the Company.
For the avoidance of doubt, all such expenses are subject to allocation if
incurred in part for third parties, personal purposes, or otherwise not
specifically and directly related to or exclusively incurred in furtherance of
Consultant's objectives under this Agreement.

-1-
<PAGE>

b. All reimbursable expenses shall be appropriately documented in
reasonable detail by Consultant upon submission of any request for
reimbursement, which submission shall be submitted monthly for any such expenses
incurred in the prior month. All documented expenses will be available and
subject to review and audit from time to time upon request by the Company.

c. In addition to the reimbursement of expenses provided for in
subparagraph (a) above, the Company agrees to pay Consultant a bonus consulting
fee, which shall be equal to two percent (2.0%) of the last twelve months
acquired gross revenues following completion of any acquisition entered into by
the Company or an affiliate of the Company resulting from the efforts and
services of Consultant during the period of Consultant's engagement hereunder.
To the extent that any acquisition is consummated by the Company and there is a
dispute between Consultant and any other party or parties regarding the payment
of the above-stated bonus consulting fee for such acquisition, then the Company,
in its sole discretion, will allocate such bonus consulting fee between
Consultant and such other party or parties to reflect the respective effort of
each such party in bringing such acquisition to completion. The above-mentioned
bonus consulting fees shall be distributed to Consultant within 30 days after
closing.

d. Any payment to Consultant contemplated hereunder shall be net of
applicable taxes, if any, whether income, sales, or otherwise which the Company
is required by law to withhold.

4. Extent of Service. Within the scope of the engagement, Consultant shall
-----------------
devote such time, attention and energy to the business of the Company, and
corporations affiliated with the Company, as shall be reasonably required in
order for Consultant to meet his objectives hereunder. The Company anticipates
that Consultant's efforts hereunder on an annual basis shall result in completed
acquisitions with an annual revenue goal which is mutually agreeable to
Consultant and Company. Consultant shall not commit any act, or make any
statement, which would be deleterious to the reputation and goodwill of the
Company or corporations affiliated with the Company. Outside the scope of the
engagement and excluding competitors of the Company, Consultant shall be free to
undertake other unrelated activities for remuneration on behalf of third
parties. A "competitor" of the Company for the purpose of this Agreement is
another company, partnership, entity, or person engaged in the towing, recovery
or auto transport business or providing any component aspect thereof.
Activities described on Schedule 13.1 to that certain Agreement and Plan of
Reorganization among the Company, Consultant and Absolute Towing and
Transporting, Inc. (the "Reorganization Agreement") shall not constitute a
violation of this Section 4.

-2-
<PAGE>

5. Disclosure of Information. Consultant recognizes and acknowledges that he
-------------------------
will have access to certain confidential information of the Company, and of
corporations affiliated with the Company, and that such information constitutes
valuable, special, and unique property of the Company, and such other
corporations. Consultant will not, during or after the term of this Agreement,
disclose any of such confidential information to any person, firm, corporation,
association or other entity, unless it is in the public domain or required by
law, except to authorized representatives of the Company and corporations
affiliated with the Company, for any reason or purpose whatsoever, or use such
information, other than in furtherance of this Agreement upon the written
authorization of the Company. In the event of a breach or threatened breach by
Consultant of the provisions of this paragraph, the Company, and corporations
affiliated with the Company, shall be entitled to injunctive relief or other
judicial restraint prohibiting Consultant from disclosing, or using, in whole or
in part, such confidential information. Nothing herein shall be construed as
prohibiting the Company, and corporations affiliated with the Company, from
pursuing any other remedies available to them for such breach or threatened
breach, including the recovery of damages from Consultant. The provisions of
this Paragraph 5 shall survive the dissolution or termination of this Agreement.

6. Termination.
-----------

a. In the event Consultant materially fails to observe or perform any of
the written duties required of him under this Agreement, or otherwise violates
the provisions of the Agreement, the Company may immediately terminate
Consultant's engagement under this Agreement subsequent to a written
notification of the material failure to perform, as per section 11, and a
reasonable period of time for corrective action.

b. Without cause, the Company may terminate Consultant upon six (6) months
prior written notice by the Company. In such event, the Company shall continue
to pay Consultant the compensation reflected in subparagraph 3(c) accrued prior
to such termination.

c. In the event of change in control of the Company, this Agreement shall
immediately terminate, provided, however, all outstanding amounts of advance
draw, bonus consulting fees, and expenses that arose prior to such change of
control shall become due and payable, in addition to a severance payment equal
to sixty (60) days pro-rata share of annual advance draw compensation. For the
purposes of this Agreement, a "change in control" of the Company shall be deemed
to have occurred if: (i) any person (other than any employee benefit plan of
the Company and its subsidiaries of the Company or any

-3-
<PAGE>

person organized, appointed, or established pursuant to the terms of any such
benefit plan) is or becomes the beneficial owner of securities of the Company
representing at least 50% of the combined voting power of the Company's then
outstanding securities, or (ii) there shall be consummated (x) any
consolidation, merger, share exchange or other business combination of the
Company in which the Company is not the continuing or surviving corporation or
pursuant to which shares of the Company's capital stock would be converted into
cash, securities, or other property, other than any of the foregoing events in
which the holders of the Company's capital stock immediately prior to such event
own not less than fifty percent (50%) of the capital stock of the surviving
corporation immediately after such event, or (y) any sale, lease, exchange, or
other transfer (in one transaction or a series of related transactions) of all,
or substantially all, of the consolidated assets of the Company.

d. In the event of a termination of Consultant's engagement in accordance
with the provisions of subparagraph (a) above, the Company shall have no further
obligation to Consultant, other than the amount owed to Consultant under 3(a)
and 3(c).

e. In the event of a pending acquisition which has not been consummated
prior to termination of Consultant's engagement by the Company in accordance
with the provisions of (b) or (c) above, and the acquisition is in fact
consummated no later than six (6) months after the termination of this
Agreement, the obligation of the Company to pay the bonus consulting fee
described in paragraph 3(c) above shall survive the termination of this
Agreement. For the avoidance of doubt, after said six (6) month period, any
outstanding obligation to Consultant pertaining to a pending acquisition shall
terminate.

f. Upon termination of this Agreement, for whatever reason, Consultant
will promptly deliver to Company all originals and copies, whether in note,
memo, or other document form or on film, video, audio, or computer tapes or
discs or otherwise of confidential information of the Company and of
corporations affiliated with the Company that are in Consultant's possession,
custody, or control whether prepared by Consultant or others. Confidential
information includes, but is not limited to, the name of any person, entity,
company, or business all or any part of which is or at any time was a candidate
for a potential acquisition by or joint undertaking with the Company (whether or
not through the introduction or efforts of Consultant), together with all
analysis and other information which Consultant or the Company has generated,
received, compiled, or otherwise obtained or possesses with respect to such
potential acquisition or joint undertaking.

-4-
<PAGE>

g. In case of a dispute there will be no right of offset by Company for
any fees or expenses due to Consultant referred to in section 3.

7. Limit of Engagement. This Agreement does not and shall not be construed to
-------------------
create any partnership or agency whatsoever beyond the purposes set forth in
Paragraph 1 above. Consultant acknowledges and agrees that he is an independent
contractor vis-a-vis the Company and that Consultant shall not be deemed to be a
partner, employee, agent, or legal representative of the Company for any purpose
other than the purposes of this Agreement set forth in said Paragraph 1, nor
shall Consultant have any authority or power to act for, or to undertake any
obligation or responsibility on behalf of, the Company, or corporations
affiliated with the Company, other than as expressly herein provided.
Consultant represents and warrants that he is engaged independently in the field
of business prospect qualification and the service sought by the Company under
this Agreement, and conducts a business enterprise independent of the Company.
Further, Consultant acknowledges and agrees that the amounts paid under
Paragraph 3 hereof are in full satisfaction of all amounts due by the Company
for services rendered by Consultant hereunder and the Consultant disclaims any
right, title, or interest in employee benefits offered by the Company or other
compensation without regard to the reclassification or other characterization of
Consultant's relationship with the Company at a future point in time by any
Federal, State, or local government or agency.

8. Unauthorized Acts.
-----------------

a. Consultant represents and agrees with the Company that he will make no
disbursement or other payment of any kind or character out of the compensation
paid to him hereunder or with any other fund, or take or authorize the taking of
any other action which contravenes any statute or rule, regulation, or order of
any jurisdiction. Consultant further agrees to indemnify and save harmless the
Company, its subsidiaries and affiliates and their directors, officers, and
employees from any and all liabilities, obligations, claims, penalties, fines or
losses resulting from any unauthorized or unlawful acts of Consultant (or from
any violations by Consultant of any laws or regulations, whether willful or not)
except to the extent such acts were undertaken at the direction of the Company.
Consultant further represents and warrants that under no circumstances shall
Consultant solicit or accept either directly or indirectly any form of
remuneration from any third party including but not limited to any business
owner or broker for or related to the performance of Consultant's service
hereunder. The provisions of this Paragraph 8 shall survive the dissolution or
termination of this Agreement.

-5-
<PAGE>

b. The Consultant agrees to disclose honestly and fully all information
and documentation in his possession concerning all transactions or events
relating to or affecting the Company or any affiliate of the Company as and to
the extent such information or documentation (i) was acquired or developed by
Consultant during his engagement under this Agreement and (ii) is requested by
the Company or the authorized representative thereof.

9. Conflict of Interest. Subject to Section 13 of the Reorganization
--------------------
Agreement, during the term of this Agreement, Consultant agrees that he will
represent the Company within the scope of the engagement and that he will not
perform similar consulting services within the scope of the engagement for any
competitor of the Company which services Consultant acknowledges and agrees
would give rise to a serious and damaging conflict of interest; provided,
however, Company may engage other consultants and Consultant may otherwise be
engaged by third parties (excluding competitors) outside of the scope of
Consultant's engagement hereunder.

10. Pending Acquisitions and Geographical Noncompetition. It is recognized
----------------------------------------------------
that pending acquisitions may not have been consummated prior to the expiration
or termination of this Agreement. Therefore, it is mutually agreed that the
parties shall identify in writing on or about the date of expiration or
termination of the Agreement, all geographical areas in which such acquisitions
have been actively pursued by Consultant and in which such acquisitions may be
pending. Consultant agrees that, subject to Section 13 of the Reorganization
Agreement, he will not consult with, represent, or be employed by any
competition of the Company with respect to (i) such geographical areas
(determined by county together with a buffer zone of 20 miles from the outside
perimeter thereof); and (ii) any pending acquisition prior to one (1) year after
the expiration or termination of the Agreement, without first obtaining the
written approval of the Company. Notwithstanding the foregoing, in the event of
change in control of the Company (as defined above herein), the restrictions
reflected in this Paragraph 10 shall be null and void.

11. Notices. Any notice required or permitted to be given under this Agreement
-------
shall be in writing and shall be deemed to have been given seven (7) days after
deposited with the United States postal service in a postage prepaid envelope
addressed, if to the Consultant, at Absolute Towing and Transporting, Inc., 7245
Laurel Canyon Blvd., North Hollywood, C.A. 91605 and if to the Company, c/o
Corporate Secretary, United Road Services, Inc., 8 Automation Lane, Albany, N.Y.
12205 or to such other address as either party shall designate by written notice
to the other.

-6-
<PAGE>

12. Assignment. Consultant may not assign his rights or obligations hereunder.
----------
The rights and obligations of the Company hereunder shall insure to the benefit
of, and shall be binding upon the successors and assigns of the Company.

13. Miscellaneous.
-------------

a. This Agreement shall be subject to and governed by the laws of the
State of New York. The parties submit to the exclusive jurisdiction of the
State and Federal Courts located in the State of New York if a lawsuit is filed
by Consultant and to the exclusive jurisdiction of the State and Federal Courts
located in the State of California if a lawsuit is filed by the Company.

b. Failure to insist upon strict compliance with any provision hereof
shall not be deemed a waiver of such provision or any other provision hereof.

c. This Agreement may not be modified except by an agreement in writing
executed by the parties hereto.

d. The invalidity or unenforceability of any provision hereof shall not
affect the validity or enforceability of any other provision.

e. Consultant represents and warrants that entering into this Agreement
and the performance of Consultant's services hereunder shall not be in violation
of any other agreement with any third party to the best knowledge of Consultant.

f. This Agreement supersedes all previous agreements and any written or
oral addendum thereto between the Company and any of its affiliated companies
and representatives and Consultant, both verbal and written.

g. If Company breaches section 3 of this agreement, Consultant will have
the right to terminate the agreement immediately, upon written notice, according
to section 11, and the Company remains responsible for any payment for
remuneration referred to in section 3, until the date of termination.

-7-
<PAGE>

IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the
day and year first above written.

"Consultant" United Road Services, Inc.

By: By:
------------------------------- -------------------------------
Todd Smart Edward T. Sheehan

Title: Chief Executive Officer

-8-
<PAGE>

APPENDIX I

The exclusive geographical region shall consist of the following California
counties:

Los Angeles
Kern
Ventura
San Bernardino
Riverside
Orange
San Diego
Imperial
Santa Barbara
San Luis Obispo

Notwithstanding the foregoing, Consultant shall not be entitled to any
compensation under the Consulting Agreement for URSI transactions with any of
the following entities: McCarthy & Sons, U.S. Tow, Doug's Tugs, Bill & Wags,
A&A Towing, Elite Towing, E&R Towing and Garage Inc.

-9-

<PAGE>

EXHIBIT 10.13

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement is entered into this February ___, 1998
among United Road Services, Inc., a Delaware corporation ("URSI"), and those
stockholders of URSI who are signatories of this Agreement (the "Stockholders").

RECITALS

A. The Stockholders have previously acquired shares of common stock of
URSI in private placements of such shares completed prior to URSI's filing of a
registration statement under the Securities Act of 1933 as amended ("1933 Act")
for its proposed initial public offering ("IPO") of common stock (the shares so
acquired by the Stockholders being referred to herein as the "Registrable
Shares").

B. URSI is expected to enter into an Agreement and Plan of Reorganization
(the "Merger Agreements") with certain companies ("Founding Companies") that are
expected to merge with and into URSI simultaneously with the completion of the
IPO, and with the stockholders of the Founding Companies, providing for the
issuance of URSI Common Stock to such stockholders and the granting to such
stockholders of registration rights with respect to such Common Stock.

C. Certain of the Stockholders will be required under the Merger
Agreements to agree to certain limitations on their ability to transfer their
Registrable Shares and in connection therewith URSI and the Stockholders desire
that the Stockholders have registration rights consistent with the registration
rights to be granted to the Founding Company Stockholders pursuant to the Merger
Agreements.

NOW, THEREFORE, in consideration of the foregoing and the covenants
contained herein, the parties hereto hereby agree as follows:

1. At any time following the consummation of the IPO whenever URSI
proposes to register any shares of URSI Common Stock ("URSI Stock") for its own
or others' account under the 1933 Act for a public offering, other than (i)
registrations of shares to be used as consideration for acquisitions of
additional businesses by URSI and (ii) registrations relating to employee
benefit plans, URSI shall give each of the Stockholders prompt written notice of
its intent to do so. Upon the written request of any of the Stockholders given
within thirty (30) days after receipt of such notice, URSI shall cause to be
included in such registration all

-1-
<PAGE>

of the Registrable Shares which any such Stockholder requests, provided that
--------
URSI shall have the right to reduce the number of shares included in such
registration to the extent that inclusion of such shares could, in the opinion
of tax counsel to URSI or its independent auditors, jeopardize the status of the
transactions contemplated by the Merger Agreements as a reorganization described
in Section 368(a)(1)(A) of the Internal Revenue Code of 1986, as amended. In
addition, if URSI is advised in writing in good faith by any managing
underwriter of an underwritten offering of the securities being offered pursuant
to any registration statement under this Section 1 that the number of shares to
be sold by persons other than URSI is greater than the number of such shares
which can be offered without adversely affecting the offering, URSI may reduce
pro rata the number of shares offered for the accounts of such persons (based
upon the number of shares of URSI Stock issued pursuant to this Agreement held
by such person) to a number deemed satisfactory by such managing underwriter,
provided that such reduction shall be made first by reducing the number of
- --------
shares to be sold by persons other than URSI, the Stockholders, the stockholders
of the Founding Companies, and any person or persons who have required such
registration pursuant to "demand" registration rights granted by URSI;
thereafter, if a further reduction is required, it shall be made by first
reducing the number of shares to be sold by the Stockholders and the
stockholders of the Founding Companies with such further reduction being made so
that to the extent any shares can be sold by the Stockholders and the
stockholders of the Founding Companies, each such stockholder will be permitted
to sell a number of shares proportionate to the number of shares of URSI Stock
owned by such stockholder immediately after the consummation of the IPO,
provided that if any stockholder does not wish to sell all shares such
stockholder is permitted to sell, the opportunity to sell additional shares
shall be reallocated in the same manner to those Stockholders and stockholders
of the Founding Companies who wish to sell more shares until no more shares can
be sold by such stockholders.

2. At any time after the date two years after the consummation of the IPO,
the holders of Registrable Shares which have (i) not been previously registered
or sold, (ii) which are not entitled to be sold under Rule 144(k) (or any
similar or successor provision) and (iii) which have an aggregate market value
in excess of $5 million (based on the average closing price on the five days
prior to the date of such request) promulgated under the 1933 Act may request in
writing that URSI file a registration statement under the 1933 Act covering the
registration of the Registrable Shares then held by such Stockholders (a "Demand
Registration"). Within ten (10) days of the receipt of such request, URSI shall
give written notice of such request to all other Stockholders and shall, as soon
as practicable, file and use its best efforts to cause to become effective a
registration

-2-
<PAGE>

statement covering all such shares. URSI will use its best efforts to keep such
Demand Registration current and effective for one hundred twenty (120) days (or
such shorter period during which holders shall have sold all URSI Stock which
they request to be registered). URSI shall be obligated to effect only two (2)
Demand Registrations for all Stockholders, and the second request may not be
made until at least one (1) year after the effective date of the registration
statement for the first Demand Registration.

Notwithstanding the foregoing paragraph, following such a demand a majority
of URSI's disinterested directors (i.e., directors who have not demanded or
----
elected to sell shares in any such public offering) may postpone the filing of
the registration statement for a thirty (30) day period beyond the period
provided above.

If at the time of any request by the Stockholders for a Demand Registration
URSI has fixed plans to file within sixty (60) days after such request a
registration statement covering the sale of any of its securities in a public
offering under the 1933 Act, no registration of the Registrable Shares shall be
initiated under this Section 2 until ninety (90) days after the effective date
of such registration unless URSI is no longer proceeding diligently to effect
such registration; provided that URSI shall provide the Stockholders the right
--------
to participate in such public offering pursuant to, and subject to, Section 1
hereof.

3. All expenses incurred in connection with the registrations under this
Agreement (including all registration, filing, qualification, legal, printer and
accounting fees, but excluding underwriting commissions and discounts) shall be
borne by URSI. In connection with such registrations URSI shall (i) prepare and
file with the Securities and Exchange Commission as soon as reasonably
practicable, a registration statement with respect to the URSI Stock and use its
best efforts to cause such registration to promptly become and remain effective
for a period of at least one hundred twenty (120) days (or such shorter period
during which holders shall have sold all URSI Stock which they requested to be
registered); (ii) use its best efforts to register and qualify the URSI Stock
covered by such registration statement under applicable state securities laws as
the holders shall reasonably request for the distribution for the URSI Stock;
and (iii) take such other actions as are reasonable and necessary to comply with
the requirements of the 1933 Act and the regulations thereunder.

4. In connection with each registration pursuant to this Agreement
covering an underwritten registered public offering, URSI and each participating
holder agree to enter into a written agreement with the managing underwriters in
such form and containing such provisions as are customary in the securities

-3-
<PAGE>

business for such an arrangement between such managing underwriters and
companies of URSI's size and investment stature, including indemnification. In a
registration under Section 1 the managing underwriters of any such underwritten
offering shall be selected by URSI (or, if required by a "demand" registration
right of a stockholder requiring such registration, by such requiring
stockholder), and in a registration under Section 2 may be selected by the
holders of a majority of the Registrable Shares that have demanded to be
included in such registration pursuant to Section 2, provided the managing
underwriters so selected are reasonably acceptable to URSI.

5. For the purposes of this Agreement, Registrable Shares shall include
shares issued as a stock dividend or stock split, or otherwise distributed by
URSI to its stockholders without consideration in respect of Registrable Shares.
URSI shall not be obligated to register shares of URSI stock held by any
stockholder at a time when the resale provisions of Rule 144(K) (or any similar
successor provisions) promulgated under the 1933 Act are available to such
stockholder. This Agreement will expire on December 31, 2001.

6. (a) Unless otherwise provided, notice required or permitted to be
given to a party pursuant to the provisions of this Agreement will be in writing
and will be effective and deemed given under this Agreement on the earliest of
(i) the date of personal delivery, (ii) the date of delivery by facsimile (upon
confirmation of receipt thereof), or (iii) upon delivery if sent by a
nationally-recognized courier or overnight service, including Federal Express or
Express Mail, or by United States mail by registered mail (airmail where sent
overseas). All notices not delivered personally or by facsimile will be sent
with postage and other charges prepaid and properly addressed to the party to be
notified at the address set forth on the signature pages hereof, or at such
other address as such party may designate by ten (10) days' advance written
notice to the other parties hereto. Notices to URSI will be marked to the
attention of the President.

(b) This Agreement constitutes the full and entire understanding and
agreement between the parties relative to the specific subject matter hereof,
and supersedes any previous agreements, understandings and negotiations among
the parties relative to the specific subject matter hereof. Except as expressly
provided herein, neither this Agreement nor any term hereof may be amended,
waived, discharged or terminated other than by a written instrument signed by
the party against whom enforcement of any such amendment, waiver, discharge or
termination is sought.

-4-
<PAGE>

(c) This Agreement may be executed in any number of counterparts, each of
which will constitute an original and all of which together will constitute one
instrument.

(d) This Agreement will be governed in all respects by the substantive laws
of the State of Delaware, without giving effect to the conflict of law
principles thereof.

IN WITNESS WHEREOF, the parties hereto have set their hands as of the date
first above written.

URSI: United Road Services, Inc.

By:
--------------------------------
Edward T. Sheehan,
Chief Executive Officer

STOCKHOLDERS:

----------------------------------
Edward T. Sheehan, for himself

- ---------------------------------- ----------------------------------
Ross Berner Mark McKinney

BankAmerica Investment
Corporation

By:
------------------------------ ----------------------------------
Donald Moorehead, Jr.
Title:
----------------------------

- ---------------------------------- ----------------------------------
Tony Stais Garry Berner

-5-

<PAGE>

- ---------------------------------- ----------------------------------
Edward Smith Chris Leuphold

- ---------------------------------- ----------------------------------
Peter A. Fowler Scott Freidheim

- ---------------------------------- ----------------------------------
Steve Decker Jonathan P. Wendell

- ---------------------------------- ----------------------------------
Stephen N. Sachman Lawrence B. Rabkin

- ---------------------------------- ----------------------------------
Raymond P. Haas Thomas A. Larsen

- ---------------------------------- ----------------------------------
Daniel J. Winnike Kenneth G. Hausman/Ellyn K.
Lazarus

-6-

<PAGE>

EXHIBIT 10.15

LEASE

THIS LEASE ("Lease") is made as of the ______ day of February, 1998, by
and between Edward W. Morawski whose address is 31299 Mally Drive, Madison
Heights, Michigan ("Landlord") and UNITED ROAD SERVICES, INC., a Delaware
corporation, whose address is 8 Automation Lane, Albany, New York ("Tenant").

W I T N E S S E T H:

For and in consideration of the rental herein reserved, and of the
covenants, conditions, agreements, and stipulations hereinafter expressed, the
parties agree as follows:

1. Premises.
--------

(a) The Landlord hereby leases to Tenant, and Tenant hereby leases
from Landlord, the following described premises commonly known as 509 Friendly
Drive, Bloomfield, Michigan (collectively, the "Premises"):

(i) All of that certain land as more particularly described on
Exhibit A, attached hereto and incorporated herein by this reference (the
---------
"Land");

(ii) All improvements located on the Land (the "Improvements"),
including the building (the "Building"), as generally described on Exhibit
-------
A, attached hereto and incorporated herein by this reference; and
-
(iii) All easements, rights of way, permits, licenses and
appurtenances benefitting the Land and the Improvements.

(b) Landlord covenants, represents and warrants: (i) that the
Premises comply with all applicable laws, rules, regulations and codes,
including without limitation, the Americans with Disabilities Act; and (ii) to
Landlord's knowledge, there are no hazardous substances or hazardous wastes
located on the Premises, except those used by the current tenant of the Premises
in connection with such tenant's operations at the Premises.

-1-
<PAGE>

2. Term.
----

(a) The term of this Lease shall be for five (5) years commencing on
the date of the consummation of the IPO _____________, 1998 (the "Commencement
Date"). Tenant shall have the right to extend the term of this Lease for one
period of five (5) years (the "Extension Term") following the expiration of the
initial term. To exercise this option, Tenant shall give Landlord notice of its
intention to extend the initial term not less than four (4) months prior to the
expiration of the initial term. All of the terms and provisions of this Lease
shall apply during the Extension Term.

(b) Any holding over after the expiration of the term hereof, or of
any renewal, shall be construed to be a tenancy from month to month, at the
monthly rental applicable for the last month of the term.

(c) During the final four (4) months of the term of this Lease,
Landlord shall be permitted to show prospective tenants the Premises upon giving
Tenant at least forty-eight (48) hours' advance notice, and provided Landlord
and Landlord's agents shall use diligent efforts to minimize any inconvenience
to Tenant resulting therefrom.

3. Rental.
------

(a) Tenant hereby covenants and agrees to pay to Landlord at the
address provided above, or at such other place as Landlord may from time to time
designate in writing, as rental for the Premises during the term of this Lease,
base rent, payable monthly in advance, beginning on the first day of
commencement of this Lease and continuing on the first day of each calendar
month thereafter for the entire term of this Lease as follows:

(i) $1500 per month

Notwithstanding the foregoing, the base rent shall be adjusted every two and
one-half (2-1/2) years after the Commencement Date (each such date being
referred to herein as an "Adjustment Date") as follows: the base for computing
the adjustment is the Consumer Price Index ("CPI") for all Urban Consumers--All
Items for the Mid-West, __________ = 100, published by the United States
Department of Labor, Bureau of Labor Statistics (the "Index"), which is in
effect for the month of (x) the Commencement Date, in the case of the initial
adjustment, and (y) the prior Adjustment Date, for each adjustment thereafter
(the "Beginning Index"). The percentage increase in the Index published for the
calendar month immediately

-2-
<PAGE>

prior to the Adjustment Date over the Beginning Index shall constitute the
percentage by which the base rent shall increase on the Adjustment Date.

(b) As additional rent, Tenant shall pay to Landlord all Real Estate
Taxes (as hereinafter defined), imposed on the Premises with respect to every
calendar year or part thereof during the term of this Lease. "Real Estate Taxes"
shall be defined as ad valorem real property taxes based on the assessed
valuation of real property, provided that said term shall not include: (i)
special assessments; (ii) taxes levied, assessed, or imposed against the rents,
profits or income derived from the Premises; (ii) penalties and interest; or
(iii) increases in property taxes occurring as a result of any transfer or sale
of the Premises (or any portion thereof) or any improvements made to the
Premises during the term hereof, other than improvements made by Tenant. If due
to a change in the method of taxation, any franchise, income, profit, or other
tax, however designated, shall be levied against Landlord's interest in the
Premises in whole or in part for or in lieu of any tax which would otherwise
constitute Real Estate Taxes, such taxes shall be included in the term Real
Estate Taxes for purposes hereof. All such payments shall be prorated for any
partial calendar years in which the term of this Lease shall commence or expire.
Notwithstanding anything contained in this Section 3(b) to the contrary, Real
Estate Taxes shall not include, and Tenant shall have no obligation to pay, any
increases in the Real Estate Taxes with respect to the Premises resulting from,
directly or indirectly, the sale or transfer of the Premises (or any portion
thereof) by Landlord during the term of this Lease.

Tenant and Landlord shall each be eligible to institute tax reduction or
other proceedings to reduce the assessed valuation of the Premises. Should
Landlord be successful in any such reduction proceedings and obtain a rebate of
Real Estate Taxes for periods for which Tenant has paid such taxes, Landlord
shall, after deducting its expenses, including, without limitation, attorneys'
fees and disbursements in connection therewith, promptly deliver to Tenant such
rebate after Landlord has received such proceeds. Tenant shall be entitled to
all rebates obtained by Tenant with respect to the period for which Tenant has
paid Real Property Taxes.

Landlord shall make written request for payment of Real Estate Taxes not
more than thirty (30) days prior to the due date for payment of such taxes.
Along with such written request, Landlord shall furnish a copy of the tax
bill(s) for which Landlord is seeking reimbursement. Failure by the Landlord to
provide notification of and supporting documentation for Real Property Taxes
within one hundred eighty (180) days after the due date of such taxes shall
constitute a

-3-
<PAGE>

waiver by the Landlord of Tenant's obligation to pay said Real Estate Taxes for
the corresponding tax year.

(c) As a late fee, Tenant shall pay to Landlord a sum equal to three
percent (3%) of any fixed or additional rent not received by Landlord within ten
(10) days after Tenant's receipt of written notice from Landlord that Tenant has
failed to pay when due such fixed or additional rent.

4. Use of Premises; Compliance with Law. Tenant shall use the Premises
------------------------------------
only for purposes permissible under applicable law. Tenant shall comply with
all present and future laws, ordinances, rules and regulations applicable to its
use of the Premises, including laws, ordinances, rules and regulations regarding
the use and disposal of hazardous materials and substances, and shall not commit
or suffer waste on the Premises, or use or permit anything on the Premises which
may be illegal, or constitute a private or public nuisance. Notwithstanding the
foregoing, Tenant shall have no obligation to make any structural repairs or
modifications or capital improvements to the Premises, or access thereto, unless
necessitated by any improvements or modifications done to the Premises by Tenant
subsequent to the commencement of the term of this Lease, or except as otherwise
specifically provided under this Lease.

5. Repairs, Maintenance, and Changes by Tenant.
-------------------------------------------

(a) Landlord shall maintain in good order and repair the structural
components of the Building (including the roof, gutters, downspouts, exterior
walls, and foundations). Except for these structural components, Tenant shall
be responsible for maintaining all other aspects of the Premises in at least as
good a condition as the Premises are in as of the Commencement Date, ordinary
wear and tear excepted. All repairs, whether by Landlord or Tenant, to the
Premises shall be in quality and class at least the equal of the original work.
If Tenant fails to perform its obligations of maintenance or repair hereunder
with respect to the Premises within a reasonable period of time, Landlord shall
have the right to come onto the Premises, make such repairs, and upon billing to
Tenant by Landlord, Tenant shall reimburse Landlord for the costs of such
repairs plus interest thereon at the lesser of the highest legal rate allowed in
the State of Michigan or 12% per annum. Upon the expiration of or prior
termination of this Lease, Tenant shall remove all property of Tenant from the
Premises, except plumbing and other fixtures and leasehold improvements which
may have been installed by Tenant (unless the same can be removed without
causing material damage to the Premises), and except as otherwise provided in
this Lease, and surrender the Premises to the Landlord "broom clean" and in as
good a condition as the Premises were in on the Commencement Date, ordinary wear
and tear and

-4-
<PAGE>

damage by fire or other casualty excepted. Any property left on
the Premises after the expiration or other termination of this Lease may be
disposed of by Landlord in any manner allowable under law.

(b) Tenant shall not make any changes, alteration, additions, or
improvements to the Premises without the written consent of Landlord (which
consent shall not be unreasonably withheld or delayed), other than non-
structural changes not exceeding an aggregate amount of $100,000.

6. Utilities. Landlord shall be responsible for insuring that adequate
---------
utility services are available to the Premises. Tenant shall pay directly to
the utility provider all charges for electricity, gas, water, scavenger and
other utility services for the benefit of the Premises. If any such utilities
are not separately metered to the Premises, Tenant shall pay Landlord a
reasonable share (based on Tenant's usage) of the charges for such utilities on
a monthly basis within ten (10) days after written request therefor by Landlord,
which written request shall include a copy of the applicable bill.

7. Janitorial Services. Tenant shall perform and provide for all
-------------------
janitorial services required by Tenant on the Premises.

8. Damage to Tenant's Property or Premises.
---------------------------------------

(a) Landlord or its agents shall not be liable for any injury or
damage to persons or property, or loss or interruption to business, resulting
from fire, explosion, falling plaster, steam, gas, electricity, water, rain,
snow, or leaks from any part of the Premises, or from the pipes, appliances, or
plumbing works, or from the roof, street, or subsurface, or from any other
place, or by dampness, or by any cause of whatsoever nature. None of the
limitations of the liability of Landlord or its agents provided for in this
subsection (a) shall apply if such loss, injury, or damages are proximately
caused by the negligence, intentional misconduct or breach of this Lease by
Landlord, its agents, employees, or independent contractors.

(b) Except as provided in Section 9(d), Tenant shall be liable for
any damage to the Premises which may be caused by the negligence or intentional
misconduct of Tenant or its agents, employees, or customers. If Tenant fails to
repair any such damage within thirty (30) days after receipt of Landlord's
written demand to do so, Landlord may, at its option, repair such damage, and
Tenant shall thereupon reimburse and compensate Landlord as additional rent,
within ten (10) days after rendition of a statement by the Landlord, for the
reasonable cost of such repair and damage.

-5-
<PAGE>

9. Indemnity, Liability Insurance, Building Insurance, Waiver of
-------------------------------------------------------------
Subrogation.
- -----------

(a) Except to the extent arising out of the negligence or willful
misconduct of Landlord, its employees, agents or independent contractors, Tenant
shall indemnify, defend and hold harmless Landlord from any and all liability
and damages arising out of injury or death to any person or damage to property
occurring at the Premises during the occupancy thereof by Tenant. The foregoing
shall apply to third party claims not claims made by or through Landlord.

(b) Tenant shall, during the entire term of this Lease and any
renewal hereof, keep in full force and effect a policy of public liability with
respect to the Premises, and the business operated by Tenant thereon, in an
amount not less than One Million Dollars ($1,000,000). Tenant shall be
responsible for insuring its own personal property located at the Premises.

(c) During the term of this Lease and any renewal hereof, Landlord
shall, at Tenant's expense, keep the Building and other Improvements insured
against loss or damage by fire or other casualty insurable under standard fire
and extended coverage insurance in an amount equal to the full current
replacement cost of the Building and other Improvements. Tenant shall reimburse
Landlord for the cost of such insurance within thirty (30) days after Landlord's
written request therefor. Along with such written request, Landlord shall
furnish Tenant with reasonable evidence of Landlord's payment of such insurance.
Notwithstanding the foregoing, Landlord shall have no obligation to provide and
Tenant shall have no obligation to pay for any earthquake or flood insurance.

(d) Landlord and Tenant release each other from any claims of
whatever nature for damage, loss or injury to the Premises (or any portion
thereof), or to the other's property in, on or about the Premises, to the extent
of any insurance proceeds that are received or receivable (or that would have
been receivable but for such releasing parties breach or default of its
obligations under this Lease), even if such damage, loss or injury shall have
been caused by the fault or negligence of the other party or any one for whom
such party may be responsible. Landlord and Tenant shall each cause their
respective insurance policies to provide that the insurance company waives all
right of recovery by way of subrogation against either Landlord or Tenant in
connection with any damage covered by any policy.

-6-
<PAGE>

10. Damage or Destruction to Premises.
---------------------------------

(a) If the Premises, or any portion thereof, shall be partially
damaged or destroyed during the term of this Lease by fire or any casualty
insurable under the standard fire and extended coverage insurance policies, to
the extent that the cost of repairing such damage or destruction is fifty
percent (50%) or less of the monetary value therefrom, Landlord shall repair
and/or rebuild the same as promptly as possible. In such event, this Lease
shall not terminate, but shall remain in full force and effect, and a
proportionate reduction in the fixed minimum monthly rental shall be made from
the time of such fire or casualty until the Premises are repaired or restored,
except if the Tenant can use and occupy the Premises without substantial
inconvenience, there shall be no reduction in rental while the Premises are
being repaired. Landlord's obligation to repair shall be subject to any delays
from labor troubles, material shortages, insurance claim negotiations, or any
other causes, whether similar or dissimilar to the foregoing, beyond Landlord's
control.

(b) If the Premises, or any portion thereof, shall be damaged or
destroyed during the term of this Lease by fire or other casualty, to the extent
that the cost of repairing such damage or destruction is more than fifty percent
(50%) of the monetary value thereof, then, and in that event, Landlord or Tenant
may, at either's option, terminate this Lease. In the foregoing instance, each
party shall notify the other as to its election within sixty (60) days of the
casualty in question. If either party elects to terminate this Lease, then the
same shall terminate three (3) days after such notice is given, and Tenant shall
immediately vacate the Premises and surrender the same to Landlord, paying the
rent to the time of such vacation and surrender, subject to an equitable
abatement from the time of said damage. If neither party elects to terminate
this Lease, Landlord shall repair and/or rebuild the Premises as promptly as
possible, subject to any delay from causes beyond its reasonable control, and
the term shall continue in full force and effect, subject to equitable abatement
in the rent from the time of said damage or destruction until the Premises are
repaired or restored.

(c) Notwithstanding anything contained in this Section 10 to the
contrary, in the event that there is material damage to the Premises due to fire
or other casualty during the last year of this Lease, or in the event that the
repair of any damage by fire or other casualty could reasonably be expected to
take more than twelve (12) months to complete, then Tenant may elect to
terminate this Lease upon written notice to Landlord.

11. Eminent Domain. If the Premises shall be taken under eminent domain
--------------
proceedings, or transferred to a public authority in lieu of such

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<PAGE>

proceedings, Landlord may terminate this Lease as of the date when possession is
taken. Tenant shall have no claim against Landlord by reason of such taking or
termination and shall not have any claim or right to any portion of the amount
that may be awarded or paid to Landlord as a result of any such taking, except
that Tenant shall have the right to make a claim against such public authority
for its loss of business and property, moving expenses, and for any other relief
available to Tenant by law in the event such taking involves the physical taking
of all or a portion of the Premises, and, in such event, Tenant shall also have
the right to terminate this Lease as of the date when possession is taken by the
public authority. If only a portion of the Premises is so taken and Tenant
determines, in its reasonable opinion, that it can continue to operate its
business on the remainder of the Premises, then this Lease shall terminate only
as to the portion of the Premises taken, and there shall be an equitable
adjustment to the rent to reflect the reduction in the size of the Premises.

12. Estoppel Certificate Statement, Attornment, Subordination, and
--------------------------------------------------------------
Execution of Documents.
- ----------------------

(a) Each of the parties hereto agrees that at any time and from
time to time at reasonable intervals, within ten (10) business days after
written request by the other party (the "Requesting Party"), such party (the
"Responding Party") will execute, acknowledge, and deliver to the Requesting
Party, or its mortgagee, or others designated by the Requesting Party, a
certificate in such form as may from time to time be provided, ratifying this
Lease and certifying:

(i) that this Lease is in full force and effect, and has not
been assigned, modified, supplemented, or amended in any way (or if there
has been any assignment, modification, supplement, or amendment, identifying
the same);

(ii) that this Lease represents the entire agreement between
Landlord and Tenant as to the subject matter hereof (or if there has been
any assignment, modification, supplement, or amendment, identifying the
same);

(iii) the commencement date and termination date of this Lease;

(iv) that to the knowledge of the signer of such writing, no
default exists in the enforcement of this Lease by the Requesting Party or
specifying each default, defense, or offset of which the signer may have
knowledge;

-8-
<PAGE>

(v) that no rental has been paid in advance other than for
the month in which such certificate is signed by the Responding Party; and

(vi) the date to which all rentals due hereunder have been
paid under this Lease.

(b) Tenant shall, in the event any proceedings are brought for the
foreclosure of, or in the event of exercise of the power of sale under any
mortgage covering the Premises, attorn to the purchaser upon any such
foreclosure or sale and recognize such purchaser as the Landlord, subject to all
of Tenant's duties, obligations, rights, and options under this Lease, provided
such purchaser agrees to assume all of the obligations of Landlord under this
Lease.

(c) Upon request by the Landlord, Tenant shall subordinate its
rights hereunder to the lien of any mortgage or mortgages, or the lien resulting
from any other method of financing or refinancing, now or hereafter in force
against the Land and/or the Building, or against any buildings hereafter placed
upon the Land, and to all advances made or hereafter to be made upon the
security thereof; provided, however, that a condition precedent to Tenant's
requirement to subordinate hereunder shall be that any such mortgagee shall
agree that, so long as Tenant is not in material default under this Lease, this
Lease and all Tenant's rights and options hereunder shall remain in full force
and effect notwithstanding any foreclosure (whether judicial or non-judicial) or
any deed in lieu of foreclosure transaction under any such mortgage.

(d) Tenant, upon request of any party in interest, shall execute,
within ten (10) days of Tenant's receipt, such reasonable instruments or
certificates to carry out the intent of these paragraphs above as shall be
requested by Landlord, provided, however, that nothing contained in such
instruments or certificates required by Landlord shall be in derogation of any
rights granted to Tenant hereunder, nor expand Tenant's obligations hereunder,
and if any such instruments or certificates would have the effect of
accomplishing one or both of the foregoing, either explicitly or implicitly,
then Tenant shall not be obligated to execute the same.

13. Default.
-------

(a) If Tenant shall, at any time, be in default of the payment of
either rent or any payments required of Tenant hereunder or any part thereof,
for more than ten (10) days after Tenant's receipt of written notice from
Landlord that the same is past due, or if Tenant shall be in default of any of
the other obligations of this Lease to be kept, observed, and performed by
Tenant for more than thirty

-9-
<PAGE>

(30) days after the giving of written notice by Landlord to Tenant of such
default (provided, however, that if the nature of the specified obligation is
such that more than thirty (30) days is required for performance then Tenant
shall not be in default if it commences performance within such 30-day period
and thereafter diligently prosecutes the same to completion), or if Tenant shall
be adjudged a bankrupt, or if a receiver or trustee shall be appointed and shall
not be discharged within ninety (90) days from the date of such appointment,
then and in any such events Landlord shall have the following rights and
remedies, in addition to any other remedies allowable under applicable law:

(i) Landlord shall have the right to terminate this Lease and
recover (x) the worth at the time of award of any unpaid rent which had been
earned at the time of such termination; (y) the worth at the
time of the award of the amount by which the unpaid rent which would have
been earned after termination until the time of award exceeds the amount of
such rental loss that Tenant proves could have been reasonably avoided; and
(z) the worth at the time of award of the amount by which the unpaid rent
for the balance of the term of this Lease after the time of award exceeds
the amount of rental loss for the same period that Tenant proves could be
reasonably avoided;

(ii) Landlord shall have the right to continue this Lease in
effect and to enforce all of its rights and remedies under this Lease,
including the right to recover rent as it becomes due, for so long as
Landlord does not terminate Tenant's right to possession. Acts of
maintenance or preservation, efforts to relet the Premises, or the
appointment of a receiver upon Landlord's initiative to protect its interest
under this Lease shall not constitute a termination of Tenant's right to
possession; and

(iii) Landlord shall have the right, but not the obligation, to
make any payment or perform any act on Tenant's part as may be required to
cure Tenant's default, without waiving its rights based upon such default by
Tenant and without releasing Tenant from any of its obligations. All sums
paid and all costs incurred by Landlord shall be paid to Landlord on demand.

(b) Landlord shall not be in default unless it fails to perform the
obligations required of Landlord by this Lease within thirty (30) days after
written notice by Tenant to Landlord specifying which obligation(s) Landlord has
failed to perform (provided, however, that if the nature of the specified
obligation(s) is such that more than thirty (30) days are required for
performance, then Landlord shall not be in default if it commences performance
within such 30-day period and

-10-
<PAGE>

thereafter diligently prosecutes the same to completion). If Landlord has not
cured or commenced to cure the default set forth in said notice within said 30-
day period, Tenant may at his option either (i) cure such default and deduct the
reasonable costs and expenses incurred from the next and succeeding rent
payment(s), or (ii) cancel this Lease and, in such event, this Lease shall
thereupon cease, terminate, and come to an end with the same force and effect as
though the original demised term had expired at that time. Notwithstanding the
foregoing, in the event of "Emergency Repairs," Tenant shall have the right to
make such repairs immediately, provided that it will give Landlord notice
thereof to the extent reasonably possible under the circumstances. The cost of
such repairs may be deducted from rent next payable hereunder. "Emergency
Repairs" means repairs that are necessary to avoid imminent harm to life, limb
or property, as reasonably determined by Tenant.

14. Subletting and Assigning. Tenant shall not sublet any portion of
------------------------
the Premises nor assign this Lease in whole or in part without the written
consent of Landlord, which consent shall not unreasonably be withheld or
delayed, and in the event of a subletting so approved by Landlord, Tenant shall
nevertheless remain obligated to Landlord under the terms of this Lease.
Notwithstanding the foregoing, Tenant shall have the absolute right to assign
this Lease in connection with the sale of its business at the Premises.

15. Signs. Tenant shall have the right to install signs on the Building
-----
or on the Land, subject to compliance with applicable law.

16. Quiet Enjoyment. Landlord covenants and agrees with the Tenant that
---------------
upon the Tenant paying the said rent and performing all the covenants and
conditions aforesaid on the Tenant's part to be observed and performed, Tenant
shall and may peaceably and quietly have, hold, and enjoy the Premises hereby
leased, for the term aforesaid.

17. Memorandum of Lease. If Tenant or Landlord request, the parties
-------------------
will enter into a short form lease, describing the Premises, the Land and the
term of this Lease, and including any other terms necessary to permit the
recording of such short form lease.

18. Collateral Liens. Landlord waives all liens or other rights
----------------
(whether common law, statutory or otherwise) with respect to the personal
property and fixtures of Tenant located or to be located at the Premises and
agrees to execute a landlord's consent and waiver with respect to any such
property in a form reasonably requested by Tenant's lender within ten (10) days
of Tenant's request therefor.

-11-
<PAGE>

19. Notices. All notices to be given under this Lease shall be in
-------
writing and shall either be served personally, by reputable overnight carrier,
or sent by certified mail, return receipt requested. All notices mailed as
herein provided shall be deemed received two (2) days after mailing. Notices to
Landlord shall be sent to the address set forth in the preamble hereof or such
other address as Landlord may specify in written notice to Tenant. Notices to
Tenant shall be sent to: _____________, at the mailing address of the Premises,
or such other addresses as Tenant may specify in written notice to Landlord.

20. Interest. Any amount due from Tenant to Landlord under this Lease
--------
which is not paid within ten (10) days of the date due shall bear interest at
the lesser of the highest legal rate allowed in the State of Michigan or 10% per
annum from the date due until paid; provided, however, the payment of such
interest shall not excuse or cure the default upon which such interest is
accrued.

21. Expense of Enforcement. If either Landlord or Tenant should
----------------------
prevail in any litigation by or against the other party related to this Lease,
then the losing party shall pay all costs and reasonable attorneys' fees
incurred by the prevailing party in connection with such litigation.

22. Inspection. Tenant will permit Landlord, its agents, employees, and
----------
contractors upon 48 hours' advance notice (except in the event of an emergency)
to enter the Premises to inspect the same and to enforce or carry out any
provisions of this Lease.

23. Non-Waiver. Except as specifically provided herein, Landlord's or
----------
Tenant's failure to insist upon strict performance of any covenant of this Lease
or to exercise any option or right herein contained shall not be a waiver or
relinquishment for the future of such covenant, right, or option, but the same
shall remain in full force and effect.

24. Captions. The captions and headings herein are for convenience and
--------
reference only and should not be used in interpreting any provision of this
Lease.

25. Applicable Law. This Lease shall be governed by and construed under
--------------
the laws of the State of Michigan. If any provision of this Lease, or portion
thereof, or the application thereof to any person or circumstance shall, to any
extent, be invalid or unenforceable, the remainder of this Lease shall not be
affected thereby, and each provision of this Lease shall be valid and
enforceable to the fullest extent permitted by law. Time is of the essence in
this Lease.

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<PAGE>

26. Successors. This Lease and the covenants and conditions herein
----------
contained shall inure to the benefit of and be binding upon Landlord, its
successors, and assigns; and shall be binding upon Tenant, its heirs, executors,
administrators, successors, and assigns; and shall inure to the benefit of
Tenant and any permitted assignees.

27. Amendments in Writing. This Lease and the Exhibits attached hereto
---------------------
and forming a part hereof set forth all the covenants, promises, agreements,
conditions, and understandings between Landlord and Tenant concerning the
Premises, and there are no covenants, promises, agreements, conditions, or
understandings, oral or written, between them other than are herein set forth.
Except as herein otherwise provided, no subsequent alteration, amendment,
change, or addition to this Lease shall be binding upon Landlord and Tenant
unless reduced to writing and signed by both parties.

28. Authority. Each party hereto that is a corporation, warrants and
---------
represents to the other party hereto that the executing party's execution of
this Lease has been duly authorized by its Board of Directors.

29. Counterpart Copies. This Lease shall be executed in multiple
------------------
copies, any one of which may be considered and used as an original.

IN WITNESS WHEREOF, the parties have hereto executed this Lease on the
day and year first written above.

LANDLORD:
--------

-----------------------------------
Edward W. Morawski

TENANT:
------

UNITED ROAD SERVICES, INC., a
Delaware corporation

By:
-----------------------------------
Edward T. Sheehan

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<PAGE>

Its: Chief Executive Officer

-14-
<PAGE>

Exhibit A
---------

DESCRIPTION OF LAND, IMPROVEMENTS AND PREMISES

-15-

<PAGE>

EXHIBIT 10.16

LEASE

THIS LEASE ("Lease") is made as of the ______ day of February, 1998, by
and between EXODUS HOLDINGS, LLC, a Nevada limited liability company, whose
address is 2201 Commerce, North Las Vegas, Nevada 89030 ("Landlord") and UNITED
ROAD SERVICES, INC., a Delaware corporation, whose address is 8 Automation Lane,
Albany, New York ("Tenant").

W I T N E S S E T H:

For and in consideration of the rental herein reserved, and of the
covenants, conditions, agreements, and stipulations hereinafter expressed, the
parties agree as follows:

1. Premises.
--------

(a) The Landlord hereby leases to Tenant, and Tenant hereby leases
from Landlord, the following described premises commonly known as 2201 Commerce
Street, North Las Vegas, Nevada 89030 (collectively, the "Premises"):

(i) All of that certain land as more particularly described on
Exhibits A and B and the map appended thereto, which Exhibits and map are
----------------
attached hereto and incorporated herein by this reference (the "Land");

(ii) All improvements located on the Land (the "Improvements"),
including without limitation an approximately 12,500 square foot two-story
building and an approximately 2,400 square foot two-story building
(collectively, the "Buildings"); and

(iii) All easements, rights of way, permits, licenses and
appurtenances benefitting the Land and the Improvements.

(b) Landlord covenants, represents and warrants that: (i) to
Landlord's knowledge, the Premises comply with all applicable laws, rules,
regulations and codes, including without limitation, the Americans with
Disabilities Act; and (ii) to Landlord's knowledge, there are no hazardous

-1-
<PAGE>

substances or hazardous wastes located on the Premises, except those used by the
current tenant of the Premises in connection with such tenant's operations at
the Premises.

2. Term.
----

(a) The term of this Lease shall be for five (5) years commencing on
the February __, 1998 (the "Commencement Date"). Tenant shall have the right to
extend the term of this Lease for one period of five (5) years (the "Extension
Term") following the expiration of the initial term. To exercise this option,
Tenant shall give Landlord notice of its intention to extend the initial term
not less than four (4) months prior to the expiration of the initial term. All
of the terms and provisions of this Lease shall apply during the Extension Term,
except that the base rent shall be determined in accordance with Section 3(d)
hereof.

3. Rental.
------

Notwithstanding the foregoing, the base rent shall be adjusted two and
one-half (2-1/2) years after the Commencement Date (the "Initial Adjustment
Date") by increasing such base rent by the sum of (i) $2,000 per month, plus
----
(ii) an additional increase determined as follows:

The base for computing the additional increase is the
Consumer Price Index ("CPI") for all Urban Consumers--All

-2-
<PAGE>

Items for the West, 1982-84 = 100, published by the United
States Department of Labor, Bureau of Labor Statistics (the
"Index"), which is in effect for the month of the Commencement
Date (the "Beginning Index"). The percentage increase in the
Index published for the calendar month immediately prior to
the Initial Adjustment Date over the Beginning Index shall be
multiplied by the base rent (i.e., $3,801.27) to determine the
additional increase in the base rent to be effective on the
Initial Adjustment Date. If the percentage increase is a
negative number, the additional increase pursuant to this
clause (ii) shall be zero.

(b) As additional rent, Tenant shall pay to Landlord all Real Estate
Taxes (as hereinafter defined), imposed on the Premises with respect to every
calendar year or part thereof during the term of this Lease. "Real Estate
Taxes" shall be defined as ad valorem real property taxes based on the assessed
valuation of real property, provided that said term shall not include: (i)
special assessments; (ii) taxes levied, assessed, or imposed against the rents,
profits or income derived from the Premises; (ii) penalties and interest; or
(iii) increases in property taxes occurring as a result of any transfer or sale
of the Premises (or any portion thereof) or any improvements made to the
Premises during the term hereof, other than improvements made by Tenant. If due
to a change in the method of taxation, any franchise, income, profit, or other
tax, however designated, shall be levied against Landlord's interest in the
Premises in whole or in part for or in lieu of any tax which would otherwise
constitute Real Estate Taxes, such taxes shall be included in the term Real
Estate Taxes for purposes hereof. All such payments shall be prorated for any
partial calendar years in which the term of this Lease shall commence or expire.
Notwithstanding anything contained in this Section 3(b) to the contrary, Real
Estate Taxes shall not include, and Tenant shall have no obligation to pay, any
increases in the Real Estate Taxes with respect to the Premises resulting from,
directly or indirectly, the sale or transfer of the Premises (or any portion
thereof) by Landlord during the term of this Lease.

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<PAGE>

rebates obtained by Tenant with respect to the period for which Tenant has
paid Real Property Taxes.

(d) In the event that Tenant exercises its right to extend the term of
this Lease pursuant to Section 2(a) hereof, the monthly base rent during the
Extension Term shall be the "Fair Rental Value" (as hereinafter defined) of the
Premises at the commencement of the Extension Term. The term "Fair Rental
Value" shall mean the rental value for the Premises that a tenant unrelated to a
landlord would be willing to pay such landlord, and what such a landlord would
be willing to accept from an unrelated tenant, in an arms'-length transaction,
with both parties being reasonable business persons having reasonable knowledge
of the relevant facts affecting the value of the leasehold interest, including,
without limitation, the obligations of the parties under the lease, the length
of the lease, and any rental escalation provisions. For the thirty (30) day
period commencing on the date that Tenant notifies Landlord that it intends to
exercise its right to extend the term of this Lease, Landlord and Tenant shall
attempt to agree in good faith as to the Fair Rental Value of the Premises. If
during this thirty (30) day period the parties are unable to agree as to the
Fair Rental Value of the Premises during the Extension Term, then the parties
shall use their best efforts to agree upon a neutral, experienced real estate
appraiser (the "Appraiser") who is knowledgeable as to commercial rental values
in the Clark County, Nevada area, and the Appraiser shall be charged with
determining within thirty (30) days of his appointment the Fair Rental Value of
the Premises for the Extension Term and shall prepare a written report of such
determination. Absent fraud or bad faith, the determination of the Appraiser
shall be binding on the parties. The parties shall share equally the fees
charged by the Appraiser. Notwithstanding the foregoing, the base rent during
the Extension Term shall be adjusted two and one-half (2-1/2) years after the
commencement of the Extension Term (the "Extension

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<PAGE>

Adjustment Date") by increasing the base rent in effect on the commencement of
the Extension Term by a percentage thereof equal to the percentage increase in
the Index published for the calendar month immediately prior to the Extension
Adjustment Date over the Index in effect for the month of the commencement of
the Extension Term. In no event shall the base rent decrease as a result of the
foregoing adjustment.

5. Repairs, Maintenance, and Changes by Tenant.
-------------------------------------------

(a) Landlord shall maintain in good order and repair the structural
components of the Buildings (including the roof, gutters, downspouts, exterior
walls, and foundations). Except for these structural components, Tenant shall
be responsible for maintaining all other aspects of the Premises in at least as
good a condition as the Premises are in as of the Commencement Date, ordinary
wear and tear excepted. All repairs, whether by Landlord or Tenant, to the
Premises shall be in quality and class at least the equal of the original work.
If Tenant fails to perform its obligations of maintenance or repair hereunder
with respect to the Premises within a reasonable period of time, Landlord shall
have the right to come onto the Premises, make such repairs, and upon billing to
Tenant by Landlord, Tenant shall reimburse Landlord for the costs of such
repairs plus interest thereon at the lesser of the highest legal rate allowed in
the State of Nevada or 12% per annum. Upon the expiration of or prior
termination of this Lease, Tenant shall remove all property of Tenant from the
Premises, except plumbing and other fixtures and leasehold improvements which
may have been installed by Tenant (unless the same can be removed without
causing material damage to the Premises), and except as otherwise provided in
this Lease, and surrender the Premises to the Landlord "broom clean" and in as
good a condition as the Premises were in on the Commencement Date, ordinary wear
and tear and damage by fire or other casualty excepted. Any property left on
the Premises after

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<PAGE>

the expiration or other termination of this Lease may be disposed of by Landlord
in any manner allowable under law.

6. Utilities. Landlord shall be responsible for insuring that adequate
---------
utility services are available to the Premises in the manner that such utility
services are currently available to the Premises. Tenant shall pay directly to
the utility provider all charges for electricity, gas, water, scavenger and
other utility services for the benefit of the Premises. If any such utilities
are not separately metered to the Premises, Tenant shall pay Landlord a
reasonable share (based on Tenant's usage) of the charges for such utilities on
a monthly basis within ten (10) days after written request therefor by Landlord,
which written request shall include a copy of the applicable bill.

7. Janitorial Services. Tenant shall perform and provide for all
-------------------
janitorial services required by Tenant on the Premises.

8. Damage to Tenant's Property or Premises.
---------------------------------------

(b) Except as provided in Section 9(d), Tenant shall be liable for any
damage to the Premises which may be caused by the negligence or intentional
misconduct of Tenant or its agents, employees, or customers. If Tenant fails to
repair any such damage within thirty (30) days after receipt of Landlord's
written demand to do so, Landlord may, at its option, repair such damage, and
Tenant shall thereupon reimburse and compensate Landlord as additional rent,
within ten (10) days after rendition of a statement by the Landlord, for the
reasonable cost of such repair and damage.

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<PAGE>

9. Indemnity, Liability Insurance, Building Insurance, Waiver of
-------------------------------------------------------------
Subrogation.
- -----------

(a) Except to the extent arising out of the negligence or willful
misconduct of Landlord its employees, agents or independent contractors, and/or
the conduct of Landlord or any of its affiliated companies (or their employees,
agents or independent contractors) in connection with their use of the Premises
pursuant to Section 30 below, Tenant shall indemnify, defend and hold harmless
Landlord from any and all liability and damages arising out of injury or death
to any person or damage to property occurring at the Premises during the
occupancy thereof by Tenant. The foregoing shall apply to third party claims
not claims made by or through Landlord.

(c) During the term of this Lease and any renewal hereof, Landlord
shall, at Tenant's expense, keep the Buildings and other Improvements insured
against loss or damage by fire or other casualty insurable under standard fire
and extended coverage insurance in an amount equal to the full current
replacement cost of the Buildings and other Improvements. Tenant shall
reimburse Landlord for the cost of such insurance within thirty (30) days after
Landlord's written request therefor. Along with such written request, Landlord
shall furnish Tenant with reasonable evidence of Landlord's payment of such
insurance. Notwithstanding the foregoing, Landlord shall have no obligation to
provide and Tenant shall have no obligation to pay for any earthquake or flood
insurance.

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<PAGE>

10. Damage or Destruction to Premises.
---------------------------------

11. Eminent Domain. If the Premises shall be taken under eminent
--------------
domain proceedings, or transferred to a public authority in lieu of such

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<PAGE>

12. Estoppel Certificate Statement, Attornment, Subordination, and
--------------------------------------------------------------
Execution of Documents.
- ----------------------

(a) Each of the parties hereto agrees that at any time and from time
to time at reasonable intervals, within ten (10) business days after written
request by the other party (the "Requesting Party"), such party (the "Responding
Party") will execute, acknowledge, and deliver to the Requesting Party, or its
mortgagee, or others designated by the Requesting Party, a certificate in such
form as may from time to time be provided, ratifying this Lease and certifying:

(iii) the commencement date and termination date of this Lease;

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<PAGE>

(v) that no rental has been paid in advance other than for the
month in which such certificate is signed by the Responding Party; and

(vi) the date to which all rentals due hereunder have been paid
under this Lease.

(c) Upon request by the Landlord, Tenant shall subordinate its rights
hereunder to the lien of any mortgage or mortgages, or the lien resulting from
any other method of financing or refinancing, now or hereafter in force against
the Land and/or the Buildings, or against any buildings hereafter placed upon
the Land, and to all advances made or hereafter to be made upon the security
thereof; provided, however, that a condition precedent to Tenant's requirement
to subordinate hereunder shall be that any such mortgagee shall agree that, so
long as Tenant is not in material default under this Lease, this Lease and all
Tenant's rights and options hereunder shall remain in full force and effect
notwithstanding any foreclosure (whether judicial or non-judicial) or any deed
in lieu of foreclosure transaction under any such mortgage.

13. Default.
-------

(a) If Tenant shall, at any time, be in default of the payment of
either rent or any payments required of Tenant hereunder or any part thereof,
for more than ten (10) days after Tenant's receipt of written notice from
Landlord that the same is past due, or if Tenant shall be in default of any
of the other obligations of this Lease to be kept, observed, and performed by
Tenant for more than thirty

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<PAGE>

(i) Landlord shall have the right to terminate this Lease and
recover (x) the worth at the time of award of any unpaid rent which had been
earned at the time of such termination; (y) the worth at the time of the
award of the amount by which the unpaid rent which would have been earned
after termination until the time of award exceeds the amount of such rental
loss that Tenant proves could have been reasonably avoided; and (z) the
worth at the time of award of the amount by which the unpaid rent for the
balance of the term of this Lease after the time of award exceeds the amount
of rental loss for the same period that Tenant proves could be reasonably
avoided;

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<PAGE>

thereafter diligently prosecutes the same to completion). If Landlord has not
cured or commenced to cure the default set forth in said notice within said 30-
day period, Tenant may at his option either (i) cure such default and deduct the
reasonable costs and expenses incurred from the next and succeeding rent
payment(s), or (ii) cancel this Lease and, in such event, this Lease shall
thereupon cease, terminate, and come to an end with the same force and effect as
though the original demised term had expired at that time. Notwithstanding the
foregoing, in the event of "Emergency Repairs" for which Landlord is responsible
under the terms of this Lease, Tenant shall have the right to make such repairs
immediately, provided that it will give Landlord notice thereof to the extent
reasonably possible under the circumstances. The cost of any such Emergency
Repairs made by Tenant may be deducted from rent next payable hereunder.
"Emergency Repairs" means repairs that are necessary to avoid imminent harm to
life, limb or property, as reasonably determined by Tenant.

15. Signs. Tenant shall have the right to install signs on the
-----
Buildings or on the Land, subject to compliance with applicable law.

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<PAGE>

form reasonably requested by Tenant's lender within ten (10) days of Tenant's
request therefor.

19. Notices. All notices to be given under this Lease shall be in
-------
writing and shall either be served personally, by reputable overnight carrier,
or sent by certified mail, return receipt requested. All notices mailed as
herein provided shall be deemed received two (2) days after mailing. Notices to
Landlord shall be sent to the address set forth in the preamble hereof or such
other address as Landlord may specify in written notice to Tenant. Notices to
Tenant shall be sent to the mailing address of the Premises and to the address
of Tenant specified in first paragraph of this Lease, or such other addresses as
Tenant may specify in written notice to Landlord.

20. Interest. Any amount due from Tenant to Landlord under this Lease
--------
which is not paid within ten (10) days of the date due shall bear interest at
the lesser of the highest legal rate allowed in the State of Nevada or 10% per
annum from the date due until paid; provided, however, the payment of such
interest shall not excuse or cure the default upon which such interest is
accrued.

21. Expense of Enforcement. If either Landlord or Tenant should prevail
----------------------
in any litigation by or against the other party related to this Lease, then the
losing party shall pay all costs and reasonable attorneys' fees incurred by the
prevailing party in connection with such litigation.

24. Captions. The captions and headings herein are for convenience and
--------
reference only and should not be used in interpreting any provision of this
Lease.

25. Applicable Law. This Lease shall be governed by and construed under
--------------
the laws of the State of Nevada. If any provision of this Lease, or portion
thereof, or the application thereof to any person or circumstance shall, to any

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<PAGE>

extent, be invalid or unenforceable, the remainder of this Lease shall not be
affected thereby, and each provision of this Lease shall be valid and
enforceable to the fullest extent permitted by law. Time is of the essence in
this Lease.

29. Counterpart Copies. This Lease shall be executed in multiple
------------------
copies, any one of which may be considered and used as an original.

30. License. For a period of one (1) year following the Commencement
-------
Date, certain of Landlord's affiliated companies shall have the right to use
office space at the Premises in substantially the same manner as such companies
have used office space in the period immediately prior to the Commencement Date;
provided that such companies do not materially interfere with or impede Tenant's
operations at the Premises. Such companies shall have no obligation to pay rent
for their use of the Premises, but shall be responsible for and shall indemnify,
defend and hold Tenant harmless from any liability arising out of their use of
the Premises.

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<PAGE>

IN WITNESS WHEREOF, the parties have hereto executed this Lease on the
day and year first written above.

LANDLORD:
--------

EXODUS HOLDINGS, LLC, a Nevada
limited liability company

By:
----------------------------------

Its:
----------------------------------

TENANT:
------

UNITED ROAD SERVICES, INC., a
Delaware corporation

By:
----------------------------------
Edward Sheehan

Its: Chief Executive Officer

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<PAGE>

Exhibit A
---------

DESCRIPTION OF LAND, IMPROVEMENTS AND PREMISES

-16-

<PAGE>

EXHIBIT 24.2

The Stockholders and Board of Directors
United Road Services, Inc.:

We consent to the use of our reports on United Road Services, Inc., Northland
Auto Transporters, Inc. and Northland Fleet Leasing, Inc., Falcon Towing and
Auto Delivery, Inc., Smith-Christensen Enterprises, Inc. and subsidiary, Caron
Auto Works, Inc. and Caron Auto Brokers, Inc., Absolute Towing and Transporting,
Inc., ASC Transportation Services and subsidiary, and Keystone Towing, Inc.
included herein and to the reference to our firm under the heading "Experts" in
the prospectus.

/s/ KPMG Peat Marwick LLP

Albany, New York
April 2, 1998