UNITED ROAD SERVICES INC, S-1, 1998-06-11

UNITED ROAD SERVICES INC
S-1, 1998-06-11
AUTOMOTIVE REPAIR, SERVICES & PARKING

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 11, 1998
REGISTRATION NO. 333-

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

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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

FORM S-1

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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UNITED ROAD SERVICES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 7549 94-3278455
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION OF INDUSTRIAL IDENTIFICATION NO.)
INCORPORATION OR CLASSIFICATION CODE
ORGANIZATION) NUMBER)
EDWARD T. SHEEHAN
PRESIDENT AND 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)

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

COPIES TO:

KAREN A. DEWIS, ESQ.
MCDERMOTT, WILL & EMERY
600 13TH STREET, N.W.
WASHINGTON, D.C. 20005-3096
(202) 756-8000

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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this Registration Statement becomes effective.
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. [X]
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. [_]

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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
TITLE OF EACH CLASS OF PROPOSED MAXIMUM PROPOSED
SECURITIES TO BE AMOUNT TO OFFERING MAXIMUM AGGREGATE AMOUNT OF
REGISTERED BE REGISTERED PRICE PER SHARE(1) OFFERING PRICE(1) REGISTRATION FEE(1)
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<S> <C> <C> <C> <C>
Common Stock, $0.001 per
value.................. 5,000,000 shares(2) $17.10 $85,500,000 $25,223
</TABLE>
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(1) Calculated in accordance with Rule 457(c) on the basis of the average of
the high and low sale prices of the Common Stock on June 9, 1998.
(2) Such number of shares are also registered hereunder for resale, with the
consent of the Registrant, by persons who receive shares covered by this
Registration Statement in connection with acquisitions and who may wish to
sell such shares under circumstances requiring or making desirable use of
the Prospectus contained herein.

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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.

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

SUBJECT TO COMPLETION, DATED JUNE 11, 1998
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+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

5,000,000 SHARES

UNITED ROAD SERVICES, INC.

LOGO
COMMON STOCK

The 5,000,000 shares of common stock, $0.001 par value per share ("Common
Stock"), covered by this Prospectus may be offered and issued from time to time
by United Road Services, Inc. (the "Company") in connection with acquisitions
of other businesses, assets, or securities in business combination transactions
in accordance with Rule 415(a)(1)(viii) of Regulation C under the Securities
Act of 1933, as amended (the "Securities Act"), or otherwise under Rule 415 or
upon exercise or conversion of warrants, options, convertible notes or other
similar instruments assumed or acquired by the Company in connection with any
such acquisitions. This Prospectus may also be used, with the Company's prior
consent, by persons who have received or will receive shares in connection with
acquisitions and who wish to offer and sell such shares under circumstances
requiring or making desirable its use. See "Securities Covered by this
Prospectus."

The Common Stock is listed on the Nasdaq National Market under the symbol
"URSI". On June 9, 1998, the last reported sale price of the Common Stock was
$17.25 per share. See "Price Range of Common Stock."

SEE "RISK FACTORS" BEGINNING ON PAGE 6 OF THIS PROSPECTUS FOR INFORMATION
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED
HEREBY.

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

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.

The date of this Prospectus is , 1998
<PAGE>

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF ANY
SECURITIES OTHER THAN THE REGISTERED SECURITIES TO WHICH IT RELATES OR AN
OFFER TO ANY PERSON IN ANY JURISDICTION WHERE IT IS UNLAWFUL TO MAKE SUCH
OFFER. THE DELIVERY OF THIS PROSPECTUS SHALL NOT, UNDER ANY CIRCUMSTANCES,
CREATE AN IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF
ANY DATE SUBSEQUENT TO THE DATE HEREOF.

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TABLE OF CONTENTS

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<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information.................................................. ii
Prospectus Summary..................................................... 1
Risk Factors........................................................... 6
Securities Covered by this Prospectus.................................. 13
Price Range of Common Stock............................................ 15
Dividend Policy........................................................ 15
The Company............................................................ 16
Capitalization......................................................... 19
Selected Consolidated Financial Data................................... 20
Management's Discussion and Analysis of Financial Condition and Results
of Operations......................................................... 22
Business............................................................... 42
Management............................................................. 49
Certain Transactions................................................... 52
Principal Stockholders................................................. 55
Description of Capital Stock........................................... 56
Experts................................................................ 58
Index to Financial Statements.......................................... F-1
</TABLE>
<PAGE>

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
material and other information concerning the Company can be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549 or at its regional offices at 500
West Madison Street, Suite 1400, Chicago, Illinois 60661 and Seven World Trade
Center, Suite 1300, New York, New York 10048. Copies of such material can be
obtained from the public reference section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. The Company's Common
Stock is listed on the Nasdaq National Market , and such reports, proxy
material and other information can also be inspected at the offices of the
Nasdaq Stock Market, Inc., 1735 K Street, N.W., Washington, D.C. 20006.

The Company has filed with the Commission a registration statement on Form
S-1 under the Securities Act of 1933, as amended, the (the "Securities Act")
with respect to the Common Stock offered hereby (the "Registration
Statement"). This Prospectus, which constitutes a part of the Registration
Statement, does not contain all the information set forth in the Registration
Statement and the exhibits and schedules thereto, certain parts of which have
been omitted in accordance with the rules and regulations of the Commission.
For further information with respect to the Company and the Common Stock,
reference is made to the Registration Statement and to the exhibits and
schedules filed as part of the Registration Statement. Statements contained in
this Prospectus concerning the contents of any contract or any other document
referred to are not necessarily complete; reference is made in each instance
to the copy of such contract or document filed as an exhibit to the
Registration Statement. Each such statement is qualified in all respects by
such reference to such exhibit. Copies of the Registration Statement and the
exhibits and schedules thereto may be inspected without charge at the public
reference facilities maintained by the Commission, and copies of all or any
part thereof may be obtained from the Commission, as described above. The
Registration Statement, including the exhibits and schedules thereto, are also
available on the Commission's web site at http://www.sec.gov.

This Prospectus contains certain forward-looking statements which involve
substantial risks and uncertainties. These forward-looking statements can
generally be identified as such because the context of the statement includes
words such as the Company "believes," "anticipates," "expects," "estimates,"
"intends," or other words of similar intent. Similarly, statements that
describe the Company's future plans, objectives and goals are also forward-
looking statements. The Company's actual results, performance or achievements
could differ materially from those expressed or implied in these forward-
looking statements as a result of certain factors, including those set forth
in "Risk Factors" and elsewhere in this Prospectus.

ii
<PAGE>

PROSPECTUS SUMMARY

Simultaneously with consummation of the Company's initial public offering in
May 1998, the Company acquired (the "Acquisitions") in exchange for cash and
shares of its Common Stock, all of the outstanding common stock and ownership
interests of seven motor vehicle and equipment towing and transport service
companies (each of the seven companies acquired being referred to herein as a
"Founding Company" and collectively the "Founding Companies"). The acquisition
of an eighth company, Keystone Towing, Inc. ("Keystone"), which requires
municipal approval of a contract assignment, is expected to be consummated in
the near future. 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.

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 it is one of the largest providers of these services in
the United States. Of the Founding Companies' combined net revenue in 1997,
approximately 58% was derived from Founding Companies which primarily provide
transport services, and approximately 42% was derived from Founding Companies
which primarily provide towing services.

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 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.

The Company estimates that motor vehicle and equipment towing and transport
services generated net revenue in excess of $14 billion in the United States in
1997. Based on available data, the Company believes that there are over 36,000
motor vehicle and equipment towing and transport 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 demand
for the provision of towing and transport services has been impacted 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.

1
<PAGE>

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. The
Company's management team includes executives with experience in implementing
acquisition programs and effectively integrating acquired businesses and
members of management of the Founding Companies who have significant contacts
and experience in towing and transport services. Edward T. Sheehan, the
Company's co-founder, Chairman of the Board and Chief Executive Officer, was
most recently the President and Chief Operating Officer of United Waste
Systems, Inc., a public consolidator of solid waste companies which itself was
acquired by USA Waste Services, Inc. in August 1997. While at United Waste
Systems, Inc., Mr. Sheehan was responsible for integrating over 200
acquisitions made over a five-year period. In addition, Donald J. Marr, the
Company's Chief Financial Officer, oversaw numerous acquisitions during his 11-
year tenure at KeyCorp. The Company believes that the combination of its
executive management, the management of its acquired companies and the
fragmented nature of the towing and transport markets will provide the Company
with the capability and opportunity to implement an effective consolidation
strategy. The Company has obtained a $50.0 million revolving line of credit
from a group of banks for whom Bank of America is acting as agent to be used,
in part, to finance future acquisitions.

OPERATING STRATEGY

Provide High Quality Service. The Company believes that timely,
professional and dependable service is the primary generator of repeat
towing and transport service business. The Company will seek to capitalize
on the particular strengths of its acquired companies to offer high quality
service to all of its customers. The Company intends to implement proven
practices of its acquired 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 its
individual acquired 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 acquired 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.

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 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.

2
<PAGE>

Maintain Local Expertise. The Company anticipates that members of
management 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.

RECENT DEVELOPMENTS

On June 10, 1998, the Company acquired all of the outstanding common
stock of 5-L Corporation, a Wyoming corporation ("5-L") and ADP Transport,
Inc., a Wyoming corporation ("ADP"; and together with 5-L, the "5-L
Companies") in exchange for an aggregate of approximately $5.7 million,
consisting of cash and shares of Common Stock. See "The Company--Recent
Developments."

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.

3
<PAGE>

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

The following 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 initial public
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
March 31, 1998. The unaudited pro forma combined as adjusted balance sheet data
give additional effect to the sale of 7,590,000 shares of Common Stock in the
initial public offering and the application of the estimated net proceeds
therefrom as if they occurred on March 31, 1998. The unaudited pro forma
combined balance sheet data as further adjusted give additional effect to the
acquisition of Keystone as if it occurred on March 31, 1998. 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 THREE MONTHS ENDED
DECEMBER 31, 1997 MARCH 31, 1998
------------------------ -----------------------
PRO FORMA PRO FORMA
COMBINED COMBINED
PRO FORMA AS FURTHER PRO FORMA AS FURTHER
COMBINED ADJUSTED COMBINED ADJUSTED
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Net revenue............ $ 42,599 $ 46,542 $ 11,897 $ 12,876
Cost of revenue........ 30,760 33,264 8,567 9,153
---------- ---------- --------- ----------
Gross profit........... 11,839 13,278 3,330 3,723
Selling, general and
administrative
expenses.............. 5,899(1) 6,483(1) 1,921(2) 2,148(2)
Goodwill
amortization(3)....... 1,159 1,367 287 339
---------- ---------- --------- ----------
Income from operations. 4,781 5,428 1,122 1,236
Interest expense and
other, net............ 223 180 246 232
---------- ---------- --------- ----------
Income before income
taxes................. 4,558 5,248 876 1,004
Income tax expense(4).. 2,099 2,470 465 537
---------- ---------- --------- ----------
Net income............. $ 2,459 $ 2,778 $ 411 $ 467
========== ========== ========= ==========
Diluted net income per
share................. $ 0.31 $ 0.32 $ 0.05 $ 0.05
========== ========== ========= ==========
Shares used in
computing diluted net
income per share(5)... 7,847,340 8,599,777 7,847,340 8,599,777
========== ========== ========= ==========
</TABLE>

<TABLE>
<CAPTION>
AT MARCH 31, 1998
---------------------------------
PRO FORMA
PRO FORMA COMBINED
PRO FORMA COMBINED AS FURTHER
COMBINED AS ADJUSTED ADJUSTED
<S> <C> <C> <C>
BALANCE SHEET DATA:
Working capital (deficit)(6)............ $(31,771) $ 45,983 $ 40,666
Total assets............................ 71,778 120,740 126,046
Long-term obligations, excluding current
installments........................... 6,200 6,200 6,504
Stockholders' equity.................... 25,106 103,400 107,327
</TABLE>
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(1) Includes contractually agreed upon reductions in salaries, bonuses and
benefits to the former owners of the Founding Companies and Keystone of $2.3
million for the Founding Companies and $556,000 for Keystone.
(2) Includes contractually agreed upon reductions in salaries, bonuses and
benefits to the former owners of the Founding Companies and Keystone of
$777,000 for the Founding Companies and $139,000 for Keystone.
(3) 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.
(4) Assumes a corporate income tax rate of 38% and the non-deductibility of
goodwill.
(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 issued to owners of the Founding Companies
in connection with the acquisitions of the Founding Companies; (iv) 2,594,863
of the shares issued in the initial public offering, representing that
portion of the total 7,590,000 shares issued in the initial public offering
necessary to pay the cash portion of the purchase price for the acquisitions
of the Founding Companies and expenses related to the initial public offering
and the Acquisitions; and (v) 54,000 shares reflecting the incremental effect
of options. 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 374,813 of the
shares 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 paid to owners of the Founding Companies,
representing the cash portion of the purchase price for the acquisitions of
the Founding Companies paid from a portion of the net proceeds of the initial
public offering.

4
<PAGE>

SUMMARY INDIVIDUAL COMPANY FINANCIAL DATA
(IN THOUSANDS)

The following table presents summary income statement data for the Founding
Companies and Keystone for each of their three most recent fiscal years and the
three months ended March 31, 1997 and 1998. 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>
THREE MONTHS ENDED
FISCAL YEARS ENDED(1) MARCH 31,
---------------------- --------------------
1995 1996 1997 1997 1998
<S> <C> <C> <C> <C> <C> <C>
NORTHLAND:
Net revenue................ $4,671 $6,353 $10,159 $ 2,082 $ 3,057
Income from operations..... 324 346 1,438 644 324
FALCON:
Net revenue................ 4,352 6,203 7,785 1,697 1,966
Income (loss) from
operations................ (93) 374 215 10 30
QUALITY:
Net revenue................ 4,396 5,395 6,802 1,533 1,955
Income from operations..... 380 986 1,564 283 210
CARON:
Net revenue................ 4,624 5,575 6,627 1,495 2,117
Income (loss) from
operations................ 341 253 (188) (1) 185
ABSOLUTE:
Net revenue................ 3,601 3,465 4,780 1,079 1,409
Income (loss) from
operations................ 56 73 (82) 246 250
AUTO SERVICE:
Net revenue................ 2,352 2,874 3,310 744 919
Income from operations..... 33 55 181 45 106
MILNE:
Net revenue................ 2,526 2,756 3,136 578 474
Income from operations..... 32 233 144 (69) (208)
KEYSTONE:
Net revenue................ 2,968 3,369 3,943 907 979
Income from operations..... 236 303 196 118 1
</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.

5
<PAGE>

RISK FACTORS

In addition to the other information in this Prospectus, the following
factors should be considered carefully by prospective investors in evaluating
the Company and its business before investing in shares of Common Stock
offered hereby. Except for 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 conducted no operations and generated no revenues prior
to its initial public offering in May 1998. Simultaneously with its initial
public offering, United Road Services completed the acquisitions of the
Founding Companies. The Company has also entered into an agreement to acquire
Keystone and expects to complete the acquisition of Keystone upon receipt of
municipal approval of a contract assignment. Historically, the Founding
Companies and Keystone have been operated 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, Keystone 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 or that the Keystone
acquisition will be consummated. 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

6
<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. 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

7
<PAGE>

NEED FOR INTEGRATED INFORMATION TECHNOLOGY SYSTEMS

The Company has selected and is in the process of 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. Companies providing towing and transport services are required to have
numerous federal, state and local licenses and permits for the conduct of
their respective businesses. Upon consummation of acquisitions of such
companies, 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 that the Company 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 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."

8
<PAGE>

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. While the Company has
not identified any sites which require remediation, the Company may be
required under federal, state or local law to investigate and remediate any
contamination identified in the future, 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 the Company maintains insurance (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 provision of towing and transport services 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 periods from July 1997 (inception) through December 31, 1997, and
the three months ended March 31, 1998 United Road Services incurred net losses
of $174,000 and $232,000, respectively. United

9
<PAGE>

Road Services incurred these losses because it had no revenues, yet 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, Dr. Allan D. Pass
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 towing or
transport experience and substantial knowledge of the local markets served,
including former owners and employees of the Founding Companies. 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 towing and
transport customers 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

The executive officers and directors of the Company and the former
stockholders of the Founding Companies, including their respective affiliates,
beneficially own 3,131,405 shares, or approximately 24.5% of the outstanding
Common Stock and upon consummation of the Keystone acquisition such officers
and directors and the stockholders of the Founding Companies and Keystone will
own 3,509,029 shares, or approximately 27.4% of the outstanding Common Stock.
Accordingly, these persons, if acting in concert, 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."

POTENTIAL DISTRIBUTION OF NON-COMPLYING PROSPECTUS

Prior to the effective date of the Registration Statement filed in
connection with the Company's initial public offering, copies of portions of
the Prospectus included within such Registration Statement were distributed to
a limited number of attendees of a towing industry trade show. The
distribution of these materials could, arguably, constitute a written offer of
the Common Stock that would constitute a violation of the Securities Act. If
this distribution did constitute a violation of the Securities Act, certain
rescission rights would be available to recipients of the materials who
purchased Common Stock in the Offering. The Company and the Underwriters
engaged in certain efforts not to sell Common Stock in the initial public
offering to any person who, to their knowledge, received the materials and the
Company believes that no shares were in fact sold to such persons.

10
<PAGE>

LACK OF SENIOR MANAGEMENT EXPERIENCE IN TOWING AND TRANSPORT SERVICES

The senior management of United Road Services has no prior experience in
towing and transport services. 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 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 experienced 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. Caron
had a net loss of approximately $81,000 in fiscal year 1997, Absolute had a
net loss of approximately $64,000 in 1997, Quality had net losses of
approximately $8,000 in fiscal year 1996 and $26,000 in the three months ended
March 31, 1998, Falcon had net losses of approximately $147,000 in 1995 and
$9,800 in the three months ended March 31, 1997 and Milne had a net loss of
approximately $208,000 for the three months ended March 31, 1998. See "The
Company." 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. 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 net
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 net revenue or target
net revenue. If target net revenue is achieved for a particular year, an
initial payment equal to 5% of the excess of actual net revenue over the
target level is due. In addition, once the target level of net revenue for a
particular year is met, subsequent and equal payments will also be due for
each year through 2002, provided that the actual net revenue for the
respective subsequent year exceeds the actual net revenue for the year that
the earn-out target was first achieved. 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."

CERTAIN ANTI-TAKEOVER PROVISIONS

The Company's Board of Directors has 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 are 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

11
<PAGE>

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."

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."

LIMITED TRADING HISTORY OF COMMON STOCK; STOCK PRICE VOLATILITY

The Common Stock was first publicly traded on May 1, 1998 after the
Company's initial public offering of Common Stock to the public at $13.00 per
share. As of the date of this Prospectus, the sale price has ranged from a low
of $15.125 to a high of $18.375 per share. The market price of the Common
Stock may fluctuate substantially due to a variety of factors, including
quarterly fluctuations in results of operations, the liquidity of the market
for the Common Stock, investor perceptions of the Company and the motor
vehicle and equipment towing and transport industry in general, changes in
earnings estimates by analysts, sales of Common Stock by existing holders,
loss of key personnel, general economic conditions and other factors. The
market price for the Company's Common Stock may also be affected by the
Company's ability to meet analysts' expectations, and any failure to meet such
expectations, even if minor, could have a material adverse effect on the
market price of the Company's 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 instigated 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
financial condition and results of operations. See "Price Range of Common
Stock."

12
<PAGE>

SECURITIES COVERED BY THIS PROSPECTUS

The shares of Common Stock covered by this Prospectus may be offered and
issued from time to time by the Company in connection with future acquisitions
of other businesses, assets or securities in business combination transactions
in accordance with Rule 415(a)(1)(viii) of Regulation C under the Securities
Act or otherwise under Rule 415 or upon the exercise or conversion of
warrants, options, convertible notes or similar instruments assumed or
acquired by the Company in connection with any such acquisitions. Such
acquisitions may be made directly by the Company or indirectly through a
subsidiary, may relate to businesses or securities of businesses similar or
dissimilar to the Company or to assets of a type which may or may not
currently be used by the Company, and may be made in connection with the
settlement of litigation or other disputes. The consideration offered by the
Company in such acquisitions, in addition to the shares of Common Stock
offered by this Prospectus, may include cash, debt, or other securities (which
may be convertible into shares of Common Stock covered by this Prospectus), or
assumption by the Company of liabilities associated with the business, assets,
or securities being acquired or of their owners, or a combination thereof. It
is contemplated that the terms of such acquisitions will be determined by
negotiations between the Company and the owners of the businesses, assets, or
securities to be acquired, with the Company taking into account such factors
as the quality of management, the past and potential earning power, growth and
appreciation of the businesses, assets, or securities acquired, and other
relevant factors, and it is anticipated that shares of Common Stock issued in
such acquisitions will be valued at a price reasonably related to the market
value of the Common Stock either at the time the terms of the acquisition are
tentatively agreed upon or at or about the time or times of delivery of the
shares.

The Company may from time to time, in an effort to maintain an orderly
market in the Common Stock, negotiate agreements with persons receiving Common
Stock covered by this Prospectus that will limit the number of shares that may
be sold by such persons at specified intervals. Such agreements may be more
restrictive than restrictions on sales made pursuant to the exemptions from
registration requirements of the Securities Act, including the requirements
under Rule 144 or Rule 145(d), and certain persons party to such agreements
may not otherwise be subject to such Securities Act requirements. The Company
anticipates that, in general, any such agreed upon limitations will be of
limited duration and will permit the recipients of Common Stock issued in
connection with acquisitions to sell up to a specified number of shares per
business day or days.

This Prospectus, as appropriately amended or supplemented, may, with the
consent of the Company, also be used from time to time by persons who have
received or will receive from the Company Common Stock covered by this
Prospectus or their transferees and who may wish to sell such stock under
circumstances requiring or making desirable its use (such persons herein
referred to as "Selling Stockholders"). The Company's consent to such use may
be conditioned upon such persons' agreeing not to offer more than a specified
number of shares of Common Stock in a given period of time and, upon the
happening of any event requiring this Prospectus to be supplemented or
amended, only following appropriate supplements or amendments to the
Prospectus, which the Company may agree to use its best efforts to prepare and
file at certain intervals. The Company may require that any such offering be
effected in an orderly manner through securities dealers, acting as brokers or
dealers selected by the Company; that Selling Stockholders enter into custody
agreements with one or more banks with respect to such shares, and that sales
be made only by one or more methods described in this Prospectus, as
appropriately amended or supplemented when required. There are presently no
arrangements or understandings pertaining to the distribution of any of the
shares of Common Stock offered hereby by Selling Stockholders.

Upon the Company's being notified by a Selling Stockholder that a particular
offer to sell its shares of Common Stock is made, a material arrangement has
been entered into with a broker-dealer for the sale of shares through a block
trade, special offering, exchange distribution, or secondary distribution, or
any block trade has taken place, to the extent required, a supplement to this
Prospectus will be delivered together with this Prospectus and filed pursuant
to Rule 424(b) under the Securities Act setting forth with respect to such
offer or trade the terms of the offer or trade, including (i) the name of the
Selling Stockholder, (ii) the number of shares of Common Stock involved, (iii)
the price at which the shares were sold, (iv) any participating brokers,
dealers or

13
<PAGE>

agents involved, (v) any discounts, commissions and other items paid as
compensation from, and the resulting net proceeds to, the Selling Stockholder,
(vi) that such broker-dealers did not conduct any investigation to verify the
information set out in this Prospectus, and (vii) other facts material to the
transaction.

Sales made by Selling Stockholders by means of this Prospectus may be made
from time to time in private transactions at prices to be individually
negotiated with the purchasers, or publicly through transactions on the
exchange or automated quotation system on which the Common Stock is then
traded or in the over-the-counter market (which may involve block
transactions), at prices reasonably related to market prices at the time of
sale or at negotiated prices. Broker-dealers participating in such
transactions may act as agent or as principal and, when acting as agent, may
receive commissions from the purchasers as well as from the sellers (if also
acting as agent for the purchasers). Unless otherwise indicated in a
supplement to this Prospectus, any such agent will be acting on a best efforts
basis for the period of its appointment.

Selling Stockholders may also offer shares of stock covered by this
Prospectus by means of prospectuses under other registration statements or
pursuant to exemptions from the registration requirements of the Securities
Act, including sales which meet the requirements of Rule 144 or Rule 145(d)
under the Securities Act, and stockholders should seek the advice of their own
counsel with respect to the legal requirements for such sales.

The Company will receive none of the proceeds from any sales of Common Stock
offered hereby by the Selling Stockholders. Printing, certain legal, filing
and other similar expenses of this offering will be paid for by the Company.
Selling Stockholders will bear any other expenses of this offering, including
brokerage fees, and any underwriting discounts or commissions.

Selling Stockholders and any brokers, dealers, agents, or others that
participate with the Selling Stockholders in the distribution of shares of
Common Stock offered hereby may be deemed to be "underwriters" within the
meaning of the Securities Act, and any commissions or fees received by such
persons and any profit on the resale of the shares purchased by such persons
may be deemed to be underwriting commissions or discounts under the Securities
Act.

The Company may agree to indemnify any Selling Stockholders under the
Securities Act against certain liabilities, including liabilities arising
under the Securities Act. Agents may be entitled under agreements entered into
with the Selling Stockholders to indemnification against certain civil
liabilities, including liabilities under the Securities Act.

The Selling Stockholders will be subject to the applicable provisions of the
Exchange Act, and the rules and regulations thereunder, including without
limitation Regulation M, which provisions may limit the timing of purchases
and sales of any of the Common Stock by the Selling Stockholders. All of the
foregoing may affect the marketability of the Common Stock.

In order to comply with certain states' securities laws, if applicable, the
Common Stock will be sold in such jurisdictions only through registered or
licensed brokers or dealers. In addition, in certain states the Common Stock
may not be sold unless the Common Stock has been registered or qualified for
sale in such state or an exemption from registration or qualification is
available and is complied with.

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<PAGE>

PRICE RANGE OF COMMON STOCK

The Common Stock began trading on the Nasdaq National Market on May 1, 1998
under the symbol "URSI." The following table sets forth the high and low sale
prices of the Common Stock since May 1, 1998, as reported by Nasdaq.

<TABLE>
<CAPTION>
HIGH LOW
<S> <C> <C>
1998
Second Quarter (May 1 through June 9).................... $18.375 $15.125
</TABLE>

On June 9, 1998, the last reported sale price of the Common Stock was $17.25
per share. As of June 9, 1998, there were approximately 12,788,477 holders of
record of Common Stock.

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.

15
<PAGE>

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 of
towing and transport service providers given the fragmented nature of these
markets 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." Simultaneously with consummation of
its initial public offering, United Road Services acquired the seven Founding
Companies. The Company also has entered into a definitive agreement to acquire
Keystone and expects to complete the acquisition of Keystone upon receipt of
municipal approval of a contract assignment. See "Recent Acquisitions". The
consideration paid by the Company in connection with the acquisitions of the
Founding Companies consisted 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 expected to be $4.5 million in
cash, 377,624 shares of Common Stock and the assumption of $657,000 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 of the Founding Companies and Keystone was determined by
negotiations among United Road Services and representatives of the Founding
Companies and Keystone. See "Certain Transactions." After giving effect to
such acquisitions (including Keystone), the Company's combined net revenue and
combined pro forma net income would have been $46.5 million and $2.8 million,
respectively, for the year ended December 31, 1997 and $12.9 million and
$467,000, respectively, for the three months ended March 31, 1998. A brief
description of each Founding Company (prior to its acquisition by the Company)
and Keystone is set forth below. Of the Founding Companies' combined net
revenue in 1997, approximately 58% was derived from Founding Companies which
primarily provide transport services, and approximately 42% was derived from
Founding Companies which primarily provide towing services. Of the Founding
Companies' combined net revenue for the three-months ended March 31, 1998,
approximately 60% was derived from Founding Companies which primarily provide
transport services, and approximately 40% was derived from Founding Companies
which primarily provide towing services.

RECENT ACQUISITIONS

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. As of March 31, 1998, it operated 55 vehicles and had
25 employees and 50 independent contractors. Northland had net revenue of
$10.2 million and net income of $1.1 million in 1997 and net revenue of $3.1
million and net income of $308,000 in the three months ended March 31, 1998.
In 1997, a substantial portion of Northland's net revenue was derived from two
customers, GE Capital and C.T. Services. The Company has a three-year
employment agreement with Edward W. Morawski, the founder and former President
of Northland, pursuant to which Mr. Morawski will continue to manage
Northland's operations. In addition, Mr. Morawski is a director of the
Company.

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. As of March 31, 1998, it operated 49 vehicles and had 72
employees. Falcon had net revenue of $7.8 million and net income of $132,000
in 1997 and net revenue of $2.0 million and net income of $11,000 in the three
months ended March 31, 1998. The Company has a three-year employment agreement
with David Floyd, the founder and former President of Falcon, pursuant to
which Mr. Floyd will continue to manage Falcon's operations.

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. As of March 31, 1998, it operated 40
vehicles and had 100 employees. Quality had net revenue of $6.8 million and
net

16
<PAGE>

income of $822,000 in 1997 and net revenue of $2.0 million and net loss of
$26,000 in the three months ended March 31, 1998. Edward D. Smith, the former
President of Quality, is a director of the Company.

CARON AUTO WORKS, INC. AND CARON AUTO BROKERS, INC. (COLLECTIVELY, "CARON")
were founded in 1976 and 1993, respectively. Caron's primary business is
transporting vehicles for leasing companies, long-haul transporters and
individuals in the Northeastern United States. It also provides towing
services for commercial and private customers in the Hartford, Connecticut
region. Caron has two facilities in East Hartford and one facility in New
Jersey. Caron also utilizes an unrelated party's facility in Florida for
vehicle storage. As of March 31, 1998 it operated 55 vehicles, with 70
employees and 10 independent contractors. Caron had net revenue of $6.6
million and a net loss of $81,000 in 1997 and net revenue of $2.1 million and
net income of $73,000 in the three months ended March 31, 1998. The Company
has a five-year employment agreement with David Caron, the founder and former
President of Caron, pursuant to which Mr. Caron will continue to be involved
in the management of Caron's operations and will provide acquisition-related
services to the Company.

ABSOLUTE TOWING AND TRANSPORTING, INC. ("ABSOLUTE") was founded in 1987.
Absolute's primary business is towing insurance salvage vehicles for insurance
companies and automobile auction companies in Southern California. Absolute
has one facility in Los Angeles. As of March 31, 1998, it operated 17
vehicles, with 20 employees and 35 independent contractors. Absolute had net
revenue of $4.8 million and a net loss of $64,000 in 1997 and net revenue of
$1.4 million and net income of $171,000 in the three months ended March 31,
1998. In 1997, virtually all of Absolute's net revenue was derived from one
customer, Insurance Auto Auctions. The Company has a three-year consulting
agreement with Todd Q. Smart, the founder and former President of Absolute,
pursuant to which Mr. Smart will continue to be involved in the management of
Absolute's operations and will provide acquisition-related consulting services
to the Company. Mr. Smart is also a director of the Company.

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. As of March 31, 1998,
it operated 28 vehicles and had 55 employees. Auto Service had net revenue of
$3.3 million and net income of $114,000 in 1997 and net revenue of $919,000
and net income of $52,000 in the three months ended March 31, 1998. In 1997, a
substantial portion of Auto Service's net revenue was derived from one
customer, Automobile Association of America. This relationship was terminated
May 8, 1998. The Company has a three-year employment agreement with Robert
Boxwell, former President of Auto Service, pursuant to which Mr. Boxwell will
continue to manage Auto Service's operations.

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. As of
March 31, 1998, it operated 35 vehicles and had 50 employees. Milne had net
revenue of $3.1 million and net income of $89,000 in 1997 and net revenue of
$474,000 and a net loss of $208,000 in the three months ended March 31, 1998.
The Company has a two-year consulting agreement with Gene Temen, the founder
and former President of Milne, pursuant to which Mr. Temen will continue to be
involved in the management of Milne's operations and will provide acquisition-
related consulting services to the Company.

KEYSTONE

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. As of March
31, 1998, it operated 21 vehicles and had 34 employees. Keystone had net
revenue of $3.9 million and net income of $239,000 in 1997 and net revenue of
$979,000 and net income of $15,000 in the three months ended March 31, 1998.
In 1997, a substantial portion of Keystone's net revenue was derived from one
customer, the Los Angeles

17
<PAGE>

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's operations 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.

RECENT DEVELOPMENTS

On June 10, 1998, the Company acquired all of the outstanding common stock
of 5-L and ADP in exchange for an aggregate of approximately $5.7 million,
consisting of cash and shares of Common Stock. 5-L's primary business is
transporting vehicles throughout the United States. 5-L has one facility in
Colorado. As of March 31, 1998, 5-L operated 38 vehicles and had eight
employees and 38 independent contractors. 5-L had net revenue of $9,816,144
and net income of $500,954 in 1997 and net revenue of $2,533,891 and net
income of $145,608 in the three months ended March 31, 1998. ADP's primary
business is guaranteeing vehicle leases. In connection with the acquisition of
the 5-L Companies, the Company entered into employment agreements with certain
members of management of 5-L, pursuant to which they will continue to manage
the operations of the 5-L Companies.

18
<PAGE>

CAPITALIZATION

The following table sets forth, as of March 31, 1998, (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 initial public 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 MARCH 31, 1998
--------------------------------------
PRO FORMA
PRO FORMA COMBINED AS
ACTUAL COMBINED FURTHER ADJUSTED
(IN THOUSANDS)
<S> <C> <C> <C>
Short-term obligations, including cur-
rent installments..................... $202 $33,353 $ 4,410
==== ======= ========
Long-term obligations, excluding cur-
rent installments..................... $-- $ 6,200 $ 6,504
---- ------- --------
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 12,176,101 shares issued
and outstanding pro forma combined as
further adjusted (2).................. 3 5 12
Additional paid-in capital............. 802 25,507 107,721
Accumulated deficit.................... (406) (406) (406)
---- ------- --------
Total stockholders' equity........... 399 25,106 107,327
---- ------- --------
Total capitalization................. $399 $31,306 $113,831
==== ======= ========
</TABLE>
- ---------------------
(1) Includes $27.8 million paid 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 initial public offering.
(2) Excludes 255,000 shares of Common Stock issuable upon exercise of stock
options outstanding as of March 31, 1998.

19
<PAGE>

SELECTED FINANCIAL DATA

United Road Services consummated the acquisitions of the seven Founding
Companies simultaneously with consummation of its initial public offering and
expects to acquire Keystone upon receipt of municipal approval of a contract
assignment. 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 initial public 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 March 31, 1998. The pro forma
combined as adjusted balance sheet data for United Road Services give
additional effect to the sale of the 7,590,000 shares of Common Stock in the
initial public offering and the application of the estimated net proceeds
therefrom as if they occurred on March 31, 1998. 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 March
31, 1998. 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 selected financial data as of March 31, 1997 and
1998 and for each of the three-month periods then ended for United Road
Services and Northland have been derived from, and are qualified by reference
to, the unaudited financial statements and notes thereto of United Road
Services and Northland, respectively, included elsewhere herein and, in the
opinion of management, contain all adjustments (consisting only of normal
recurring adjustments) necessary for the fair presentation of the information
set forth therein. The results of such interim periods are not necessarily
indicative of the results for the full year. 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>
THREE MONTHS
YEAR ENDED ENDED
DECEMBER 31, 1997 MARCH 31, 1998
----------------------- ------------------------------------
PERIOD FROM PRO FORMA PRO FORMA
JULY 25, 1997 COMBINED COMBINED
(INCEPTION) TO PRO FORMA AS FURTHER PRO FORMA AS FURTHER
DECEMBER 31, 1997 COMBINED ADJUSTED ACTUAL COMBINED ADJUSTED
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA--UNITED ROAD
SERVICES:
Net revenue............. $ -- $ 42,599 $ 46,542 $ -- $ 11,897 $ 12,876
Cost of revenue......... -- 30,760 33,264 -- 8,567 9,153
--------- --------- --------- --------- --------- ---------
Gross profit............ -- 11,839 13,278 -- 3,330 3,723
Selling, general and
administrative
expenses............... 174 5,899(1) 6,483(1) 390 1,921 2,148(2)
Goodwill
amortization(3)........ -- 1,159 1,367 -- 287 339
--------- --------- --------- --------- --------- ---------
Income (loss) from
operations............. (174) 4,781 5,428 (390) 1,122 1,236
Interest expense and
other, net............. -- (223) (180) 5 (246) (232)
--------- --------- --------- --------- --------- ---------
Income (loss) before
income tax............. (174) 4,558 5,248 (385) 876 1,004
Income tax expense
(benefit)(4)........... -- 2,099 2,470 (153) 465 537
--------- --------- --------- --------- --------- ---------
Net income (loss)....... $ (174) $ 2,459 $ 2,778 $ (232) $ 411 $ 467
========= ========= ========= ========= ========= =========
Diluted net income
(loss) per share....... $ (0.08) $ 0.31 $ 0.32 $ (0.08) $ 0.05 $ 0.05
========= ========= ========= ========= ========= =========
Shares used in computing
diluted net income
(loss) per share....... 2,055,300(5) 7,847,340(6) 8,599,777(6) 2,822,736(5) 7,847,340(6) 8,599,777(6)
========= ========= ========= ========= ========= =========
</TABLE>

20
<PAGE>

<TABLE>
<CAPTION>
AT
DECEMBER 31, AT MARCH 31, 1998
------------ ----------------------------------------------------
1997 PRO FORMA PRO FORMA
PRO FORMA COMBINED AS COMBINED AS
ACTUAL COMBINED ADJUSTED FURTHER ADJUSTED
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA--
UNITED ROAD SERVICES:
Working capital
(deficit).............. $(104) $(1,438) $(31,771) $ 45,983 $ 40,666
Total assets............ 50 1,905 71,778 120,740 126,046
Long-term obligations,
excluding current
installments........... -- -- 6,200 6,200 6,504
Stockholders' equity
(deficit).............. (104) 399 25,106 103,400 107,327
</TABLE>

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31, MARCH 31,
-------------------------------------- ----------------
1993 1994 1995 1996 1997 1997 1998
HISTORICAL STATEMENT OF (IN
OPERATIONS DATA-- THOUSANDS)
NORTHLAND:
<S> <C> <C> <C> <C> <C> <C> <C>
Net revenue............ $4,736 $3,769 $4,671 $6,353 $10,159 $2,082 $3,057
Operating income
(loss)................ (128) (44) 324 346 1,438 644 324
Other income (expense),
net................... 199 117 (18) -- (49) -- 82
Net income............. 71 67 275 346 1,054 489 308
<CAPTION>
AT
AT DECEMBER 31, MARCH 31,
-------------------------------------- ---------
1993 1994 1995 1996 1997 1998
HISTORICAL BALANCE SHEET (IN
DATA-- THOUSANDS)
NORTHLAND:
<S> <C> <C> <C> <C> <C> <C> <C>
Working capital........ $ 387 $ 52 $ 375 $ 235 $ 399 $ 617
Total assets........... 1,193 2,368 2,653 3,268 5,465 5,686
Long-term obligations,
excluding current
installments.......... 60 205 257 331 1,074 929
Stockholders' equity... 815 1,369 1,645 1,991 3,045 3,353
</TABLE>
- ---------------------
(1) Includes contractually agreed upon reductions in salaries, bonuses and
benefits to the former owners of the Founding Companies and Keystone of
$2.3 million for the Founding Companies and $556,000 for Keystone.
(2) Includes contractually agreed upon reductions in salaries, bonuses and
benefits to the former owners of the Founding Companies and Keystone of
$777,000 for the Founding Companies and $139,000 for Keystone.
(3) 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.
(4) Assumes a corporate income tax rate of 38% and the non-deductibility of
goodwill.
(5) Represents the actual weighted average outstanding shares.
(6) 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 issued to owners of the Founding
Companies in connection with the acquisitions of the Founding Companies;
(iv) 2,594,863 of the shares issued in the initial public offering,
representing that portion of the total 7,590,000 shares issued in the
initial public offering necessary to pay the cash portion of the purchase
price for the acquisitions of the Founding Companies and estimated
expenses related to the initial public offering and the Acquisitions; and
(v) 54,000 shares reflecting the incremental effect of options. 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 374,813 of the shares issued
in the initial public offering, representing the number of shares
necessary to pay the cash portion of the purchase price for the Keystone
acquisition.
(7) Includes $27.8 million paid 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 initial public offering.

21
<PAGE>

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

The following discussion and analysis should be read in conjunction with the
Founding Companies' and Keystone's 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 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

22
<PAGE>

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
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, would have been $2.3 million for the Founding Companies and $556,000
for Keystone. The aggregate amount of such reductions, had they been in effect
in the three months ended March 31, 1998, would have been $777,000 for the
Founding Companies and $139,000 for Keystone. These reductions have been
reflected as adjustments in the Unaudited Pro Forma Combined Statement of
Operations (the "Compensation Differential").

The Company anticipates that 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. For example, based on preliminary
discussions with insurance brokers, the Company currently anticipates that it
can reduce Company-wide insurance costs by approximately $500,000 compared to
the insurance expense of the Founding Companies and Keystone in 1997. Further,
had the borrowings of the Founding Companies and Keystone in 1997 carried the
interest rate that the Company expects will apply to borrowings under the
Credit Facility, their aggregate interest costs in 1997 would have been
approximately $104,000 lower than those actually incurred. 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 that the cost of implementing the new
integrated information system will be approximately $2.0 million. The Company
believes that neither these savings nor the costs associated therewith can be
quantified with specificity because the Acquisitions have recently 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 have been 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 $45.5 million for the Founding
Companies and $8.4 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. 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
presented 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.

23
<PAGE>

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:

<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEARS ENDED MARCH 31
------------------------------------------- ---------------------------
1995 1996 1997 1997 1998
------------- ------------- ------------- ------------ -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net revenue............. $26,521 100.0% $32,621 100.0% $42,599 100.0% $9,208 100.0% $11,897 100.0%
Cost of revenue......... 20,132 75.9 24,767 75.9 31,258 73.4 6,541 71.0 8,567 72.0
------- ----- ------- ----- ------- ----- ------ ----- ------- -----
Gross profit............ 6,389 24.1 7,854 24.1 11,341 26.6 2,667 29.0 3,330 28.0
Selling, general and
administrative
expenses............... 5,315 20.0 5,534 17.0 8,244 19.4 1,510 16.4 1,921 16.1
Goodwill amortization... -- -- -- -- -- -- -- -- 287 2.4
------- ----- ------- ----- ------- ----- ------ ----- ------- -----
Income from operations.. 1,074 4.1 2,320 7.1 3,097 7.2 1,157 12.6 1,122 9.5
Other expense, net...... 383 1.5 439 1.3 379 0.9 239 2.6 246 2.1
------- ----- ------- ----- ------- ----- ------ ----- ------- -----
Income before income
taxes.................. 691 2.6 1,881 5.8 2,718 6.3 918 10.0 876 7.4
Income tax expense...... 264 1.0 445 1.4 826 1.9 230 2.5 465 3.9
------- ----- ------- ----- ------- ----- ------ ----- ------- -----
Net income.............. $ 427 1.6% $ 1,436 4.4% $ 1,892 4.4% $ 688 7.5% $ 411 3.5%
======= ===== ======= ===== ======= ===== ====== ===== ======= =====
</TABLE>

Combined Results of Operations for the three months ended March 31, 1998
compared to the three months ended March 31, 1997

Net Revenue. Net revenue increased $2.7 million, or 29.2%, from $9.2 million
for the three months ended March 31, 1997 to $11.9 million for the three
months ended March 31, 1998. 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 for the three months ended March 31, 1998, except
for Milne which had a decline in net revenue of 18.0%. These increases ranged
from 15.8% to 46.8%. The largest net revenue increases were at Northland,
Quality and Caron.

Gross Profit. Gross profit increased $663,000, or 24.9%, from $2.7 million
for the three months ended March 31, 1997 to $3.3 million for the three months
ended March 31, 1998, due principally to increases in gross profit of $105,000
at Falcon, $213,000 at Quality and $402,000 at Caron offset by a decline in
gross profit of $239,000 at Northland. As a percentage of net revenue, gross
profit decreased from 29.0% for the three months ended March 31, 1997 to 28.0%
for the three months ended March 31, 1998.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $411,000, or 27.2%, from $1.5 million for
the three months ended March 31, 1997 to $1.9 million for the three months
ended March 31, 1998. This increase was primarily attributable to an increase
in stockholder compensation and the continued expansion of administrative
staff to support revenue growth. Selling, general and administrative expenses
as a percentage of net revenue decreased from 16.4% for the three months ended
March 31, 1997 to 16.1% for the three months ended March 31, 1998.

Other Expense, Net. Other expense, net increased $7,000 or 2.9%, from
$239,000 for the three months ended March 31, 1997 to $246,000 for the three
months ended March 31, 1998. As a percentage of net revenue, other expense,
net decreased from 2.6% for the three months ended March 31, 1997 to 2.1% for
the three months ended March 31, 1998.

Income Tax Expense. Income tax expense increased $235,000, or 102.2%, from
$230,000 for the three months ended March 31, 1997 to $465,000 for the three
months ended March 31, 1998. As a percentage of net revenue, income tax
expense increased from 2.5% for the three months ended March 31, 1997 to 3.9%
for the three months ended March 31, 1998.

24
<PAGE>

Net Income. Net income decreased $277,000, or 40.3%, from $688,000 for the
three months ended March 31, 1997 to $411,000 for the three months ended March
31, 1998. As a percentage of net revenue, net income decreased from 7.5% for
the three months ended March 31, 1997 to 3.5% for the three months ended March
31, 1998.

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 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.

25
<PAGE>

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

Assuming that the acquisitions of the Founding Companies and the initial
public offering and application of the estimated net proceeds therefrom had
actually taken place on March 31, 1998, the Company has on a pro forma
combined as adjusted basis as of March 31, 1998, approximately $50.5 million
of cash and cash equivalents, $46.0 million of working capital and $10.2
million of outstanding indebtedness. The Company intends to use $4.5 million
of net proceeds of the initial public offering to pay the cash portion of the
purchase price for Keystone and to assume $657,000 of outstanding indebtedness
in connection with the Keystone acquisition, at which point working capital
would be $40.7 million and $10.9 million of outstanding indebtedness on a pro
forma combined as adjusted basis as of March 31, 1998.

The Founding Companies generated $3.1 million of net cash from operating
activities during the three months ended March 31, 1998, primarily at United
Road Services, Northland and Absolute. Net cash used in investing activities
was $2.7 million, primarily relating to equipment purchases. Net cash used in
financing activities was $881,000 consisting of reductions in long-term debt
and capital lease obligations of $1.4 million and offering costs of $793,000,
offset by new financing of $3.1 million. At March 31, 1998, the Founding
Companies had a working capital deficit of $2.6 million and total debt
(including debt to stockholders) and capital lease obligations of $8.5 million
and $3.4 million, respectively.

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 has obtained a credit facility with a group of banks, for whom
which Bank of America is acting as agent, enabling the Company to borrow up to
$50.0 million on a revolving basis (the "Credit Facility"). In connection with
the Credit Facility, the Company agreed to issue to Bank of America a warrant
to purchase up to 156,250 shares of Common Stock. The Credit Facility will
terminate three years from closing, at which time all outstanding indebtedness
will be due. Borrowings under the Credit Facility 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 requires 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 and is subject to customary drawing
conditions. 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 Founding Companies spent an aggregate of $2.9 million in 1997 and $2.4
million for the three months ended March 31, 1998 on purchases of property and
equipment, which includes towing and transport vehicles and the Company
expects to make comparable expenditures in the current 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 $2.9
million in 1997 and $2.4 million for the three months ended March 31, 1998.

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, THREE MONTHS ENDED MARCH 31,
------------------------------------------- -------------------------------
1995 1996 1997 1997 1998
------------- ------------ -------------- --------------- ---------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net revenue............. $4,671 100.0% $6,353 100.0% $10,159 100.0% $ 2,082 100.0% $ 3,057 100.0%
Cost of revenue......... 3,683 78.8 5,132 80.8 7,342 72.3 1,237 59.4 2,451 80.2
------ ----- ------ ----- ------- ----- ------- ------ ------- ------
Gross profit............ 988 21.2 1,221 19.2 2,817 27.7 845 40.6 606 19.8
Selling, general and
administrative 664 14.2 875 13.8 1,379 13.5 201 9.7 282 9.2
expenses............... ------ ----- ------ ----- ------- ----- ------- ------ ------- ------
Income from operations.. 324 7.0 346 5.4 1,438 14.2 644 30.9 324 10.6
Other income (expense),
net.................... (18) (0.4) -- -- (49) (0.5) -- -- 82 2.7
------ ----- ------ ----- ------- ----- ------- ------ ------- ------
Income before income
taxes.................. 306 6.6 346 5.4 1,389 13.7 644 30.9 406 13.3
Income tax expense...... 31 0.7 -- -- 335 3.3 155 7.4 98 3.2
------ ----- ------ ----- ------- ----- ------- ------ ------- ------
Net income.............. $ 275 5.9% $ 346 5.4% $ 1,054 10.4% $ 489 23.5% $ 308 10.1%
====== ===== ====== ===== ======= ===== ======= ====== ======= ======
</TABLE>

Northland Results for the three-months ended March 31, 1998 compared to the
three-months ended March 31, 1997

Net Revenue. Net revenue increased $975,000, or 46.8%, from $2.1 million for
the three months ended March 31, 1997 to $3.1 million for the three months
ended March 31, 1998, primarily due to the increased volume of a service
arrangement with a national provider of automobile lease financing and other
previously existing service arrangements.

27
<PAGE>

Gross Profit. Gross profit decreased $239,000, or 28.3%, from $845,000 for
the three months ended March 31, 1997 to $606,000 for the three months ended
March 31, 1998. As a percentage of net revenue, gross profit decreased from
40.6% for the three months ended March 31, 1997 to 19.8% for the three months
ended March 31, 1998. These decreases were due primarily to the increased
depreciation costs and other costs resulting from variable subcontractor and
broker arrangements.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $81,000, or 40.3%, from $201,000 for the
three months ended March 31, 1997 to $282,000 for the three months ended March
31, 1998, 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 9.7% for the three months ended March 31, 1997 to 9.2% for the
three months ended March 31, 1998.

Other Income (Expense), Net. Other income increased $82,000 from income of
zero for the three months ended March 31, 1997 to income of $82,000 for the
three months ended March 31, 1998. As a percentage of net revenue, other
income (expense), net increased from 0.0% for the three months ended March 31,
1997 to 2.7% for the three months ended March 31, 1998. This increase was
primarily attributable to increased gain on sale of assets and increased
interest income.

Income Tax Expense. Income tax expense decreased from $155,000 for the three
months ended March 31, 1997 to $98,000 for the three months ended March 31,
1998. As a percentage of net revenue, income tax expense decreased from 7.4%
for the three months ended March 31, 1997 to 3.2% for the three months ended
March 31, 1998.

Net Income. Net income decreased $181,000, or 37.0%, from $489,000 for the
three months ended March 31, 1997 to $308,000 for the three months ended March
31, 1998. As a percentage of net revenue, net income decreased from 23.5% for
the three months ended March 31, 1997 to 10.1% for the three months ended
March 31, 1998.

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.

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.

28
<PAGE>

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 March 31, 1998, working capital was $617,000 and debt and capital lease
obligations outstanding were $591,000 and $842,000, respectively.

Northland generated $544,000 in net cash from operating activities for the
three-months ended March 31, 1998. Net cash provided by investing activities
was $38,000, which was primarily from equipment sales. Net cash used in
financing activities consisted of $183,000 relating to principal payments on
debt and capital leases outstanding.

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.

29
<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>
THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
------------------------------------------- -----------------------------
1995 1996 1997 1997 1998
------------- ------------- ------------ ------------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net revenue............. $4,351 100.0% $6,203 100.0% $7,785 100.0% $1,697 100.0% $1,966 100.0%
Cost of revenue......... 3,492 80.2 4,638 74.8 5,956 76.5 1,266 74.6 1,430 72.7
------ ----- ------ ----- ------ ----- ------ ----- ------ -----
Gross profit............ 859 19.8 1,565 25.2 1,829 23.5 431 25.4 536 27.3
Selling, general and
administrative
expenses............... 952 21.9 1,191 19.2 1,614 20.7 421 24.8 506 25.7
------ ----- ------ ----- ------ ----- ------ ----- ------ -----
Income (loss) from
operations............. (93) (2.1) 374 6.0 215 2.8 10 0.6 30 1.6
Other income (expense),
net.................... (39) (0.9) (117) (1.9) 25 0.3 (28) (1.6) (10) (0.5)
------ ----- ------ ----- ------ ----- ------ ----- ------ -----
Income (loss) before
income taxes........... (132) (3.0) 257 4.1 240 3.1 (18) (1.0) 20 1.1
Income tax expense
(benefit).............. 15 0.4 94 1.5 108 1.4 (8) (0.5) 9 0.5
------ ----- ------ ----- ------ ----- ------ ----- ------ -----
Net income (loss)....... $ (147) (3.4)% $ 163 2.6% $ 132 1.7% $ (10) (0.5)% $ 11 0.6
====== ===== ====== ===== ====== ===== ====== ===== ====== =====
</TABLE>

Falcon Results for the three-months ended March 31, 1998 compared to the
three-months ended March 31, 1997

Net Revenue. Net revenue increased $269,000, or 15.9%, from $1.7 million for
the three-months ended March 31, 1997 to $2.0 million for the three months
ended March 31, 1998. The growth in revenue was primarily due to increased
volume driven by continued fleet expansion.

Gross Profit. Gross profit increased $105,000, or 24.4%, from $431,000 for
the three-months ended March 31, 1997 to $536,000 for the three months ended
March 31, 1998. As a percentage of net revenue, gross profit increased from
25.4% for the three-months ended March 31, 1997 to 27.3% for the three-months
ended March 31, 1998. This increase as a percentage of net revenue was the
result of increased depreciation and facility and equipment rental expense.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $85,000, or 20.2%, from $421,000 for the
three-months ended March 31, 1997 to $506,000 for the three-months ended March
31, 1998. As a percentage of net revenue, selling, general and administrative
expenses increased from 24.8% for the three-months ended March 31, 1997 to
25.7% for the three-months ended March 31, 1998. These increases were
primarily due to increased officer and office personnel compensation, which
was related to an increase in net revenue and an increase in professional
fees.

Other Income (Expense), Net. Other income (expense), net changed $18,000
from an expense of $28,000 for the three-months ended March 31, 1997 to an
expense of $10,000 for the three-months ended March 31, 1998. As a percentage
of net revenue, other income (expense), net changed from an expense of 1.6%
for the three-months ended March 31, 1997 to an expense of 0.5% for the three-
months ended March 31, 1998. This change in other income (expense), net was
primarily attributable to the decrease in interest expense.

Income Tax Expense (Benefit). Income tax expense (benefit) decreased
$17,000, or (212.5%), from ($8,000) for the three-months ended March 31, 1997
to $9,000 for the three-months ended March 31, 1998. As a percentage of net
revenue, income tax expense (benefit) increased from (0.5%) for the three-
months ended March 31, 1997 to 0.5% for the three-months ended March 31, 1998.

Net Income (Loss). Net income increased $21,000, or 210.0% from ($10,000)
for the three-months ended March 31, 1997 to $11,000 for the three-months
ended March 31, 1998. As a percentage of net revenue, net income increased
from 0.5% for the three-months ended March 31, 1997 to 0.6% for the three-
months ended March 31, 1998.

30
<PAGE>

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, 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.

31
<PAGE>

Falcon Liquidity and Capital Resources

At March 31, 1998, working capital deficiency was $1.1 million. Debt and
capital lease obligations outstanding were $473,000 and $993,000,
respectively.

Falcon generated $331,000 in net cash from operating activities for the
three-months ended March 31, 1998. Net cash used in investing activities was
approximately $151,000, which was related to the purchase of various
equipment. Net cash used in financing activities was $180,000 consisting of
payments on capital lease obligations.

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 THREE MONTHS ENDED
YEARS ENDED JANUARY 31, DECEMBER 31, 1997(1) MARCH 31,
---------------------------- -------------------- -----------------------------
1996 1997 1997 1997 1998
------------- ------------ --------------------- ------------- --------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net revenue............. $4,396 100.0% $5,395 100.0% $ 6,802 100.0% $1,533 100.0% $ 1,955 100.0%
Cost of revenue......... 2,579 58.7 3,214 59.6 3,849 56.6 1,015 66.2 1,224 62.6
------ ----- ------ ----- ---------- --------- ------ ----- ------- -----
Gross profit............ 1,817 41.3 2,181 40.4 2,953 43.4 518 33.8 731 37.4
Selling, general and
administrative
expenses............... 1,437 32.7 1,195 22.2 1,390 20.4 235 15.3 521 26.6
------ ----- ------ ----- ---------- --------- ------ ----- ------- -----
Income from operations.. 380 8.6 986 18.2 1,563 23.0 283 18.5 210 10.8
Other expense, net...... 284 6.4 194 3.6 300 4.4 (197) (12.9) (245) (12.5)
------ ----- ------ ----- ---------- --------- ------ ----- ------- -----
Income (loss) before
income taxes........... 96 2.2 792 14.6 1,263 18.6 86 5.6 (35) (1.7)
Income tax expense
(benefit).............. 104 2.4 277 5.1 441 6.5 30 2.0 (9) (0.5)
------ ----- ------ ----- ---------- --------- ------ ----- ------- -----
Net income (loss)....... $ (8) (0.2)% $ 515 9.5% $ 822 12.1% $ 56 3.6% $ (26) (1.2)%
====== ===== ====== ===== ========== ========= ====== ===== ======= =====
</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.

Quality Results for the three-month Period Ended March 31, 1997 compared to
the three-months ended March 31, 1998

Net Revenue. Net revenue increased $422,000, or 27.5%, from $1.5 million in
the three-month period ended March 31, 1997 to $2.0 million in the three-month
period ended March 31, 1998. The increase was due primarily to increased
service calls arising from the continued expansion of the population within
the geographical service area.

32
<PAGE>

Gross Profit. Gross profit increased $213,000, or 41.1%, from $518,000 in
the three-month period ended March 31, 1997 to $731,000 in the three-month
period ended March 31, 1998. As a percentage of net revenue, gross profit
increased from 33.8% in the three-month period ended March 31, 1997 to 37.4%
to the three-month period ended March 31, 1998. 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 $286,000, or 121.7%, from $235,000 in the
three-month period ended March 31, 1997 to $521,000 in the three-month period
ended March 31, 1998. As a percentage of net revenue, selling, general and
administrative expenses increased from 15.3% in the three-month period ended
March 31, 1997 to 26.6% in the three-month period ended March 31, 1998. This
increase was primarily due to increased officer compensation and professional
fees.

Other Expense, Net. Other expense, net increased $48,000, or 24.4%, from
$197,000 in the three-month period ended March 31, 1997 to $245,000 in the
three-month period ended March 31, 1998. As a percentage of net revenue, other
expense, net decreased from 12.9% in the three-month period ended March 31,
1997 to 12.5% in the three-month period ended March 31, 1998. This increase is
primarily due to a net loss on sale of assets for the period.

Income Tax Expense (Benefit). Income tax expense (benefit) decreased
$39,000, or 130%, from an income tax expense of $30,000 in the three-month
period ended March 31, 1997 to a tax benefit of $9,000 in the three-month
period ended March 31, 1998. As a percentage of net revenue, income tax
expense increased from 2.0% in the three-month period ended March 31, 1997 to
an income tax benefit of 0.5% in the three-month period ended March 31, 1998.

Net Income (Loss). Net income decreased $82,000, or 146.4%, from net income
of $56,000 in the three-month period ended March 31, 1997 to a loss of $26,000
in the three-month period ended March 31, 1998. As a percentage of net
revenue, net income decreased from 3.6% in the three month period ended March
31, 1997 to 1.2% in the three-month period ended March 31, 1998.

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.

33
<PAGE>

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.

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 March 31, 1998, working capital deficiency was $334,000 and debt
obligations outstanding were $2.7 million.

Quality generated $373,000 in net cash from operating activities for the
three months ended March 31, 1998. Net cash used in investing activities was
approximately $312,000, which was related to the purchase of various
equipment. Net cash used in financing activities was approximately $19,000,
consisting primarily of payments on debt obligations.

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.

34
<PAGE>

CARON COMBINED RESULTS OF OPERATIONS

Caron's primary business is transporting vehicles for leasing companies,
long-haul transporters and individuals in the Northeastern United States. It
also provides towing services for commercial and private customers in the
Hartford, Connecticut region. Caron has facilities in East Hartford and New
Jersey, and utilizes an unrelated party's facility in 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>
THREE MONTHS ENDED MARCH
YEARS ENDED SEPTEMBER 30, 31,
------------------------------------------- ----------------------------
1995 1996 1997 1997 1998
------------- ------------- ------------- ------------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net revenue............. $4,624 100.0% $5,575 100.0% $6,627 100.0% $1,495 100.0% $2,117 100.0%
Cost of revenue......... 4,045 87.5 5,084 91.2 6,304 95.1 1,351 90.4 1,571 74.2
------ ----- ------ ----- ------ ----- ------ ----- ------ -----
Gross profit............ 579 12.5 491 8.8 323 4.9 144 9.6 546 25.8
Selling, general and
administrative
expenses............... 238 5.1 238 4.3 511 7.7 145 9.7 361 17.1
------ ----- ------ ----- ------ ----- ------ ----- ------ -----
Income (loss) from
operations............. 341 7.4 253 4.5 (188) (2.8) (1) (0.1) 185 8.7
Other income (expense),
net.................... (44) (1.0) (62) (1.1) 12 0.2 4 0.3 (75) (3.5)
------ ----- ------ ----- ------ ----- ------ ----- ------ -----
Income (loss) before
income taxes........... 297 6.4 191 3.4 (176) (2.6) 3 0.2 110 5.2
Income tax expense
(benefit).............. 103 2.2 62 1.1 (95) (1.4) 1 0.1 37 1.7
------ ----- ------ ----- ------ ----- ------ ----- ------ -----
Net income (loss)....... $ 194 4.2% $ 129 2.3% $ (81) (1.2)% $ 2 0.1% $ 73 3.5%
====== ===== ====== ===== ====== ===== ====== ===== ====== =====
</TABLE>

Caron Results for the three months ended March 31, 1998 compared to the three
months ended March 31, 1997

Net Revenue. Net revenue increased $622,000, or 41.6%, from $1.5 million for
the three months ended March 31, 1997 to $2.1 million for the three months
ended March 31, 1998, primarily due to increased volume for a major automobile
leasing customer and general increases in volume in transport services.

Gross Profit. Gross profit increased $402,000, or 279.2%, from $144,000 for
the three months ended March 31, 1997 to $546,000 for the three months ended
March 31, 1998. As a percentage of net revenue, gross profit increased from
9.6% for the three months ended March 31, 1997 to 25.8% for the three months
ended March 31, 1998 as a result of reduced repair and maintenance costs
associated with facilities and equipment.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $216,000, or 149.0%, from $145,000 in 1997
to $361,000 for the three months ended March 31, 1998. As a percentage of net
revenue, selling, general and administrative expenses increased from 9.7% for
the three months ended March 31, 1997 to 17.1% for the three months ended
March 31, 1998. These increases resulted primarily from an increase in office
and clerical staff to support business growth.

Other Income, Net. Other income, net changed $79,000 from income of $4,000
for the three months ended March 31, 1997 to an expense of $75,000 for the
three months ended March 31, 1998. As a percentage of net revenue, other
income, net changed from 0.3% for the three months ended March 31, 1997 to
3.5% for the three months ended March 31, 1998. This change in other income,
net was primarily attributable to the increase in interest expense.

Income Tax Expense. Income tax expense changed $36,000 from $1,000 for the
three months ended March 31, 1997 to $37,000 for the three months ended March
31, 1998. As a percentage of net revenue, income tax expense changed from 0.1%
for the three months ended March 31, 1997 to 1.7% for the three months ended
March 31, 1998.

35
<PAGE>

Net Income. Net income changed $71,000 from net income of $2,000 for the
three months ended March 31, 1997 to a net income of $73,000 for the three
months ended March 31, 1998. As a percentage of net revenue, net income
changed from income of 0.1% for the three months ended March 31, 1997 to
income of 3.5% for the three months ended March 31, 1998.

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, 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.

36
<PAGE>

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 March 31, 1998, working capital deficiency was $70,000 and debt and
capital lease obligations outstanding were $2.8 million and $896,000,
respectively. The growth in the indebtedness relates to a substantial fleet
expansion, since December 31, 1997, which has been financed with debt and
capital lease obligations.

Caron used $96,000 net cash in operating activities for the three months
ended March 31, 1998. Net cash used in investing activities was approximately
$1.3 million, which was used substantially for equipment purchases. Net cash
provided by financing activities was $1.4 million, relating primarily to an
increase in borrowing.

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 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.

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>
THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
--------------------------- ----------------------------
1996 1997 1997 1998
------------ ------------- ------------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net revenue............. $3,465 100.0% $4,780 100.0% $1,079 100.0% $1,409 100.0%
Cost of revenue......... 2,756 79.5 3,767 78.8 735 68.1 1,055 74.9
------ ----- ------ ----- ------ ----- ------ -----
Gross profit............ 709 20.5 1,013 21.2 344 31.9 354 25.1
Selling, general and ad-
ministrative expenses.. 636 18.4 1,095 22.9 98 9.1 104 7.4
------ ----- ------ ----- ------ ----- ------ -----
Income (loss) from oper-
ations................. 73 2.1 (82) (1.7) 246 22.8 250 17.7
Other expense, net...... 4 0.1 6 0.1 (2) (0.2) (14) (1.0)
------ ----- ------ ----- ------ ----- ------ -----
Income (loss) before in-
come tax............... 69 2.0 (88) (1.8) 244 22.6 236 16.7
Income tax Expense (ben-
efit).................. 12 0.4 24 0.5 67 6.2 65 4.6
------ ----- ------ ----- ------ ----- ------ -----
Net income (loss)....... $ 81 2.4% $ (64) (1.3)% $ 177 16.4% $ 171 12.1%
====== ===== ====== ===== ====== ===== ====== =====
</TABLE>

Absolute Results for the three-months ended March 31, 1998 compared to the
three-months ended March 31, 1997

Net Revenue. Net revenue increased $330,000, or 30.6%, from $1.1 million for
the three-months ended March 31, 1997 to $1.4 million for the three-months
ended March 31, 1998. The growth in net revenue was primarily due to severe
winter weather resulting in hazardous road conditions, a service arrangement
with a national automobile auction company and establishment of service for a
large insurance company which was not in place during the three months ended
March 31, 1997.

Gross Profit. Gross profit increased $10,000, or 2.9%, from $344,000 for the
three-months ended March 31, 1997 to $354,000 for the three-months ended March
31, 1998. As a percentage of net revenue, gross profit decreased from 31.9%
for the three-months ended March 31, 1997 to 25.1% for the three-months ended
March 31, 1998.

37
<PAGE>

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $6,000 or 6.1%, from $98,000 for the three-
months ended March 31, 1997 to $104,000 for the three-months ended March 31,
1998. As a percentage of net revenue, selling, general and administrative
expenses decreased from 9.1% for the three-months ended March 31, 1997 to 7.4%
for the three-months ended March 31, 1998.

Other Expense, Net. Other expense, net increased $12,000, or 600.0%, from
$2,000 for the three months ended March 31, 1997 to $14,000 for the three
months ended March 31, 1998. As a percentage of net revenue, other expense,
net changed from 0.2% for the three-months ended March 31, 1997 to 1.0% for
the three-months ended March 31, 1998.

Income Tax Benefit. Income tax expense decreased $2,000, or 3%, from $67,000
for the three-months ended March 31, 1997 to $65,000 for the three-months
ended March 31, 1998. As a percentage of net revenue, income tax benefit
decreased from 6.2% for the three-months ended March 31, 1997 to 4.6% from the
three-months ended March 31, 1998.

Net Income (Loss). Net income (loss) changed $6,000 from net income of
$177,000 for the three-months ended March 31, 1997 to $171,000 for the three-
months ended March 31, 1998. As a percentage of net revenue, net income (loss)
changed from income of 16.4% for the three-months ended March 31, 1997 to
12.1% for the three-months ended March 31, 1998.

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 towing 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 March 31, 1998, working capital was $73,000 and debt obligations
outstanding were $651,000. The growth in indebtedness related to expanded line
of credit borrowing to finance expanded operations.

Absolute generated $877,000 net cash in operating activities for the three-
months ended March 31, 1998. Net cash used in investing activities was
$169,000, which was used for equipment purchases. Net cash provided by
financing activities was $26,000.

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

38
<PAGE>

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.

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 28 vehicles and has 55 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>
THREE MONTHS ENDED
MARCH 31,
YEAR ENDED -----------------------
DECEMBER 31, 1997 1997 1998
------------------ ---------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Net revenue....................... $ 3,310 100.0% $744 100.0% $919 100.0%
Cost of revenue................... 2,364 71.4 460 61.8 555 60.4
--------- -------- ---- ----- ---- -----
Gross profit...................... 946 28.6 284 38.2 364 39.6
Selling, general and administra-
tive expenses.................... 765 23.1 239 32.1 258 28.1
--------- -------- ---- ----- ---- -----
Income from operations............ 181 5.5 45 6.1 106 11.5
Other income (expense), net....... 18 0.6 1 0.1 (28) (3.0)
--------- -------- ---- ----- ---- -----
Income before income taxes........ 163 4.9 46 6.2 78 8.5
Income tax expense................ 49 1.5 14 1.9 26 2.8
--------- -------- ---- ----- ---- -----
Net income........................ $ 114 3.4% $ 32 4.3% $ 52 5.7%
========= ======== ==== ===== ==== =====
</TABLE>

Auto Service Results for the three months ended March 31, 1998 compared to
the three months ended March 31, 1997

Net Revenue. Net revenue increased $175,000, or 23.5%, from $744,000 for the
three months ended March 31, 1997 to $919,000 for the three months ended March
31, 1998, primarily due to increased volume in commercial and non-road club
towing.

Gross Profit. Gross profit increased $80,000, or 28.2%, from $284,000 for
the three months ended March 31, 1997 to $364,000 for the three months ended
March 31, 1998. As a percentage of net revenue, gross profit increased from
38.2% for the three months ended March 31, 1997 to 39.6% for the three months
ended March 31, 1998.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $19,000, or 7.9%, from $239,000 in 1997 to
$258,000 for the three months ended March 31, 1998. As a percentage of net
revenue, selling, general and administrative expenses decreased from 32.1% for
the three months ended March 31, 1997 to 28.1% for the three months ended
March 31, 1998.

Other Income (expense), Net. Other income (expense), net changed $29,000
from income of $1,000 for the three months ended March 31, 1997 to an expense
of $28,000 for the three months ended March 31, 1998. As a percentage of net
revenue, other income, net changed from 0.1% for the three months ended March
31, 1997 to 3.0% for the three months ended March 31, 1998. This change in
other income, net was primarily attributable to the increase in interest
expense.

Income Tax Expense. Income tax expense changed $12,000 from $14,000 for the
three months ended March 31, 1997 to $26,000 for the three months ended March
31, 1998. As a percentage of net revenue, income tax expense changed from 1.9%
for the three months ended March 31, 1997 to 2.8% for the three months ended
March 31, 1998.

39
<PAGE>

Net Income. Net income changed $20,000 from net income of $32,000 and for
the three months ended March 31, 1997 to a net income of $52,000 for the three
months ended March 31, 1998. As a percentage of net revenue, net income
changed from income of 4.3% for the three months ended March 31, 1998 to
income of 5.7% for the three months ended March 31, 1998.

Auto Service Liquidity and Capital Resources

At March 31, 1998, working capital deficiency was $35,000 and debt and
capital lease obligations outstanding were $224,000 and $687,000,
respectively.

Auto Service generated $61,000 in net cash from operating activities for the
three-months ended March 31, 1998. Net cash used in investing activities was
approximately $9,000, which was used for equipment and property purchases. Net
cash used by financing activities was $58,000.

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>
THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
--------------------------- ----------------------
1996 1997 1997 1998
------------- ------------ ---------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net revenue............... $3,369 100.0% $3,943 100.0% $907 100.0% $979 100.0%
Cost of revenue........... 2,132 63.3 2,607 66.1 551 60.7 612 62.5
------ ----- ------ ----- ---- ----- ---- -----
Gross profit.............. 1,237 36.7 1,336 33.9 356 39.3 367 37.5
Selling, general and ad-
ministrative expenses.... 934 27.7 1,140 28.9 238 26.2 366 37.4
------ ----- ------ ----- ---- ----- ---- -----
Income from operations.... 303 9.0 196 5.0 118 13.1 1 0.1
Other income (expense),
net...................... (26) (0.8) 43 1.1 12 1.3 14 1.4
------ ----- ------ ----- ---- ----- ---- -----
Net income................ $ 277 8.2% $ 239 6.1% $130 14.4% $ 15 1.5%
====== ===== ====== ===== ==== ===== ==== =====
</TABLE>

Keystone Results for the three-months ended March 31, 1998, compared to the
three-months ended March 31, 1997

Net Revenue. Net revenue increased $72,000, or 7.9%, from $907,000 for the
three-months ended March 31, 1997 to $979,000 for the three-months ended March
31, 1998. The growth in net revenue was primarily due to severe winter weather
resulting in increased commercial activity offset by a decrease in municipal
activity.

Gross Profit. Gross profit increased $11,000, or 3.1%, from $356,000 for the
three-months ended March 31, 1997 to $367,000 for the three-months ended March
31, 1998. As a percentage of net revenue, gross profit decreased from 39.3%
for the three-months ended March 31, 1997 to 37.5% for the three-months ended
March 31, 1998. The decrease as a percentage of net revenue was caused
primarily by increased depreciation and repair expense related to equipment
obtained as part of recent acquisitions.

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<PAGE>

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $128,000, or 53.8%, from $238,000 for the
three-months ended March 31, 1997 to $366,000 for the three months ended March
31, 1998. This change in selling, general and administration expenses was a
result of an increase in professional fees and increased staffing to support
business growth. As a percentage of net revenue, selling, general and
administrative expenses increased from 26.2% for the three-months ended March
31, 1997 to 37.4% for the three-months ended March 31, 1998.

Other Income (Expense), Net. Other income (expense), net changed $2,000 from
$12,000 for the three-months ended March 31, 1997 to $14,000 for the three-
months ended March 31, 1998. As a percentage of net revenue, other income
(expense), net changed from an expense of 1.3% for the three-months ended
March 31, 1997 to income of 1.4% for the three-months ended March 31, 1998.
This change in other income (expense), net was primarily attributable to the
increase in related party management fee income.

Net Income. Net income decreased $115,000, or 88.5%, from $130,000 for the
three-months ended March 31, 1997 to $15,000 for the three-months ended March
31, 1998. As a percentage of net revenue, net income decreased from 14.4% for
the three-months ended March 31, 1997 to 1.5% for the three-months ended March
31, 1998.

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 March 31, 1998, working capital deficiency was $636,000 and debt
obligations outstanding were $681,000.

Keystone generated $128,000 in net cash from operating activities for the
three-months ended March 31, 1998. Net cash used in investing activities was
approximately $18,000, which was used for the purchase of equipment. Net cash
used in financing activities was approximately $132,000, consisting primarily
of a distribution to Keystone's stockholders.

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.

41
<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.
Simultaneously with its initial public offering in May 1998, United Road
Services acquired the seven Founding Companies. The Company also has entered
into a definitive agreement to acquire Keystone and expects to complete the
acquisition of Keystone upon municipal approval of a contract assignment. The
Company believes that it is one of the largest providers of motor vehicle and
equipment towing and transport services in the United States. Of the Founding
Companies' combined net revenue in 1997, approximately 58% was derived from
Founding Companies which primarily provide transport services, and
approximately 42% was derived from Founding Companies which primarily provide
towing services.

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 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.

OVERVIEW

The Company estimates that motor vehicle and equipment towing and transport
services generated net revenue in excess of $14 billion in the United States
in 1997. Based on available data, the Company believes that there are over
36,000 motor vehicle and equipment towing and transport 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
demand for the provision of towing and transport services has been impacted 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.

Towing and transport services are provided to 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, between dealers and from point to point for individuals.
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.

42
<PAGE>

Insurance Salvage Towing. This market involves towing 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 that the
demand will increase for a provider of towing and transport services with the
resources and geographic coverage to serve the expanding needs 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
members of management of the Founding Companies who have significant contacts
and experience in towing and transport services. Edward T. Sheehan, the
Company's co-founder, Chairman of the Board and Chief Executive Officer, was
most recently the President and Chief Operating Officer of United Waste
Systems, Inc., a public consolidator of solid waste companies which itself was
acquired by USA Waste Services, Inc. in August 1997. While at United Waste
Systems, Inc., Mr. Sheehan was responsible for integrating over 200
acquisitions made over a five-year period. In addition, Donald J. Marr, the
Company's Chief Financial Officer, oversaw numerous acquisitions during his
11-year tenure at KeyCorp. The Company believes that the combination of its
executive management, the management of its acquired companies and the
fragmented nature of the towing and transport markets will provide the Company
with the capability and opportunity to implement an effective consolidation
strategy. The Company has obtained a $50.0 million revolving line of credit
from a group of banks for whom Bank of America is acting as agent to be used,
in part, to finance future acquisitions.

43
<PAGE>

OPERATING STRATEGY

Provide High Quality Service. The Company believes that timely, professional
and dependable service is the primary generator of repeat towing and transport
service business. The Company will seek to capitalize on the particular
strengths of its acquired companies to offer high quality service to all of
its customers. The Company intends to implement proven practices of its
acquired 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 its
individual acquired 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 acquired 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 members of management
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

44
<PAGE>

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 the existing business names and identities of such
acquired companies.

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 its 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.

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 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.

45
<PAGE>

Insurance Salvage Towing. The Company provides insurance salvage towing
services pursuant to contractual arrangements with insurance companies and
automobile auction companies for a per-vehicle fee based on the towing
distance. This business involves secondary towing, 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 operations collect these
towed vehicles and deliver 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 vehicle used and the distance
traveled.

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.

The Company also may provide municipal freeway towing services 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. Prior to
their acquisition by the Company, 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. The
Company intends to focus its marketing efforts on large governmental and
commercial accounts, including leasing companies, insurance companies and law
enforcement agencies. The Company also intends to augment the capabilities and
contacts of the owners and general managers of its acquired 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 11.0% of its
combined net revenue in 1997 and approximately 10.7% of its combined net
revenue in the three months ended March 31, 1998. The Company provides towing
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 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.

46
<PAGE>

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 utilize computerized positioning systems which identify
and track vehicle location and status, thereby decreasing response times and
increasing asset utilization. The Company intends to continue to use existing
dispatch systems of its acquired 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.

The Company is in 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 acquired company and expects that its new accounting and financial
reporting system will be year 2000 compatible.

COMPETITION

The provision of towing and transport services is 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 towing and transport service
providers. 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

47
<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 that the Company
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 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 utilizes a variety of programs to improve safety and promote an
accident-free environment, including regular driver training and
certification, drug testing and safety bonuses. These programs are designed to
ensure that all employees comply with safety standards established by the
Company, its insurance carriers and federal, state and local laws and
regulations. The Company believes that its emphasis on safety and training
will assist it in attracting and retaining quality employees.

FACILITIES AND VEHICLES

As of May 15, 1998, the Company operated 15 facilities 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.

As of May 15, 1998, the Company operated a fleet of approximately 285 towing
and transport vehicles, which the Company believes are generally 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. The Company maintains insurance on a
Company-wide basis, subject to customary deductibles. Although companies
acquired by the Company 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 May 15, 1998, the Company had approximately 370 employees and
approximately 95 independent contractors. None of the Company's employees are
subject to collective bargaining agreements.

48
<PAGE>

MANAGEMENT

DIRECTORS AND OFFICERS

The following table sets forth the name, age and position of the Company's
directors and officers:

<TABLE>
<CAPTION>
NAME AGE POSITION
<S> <C> <C>
Edward T. Sheehan................ 56 Chairman of the Board, Chief Executive Officer and Secretary
Allan D. Pass.................... 49 Senior Vice President and Chief Operating Officer
Donald J. Marr................... 39 Senior Vice President and Chief Financial Officer
Richard P. McGinn, Jr............ 33 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>
- ---------------------

Edward T. Sheehan has served as Chairman of the Board and Chief Executive
Officer since October 1997. Mr. Sheehan was President from December 1992 to
August 1997, and Chief Operating Officer from 1994 to August 1997, of United
Waste Systems, Inc. ("United"), when United 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. Mr. Sheehan currently
serves as a director of Gundle/SLT Environmental, Inc., an environmental
products company.

Allan D. Pass, Ph.D has served as Senior Vice President and Chief Operating
Officer of the Company since January 1998. From 1986 until February 1998, he
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.

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.

Edward W. Morawski has served as Vice President and a director of the
Company since May 1998. Mr. Morawski founded Northland in 1977 and served as
its President from inception until its acquisition by the Company.

Grace M. Hawkins has been a director of the Company since May 1998. 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. has been a director of the Company since May 1998.
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

49
<PAGE>

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 has been a director of the Company since May 1998. Mr. Smart
is also involved in the management of Absolute's operations and provides
acquisition-related consulting services to the Company. Mr. Smart founded
Absolute in 1988 and served as its President from inception until its
acquisition by the Company.

Edward D. Smith has been a director of the Company since May 1998. Mr. Smith
served as President of Quality from 1988 until its acquisition by the Company.
He has also served as 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's operations 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 in the near future. 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 are
entitled to receive (i) an annual grant of options to purchase 20,000 shares
of Common Stock upon being elected as a director of the Company at the fair
market value on the date of grant and (ii) cash compensation of approximately
$2,500 for each meeting attended. Directors who are employees or consultants
of the Company do 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 conducted no operations during
1997 other than activities related to the Acquisitions and the initial public
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, Marr, Morawski and
McGinn and Dr. Pass (collectively, the "Named Executive Officers").

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 a performance bonus as
determined by the Board of Directors. The annual base salaries of the
executives are as follows: Mr. Sheehan--$200,000; Dr. Pass--$150,000; Mr.
Marr--$75,000; Mr. Morawski--$150,000; and Mr. McGinn--$90,000. Each
employment agreement has an initial term of three years (beginning in February
1998 in the case of Mr. Sheehan, May 1998 in the case of Mr. Morawski 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

50
<PAGE>

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; Dr. Pass--two years; Mr. Marr--one year; Mr. McGinn--one
year and Mr. Morawski--the remainder of the initial term of the agreement. For
purposes of such severance payments, a voluntary termination of employment by
any of Messrs. Marr, McGinn 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,
1,278,885 shares. 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 with a
weighted average exercise price of $9.00 per share had been granted to
officers and consultants of the Company as of May 1, 1998 as follows: 90,000
shares to Dr. Pass; 50,000 shares to Mr. Marr; 40,000 shares to Mr. McGinn; an
aggregate of 35,000 shares to two consultants. Each such option vests at the
rate of 33 1/3% per year, commencing on the first anniversary of the date of
grant, and will expire ten years after the date of grant.

51
<PAGE>

CERTAIN TRANSACTIONS

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 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
expired with respect to 372,000 shares upon consummation of the initial public
offering, and will expire 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 Messrs. Moorehead and Smith, 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 the initial public offering.

The aggregate consideration paid by United Road Services in the
acquisitions of the Founding Companies was $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 expected to be $4.5 million in
cash, 377,624 shares of Common Stock and the assumption of $657,000 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 net 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 net revenue or target net revenue.
If target net revenue is achieved for a particular year, an initial payment
equal to 5% of the excess of actual net revenue over the target level is due.
In addition, once the target level of net revenue for a particular year is
met, subsequent and equal payments will also be due for each year through
2002, provided that the actual net revenue for the respective subsequent year
exceeds the actual net revenue for the year that the earn-out target was first
achieved. Any required earn-out payments will be made in the form of Common
Stock of the Company.

The consummation of the Keystone acquisition is subject to customary
conditions. These conditions include, among others, the continuing accuracy on
the closing date of the Keystone acquisition of the representations and
warranties of Keystone and the principal stockholders thereof and of the
Company, the performance by each of them of all covenants included in the
agreements relating to the Keystone acquisition, 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 Keystone. There can be no assurance that the conditions to closing of the
Keystone acquisition will be satisfied or waived or that the Keystone
acquisition 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 the acquisition has not been consummated on or before
September 1, 1998.

52
<PAGE>

The following table sets forth the consideration paid by United Road
Services for each Founding Company and the consideration expected to be paid
for 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 of the Founding Companies and Keystone occurred
on March 31, 1998:

<TABLE>
<CAPTION>
SHARES OF TOTAL
NAME CASH COMMON STOCK INDEBTEDNESS
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Northland................................ $ 8,307 692,277 $ 1,433
Falcon................................... 4,282 356,850 1,466
Quality.................................. 5,129 485,750 2,711
Caron.................................... 3,000 250,000 3,698
Absolute................................. 3,567 297,267 651
Auto Service............................. 1,651 137,554 911
Milne.................................... 1,873 156,043 868
------- --------- -------
Total Founding Companies............... 27,809 2,375,741 11,738
Keystone................................. 4,531 377,624 718
------- --------- -------
Total.................................. $32,340 2,753,365 $12,456
======= ========= =======
</TABLE>

In connection with the Acquisitions and as consideration for their interests
in the Founding Companies, certain officers, directors and holders of more
than five percent of the outstanding shares of Common Stock of the Company
received 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................................ 413 39,156
Todd Q. Smart.................................. 3,567 297,267
</TABLE>

In connection with the Keystone acquisition and as consideration for his
interest in Keystone, Mr. Henninger, who will become a director of the Company
upon consummation of the Keystone acquisition, is expected to receive $4.5
million in cash and 377,624 shares of Common Stock.

Prior to consummation of the Absolute acquisition, Absolute distributed to
Mr. Smart personal assets not included in the transaction with a book value of
$65,000.

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
intends to distribute to Mr. Henninger personal assets not included in the
transaction with a book value of $56,000.

From time to time prior to the acquisition of Quality by the Company,
Quality advanced amounts to, and borrowed amounts from, entities of which Mr.
Smith was 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, was repaid to Quality prior to consummation
of the acquisition of Quality by the Company.

In addition, Quality paid management fees to Eureka Management llc
("Eureka"), an entity which was approximately 50% beneficially owned by Mr.
Smith. Prior to consummation of the acquisition of Quality by the Company,
Quality paid $80,000 to Eureka for management fees accrued in 1998. Fees paid
by Quality 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
of the Founding Companies and Keystone 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 initial public
offering in defined businesses and geographic areas.

In connection with the Absolute acquisition, the Company entered into a
consulting agreement with Mr. Smart. Pursuant to this agreement, Mr. Smart is
entitled to receive from the Company a consulting fee equal to two percent of
the gross revenue of each company that Mr. Smart assists the Company in
acquiring, with the fee

53
<PAGE>

being based upon such acquired company's gross revenue for the twelve months
immediately preceding the acquisition. Mr. Smart's consulting agreement is for
a term of three years. In addition, in connection with the Northland
acquisition, the Company entered 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.

Upon consummation of the Keystone acquisition, the Company will enter into a
consulting agreement with Mr. Henninger. Pursuant to the agreement, Mr.
Henninger will be entitled to receive from the Company a consulting fee equal
to two percent of the gross revenue of each company that Mr. Henninger 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. Mr. Henninger's consulting agreement will be for a term of three
years.

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 initial public offering, Quality (i) formed and
funded a new limited liability company, Exodus Holdings llc ("Exodus") and
transferred 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) transferred 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. The Company leases 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 was secured by the
capital stock and certain assets of Quality, including certain of the real
property transferred to Exodus, was assumed by the Company in connection with
the Quality acquisition, and repaid from the net proceeds of the Offering.

Prior to its acquisition by the Company, Quality leased 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 the twelve-month
period ended December 31, 1997, respectively. The Company has agreed to 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 became directors of the
Company upon consummation of the initial public offering had guaranteed
obligations of their respective Founding Companies prior to the acquisition of
such Founding Companies by the Company. The Company intends to obtain the
release of these guarantees as soon as practicable.

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.

54
<PAGE>

PRINCIPAL STOCKHOLDERS

The following table sets forth certain information with regard to the
beneficial ownership of the Common Stock as of June 1, 1998, 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, (c) each Named Executive Officer, and (d) all directors 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>
NUMBER OF
NAME SHARES PERCENT
<S> <C> <C>
Edward T. Sheehan(1).... 714,000 5.6%
Edward W. Morawski...... 692,277 5.4
John David Floyd........ 356,850 2.8
Todd Q. Smart........... 297,267 2.3
Edward D. Smith......... 51,060 *
Donald F. Moorehead,
Jr..................... 29,760 *
Allan D. Pass........... -- --
Donald J. Marr.......... -- --
Grace M. Hawkins........ -- --
Mark McKinney........... 930,000 7.3
Ross Berner............. 930,000 7.3
All directors and
executive officers
as a group (8
persons)............... 1,784,364 14.0%
</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 is expected to receive
377,624 shares of Common Stock upon consummation of the Keystone acquisition,
which would represent 2.9% of the Common Stock outstanding at that time.

55
<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. As of June
1, 1998, there were 12,788,477 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.

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 first annual meeting of stockholders of the Company, the
term of office of the second class will expire at the second annual meeting of
stockholders of the Company, and the term of office of the third class will
expire at the third annual meeting of stockholders of the Company. 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

56
<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.

57
<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.

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.

58
<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-7
UNITED ROAD SERVICES, INC.
Independent Auditors' Report........................................... F-10
Balance Sheet.......................................................... F-11
Statement of Operations................................................ F-12
Statement of Stockholders' Equity (Deficit)............................ F-13
Statement of Cash Flows................................................ F-14
Notes to Financial Statements.......................................... F-15
FOUNDING COMPANIES
NORTHLAND AUTO TRANSPORTERS, INC. AND NORTHLAND FLEET LEASING, INC.
Independent Auditors' Report........................................... F-18
Combined Balance Sheets................................................ F-19
Combined Statements of Operations...................................... F-20
Combined Statements of Stockholder's Equity............................ F-21
Combined Statements of Cash Flows...................................... F-22
Notes to Combined Financial Statements................................. F-23
FALCON TOWING AND AUTO DELIVERY, INC.
Independent Auditors' Report........................................... F-29
Balance Sheets......................................................... F-30
Statements of Operations............................................... F-31
Statements of Stockholder's Equity..................................... F-32
Statements of Cash Flows............................................... F-33
Notes to Financial Statements.......................................... F-34
SMITH-CHRISTENSEN ENTERPRISES, INC. AND SUBSIDIARY
Independent Auditors' Report........................................... F-39
Consolidated Balance Sheets............................................ F-40
Consolidated Statements of Operations.................................. F-41
Consolidated Statements of Stockholders' Equity........................ F-42
Consolidated Statements of Cash Flows.................................. F-43
Notes to Consolidated Financial Statements............................. F-44
CARON AUTO WORKS, INC. AND CARON AUTO BROKERS, INC.
Independent Auditors' Report........................................... F-51
Combined Balance Sheets................................................ F-52
Combined Statements of Operations...................................... F-53
Combined Statements of Stockholders' Equity............................ F-54
Combined Statements of Cash Flows...................................... F-55
Notes to Combined Financial Statements................................. F-56
</TABLE>

F-1
<PAGE>

<S> <C>
ABSOLUTE TOWING AND TRANSPORTING, INC.
Independent Auditors' Report............................................. F-62
Balance Sheets........................................................... F-63
Statements of Operations................................................. F-64
Statements of Stockholder's Equity....................................... F-65
Statements of Cash Flows................................................. F-66
Notes to Financial Statements............................................ F-67
ASC TRANSPORTATION SERVICES AND SUBSIDIARY
Independent Auditors' Report............................................. F-71
Consolidated Balance Sheet............................................... F-72
Consolidated Statement of Operations..................................... F-73
Consolidated Statement of Stockholders' Deficit.......................... F-74
Consolidated Statement of Cash Flows..................................... F-75
Notes to Consolidated Financial Statements............................... F-76

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

KEYSTONE TOWING, INC.
Independent Auditors' Report............................................. F-81
Balance Sheets........................................................... F-82
Statements of Operations................................................. F-83
Statements of Stockholder's Equity....................................... F-84
Statements of Cash Flows................................................. F-85
Notes to Financial Statements............................................ F-86
</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 March 31, 1998. 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

MARCH 31, 1998
(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...... $ 65 807 3 308 30 745 133 -- $ -- $2,091 $48,422(c)(d)
Accounts
receivable....... -- 815 563 284 1,044 107 258 246 -- 3,317 --
Less:
allowance....... -- -- -- -- -- -- -- -- -- -- --
------ ----- ----- ----- ----- ----- ----- ----- ------ ------ -------
Accounts
receivable, net.. -- 815 563 284 1,044 107 258 285 -- 3,317 --
Accounts
receivable from
related parties
and employees.... -- 41 -- 66 510 -- 2 3 -- 622 --
Inventory........ -- -- 26 29 91 -- 9 9 -- 164 --
Notes
receivables...... -- 21 -- -- 153 -- -- -- -- 174 --
Prepaid and other
current assets... 3 93 150 48 175 27 67 21 -- 584 --
------ ----- ----- ----- ----- ----- ----- ----- ------ ------ -------
Total Current
Assets.......... 68 1,777 742 735 2,003 879 469 279 -- 6,952 48,422
Property and
equipment, net... 387 3,886 2,453 3,166 3,310 424 764 995 1,827(a)(b) 17,212 --
Accounts
receivable--
related parties--
non-current...... -- -- -- 454 -- -- -- -- -- 454 --
Other non-current
assets, net...... 1,450 23 -- 99 67 31 26 -- -- 1,696 --
Goodwill......... -- -- -- -- -- -- -- -- 45,464(a)(b) 45,464 540(c)
------ ----- ----- ----- ----- ----- ----- ----- ------ ------ -------
Total Assets..... $1,905 5,686 3,195 4,454 5,380 1,334 1,259 1,274 47,291 71,778 48,962
====== ===== ===== ===== ===== ===== ===== ===== ====== ====== =======
LIABILITIES AND
STOCKHOLDERS' EQ-
UITY
Current
installment of
notes payable.... $ -- 324 355 522 549 17 18 314 (162)(b) 1,937 --
Current
installment of
lease
obligations...... -- 132 369 -- 233 -- 249 -- -- 983 --
Borrowings under
lines of credit.. -- -- 45 -- 250 556 -- -- -- 851 --
Payable to
related parties--
current.......... 202 48 -- -- -- -- -- -- -- 250 --
Accounts
payable.......... 1,304 204 595 164 815 233 81 197 -- 3,593 --
Income taxes
payable.......... -- 317 216 336 8 -- 47 -- -- 924
Payable to
stockholders..... -- -- -- -- -- -- -- -- 29,332(a)(b) 29,332 (29,332)(d)
Other accrued
liabilities...... -- 135 288 47 218 -- 109 56 -- 853 --
------ ----- ----- ----- ----- ----- ----- ----- ------ ------ -------
Total Current
Liabilities..... 1,506 1,160 1,868 1,069 2,073 806 504 567 29,170 38,723 (29,332)
Notes payable,
excluding current
installments..... -- 219 73 2,188 2,003 78 206 554 (1,556)(b) 3,765 --
Capital lease
obligations,
excluding current
installments..... -- 710 624 -- 663 -- 458 -- -- 2,435 --
Deferred income
taxes............ -- 244 11 313 54 -- 83 -- 1,044 (b) 1,749 --
------ ----- ----- ----- ----- ----- ----- ----- ------ ------ -------
Total
Liabilities...... 1,506 2,333 2,576 3,570 4,793 884 1,231 1,121 28,658 46,672 (29,332)
Stockholders'
Equity:
Common stock.... 3 2 -- 20 2 43 24 28 (117)(a)(c) 5 7 (c)
Additional paid-
in capital...... 802 -- -- -- 10 -- 33 -- 24,662 (b)(b)(c) 25,507 78,287 (c)
Retained
earnings
(accumulated
deficit)........ (406) 3,351 619 864 605 407 (29) 125 (5,942)(b) (406) --
Treasury stock.. -- -- -- -- (30) -- -- -- 30 (b) -- --
------ ----- ----- ----- ----- ----- ----- ----- ------ ------ -------
Total
Stockholders'
Equity
(deficit)....... 399 3,353 619 864 587 450 28 153 18,633 25,106 78,294
------ ----- ----- ----- ----- ----- ----- ----- ------ ------ -------
Total Liabilities
and Stockholders'
Equity........... $1,905 5,686 3,195 4,454 5,380 1,334 1,259 1,274 47,291 71,778 48,962
====== ===== ===== ===== ===== ===== ===== ===== ====== ====== =======

<CAPTION>
PRO FORMA PRO FORMA
COMBINED KEYSTONE COMBINED
AS ------------------------- AS FURTHER
ADJUSTED HISTORICAL ADJUSTMENTS(F) ADJUSTED
<S> <C> <C> <C> <C>
ASSETS
Cash and cash
equivalents...... $50,513 $ 49 $(4,681) $45,881
Accounts
receivable....... 3,317 137 -- 3,454
Less:
allowance....... -- -- -- --
--------- ---------- -------------- ----------
Accounts
receivable, net.. 3,317 137 -- 3,454
Accounts
receivable from
related parties
and employees.... 622 5 -- 627
Inventory........ 164 61 -- 225
Notes
receivables...... 174 5 -- 179
Prepaid and other
current assets... 584 104 -- 688
--------- ---------- -------------- ----------
Total Current
Assets.......... 55,374 361 (4,681) 51,054
Property and
equipment, net... 17,212 967 193 18,372
Accounts
receivable--
related parties--
non-current...... 454 -- -- 454
Other non-current
assets, net...... 1,696 81 -- 1,797
Goodwill......... 46,004 -- 8,385 54,389
--------- ---------- -------------- ----------
Total Assets..... 120,740 1,409 3,897 126,046
========= ========== ============== ==========
LIABILITIES AND
STOCKHOLDERS' EQ-
UITY
Current
installment of
notes payable.... 1,937 273 -- 2,210
Current
installment of
lease
obligations...... 983 -- -- 983
Borrowings under
lines of credit.. 851 68 -- 919
Payable to
related parties--
current.......... 250 48 -- 298
Accounts
payable.......... 3,593 187 -- 3,780
Income taxes
payable.......... 924 -- -- 924
Payable to
stockholders..... -- -- -- --
Other accrued
liabilities...... 853 421 -- 1,274
--------- ---------- -------------- ----------
Total Current
Liabilities..... 9,391 997 -- 10,388
Notes payable,
excluding current
installments..... 3,765 304 -- 4,069
Capital lease
obligations,
excluding current
installments..... 2,435 -- -- 2,435
Deferred income
taxes............ 1,749 -- 78 1,827
--------- ---------- -------------- ----------
Total
Liabilities...... 17,340 1,301 78 18,719
Stockholders'
Equity:
Common stock.... 12 20 (20) 12
Additional paid-
in capital...... 103,794 -- 3,927 107,721
Retained
earnings
(accumulated
deficit)........ (406) 88 (88) (406)
Treasury stock.. -- -- -- --
--------- ---------- -------------- ----------
Total
Stockholders'
Equity
(deficit)....... 103,400 108 3,819 107,327
--------- ---------- -------------- ----------
Total Liabilities
and Stockholders'
Equity........... 120,740 1,409 3,897 126,046
========= ========== ============== ==========
</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..... -- -- -- -- -- -- -- -- 1,159 (c) 1,159
----- ------ ----- ----- ----- ----- ----- ----- ------ ------
Income (loss)
from operations.. (174) 1,438 215 1,563 (188) (82) 181 144 1,684 4,781
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 1,840 4,558
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 89 567 2,459
===== ====== ===== ===== ===== ===== ===== ===== ====== ======
Basic earnings
per share (f).... $ 0.32
======
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..... -- 208 1,367
---------- --------------- ----------
Income (loss)
from operations.. 196 451 5,428
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............ 239 451 5,248
Income tax
expense
(benefit)........ -- 371 2,470
---------- --------------- ----------
Net income
(loss)........... 239 80 2,778
========== =============== ==========
Basic earnings
per share (f).... $ 0.33
==========
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>

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS

THREE-MONTHS ENDED MARCH 31, 1998

(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 revenues..... $ -- 3,057 1,966 1,955 2,117 1,409 919 474 -- 11,897
Cost of
revenues......... -- 2,451 1,430 1,224 1,571 1,055 555 406 (125)(b) 8,567
----- ----- ----- ----- ----- ----- --- ---- ---- ------
Gross profit.... -- 606 536 731 546 354 364 68 125 3,330
Selling general
and
administrative... 390 282 506 521 361 104 258 276 (777)(a) 1,921
Goodwill
amortization..... -- -- -- -- -- -- -- -- 287 (c) 287
----- ----- ----- ----- ----- ----- --- ---- ---- ------
Income (loss)
from operations.. (390) 324 30 210 185 250 106 (208) 615 1,122
Other income
(expense):
Interest
expense......... -- (10) (10) (64) (78) (14) (18) -- 39 (d) (155)
Interest
income.......... 5 32 -- -- -- -- -- -- -- 37
Gain (loss) on
sale of assets.. -- 60 -- -- -- -- (10) -- -- 50
Other........... -- -- -- (181) 3 -- -- -- -- (178)
----- ----- ----- ----- ----- ----- --- ---- ---- ------
Income (loss)
before income
taxes............ (385) 406 20 (35) 110 236 78 (208) 654 876
Income tax
expense
(benefit)........ (153) 98 9 (9) 37 65 26 -- 392 (e) 465
----- ----- ----- ----- ----- ----- --- ---- ---- ------
Net income
(loss)........... $(232) 308 11 (26) 73 171 52 (208) 262 411
===== ===== ===== ===== ===== ===== === ==== ==== ======
Basic earnings
per share (f).... $ 0.05
======
Diluted earnings
per share (f).... $ 0.05
======
<CAPTION>
KEYSTONE
--------------------------
PRO FORMA
COMBINED
AS FURTHER
HISTORICAL ADJUSTMENTS (G) ADJUSTED
<S> <C> <C> <C>
Net revenues..... 979 -- 12,876
Cost of
revenues......... 612 (26) 9,153
---------- --------------- ----------
Gross profit.... 367 26 3,723
Selling general
and
administrative... 366 (139) 2,148
Goodwill
amortization..... -- 52 339
---------- --------------- ----------
Income (loss)
from operations.. 1 113 1,236
Other income
(expense):
Interest
expense......... (12) -- (167)
Interest
income.......... -- -- 37
Gain (loss) on
sale of assets.. -- -- 50
Other........... 26 -- (152)
---------- --------------- ----------
Income (loss)
before income
taxes............ 15 113 1,004
Income tax
expense
(benefit)........ -- 72 537
---------- --------------- ----------
Net income
(loss)........... 15 41 467
========== =============== ==========
Basic earnings
per share (f).... $ 0.05
==========
Diluted earnings
per share (f).... $ 0.05
==========
</TABLE>

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

F-6
<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 acquired the Founding Companies simultaneously with the initial
public 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 three-months ended March 31, 1998 and for the year ended
December 31, 1997, with the exception of Caron for which the information is as
of and for the three-months ended March 31, 1998 and for the fiscal year ended
September 30, 1997.

2. ACQUISITION OF FOUNDING COMPANIES:

Simultaneously with the initial public offering, United Road Services
acquired by merger all of the Founding Companies and expects to acquire
Keystone in the near future. All of the acquisitions are 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 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 $10.40 per share (or $24.7 million), which represents
a discount of 20% from the initial public offering price of $13.00 due to
restrictions on the sale and transferability of the shares issued. The total
estimated purchase price of $52.5 million for the Acquisitions is based upon
preliminary estimates and is subject to certain purchase price adjustments
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-7
<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 distribution to stockholders of two Founding Companies of
certain assets and liabilities that are specifically excluded from the
transactions.

(b) Reflects the acquisition of the Founding Companies by United Road
Services for a total estimated purchase price of $52.5 million consisting of
$27.8 million in cash and 2,375,741 shares of Common Stock valued at $10.40
per share (or $24.7 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 $45.5
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 net 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 net revenue or target net revenue. If target net revenue
is achieved for a particular year, an initial payment equal to 5% of the
excess of actual net revenue over the target level is due. In addition, once
the target level of net revenue for a particular year is met, subsequent and
equal payments will also be due for each year through 2002, provided that the
actual net revenue for the respective subsequent year exceeds the actual net
revenue for the year that the earn-out target was first achieved. Amounts
earned under the agreements will be recorded as additional goodwill and
amortized over the remaining amortization period.

(c) Reflects the cash proceeds of $76.2 million from the issuance of
6,600,000 shares of United Road Services Common Stock, net of offering costs
of $7.5 million (based on the initial public offering price of $13.00 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.

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

(e) 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 $8.5 million, consisting of $4.5 million in
cash and 377,624 shares of Common Stock valued at $10.40 per share (or $3.9
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 $8.4 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 net revenue of Keystone's
business and for the years 1999 through 2002 is 110% of the greater of the
prior year's actual net revenue or target net revenue. If target net revenue
is achieved for a particular year, an initial payment equal to 5% of the
excess of actual net

F-8
<PAGE>

UNITED ROAD SERVICES, INC. AND FOUNDING COMPANIES AND KEYSTONE

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

revenue over the target level is due. In addition, once the target level of
net revenue for a particular year is met, subsequent and equal payments will
also be due for each year through 2002, provided that the actual net revenue
for the respective subsequent year exceeds the actual net revenue for the year
that the earn-out target was first achieved. Amounts earned under the
agreement will be recorded as additional goodwill and amortized over the
remaining amortization period.

4. UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS ADJUSTMENTS:

Year Ended December 31, 1997 and three-months ended March 31, 1998

(a) Reflects $2.3 million and $797,000 of reductions in salaries, bonuses
and benefits to the former stockholders of the Founding Companies to which
they have contractually agreed for the year ended December 31, 1997 and for
the three-months ended March 31, 1998, respectively.

(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 and
$1.5 million of debt at December 31, 1997 and March 31, 1998 respectively
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................. 2,594,863 2,969,676
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...... 7,793,340 8,545,777
Incremental effect of options on shares
outstanding.................................. 54,000 54,000
--------- ---------
Diluted shares estimated to be outstanding.... 7,847,340 8,599,777
========= =========
</TABLE>

(g) Reflects $556,000 and $139,000 of reductions in salaries, bonuses and
benefits which have been contractually agreed for the year ended December 31,
1997 and the three months ended March 31, 1998.

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-9
<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, except as
to Notes (4) and 4(g), which
are as of May 8, 1998 and May
6, 1998, respectively

F-10
<PAGE>

UNITED ROAD SERVICES, INC.

BALANCE SHEET

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1997 1998
------------ -----------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents........................... $ 49,987 $ 65,352
--------- ----------
Prepaid expenses...................................... -- 2,790
--------- ----------
Total current assets.............................. 49,987 68,142
--------- ----------
Property and equipment:
Computer and related equipment...................... -- 354,472
Furniture and fixtures.............................. -- 33,810
--------- ----------
-- 388,282
Accumulated depreciation.............................. -- (1,691)
--------- ----------
Property and equipment, net......................... -- 386,591
--------- ----------
Deferred offering costs............................... -- 793,248
Deferred acquisition costs............................ -- 473,250
Deferred financing costs.............................. -- 30,000
Deferred income taxes................................. -- 153,333
--------- ----------
Total assets...................................... $ 49,987 $1,904,564
========= ==========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Payable to related parties (note 3)................. $ 91,874 $ 201,506
Accounts payable.................................... 62,077 1,303,713
--------- ----------
Total current liabilities......................... 153,951 1,505,219
--------- ----------
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 2,823
Additional paid-in capital.......................... 67,396 802,177
Accumulated deficit................................. (173,964) (405,655)
--------- ----------
Total stockholders' equity (deficit).............. (103,964) 399,345
--------- ----------
Total liabilities and stockholders' equity
(deficit)........................................ $ 49,987 $1,904,564
========= ==========
</TABLE>

See accompanying notes to financial statements.

F-11
<PAGE>

UNITED ROAD SERVICES, INC.

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
FOR THE
PERIOD FROM
JULY 25, 1997
(INCEPTION) THREE-MONTHS
THROUGH ENDED
DECEMBER 31, 1997 MARCH 31, 1998
----------------- --------------
(UNAUDITED)
<S> <C> <C>
Revenue........................................ $ -- $ --
Selling, general and administrative expenses... 173,964 389,622
--------- ---------
Loss from operations....................... (173,964) (389,622)
Other income:
Interest income............................ -- 4,598
--------- ---------
Loss before income taxes................... (173,964) (385,024)
Income tax benefit............................. -- 153,333
--------- ---------
Net loss................................... $(173,964) $(231,691)
========= =========
Net loss per share (note 2)................ $ (.08) $ (.08)
========= =========
</TABLE>

See accompanying notes to financial statements.

F-12
<PAGE>

UNITED ROAD SERVICES, INC.

STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)

<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)
Issuance of common stock (unau-
dited)......................... 219 734,781 -- 735,000
Net loss--three-months ended
March 31, 1998 (unaudited)..... -- -- (231,691) (231,691)
------ -------- --------- ---------
Balance at March 31, 1998 (unau-
dited)......................... $2,823 $802,177 $(405,655) $ 399,345
====== ======== ========= =========
</TABLE>

See accompanying notes to financial statements.

F-13
<PAGE>

UNITED ROAD SERVICES, INC.

STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
FOR THE PERIOD FROM
JULY 25, 1997 THREE-MONTHS
(INCEPTION) THROUGH ENDED MARCH 31,
DECEMBER 31, 1997 1998
------------------- ---------------
(UNAUDITED)
<S> <C> <C>
Cash flows from operating activities:
Net loss................................. $(173,964) $(231,691)
Adjustments to reconcile net loss to net
cash (used in) provided by operating
activities:
Depreciation........................... -- 1,691
Deferred income taxes.................. -- (153,333)
Increase in prepaid expenses........... -- (2,790)
Increase in accounts payable........... 62,077 1,241,636
Increase in amounts payable to related
parties............................... 91,874 109,632
--------- ---------
Net cash (used in) provided by
operating activities................ (20,013) 965,145
--------- ---------
Cash flows from investing activities:
Payments for acquisition costs........... -- (473,250)
Purchase of property and equipment....... -- (388,282)
--------- ---------
Net cash used in investing
activities.......................... -- (861,532)
Cash flows from financing activities:
Proceeds from issuance of stock.......... 70,000 735,000
Payments for offering costs.............. -- (793,248)
Payments for financing costs............. -- (30,000)
--------- ---------
Net cash provided by (used in)
financing activities................ 70,000 (88,248)
Net increase in cash....................... 49,987 15,365
Cash at beginning of period................ -- 49,987
--------- ---------
Cash at end of period...................... $ 49,987 $ 65,352
========= =========
</TABLE>

See accompanying notes to financial statements.

F-14
<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 vehicle 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. Effective January 1, 1998, United Road Services, Inc. elected to file
federal and State income tax returns under C-corporation provisions. As a
result of United Road Services, Inc. losses for the three-months ended March
31, 1998 and in consideration of anticipated profits resulting from operations
subsequent to the Acquisitions, a tax benefit has been recorded at March 31,
1998 at the effective tax rate expected by United Road Services, Inc. for the
year ended December 31, 1998.

(e) Interim Financial Statements

The interim financial information included in these financial statements is
unaudited but reflects all adjustments (consisting of only normal recurring
accruals) which are, in the opinion of management, necessary

F-15
<PAGE>

UNITED ROAD SERVICES, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

for a fair presentation of the results for the interim periods presented.
Results of operations for the three-months ended March 31, 1998 is not
necessarily indicative of results to be expected for the full year ended
December 31, 1998.

(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.

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 for period ended December 31, 1997 and 2,822,736 for the three
months ended March 31, 1998.

(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

(a) 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

(b) 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.

F-16
<PAGE>

UNITED ROAD SERVICES, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(c) United Road Services, Inc. has received 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.

(d) 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.

(e) 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.

(f) 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.

(g) On May 6, 1998, United Road Services, Inc. effectively acquired the
Founding Companies as a result of the successful completion of the Offering,
as described in note 1(a).

F-17
<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,
except as to note 14(b),
which is as of May 6, 1998

F-18
<PAGE>

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

COMBINED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31
--------------------- MARCH 31,
1996 1997 1998
---------- ---------- -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.................. $ 432,949 $ 407,309 $ 806,933
Trade accounts receivable, net of allowance
for doubtful accounts of $40,000 in 1996
and $75,000 in 1997....................... 416,220 942,432 814,778
Accounts receivable from employees......... 4,955 3,445 40,822
Notes receivable........................... 35,068 17,453 20,933
Income tax receivable (note 7)............. 37,584 -- --
Prepaid and other current assets (note 2).. 74,302 113,558 76,555
Deferred income taxes (note 7)............. 9,000 17,000 17,000
---------- ---------- ----------
Total current assets..................... 1,010,078 1,501,197 1,777,021
Property and equipment, net (notes 3, 5 and
6).......................................... 2,204,802 3,924,055 3,886,336
Notes receivable............................. 44,044 31,468 14,347
Other assets................................. 8,862 8,426 8,426
---------- ---------- ----------
Total assets............................. $3,267,786 $5,465,146 $5,686,130
========== ========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Current installments of notes payable (note
5)........................................ $ 282,824 $ 346,859 $ 324,347
Current installments of obligations under
capital leases (note 6)................... 4,408 147,538 131,883
Payable to related parties (note 10)....... 159,505 53,849 47,756
Accounts payable........................... 210,998 188,064 204,058
Income taxes payable (note 7).............. -- 261,933 317,465
Accrued payroll and related costs.......... 18,062 52,676 105,949
Other accrued liabilities (note 4)......... 98,914 51,300 28,705
---------- ---------- ----------
Total current liabilities................ 774,711 1,102,219 1,160,163
Long-term liabilities:
Notes payable, excluding current
installments (note 5)..................... 318,382 279,963 219,074
Obligations under capital leases, excluding
current installments (note 6)............. 12,833 793,774 710,171
Deferred income taxes (note 7)............. 171,000 244,000 244,000
---------- ---------- ----------
Total liabilities........................ 1,276,926 2,419,956 2,333,408
---------- ---------- ----------
Stockholder's equity:
Common stock, $1 par value. Authorized,
issued and outstanding 2,000 shares in
1996 and 1997............................. 2,000 2,000 2,000
Retained earnings.......................... 1,988,860 3,043,190 3,350,722
---------- ---------- ----------
Total stockholder's equity............... 1,990,860 3,045,190 3,352,722
---------- ---------- ----------
Total liabilities and stockholder's
equity.................................. $3,267,786 $5,465,146 $5,686,130
========== ========== ==========
</TABLE>

See accompanying notes to combined financial statements.

F-19
<PAGE>

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

COMBINED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
THREE-MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31
----------------------------------- ----------------------
1995 1996 1997 1997 1998
---------- ---------- ----------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net revenue............. $4,671,164 $6,353,290 $10,159,113 $2,081,610 $3,057,307
Cost of revenue......... 3,683,119 5,132,828 7,341,748 1,237,243 2,451,066
---------- ---------- ----------- ---------- ----------
Gross profit........ 988,045 1,220,462 2,817,365 844,367 606,241
Selling, general and
administrative
expenses............... 663,723 874,559 1,378,872 201,071 281,946
---------- ---------- ----------- ---------- ----------
Income from
operations......... 324,322 345,903 1,438,493 643,296 324,295
---------- ---------- ----------- ---------- ----------
Other income (expense):
Interest expense...... (48,825) (79,384) (139,099) (18,122) (10,674)
Interest income....... 16,624 37,701 35,723 19,904 31,498
Gain (loss) on sale of
assets............... (14,540) -- (34,568) 23,000 60,127
Other................. 29,078 41,282 88,781 (24,183) --
---------- ---------- ----------- ---------- ----------
Income before income
taxes.............. 306,659 345,502 1,389,330 643,895 405,246
Income tax expense
(benefit)
(note 7)............... 31,400 (710) 335,000 155,258 97,714
---------- ---------- ----------- ---------- ----------
Net income.......... $ 275,259 $ 346,212 $ 1,054,330 $ 488,637 $ 307,532
========== ========== =========== ========== ==========
</TABLE>

See accompanying notes to combined financial statements.

F-20
<PAGE>

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

COMBINED STATEMENTS OF STOCKHOLDER'S EQUITY

<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
Net income--three-months ended March 31, 1998
(unaudited)................................... -- 307,532 307,532
------ ---------- ----------
Balance at March 31, 1998 (unaudited).......... $2,000 $3,350,722 $3,352,722
====== ========== ==========
</TABLE>

See accompanying notes to combined financial statements.

F-21
<PAGE>

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

COMBINED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
THREE-MONTHS
YEAR ENDED DECEMBER 31 ENDED MARCH 31
-------------------------------- --------------------
1995 1996 1997 1997 1998
--------- --------- ---------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from
operating activities:
Net income............. $ 275,259 $ 346,212 $1,054,330 $ 488,637 $ 307,532
Adjustments to
reconcile net income
to net cash provided
by operating
activities:
Depreciation and
amortization........ 181,634 224,637 289,479 66,815 73,596
Deferred income
taxes............... (11,000) (6,000) 65,000 -- --
Loss (gain) on sale
of property and
equipment........... 14,540 -- 34,568 (23,000) (60,127)
Decrease (increase)
in trade accounts
receivable.......... (115,982) 138,452 (526,212) (275,875) 127,654
Decrease (increase)
in accounts
receivable from
employees........... 1,185 (4,100) 1,510 (24,420) (37,377)
Decrease (increase)
in income tax
receivable.......... -- -- 37,584 (5,791) --
Decrease (increase)
in prepaid and other
current assets...... (17,892) 16,331 (39,256) (23,374) 37,003
Increase (decrease)
in accounts payable. 716 23,236 (22,934) (28,080) 15,994
Increase in income
taxes payable....... -- -- 261,933 -- 55,532
Increase (decrease)
in accrued payroll
and related costs... (85,348) (14,137) 34,614 1,313 53,273
Increase (decrease)
in amounts payable
to related parties.. 20,552 16,410 (105,656) 16,303 (6,093)
Increase (decrease)
in other accrued
liabilities......... 25,946 2,880 (47,614) (12,816) (22,595)
--------- --------- ---------- --------- ---------
Net cash provided
by operating
activities........ 289,610 743,921 1,037,346 179,712 544,392
--------- --------- ---------- --------- ---------
Cash flows from
investing activities:
Purchases of property
and equipment......... (229,888) (395,881) (762,597) (271,868) (54,450)
Proceeds from sale of
equipment............. 53,044 -- 67,656 23,000 78,700
Decrease in notes
receivable............ 8,159 (30,984) 30,191 38,697 13,641
--------- --------- ---------- --------- ---------
Net cash (used in)
provided by
investing
activities........ (168,685) (426,865) (664,750) (210,171) 37,891
--------- --------- ---------- --------- ---------
Cash flows from
financing activities:
Proceeds from long-
term debt............. -- -- 24,629 -- 15,434
Principal payments on
long-term debt........ (139,745) (156,620) (317,543) (76,931) (98,835)
Principal payments on
obligations under
capital leases........ -- (1,351) (105,322) (603) (99,258)
--------- --------- ---------- --------- ---------
Net cash used in
financing
activities........ (139,745) (157,971) (398,236) (77,534) (182,659)
--------- --------- ---------- --------- ---------
Net (decrease)
increase in cash.. (18,820) 159,085 (25,640) (107,993) 399,624
Cash and cash
equivalents at
beginning of period.... 292,684 273,864 432,949 432,949 407,309
--------- --------- ---------- --------- ---------
Cash and cash
equivalents at end of
period................. $ 273,864 $ 432,949 $ 407,309 $ 324,956 $ 806,933
========= ========= ========== ========= =========
Supplemental disclosure
of cash flow
information:
Cash paid during the
year for:
Interest............. $ 48,825 $ 79,384 $ 139,099 $ 18,122 $ 10,674
========= ========= ========== ========= =========
Income taxes......... $ 7,024 $ 79,835 $ 6,480 $ 161,049 $ 42,182
========= ========= ========== ========= =========
</TABLE>

See accompanying notes to combined financial statements.

F-22
<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") were founded in 1977 and 1992,
respectively. 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) 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.

F-23
<PAGE>

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

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

(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.

(i) Interim Financial Statements

(2) PREPAID AND OTHER CURRENT ASSETS

Prepaid and other current assets consists of:
<TABLE>
<CAPTION>
DECEMBER 31
---------------- MARCH 31,
1996 1997 1998
------- -------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Prepaid insurance............................. $14,818 $ 28,172 $17,638
Prepaid vehicle registration.................. 25,978 35,778 23,852
Deposits on trucks............................ 12,403 16,633 29,843
Miscellaneous advances........................ 12,716 9,320 205
Prepaid property and other taxes.............. 8,387 23,655 5,017
------- -------- -------
$74,302 $113,558 $76,555
======= ======== =======
</TABLE>

(3) PROPERTY AND EQUIPMENT

Property and equipment consists of the following:
<TABLE>
<CAPTION>
DECEMBER 31
---------------------- MARCH 31,
1996 1997 1998
---------- ---------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Transportation equipment.............. $2,745,094 $4,457,178 $4,336,121
Furniture and fixtures................ 123,585 147,035 141,338
Office equipment...................... 34,449 34,244 34,244
Automobiles........................... 64,781 126,926 124,009
---------- ---------- ----------
Total............................... 2,967,909 4,765,383 4,635,712
Less accumulated depreciation and
amortization......................... (763,107) (841,328) (749,376)
---------- ---------- ----------
$2,204,802 $3,924,055 $3,886,336
========== ========== ==========
</TABLE>

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

F-24
<PAGE>

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

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

(4) OTHER ACCRUED LIABILITIES

Other accrued liabilities consists of:

<TABLE>
<CAPTION>
DECEMBER 31
--------------- MARCH 31,
1996 1997 1998
------- ------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Accrued highway use tax............................. $ 9,487 $14,300 $ 4,247
Accrued insurance................................... 12,324 6,880 5,397
Accrued profit sharing.............................. 64,196 -- --
Other............................................... 12,907 30,120 19,061
------- ------- -------
$98,914 $51,300 $28,705
======= ======= =======
</TABLE>

(5) INDEBTEDNESS

Northland's long-term debt consisted of the following:

<TABLE>
<CAPTION>
DECEMBER 31
-------------------- MARCH 31,
1996 1997 1998
--------- --------- -----------
(UNAUDITED)
<S> <C> <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 $ 43,113
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. ................ 288,698 176,248 146,308
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 25,492
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 28,150
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. ................................. -- 288,656 281,234
Various notes payable secured by equipment... -- 20,261 19,124
--------- --------- ---------
Total long-term debt....................... 601,206 626,822 543,421
Less installments due within one year........ (282,824) (346,859) (324,347)
--------- --------- ---------
Long-term debt, excluding current
installments.............................. $ 318,382 $ 279,963 $ 219,074
========= ========= =========
</TABLE>

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

F-25
<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:

<TABLE>
<CAPTION>
DECEMBER 31
------------------- MARCH 31,
1996 1997 1998
------- ---------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Transportation equipment................. $18,000 $1,047,298 $1,047,298
Less accumulated amortization............ (3,600) (298,619) (372,374)
------- ---------- ----------
$14,400 $ 748,679 $ 674,924
======= ========== ==========
</TABLE>

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

<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31, CAPITAL
------------------------ 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-26
<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 Northland's performance.

F-27
<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

(a) 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.

(b) On May 6, 1998, United Road Services, Inc. effectively acquired
Northland as a result of the successful completion of the initial public
offering of the common stock of United Road Services, Inc. on May 1, 1998.

F-28
<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,
except as to note 11(c),
which is as of May 6, 1998

F-29
<PAGE>

FALCON TOWING AND AUTO DELIVERY, INC.

BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31
---------------------
MARCH 31,
1996 1997 1998
---------- ---------- -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash....................................... $ 23,505 $ 3,527 $ 3,024
Trade accounts receivable, net of allowance
for doubtful accounts of $67,650 in 1996
and $188,500 in 1997...................... 476,896 717,560 563,353
Inventories................................ 24,868 26,068 26,068
Prepaid and other current assets (note 2).. 46,537 131,328 149,729
---------- ---------- ----------
Total current assets..................... 571,806 878,483 742,174
Property and equipment, net (notes 3, 5 and
6).......................................... 1,656,635 2,423,368 2,453,169
---------- ---------- ----------
Total assets............................. $2,228,441 $3,301,851 $3,195,343
========== ========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Current installments of long-term debt
(note 5).................................. $ 123,722 $ 264,081 $ 355,393
Current installments of obligations under
capital leases
(note 6).................................. 252,527 368,590 368,590
Borrowings under lines of credit (note 5).. 36,150 47,121 45,316
Accounts payable........................... 178,357 546,301 595,073
Accrued payroll and related costs.......... 57,000 67,701 67,701
Income taxes payable (note 8).............. 98,698 207,399 216,261
Other accrued liabilities (note 4)......... 137,600 214,979 219,959
---------- ---------- ----------
Total current liabilities................ 884,054 1,716,172 1,868,293
Long-term liabilities:
Long-term debt, excluding current
installments (note 5)..................... 225,386 250,196 72,831
Obligations under capital leases, excluding
current installments (note 6)............. 630,677 716,288 624,140
Deferred income taxes (note 8)............. 11,733 10,555 10,555
---------- ---------- ----------
Total liabilities........................ 1,751,850 2,693,211 2,575,819
---------- ---------- ----------
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.......................... 476,591 608,640 619,524
---------- ---------- ----------
Total stockholder's equity............... 476,591 608,640 619,524
---------- ---------- ----------
Total liabilities and stockholder's
equity.................................. $2,228,441 $3,301,851 $3,195,343
========== ========== ==========
</TABLE>

See accompanying notes to financial statements.

F-30
<PAGE>

FALCON TOWING AND AUTO DELIVERY, INC.

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
THREE-MONTHS
YEAR ENDED DECEMBER 31 ENDED MARCH 31
---------------------------------- ----------------------
1995 1996 1997 1997 1998
---------- ---------- ---------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Net revenue............. $4,351,847 $6,203,104 $7,784,766 $1,697,166 $1,965,856
Cost of revenue......... 3,492,248 4,638,239 5,955,423 1,265,627 1,430,094
---------- ---------- ---------- ---------- ----------
Gross profit........ 859,599 1,564,865 1,829,343 431,539 535,762
Selling, general and
administrative
expenses............... 952,260 1,190,631 1,614,386 420,944 505,544
---------- ---------- ---------- ---------- ----------
Income (loss) from
operations......... (92,661) 374,234 214,957 10,595 30,218
---------- ---------- ---------- ---------- ----------
Other income (expense):
Interest expense...... (77,176) (129,150) (147,700) (35,021) (10,472)
Gain (loss) on sale of
equipment............ (417) -- 98,735 (9,323) --
Other................. 38,508 12,167 73,580 16,041 --
---------- ---------- ---------- ---------- ----------
Income (loss) before
income taxes....... (131,746) 257,251 239,572 (17,708) 19,746
Income tax expense
(benefit) (note 8)..... 15,707 94,723 107,523 (7,947) 8,862
---------- ---------- ---------- ---------- ----------
Net income (loss)... $ (147,453) $ 162,528 $ 132,049 $ (9,761) $ 10,884
========== ========== ========== ========== ==========
</TABLE>

See accompanying notes to financial statements.

F-31
<PAGE>

FALCON TOWING AND AUTO DELIVERY, INC.

STATEMENTS OF STOCKHOLDER'S EQUITY

<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
Net loss--three-months ended March 31, 1998
(unaudited)................................... -- 10,884 10,884
---- --------- ---------
Balance at March 31, 1998 (unaudited).......... $-- $ 619,524 $ 619,524
==== ========= =========
</TABLE>

See accompanying notes to financial statements.

F-32
<PAGE>

FALCON TOWING AND AUTO DELIVERY, INC.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
THREE-MONTHS
YEAR ENDED DECEMBER 31 ENDED MARCH 31
------------------------------- ------------------
1995 1996 1997 1997 1998
--------- --------- --------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating
activities:
Net income (loss)....... $(147,453) $ 162,528 $ 132,049 $ (9,761) $ 10,884
Adjustments to
reconcile net income
(loss) to net cash
provided by operating
activities:
Depreciation and
amortization......... 343,595 431,828 621,673 139,697 121,399
Deferred income taxes. 15,707 (3,975) (1,178) -- --
(Gain) loss on sale of
equipment............ 417 -- (98,735) 9,323 --
Decrease (increase) in
trade accounts
receivable........... (1,169) (236,557) (240,664) (2,334) 154,207
Increase in
inventories.......... -- -- (1,200) (1,200) --
Decrease (increase) in
prepaid and other
current assets....... (10,524) (9,236) (84,791) 1,817 (18,401)
Increase (decrease) in
accounts payable..... 104,440 (8,097) 367,944 58,796 48,772
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 (7,947) 8,862
Increase (decrease) in
other accrued
liabilities.......... 7,434 (12,591) 77,379 434 4,980
--------- --------- --------- -------- --------
Net cash provided by
operating
activities......... 363,348 476,535 891,879 188,825 330,703
--------- --------- --------- -------- --------
Cash flows used in
investing activities:
Purchases of property
and equipment.......... (290,177) (169,861) (919,049) (93,685) (151,200)
Proceeds from sale of
property and
equipment.............. -- -- 141,100 -- --
--------- --------- --------- -------- --------
Net cash used in
investing
activities......... (290,177) (169,861) (777,949) (93,685) (151,200)
--------- --------- --------- -------- --------
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) (122,471) (178,201)
Net borrowings under
lines of credit........ (36,066) (2,784) 10,971 8,259 (1,805)
--------- --------- --------- -------- --------
Net cash used in
financing
activities......... (81,050) (285,617) (133,908) (114,212) (180,006)
--------- --------- --------- -------- --------
Net (decrease) increase
in cash................. (7,879) 21,057 (19,978) (19,072) (503)
Cash at beginning of
period.................. 10,327 2,448 23,505 23,505 3,527
--------- --------- --------- -------- --------
Cash at end of period.... $ 2,448 $ 23,505 $ 3,527 $ 4,433 $ 3,024
========= ========= ========= ======== ========
Supplemental disclosure
of cash flow
information:
Cash paid during the year
for:
Interest................ $ 74,280 $ 125,435 $ 144,806 $ 35,021 $ 10,472
========= ========= ========= ======== ========
Income taxes............ $ -- $ 12,591 $ -- $ -- $ --
========= ========= ========= ======== ========
</TABLE>

See accompanying notes to financial statements.

F-33
<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 1985.
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.

(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.

F-34
<PAGE>

FALCON TOWING AND AUTO DELIVERY, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(h) Interim Financial Statements

(2) PREPAID EXPENSES

Prepaid and other current assets consists of:

<TABLE>
<CAPTION>
DECEMBER 31
----------------
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 consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31
------------------------ MARCH 31,
1996 1997 1998
----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Transportation and towing
equipment......................... $ 2,970,070 $ 4,124,483 $ 4,275,683
Machinery and equipment............ 70,296 104,411 104,411
Leasehold improvements............. 26,489 43,653 43,653
Furniture and fixtures............. 10,448 14,298 14,298
Office equipment................... 19,225 19,225 19,225
Construction-in-progress........... -- 33,000 33,000
----------- ----------- -----------
Total............................ 3,096,528 4,339,070 4,490,270
Less accumulated depreciation and
amortization...................... (1,439,893) (1,915,702) (2,037,101)
----------- ----------- -----------
$ 1,656,635 $ 2,423,368 $ 2,453,169
=========== =========== ===========
</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 consists of:

<TABLE>
<CAPTION>
DECEMBER 31
-----------------
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-35
<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 consists of:

<TABLE>
<CAPTION>
DECEMBER 31
-------------------- MARCH 31,
1996 1997 1998
--------- --------- -----------
(UNAUDITED)
<S> <C> <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 $428,224
Less installments due within one year... (123,722) (264,081) (355,393)
--------- --------- --------
Long-term debt, excluding current
installments........................... $ 225,386 $ 250,196 $ 72,831
========= ========= ========
</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:

<TABLE>
<CAPTION>
DECEMBER 31
----------------------- MARCH 31,
1996 1997 1998
---------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Transportation and towing
equipment......................... $1,612,687 $ 2,124,409 $ 2,124,409
Less accumulated amortization...... (703,928) (1,036,670) (1,127,996)
---------- ----------- -----------
$ 908,759 $ 1,087,739 $ 996,413
========== =========== ===========
</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-36
<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-37
<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

(a) 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.

(b) 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.

(c) On May 6, 1998, United Road Services, Inc. effectively acquired Falcon
as a result of the successful completion of the initial public offering of the
common stock of United Road Services, Inc. on May 1, 1998.

F-38
<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,
except as to note 11(c),
which is as of May 6, 1998

F-39
<PAGE>

SMITH-CHRISTENSEN ENTERPRISES, INC.
AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
JANUARY 31, DECEMBER 31, MARCH 31,
1997 1997 1998
----------- ------------ -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash.................................... $ 180,269 $ 266,687 $ 308,414
Trade accounts receivable, net of
allowance for doubtful accounts of
$26,850 and $75,850 at January 31, 1997
and December 31, 1997, respectively.... 88,518 277,966 283,677
Accounts receivable from related parties
(note 9)............................... 10,665 50,151 50,151
Due from employees...................... 19,124 22,053 15,955
Inventories............................. 20,661 9,950 29,372
Prepaid expenses (note 2)............... 30,048 19,680 46,988
Other current assets.................... 900 900 900
---------- ---------- ----------
Total current assets.................. 350,185 647,387 735,457
Property, plant and equipment, net (notes
3 and 5)................................. 2,653,243 2,877,229 3,165,423
Accounts receivable from related parties
(note 9)................................. 157,294 831,733 454,441
Other assets, net (note 4)................ 118,908 98,905 98,905
---------- ---------- ----------
Total assets.......................... $3,279,630 $4,455,254 $4,454,226
========== ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt
(note 5)............................... $ 447,875 $ 541,836 $ 522,470
Accounts payable........................ 38,278 68,203 163,506
Accrued payroll and related costs....... 28,757 85,563 21,832
Income taxes payable (note 7)........... 60,863 345,339 336,039
Other accrued expenses.................. 5,305 3,110 25,418
---------- ---------- ----------
Total current liabilities............. 581,078 1,044,051 1,069,265
---------- ---------- ----------
Long-term liabilities:
Long-term debt, excluding current
installments (note 5).................. 2,415,340 2,188,038 2,188,038
Deferred income taxes (note 7).......... 193,379 312,721 312,721
---------- ---------- ----------
Total liabilities..................... 3,189,797 3,544,810 3,570,024
---------- ---------- ----------
Stockholders' equity:
Common stock, no par value.
Authorized 2,500 shares; issued and
outstanding 2,425 shares............... 20,000 20,000 20,000
Retained earnings....................... 69,833 890,444 864,202
---------- ---------- ----------
Total stockholders' equity............ 89,833 910,444 884,202
---------- ---------- ----------
Total liabilities and stockholders'
equity............................... $3,279,630 $4,455,254 $4,454,226
========== ========== ==========
</TABLE>

See accompanying notes to the consolidated financial statements.

F-40
<PAGE>

SMITH-CHRISTENSEN ENTERPRISES, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
TWELVE-MONTH THREE-MONTH PERIODS
PERIOD ENDED ENDED MARCH 31
YEAR ENDED YEAR ENDED DECEMBER 31, 1997 ----------------------
JANUARY 31, 1996 JANUARY 31, 1997 (NOTE 1(B)) 1997 1998
---------------- ---------------- ----------------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net revenue............. $4,395,762 $5,395,475 $6,802,474 $1,533,327 $1,954,670
Cost of revenue......... 2,579,463 3,214,772 3,849,138 1,014,657 1,223,785
---------- ---------- ---------- ---------- ----------
Gross profit........ 1,816,299 2,180,703 2,953,336 518,670 730,885
Selling, general and
administrative
expenses............... 1,436,488 1,194,716 1,389,707 234,887 520,620
---------- ---------- ---------- ---------- ----------
Income from
operations......... 379,811 985,987 1,563,629 283,783 210,265
---------- ---------- ---------- ---------- ----------
Other income (expense):
Interest expense...... (258,554) (325,370) (277,436) (70,352) (64,460)
Interest income....... -- -- 4,524 -- --
Other................. (25,005) 131,721 (27,375) (127,032) (181,347)
---------- ---------- ---------- ---------- ----------
Income (loss) before
income taxes....... 96,252 792,338 1,263,342 86,399 (35,542)
Income tax expense
(benefit) (note 7)..... 103,752 277,623 440,978 30,240 (9,300)
---------- ---------- ---------- ---------- ----------
Net income (loss)... $ (7,500) $ 514,715 $ 822,364 $ 56,159 $ (26,242)
========== ========== ========== ========== ==========
</TABLE>

See accompanying notes to the consolidated financial statements.

F-41
<PAGE>

SMITH-CHRISTENSEN ENTERPRISES, INC.
AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<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
Net loss--three-month periods ended March 31,
1998 (unaudited)............................. -- (26,242) (26,242)
------- --------- ---------
Balance at March 31, 1998 (unaudited)......... $20,000 $ 864,202 $ 884,202
======= ========= =========
</TABLE>

See accompanying notes to the consolidated financial statements.

F-42
<PAGE>

SMITH-CHRISTENSEN ENTERPRISES, INC.
AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
THREE-MONTH
PERIODS ENDED
TWELVE-MONTH MARCH 31
YEAR ENDED YEAR ENDED PERIOD ENDED ------------------
JANUARY 31, 1996 JANUARY 31, 1997 DECEMBER 31, 1997 1997 1998
---------------- ---------------- ----------------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from
operating activities:
Net income (loss)..... $ (7,500) $ 514,715 $ 822,364 $ 56,159 $(26,242)
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 67,183 23,638
Deferred income
taxes.............. 151,090 106,198 119,342 -- --
Decrease (increase)
in trade accounts
receivable......... (74,638) 63,597 (189,448) 141,456 (5,711)
Increase in due from
related parties.... (6,512) (10,285) (39,486) -- --
Decrease (increase)
in due from
employees.......... -- -- (2,929) -- 6,098
Decrease (increase)
in inventories..... -- (20,661) 10,711 5,175 (19,422)
Decrease (increase)
in prepaid
expenses........... (29,858) 7,609 10,368 (262,315) (27,308)
Decrease (increase)
in receivables from
related parties.... (34,549) (297,009) (674,439) -- 377,292
Increase (decrease)
in accounts
payable............ 65,853 (49,744) 29,925 (15,789) 95,303
Increase (decrease)
in accrued payroll
and related costs.. 62,316 (58,732) 56,806 52,697 (63,731)
Increase (decrease)
in income taxes
payable............ (30,809) 75,650 284,476 (2,214) (9,300)
(Decrease) increase
in other accrued
expenses........... 6,130 (1,785) (2,195) -- 22,308
--------- --------- --------- -------- --------
Net cash provided
by operating
activities....... 338,641 652,181 692,474 42,352 372,925
--------- --------- --------- -------- --------
Cash flows from
investing activities:
Purchases of
property, plant and
equipment............ (700,708) (493,663) (472,715) (175,175) (311,832)
Purchase of Custom
Towing............... (200,000) -- -- -- --
--------- --------- --------- -------- --------
Net cash used in
investing
activities....... (900,708) (493,663) (472,715) (175,175) (311,832)
--------- --------- --------- -------- --------
Cash flows from
financing activities:
Proceeds from long-
term debt............ 424,979 -- -- 76,624 --
Principal payments on
long-term debt....... -- (104,014) (133,341) -- (19,366)
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) 76,624 (19,366)
--------- --------- --------- -------- --------
Net increase in cash... 12,912 174,504 86,418 (56,199) 41,727
Cash at beginning of
period................ (7,147) 5,765 180,269 258,181 266,687
--------- --------- --------- -------- --------
Cash at end of period.. $ 5,765 $ 180,269 $ 266,687 $201,982 $308,414
========= ========= ========= ======== ========
Supplemental disclosure
of cash flow
information:
Cash paid during the
year for:
Interest............ $ 258,554 $ 325,370 $ 253,242 $ 63,310 $ 62,063
========= ========= ========= ======== ========
Income taxes........ $ 58,439 $ 61,656 $ 37,160 $ 9,290 $ 11,889
========= ========= ========= ======== ========
</TABLE>

See accompanying notes to the consolidated financial statements.

F-43
<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," were founded in 1988 and 1968, respectively. 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-44
<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.

(j) Interim Financial Statements

(2) PREPAID EXPENSES

Prepaid expenses consist of the following:

<TABLE>
<CAPTION>
JANUARY 31, DECEMBER 31, MARCH 31,
1997 1997 1998
----------- ------------ -----------
(UNAUDITED)
<S> <C> <C> <C>
Prepaid insurance..................... $28,010 $19,680 $45,988
Prepaid interest...................... 2,038 -- --
------- ------- -------
$30,048 $19,680 $45,988
======= ======= =======
</TABLE>

F-45
<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, MARCH 31,
1997 1997 1998
----------- ------------ -----------
(UNAUDITED)
<S> <C> <C> <C>
Land................................. $ 600,000 $ 600,000 $ 600,000
Buildings............................ 156,225 156,225 156,225
Leasehold improvements............... 278,925 278,925 278,925
Transportation and towing equipment.. 2,109,893 2,481,396 2,736,468
Office equipment..................... 123,691 212,066 222,089
Machinery and other equipment........ 112,889 125,726 172,463
---------- ---------- ----------
Total.............................. 3,381,623 3,854,338 4,166,170
Less accumulated depreciation and
amortization........................ (728,380) (977,109) (1,000,747)
---------- ---------- ----------
$2,653,243 $2,877,229 $3,165,423
========== ========== ==========
</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, MARCH 31,
1997 1997 1998
----------- ------------ -----------
(UNAUDITED)
<S> <C> <C> <C>
Metro Contract........................ $ 705,850 $ 705,850 $ 705,850
Non-compete agreement................. 25,000 25,000 25,000
Goodwill.............................. 225,048 225,048 225,048
--------- --------- ---------
Total............................... 955,898 955,898 955,898
Less accumulated amortization......... (836,990) (856,993) (861,993)
--------- --------- ---------
$ 118,908 $ 98,905 $ 93,905
========= ========= =========
</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-46
<PAGE>

SMITH-CHRISTENSEN ENTERPRISES, INC.
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(5) INDEBTEDNESS

Quality's long-term debt consisted of the following:

<TABLE>
<CAPTION>
JANUARY 31, DECEMBER 31, MARCH 31,
1997 1997 1998
----------- ------------ -----------
(UNAUDITED)
<S> <C> <C> <C>
Notes payable to bank, payable in
aggregate monthly installments of
$20,312, plus interest ranging
from 9% to 9.25% over periods
ranging from 36 to 48 months, ma-
turing between September 5, 1998
and June, 2001. Secured by vehi-
cles and equipment. .............. $ 428,678 $ 596,105 $ 667,913
Note payable to former owner, pay-
able in varied monthly install-
ments, 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 Towing,
Inc. ............................. 1,682,529 1,562,530 1,522,484
Note payable to former owner, pay-
able in monthly installments of
$3,800, including interest at 9%,
maturing July 1, 2003. Secured by
land and building. ............... 226,489 202,485 195,357
Note payable to Navistar, payable
in monthly installments of $1,433,
including interest at 10.5%, ma-
turing May 4, 1999. Secured by
equipment. ....................... 35,444 22,540 18,666
Notes payable to Navistar, payable
in monthly installments of $6,110
and 2,900, respectively, including
interest at 9%, maturing May 12,
1999 and August 11, 1999, respec-
tively. Secured by equipment. .... 240,964 158,685 135,102
Note payable to Navistar, payable
in monthly installments of $563,
including interest at 11.5%, ma-
turing August 28, 1997. Secured by
equipment. ....................... 3,796 -- --
Note payable to bank, payable in
monthly installments of $6,716,
including interest at 8%, maturing
July 1, 2000. Secured by equip-
ment. ............................ 245,316 187,529 170,986
---------- ---------- ----------
Total long-term debt............. 2,863,216 2,729,874 2,710,508
Less installments due within one
year.............................. (447,875) (541,836) (522.470)
---------- ---------- ----------
Long-term debt, excluding current
installments.................... $2,415,341 $2,188,038 $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-47
<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-48
<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-49
<PAGE>

SMITH-CHRISTENSEN ENTERPRISES, INC.
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(11) SUBSEQUENT EVENT

(a) 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.

(b) 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.

(c) On May 6, 1998, United Road Services, Inc. effectively acquired Quality
as a result of the successful completion of the initial public offering of the
common stock of United Road Services, Inc. on May 1, 1998.

F-50
<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,
except as to note 8(c),
which is as of May 6, 1998

F-51
<PAGE>

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

COMBINED BALANCE SHEETS

<TABLE>
<CAPTION>
SEPTEMBER 30
---------------------- MARCH 31,
1996 1997 1998
---------- ---------- -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash..................................... $ 29,370 $ 108,163 $ 29,676
Trade accounts receivable, net of
allowance for doubtful accounts of
$26,793 in 1996 and $45,079 in 1997..... 633,736 746,332 1,044,089
Accounts receivable from related parties
(note 7)................................ 98,056 49,754 496,589
Accounts receivable from employees....... -- 6,500 13,000
Notes receivable......................... -- 44,539 153,561
Inventories.............................. 24,185 30,040 91,520
Prepaid and other current assets......... 38,685 5,142 175,429
---------- ---------- ----------
Total current assets................... 824,032 990,470 2,003,864
Property and equipment, net (notes 2, 3 and
4)........................................ 1,241,097 2,278,962 3,309,753
Other assets............................... 2,500 22,736 66,780
---------- ---------- ----------
Total assets........................... $2,067,629 $3,292,168 5,380,397
========== ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt
(note 3)................................ $ 83,297 $ 263,093 $ 549,176
Current installments of obligations under
capital lease (note 4).................. 181,272 177,932 233,205
Borrowings under lines of credit (note
3)...................................... 18,839 225,000 250,000
Payable to related parties (note 7)...... 185,920 9,500 --
Accounts payable......................... 130,282 332,544 815,157
Accrued payroll and related costs........ 16,058 40,870 199,961
Income taxes payable (note 5)............ 101,128 92,447 7,950
Other accrued liabilities................ 24,021 48,277 17,458
---------- ---------- ----------
Total current liabilities.............. 740,817 1,189,663 2,072,907
Long-term liabilities:
Long-term debt, excluding current
installments (note 3)................... 56,982 1,010,856 2,003,282
Obligations under capital lease,
excluding current installments (note 4). 428,862 437,789 662,669
Deferred income taxes (note 5)........... 160,342 54,019 54,019
---------- ---------- ----------
Total liabilities...................... 1,387,003 2,692,327 4,792,877
---------- ---------- ----------
Stockholders' equity:
Common stock, $10 par value.
Authorized 10,000 shares; issued and
outstanding 200 shares in 1996 and 1997. 2,000 2,000 2,000
Additional paid-in capital............... 10,225 10,225 10,225
Retained earnings........................ 698,401 617,616 605,295
Less treasury stock, 3,000 common shares
in 1996 and 1997, at cost............... (30,000) (30,000) (30,000)
---------- ---------- ----------
Total stockholders' equity............. 680,626 599,841 587,520
---------- ---------- ----------
Total liabilities and stockholders'
equity................................ $2,067,629 $3,292,168 $5,380,397
========== ========== ==========
</TABLE>

See accompanying notes to combined financial statements.

F-52
<PAGE>

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

COMBINED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
SIX-MONTHS
YEARS ENDED SEPTEMBER 30 ENDED MARCH 31
---------------------------------- ----------------------
1995 1996 1997 1997 1998
---------- ---------- ---------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net revenue............. $4,624,155 $5,575,257 $6,626,850 $3,565,268 $4,016,293
Cost of revenue......... 4,044,834 5,083,883 6,303,546 3,278,560 3,354,742
---------- ---------- ---------- ---------- ----------
Gross profit......... 579,321 491,374 323,304 286,708 661,551
Selling, general and
administrative
expenses............... 238,006 237,943 511,510 380,692 611,988
---------- ---------- ---------- ---------- ----------
Income (loss) from
operations.......... 341,315 253,431 (188,206) (93,984) 49,563
---------- ---------- ---------- ---------- ----------
Other income (expense):
Interest expense....... (77,693) (108,069) (141,000) (52,060) (131,207)
Interest income........ 810 5,706 8,360 -- --
Gain on sale of
assets................ 7,457 16,985 114,966 3,263 54,534
Other.................. 25,570 22,526 29,460 10,693 8,442
---------- ---------- ---------- ---------- ----------
Income (loss) before
income taxes........ 297,459 190,579 (176,420) (132,088) (18,668)
Income tax expense
(benefit) (note 5)..... 103,020 61,838 (95,635) (44,910) (6,347)
---------- ---------- ---------- ---------- ----------
Net income (loss).... $ 194,439 $ 128,741 $ (80,785) $ (87,178) $ (12,321)
========== ========== ========== ========== ==========
</TABLE>

See accompanying notes to combined financial statements.

F-53
<PAGE>

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

COMBINED STATEMENTS OF STOCKHOLDERS' EQUITY

<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
Net income--Six-months
ended March 31, 1998
(unaudited)............... -- -- (12,321) -- (12,321)
------ ------- -------- -------- --------
Balance of March 31, 1998
(unaudited)............... $2,000 $10,225 $605,295 $(30,000) $587,520
====== ======= ======== ======== ========
</TABLE>

See accompanying notes to combined financial statements.

F-54
<PAGE>

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

COMBINED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
SIX-MONTHS
YEARS ENDED SEPTEMBER 30 ENDED MARCH 31
------------------------------- ---------------------
1995 1996 1997 1997 1998
--------- --------- --------- --------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating
activities:
Net income (loss)....... $ 194,437 $ 128,741 $ (80,785) $ (87,178) $ (12,321)
Adjustments to
reconcile net income
(loss) to net cash
provided by (used in)
operating activities:
Depreciation and
amortization......... 158,790 196,937 213,290 84,186 98,113
Deferred income taxes. 41,924 18,467 (106,323) -- --
Gain on sale of
assets............... (7,457) (16,985) (114,966) (3,263) 54,534
Increase in trade
accounts receivable.. (63,618) (119,278) (112,596) (135,102) (297,757)
Decrease (increase) in
receivables from
related parties...... (12,056) (66,885) 48,302 4,967 (446,835)
Increase in accounts
receivable from
employees............ -- -- (6,500) -- (6,500)
(Increase) decrease in
inventories.......... 4,705 (23,766) (5,855) (9,235) (61,480)
Decrease (increase) in
prepaid expenses..... 4,758 (19,644) 33,543 (104,759) (172,187)
(Increase) decrease in
other assets......... 191 -- (20,236) -- (44,044)
Decrease in amounts
payable to related
parties.............. (10,702) (22,889) (176,420) 14,947 (9,500)
Increase (decrease) in
accounts payable..... (44,731) 16,036 202,262 161,676 482,613
Increase (decrease) in
accrued payroll and
related costs........ (119,686) (1,670) 24,812 24,859 159,091
Increase in other
accrued liabilities.. 447 86,401 15,575 (72,439) (115,316)
--------- --------- --------- --------- ----------
Net cash provided by
(used in) operating
activities......... 147,002 175,465 (85,897) (121,341) (371,589)
--------- --------- --------- --------- ----------
Cash flows from investing
activities:
Purchases of property
and equipment.......... (142,383) (54,909) (333,277) (137,328) (1,261,847)
Proceeds from sale of
assets................. 123,913 56,011 341,196 156,636 80,309
Increase in notes
receivable............. -- -- (44,539) (189,157) (109,022)
--------- --------- --------- --------- ----------
Net cash provided by
(used in) investing
activities......... (18,470) 1,102 (36,620) (169,849) (1,290,560)
--------- --------- --------- --------- ----------
Cash flows from financing
activities:
Proceeds from long-term
debt................... 100,000 70,345 456,500 456,500 1,835,267
Principal payments on
long-term debt and
capital leases......... (174,880) (300,175) (461,351) (174,890) (276,605)
Borrowings under line
of credit, net......... (35,000) 18,839 206,161 51,161 25,000
--------- --------- --------- --------- ----------
Net cash provided by
(used in) financing
activities......... (109,880) (210,991) 201,310 332,771 1,583,662
--------- --------- --------- --------- ----------
Net increase (decrease)
in cash................. 18,652 (34,424) 78,793 41,581 (78,487)
Cash at beginning of
year.................... 45,142 63,794 29,370 29,370 108,163
--------- --------- --------- --------- ----------
Cash at end of year...... $ 63,794 $ 29,370 $ 108,163 $ 70,951 $ 29,676
========= ========= ========= ========= ==========
Supplemental disclosure
of cash flow
information:
Cash paid during the
year for:
Interest.............. $ 124,505 $ 110,038 $ 143,639 $ 52,060 $ 131,207
========= ========= ========= ========= ==========
Income taxes.......... $ -- $ 61,096 $ 43,371 $ 44,910 $ 78,150
========= ========= ========= ========= ==========
</TABLE>

See accompanying notes to combined financial statements.

F-55
<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")
were founded in 1976 and 1993, respectively. Caron's primary business is
transporting vehicles for leasing companies, long-haul transporters and
individuals in the Northeastern United States. It also provides towing
services for commercial and private customers in the Hartford, Connecticut
region. Caron has two facilities in East Hartford and one facility in New
Jersey. 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-56
<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.

(i) Interim Financial Statements

(2) PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

<TABLE>
<CAPTION>
SEPTEMBER 30
---------------------- MARCH 31,
1996 1997 1998
---------- ---------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Vehicles................................... $ 16,608 $ 42,258 $ 25,650
Office equipment........................... 75,590 112,455 149,391
Transportation and towing equipment........ 1,663,407 2,604,541 3,600,952
Leasehold improvements..................... 262,276 313,011 366,898
---------- ---------- ----------
Total.................................... 2,017,881 3,072,265 4,142,891
Less accumulated depreciation and
amortization.............................. (776,784) (793,303) (833,138)
---------- ---------- ----------
$1,241,097 $2,278,962 $3,309,753
========== ========== ==========
</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-57
<PAGE>

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

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

Caron's long-term debt consists of the following:

<TABLE>
<CAPTION>
SEPTEMBER 30
---------------- MARCH 31,
1996 1997 1998
------- -------- -----------
(UNAUDITED)
<S> <C> <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 $ 29,333
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............ -- 147,500 132,500
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 18,714
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 14,124
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 14,444
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..................................... -- 390,878 355,615
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.... -- 148,214 137,498
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 15,524
Note payable to Ford Motor Credit Company,
payable in monthly installments of $959,
including interest at 8.5%. Secured by
equipment....................................... 16,150 -- --
Notes 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................ -- 474,416 426,239
Notes payable to Chase Manhattan Bank, payable in
monthly installments of $2,082 and $741
including interest at 9.0% and 8.5%, maturing in
2002. Secured by a tractor trailer and real
property........................................ -- -- 129,138
Notes payable to Green Tree Financial Servicing
Corporation, payable in monthly installments of
$10,649 including interest at 10.9% maturing
July 20, 2002. Secured by three trucks.......... -- -- 432,970
</TABLE>

F-58
<PAGE>

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

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

<TABLE>
<CAPTION>
SEPTEMBER 30
-------------------- MARCH 31,
1996 1997 1998
-------- ---------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Notes payable to PACCAR Financial Corp,
payable in monthly installments of $7,199
and $3,049 including interest at 10.8%
maturing August 1, 2002. Secured by two
trucks..................................... $ -- $ -- $ 430,161
Note payable to Orix Credit Alliance, Inc.,
payable in monthly installments of $3,719,
including interest at 9.6% maturing
February 3, 2002. Secured by one trailer
and one tractor truck...................... -- -- 145,321
Note payable to Norwest Equipment Finance,
Inc., payable in monthly installments of
$3,398, including interest at 10.3%
maturing April 2, 2002. Secured by one
tractor, one trailer, and a car carrier.... -- -- 133,337
Note payable to Newcourt Financial Corp.,
payable in monthly installments of $3,320
including interest at 10.8% maturing July
23, 2002. Secured by one tractor and one
car hauler................................. -- -- 137,540
-------- ---------- ----------
Total long-term debt...................... 140,279 1,273,949 2,552,458
Less installments due within one year....... (83,297) (263,093) (549,176)
-------- ---------- ----------
Long-term debt, excluding current
installments............................. $ 56,982 $1,010,856 $2,003,282
======== ========== ==========
</TABLE>

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:

<TABLE>
<CAPTION>
SEPTEMBER 30
-------------------- MARCH 31,
1996 1997 1998
--------- --------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Transportation and towing equipment........... $ 885,356 $ 741,628 $856,719
Less accumulated amortization................. (186,143) (198,826) (218,000)
--------- --------- --------
$ 699,213 $ 542,802 $638,719
========= ========= ========
</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.

F-59
<PAGE>

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

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

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>

(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>

F-60
<PAGE>

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

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 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, $49,757 and $496,589 as of September 30,
1996 and 1997 and March 31, 1998, respectively.

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

(8) SUBSEQUENT EVENT

(a) 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.

(b) 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.

(c) On May 6, 1998, United Road Services, Inc. effectively acquired Caron as
a result of the successful completion of the initial public offering of the
common stock of United Road Services, Inc. on May 1, 1998.

F-61
<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,
except as to note 7(b),
which is as of May 6, 1998

F-62
<PAGE>

ABSOLUTE TOWING AND TRANSPORTING, INC.

BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31
------------------- MARCH 31,
1996 1997 1998
-------- ---------- -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash......................................... $ -- $ 10,935 $ 744,792
Trade accounts receivable (note 3)........... 268,818 593,679 107,156
Income taxes receivable (note 5)............. 9,731 55,324 --
Prepaid expenses............................. 23,613 30,587 27,156
-------- ---------- ----------
Total current assets....................... 302,162 690,525 879,104
Property and equipment, net (notes 2 and 3).... 265,934 306,153 423,604
Deferred income taxes (note 5)................. 6,436 31,331 31,331
-------- ---------- ----------
Total assets............................... $574,532 $1,028,009 $1,334,039
======== ========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Current installments of long-term debt (note
3).......................................... $ 15,737 $ 16,218 $ 16,915
Borrowings under lines of credit (note 3).... -- 212,403 556,034
Book overdraft............................... 98,012 312,217 --
Accounts payable............................. 79,468 124,573 233,190
-------- ---------- ----------
Total current liabilities.................. 193,217 665,411 806,139
Long-term liabilities:
Long-term debt, excluding current
installments (note 3)....................... -- 83,782 78,006
-------- ---------- ----------
Total liabilities.......................... 193,217 749,193 884,145
-------- ---------- ----------
Stockholder's equity:
Common stock, $42.86 par value. Authorized,
issued and outstanding 1,000 shares in 1996
and 1997.................................... 42,860 42,860 42,860
Retained earnings............................ 338,455 235,956 407,034
-------- ---------- ----------
Total stockholder's equity................. 381,315 278,816 449,894
-------- ---------- ----------
Total liabilities and stockholder's equity. $574,532 $1,028,009 $1,334,039
======== ========== ==========
</TABLE>

See accompanying notes to financial statements.

F-63
<PAGE>

ABSOLUTE TOWING AND TRANSPORTING, INC.

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER THREE-MONTHS
31 ENDED MARCH 31
---------------------- ----------------------
1996 1997 1997 1998
---------- ---------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C>
Net revenue.................... $3,464,623 $4,779,901 $1,079,300 $1,409,417
Cost of revenue................ 2,756,327 3,766,564 734,684 1,054,974
---------- ---------- ---------- ----------
Gross profit............... 708,296 1,013,337 344,616 354,443
Selling, general and
administrative expenses....... 635,595 1,095,416 98,728 104,035
---------- ---------- ---------- ----------
Income (loss) from
operations................ 72,701 (82,079) 245,888 250,408
---------- ---------- ---------- ----------
Other income (expense):
Interest expense............. (1,440) (15,018) (1,763) (14,667)
Gain (loss) on sale of
assets...................... (2,842) 9,254 -- --
---------- ---------- ---------- ----------
Income (loss) before income
taxes..................... 68,419 (87,843) 244,125 235,741
Income tax expense (benefit)
(note 5)...................... (12,667) (24,095) 66,963 64,663
---------- ---------- ---------- ----------
Net income (loss).......... $ 81,086 $ (63,748) $ 177,162 $ 171,078
========== ========== ========== ==========
</TABLE>

See accompanying notes to financial statements.

F-64
<PAGE>

ABSOLUTE TOWING AND TRANSPORTING, INC.

STATEMENTS OF STOCKHOLDER'S EQUITY

<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
Net income--three-months ended March 31, 1998
(unaudited)................................... -- 171,078 171,078
------- -------- --------
Balance at March 31, 1998 (unaudited).......... $42,860 $407,034 $449,894
======= ======== ========
</TABLE>

See accompanying notes to financial statements.

F-65
<PAGE>

ABSOLUTE TOWING AND TRANSPORTING, INC.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
THREE-MONTHS
YEAR ENDED DECEMBER 31 ENDED MARCH 31
------------------------ --------------------
1996 1997 1997 1998
----------- ----------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C>
Cash flows from operating
activities:
Net income (loss)............. $ 81,086 $ (63,748) $ 177,162 $ 171,078
Adjustments to reconcile net
income (loss) to net cash
provided by (used in)
operating activities:
Depreciation and
amortization............... 110,327 127,960 30,728 51,812
Deferred income taxes....... (24,253) (24,895) -- --
Loss (gain) from sale of
property and equipment..... 2,842 (9,254) -- --
Decrease (increase) in trade
accounts receivable........ (75,514) (324,861) (112,420) 486,523
Decrease (increase) in
income taxes receivable.... 8,086 (45,593) 9,731 55,324
Decrease (increase) in
prepaid expenses........... 2,718 (6,974) 4,069 3,431
Increase (decrease) in
accounts payable........... 29,252 45,105 (1,230) 108,617
----------- ----------- --------- ---------
Net cash provided by (used
in) operating activities. 134,544 (302,260) 108,040 876,785
----------- ----------- --------- ---------
Cash flows from investing
activities:
Purchases of property and
equipment.................... (143,215) (192,675) (57,606) (169,263)
Proceeds from sale of
property and equipment....... 11,749 33,750 -- --
----------- ----------- --------- ---------
Net cash used in investing
activities............... (131,466) (158,925) (57,606) (169,263)
----------- ----------- --------- ---------
Cash flows from financing
activities:
Net increase in borrowings
under line of credit......... -- 212,403 -- 343,631
Increase (decrease) in book
overdraft.................... (20,890) 214,205 41,412 (312,217)
Proceeds from long-term debt.. 15,737 100,000 -- --
Principal payments on long
term debt.................... -- (15,737) (15,737) (5,079)
Stockholder distributions..... (5,001) (38,751) -- --
----------- ----------- --------- ---------
Net cash provided by (used
in) financing activities. (10,154) 472,120 25,675 26,335
----------- ----------- --------- ---------
Net (decrease) increase in
cash.......................... (7,076) 10,935 76,109 733,857
Cash at beginning of period.... 7,076 -- -- 10,935
----------- ----------- --------- ---------
Cash at end of period.......... $ -- $ 10,935 $ 76,109 $ 744,792
=========== =========== ========= =========
Supplemental disclosure of cash
flow information:
Cash paid during the year
for:
Interest.................... $ 1,439 $ 15,018 $ 1,763 $ 14,667
=========== =========== ========= =========
Income taxes................ $ 3,500 $ 46,393 $ 57,232 $ 9,339
=========== =========== ========= =========
</TABLE>

See accompanying notes to financial statements.

F-66
<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 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.

(g) Interim Financial Statements

F-67
<PAGE>

ABSOLUTE TOWING AND TRANSPORTING, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(2) PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31
--------------------- MARCH 31,
1996 1997 1998
--------- ---------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Transportation and towing equipment...... $ 920,210 $ 974,036 $1,143,299
Leasehold improvements................... 3,740 27,110 27,110
Furniture and fixtures................... 1,060 1,060 1,060
--------- ---------- ----------
Total.................................. 925,010 1,002,206 1,171,469
Less accumulated depreciation and
amortization............................ (659,076) (696,053) (747,865)
--------- ---------- ----------
$ 265,934 $ 306,153 $ 423,604
========= ========== ==========
</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:

<TABLE>
<CAPTION>
DECEMBER 31
------------------ MARCH 31,
1996 1997 1998
-------- -------- -----------
(UNAUDITED)
<S> <C> <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 $ 94,921
Less installments due within one year...... (15,737) (16,218) (16,915)
-------- -------- --------
Long-term debt, excluding current
installments............................ $ -- $ 83,782 $ 78,006
======== ======== ========
</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-68
<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-69
<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

(a) 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.

(b) On May 6, 1998, United Road Services, Inc. effectively acquired Absolute
as a result of the successful completion of the initial public offering of the
common stock of United Road Services, Inc. on May 1, 1998.

F-70
<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,
except as to notes 7 and 8(c)
which are as of May 8, 1998 and
May 6, 1998, respectively

F-71
<PAGE>

ASC TRANSPORTATION SERVICES AND SUBSIDIARY

CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1997 1998
------------ ----------
<S> <C> <C>
ASSETS
Current assets:
Cash................................................ $ 138,213 $ 132,644
Trade accounts receivable........................... 225,364 249,103
Due from employees.................................. 715 1,884
Accounts receivable--other.......................... 4,977 9,089
Inventories......................................... 18,167 9,213
Prepaid expenses.................................... 69,535 66,753
---------- ----------
Total current assets.............................. 456,971 468,686
Property and equipment, net (notes 2 and 4)........... 806,503 764,338
Other assets.......................................... 10,986 25,577
---------- ----------
Total assets...................................... $1,274,460 $1,258,601
========== ==========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Current installments of long-term debt (note 3)..... $ 20,275 $ 17,450
Current installments of obligations under capital
leases (note 4).................................... 247,845 249,390
Accounts payable.................................... 121,245 80,736
Accrued payroll and related costs................... 45,759 77,339
Income taxes payable (note 5)....................... 62,051 46,565
Other accrued liabilities........................... 16,961 31,152
---------- ----------
Total current liabilities......................... 514,136 502,632
Long-term liabilities:
Long-term debt, excluding current installments (note
3)................................................. 209,326 206,149
Obligations under capital leases, excluding current
installments (note 4).............................. 491,680 438,445
Deferred income taxes (note 5)...................... 82,965 82,965
---------- ----------
Total liabilities................................. 1,298,107 1,230,191
---------- ----------
Stockholders' deficit:
Common stock, no par value. Authorized 10,000
shares; issued and outstanding 25 shares........... 24,000 24,000
Additional paid-in capital.......................... 33,325 33,325
Accumulated deficit................................. (80,972) (28,915)
---------- ----------
Total stockholders' deficit....................... (23,647) 28,410
---------- ----------
Total liabilities and stockholders' deficit....... $1,274,460 $1,258,601
========== ==========
</TABLE>

See accompanying notes to the consolidated financial statements.

F-72
<PAGE>

ASC TRANSPORTATION SERVICES AND SUBSIDIARY

CONSOLIDATED STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
THREE-MONTHS
ENDED MARCH 31
------------------
YEAR ENDED
DECEMBER 31, 1997 1997 1998
----------------- -------- --------
(UNAUDITED)
<S> <C> <C> <C>
Net revenue.............................. $3,310,464 $743,768 $919,626
Cost of revenue.......................... 2,364,355 459,654 555,251
---------- -------- --------
Gross profit......................... 946,109 284,114 364,375
Selling, general, and administrative
expenses................................ 764,778 239,078 258,285
---------- -------- --------
Income from operations............... 181,331 45,036 106,090
---------- -------- --------
Other income (expense):
Interest expense....................... (71,947) (17,553) (17,936)
Gain (loss) on sale of assets.......... 18,670 10,500 (9,652)
Other.................................. 34,834 7,826 --
---------- -------- --------
Income before income taxes........... 162,888 45,809 78,502
Income tax expense (note 5).............. 49,096 13,808 26,445
---------- -------- --------
Net income........................... $ 113,792 $ 32,001 $ 52,057
========== ======== ========
</TABLE>

See accompanying notes to the consolidated financial statements.

F-73
<PAGE>

ASC TRANSPORTATION SERVICES AND SUBSIDIARY

CONSOLIDATED STATEMENT OF STOCKHOLDER'S DEFICIT

<TABLE>
<CAPTION>
ADDITIONAL TOTAL
COMMON PAID-IN ACCUMULATED STOCKHOLDER'S
STOCK CAPITAL DEFICIT EQUITY (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)
Net income--three-months ended
March 31, 1998
(unaudited)................... -- -- 52,057 52,057
------- ------- --------- ---------
Balance at March 31, 1998 (un-
audited)...................... $24,000 $33,325 $ (28,915) $ 28,410
======= ======= ========= =========
</TABLE>

See accompanying notes to the consolidated financial statements.

F-74
<PAGE>

ASC TRANSPORTATION SERVICES AND SUBSIDIARY

CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
THREE-MONTHS
ENDED MARCH 31
YEAR ENDED ------------------
DECEMBER 31, 1997 1997 1998
----------------- -------- --------
(UNAUDITED)
<S> <C> <C> <C>
Cash flows from operating activities:
Net income............................. $ 113,792 $ 32,001 $ 52,057
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization........ 177,150 41,790 41,219
Deferred income taxes................ (6,786) -- --
Loss (gain) on sale of property and
equipment........................... (18,670) (10,500) 9,652
Decrease (increase) in trade accounts
receivable.......................... (88,313) 2,757 (23,739)
Increase in due from employees....... (1,376) (661) (1,169)
Increase in accounts receivable--
other............................... (1,366) (2,182) (4,112)
Decrease (increase) in inventories... (5,006) (1,987) 8,954
Decrease (increase) in prepaid
expenses and other assets........... 28,383 26,044 (11,809)
Decrease in accounts payable......... (11,932) (35,648) (40,509)
Increase in accrued payroll and
related costs....................... 17,020 27,495 31,580
Increase (decrease) in income taxes
payable............................. 38,517 8,479 (15,486)
Increase in other accrued
liabilities......................... 7,191 298 14,191
--------- -------- --------
Net cash provided by operating
activities........................ 248,604 87,886 60,829
--------- -------- --------
Cash flows from investing activities:
Purchases of property and equipment.... (268,647) (11,561) (8,706)
Proceeds from sale of property and
equipment............................. 52,938 18,537 --
--------- -------- --------
Net cash used in investing activi-
ties.............................. (215,709) 6,976 (8,706)
--------- -------- --------
Cash flows from financing activities:
Proceeds from long-term debt........... 240,673 -- --
Principal payments on long-term debt
and capital leases.................... (211,134) (41,206) (57,692)
--------- -------- --------
Net cash provided by financing ac-
tivities.......................... 29,539 (41,206) (57,692)
--------- -------- --------
Net increase (decrease) in cash.......... 62,434 53,656 (5,569)
Cash at beginning of period.............. 75,779 75,779 138,213
--------- -------- --------
Cash at end of period.................... $ 138,213 $129,435 $132,644
========= ======== ========
Supplemental disclosure of cash flow in-
formation:
Cash paid during the year for:
Interest............................. $ 72,183 $ 17,553 $ 17,936
========= ======== ========
Income taxes......................... $ 17,660 $ 5,624 $ 41,931
========= ======== ========
</TABLE>

See accompanying notes to the consolidated financial statements.

F-75
<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", were founded in 1993 and 1965, respectively. Auto Service 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 28 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-76
<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.

(i) Interim Financial Statements

(2) PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1997 1998
------------ -----------
(UNAUDITED)
<S> <C> <C>
Transportation and towing equipment................ $1,425,655 $1,414,374
Machinery and other equipment...................... 169,403 157,859
Leasehold improvements............................. 29,614 31,811
Furniture and fixtures............................. 39,175 40,442
---------- ----------
Total.............................................. 1,663,847 1,644,486
Less accumulated depreciation and amortization..... (857,344) (880,148)
---------- ----------
$ 806,503 $ 764,338
========== ==========
</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:

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1997 1998
------------ -----------
(UNAUDITED)
<S> <C> <C>
Note payable to bank, payable in monthly
installments of $1,042, including interest at
10.5%, maturing August 1998....................... $ 8,333 $ 5,207
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...................................... 221,268 218,392
-------- --------
Total long-term debt............................. 229,601 223,599
Less installments due within one year.............. (20,275) (17,450)
-------- --------
Long-term debt, excluding current installments... $209,326 $206,149
======== ========
</TABLE>

F-77
<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:

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1997 1998
------------ -----------
(UNAUDITED)
<S> <C> <C>
Transportation and towing equipment................... $1,136,544 $1,136,544
Other equipment....................................... 55,350 55,350
Furniture and fixtures................................ 18,240 18,240
---------- ----------
1,210,134 1,210,134
Less accumulated amortization......................... (519,886) (553,639)
---------- ----------
$ 690,248 $ 656,495
========== ==========
</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-78
<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-79
<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). On May 8, 1998, the Automobile
Association of America (AAA) terminated its relationship with Auto Service.
The loss of this customer could significantly effect Auto Service's
performance.

(8) SUBSEQUENT EVENT

(a) 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.

(b) 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.

(c) On May 6, 1998, United Road Services, Inc. effectively acquired Auto
Service as a result of the successful completion of the initial public
offering of the common stock of United Road Services, Inc. on May 1, 1998.

F-80
<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,
except as to note 13(b),
which is as of May 6, 1998

F-81
<PAGE>

KEYSTONE TOWING, INC.

BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31
------------------- MARCH 31,
1996 1997 1998
-------- ---------- -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash......................................... $193,165 $ 71,634 $ 49,185
Trade accounts receivable.................... 97,368 167,192 136,916
Accounts receivable from employees........... 3,443 2,989 4,724
Inventory.................................... 15,000 60,990 60,990
Note receivable--other....................... -- 5,000 5,000
Prepaid and other current assets (note 2).... 47,684 98,111 104,363
-------- ---------- ----------
Total current assets....................... 356,660 405,916 361,178
Property and equipment, net (notes 3, 6 and 7). 598,850 1,038,776 966,964
Other non-current assets (note 4).............. -- 82,256 80,705
-------- ---------- ----------
Total assets............................... $955,510 $1,526,948 $1,408,847
======== ========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Current installments of notes payable (note
6).......................................... $ 94,782 $ 278,765 $ 273,016
Borrowings under lines of credit (note 6).... 7,558 73,297 67,847
Current installment of note payable to
stockholder (notes 6 and 10)................ 31,724 35,046 35,929
Accounts payable............................. 88,176 200,779 187,523
Accrued payroll and related costs............ 53,309 52,157 74,023
Payable to affiliate (note 10)............... -- 40,909 11,598
Other liabilities (note 5)................... 301,965 326,778 347,047
-------- ---------- ----------
Total current liabilities.................. 577,514 1,007,731 996,983
Long-term liabilities:
Notes payable, excluding current installments
(note 6).................................... 156,940 349,982 298,358
Note payable to stockholder, excluding
current installments (notes 6 and 10)....... 50,314 15,268 5,948
-------- ---------- ----------
Total liabilities.......................... 784,768 1,372,981 1,301,289
-------- ---------- ----------
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 20,000
Retained earnings............................ 150,742 133,967 87,558
-------- ---------- ----------
Total stockholder's equity................. 170,742 153,967 107,558
-------- ---------- ----------
Total liabilities and stockholder's equity. $955,510 $1,526,948 $1,408,847
======== ========== ==========
</TABLE>

See accompanying notes to financial statements.

F-82
<PAGE>

KEYSTONE TOWING, INC.

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
THREE-MONTHS
YEAR ENDED DECEMBER 31 ENDED MARCH 31
------------------------ ------------------
1996 1997 1997 1998
----------- ----------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C>
Net revenue...................... $ 3,369,354 $ 3,943,073 $906,943 $979,324
Cost of revenue.................. 2,132,646 2,606,452 550,643 612,472
----------- ----------- -------- --------
Gross profit................. 1,236,708 1,336,621 356,300 366,852
Selling, general and
administrative expenses......... 934,105 1,140,252 237,579 365,531
----------- ----------- -------- --------
Income from operations....... 302,603 196,369 118,721 1,321
----------- ----------- -------- --------
Other income (expense):
Interest expense............... (28,067) (71,451) (7,912) (12,068)
Interest income................ 2,534 1,556 -- --
Gain on sale of assets......... -- 36,275 275 --
Other (note 10)................ -- 76,312 19,078 25,329
----------- ----------- -------- --------
Net income................... $ 277,070 $ 239,061 $130,162 $ 14,582
=========== =========== ======== ========
</TABLE>

See accompanying notes to financial statements.

F-83
<PAGE>

KEYSTONE TOWING, INC.

STATEMENTS OF STOCKHOLDER'S EQUITY

<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
Net income--three-months ended March 31, 1998
(unaudited).................................. -- 14,582 14,582
Owner distribution (unaudited)................ -- (60,991) (60,991)
------- --------- ---------
Balance at March 31, 1998 (unaudited)......... $20,000 $ 87,558 $ 107,558
======= ========= =========
</TABLE>

See accompanying notes to financial statements.

F-84
<PAGE>

KEYSTONE TOWING, INC.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED THREE-MONTHS
DECEMBER 31 ENDED MARCH 31
-------------------- -------------------
1996 1997 1997 1998
--------- --------- -------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C>
Cash flows from operating
activities:
Net income........................ $ 277,070 $ 239,061 $130,162 $ 14,582
Adjustments to reconcile net
income to net cash provided by
operating activities, net of
effects of acquisitions:
Depreciation and amortization... 155,367 280,075 91,229 91,827
Gain on sale of assets.......... -- (36,275) (275) --
Decrease (increase) in trade
accounts receivable............ (11,892) (69,824) (18,089) 30,276
Decrease (increase) in accounts
receivable from employees...... (2,015) 454 1,850 (1,735)
Increase in inventory........... (5,000) (45,990) -- --
Decrease (increase) in prepaid
and other current assets....... 10,619 (50,427) (18,702) (6,252)
Increase (decrease) in accounts
payable........................ 48,580 112,603 (68,769) (13,256)
Increase (decrease) in accrued
payroll and related costs...... 16,970 (1,152) 191 21,866
Increase (decrease) in payable
to affiliate................... -- 40,909 6,000 (29,311)
Increase (decrease) in other
liabilities.................... 44,984 24,813 (56,894) 20,269
--------- --------- -------- ---------
Net cash provided by operating
activities................... 534,683 494,247 66,703 128,266
--------- --------- -------- ---------
Cash flows from investing
activities:
Purchases of property and
equipment........................ (97,818) (396,324) (226,696) (18,464)
Proceeds from sale of assets...... -- 40,000 4,000 --
(Increase) decrease in note
receivable--other................ 24,351 (5,000) (4,571) --
--------- --------- -------- ---------
Net cash used in investing
activities................... (73,467) (361,324) (227,267) (18,464)
--------- --------- -------- ---------
Cash flows from financing
activities:
Proceeds from long-term debt...... -- 13,289 -- --
Principal payments on long-term
debt............................. (146,768) (77,646) (16,532) (65,810)
Borrowings on line of credit, net. 7,557 65,739 92,442 (5,450)
Owner distributions............... (214,793) (255,836) -- (60,991)
--------- --------- -------- ---------
Net cash used in financing
activities................... (354,004) (254,454) 75,910 (132,251)
--------- --------- -------- ---------
Net (decrease) increase in cash..... 107,212 (121,531) (84,654) (22,449)
Cash at beginning of period......... 85,953 193,165 193,165 71,634
--------- --------- -------- ---------
Cash at end of period............... $ 193,165 $ 71,634 $108,511 $ 49,185
========= ========= ======== =========
Supplemental disclosure of cash flow
information:
Cash paid during the year for:
Interest........................ $ 28,067 $ 71,451 $ 7,912 $ 12,068
========= ========= ======== =========
</TABLE>

See accompanying notes to financial statements.

F-85
<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 1991. 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.

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.

F-86
<PAGE>

KEYSTONE TOWING, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(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.

(h) Interim Financial Statements

The interim financial information included in these financial statements is
unaudited but reflects all adjustments (consisting of only normal accruals)
which are, in the opinion of management, necessary for a fair presentation of
the results for the interim periods presented.

(2) PREPAID AND OTHER CURRENT ASSETS

Prepaid and other current assets consists of:

<TABLE>
<CAPTION>
DECEMBER 31
--------------- MARCH 31,
1996 1997 1998
------- ------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Prepaid insurance................................ $ 6,750 $13,549 $ 50,483
Prepaid vehicle registration..................... -- 22,010 --
Miscellaneous deposits........................... 32,304 39,657 46,522
Prepaid property taxes........................... 3,432 2,631 2,632
Other............................................ 5,198 20,264 4,726
------- ------- --------
$47,684 $98,111 $104,363
======= ======= ========
</TABLE>

(3) PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31
---------------------- MARCH 31,
1996 1997 1998
---------- ---------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Automobiles and transportation
equipment.............................. $ 578,891 $1,025,234 $1,025,234
Furniture and fixtures.................. 129,592 144,361 144,361
Machinery and equipment................. 240,653 270,163 270,163
Leasehold improvements.................. 273,137 460,641 479,105
---------- ---------- ----------
Total................................. 1,222,273 1,900,399 1,918,863
Less accumulated depreciation and
amortization........................... (623,423) (861,623) (951,899)
---------- ---------- ----------
$ 598,850 $1,038,776 $ 966,964
========== ========== ==========
</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 consists of the following (see note 8):

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1997 1998
------------ -----------
(UNAUDITED)
<S> <C> <C>
Goodwill............................................... $85,572 $85,572
Covenant-not-to-compete................................ 2,500 2,500
------- -------
Total................................................ 88,072 88,072
Less accumulated amortization.......................... (5,816) (7,367)
------- -------
$82,256 $80,705
======= =======
</TABLE>

F-87
<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 consists of:

<TABLE>
<CAPTION>
DECEMBER 31
----------------- MARCH 31,
1996 1997 1998
-------- -------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Retirement savings plan payable................ $ 70,964 $125,261 $117,112
Parking and other taxes payable(a)............. 123,647 107,734 114,372
Lien sale payable(b)........................... 75,299 87,938 84,553
Insurance premiums payable..................... 3,745 4,220 --
Other.......................................... 28,310 1,625 31,010
-------- -------- --------
$301,965 $326,778 $347,047
======== ======== ========
</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 consists of:

<TABLE>
<CAPTION>
DECEMBER 31
-------------------- MARCH 31,
1996 1997 1998
--------- --------- -----------
(UNAUDITED)
<S> <C> <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 $ 41,877
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.................................. 209,136 599,407 545,861
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 25,513
--------- --------- ---------
Total long-term debt................. 333,760 679,061 613,251
Less installments due within one year.. (126,506) (313,811) (308,945)
--------- --------- ---------
Long-term debt, excluding current
installments........................ $ 207,254 $ 365,250 $ 304,306
========= ========= =========
</TABLE>

F-88
<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-89
<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

(a) 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.

(b) On May 1, 1998, United Road Services, Inc. successfully completed the
initial public offering of its common stock.

F-90
<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.

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

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

5,000,000 SHARES

LOGO
UNITED ROAD
SERVICES, INC.

COMMON STOCK

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

PROSPECTUS

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

, 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............................................ $ 25,223
Nasdaq National Market Listing Fee.............................. 17,500*
Legal fees and expenses......................................... 50,000*
Accounting fees and expenses.................................... 100,000*
Miscellaneous expenses.......................................... 2,277*
--------
Total......................................................... $195,000
========
</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>

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>
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 (incorporated by reference to the same-
numbered Exhibit to the Company's Registration Statement on Form S-1
(Registration No. 333-46925)).
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 (incorporated by reference to the same-
numbered Exhibit to the Company's Registration Statement on Form S-1
(Registration No. 333-46925)).
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 (incorporated by reference to the same-
numbered Exhibit to the Company's Registration Statement on Form S-1
(Registration No. 333-46925)).
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 (incorporated by
reference to the same-numbered Exhibit to the Company's Registration
Statement on Form S-1 (Registration No. 333-46925)).
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 (incorporated by reference to the same-numbered Exhibit
to the Company's Registration Statement on Form S-1 (Registration No.
333-46925)).
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 (incorporated by reference to the same-numbered Exhibit
to the Company's Registration Statement on Form S-1 (Registration No.
333-46925)).
</TABLE>

II-2
<PAGE>

<TABLE>
<CAPTION>
NUMBER DESCRIPTION OF DOCUMENT
------ -----------------------
<C> <S>
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 (incorporated by reference to the same-
numbered Exhibit to the Company's Registration Statement on Form S-1
(Registration No. 333-46925)).
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 (incorporated by reference to the same-numbered Exhibit to the
Company's Registration Statement on Form S-1 (Registration No. 333-
46925)).
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 (incorporated by reference to the
same-numbered Exhibit to the Company's Registration Statement on Form
S-1 (Registration No. 333-46925)).
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 (incorporated by reference to the same-
numbered Exhibit to the Company's Registration Statement on Form S-1
(Registration
No. 333-46925)).
2.11 Form of Amendment Number One to Agreement and Plan of Reorganization
dated as of February 23, 1998, by and among the Company, Keystone
Towing, Inc. and the Stockholder named therein (incorporated by
reference to the same-numbered Exhibit to Amendment No. 3 to the
Company's Form S-1 Registration Statement (Registration No. 333-
46925)).
3.1 Amended and Restated Certificate of Incorporation of the Company
(incorporated by reference to the same-numbered Exhibit to the
Company's Registration Statement on Form S-1 (Registration No. 333-
46925)).
3.2 Amended and Restated Bylaws of the Company (incorporated by reference
to the same-numbered Exhibit to the Company's Registration Statement on
Form S-1 (Registration No. 333-46925)).
4.1 Specimen Common Stock Certificate (incorporated by reference to the
same-numbered Exhibit to Amendment No. 3 to the Company's Form S-1
Registration Statement (Registration No. 333-46925)).
5.1 Opinion of McDermott, Will & Emery, as to the validity of the issuance
of the securities registered hereby.
10.1 United Road Services, Inc. 1998 Stock Option Plan (incorporated by
reference to the same-numbered Exhibit to the Company's Registration
Statement on Form S-1 (Registration No. 333-46925)).
10.2 Stock Purchase and Restriction Agreement between the Company and Edward
Sheehan (incorporated by reference to the same-numbered Exhibit to the
Company's Registration Statement on Form S-1 (Registration No. 333-
46925)).
10.3 Executive Employment Agreement between the Company and Edward T.
Sheehan (incorporated by reference to the same-numbered Exhibit to the
Company's Registration Statement on Form S-1 (Registration No. 333-
46925)).
10.4 Resignation letter from Mark McKinney in favor of the Company.
10.5 Resignation letter from Ross Berner in favor of the Company.
10.6 Executive Employment Agreement between the Company and Allan D. Pass
(incorporated by reference to the same-numbered Exhibit to the
Company's Registration Statement on Form S-1 (Registration No. 333-
46925)).
10.7 Executive Employment Agreement between the Company and Donald J. Marr
(incorporated by reference to the same-numbered Exhibit to the
Company's Registration Statement on Form S-1 (Registration No. 333-
46925)).
</TABLE>

II-3
<PAGE>

<TABLE>
<CAPTION>
NUMBER DESCRIPTION OF DOCUMENT
------ -----------------------
<C> <S>
10.8 Employment Agreement between the Company and Edward Morawski
(incorporated by reference to the same-numbered Exhibit to Amendment
No. 1 to the Company's Form S-1 Registration Statement (Registration
No. 333-46925)).
10.9 Consulting Agreement between the Company and Todd Q. Smart
(incorporated by reference to the same-numbered Exhibit to Amendment
No. 1 to the Company's Form S-1 Registration Statement (Registration
No. 333-46925)).
10.10 Credit Agreement dated as of May 8, 1998 among United Road Services,
Inc., various financial institutions and Bank of America National Trust
and Savings Association, as Agent.
10.11 Amended and Restated Executive Employment Agreement, dated as of May 1,
1998, between the Company and Donald J. Marr.
10.12 [Reserved]
10.13 Form of Registration Rights Agreement between the Company and
Stockholders named therein (incorporated by reference to the same-
number Exhibit to Amendment No. 1 to the Company's Form S-1
Registration Statement (Registration No. 333-46925)).
10.14 Form of Indemnification Agreement between the Company and each of the
Company's executive officers and directors (incorporated by reference
to the same-numbered Exhibit to Amendment No. 2 to the Company's Form
S-1 Registration Statement Registration No. 333-46925)).
10.15 Lease between the Company and Edward Morawski (incorporated by
reference to the same-numbered Exhibit to Amendment No. 1 to the
Company's Form S-1 Registration Statement (Registration
No. 333-46925)).
10.16 Lease between the Company and Exodus Holdings LLC (incorporated by
reference to the same-numbered Exhibit to Amendment No. 1 to the
Company's Form S-1 Registration Statement (Registration No. 333-
46925)).
24.1 Consent of McDermott, Will & Emery (included in Exhibit 5.1).
24.2 Consent of KPMG Peat Marwick LLP.
25.1 Powers of Attorney (included on signature page).
27.1 Financial Data Schedule.
</TABLE>

(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.

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.

II-4
<PAGE>

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-5
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this 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 4th day of June, 1998.

United Road Services, Inc.

By: /s/ Edward T. Sheehan
----------------------------------
EDWARD T. SHEEHAN
CHAIRMAN OF THE BOARD,
CHIEF EXECUTIVE OFFICER
AND SECRETARY

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Edward T. Sheehan and Allan D. Pass and each of
them, as his true and lawful attorneys-in-fact and agents, with full power of
substitution for him in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that said attorney-in-fact
and agents, or any of them, or their or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed on June 4, 1998 by the following persons in the
capacities indicated.

SIGNATURE TITLE

/s/ Edward T. Sheehan Chairman of the Board
- ------------------------ Chief Executive Officer,
EDWARD T. SHEEHAN and Secretary (Principal Executive Officer)
and Director

/s/ Donald J. Marr Senior Vice President and Chief Financial
- ------------------------ Officer (Principal Financial and Accounting
DONALD J. MARR Officer)

/s/ Grace M. Hawkins Director
- ------------------------
GRACE M. HAWKINS

/s/ Donald F. Director
Moorehead, Jr.
- ------------------------
DONALD F. MOOREHEAD,
JR.

/s/ Edward W. Morawski Director
- ------------------------
EDWARD W. MORAWSKI

/s/ Todd Q. Smart Director
- ------------------------
TODD Q. SMART

/s/ Edward Smith
- ------------------------
EDWARD SMITH
Director

II-6

<PAGE>

EXHIBIT 5.1

[McDERMOTT, WILL & EMERY LETTERHEAD]

June 3, 1998

United Road Services, Inc.
8 Automation Lane
Albany, New York 12205

Gentlemen:

We have acted as counsel for United Road Services, Inc., a Delaware
corporation (the "Company"), in connection with the filing of the Registration
Statement on Form S-1 (the "Registration Statement") with respect to the
registration of 5,000,000 shares (the "Shares") of the Common Stock, $.001 par
value (the "Common Stock"), of the Company.

We have made such inquiries and examined such documents as we have
considered necessary or appropriate for purposes of giving the opinions
hereinafter set forth, including the examination of executed or conformed
counterparts, or copies certified or otherwise proved to our satisfaction, of
the following:

(a) the Amended and Restated Certificate of Incorporation of the
Company;

(b) the Amended Bylaws of the Company;

(c) the Registration Statement on Form S-1 of the Company, including
the related prospectus and other attachments, filed with the Securities and
Exchange Commission to register the Shares under the Securities Act of 1933, as
amended.

We have assumed the genuineness and authenticity of all signatures on
all original documents, the authenticity of all documents submitted to us as
originals, the conformity to originals of all documents submitted to us as
copies and the due authorization, execution, delivery or recordation of all
documents where due authorization, execution or recordation are prerequisites to
the effectiveness thereof.

Based upon the foregoing, and having due regard for such legal
considerations as we deem relevant, we are of the opinion that:

(i) the Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware;

(ii) the Shares proposed to be issued by the Company pursuant to the
Registration Statement will be, when so issued in accordance with due
authorization by the board of directors of the Company and paid for, legally
issued, fully paid, and non-assessable.

We hereby consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement.

/s/ McDERMOTT, WILL & EMERY

<PAGE>

EXHIBIT 10.4

June 3, 1998

Edward T. Sheehan
Chairman and Chief Executive Officer
United Road Services, Inc.
8 Automation Lane
Albany, New York 12205

Re: Resignation

Dear Ed:

I hereby resign as a Director, officer and employee of United Road
Services, Inc. (the "Company"), effective June 3, 1998. The decision to resign
is not related in any way to any disagreement with the Company on any matters
relating to the Company's operations, policies or practices. I agree that the
Executive Employment Agreement between the Company and me dated February 4, 1998
is hereby terminated and hereby release and waive any and all rights I have
under that agreement, except for the provisions of Sections 7.1, 7.2, 7.4 and 8
thereof, which shall remain in full force and effect. The Company and I agree
that the Indemnification Agreement between the Company and me dated April 1998
(the "Indemnification Agreement") shall remain in full force and effect in
accordance with its terms.

Other than as set forth in the Indemnification Agreement, I hereby
irrevocably and unconditionally, waive any and all rights, entitlements
and privileges associated with my role as an officer, director and employee of
the Company. Further, I hereby agree that after the effective date of my
resignation, I will not make any representations that I am a director, officer
or employee of the Company. Other than as specifically set forth above, the
Company agrees that it hereby irrevocably and unconditionally releases, acquits
and discharges me from any charges, complaints, claims, liabilities,
obligations, damages, causes of action, rights, debts and expenses of any nature
whatsoever, absolute or contingent, known or unknown. Other than as specifically
set forth above, I agree and hereby irrevocably and unconditionally release,
acquit and discharge the Company and its officers, directors, employees, agents,
and affiliates from any charges, complaints, claims, liabilities, obligations,
damages, causes of action, rights, debts and expenses of any nature whatsoever,
absolute or contingent, known or unknown.

<PAGE>

Edward T. Sheehan
June __, 1998
Page 2

I look forward to assisting you in a smooth transition of my role in the
Company. Please sign below where indicated to acknowledge receipt and acceptance
of my resignation and the Company's agreement with the terms hereof. Thank you.

/s/ Mark McKinney
- -----------------------
Mark McKinney

The Company hereby acknowledges receipt and acceptance of the resignation of
Mark McKinney in his capacity as an officer, director and employee of the
Company, to be effective June 3, 1998 and hereby accepts and agrees to the
provisions set forth above.

Dated: June 3, 1998

United Road Services, Inc.

/s/ Edward T. Sheehan
- ------------------------
Edward T. Sheehan
Chairman and Chief

<PAGE>

EXHIBIT 10.5

June 4, 1998

Edward T. Sheehan
Chairman and Chief Executive Officer
United Road Services, Inc.
8 Automation Lane
Albany, New York 12205

Re: Resignation

Dear Ed:

I hereby resign as a Director, officer and employee of United Road
Services, Inc. (the "Company"), effective June 3, 1998. The decision to resign
is not related in any way to any disagreement with the Company on any matters
relating to the Company's operations, policies or practices. I agree that the
Executive Employment Agreement between the Company and me dated February 4, 1998
is hereby terminated, except for the provisions of Sections 7.1, 7.2, 7.4 and 8
thereof, which shall remain in full force and effect, and I hereby release and
waive any and all rights I have under that agreement. The Company and I agree
that the Indemnification Agreement between the Company and me dated April 1998
(the "Indemnification Agreement") shall remain in full force and effect in
accordance with its terms.

Edward T. Sheehan
June __, 1998
Page 2

/s/ Ross Berner
- -----------------------
Ross Berner

The Company hereby acknowledges receipt and acceptance of the resignation of
Ross Berner in his capacity as an officer, director and employee of the Company,
to be effective June 1, 1998 and hereby accepts and agrees to the provisions set
forth above.

Dated: June 4, 1998

United Road Services, Inc.

/s/ Edward T. Sheehan
- ------------------------
Edward T. Sheehan
Chairman and Chief

<PAGE>

EXHIBIT 10.10

================================================================================

CREDIT AGREEMENT

dated as of May 8, 1998

among

UNITED ROAD SERVICES, INC.,

VARIOUS FINANCIAL INSTITUTIONS

and

BANK OF AMERICA NATIONAL TRUST

AND SAVINGS ASSOCIATION,

as Agent

Arranged by BANCAMERICA ROBERTSON STEPHENS

================================================================================
<PAGE>

TABLE OF CONTENTS

Page

SECTION 1 DEFINITIONS.....................................................1
1.1 Definitions..................................................1
1.2 Other Interpretive Provisions...............................14

SECTION 2 COMMITMENTS OF THE BANKS; LETTER OF CREDIT,
BORROWING, CONVERSION AND CONTINUATION PROCEDURES..............15
2.1 Commitments.................................................15
2.1.1 Loan Commitment......................................15
2.1.2 L/C Commitment.......................................15
2.2 Loan Procedures.............................................16
2.2.1 Various Types of Loans...............................16
2.2.2 Borrowing Procedures.................................16
2.2.3 Conversion and Continuation Procedures...............17
2.3 Letter of Credit Procedures.................................18
2.3.1 L/C Applications.....................................18
2.3.2 Participation in Letters of Credit...................18
2.3.3 Reimbursement Obligations............................18
2.3.4 Limitation on Obligations of Issuing
Banks................................................19
2.3.5 Funding by Banks to Issuing Banks....................19
2.4 Commitments Several.........................................20
2.5 Certain Conditions..........................................20

SECTION 3 NOTES EVIDENCING LOANS.........................................20
3.1 Notes.......................................................20
3.2 Recordkeeping...............................................20

SECTION 4 INTEREST.......................................................21
4.1 Interest Rates..............................................21
4.2 Interest Payment Dates......................................21
4.3 Setting and Notice of Eurodollar Rates......................21
4.4 Computation of Interest.....................................21

SECTION 5 FEES...........................................................22
5.1 Non-Use Fee.................................................22
5.2 Letter of Credit Fees.......................................22
5.3 Arrangement and Agent's Fees................................22
5.4 Closing Fees................................................22

SECTION 6 REDUCTION AND TERMINATION OF THE COMMITMENTS;
PREPAYMENTS....................................................23

6.1 Reduction or Termination of the Commitments.................23
6.2 Voluntary Prepayments.......................................23
6.3 Mandatory Prepayments. .....................................23

-i-
<PAGE>

SECTION 7 MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES................23
7.1 Making of Payments..........................................23
7.2 Application of Certain Payments.............................24
7.3 Due Date Extension..........................................24
7.4 Setoff......................................................24
7.5 Proration of Payments.......................................24
7.6 Taxes.......................................................24

SECTION 8 INCREASED COSTS; SPECIAL PROVISIONS FOR
EURODOLLAR LOANS...............................................26
8.1 Increased Costs.............................................26
8.2 Basis for Determining Interest Rate Inadequate
or Unfair...................................................27
8.3 Changes in Law Rendering Eurodollar Loans Unlawful..........28
8.4 Funding Losses..............................................28
8.5 Right of Banks to Fund through Other Offices................28
8.6 Discretion of Banks as to Manner of Funding.................29
8.7 Mitigation of Circumstances; Replacement
of Affected Bank............................................29
8.8 Conclusiveness of Statements; Survival
of Provisions...............................................30

SECTION 9 WARRANTIES.....................................................30
9.1 Organization, etc...........................................30
9.2 Authorization; No Conflict..................................30
9.3 Validity and Binding Nature.................................30
9.4 Financial Condition.........................................31
9.5 No Material Adverse Change..................................31
9.6 Litigation and Contingent Liabilities.......................31
9.7 Ownership of Properties; Liens..............................31
9.8 Subsidiaries................................................31
9.9 Pension and Welfare Plans...................................32
9.10 Investment Company Act......................................32
9.11 Public Utility Holding Company Act..........................32
9.12 Regulation U................................................32
9.13 Taxes.......................................................32
9.14 Solvency, etc...............................................33
9.15 Environmental Matters.......................................33
9.16 Year 2000 Problem...........................................34
9.17 Copyrights, Patents, Trademarks and Licenses, etc...........35
9.18 Founding Companies Acquisition..............................35
9.19 Transactions with Affiliates................................36
9.20 Information.................................................36

SECTION 10 COVENANTS.....................................................36
10.1 Reports, Certificates and Other Information.................36
10.1.1 Audit Report........................................36

-ii-
<PAGE>

10.1.2 Quarterly Reports....................................37
10.1.3 Monthly Reports......................................37
10.1.4 Borrowing Base Certificate...........................37
10.1.5 Compliance Certificates..............................37
10.1.6 Reports to SEC and to Shareholders...................38
10.1.7 Notice of Default, Litigation and
ERISA Matters..................................38
10.1.8 Subsidiaries.........................................39
10.1.9 Management Reports...................................39
10.1.10 Projections.........................................39
10.1.11 Contracts...........................................39
10.1.12 Fleet Audit Reports.................................39
10.1.13 Other Information...................................39
10.2 Books, Records and Inspections...............................39
10.3 Insurance....................................................40
10.4 Compliance with Laws; Payment of Taxes
and Liabilities..............................................40
10.5 Maintenance of Existence, etc................................40
10.6 Financial Covenants..........................................40
10.6.1 Minimum Consolidated Net Income......................40
10.6.2 Funded Debt to Funded Debt plus Net
Worth Ratio..........................................40
10.6.3 Funded Debt to EBITDA Ratio..........................41
10.6.4 Capital Expenditures.................................41
10.6.5 EBITR to Interest Expense plus
Rental Expense Ratio.................................41
10.7 Limitations on Debt.........................................41
10.8 Liens.......................................................42
10.9 Restricted Payments.........................................43
10.10 Mergers, Consolidations, Sales..............................43
10.11 Modification of Organizational Documents....................44
10.12 Use of Proceeds.............................................44
10.13 Further Assurances..........................................44
10.14 Transactions with Affiliates................................44
10.15 Employee Benefit Plans......................................44
10.16 Environmental Matters.......................................44
10.17 Unconditional Purchase Obligations..........................45
10.18 Inconsistent Agreements.....................................45
10.19 Business Activities.........................................45
10.20 Advances and Other Investments..............................45
10.21 Maintenance of Property.....................................46
10.22 Performance of Obligations..................................46
10.23 Leases......................................................47

SECTION 11 EFFECTIVENESS; CONDITIONS OF LENDING, ETC.....................47
11.1 Initial Credit Extensions....................................47
11.1.1 Notes................................................47
11.1.2 Resolutions..........................................48

-iii-
<PAGE>

11.1.3 Consents, etc........................................48
11.1.4 Incumbency and Signature Certificates................48
11.1.5 Guaranty.............................................48
11.1.6 Security Agreement...................................48
11.1.7 Pledge Agreements....................................48
11.1.8 Opinion of Counsel for the Company
and the Guarantors...................................48
11.1.9 Borrowing Base Certificate...........................48
11.1.10 Other...............................................49
11.2 Conditions...................................................49
11.2.1 Compliance with Warranties,
No Default, etc......................................49
11.2.2 Confirmatory Certificate.............................50

SECTION 12 EVENTS OF DEFAULT AND THEIR EFFECT............................50
12.1 Events of Default............................................50
12.1.1 Non-Payment of the Loans, etc........................50
12.1.2 Non-Payment of Other Debt............................50
12.1.3 Other Material Obligations...........................50
12.1.4 Bankruptcy, Insolvency, etc..........................51
12.1.5 Non-Compliance with Provisions of
This Agreement.......................................51
12.1.6 Warranties...........................................51
12.1.7 Pension Plans........................................51
12.1.8 Judgments............................................52
12.1.9 Invalidity of Guaranty, etc..........................52
12.1.10 Invalidity of Collateral Documents, etc.............52
12.1.11 Change in Control...................................52
12.2 Effect of Event of Default...................................53

SECTION 13 THE AGENT.....................................................53
13.1 Appointment and Authorization................................53
13.2 Delegation of Duties.........................................54
13.3 Liability of Agent...........................................54
13.4 Reliance by Agent............................................54
13.5 Notice of Default............................................55
13.6 Credit Decision..............................................55
13.7 Indemnification..............................................56
13.8 Agent in Individual Capacity.................................57
13.9 Successor Agent; Assignment of Agency........................57
13.10 Withholding Tax.............................................58
13.11 Collateral Matters..........................................60

SECTION 14 GENERAL.......................................................60
14.1 Waiver; Amendments...........................................60
14.2 Confirmations................................................61
14.3 Notices......................................................61
14.4 Computations.................................................61
14.5 Regulation U.................................................61
14.6 Costs, Expenses and Taxes....................................62

-iv-
<PAGE>

14.7 Subsidiary References........................................62
14.8 Captions.....................................................62
14.9 Assignments; Participations..................................62
14.9.1 Assignments..........................................62
14.9.2 Participations.......................................64
14.10 Governing Law...............................................65
14.11 Counterparts................................................65
14.12 Successors and Assigns......................................65
14.13 Indemnification by the Company..............................65
14.14 Forum Selection and Consent to Jurisdiction.................66
14.15 Waiver of Jury Trial........................................67

SCHEDULE 1.1A Pricing Schedule

SCHEDULE 1.1B Debt to be Repaid

SCHEDULE 2.1 Banks and Percentages

SCHEDULE 2.1.2 Existing Letters of Credit

SCHEDULE 9.6 Litigation and Contingent Liabilities

SCHEDULE 9.8 Subsidiaries

SCHEDULE 9.15 Environmental Matters

SCHEDULE 10.7 Existing Debt

SCHEDULE 10.8 Existing Liens

SCHEDULE 12.1.11A Key Executives

SCHEDULE 12.1.11B Key Directors

SCHEDULE 14.3 Addresses for Notices

EXHIBIT A Form of Note
(Section 3.1)

EXHIBIT B Form of Compliance Certificate
(Section 10.1.3)

EXHIBIT C Form of Guaranty
(Section 1)

EXHIBIT D Form of Security Agreement
(Section 1)

-v-
<PAGE>

EXHIBIT E Form of Company Pledge Agreement
(Section 1)

EXHIBIT F Form of Subsidiary Pledge Agreement
(Section 11.1.7)

EXHIBIT G Form of Assignment Agreement
(Section 14.9)

EXHIBIT H Form of Borrowing Base Certificate
(Section 10.1.4)

EXHIBIT I Form of Notice of Borrowing
(Section 2.2.2)

Exhibit J Form of Notice of Conversion/Continuation

-vi-
<PAGE>

CREDIT AGREEMENT

This CREDIT AGREEMENT, dated as of May 8, 1998 (this "Agreement"), is
entered into among UNITED ROAD SERVICES, INC., a Delaware corporation (the
"Company"), the financial institutions that are or may from time to time become
parties hereto (together with their respective successors and assigns, the
"Banks") and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION (in its
individual capacity, "BofA"), as agent for the Banks.

In consideration of the premises and the mutual agreements herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

SECTION 1 DEFINITIONS.

1.1 Definitions. When used herein the following terms shall have the
following meanings:

Account Debtor means the party who is obligated on or under any
Receivable.

Acquired Equipment means Eligible Equipment acquired by the Company
or any Subsidiary as a result of an acquisition permitted by Section 10.10.

Affected Bank means any Bank that has given notice to the Company
(which has not been rescinded) of (i) any obligation by the Company to pay any
amount pursuant to Section 7.6 or 8.1 or (ii) the occurrence of any
circumstances of the nature described in Section 8.2 or 8.3.

Affiliate of any Person means (i) any other Person which, directly or
indirectly, controls or is controlled by or is under common control with such
Person and (ii) any officer or director of such Person.

Agent means BofA in its capacity as agent for the Banks hereunder and
any successor thereto in such capacity.

Agent-Related Persons means BofA and any successor agent arising
under Section 13.9, together with their respective Affiliates (including, in the
case of BofA, the Arranger), and the officers, directors, employees, agents and
attorneys-in-fact of such Persons and Affiliates.
<PAGE>

Agreement - see the Preamble.

Arranger means BancAmerica Robertson Stephens, a Delaware
corporation.

Assignment Agreement - see Section 14.9.1.

Bank - see the Preamble.

Base Rate means at any time the greater of (a) the Federal Funds Rate
plus 0.5% and (b) the Reference Rate.

BofA - see the Preamble.

Borrowing Base means the sum of (a) 85% of Eligible Receivables; plus
(b) 60% of Eligible Inventory, provided that the amount determined pursuant to
this clause (b) shall not exceed $5,000,000; plus (c) 75% of the Equipment Value
of all Eligible Equipment; plus (d) the lesser of (i) the Overadvance Amount or
(ii) 50% of the sum of clauses (a), (b) and (c). For purposes of the foregoing,
the "Overadvance Amount" shall be (i) $7,000,000 during the period from the
Effective Date to April 30, 1999, (ii) $3,000,000 during the period from April
30, 1999 to April 30, 2000, and (iii) zero thereafter; provided that the
Overadvance Amount set forth in clauses (i) and (ii) above shall be increased by
$1,000,000 on the date (if any) on which the Company acquires Keystone (or a
company which the Required Banks agree in writing is a satisfactory replacement
for Keystone).

Business Day means any day on which BofA is open for commercial
banking business in Chicago, New York and San Francisco and, in the case of a
Business Day which relates to a Eurodollar Loan, on which dealings are carried
on in the interbank eurodollar market.

Capital Expenditures means all expenditures which, in accordance with
GAAP, would be required to be capitalized and shown on the consolidated balance
sheet of the Company, but excluding expenditures made in connection with the
replacement, substitution or restoration of assets to the extent financed within
three months (i) from insurance proceeds (or other similar recoveries) paid on
account of the loss of or damage to the assets being replaced or restored or
(ii) with awards of compensation arising from the taking by eminent domain or
condemnation of the assets being replaced.

Capital Lease means, with respect to any Person, any lease of (or
other agreement conveying the right to use) any real or

2
<PAGE>

personal property by such Person that, in conformity with GAAP, is accounted for
as a capital lease on the balance sheet of such Person.

Cash Equivalent Investment means, at any time, (a) any evidence of
Debt, maturing not more than one year after such time, issued or guaranteed by
the United States Government or any agency thereof, (b) commercial paper,
maturing not more than one year from the date of issue, or corporate demand
notes, in each case (unless issued by a Bank or its holding company) rated at
least A-l by Standard & Poor's Ratings Group or P-l by Moody's Investors
Service, Inc., (c) any certificate of deposit (or time deposits represented by
such certificates of deposit) or bankers acceptance, maturing not more than one
year after such time, or overnight Federal Funds transactions that are issued or
sold by a commercial banking institution that is a member of the Federal Reserve
System and has a combined capital and surplus and undivided profits of not less
than $500,000,000, (d) any repurchase agreement entered into with any Bank (or
other commercial banking institution of the stature referred to in clause (c))
which (i) is secured by a fully perfected security interest in any obligation of
the type described in any of clauses (a) through (c) and (ii) has a market value
at the time such repurchase agreement is entered into of not less than 100% of
the repurchase obligation of such Bank (or other commercial banking institution)
thereunder and (e) investments in short-term asset management accounts offered
by any Bank for the purpose of investing in loans to any corporation (other than
the Company or an Affiliate of the Company), state or municipality, in each case
organized under the laws of any state of the United States or of the District of
Columbia.

CERCLA - see Section 9.15.

Code means the Internal Revenue Code of 1986, as amended.

Collateral Documents means the Company Pledge Agreement, each
Subsidiary Pledge Agreement, the Security Agreement and any other agreement
pursuant to which the Company or any Guarantor grants collateral to the Agent
for the benefit of the Banks.

Commitment Amount - see Section 2.1.1.

Commitments means the Loan Commitment and the L/C Commitment.

Company - see the Preamble.

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Company Pledge Agreement means a pledge agreement between the Company
and the Agent, substantially in the form of Exhibit E.

Computation Period means each period of four consecutive Fiscal
Quarters ending on the last day of a Fiscal Quarter.

Consolidated Net Income means, with respect to the Company and its
Subsidiaries for any period, the net income (or loss) of the Company and its
Subsidiaries for such period, excluding any extraordinary gains during such
period.

Controlled Group means all members of a controlled group of
corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under common control which, together with the
Company, are treated as a single employer under Section 414 of the Code or
Section 4001 of ERISA.

Debt of any Person means, without duplication, (a) all indebtedness
of such Person for borrowed money, whether or not evidenced by bonds,
debentures, notes or similar instruments, (b) all obligations of such Person as
lessee under Capital Leases which have been or should be recorded as liabilities
on a balance sheet of such Person, (c) all obligations of such Person to pay the
deferred purchase price of property or services (excluding trade accounts
payable in the ordinary course of business), (d) all indebtedness secured by a
Lien on the property of such Person, whether or not such indebtedness shall have
been assumed by such Person (it being understood that if such Person has not
assumed or otherwise become personally liable for any such indebtedness, the
amount of the Debt of such Person in connection therewith shall be limited to
the lesser of the face amount of such indebtedness or the fair market value of
all property of such Person securing such indebtedness), (e) all obligations,
contingent or otherwise, with respect to the face amount of all letters of
credit (whether or not drawn) and banker's acceptances issued for the account of
such Person (including the Letters of Credit), (f) net liabilities of such
Person under all Hedging Obligations and (g) all Suretyship Liabilities of such
Person.

Debt to be Repaid means the Debt of the Founding Companies, the
Company and its Subsidiaries set forth on Schedule 1.1B.

Disposal - see the definition of "Release".

Dollar and the sign "$" mean lawful money of the United States of
America.

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<PAGE>

EBITDA means, for any period, Consolidated Net Income for such period
plus, to the extent deducted in determining such Consolidated Net Income,
Interest Expense, income tax expense, depreciation and amortization for such
period; provided that for purposes of calculating EBITDA for any period, the
consolidated net income of any Person acquired by the Company or any Subsidiary
during such period (plus, to the extent deducted in determining such
consolidated net income, interest expense, income tax expense, depreciation and
amortization of such Person) shall be included on a pro forma basis for such
period (assuming the consummation of each such acquisition and the incurrence or
assumption of any Debt in connection therewith occurred on the first day of such
period) in accordance with Article 11 of Regulation S-X of the SEC.

EBITR means, for any period, Consolidated Net Income for such period
plus Rental Expense and, to the extent deducted in determining such Consolidated
Net Income, Interest Expense and income tax expense.

Effective Date - see Section 11.1.

Eligible Equipment means all Equipment of the Company or any
Subsidiary which meets each of the following requirements: (a) it is in
marketable condition; (b) it is not obsolete; (c) it is owned solely by the
Company or a Subsidiary and is not subject to any Lien whatsoever other than
pursuant to the Security Agreement; (d) such Equipment is a motor vehicle or
other item subject to a certificate of title, the Agent's lien has been noted on
the certificate of title for such Equipment and such certificate of title is in
the Agent's possession; and (e) it is not Equipment which the Required Banks,
acting in their reasonable, good faith discretion, shall have notified the
Company in writing is not deemed to constitute Eligible Equipment. Any Equipment
which is at any time Eligible Equipment, but which subsequently fails to meet
any of the foregoing requirements, shall forthwith cease to be Eligible
Equipment.

Eligible Inventory means all Inventory of the Company or any
Subsidiary which meets each of the following requirements: (a) it is in
marketable condition; (b) it is not obsolete; (c) it is owned solely by the
Company or a Subsidiary and is not subject to any Lien whatsoever other than
pursuant to the Security Agreement; (d) it is finished goods or raw materials;
(e) it is located at real property which is owned or leased by the Company or a
Subsidiary; and (f) it is not Inventory which the Required Banks, acting in
their reasonable, good faith discretion, shall

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<PAGE>

have notified the Company in writing is not deemed to constitute Eligible
Inventory. Any Inventory which is at any time Eligible Inventory, but which
subsequently fails to meet any of the foregoing requirements, shall forthwith
cease to be Eligible Inventory.

Eligible Receivable means a Receivable of the Company or any
Subsidiary which meets each of the following requirements: (a) if it arises from
the sale of goods, such goods have been shipped or delivered to the Account
Debtor under such Receivable; (b) it is a valid, legally enforceable obligation
of the Account Debtor thereunder, and is not subject to any offset, counterclaim
or other defense on the part of such Account Debtor of which the Company or a
Subsidiary has knowledge; (c) it is not subject to any Lien whatsoever other
than the security interest under the Security Agreement; (d)it is evidenced by
an invoice (dated not later than the date of shipment or performance rendered to
such Account Debtor), and is not evidenced by any instrument or chattel paper;
(e) it is not owing by any Account Debtor whose obligations the Required Banks,
acting in their reasonable, good faith discretion, shall have notified the
Company in writing are not deemed to constitute Eligible Receivables; (f) it is
not owing by an Account Debtor who, as of the computation date of the Borrowing
Base most recently received by the Banks, shall have failed to pay within 90
days of their due date more than 25% of the aggregate dollar amount of the
invoices of the Company evidencing all Receivables billed to such Account
Debtor; (g) it is not owing by an Account Debtor who is not a permanent resident
of or incorporated in any state of the United States or any province of Canada
in which the Personal Property Security Act is in effect (unless in the case of
an Account Debtor that is a resident of or incorporated in another province of
Canada, other appropriate steps have been taken to perfect and protect the
security interest of the Collateral Agent in such Receivable); (h) it has not
been outstanding for more than 90 days from the date of the invoice which
evidences such Receivable; (i) it is not owing by an Account Debtor which, to
the knowledge of the Company or the applicable Subsidiary, is subject to any
bankruptcy, insolvency or similar proceeding; and (j) it is not owing by an
Account Debtor which is an Affiliate of the Company or any Subsidiary or a
director, officer, employee or agent of the Company or any Subsidiary or any of
their Affiliates; provided, however, that a Receivable that fails to meet the
requirements of any of clauses (f), (g), (h) or (i) but (x) meets all of the
other foregoing requirements and (y) is insured by a creditworthy third-party,
shall be an Eligible Receivable to the extent it is so insured; provided,
further, that the aggregate amount of all Receivables which constitute Eligible
Receivables

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<PAGE>

pursuant to the foregoing proviso shall not exceed the maximum amount of the
insurance available for the applicable receivables minus any deductible or self-
insured retention with respect to such insurance. A Receivable which is at any
time an Eligible Receivable, but which subsequently fails to meet any of the
foregoing requirements, shall forthwith cease to be an Eligible Receivable.

Environmental Claims means all claims, however asserted, by any
governmental, regulatory or judicial authority or other Person alleging
potential liability or responsibility for violation of any Environmental Law, or
for release or injury to the environment.

Environmental Laws means all federal, state or local laws, statutes,
common law duties, rules, regulations, ordinances and codes, together with all
administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any governmental authority, in each case
relating to environmental matters.

Equipment has the meaning assigned to such term in the Security
Agreement.

Equipment Value means (A) with respect to Existing Equipment, on the
Effective Date the Initial Equipment Value, and at any time thereafter the
Initial Equipment Value reduced by the product of 1.19% multiplied by the number
of full calendar months that have elapsed since the Effective Date; and (B) with
respect to any Acquired Equipment, Purchased Equipment or capital improvements
to Eligible Equipment, on the date such equipment or improvement is acquired or
purchased, the Initial Equipment Value, and at any time thereafter the Initial
Equipment Value reduced by the product of 1.19% multiplied by the number of full
calendar months that have elapsed since the date of acquisition of such
equipment or improvement. In no event shall the Specified Percentage for any
Equipment be less than zero.

ERISA means the Employee Retirement Income Security Act of 1974.
References to sections of ERISA also refer to any successor sections.

Eurocurrency Reserve Percentage means, with respect to any Eurodollar
Loan for any Interest Period, a percentage (expressed as a decimal) equal to the
daily average during such Interest Period of the percentage in effect on each
day of such Interest Period, as prescribed by the Board of Governors of the
Federal Reserve System (or any successor), for determining the aggregate

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<PAGE>

maximum reserve requirements applicable to "Eurocurrency Liabilities" pursuant
to Regulation D or any other then applicable regulation of such Board of
Governors which prescribes reserve requirements applicable to "Eurocurrency
Liabilities" as presently defined in Regulation D.

Eurodollar Loan means any Loan which bears interest at a rate
determined by reference to the Eurodollar Rate (Reserve Adjusted).

Eurodollar Margin - see Schedule 1.1A.

Eurodollar Office means with respect to any Bank the office or
offices of such Bank which shall be making or maintaining the Eurodollar Loans
of such Bank hereunder or such other office or offices through which such Bank
determines its Eurodollar Rate. A Eurodollar Office of any Bank may be, at the
option of such Bank, either a domestic or foreign office.

Eurodollar Rate means, with respect to any Eurodollar Loan for any
Interest Period, the rate per annum at which Dollar deposits in immediately
available funds are offered to the Eurodollar Office of BofA two Business Days
prior to the beginning of such Interest Period by major banks in the interbank
eurodollar market as at or about 10:00 A.M., Chicago time, for delivery on the
first day of such Interest Period, for the number of days comprised therein and
in an amount equal or comparable to the amount of the Eurodollar Loan of BofA
for such Interest Period.

Eurodollar Rate (Reserve Adjusted) means, with respect to any
Eurodollar Loan for any Interest Period, a rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) determined pursuant to the following
formula:

Eurodollar Rate = Eurodollar Rate
(Reserve Adjusted) ---------------
1-Eurocurrency
Reserve Percentage

Event of Default means any of the events described in Section 12.1.

Existing Equipment means Eligible Equipment owned by the Company or
any Subsidiary on the Effective Date.

Existing Letters of Credit means the letters of credit listed on
Schedule 2.1.2.

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<PAGE>

Federal Funds Rate means, for any day, the rate set forth in the
weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Bank of New York (including any
such successor publication, "H.15(519)") on the preceding Business Day opposite
the caption "Federal Funds (Effective)"; or, if for any relevant day such rate
is not so published on any such preceding Business Day, the rate for such day
will be the arithmetic mean as determined by the Agent of the rates for the last
transaction in overnight Federal funds arranged prior to 9:00 a.m. (New York
City time) on that day by each of three leading brokers of Federal funds
transactions in New York City selected by the Agent.

Financial Letter of Credit means any Letter of Credit determined by
the applicable Issuing Bank to be a "financial guaranty-type Standby Letter of
Credit" as defined in footnote 13 to Appendix A to the Risk Based Capital
Guidelines issued by the Comptroller of the Currency (or in any successor
regulation, guideline or ruling by any applicable banking regulatory authority).

Fiscal Quarter means a fiscal quarter of a Fiscal Year.

Fiscal Year means the fiscal year of the Company and its
Subsidiaries, which period shall be the 12-month period ending on December 31 of
each year. References to a Fiscal Year with a number corresponding to any
calendar year (e.g., "Fiscal Year 1997") refer to the Fiscal Year ending on
December 31 of such calendar year.

Floating Rate Loan means any Loan which bears interest at or by
reference to the Base Rate.

Floating Rate Margin - see Schedule 1.1A.

Founding Companies means Northland Auto Transporters, Inc., Northland
Fleet Leasing Company, Falcon Towing & Auto Delivery, Inc., Caron Auto Works,
Inc., Caron Auto Brokers, Inc., Smith- Christensen Enterprises, Inc., ASC
Transportation Services, Auto Service Corporation, Absolute Towing and
Transporting, Inc. and Silver State Tow & Recovery, Inc.

Founding Companies Acquisition means the acquisition of the Founding
Companies by the Company pursuant to the Founding Companies Acquisition
Documents.

Founding Companies Acquisition Documents means each Agreement and
Plan of Reorganization entered into by the Company

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<PAGE>

with each Founding Company, including all schedules and exhibits thereto, and
all other documents executed in connection with such Agreements and Plans of
Reorganization.

Funded Debt means all Debt of the Company and its Subsidiaries,
excluding (i) contingent obligations in respect of undrawn letters of credit and
Suretyship Liabilities (except, in each case, to the extent constituting
Suretyship Liabilities in respect of Debt of a Person other than the Company or
any Subsidiary), (ii) Hedging Obligations and (iii) Debt of the Company to
Subsidiaries and Debt of Subsidiaries to the Company or to other Subsidiaries.

Funded Debt to EBITDA Ratio means, as of the last day of any Fiscal
Quarter, the ratio of (i) Funded Debt as of the last day of such Fiscal Quarter
to (ii) EBITDA for the Computation Period ending on the last day of such Fiscal
Quarter.

GAAP means generally accepted accounting principles set forth from
time to time in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination.

Group - see Section 2.2.1.

Guarantor means, on any day, each Subsidiary that has executed a
counterpart of the Guaranty on or prior to that day (or is required to execute a
counterpart of the Guaranty on that date).

Guaranty means a guaranty substantially in the form of Exhibit C.

Hazardous Substances - see Section 9.15.

Hedging Obligations means, with respect to any Person, all
liabilities of such Person under interest rate, currency and commodity swap
agreements, cap agreements and collar agreements, and all other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates, currency exchange rates or commodity prices.

Initial Equipment Value means (A) with respect to Existing Equipment
or Acquired Equipment, the value of such equipment as

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<PAGE>

determined from time to time as requested by the Agent in an analysis by
Winternitz, Inc. ("Winternitz") or another appraisal firm acceptable to the
Required Banks; and (B) with respect to Purchased Equipment or capital
improvements to Eligible Equipment, the cost of such equipment or improvement as
evidenced by an invoice or other documentation acceptable to the Agent or as
determined from time to time as requested by the Agent in an appraisal by an
appraisal firm acceptable to the Required Banks, it being understood that such
invoice or other documentation need not be provided unless requested by the
Agent and that capital improvements to Eligible Equipment shall only be included
upon the earlier of (Y) an aggregate of $100,000 being spent by the Company and
its Subsidiaries on capital improvements to Eligible Equipment since the last
date reported and (Z) the end of a Fiscal Quarter. The Initial Equipment Value
for Purchased Equipment may be increased to reflect purchases by the Company or
any Subsidiary of Eligible Equipment only at such times as the Company delivers
monthly borrowing base certificates pursuant to Section 10.1.4.

Interest Expense means for any period the consolidated interest
expense of the Company and its Subsidiaries for such period (including all
imputed interest on Capital Leases and before giving effect to any
capitalization of interest but excluding amortization of deferred financing
costs).

Interest Period means, as to any Eurodollar Loan, the period
commencing on the date such Loan is borrowed or continued as, or converted into,
a Eurodollar Loan and ending on the date one, two, three or six months
thereafter as selected by the Company pursuant to Section 2.2.2 or 2.2.3, as the
case may be; provided that:

(i) if any Interest Period would otherwise end on a day
that is not a Business Day, such Interest Period shall be extended to
the following Business Day unless the result of such extension would
be to carry such Interest Period into another calendar month, in
which event such Interest Period shall end on the preceding Business
Day;

(ii) any Interest Period that begins on a day for which
there is no numerically corresponding day in the calendar month at
the end of such Interest Period shall end on the last Business Day of
the calendar month at the end of such Interest Period; and

(iii) the Company may not select any Interest Period which
would extend beyond the scheduled Termination Date.

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<PAGE>

Inventory means, at any time with respect to any Person, any goods
held for sale, or furnished or to be furnished by such Person under any contract
of service, or held by such Person as raw materials, work in process or
materials used or consumed in a business.

Investment means, relative to any Person, (a) any loan or advance
made by such Person to any other Person (excluding any commission, travel or
similar advances made to directors, officers and employees of the Company or any
of its Subsidiaries), (b) any Suretyship Liability of such Person, (c) any
ownership or similar interest held by such Person in any other Person and (d)
deposits and the like relating to prospective acquisitions of businesses.

Issuing Bank means BofA in its capacity as an issuer of Letters of
Credit hereunder and any other Bank which, with the written consent of the
Company and the Agent, is the issuer of one or more Letters of Credit hereunder.

Keystone means Keystone Towing, Inc.

L/C Application means, with respect to any request for the issuance
of a Letter of Credit, a letter of credit application in the form being used by
the applicable Issuing Bank at the time of such request for the type of letter
of credit requested.

L/C Commitment means the commitment of the Issuing Bank to issue, and
of each Bank to participate in, Letters of Credit pursuant to Section 2.1.2.

Letter of Credit - see Section 2.1.2.

Lien means, with respect to any Person, any interest granted by such
Person in any real or personal property, asset or other right owned or being
purchased or acquired by such Person which secures payment or performance of any
obligation and shall include any mortgage, lien, encumbrance, charge or other
security interest of any kind, whether arising by contract, as a matter of law,
by judicial process or otherwise.

Loan Commitment means the commitment of the Banks to make Loans
pursuant to Section 2.1.1.

Loan Documents means this Agreement, the Notes, the Guaranty, the L/C
Applications and the Collateral Documents.

Loans - see Section 2.1.1.

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<PAGE>

Margin Stock means any "margin stock" as defined in Regulation U of
the Board of Governors of the Federal Reserve System.

Material Adverse Effect means (a) a material adverse change in, or a
material adverse effect upon, the financial condition, operations, assets,
business, properties or prospects of the Company and its Subsidiaries taken as a
whole, or (b) a material adverse effect upon any substantial portion of the
collateral under the Collateral Documents or upon the legality, validity,
binding effect or enforceability against the Company or any Guarantor of any
Loan Document.

Multiemployer Pension Plan means a multiemployer plan, as such term
is defined in Section 4001(a)(3) of ERISA, and to which the Company or any
member of the Controlled Group may have any liability.

Net Worth means the Company's consolidated stockholders' equity
(including preferred stock accounts).

Non-Financial Letter of Credit means any Letter of Credit other than
a Financial Letter of Credit.

Note - see Section 3.1.

Notice of Borrowing means a notice substantially in the Form of
Exhibit I.

Notice of Conversion/Continuation means a notice substantially in the
form of Exhibit J.

Operating Lease means any lease of (or other agreement conveying the
right to use) any real or personal property by the Company or any Subsidiary, as
lessee, other than any Capital Lease.

PBGC means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.

Pension Plan means a "pension plan", as such term is defined in
Section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a
Multiemployer Pension Plan), and to which the Company or any member of the
Controlled Group may have any liability, including any liability by reason of
having been a substantial employer within the meaning of Section 4063 of ERISA
at any time during the preceding five years, or by reason of

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<PAGE>

being deemed to be a contributing sponsor under Section 4069 of ERISA.

Percentage means, with respect to any Bank, the percentage specified
opposite such Bank's name on Schedule 2.1 hereto, reduced (or increased) by
subsequent assignments pursuant to Section 14.9.1.

Person means any natural person, corporation, partnership, trust,
limited liability company, association, governmental authority or unit, or any
other entity, whether acting in an individual, fiduciary or other capacity.

Purchased Equipment means Eligible Equipment purchased or otherwise
acquired by the Company or any Subsidiary (other than as a result of an
acquisition permitted by Section 10.10) after the Effective Date or, with
respect to the Founding Companies, after the date of the appraisal performed by
Winternitz.

RCRA - see Section 9.15.

Receivable means, with respect to any Person, any right of such
Person to payment for goods sold or services rendered.

Reference Rate means, for any day, the rate of interest in effect for
such day as publicly announced from time to time by BofA in San Francisco,
California, as its "reference rate." (The "reference rate" is a rate set by BofA
based upon various factors, including BofA's costs and desired return, general
economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such announced
rate.) Any change in the reference rate announced by BofA shall take effect at
the opening of business on the day specified in the public announcement of such
change.

Release has the meaning specified in CERCLA and the term "Disposal"
(or "Disposed") has the meaning specified in RCRA; provided that in the event
either CERCLA or RCRA is amended so as to broaden the meaning of any term
defined thereby, such broader meaning shall apply as of the effective date of
such amendment; and provided, further, that to the extent that the laws of a
state wherein any affected property lies establish a meaning for "Release" or
"Disposal" which is broader than is specified in either CERCLA or RCRA, such
broader meaning shall apply.

Rental Expense means for any period the consolidated rental expense
of the Company and its Subsidiaries for such period.

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<PAGE>

Required Banks means Banks having Percentages aggregating 66-2/3% or
more.

SEC means the Securities and Exchange Commission.

Security Agreement means a Security Agreement substantially in the
form of Exhibit D.

Senior Debt means all Debt of the Company and its Subsidiaries other
than Subordinated Debt.

Stated Amount means, with respect to any Letter of Credit at any date
of determination, the maximum aggregate amount available for drawing thereunder
at any time during the then ensuing term of such Letter of Credit under any and
all circumstances, plus the aggregate amount of all unreimbursed payments and
disbursements under such Letter of Credit.

Subordinated Debt means any unsecured indebtedness of the Company
which (x) is owed to Persons other than officers, employees, directors or
Affiliates of the Company, (y) has no amortization prior to December 31, 2001
and (z) has subordination terms, covenants, pricing and other terms applicable
to such indebtedness which have been approved in writing by the Required Banks.

Subsidiary means, with respect to any Person, a corporation of which
such Person and/or its other Subsidiaries own, directly or indirectly, such
number of outstanding shares as have more than 50% of the ordinary voting power
for the election of directors. Unless the context otherwise requires, each
reference to Subsidiaries herein shall be a reference to Subsidiaries of the
Company.

Subsidiary Pledge Agreement means each pledge agreement substantially
in the form of Exhibit F issued by any Subsidiary, whether pursuant to Section
11.1.7 or Section 10.14.

Suretyship Liability means any agreement, undertaking or arrangement
by which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to or otherwise to invest in a
debtor, or otherwise to assure a creditor against loss) any indebtedness,
obligation or other liability of any other Person (other than by endorsements of
instruments in the course of collection), or guarantees the payment of dividends
or other distributions upon the shares of any other Person. The amount of any
Person's

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<PAGE>

obligation in respect of any Suretyship Liability shall (subject to any
limitation set forth therein) be deemed to be the principal amount of the debt,
obligation or other liability supported thereby.

Termination Date means the earlier to occur of (a) April 30, 2001, or
such later date to which the Termination Date may be extended at the request of
the Company and with the consent of each Bank or (b) such other date on which
the Commitments shall terminate pursuant to Section 6 or 12.

Type of Loan or Borrowing - see Section 2.2.1. The types of Loans or
borrowings under this Agreement are as follows: Floating Rate Loans or
borrowings and Eurodollar Loans or borrowings.

Unmatured Event of Default means any event that, if it continues
uncured, will, with lapse of time or notice or both, constitute an Event of
Default.

Welfare Plan means a "welfare plan", as such term is defined in
Section 3(1) of ERISA.

1.2 Other Interpretive Provisions. (a) The meanings of
defined terms are equally applicable to the singular and plural forms of the
defined terms.

(b) Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified.

(ii) In the computation of periods of time from a
specified date to a later specified date, the word "from" means "from
and including"; the words "to" and "until" each mean "to but
excluding", and the word "through" means "to and including."

(d) Unless otherwise expressly provided herein, (i)
references to agreements (including this Agreement) and other contractual
instruments shall be deemed to include all subsequent amendments and other
modifications thereto, but only to the extent such amendments and other
modifications are not prohibited by the terms of any Loan Document, and (ii)
references to any statute or regulation are to be construed as including all
statutory and regulatory provisions consolidating, amending,

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<PAGE>

replacing, supplementing or interpreting such statute or regulation.

(e) This Agreement and the other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative and shall
each be performed in accordance with their terms.

(f) This Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to the Agent, the Company,
the Banks and the other parties thereto and are the products of all parties.
Accordingly, they shall not be construed against the Agent or the Banks merely
because of the Agent's or Banks' involvement in their preparation.

SECTION 2 COMMITMENTS OF THE BANKS; LETTER OF CREDIT,
BORROWING, CONVERSION AND CONTINUATION PROCEDURES.

2.1 Commitments. On and subject to the terms and conditions of this
Agreement, each of the Banks, severally and for itself alone, agrees to make
loans to, and to issue or participate in the issuance of letters of credit for
the account of, the Company as follows:

2.1.1 Loan Commitment. Each Bank will make loans on a revolving basis
("Loans") from time to time before the Termination Date in such Bank's
Percentage of such aggregate amounts as the Company may from time to time
request from all Banks; provided that the sum of (x) the aggregate outstanding
principal amount of all Loans plus (y) the aggregate Stated Amount of all
Letters of Credit shall not at any time exceed the lesser of (a) $50,000,000, as
such amount may be reduced from time to time pursuant to Section 6.1 (as so
reduced, the "Commitment Amount"), or (b) the Borrowing Base.

2.1.2 L/C Commitment. (a) The Issuing Banks will issue standby
letters of credit, in each case containing such terms and conditions as are
permitted by this Agreement and are reasonably satisfactory to the applicable
Issuing Bank (each, a "Letter of Credit" and, together with the Existing Letters
of Credit, the "Letters of Credit"), at the request of and for the account of
the Company or any Subsidiary from time to time before the Termination Date and
(b) as more fully set forth in Section 2.3.5, each Bank agrees to purchase a
participation in each such Letter of Credit; provided that the proposed Letter
of Credit shall not cause the aggregate Stated Amount of all Letters

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of Credit at any time to exceed the lesser of (i) $1,000,000 and (ii) the
excess, if any, of the Commitment Amount over the sum of the aggregate principal
amount of all outstanding Loans plus the aggregate Stated Amount of all Letters
of Credit.

2.2 Loan Procedures.

2.2.1 Various Types of Loans. Each Loan shall be either a Floating
Rate Loan or a Eurodollar Loan (each a "type" of Loan), as the Company shall
specify in the related notice of borrowing or conversion pursuant to Section
2.2.2 or 2.2.3. Eurodollar Loans having the same Interest Period are sometimes
called a "Group" or collectively "Groups". Floating Rate Loans and Eurodollar
Loans may be outstanding at the same time, provided that (i) not more than seven
different Groups of Loans shall be outstanding at any one time and (ii) the
aggregate principal amount of each Group of Eurodollar Loans shall at all times
be at least $1,000,000 and an integral multiple of $100,000. All borrowings,
conversions and repayments of Loans shall be effected so that each Bank will
have a pro rata share (according to its Percentage) of all types and Groups of
Loans.

2.2.2 Borrowing Procedures. The Company shall give written notice
pursuant to a Notice of Borrowing or telephonic notice (followed immediately by
written confirmation thereof pursuant to a Notice of Borrowing) to the Agent of
each proposed borrowing not later than (a) in the case of a Floating Rate
borrowing, 10:00 A.M., Chicago time, on the proposed date of such borrowing, and
(b) in the case of a Eurodollar borrowing, 10:00 A.M., Chicago time, at least
three Business Days prior to the proposed date of such borrowing. Each such
notice shall be effective upon receipt by the Agent, shall be irrevocable, and
shall specify the date, amount and type of borrowing and, in the case of a
Eurodollar borrowing, the initial Interest Period therefor. Promptly upon
receipt of such notice, the Agent shall advise each Bank thereof. Not later than
1:00 p.m., Chicago time, on the date of a proposed borrowing, each Bank shall
provide the Agent at the office specified by the Agent with immediately
available funds covering such Bank's Percentage of such borrowing and, so long
as the Agent has not received written notice that the conditions precedent set
forth in Section 11 with respect to such borrowing have not been satisfied (and
does not have knowledge of any default in the payment of any principal, interest
or fees to be paid to the Agent for the account of the Banks), the Agent shall
pay over the requested amount to the Company on the requested borrowing date.
Each borrowing shall be on a Business Day. Each Floating Rate borrowing shall be
in an aggregate amount of at least $500,000 and an integral multiple of
$100,000.

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<PAGE>

2.2.3 Conversion and Continuation Procedures. (a) Subject to Section
2.2.1, the Company may, upon irrevocable written notice to the Agent in
accordance with clause (b) below:

(i) elect, as of any Business Day, to convert any
Loans (or any part thereof in an aggregate amount not less
than $1,000,000 or a higher integral multiple of $100,000)
into Loans of the other type; or

(ii) elect, as of the last day of the applicable
Interest Period, to continue any Eurodollar Loans having
Interest Periods expiring on such day (or any part thereof
in an aggregate amount not less than $1,000,000 or a higher
integral multiple of $100,000)

for a new Interest Period.

(b) The Company shall give written notice pursuant to
a Notice of Conversion/Continuation or telephonic notice (followed immediately
by written confirmation thereof pursuant to a Notice of Conversion/Continuation)
to the Agent of each proposed conversion or continuation not later than (i) in
the case of conversion into Base Rate Loans, 10:00 A.M., Chicago time, on the
proposed date of such conversion; and (ii) in the case of conversion into or
continuation of Eurodollar Loans, 10:00 A.M., Chicago time, at least three
Business Days prior to the proposed date of such conversion or continuation,
specifying in each case:

(i) the proposed date of conversion or
continuation;

(ii) the aggregate amount of Loans to be
converted or continued;

(iii) the type of Loans resulting from the
proposed conversion or continuation; and

(iv) in the case of conversion into, or
continuation of, Eurodollar Loans, the duration of the
requested Interest Period therefor.

(c) If upon the expiration of any Interest Period
applicable to Eurodollar Loans, the Company has failed to select timely a new
Interest Period to be applicable to such Eurodollar Loans, the Company shall be
deemed to have elected to convert such Eurodollar Loans into Base Rate Loans
effective on the last day of such Interest Period.

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<PAGE>

(d) The Agent will promptly notify each Bank of its receipt of
a notice of conversion or continuation pursuant to this Section 2.2.3 or, if no
timely notice is provided by the Company, of the details of any automatic
conversion.

(e) Any conversion of a Eurodollar Loan on a day other than the
last day of an Interest Period therefor shall be subject to Section 8.4.

2.3 Letter of Credit Procedures.

2.3.1 L/C Applications. The Company shall give notice to the Agent
and the applicable Issuing Bank of the proposed issuance of each Letter of
Credit on a Business Day which is at least three Business Days (or such lesser
number of days as the Agent and such Issuing Bank shall agree in any particular
instance) prior to the proposed date of issuance of such Letter of Credit. Each
such notice shall be accompanied by an L/C Application, duly executed by the
Company (together with any Subsidiary for the account of which the related
Letter of Credit is to be issued) and in all respects satisfactory to the Agent
and the applicable Issuing Bank, together with such other documentation as the
Agent or such Issuing Bank may request in support thereof, it being understood
that each L/C Application shall specify, among other things, the date on which
the proposed Letter of Credit is to be issued, the expiration date of such
Letter of Credit (which shall not be later than the Termination Date) and
whether such Letter of Credit is to be transferable in whole or in part. So long
as the applicable Issuing Bank has not received written notice that the
conditions precedent set forth in Section 11 with respect to the issuance of
such Letter of Credit have not been satisfied, such Issuing Bank shall issue
such Letter of Credit on the requested issuance date. Each Issuing Bank shall
promptly advise the Agent of the issuance of each Letter of Credit by such
Issuing Bank and of any amendment thereto, extension thereof or event or
circumstance changing the amount available for drawing thereunder.

2.3.2 Participation in Letters of Credit. Concurrently with the
issuance of each Letter of Credit (and with respect to each Existing Letter of
Credit, on the Effective Date), the applicable Issuing Bank shall be deemed to
have sold and transferred to each other Bank, and each other Bank shall be
deemed irrevocably and unconditionally to have purchased and received from such
Issuing Bank, without recourse or warranty, an undivided interest and
participation, to the extent of such other Bank's Percentage, in such Letter of
Credit and the Company's reimbursement obligations with respect thereto. For the
purposes

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<PAGE>

of this Agreement, the unparticipated portion of each Letter of Credit
shall be deemed to be the applicable Issuing Bank's "participation" therein.
Each Issuing Bank hereby agrees, upon request of the Agent or any Bank, to
deliver to such Bank a list of all outstanding Letters of Credit issued by such
Issuing Bank, together with such information related thereto as such Bank may
reasonably request.

2.3.3 Reimbursement Obligations. The Company hereby unconditionally
and irrevocably agrees to reimburse the applicable Issuing Bank for each payment
or disbursement made by such Issuing Bank under any Letter of Credit honoring
any demand for payment made by the beneficiary thereunder, in each case on the
date that such payment or disbursement is made. Any amount not reimbursed on the
date of such payment or disbursement shall bear interest from the date of such
payment or disbursement to the date that such Issuing Bank is reimbursed by the
Company therefor, payable on demand, at a rate per annum equal to the Base Rate
from time to time in effect plus the Floating Rate Margin from time to time in
effect plus, beginning on the three Business Day after receipt of notice from
the Issuing Bank of such payment or disbursement, 2%. The applicable Issuing
Bank shall notify the Company and the Agent whenever any demand for payment is
made under any Letter of Credit by the beneficiary thereunder; provided,
however, that the failure of such Issuing Bank to so notify the Company shall
not affect the rights of such Issuing Bank or the Banks in any manner
whatsoever.

2.3.4 Limitation on Obligations of Issuing Banks. In determining
whether to pay under any Letter of Credit, no Issuing Bank shall have any
obligation to the Company or any Bank other than to confirm that any documents
required to be delivered under such Letter of Credit appear to have been
delivered and appear to comply on their face with the requirements of such
Letter of Credit. Any action taken or omitted to be taken by an Issuing Bank
under or in connection with any Letter of Credit, if taken or omitted in the
absence of gross negligence and willful misconduct, shall not impose upon such
Issuing Bank any liability to the Company or any Bank and shall not reduce or
impair the Company's reimbursement obligations set forth in Section 2.3.3 or the
obligations of the Banks pursuant to Section 2.3.5.

2.3.5 Funding by Banks to Issuing Banks. If an Issuing Bank makes any
payment or disbursement under any Letter of Credit and the Company has not
reimbursed such Issuing Bank in full for such payment or disbursement by 11:00
A.M., Chicago time, on the date of such payment or disbursement, or if any
reimbursement received by such Issuing Bank from the Company is or must be

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<PAGE>

returned or rescinded upon or during any bankruptcy or reorganization of the
Company or otherwise, each other Bank shall be obligated to pay to the Agent for
the account of such Issuing Bank, in full or partial payment of the purchase
price of its participation in such Letter of Credit, its pro rata share
(according to its Percentage) of such payment or disbursement (but no such
payment shall diminish the obligations of the Company under Section 2.3.3), and
upon notice from the applicable Issuing Bank, the Agent shall promptly notify
each other Bank thereof. Each other Bank irrevocably and unconditionally agrees
to so pay to the Agent in immediately available funds for the applicable Issuing
Bank's account the amount of such other Bank's Percentage of such payment or
disbursement. If and to the extent any Bank shall not have made such amount
available to the Agent by 2:00 P.M., Chicago time, on the Business Day on which
such Bank receives notice from the Agent of such payment or disbursement (it
being understood that any such notice received after noon, Chicago time, on any
Business Day shall be deemed to have been received on the next following
Business Day), such Bank agrees to pay interest on such amount to the Agent for
the applicable Issuing Bank's account forthwith on demand for each day from the
date such amount was to have been delivered to the Agent to the date such amount
is paid, at a rate per annum equal to (a) for the first three days after demand,
the Federal Funds Rate from time to time in effect and (b) thereafter, the Base
Rate from time to time in effect. Any Bank's failure to make available to the
Agent its Percentage of any such payment or disbursement shall not relieve any
other Bank of its obligation hereunder to make available to the Agent such other
Bank's Percentage of such payment, but no Bank shall be responsible for the
failure of any other Bank to make available to the Agent such other Bank's
Percentage of any such payment or disbursement.

2.4 Commitments Several. The failure of any Bank to make a requested
Loan on any date shall not relieve any other Bank of its obligation to make a
Loan on such date, but no Bank shall be responsible for the failure of any other
Bank to make any Loan to be made by such other Bank.

2.5 Certain Conditions. Notwithstanding any other provision of this
Agreement, no Bank shall have an obligation to make any Loan, or to permit the
continuation of or any conversion into any Eurodollar Loan, and no Issuing Bank
shall have any obligation to issue any Letter of Credit, if an Event of Default
or Unmatured Event of Default exists.

SECTION 3 NOTES EVIDENCING LOANS.

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<PAGE>

3.1 Notes. The Loans of each Bank shall be evidenced by a promissory
note (each a "Note") substantially in the form set forth in Exhibit A, with
appropriate insertions, payable to the order of such Bank in an amount equal to
such Bank's Percentage of the Loan Commitment (or, if less, in the aggregate
unpaid principal amount of such Bank's Loans).

3.2 Recordkeeping. Each Bank shall record in its records, or at its
option on the schedule attached to its Note, the date and amount of each Loan
made by such Bank, each repayment or conversion thereof and, in the case of each
Eurodollar Loan, the dates on which each Interest Period for such Loan shall
begin and end. The aggregate unpaid principal amount so recorded shall be
rebuttable presumptive evidence of the principal amount owing and unpaid on such
Note. The failure to so record any such amount or any error in so recording any
such amount shall not, however, limit or otherwise affect the obligations of the
Company hereunder or under any Note to repay the principal amount of the Loans
evidenced by such Note together with all interest accruing thereon.

SECTION 4 INTEREST.

4.1 Interest Rates. The Company promises to pay interest on the
unpaid principal amount of each Loan for the period commencing on the date of
such Loan until such Loan is paid in full as follows:

(a) at all times while such Loan is a Floating Rate Loan,
at a rate per annum equal to the sum of the Base Rate from time to
time in effect plus the Floating Rate Margin from time to time in
effect; and

(b) at all times while such Loan is a Eurodollar Loan, at a
rate per annum equal to the sum of the Eurodollar Rate (Reserve
Adjusted) applicable to each Interest Period for such Loan plus the
Eurodollar Margin from time to time in effect;

provided, however, that at any time an Event of Default exists, the interest
rate applicable to each Loan shall be increased by 2% (200 basis points per
annum).

4.2 Interest Payment Dates. Accrued interest on each Floating Rate
Loan shall be payable in arrears on the last Business Day of each calendar month
and at maturity. Accrued interest on each Eurodollar Loan shall be payable on
the last day of each Interest Period relating to such Loan (and, in the case

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<PAGE>

of a Eurodollar Loan with a six-month Interest Period, on the three-month
anniversary of the first day of such Interest Period) and at maturity. After
maturity, accrued interest on all Loans shall be payable on demand.

4.3 Setting and Notice of Eurodollar Rates. The applicable Eurodollar
Rate for each Interest Period shall be determined by the Agent, and notice
thereof shall be given by the Agent promptly to the Company and each Bank. Each
determination of the applicable Eurodollar Rate by the Agent shall be conclusive
and binding upon the parties hereto, in the absence of demonstrable error. The
Agent shall, upon written request of the Company or any Bank, deliver to the
Company or such Bank a statement showing the computations used by the Agent in
determining any applicable Eurodollar Rate hereunder.

4.4 Computation of Interest. All determinations of interest for
Floating Rate Loans when the Base Rate is determined by the Reference Rate shall
be made on the basis of a year of 365 or 366 days, as the case may be, and the
actual number of days elapsed. All other computations of interest shall be
computed for the actual number of days elapsed on the basis of a year of 360
days. The applicable interest rate for each Floating Rate Loan shall change
simultaneously with each change in the Base Rate.

SECTION 5 FEES.

5.1 Non-Use Fee. The Company agrees to pay to the Agent for the
account of each Bank a non-use fee, for the period from the Effective Date to
the Termination Date, at the rate per annum in effect from time to time pursuant
to Schedule 1.1A of the daily average of the unused amount of such Bank's
Percentage of the Commitment Amount. For purposes of calculating usage under
this Section, the Commitment Amount shall be deemed used to the extent of the
aggregate principal amount of all outstanding Loans plus the undrawn amount of
all Letters of Credit. Such non-use fee shall be payable in arrears on the last
Business Day of each calendar quarter and on the Termination Date for any period
then ending for which such non-use fee shall not have theretofore been paid. The
non-use fee shall be computed for the actual number of days elapsed on the basis
of a year of 360 days.

5.2 Letter of Credit Fees. (a) The Company agrees to pay to the Agent
for the account of the Banks pro rata according to their respective Percentages
a letter of credit fee for each Letter of Credit in an amount equal to the rate
per annum in effect from time to time pursuant to Schedule 1.1A of the undrawn

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<PAGE>

amount of such Letter of Credit (computed for the actual number of days elapsed
on the basis of a year of 360 days); provided that the rate applicable to each
Letter of Credit shall be increased by 2% (200 basis points per annum)at any
time that an Event of Default exists. Such letter of credit fee shall be payable
in arrears on the last Business Day of each calendar quarter and on the
Termination Date for the period from the date of the issuance of each Letter of
Credit to the date such payment is due or, if earlier, the date on which such
Letter of Credit expired or was terminated.

(b) In addition, with respect to each Letter of Credit, the Company
agrees to pay to the applicable Issuing Bank, for its own account, (i) such fees
and expenses as such Issuing Bank customarily requires in connection with the
issuance, negotiation, processing and/or administration of letters of credit in
similar situations and (ii) a letter of credit fee in the amount separately
agreed to by the Company and such Issuing Bank.

5.3 Arrangement and Agent's Fees. The Company agrees to pay to the
Arranger and the Agent such arrangement and agent's fees as are mutually agreed
to from time to time by the Company and the Agent.

5.4 Closing Fees. On the Effective Date, the Company shall pay to the
Agent for the account of each Bank a closing fee in the amount previously agreed
with such Bank.

SECTION 6 REDUCTION AND TERMINATION OF THE COMMITMENTS;
PREPAYMENTS.

6.1 Reduction or Termination of the Commitments. The Company may from
time to time on at least five Business Days' prior written notice received by
the Agent (which shall promptly advise each Bank thereof) permanently reduce the
Commitment Amount to an amount not less than the sum of the aggregate unpaid
principal amount of the Loans and the aggregate Stated Amount of all Letters of
Credit. Any such reduction shall be in an amount not less than $5,000,000 or a
higher integral multiple of $1,000,000. The Company may at any time on like
notice terminate the Commitments upon payment in full of all Loans and all other
obligations of the Company hereunder and cash collateralization in full,
pursuant to documentation in form and substance reasonably satisfactory to the
Banks, of all obligations arising with respect to the Letters of Credit. All
reductions of the Commitment Amount shall reduce the Commitments pro rata among
the Banks according to their respective Percentages.

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<PAGE>

6.2 Voluntary Prepayments. The Company may from time to time prepay
the Loans in whole or in part, provided that (a) the Company shall give the
Agent (which shall promptly advise each Bank) notice thereof not later than
10:00 A.M. (Chicago time) on the day of such prepayment (which shall be a
Business Day) specifying the Loans to be prepaid and the date and amount of
prepayment,(b) each partial prepayment shall be in a principal amount of at
least $500,000 and an integral multiple of $100,000, or such lesser amount as
may be necessary to prepay in full all Loans outstanding, (c) any prepayment of
a Eurodollar Loan on a day other than the last day of an Interest Period
therefor shall be subject to Section 8.4, and (d) if any prepayment shall result
in the aggregate principal amount of a Group of Eurodollar Loans being less than
$1,000,000, such Eurodollar Loans shall be automatically converted into Floating
Rate Loans.

6.3 Mandatory Prepayments. If at any time (a) the sum of
(i) the aggregate principal amount of all outstanding Loans plus
(ii) the Stated Amount of all outstanding Letters of Credit exceeds (b) the
Borrowing Base, the Company will make an immediate repayment of Loans in an
amount equal to such excess (rounded upward, if necessary, to an integral
multiple of $100,000).

SECTION 7 MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES.

7.1 Making of Payments. All payments of principal of or interest on
the Notes, and of all non-use fees and Letter of Credit fees, shall be made by
the Company to the Agent in immediately available funds at the office specified
by the Agent not later than noon, Chicago time, on the date due; and funds
received after that hour shall be deemed to have been received by the Agent on
the next following Business Day. The Agent shall promptly remit to each Bank or
other holder of a Note its share of all such payments received in collected
funds by the Agent for the account of such Bank or holder.

All payments under Section 8.1 shall be made by the Company directly
to the Bank entitled thereto.

7.2 Application of Certain Payments. Each payment of principal shall
be applied to such Loans as the Company shall direct by notice to be received by
the Agent on or before the date of such payment or, in the absence of such
notice, as the Agent shall determine in its discretion. Concurrently with each
remittance to any Bank of its share of any such payment, the

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<PAGE>

Agent shall advise such Bank as to the application of such payment.

7.3 Due Date Extension. If any payment of principal or interest with
respect to any of the Notes, or of non-use fees or Letter of Credit fees, falls
due on a day which is not a Business Day, then such due date shall be extended
to the immediately following Business Day (unless, in the case of a Eurodollar
Loan, such immediately following Business Day is the first Business Day of a
calendar month, in which case such date shall be the immediately preceding
Business Day) and, in the case of principal, additional interest shall accrue
and be payable for the period of any such extension.

7.4 Setoff. The Company agrees that the Agent and each Bank have all
rights of set-off and bankers' lien provided by applicable law, and in addition
thereto, the Company agrees that at any time any Event of Default exists, the
Agent and each Bank may apply to the payment of any obligations of the Company
hereunder, whether or not then due, any and all balances, credits, deposits,
accounts or moneys of the Company then or thereafter with the Agent or such
Bank.

7.5 Proration of Payments. If any Bank shall obtain any payment or
other recovery (whether voluntary, involuntary, by application of offset or
otherwise) on account of principal of or interest on any Note (or on account of
its participation in any Letter of Credit) in excess of its pro rata share of
payments and other recoveries obtained by all Banks on account of principal of
and interest on Notes (or such participation) then held by them, such Bank shall
purchase from the other Banks such participation in the Notes (or
sub-participation in Letters of Credit) held by them as shall be necessary to
cause such purchasing Bank to share the excess payment or other recovery ratably
with each of them; provided, however, that if all or any portion of the excess
payment or other recovery is thereafter recovered from such purchasing Bank, the
purchase shall be rescinded and the purchase price restored to the extent of
such recovery.

7.6 Taxes. All payments of principal of, and interest on, the Loans
and all other amounts payable hereunder shall be made free and clear of and
without deduction for any present or future income, excise, stamp or franchise
taxes and other taxes, fees, duties, withholdings or other charges of any nature
whatsoever imposed by any taxing authority, but excluding franchise taxes and
taxes imposed on or measured by any Bank's net income or receipts (all
non-excluded items being called "Taxes"). If any withholding or deduction from
any payment to be made by the

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<PAGE>

Company hereunder is required in respect of any Taxes pursuant to any applicable
law, rule or regulation, then the Company will:

(a) pay directly to the relevant authority the full
amount required to be so withheld or deducted;

(b) promptly forward to the Agent an official receipt or
other documentation satisfactory to the Agent evidencing such payment
to such authority; and

(c) pay to the Agent for the account of the Banks such
additional amount or amounts as is necessary to ensure that the net
amount actually received by each Bank will equal the full amount such
Bank would have received had no such withholding or deduction been
required.

Moreover, if any Taxes are directly asserted against the Agent or any Bank with
respect to any payment received by the Agent or such Bank hereunder, the Agent
or such Bank may pay such Taxes and the Company will promptly pay such
additional amounts (including any penalty, interest and expense) as is necessary
in order that the net amount received by such Person after the payment of such
Taxes (including any Taxes on such additional amount) shall equal the amount
such Person would have received had such Taxes not been asserted.

If the Company fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to the Agent, for the account of the
respective Banks, the required receipts or other required documentary evidence,
the Company shall indemnify the Banks for any incremental Taxes, interest or
penalties that may become payable by any Bank as a result of any such failure.
For purposes of this Section 7.6, a distribution hereunder by the Agent or any
Bank to or for the account of any Bank shall be deemed a payment by the Company.

Upon the request from time to time of the Company or the Agent, each
Bank that is organized under the laws of a jurisdiction other than the United
States of America shall execute and deliver to the Company and the Agent one or
more (as the Company or the Agent may reasonably request) United States Internal
Revenue Service Forms 4224 or Forms 1001 or such other forms or documents,
appropriately completed, as may be applicable to establish the extent, if any,
to which a payment to such Bank is exempt from withholding or deduction of
Taxes.

The obligations of the Company under this Section 7.6 are subject to
the limitation set out in Section 14.9.1.

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SECTION 8 INCREASED COSTS; SPECIAL PROVISIONS FOR
EURODOLLAR LOANS.

8.1 Increased Costs. (a) If, after the date hereof, the adoption of
any applicable law, rule or regulation, or any change therein, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or any Eurodollar Office of
such Bank) with any request or directive (whether or not having the force of
law) of any such authority, central bank or comparable agency

(A) shall subject any Bank (or any Eurodollar Office of
such Bank) to any tax, duty or other charge with respect to its
Eurodollar Loans, its Note or its obligation to make Eurodollar
Loans, or shall change the basis of taxation of payments to any Bank
of the principal of or interest on its Eurodollar Loans or any other
amounts due under this Agreement in respect of its Eurodollar Loans
or its obligation to make Eurodollar Loans (except for changes in the
rate of tax on the overall net income of such Bank or its Eurodollar
Office imposed by the jurisdiction in which such Bank's principal
executive office or Eurodollar Office is located); or

(B) shall impose, modify or deem applicable any reserve
(including any reserve imposed by the Board of Governors of the
Federal Reserve System, but excluding any reserve included in the
determination of interest rates pursuant to Section 4), special
deposit or similar requirement against assets of, deposits with or
for the account of, or credit extended by any Bank (or any Eurodollar
Office of such Bank); or

(C) shall impose on any Bank (or its Eurodollar Office) any
other condition affecting its Eurodollar Loans, its Note or its
obligation to make Eurodollar Loans;

and the result of any of the foregoing is to increase the cost to (or in the
case of Regulation D of the Board of Governors of the Federal Reserve System, to
impose a cost on) such Bank (or any Eurodollar Office of such Bank) of making or
maintaining any Eurodollar Loan, or to reduce the amount of any sum received or
receivable by such Bank (or its Eurodollar Office) under this Agreement or under
its Note with respect to any Eurodollar Loan, then within 10 days after demand
by such Bank (which demand shall be accompanied by a statement setting forth the
basis for such demand and a calculation of the amount thereof in reasonable

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<PAGE>

detail, a copy of which shall be furnished to the Agent), the Company shall pay
directly to such Bank such additional amount as will compensate such Bank for
such increased cost or such reduction.

(b) If any Bank shall reasonably determine that the adoption or
phase-in of any applicable law, rule or regulation regarding capital adequacy,
or any change therein, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any Bank or
any Person controlling such Bank with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on such Bank's or such controlling Person's capital as a consequence of
such Bank's obligations hereunder (including such Bank's obligations under the
Loan Commitment or the L/C Commitment) or under any Letter of Credit to a level
below that which such Bank or such controlling Person could have achieved but
for such adoption, change or compliance (taking into consideration such Bank's
or such controlling Person's policies with respect to capital adequacy) by an
amount deemed by such Bank or such controlling Person to be material, then from
time to time, within 10 days after demand by such Bank (which demand shall be
accompanied by a statement setting forth the basis for such demand and a
calculation of the amount thereof in reasonable detail, a copy of which shall be
furnished to the Agent), the Company shall pay to such Bank such additional
amount or amounts as will compensate such Bank or such controlling Person for
such reduction.

8.2 Basis for Determining Interest Rate Inadequate or
Unfair. If with respect to any Interest Period:

(a) deposits in Dollars (in the applicable amounts) are not
being offered to the Agent in the interbank eurodollar market for
such Interest Period, or the Agent otherwise reasonably determines
(which determination, if made in good faith, shall be binding and
conclusive on the Company) that by reason of circumstances affecting
the interbank eurodollar market adequate and reasonable means do not
exist for ascertaining the applicable Eurodollar Rate; or

(b) Banks having an aggregate Percentage of 40% or more
advise the Agent that the Eurodollar Rate (Reserve Adjusted) as
determined by the Agent will not adequately and

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<PAGE>

fairly reflect the cost to such Banks of maintaining or funding such
Loans for such Interest Period (taking into account any amount to
which such Banks may be entitled under Section 8.1) or that the
making or funding of Eurodollar Loans has become impracticable as a
result of an event occurring after the date of this Agreement which
in the opinion of such Banks materially affects such Loans;

then the Agent shall promptly notify the other parties thereof and, so long as
such circumstances shall continue, (i) no Bank shall be under any obligation to
make or convert into Eurodollar Loans and (ii) on the last day of the current
Interest Period for each Eurodollar Loan, such Loan shall, unless then repaid in
full, automatically convert to a Floating Rate Loan.

8.3 Changes in Law Rendering Eurodollar Loans Unlawful. In
--------------------------------------------------
the event that any change in (including the adoption of any new) applicable laws
or regulations, or any change in the interpretation of applicable laws or
regulations by any governmental or other regulatory body charged with the
administration thereof, should make it (or in the good faith judgment of any
Bank cause a substantial question as to whether it is) unlawful for any Bank to
make, maintain or fund Eurodollar Loans, then such Bank shall promptly notify
each of the other parties hereto and, so long as such circumstances shall
continue, (a) such Bank shall have no obligation to make or convert into
Eurodollar Loans (but shall make Floating Rate Loans concurrently with the
making of or conversion into Eurodollar Loans by the Banks which are not so
affected, in each case in an amount equal to such Bank's pro rata share of all
Eurodollar Loans which would be made or converted into at such time in the
absence of such circumstances) and (b) on the last day of the current Interest
Period for each Eurodollar Loan of such Bank (or, in any event, on such earlier
date as may be required by the relevant law, regulation or interpretation), such
Eurodollar Loan shall, unless then repaid in full, automatically convert to a
Floating Rate Loan. Each Floating Rate Loan made by a Bank which, but for the
circumstances described in the foregoing sentence, would be a Eurodollar Loan
(an "Affected Loan") shall remain outstanding for the same period as the Group
of Eurodollar Loans of which such Affected Loan would be a part absent such
circumstances.

8.4 Funding Losses. The Company hereby agrees that upon demand by any
Bank (which demand shall be accompanied by a statement setting forth the basis
for the amount being claimed, a copy of which shall be furnished to the Agent),
the Company will indemnify such Bank against any net loss or expense which such
Bank may sustain or incur (including any net loss or expense

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<PAGE>

incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by such Bank to fund or maintain any Eurodollar Loan), as reasonably
determined by such Bank, as a result of (a) any payment, prepayment or
conversion of any Eurodollar Loan of such Bank on a date other than the last day
of an Interest Period for such Loan (including any conversion pursuant to
Section 8.3) or (b) any failure of the Company to borrow or convert any Loan on
a date specified therefor in a notice of borrowing or conversion pursuant to
this Agreement. For this purpose, all notices to the Agent pursuant to this
Agreement shall be deemed to be irrevocable.

8.5 Right of Banks to Fund through Other Offices. Each Bank may, if
it so elects, fulfill its commitment as to any Eurodollar Loan by causing a
foreign branch or affiliate of such Bank to make such Loan, provided that in
such event for the purposes of this Agreement such Loan shall be deemed to have
been made by such Bank and the obligation of the Company to repay such Loan
shall nevertheless be to such Bank and shall be deemed held by it, to the extent
of such Loan, for the account of such branch or affiliate.

8.6 Discretion of Banks as to Manner of Funding. Notwithstanding any
provision of this Agreement to the contrary, each Bank shall be entitled to fund
and maintain its funding of all or any part of its Loans in any manner it sees
fit, it being understood, however, that for the purposes of this Agreement all
determinations hereunder shall be made as if such Bank had actually funded and
maintained each Eurodollar Loan during each Interest Period for such Loan
through the purchase of deposits having a maturity corresponding to such
Interest Period and bearing an interest rate equal to the Eurodollar Rate for
such Interest Period.

8.7 Mitigation of Circumstances; Replacement of Affected Bank. (a)
Each Bank shall promptly notify the Company and the Agent of any event of which
it has knowledge which will result in, and will use reasonable commercial
efforts available to it (and not, in such Bank's good faith judgment, otherwise
disadvantageous to such Bank) to mitigate or avoid, (i) any obligation by the
Company to pay any amount pursuant to Section 7.6 or 8.1 or (ii) the occurrence
of any circumstances of the nature described in Section 8.2 or 8.3 (and, if any
Bank has given notice of any such event described in clause (i) or (ii) above
and thereafter such event ceases to exist, such Bank shall promptly so notify
the Company and the Agent). Without limiting the foregoing, each Bank will
designate a different funding office if such designation will avoid (or reduce
the cost to the

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Company of) any event described in clause (i) or (ii) of the preceding sentence
and such designation will not, in such Bank's sole judgment, be otherwise
disadvantageous to such Bank.

(b) At any time any Bank is an Affected Bank, the Company may replace
such Affected Bank as a party to this Agreement with one or more other bank(s)
or financial institution(s) reasonably satisfactory to the Agent (and upon
notice from the Company such Affected Bank shall assign pursuant to an
Assignment Agreement, and without recourse or warranty, its Commitment, its
Loans, its Note, its participation in Letters of Credit, and all of its other
rights and obligations hereunder to such replacement bank(s) or other financial
institution(s) for a purchase price equal to the sum of the principal amount of
the Loans so assigned, all accrued and unpaid interest thereon, its ratable
share of all accrued and unpaid non-use fees and Letter of Credit fees, any
amounts payable under Section 8.4 as a result of such Bank receiving payment of
any Eurodollar Loan prior to the end of an Interest Period therefor and all
other obligations owed to such Affected Bank hereunder).

8.8 Conclusiveness of Statements; Survival of Provisions.
Determinations and statements of any Bank pursuant to Section 8.1, 8.2, 8.3 or
8.4 shall be conclusive absent demonstrable error. Banks may use reasonable
averaging and attribution methods in determining compensation under Sections 8.1
and 8.4, and the provisions of such Sections shall survive repayment of the
Loans, cancellation of the Notes, cancellation or expiration of the Letters of
Credit and any termination of this Agreement.

SECTION 9 WARRANTIES.

To induce the Agent and the Banks to enter into this Agreement and to
induce the Banks to make Loans and issue or purchase participations in Letters
of Credit hereunder, the Company warrants to the Agent and the Banks that:

9.1 Organization, etc. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware;
each Subsidiary is a corporation duly organized, validly existing and in good
standing under the laws of the state of its incorporation; and the Company and
each Subsidiary is duly qualified to do business in each jurisdiction where the
nature of its business makes such qualification necessary (except in those
instances in which the failure to be qualified or in good standing does not have
a Material Adverse Effect) and has full power and authority to own its property
and conduct its business as presently conducted by it.

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<PAGE>

9.2 Authorization; No Conflict. The execution and delivery by the
Company of this Agreement and each other Loan Document to which it is a party,
the borrowings hereunder, the execution and delivery by each Guarantor of each
Loan Document to which it is a party and the performance by each of the Company
and each Guarantor of its obligations under each Loan Document to which it is a
party are within the corporate powers of the Company and each Guarantor, have
been duly authorized by all necessary corporate action on the part of the
Company and each Guarantor (including any necessary shareholder action), have
received all necessary governmental approval (if any shall be required), and do
not and will not (a) violate any provision of law or any order, decree or
judgment of any court or other government agency which is binding on the Company
or any Guarantor, (b) contravene or conflict with, or result in a breach of, any
provision of the Certificate of Incorporation, By-Laws or other organizational
documents of the Company or any Guarantor or of any agreement, indenture,
instrument or other document which is binding on the Company, any Guarantor or
any other Subsidiary or (c) result in, or require, the creation or imposition of
any Lien on any property of the Company, any Guarantor or any other Subsidiary
(other than Liens arising under the Loan Documents).

9.3 Validity and Binding Nature. Each of this Agreement and each
other Loan Document to which the Company is a party is the legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms; and each Loan Document to which any Guarantor is a party is, or
upon the execution and delivery thereof by such Guarantor will be, the legal,
valid and binding obligation of such Guarantor, enforceable against such
Guarantor in accordance with its terms.

9.4 Financial Condition. The financial statements of the Company and
its Subsidiaries incorporated in Amendment No. 1 to the form S-1 Registration
Statement filed on April 3, 1998, copies of which have been furnished to each
Bank:

(i) were prepared in accordance with GAAP
consistently applied throughout the periods covered thereby, except
as otherwise expressly noted therein (subject, in the case of the
unaudited financial statements, to the absence of footnotes and to
customary year-end audit adjustments); and

(ii) fairly present in all material respects the
financial condition of the Company and its Subsidiaries as of the
dates thereof and the results of operations for the periods covered
thereby.

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<PAGE>

9.5 No Material Adverse Change. As of the Effective Date, there has
been no material adverse change in the financial condition, operations, assets,
business, properties or prospects of the Company or any Subsidiary since the
date of the applicable financial statements referred to in Section 9.4 and since
the Effective Date there has been no material adverse change in the financial
condition, operations, assets, business, properties or prospects of the Company
and its Subsidiaries taken as a whole.

9.6 Litigation and Contingent Liabilities. No litigation (including
derivative actions), arbitration proceeding, labor controversy or governmental
investigation or proceeding is pending or, to the Company's knowledge,
threatened against the Company or any Subsidiary which might reasonably be
expected to have a Material Adverse Effect, except as set forth in Schedule 9.6.
Other than any liability incident to such litigation or proceedings, neither the
Company nor any Subsidiary has any material contingent liabilities not listed in
such Schedule 9.6.

9.7 Ownership of Properties; Liens. Each of the Company and each
Subsidiary owns good and marketable title to all of its properties and assets,
real and personal, tangible and intangible, of any nature whatsoever (including
patents, trademarks, trade names, service marks and copyrights), free and clear
of all Liens, charges and material claims (including material infringement
claims with respect to patents, trademarks, copyrights and the like) except as
permitted pursuant to Section 10.8.

9.8 Subsidiaries. As of the Effective Date, the Company has no
Subsidiaries except those listed in Schedule 9.8.

9.9 Pension and Welfare Plans. (a) During the twelve-
consecutive-month period prior to the date of the execution and delivery of this
Agreement or the making of any Loan hereunder, (i) no steps have been taken to
terminate any Pension Plan and (ii) no contribution failure has occurred with
respect to any Pension Plan sufficient to give rise to a lien under Section
302(f) of ERISA. No condition exists or event or transaction has occurred with
respect to any Pension Plan which could result in the incurrence by the Company
of any material liability, fine or penalty. The Company has no contingent
liability with respect to any post-retirement benefit under a Welfare Plan,
other than liability for continuation coverage described in Part 6 of Subtitle B
of Title I of ERISA.

(b) All contributions (if any) have been made to any Multiemployer
Pension Plan that are required to be made by the

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<PAGE>

Company or any other member of the Controlled Group under the terms of the plan
or of any collective bargaining agreement or by applicable law; neither the
Company nor any member of the Controlled Group has withdrawn or partially
withdrawn from any Multiemployer Pension Plan, incurred any withdrawal liability
with respect to any such plan, received notice of any claim or demand for
withdrawal liability or partial withdrawal liability from any such plan, and no
condition has occurred which, if continued, might result in a withdrawal or
partial withdrawal from any such plan; and neither the Company nor any member of
the Controlled Group has received any notice that any Multiemployer Pension Plan
is in reorganization, that increased contributions may be required to avoid a
reduction in plan benefits or the imposition of any excise tax, that any such
plan is or has been funded at a rate less than that required under Section 412
of the Code, that any such plan is or may be terminated, or that any such plan
is or may become insolvent.

9.10 Investment Company Act. Neither the Company nor any Subsidiary
is an "investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940.

9.11 Public Utility Holding Company Act. Neither the Company nor any
Subsidiary is a "holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935.

9.12 Regulation U. The Company is not engaged principally, or as one
of its important activities, in the business of extending credit for the purpose
of purchasing or carrying Margin Stock.

9.13 Taxes. Each of the Company and each Subsidiary has filed all tax
returns and reports required by law to have been filed by it and has paid all
taxes and governmental charges thereby shown to be owing, except any such taxes
or charges which are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books.

9.14 Solvency, etc. On the Effective Date (or, in the case of any
Person which becomes a Guarantor after the Effective Date, on the date such
Person becomes a Guarantor), and immediately prior to and after giving effect to
the issuance of each Letter of Credit and each borrowing hereunder and the use
of the

36
<PAGE>

proceeds thereof, (a) each of the Company's and each Guarantor's assets will
exceed its liabilities and (b) each of the Company and each Guarantor will be
solvent, will be able to pay its debts as they mature, will own property with
fair saleable value greater than the amount required to pay its debts and will
have capital sufficient to carry on its business as then constituted.

9.15 Environmental Matters.

(a) No Violations. Except as set forth on Schedule 9.15,
neither the Company nor any Subsidiary, nor any operator of the Company's or any
Subsidiary's properties, is in violation, or alleged violation, of any judgment,
decree, order, law, permit, license, rule or regulation pertaining to
environmental matters, including those arising under the Resource Conservation
and Recovery Act ("RCRA"), the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA"), the Superfund Amendments and
Reauthorization Act of 1986 or any other Environmental Law which (i) in any
single case, requires expenditures in any three-year period of $500,000 or more
by the Company and its Subsidiaries in penalties and/or for investigative,
removal or remedial actions or (ii) individually or in the aggregate otherwise
might reasonably be expected to have a Material Adverse Effect.

(b) Notices. Except as set forth on Schedule 9.15, neither
the Company nor any Subsidiary has received notice from any third party,
including any Federal, state or local governmental authority: (a) that any one
of them has been identified by the U.S. Environmental Protection Agency as a
potentially responsible party under CERCLA with respect to a site listed on the
National Priorities List, 40 C.F.R. Part 300 Appendix B; (b) that any hazardous
waste, as defined by 42 U.S.C. ss.6903(5), any hazardous substance as defined by
42 U.S.C. ss.9601(14), any pollutant or contaminant as defined by 42 U.S.C.
ss.9601(33) or any toxic substance, oil or hazardous material or other chemical
or substance regulated by any Environmental Law, excluding household hazardous
waste (all of the foregoing, "Hazardous Substances"), which any one of them has
generated, transported or disposed of has been found at any site at which a
Federal, state or local agency or other third party has conducted a remedial
investigation, removal or other response action pursuant to any Environmental
Law; (c) that the Company or any Subsidiary must conduct a remedial
investigation, removal, response action or other activity pursuant to any
Environmental Law; or (d) of any Environmental Claim.

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<PAGE>

(c) Handling of Hazardous Substances. Except as set forth on
Schedule 9.15, (i) no portion of any real property or other assets owned, leased
or operated by the Company or any Subsidiary has been used for the handling,
processing, storage or disposal of Hazardous Substances except in accordance in
all material respects with applicable Environmental Laws; and no underground
tank or other underground storage receptacle for Hazardous Substances is located
on such properties; (ii) in the course of any activities conducted by the
Company, any Subsidiary or the operators of any real property owned, leased or
operated by the Company or any Subsidiary, no Hazardous Substances have been
generated or are being used on such properties except in accordance in all
material respects with applicable Environmental Laws; (iii) there have been no
Releases or threatened Releases of Hazardous Substances on, upon, into or from
any real property or other assets owned, leased or operated by the Company or
any Subsidiary, which Releases singly or in the aggregate might reasonably be
expected to have a material adverse effect on the value of such real property or
assets; (iv) to the Company's actual knowledge, there have been no Releases on,
upon, from or into any real property in the vicinity of any real property or
other assets owned, leased or operated by the Company or any Subsidiary which,
through soil or groundwater contamination, may have come to be located on, and
which might reasonably be expected to have a material adverse effect on the
value of, any real property or other assets owned, leased or operated by the
Company or any Subsidiary; and (v) any Hazardous Substances generated by the
Company and its Subsidiaries have been transported offsite only by properly
licensed carriers and delivered only to treatment or disposal facilities
maintaining valid permits as required under applicable Environmental Laws, which
transporters and facilities have been and are, to the best of the Company's
knowledge, operating in compliance with such permits and applicable
Environmental Laws.

(d) Investigations. Except as set forth on Schedule 9.15, the
Company and its Subsidiaries have taken all reasonable steps to investigate the
past and present condition and usage of any real property owned, leased or
operated by the Company and its Subsidiaries and the operations conducted by the
Company and its Subsidiaries with regard to environmental matters.

9.16 Year 2000 Problem. The Company and its Subsidiaries have
reviewed the areas within their business and operations which could be adversely
affected by, and have developed or are developing a program to address on a
timely basis, the "Year 2000 Problem" (that is, the risk that computer
applications used by the Company and its Subsidiaries may be unable to recognize
and

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<PAGE>

perform properly date-sensitive functions involving certain dates prior to and
any date after December 31, 1999). Based on such review and program, the Company
reasonably believes that the "Year 2000 Problem" will not have a Material
Adverse Effect.

9.17 Copyrights, Patents, Trademarks and Licenses, etc. The
Company and its Subsidiaries own or are licensed or otherwise have the right to
use all of the patents, trademarks, service marks, trade names, copyrights,
contractual franchises, authorizations and other rights that are reasonably
necessary for the operation of their respective businesses, without conflict
with the rights of any other Person. No slogan or other advertising device,
product, process, method, substance, part or other material now employed, or now
contemplated to be employed, by the Company or any Subsidiary infringes upon any
rights held by any other Person. No claim or litigation regarding any of the
foregoing is pending or, to the knowledge of the Company, threatened, and no
patent, invention, device, application, principle or any statute, law, rule,
regulation, standard or code is pending or, to the knowledge of the Company,
proposed, which, in either case, could reasonably be expected to have a Material
Adverse Effect.

9.18 Founding Companies Acquisition.(a) The Founding Companies
Acquisition Documents constitute the purchase agreements for the Founding
Companies Acquisition (including all amendments thereto) as in effect on the
Effective Date.

(b) The representations and warranties made by the Company
and, to the best of the Company's knowledge, by the Founding Companies contained
in the Founding Companies Acquisition Documents (i) were true and correct in all
material respects when made, (ii) are true and correct in all material respects
on the date hereof, and (iii) will be true and correct in all material respects
as of the Effective Date (except, in the case of clauses (ii) and (iii), to the
extent such representations and warranties relate solely to an earlier date, in
which case they were true and correct to all material respects as of such
earlier dates) .

(c) The Founding Companies Acquisition complies in all
material respects with all applicable legal requirements, and all necessary
governmental, regulatory, shareholder and other consents and approvals required
for the consummation of the Founding Companies Acquisition have been, or prior
to the consummation thereof will be, duly obtained and in full force and effect.

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<PAGE>

(d) The execution and delivery by the Company of the Founding
Companies Acquisition Documents, and the consummation by the Company of the
Founding Companies Acquisition, will not violate any requirement of law, or
result in a breach of, or constitute a default under, or require any consent
which will not be obtained for, any material agreement or indenture, or any
order or decree, affecting the Company, or, to the best of the Company's
knowledge, the Founding Companies.

9.19 Transactions with Affiliates. Neither the Company nor
any Subsidiary has entered into or participated in any agreements or
transactions of any kind with any Affiliates of the Company except agreements or
transactions entered into in the ordinary course of business on an arms-length
basis.

9.20 Information. All information heretofore or contemporaneously
herewith furnished in writing by the Company or any Subsidiary to any Bank for
purposes of or in connection with this Agreement and the transactions
contemplated hereby is, and all written information hereafter furnished by or on
behalf of the Company or any Subsidiary to any Bank pursuant hereto or in
connection herewith will be, true and accurate in every material respect on the
date as of which such information is dated or certified, and none of such
information is or will be incomplete by omitting to state any material fact
necessary to make such information not misleading in light of the circumstances
under which made (it being recognized by the Agent and the Banks that (a) any
projections and forecasts provided by the Company are based on good faith
estimates and assumptions believed by the Company to be reasonable as of the
date of the applicable projections or assumptions and that actual results during
the period or periods covered by any such projections and forecasts may differ
from projected or forecasted results and (b) any information provided by the
Company or any Subsidiary with respect to any Person or assets acquired or to be
acquired by the Company or any Subsidiary shall, for all periods prior to the
date of such acquisition, be limited to the knowledge of the Company or the
acquiring Subsidiary after reasonable inquiry).

SECTION 10 COVENANTS.

Until the expiration or termination of the Commitments and thereafter
until all obligations of the Company hereunder and under the other Loan
Documents are paid in full and all Letters of Credit have been terminated, the
Company agrees that, unless at any time the Required Banks shall otherwise
expressly consent in writing, it will:

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<PAGE>

10.1 Reports, Certificates and Other Information. Furnish to the
Agent and each Bank:

10.1.1 Audit Report. Promptly when available and in any event within
90 days after the close of each Fiscal Year: (a) a copy of the annual audit
report of the Company and its Subsidiaries for such Fiscal Year, including
therein consolidated balance sheets of the Company and its Subsidiaries as of
the end of such Fiscal Year and consolidated statements of earnings and cash
flow of the Company and its Subsidiaries for such Fiscal Year certified without
qualification by independent auditors of recognized standing selected by the
Company and reasonably acceptable to the Required Banks, together with a written
statement from such accountants to the effect that in making the examination
necessary for the signing of such annual audit report by such accountants,
nothing came to their attention that caused them to believe that the Company was
not in compliance with any provision of Section 10.6, 10.7 or 10.9 of this
Agreement insofar as such provision relates to accounting matters or, if
something has come to their attention that caused them to believe that the
Company was not in compliance with any such provision, describing such non-
compliance in reasonable detail (it being understood that any such audit is not
directed primarily toward obtaining knowledge of such non-compliance); and (b)
consolidating balance sheets of the Company and its Subsidiaries as of the end
of such Fiscal Year and a consolidating statement of earnings for the Company
and its Subsidiaries for such Fiscal Year, certified by the Chief Financial
Officer, the Vice President, Finance, Controller or Treasurer of the Company.

10.1.2 Quarterly Reports. Promptly when available and in any event
within 45 days after the end of each Fiscal Quarter (except the last Fiscal
Quarter) of each Fiscal Year, consolidated and consolidating balance sheets of
the Company and its Subsidiaries as of the end of such Fiscal Quarter, together
with consolidated and consolidating statements of earnings and a consolidated
statement of cash flows for such Fiscal Quarter and for the period beginning
with the first day of such Fiscal Year and ending on the last day of such Fiscal
Quarter, certified by the Chief Financial Officer, the Vice President, Finance,
Controller or Treasurer of the Company.

10.1.3 Monthly Reports. Promptly when available and in any event
within 30 days after the end of each of the first two months of each Fiscal
Quarter, balance sheets of the Company and its Subsidiaries as of the end of
such month, together with statements of earnings for such month and for the
period beginning with the first day of the Fiscal Year and ending on the last
day of such

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<PAGE>

month, certified by the Chief Financial Officer, the Vice President, Finance,
Controller or Treasurer of the Company.

10.1.4 Borrowing Base Certificate. Within 30 days after the end of
each month, a borrowing base certificate substantially in the form of Exhibit H,
together with an aging of Receivables and a report of sales and other
dispositions of Equipment specifying Equipment by equipment number, location,
vehicle identification number and a brief description.

10.1.5 Compliance Certificates. Contemporaneously with the furnishing
of a copy of each annual audit report pursuant to Section 10.1.1 and of each set
of quarterly statements pursuant to Section 10.1.2, a duly completed compliance
certificate in the form of Exhibit B, with appropriate insertions, dated the
date of such annual report or such quarterly statements and signed by the Chief
Financial Officer, the Vice President, Finance, Controller or Treasurer of the
Company, containing a computation of each of the financial ratios and
restrictions set forth in Section 10.6 and to the effect that such officer has
not become aware of any Event of Default or Unmatured Event of Default that has
occurred and is continuing or, if there is any such event, describing it and the
steps, if any, being taken to cure it.

10.1.6 Reports to SEC and to Shareholders. Promptly upon the filing
or sending thereof, copies of all regular, periodic or special reports of the
Company or any Subsidiary filed with the SEC (excluding exhibits thereto,
provided that the Company shall promptly deliver any such exhibit to the Agent
or any Bank upon request therefor); copies of all registration statements of the
Company or any Subsidiary filed with the SEC (other than on Form S-8); and
copies of all proxy statements or other communications made to security holders
generally concerning material developments in the business of the Company or any
Subsidiary.

10.1.7 Notice of Default, Litigation and ERISA Matters. Promptly upon
becoming aware of any of the following, written notice describing the same and
the steps being taken by the Company or the Subsidiary affected thereby with
respect thereto:

(a) the occurrence of an Event of Default or an
Unmatured Event of Default;

(b) any litigation, arbitration or governmental
investigation or proceeding not previously disclosed by the Company
to the Banks which has been instituted or, to the knowledge of the
Company, is threatened against the Company or any Subsidiary or to
which any of the properties of any

42
<PAGE>

thereof is subject which, if adversely determined, might reasonably
be expected to have a Material Adverse Effect;

(c) the institution of any steps by any member of the
Controlled Group or any other Person to terminate any Pension Plan,
or the failure of any member of the Controlled Group to make a
required contribution to any Pension Plan (if such failure is
sufficient to give rise to a lien under Section 302(f) of ERISA) or
to any Multiemployer Pension Plan, or the taking of any action with
respect to a Pension Plan which could result in the requirement that
the Company furnish a bond or other security to the PBGC or such
Pension Plan, or the occurrence of any event with respect to any
Pension Plan or Multiemployer Pension Plan which could result in the
incurrence by any member of the Controlled Group of any material
liability, fine or penalty (including any claim or demand for
withdrawal liability or partial withdrawal from any Multiemployer
Pension Plan), or any material increase in the contingent liability
of the Company with respect to any post-retirement Welfare Plan
benefit, or any notice that any Multiemployer Pension Plan is in
reorganization, that increased contributions may be required to avoid
a reduction in plan benefits or the imposition of an excise tax, that
any such plan is or has been funded at a rate less than that required
under Section 412 of the Code, that any such plan is or may be
terminated, or that any such plan is or may become insolvent;

(d) any cancellation or material change in any insurance
maintained by the Company or any Subsidiary;

(e) any event (including (i) any violation of any
Environmental Law or the assertion of any Environmental Claim or (ii)
the enactment or effectiveness of any law, rule or regulation) which
might reasonably be expected to have a Material Adverse Effect; or

(f) any setoff, claims, withholdings or other defenses to
which any of the Collateral, or the Banks' rights with respect to the
Collateral, are subject.

10.1.8 Subsidiaries. Promptly upon any change in the list of its
Subsidiaries, a written report of such change.

10.1.9 Management Reports. Promptly upon the request of the Agent or
any Bank, copies of all detailed financial and management reports submitted to
the Company by independent

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<PAGE>

auditors in connection with each annual or interim audit made by such auditors
of the books of the Company.

10.1.10 Projections. As soon as practicable and in any event within
60 days after the commencement of each Fiscal Year, financial projections for
the Company and its Subsidiaries for such Fiscal Year prepared in a manner
consistent with those projections delivered by the Company to the Banks prior to
the Effective Date or otherwise in a manner reasonably satisfactory to the
Agent.

10.1.11 Contracts. As soon as practicable after becoming aware of the
event and in any event within 30 days of such event, written notice of any
termination by a customer of a material contract with a Subsidiary (with
materiality being measured at the Subsidiary level).

10.1.12 Fleet Audit Reports. From time to time as requested by the
Agent, a written report by appraisers acceptable to the Agent of an audit and
appraisal of the Equipment of the Company and its Subsidiaries.

10.1.13 Other Information. From time to time such other information
concerning the Company and its Subsidiaries as any Bank or the Agent may
reasonably request.

10.2 Books, Records and Inspections. Keep, and cause each Subsidiary
to keep, its books and records in accordance with sound business practices
sufficient to allow the preparation of financial statements in accordance with
GAAP; permit, and cause each Subsidiary to permit, any Bank or the Agent or any
representative thereof to inspect the properties and operations of the Company
and of such Subsidiary; and permit, and cause each Subsidiary to permit, at any
reasonable time and with reasonable notice (or at any time without notice if an
Event of Default exists), any Bank or the Agent or any representative thereof to
visit any or all of its offices, to discuss its financial matters with its
officers and its independent auditors (and the Company hereby authorizes such
independent auditors to discuss such financial matters with any Bank or the
Agent or any representative thereof, provided that so long as no Event of
Default exists, a representative of the Company shall be present at any such
discussions), and to examine (and, at the expense of the Company or the
applicable Subsidiary, photocopy extracts from) any of its books or other
corporate records.

10.3 Insurance. Maintain, and cause each Subsidiary to maintain, with
responsible insurance companies, such insurance as

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may be required by any law or governmental regulation or court decree or order
applicable to it and such other insurance, to such extent and against such
hazards and liabilities, as is customarily maintained by companies similarly
situated and that is acceptable to the Agent; and, on each anniversary of the
Effective Date and from time to time upon request of the Agent or any Bank,
furnish to the Agent or such Bank a certificate setting forth in reasonable
detail the nature and extent of all insurance maintained by the Company and its
Subsidiaries.

10.4 Compliance with Laws; Payment of Taxes and Liabilities. (a)
Comply, and cause each Subsidiary to comply, in all material respects with all
applicable laws (including Environmental Laws), rules, regulations, decrees,
orders, judgments, licenses and permits; and (b) pay, and cause each Subsidiary
to pay, prior to delinquency, all taxes and other governmental charges against
it or any of its property, as well as claims of any kind which, if unpaid, might
become a Lien on any of its property; provided, however, that the foregoing
shall not require the Company or any Subsidiary to pay any such tax or charge so
long as it shall contest the validity thereof in good faith by appropriate
proceedings and shall set aside on its books adequate reserves with respect
thereto in accordance with GAAP.

10.5 Maintenance of Existence, etc. Maintain and preserve, and
(subject to Section 10.11) cause each Subsidiary to maintain and preserve, (a)
its existence and good standing in the jurisdiction of its incorporation and (b)
its qualification and good standing as a foreign corporation in each
jurisdiction where the nature of its business makes such qualification necessary
(except in those instances in which the failure to be qualified or in good
standing does not have a Material Adverse Effect).

10.6 Financial Covenants.

10.6.1 Minimum Consolidated Net Income. Not permit its Consolidated
Net Income as of the last day of any Fiscal Quarter to be less than zero.

10.6.2 Funded Debt to Funded Debt plus Net Worth Ratio. Not permit
the ratio of (a) Funded Debt to (b) the sum of Funded Debt plus Net Worth as of
the last day of any Fiscal Quarter to exceed 0.50 to 1.0.

10.6.3 Funded Debt to EBITDA Ratio. Not permit the Funded Debt to
EBITDA Ratio as of the last day of any Fiscal Quarter to exceed the applicable
ratio set forth below:

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FISCAL FUNDED DEBT TO
QUARTER ENDING: EBITDA RATIO

6/30/98 through 6/30/99 2.75 to 1.0
9/30/99 and thereafter 2.50 to 1.0.

10.6.4 Capital Expenditures. The Company will not permit the
aggregate amount of all Capital Expenditures made by the Company and its
Subsidiaries in any Fiscal Year (excluding Capital Expenditures for management
information systems made during the first 18 months following the Effective Date
in an aggregate amount not exceeding $2,500,000) to exceed 100% of consolidated
depreciation of machinery and equipment in such Fiscal Year.

10.6.5 EBITR to Interest Expense plus Rental Expense Ratio. Not
permit the ratio of EBITR to Interest Expense plus Rental Expense to be less
than 2.0 to 1.0 as of the last day of any Fiscal Quarter.

10.7 Limitations on Debt. Not, and not permit any Subsidiary to,
create, incur, assume or suffer to exist any Debt, except:

(a) obligations in respect of the Loans, the L/C
Applications and the Letters of Credit;

(b) unsecured Debt of the Company which represents all or part of the
purchase price payable in connection with a transaction permitted by
Section 10.10(c); provided that the aggregate principal amount of all
such unsecured Debt shall not at any time exceed $2,500,000;

(c) Debt secured by Liens permitted by subsection 10.8(c) or (d), and
refinancings of any such Debt so long as the terms applicable to such
refinanced Debt are no less favorable to the Company or the
applicable Subsidiary than the terms in effect immediately prior to
such refinancing, provided that the aggregate amount of all such Debt
at any time outstanding shall not exceed $4,500,000;

(d) Debt of Subsidiaries owed to the Company;

(e) unsecured Debt of the Company to Subsidiaries;

(f) Subordinated Debt;

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(g) other Debt outstanding on the date hereof and listed in Schedule
10.7; and

(h) Debt to be Repaid (provided that all such Debt is repaid on or
before the Effective Date).

10.8 Liens. Not, and not permit any Subsidiary to, create or permit
to exist any Lien on any of its real or personal properties, assets or rights of
whatsoever nature (whether now owned or hereafter acquired), except:

(a) Liens for taxes or other governmental charges not at the time
delinquent or thereafter payable without penalty or being contested
in good faith by appropriate proceedings and, in each case, for which
it maintains adequate reserves;

(b) Liens arising in the ordinary course of business (such as (i)
Liens of carriers, warehousemen, mechanics and materialmen and other
similar Liens imposed by law and (ii) Liens incurred in connection
with worker's compensation, unemployment compensation and other types
of social security (excluding Liens arising under ERISA) or in
connection with surety bonds, bids, performance bonds and similar
obligations) for sums not overdue or being contested in good faith by
appropriate proceedings and not involving any deposits or advances or
borrowed money or the deferred purchase price of property or
services, and, in each case, for which it maintains adequate
reserves;

(d) subject to the limitation set forth in Section 10.7(c),(i) Liens
arising in connection with Capital Leases (and attaching only to the
property being leased), (ii) Liens existing on property at the time
of the acquisition thereof by the Company or any Subsidiary (and not
created in contemplation of such acquisition) and (iii) Liens that
constitute purchase money security interests on any property securing
debt incurred for the purpose of financing all or any part of the
cost of acquiring such property, provided that any such Lien attaches
to such property within 60 days of the acquisition thereof and such
Lien attaches solely to the property so acquired;

(e) attachments, appeal bonds, judgments and other similar Liens, for
sums not exceeding $250,000 arising in connection with court
proceedings, provided the execution or other enforcement of such
Liens is effectively stayed and the

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<PAGE>

claims secured thereby are being actively contested in good faith and
by appropriate proceedings;

(f) easements, rights of way, restrictions, minor defects or
irregularities in title and other similar Liens not interfering in
any material respect with the ordinary conduct of the business of the
Company or any Subsidiary;

(g) Liens in favor of the Agent arising under the Loan Documents; and

(h) Liens securing Debt to be Repaid (provided that all such Liens
are released on or before the Effective Date).

10.9 Restricted Payments. Not, and not permit any Subsidiary to, (a)
declare or pay any dividends on any of its capital stock (other than stock
dividends), (b) purchase or redeem any such stock or any warrants, units,
options or other rights in respect of such stock, (c) make any other
distribution to shareholders, (d) prepay, purchase, defease or redeem any
Subordinated Debt or (e) set aside funds for any of the foregoing; provided that
any Subsidiary may declare and pay dividends to the Company or to any other
wholly-owned Subsidiary.

10.10 Mergers, Consolidations, Sales. Not, and not permit any
Subsidiary to, be a party to any merger or consolidation, or purchase or
otherwise acquire all or substantially all of the assets or any stock of any
class of, or any partnership or joint venture interest in, any other Person, or
sell, transfer, convey or lease all or any substantial part of its assets, or
sell or assign with or without recourse any receivables, except for (a) any such
merger or consolidation, sale, transfer, conveyance, lease or assignment of or
by any wholly-owned Subsidiary into the Company or into, with or to any other
wholly-owned Subsidiary; (b) any such purchase or other acquisition by the
Company or any wholly-owned Subsidiary of the assets or stock of any wholly-
owned Subsidiary; (c) any such purchase or other acquisition by the Company or
any wholly-owned Subsidiary of the assets or stock of any other Person where (1)
such assets (in the case of an asset purchase) are for use, or such Person (in
the case of a stock purchase) is engaged, solely in providing towing services
and/or vehicle transport; (2) immediately before or after giving effect to such
purchase or acquisition, no Event of Default or Unmatured Event of Default shall
have occurred and be continuing; (3) either (i) (x) the aggregate consideration
to be paid by the Company and its Subsidiaries (including any Debt assumed or
issued in connection therewith, the amount thereof to be calculated in
accordance with GAAP) in connection with such

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purchase or other acquisition (or any series of related acquisitions) is not
greater than $5,000,000 and (y) the aggregate consideration to be paid in cash
by the Company and its Subsidiaries in connection with such purchase or
acquisition (or any series of related acquisitions) is not greater than
$2,500,000, (ii) immediately after giving effect to such purchase or
acquisition, the Funded Debt to EBITDA Ratio is less than 1.0 to 1.0 or (iii)
the Required Lenders have consented to such purchase or acquisition; (4) the
Company is in pro forma compliance with all the financial ratios and
restrictions set forth in Section 10.6; and (5) such Person (or its board of
directors or similar body) has approved such acquisition or other purchase; and
(d) sales and dispositions of assets (including the stock of Subsidiaries) so
long as the net book value of all assets sold or otherwise disposed of in any
Fiscal Year does not exceed 5% of the aggregate net book value of all assets of
the Company and its Subsidiaries.

10.11 Modification of Organizational Documents. Not permit the
Certificate of Incorporation, By-Laws or other organizational documents of the
Company or any Subsidiary to be amended or modified in any way which might
reasonably be expected to materially adversely affect the interests of the
Banks.

10.12 Use of Proceeds. Use the proceeds of the Loans solely to
finance the Company's working capital, for acquisitions permitted by Section
10.10, for Capital Expenditures and for other general corporate purposes,
including the payment of Debt to be Repaid; and not use or permit any proceeds
of any Loan to be used, either directly or indirectly, for the purpose, whether
immediate, incidental or ultimate, of "purchasing or carrying" any Margin Stock.

10.13 Further Assurances. Take, and cause each Subsidiary to take,
such actions as are necessary, or as the Agent or the Required Banks may
reasonably request, from time to time (including the execution and delivery of
guaranties, security agreements, pledge agreements, financing statements and
other documents, the filing or recording of any of the foregoing, and the
delivery of stock certificates and other collateral with respect to which
perfection is obtained by possession) to ensure that (i) the obligations of the
Company hereunder and under the other Loan Documents are secured by
substantially all of the assets of the Company and guaranteed by all of the
Subsidiaries (including, promptly upon the acquisition or creation thereof, any
Subsidiary acquired or created after the date hereof) by execution of a
counterpart of the Guaranty and (ii) the

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obligations of each Guarantor under the Guaranty are secured by substantially
all of the assets of such Guarantor.

10.14 Transactions with Affiliates. Not, and not permit any
Subsidiary to, enter into, or cause, suffer or permit to exist any transaction,
arrangement or contract with any of its other Affiliates (other than the Company
and its Subsidiaries) which is on terms which are less favorable than are
obtainable from any Person which is not one of its Affiliates.

10.15 Employee Benefit Plans. Maintain, and cause each Subsidiary to
maintain, each Pension Plan in substantial compliance with all applicable
requirements of law and regulations.

10.16 Environmental Matters. (a) If any material Release or Disposal
of Hazardous Substances shall occur or shall have occurred on any real property
or any other assets owned, leased or operated by the Company or any Subsidiary,
the Company shall, or shall cause the applicable Subsidiary to, cause the prompt
containment and removal of such Hazardous Substances and the remediation of such
real property or other assets as necessary to comply in all material respects
with all Environmental Laws and to preserve the value of such real property or
other assets. Without limiting the generality of the foregoing, the Company
shall, and shall cause each Subsidiary to, comply in a reasonable and
cost-effective manner with any valid Federal or state judicial or administrative
order requiring the performance at any real property owned, leased or operated)
of the Company or any Subsidiary of activities in response to the Release or
threatened Release of a Hazardous Substance except for the period of time that
the Company or such Subsidiary is diligently and in good faith contesting such
order.

(b) To the extent that the transportation of "hazardous
waste" as defined by RCRA is permitted by this Agreement, the Company shall, and
shall cause its Subsidiaries to, dispose of such hazardous waste only at
licensed disposal facilities operating, to the best of the Company's or such
Subsidiary's knowledge after reasonable inquiry, in compliance with
Environmental Laws.

10.17 Unconditional Purchase Obligations. Not, and not permit any
Subsidiary to, enter into or be a party to any contract for the purchase of
materials, supplies or other property or services, if such contract requires
that payment be made by it regardless of whether or not delivery is ever made of
such materials, supplies or other property or services; provided that the
foregoing shall not prohibit the Company or any

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<PAGE>

Subsidiary from entering into options for the purchase of particular assets or
businesses.

10.18 Inconsistent Agreements. Not, and not permit any Subsidiary to,
enter into any agreement containing any provision which (a) would be violated or
breached by any borrowing by the Company hereunder or by the performance by the
Company or any Subsidiary of any of its obligations hereunder or under any other
Loan Document or (b) would prohibit the Company or any Subsidiary from granting
to the Agent, for the benefit of the Banks, a Lien on any of its assets.

10.19 Business Activities. Not, and not permit any Subsidiary to,
engage in any line of business other than the towing service and vehicle
transport businesses and businesses which are reasonably related thereto.

10.20 Advances and Other Investments. Not, and not permit any
Subsidiary to, make, incur, assume or suffer to exist any Investment in any
other Person, except (without duplication) the following:

(a) equity Investments existing on the Effective Date in wholly-owned
Subsidiaries identified in Schedule 9.8;

(b) equity Investments in Subsidiaries acquired after the Effective
Date in transactions permitted as acquisitions of stock or assets
pursuant to Section 10.10;

(c) in the ordinary course of business, contributions by the Company
to the capital of any of its Subsidiaries, or by any such Subsidiary
to the capital of any of its Subsidiaries;

(d) in the ordinary course of business, Investments by the Company in
any Subsidiary or by any of the Subsidiaries in the Company, by way
of intercompany loans, advances or guaranties, all to the extent
permitted by Section 10.7;

(e) Suretyship Liabilities permitted by Section 10.7;

(f) good faith deposits made in connection with prospective
acquisitions of stock or assets permitted by Section 10.10;

(g) loans to officers and employees not exceeding (i) $100,000 in the
aggregate to any single individual or (ii) $250,000 in the aggregate
for all such individuals;

(h) Cash Equivalent Investments; and

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<PAGE>

(i) bank deposits in the ordinary course of business; provided that
the aggregate amount of all such deposits (excluding amounts in
payroll accounts or for accounts payable, in each case to the extent
that checks have been issued to third parties) which are maintained
with any bank other than the Agent shall not at any time exceed (x)
in the case of such deposits with any single bank, $100,000 for three
consecutive Business Days and (y) in the case of all such deposits,
$2,500,000 for three consecutive Business Days;

provided, however, that no Investment otherwise permitted by clause (b), (c),
(d), (e), (f) or (g) shall be permitted to be made if, immediately before or
after giving effect thereto, any Event of Default or Unmatured Event of Default
shall have occurred and be continuing.

10.21 Maintenance of Property. The Company shall, and shall cause
each Subsidiary to, maintain and preserve all its property which is used or
useful in its business in good working order and condition, ordinary wear and
tear excepted.

10.22 Performance of Obligations. The Company shall, and shall cause
each Subsidiary to, pay and discharge as the same shall become due and payable,
all their respective obligations and liabilities, including:

(a) all tax liabilities, assessments and governmental charges or
levies upon it or its properties or assets; and

(b) all lawful claims which, if unpaid, would by law become a Lien
upon its property; unless, in each case, the same are being contested
in good faith by appropriate proceedings and adequate reserves in
accordance with GAAP are being maintained by the Company or such
Subsidiary.

10.23 Leases. Enter into, and cause each Subsidiary to enter into,
leases acceptable to the Agent with respect to any real property used by the
Company or any Subsidiary in the conduct of its business.

SECTION 11 EFFECTIVENESS; CONDITIONS OF LENDING, ETC.

The obligation of each Bank to make its Loans and of any Issuing Bank
to issue Letters of Credit is subject to the following conditions precedent:

11.1 Initial Credit Extensions. The obligation of each Bank to make
its initial Loan and of any Issuing Bank to issue

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<PAGE>

any Letter of Credit, whichever first occurs, is, in addition to the conditions
precedent specified in Section 11.2, subject to the conditions precedent (and
the date on which all such conditions precedent have been satisfied or waived in
writing by the Banks is called the "Effective Date") that (a) the Agent shall
have received all amounts which are then due and payable pursuant to Section 5
and (to the extent billed) Section 14.6, (b) the Agent shall have received
evidence, reasonably satisfactory to the Agent (i) of the completion of an
initial equity offering by the Company producing gross proceeds of at least
$50,000,000, (ii) that the Founding Companies Acquisition has been (or
concurrently with the initial borrowing will be) consummated on terms and
conditions set forth in the Founding Companies Acquisition Documents, without
giving effect to any amendment or other modification thereto or waiver
thereunder unless consented to by the Banks, (iii) that all Debt to be Repaid
has been (or concurrently with the making of the initial Loans will be) paid in
full and all Liens securing such Debt have been (or concurrently with the making
of the initial Loans will be) terminated, and (iv) that the Company and its
Subsidiaries leases the real property necessary to operate the Founding
Companies pursuant to leases acceptable to the Agent, (c) Winternitz shall have
completed a review of the Equipment of the Founding Companies, (d) the Effective
Date shall occur on or before June 15, 1998 and (e) all of the following, each
duly executed and dated the Effective Date (or such other date as shall be
satisfactory to the Agent), in form and substance satisfactory to the Agent, and
each (except for the Notes, of which only the originals shall be signed) in
sufficient number of signed counterparts to provide one for each Bank:

11.1.1 Notes. The Notes.

11.1.2 Resolutions. Certified copies of resolutions of the Board of
Directors of the Company authorizing or ratifying the execution, delivery and
performance by the Company of this Agreement, the Notes and the other Loan
Documents to which the Company is a party; and certified copies of resolutions
of the Board of Directors of each Subsidiary (if any) which is to execute and
deliver any document pursuant to Section 11.1.5, 11.1.6 or 11.1.7 authorizing or
ratifying the execution, delivery and performance by such Subsidiary of each
Loan Document to which such Subsidiary is a party.

11.1.3 Consents, etc. Certified copies of all documents evidencing
any necessary corporate action, consents and governmental approvals (if any)
required for the execution, delivery and performance by the Company and each
Subsidiary of the documents referred to in this Section 11.

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<PAGE>

11.1.4 Incumbency and Signature Certificates. A certificate of the
Secretary or an Assistant Secretary of the Company and each Subsidiary of the
Company as of the Effective Date certifying the names of the officer or officers
of such entity authorized to sign the Loan Documents to which such entity is a
party, together with a sample of the true signature of each such officer (it
being understood that the Agent and each Bank may conclusively rely on each such
certificate until formally advised by a like certificate of any changes
therein).

11.1.5 Guaranty. The Guaranty executed by each Subsidiary as of the
Effective Date.

11.1.6 Security Agreement. The Security Agreement executed by the
Company and each Subsidiary (if any) as of the Effective Date, together with
evidence, satisfactory to the Agent, that all filings necessary to perfect the
Agent's Lien on any collateral granted under the Security Agreement have been
duly made and are in full force and effect.

11.1.7 Pledge Agreements. The Company Pledge Agreement and, with
respect to any Subsidiary that as of the Effective Date has one or more
Subsidiaries, a Subsidiary Pledge Agreement, in each case together with all
stock certificates, stock powers and other items required to be delivered in
connection therewith.

11.1.8 Opinion of Counsel for the Company and the Guarantors. The
opinion of Hiscock & Barclay, counsel to the Company and the Guarantors.

11.1.9 Borrowing Base Certificate. A borrowing base certificate
substantially in the form of Exhibit H, together with an aging of Receivables
and specifying Equipment by equipment number, location, vehicle identification
number and a brief description.

11.1.10 Other. Such other documents as the Agent or any Bank may
reasonably request.

11.2 Conditions. The obligation (a) of each Bank to make each Loan
and (b) of each Issuing Bank to issue each Letter of Credit is subject to the
following further conditions precedent that:

11.2.1 Compliance with Warranties, No Default, etc. Both
before and after giving effect to any borrowing and the issuance of any Letter
of Credit (but, if any Event of Default of the nature referred to in Section
12.1.2 shall have occurred with respect to any other Debt, without giving effect
to the

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application, directly or indirectly, of the proceeds thereof) the following
statements shall be true and correct:

(a) the representations and warranties of the Company and
the Guarantors set forth in this Agreement (excluding Section 9.6)
and the other Loan Documents shall be true and correct in all
material respects with the same effect as if then made (except to the
extent stated to relate to an earlier date, in which case such
representations and warranties shall be true and correct in all
material respects as of such earlier date);

(b) except as disclosed by the Company to the Agent and the
Banks pursuant to Section 9.6,

(i) no litigation (including derivative actions),
arbitration proceeding, labor controversy or governmental
investigation or proceeding shall be pending or, to the
knowledge of the Company, threatened against the Company or
any of its Subsidiaries which might reasonably be expected
to have a Material Adverse Effect or which purports to
affect the legality, validity or enforceability of this
Agreement, the Notes or any other Loan Document; and

(ii) no development shall have occurred in any
litigation (including derivative actions), arbitration
proceeding, labor controversy or governmental investigation
or proceeding disclosed pursuant to Section 9.6 which might
reasonably be expected to have a Material Adverse Effect;
and

(c) no Event of Default or Unmatured Event of Default shall
have then occurred and be continuing, and neither the Company nor any
of its Subsidiaries shall be in violation of any law or governmental
regulation or court order or decree where such violation or
violations singly or in the aggregate might reasonably be expected to
have a Material Adverse Effect; and

(d) there shall have been no change in the operations,
financial condition or prospects of the Company and its Subsidiaries
or in the market for syndicated loans that might reasonably be
expected to have a Material Adverse Effect.

11.2.2 Confirmatory Certificate. If requested by the Agent
or any Bank, the Agent shall have received (in sufficient

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<PAGE>

counterparts to provide one to each Bank) a certificate dated the date of such
requested Loan or Letter of Credit and signed by a duly authorized
representative of the Company as to the matters set out in Section 11.2.1 (it
being understood that each request by the Company for the making of a Loan or
the issuance of a Letter of Credit shall be deemed to constitute a warranty by
the Company that the conditions precedent set forth in Section 11.2.1 will be
satisfied at the time of the making of such Loan or the issuance of such Letter
of Credit), together with such other documents as the Agent or any Bank may
reasonably request in support thereof.

SECTION 12 EVENTS OF DEFAULT AND THEIR EFFECT.

12.1 Events of Default. Each of the following shall constitute an
Event of Default under this Agreement:

12.1.1 Non-Payment of the Loans, etc. Default in the payment when due
of the principal of any Loan; or default, and continuance thereof for five days,
in the payment when due of any interest, fee, reimbursement obligation with
respect to any Letter of Credit or other amount payable by the Company hereunder
or under any other Loan Document.

12.1.2 Non-Payment of Other Debt. Any default shall occur under the
terms applicable to any Debt of the Company or any Subsidiary in an aggregate
amount (for all such Debt so affected) exceeding $250,000 and such default shall
(a) consist of the failure to pay such Debt when due (subject to any applicable
grace period), whether by acceleration or otherwise, or (b) accelerate the
maturity of such Debt or permit the holder or holders thereof, or any trustee or
agent for such holder or holders, to cause such Debt to become due and payable
prior to its expressed maturity.

12.1.3 Other Material Obligations. Default in the payment when due,
or in the performance or observance of, any material obligation of, or condition
agreed to by, the Company or any Subsidiary with respect to any material
purchase or lease of goods or services where such default, singly or in the
aggregate with other such defaults might reasonably be expected to have a
Material Adverse Effect (except only to the extent that the existence of any
such default is being contested by the Company or such Subsidiary in good faith
and by appropriate proceedings and appropriate reserves have been made in
respect of such default).

12.1.4 Bankruptcy, Insolvency, etc. The Company or any Subsidiary
becomes insolvent or generally fails to pay, or admits

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in writing its inability or refusal to pay, debts as they become due; or the
Company or any Subsidiary applies for, consents to, or acquiesces in the
appointment of a trustee, receiver or other custodian for the Company or such
Subsidiary or any property thereof, or makes a general assignment for the
benefit of creditors; or, in the absence of such application, consent or
acquiescence, a trustee, receiver or other custodian is appointed for the
Company or any Subsidiary or for a substantial part of the property of any
thereof and is not discharged within 60 days; or any bankruptcy, reorganization,
debt arrangement, or other case or proceeding under any bankruptcy or insolvency
law, or any dissolution or liquidation proceeding (except the voluntary
dissolution, not under any bankruptcy or insolvency law, of a Subsidiary), is
commenced in respect of the Company or any Subsidiary, and if such case or
proceeding is not commenced by the Company or such Subsidiary, it is consented
to or acquiesced in by the Company or such Subsidiary, or remains for 60 days
undismissed; or the Company or any Subsidiary takes any corporate action to
authorize, or in furtherance of, any of the foregoing.

12.1.5 Non-Compliance with Provisions of This Agreement. (a) Failure
by the Company to comply with or to perform any covenant set forth in Sections
10.6 through 10.11, 10.14 or 10.17 through 10.20; or (b) failure by the Company
to comply with or to perform any other provision of this Agreement (and not
constituting an Event of Default under any of the other provisions of this
Section 12) and continuance of such failure described in this clause (b) for 30
days (or, in the case of Section 10.13, five Business Days) after notice thereof
to the Company from the Agent, any Bank or the holder of any Note.

12.1.6 Warranties. Any warranty made by the Company herein is
breached or is false or misleading in any material respect, or any schedule,
certificate, financial statement, report, notice or other writing furnished by
the Company to the Agent or any Bank in connection herewith is false or
misleading in any material respect on the date as of which the facts therein set
forth are stated or certified.

12.1.7 Pension Plans. (i) Institution of any steps by the Company or
any other Person to terminate a Pension Plan if as a result of such termination
the Company could be required to make a contribution to such Pension Plan, or
could incur a liability or obligation to such Pension Plan, in excess of
$250,000; (ii) a contribution failure occurs with respect to any Pension Plan
sufficient to give rise to a Lien under section 302(f) of ERISA; or (iii) there
shall occur any withdrawal or partial withdrawal from a Multiemployer Pension
Plan and the withdrawal liability (without unaccrued interest) to Multiemployer
Pension Plans as a

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result of such withdrawal (including any outstanding withdrawal liability that
the Company and the Controlled Group have incurred on the date of such
withdrawal) exceeds $250,000.

12.1.8 Judgments. Final judgments which exceed an aggregate of
$250,000 shall be rendered against the Company, or any Subsidiary and shall not
have been paid, discharged or vacated or had execution thereof stayed pending
appeal within 30 days after entry or filing of such judgments.

12.1.9 Invalidity of Guaranty, etc. The Guaranty shall cease to be in
full force and effect with respect to any Guarantor, any Guarantor shall fail
(subject to any applicable grace period) to comply with or to perform any
applicable provision of the Guaranty, or any Guarantor (or any Person by,
through or on behalf of such Guarantor) shall contest in any manner the
validity, binding nature or enforceability of the Guaranty with respect to such
Guarantor.

12.1.10 Invalidity of Collateral Documents, etc. Any Collateral
Document shall cease to be in full force and effect with respect to the Company
or any Guarantor, the Company or any Guarantor shall fail (subject to any
applicable grace period) to comply with or to perform any applicable provision
of any Collateral Document to which such entity is a party, or the Company or
any Guarantor (or any Person by, through or on behalf of the Company or such
Guarantor) shall contest in any manner the validity, binding nature or
enforceability of any Collateral Document.

12.1.11 Change in Control. (a) Any Person or group of Persons (within
the meaning of Section 13 or 14 of the Securities Exchange Act of 1934, but
excluding the executive managers of the Company as of the Effective Date) shall
acquire beneficial ownership (within the meaning of Rule 13d-3 promulgated under
such Act) of 30% or more of the outstanding shares of common stock of the
Company; (b) during any 24-month period, individuals who at the beginning of
such period constituted the Company's Board of Directors (together with any new
directors whose election by the Company's Board of Directors or whose nomination
for election by the Company's shareholders was approved by a vote of at least
two-thirds of the directors who either were directors at beginning of such
period or whose election or nomination was previously so approved) cease for any
reason to constitute a majority of the Board of Directors of the Company; (c) a
period of 60 consecutive days shall have elapsed during which any of the
individuals named in Schedule 12.1.11A shall have ceased to hold executive
offices with the Company at least equal in seniority to such individual's
present offices, as set out in such Schedule

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12.1.11, excluding any such individual who has been replaced by another
individual or individuals reasonably satisfactory to the Required Banks (it
being understood that any such replacement individual shall be deemed added to
Schedule 12.1.11 on the date of approval thereof by the Required Banks); or (d)
a period of 60 consecutive days shall have elapsed during which all of the
individuals named in Schedule 12.1.11B shall have ceased to be members of the
Company's Board of Directors.

12.2 Effect of Event of Default. If any Event of Default described in
Section 12.1.4 shall occur, the Commitments (if they have not theretofore
terminated) shall immediately terminate and the Notes and all other obligations
hereunder shall become immediately due and payable and the Company shall become
immediately obligated to deliver to the Agent cash collateral in an amount equal
to the outstanding face amount of all Letters of Credit, all without
presentment, demand, protest or notice of any kind; and, if any other Event of
Default shall occur and be continuing, the Agent (upon written request of the
Required Banks) shall declare the Commitments (if they have not theretofore
terminated) to be terminated and/or declare all Notes and all other obligations
hereunder to be due and payable and/or demand that the Company immediately
deliver to the Agent cash collateral in amount equal to the outstanding face
amount of all Letters of Credit, whereupon the Commitments (if they have not
theretofore terminated) shall immediately terminate and/or all Notes and all
other obligations hereunder shall become immediately due and payable and/or the
Company shall immediately become obligated to deliver to the Agent cash
collateral in an amount equal to the face amount of all Letters of Credit, all
without presentment, demand, protest or notice of any kind. The Agent shall
promptly advise the Company of any such declaration, but failure to do so shall
not impair the effect of such declaration. Notwithstanding the foregoing, the
effect as an Event of Default of any event described in Section 12.1.1 or
Section 12.1.4 may be waived by the written concurrence of all of the Banks, and
the effect as an Event of Default of any other event described in this Section
12 may be waived by the written concurrence of the Required Banks. Any cash
collateral delivered hereunder shall be held by the Agent (without liability for
interest thereon) and applied to obligations arising in connection with any
drawing under a Letter of Credit. After the expiration or termination of all
Letters of Credit, such cash collateral shall be applied by the Agent to any
remaining obligations hereunder and any excess shall be delivered to the Company
or as a court of competent jurisdiction may elect.

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SECTION 13 THE AGENT.

13.1 Appointment and Authorization. (a) Each Bank hereby irrevocably
(subject to Section 13.9) appoints, designates and authorizes the Agent to take
such action on its behalf under the provisions of this Agreement and each other
Loan Document and to exercise such powers and perform such duties as are
expressly delegated to it by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, the Agent shall not have any duties or
responsibilities except those expressly set forth herein, nor shall the Agent
have or be deemed to have any fiduciary relationship with any Bank, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Agent.

(b) Each Issuing Bank shall act on behalf of the Banks with respect
to any Letters of Credit issued by it and the documents associated therewith.
Each Issuing Bank shall have all of the benefits and immunities (i) provided to
the Agent in this Section 13 with respect to any acts taken or omissions
suffered by such Issuing Bank in connection with Letters of Credit issued by it
or proposed to be issued by it and the applications and agreements for letters
of credit pertaining to such Letters of Credit as fully as if the term "Agent",
as used in this Section 13, included such Issuing Bank with respect to such acts
or omissions and (ii) as additionally provided in this Agreement with respect to
the Issuing Banks.

13.2 Delegation of Duties. The Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.

13.3 Liability of Agent. None of the Agent-Related Persons shall (i)
be liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (ii) be responsible in any manner to any of the Banks for any recital,
statement, representation or warranty made by the Company or any Subsidiary or
Affiliate of the Company, or any officer thereof, contained in this Agreement or
in any other Loan Document, or in any certificate, report, statement or other

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document referred to or provided for in, or received by the Agent under or in
connection with, this Agreement or any other Loan Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of the Company or any other party to
any Loan Document to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Bank to ascertain or
to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or to
inspect the properties, books or records of the Company or any of the Company's
Subsidiaries or Affiliates.

13.4 Reliance by Agent. The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons, and upon advice and statements of legal counsel (including counsel
to the Company), independent accountants and other experts selected by the
Agent. The Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Banks as it deems appropriate
and, if it so requests, confirmation from the Banks of their obligation to
indemnify the Agent against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such action. The
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Loan Document in accordance with a
request or consent of the Required Banks and such request and any action taken
or failure to act pursuant thereto shall be binding upon all of the Banks.

13.5 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Event of Default or Unmatured Event
of Default except with respect to defaults in the payment of principal, interest
and fees required to be paid to the Agent for the account of the Banks, unless
the Agent shall have received written notice from a Bank or the Company
referring to this Agreement, describing such Event of Default or Unmatured Event
of Default and stating that such notice is a "notice of default". The Agent will
notify the Banks of its receipt of any such notice. The Agent shall take such
action with respect to such Event of Default or Unmatured Event of Default as
may be requested by the Required Banks in accordance with Section 12; provided,
however, that unless and

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until the Agent has received any such request, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Event of Default or Unmatured Event of Default as it shall deem
advisable or in the best interest of the Banks.

13.6 Credit Decision. Each Bank acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by the Agent hereafter taken, including any review of the affairs of the
Company and its Subsidiaries, shall be deemed to constitute any representation
or warranty by any Agent-Related Person to any Bank. Each Bank represents to the
Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of the
Company and its Subsidiaries, and all applicable bank regulatory laws relating
to the transactions contemplated hereby, and made its own decision to enter into
this Agreement and to extend credit to the Company hereunder. Each Bank also
represents that it will, independently and without reliance upon any Agent-
Related Person and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the other
Loan Documents, and to make such investigations as it deems necessary to inform
itself as to the business, prospects, operations, property, financial and other
condition and creditworthiness of the Company. Except for notices, reports and
other documents expressly herein required to be furnished to the Banks by the
Agent, the Agent shall not have any duty or responsibility to provide any Bank
with any credit or other information concerning the business, prospects,
operations, property, financial or other condition or creditworthiness of the
Company which may come into the possession of any of the Agent-Related Persons.

13.7 Indemnification. Whether or not the transactions contemplated
hereby are consummated, the Banks shall indemnify upon demand the Agent-Related
Persons (to the extent not reimbursed by or on behalf of the Company and without
limiting the obligation of the Company to do so), pro rata, from and against any
and all Indemnified Liabilities; provided, however, that no Bank shall be liable
for any payment to the Agent-Related Person of any portion of the Indemnified
Liabilities resulting solely from such Person's gross negligence or willful
misconduct. Without limitation of the foregoing, each Bank shall reimburse the
Agent upon demand for its ratable share of any costs or out-of-pocket expenses
(including reasonable fees of attorneys

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for the Agent (including the allocable costs of internal legal services and all
disbursements of internal counsel)) incurred by the Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Loan Document, or any document contemplated by or referred to herein,
to the extent that the Agent is not reimbursed for such expenses by or on behalf
of the Company. The undertaking in this Section shall survive repayment of the
Loans, cancellation of the Notes, any foreclosure under, or any modification,
release or discharge of, any or all of the Collateral Documents, any termination
of this Agreement and the resignation or replacement of the Agent.

For the purposes of this Section 13.7, "Indemnified Liabilities"
shall mean: any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, charges, expenses and disbursements (including
reasonable fees of attorneys for the Agent (including the allocable costs of
internal legal services and all disbursements of internal counsel)) of any kind
or nature whatsoever which may at any time (including at any time following
repayment of the Loan and the termination, resignation or replacement of the
Agent or the replacement of any Bank) be imposed on, incurred by or asserted
against any Agent-Related Person in any way relating to or arising out of this
Agreement or any document contemplated by or referred to herein, or the
transactions contemplated hereby, or any action taken or omitted by any such
Person under or in connection with any of the foregoing, including with respect
to any investigation, litigation or proceeding (including (a) any case, action
or proceeding before any court or other governmental authority relating to
bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution,
winding-up or relief of debtors, or (b) any general assignment for the benefit
of creditors, composition, marshalling of assets for creditors, or other,
similar arrangement in respect of its creditors generally or any substantial
portion of its creditors; undertaken under U.S. Federal, state or foreign law,
including the Bankruptcy Code, and including any appellate proceeding) related
to or arising out of this Agreement or the Commitments or the use of the
proceeds thereof, whether or not any Agent-Related Person, any Bank or any of
their respective officers, directors, employees, counsel, agents or

13.8 Agent in Individual Capacity. BofA and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally

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engage in any kind of banking, trust, financial advisory, underwriting or other
business with the Company and its Subsidiaries and Affiliates as though BofA
were not the Agent hereunder and without notice to or consent of the Banks. The
Banks acknowledge that, pursuant to such activities, BofA or its Affiliates may
receive information regarding the Company or its Affiliates (including
information that may be subject to confidentiality obligations in favor of the
Company or such Subsidiary) and acknowledge that the Agent shall be under no
obligation to provide such information to them. With respect to their Loans,
BofA and its Affiliates shall have the same rights and powers under this
Agreement as any other Bank and may exercise the same as though BofA were not
the Agent, and the terms "Bank" and "Banks" include BofA and its Affiliates, to
the extent applicable, in their individual capacities.

13.9 Successor Agent; Assignment of Agency. The Agent may, and at the
request of the Required Banks shall, resign as Agent upon 30 days' notice to the
Banks. If the Agent resigns under this Agreement, the Required Banks shall, with
(so long as no Event of Default exists) the consent of the Company (which shall
not be unreasonably withheld or delayed), appoint from among the Banks a
successor agent for the Banks. If no successor agent is appointed prior to the
effective date of the resignation of the Agent, the Agent may appoint, after
consulting with the Banks and the Company, a successor agent from among the
Banks. Upon the acceptance of its appointment as successor agent hereunder, such
successor agent shall succeed to all the rights, powers and duties of the
retiring Agent and the term "Agent" shall mean such successor agent, and the
retiring Agent's appointment, powers and duties as Agent shall be terminated.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Section 13 and Sections 14.6 and 14.13 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement. If no successor agent has accepted appointment as Agent by the date
which is 30 days following a retiring Agent's notice of resignation, the
retiring Agent's resignation shall nevertheless thereupon become effective and
the Banks shall perform all of the duties of the Agent hereunder until such
time, if any, as the Required Banks appoint a successor agent as provided for
above. Notwithstanding the foregoing, however, BofA may not be removed as the
Agent at the request of the Required Banks unless BofA shall also simultaneously
be replaced as an "Issuing Bank" hereunder pursuant to documentation in form and
substance reasonably satisfactory to BofA.

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13.10 Withholding Tax.

(a) If any Bank is a "foreign corporation, partnership or
trust" within the meaning of the Code and such Bank claims exemption
from, or a reduction of, U.S. withholding tax under Sections 1441 or
1442 of the Code, such Bank agrees to deliver to the Agent:

(i) if such Bank claims an exemption from, or a
reduction of, withholding tax under a United States tax
treaty, properly completed Internal Revenue Service ("IRS")
Forms 1001 and W-8 before the payment of any interest in
the first calendar year and before the payment of any
interest in each third succeeding calendar year during
which interest may be paid under this Agreement;

(ii) if such Bank claims that interest paid under
this Agreement is exempt from United States withholding tax
because it is effectively connected with a United States
trade or business of such Bank, two properly completed and
executed copies of IRS Form 4224 before the payment of any
interest is due in the first taxable year of such Bank and
in each succeeding taxable year of such Bank during which
interest may be paid under this Agreement, and IRS Form
W-9; and

(iii) such other form or forms as may be required
under the Code or other laws of the United States as a
condition to exemption from, or reduction of, United States
withholding tax. Such Bank agrees to promptly notify the
Agent of any change in circumstances which would modify or
render invalid any claimed exemption or reduction.

(b) If any Bank claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS
Form 1001 and such Bank sells, assigns, grants a participation in, or
otherwise transfers all or part of the obligations of the Company to
such Bank, such Bank agrees to notify the Agent of the percentage
amount in which it is no longer the beneficial owner of such
obligations of the Company hereunder. To the extent of such
percentage amount, the Agent will treat such Bank's IRS Form 1001 as
no longer valid.

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(c) If any Bank claiming exemption from United States
withholding tax by filing IRS Form 4224 with the Agent sells,
assigns, grants a participation in, or otherwise transfers all or
part of the obligations of the Company to such Bank hereunder, such
Bank agrees to undertake sole responsibility for complying with the
withholding tax requirements imposed by Sections 1441 and 1442 of the
Code.

(d) If any Bank is entitled to a reduction in the
applicable withholding tax, the Agent may withhold from any interest
payment to such Bank an amount equivalent to the applicable
withholding tax after taking into account such reduction. If the
forms or other documentation required by subsection (a) of this
Section are not delivered to the Agent, then the Agent may withhold
from any interest payment to such Bank not providing such forms or
other documentation an amount equivalent to the applicable
withholding tax.

(e) If the IRS or any other governmental authority of the
United States or any other jurisdiction asserts a claim that the
Agent did not properly withhold tax from amounts paid to or for the
account of any Bank (because the appropriate form was not delivered
or was not properly executed, or because such Bank failed to notify
the Agent of a change in circumstances which rendered the exemption
from, or reduction of, withholding tax ineffective, or for any other
reason) such Bank shall indemnify the Agent fully for all amounts
paid, directly or indirectly, by the Agent as tax or otherwise,
including penalties and interest, and including any taxes imposed by
any jurisdiction on the amounts payable to the Agent under this
Section, together with all costs and expenses (including reasonable
fees of attorneys for the Agent (including the allocable costs of
internal legal services and all disbursements of internal counsel)).
The obligation of the Banks under this subsection shall survive the
repayment of the Loans, cancellation of the Notes, any termination of
this Agreement and the resignation or replacement of the Agent.

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13.11 Collateral Matters. The Banks irrevocably authorize the Agent,
at its option and in its discretion, to release any Lien granted to or held by
the Agent under any Collateral Document (i) upon termination of the Commitments
and payment in full of all Loans and all other obligations of the Company
hereunder and the expiration or termination of all Letters of Credit; (ii)
constituting property sold or to be sold or disposed of as part of or in
connection with any disposition permitted hereunder; or (iii) subject to Section
14.1, if approved, authorized or ratified in writing by the Required Banks. Upon
request by the Agent at any time, the Banks will confirm in writing the Agent's
authority to release particular types or items of collateral pursuant to this
Section 13.11.

SECTION 14 GENERAL.

14.1 Waiver; Amendments. No delay on the part of the Agent, any Bank
or any other holder of a Note in the exercise of any right, power or remedy
shall operate as a waiver thereof, nor shall any single or partial exercise by
any of them of any right, power or remedy preclude other or further exercise
thereof, or the exercise of any other right, power or remedy. No amendment,
modification or waiver of, or consent with respect to, any provision of this
Agreement or the Notes shall in any event be effective unless the same shall be
in writing and signed and delivered by Banks having an aggregate Percentage of
not less than the aggregate Percentage expressly designated herein with respect
thereto or, in the absence of such designation as to any provision of this
Agreement or the Notes, by the Required Banks, and then any such amendment,
modification, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given. No amendment, modification, waiver
or consent shall change the Percentage of any Bank without the consent of such
Bank. No amendment, modification, waiver or consent shall (i) extend or increase
the amount of the Commitments, (ii) extend the date for payment of any principal
of or interest on the Loans or any fees payable hereunder, (iii) reduce the
principal amount of any Loan, the rate of interest thereon or any fees payable
hereunder, (iv) release the Guaranty (other than with respect to a Guarantor
which ceases to be a Subsidiary as a result of a transaction permitted
hereunder) or all or any substantial part of the collateral granted under the
Collateral Documents or (v) reduce the aggregate Percentage required to effect
an amendment, modification, waiver or consent without, in each case, the consent
of all Banks. No provisions of Section 13 or other provision of this Agreement
affecting the Agent in its capacity as such shall be amended, modified or waived
without the consent of the Agent. No provision of this Agreement relating to the
rights or duties of an Issuing Bank in

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its capacity as such shall be amended, modified or waived without the consent of
such Issuing Bank.

14.2 Confirmations. The Company and each holder of a Note agree from
time to time, upon written request received by it from the other, to confirm to
the other in writing (with a copy of each such confirmation to the Agent) the
aggregate unpaid principal amount of the Loans then outstanding under such Note.

14.3 Notices. Except as otherwise provided in Section 2.2, all
notices hereunder shall be in writing (including facsimile transmission) and
shall be sent to the applicable party at its address shown on Schedule 14.3 or
at such other address as such party may, by written notice received by the other
parties, have designated as its address for such purpose. Notices sent by
facsimile transmission shall be deemed to have been given when sent; notices
sent by mail shall be deemed to have been given three Business Days after the
date when sent by registered or certified mail, postage prepaid; and notices
sent by hand delivery or overnight courier service shall be deemed to have been
given when received. For purposes of Section 2.2, the Agent shall be entitled to
rely on telephonic instructions from any person that the Agent in good faith
believes is an authorized officer or employee of the Company, and the Company
shall hold the Agent and each Bank harmless from any loss, cost or expense
resulting from any such reliance.

14.4 Computations. Where the character or amount of any asset or
liability or item of income or expense is required to be determined, or any
consolidation or other accounting computation is required to be made, for the
purpose of this Agreement, such determination or calculation shall, to the
extent applicable and except as otherwise specified in this Agreement, be made
in accordance with GAAP, consistently applied; provided that if the Company
notifies the Agent that the Company wishes to amend any covenant in Section 10
to eliminate or to take into account the effect of any change in GAAP on the
operation of such covenant (or if the Agent notifies the Company that the
Required Banks wish to amend Section 10 for such purpose), then the Company's
compliance with such covenant shall be determined on the basis of GAAP in effect
immediately before the relevant change in GAAP became effective, until either
such notice is withdrawn or such covenant is amended in a manner satisfactory to
the Company and the Required Banks.

14.5 Regulation U. Each Bank represents that it in good faith is not
relying, either directly or indirectly, upon any Margin Stock as collateral
security for the extension or maintenance by it of any credit provided for in
this Agreement.

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14.6 Costs, Expenses and Taxes. The Company agrees to pay on demand
all reasonable out-of-pocket costs and expenses of Agent-Related Persons
(including the reasonable accounting fees, appraisal fees and fees and charges
of counsel for the Agent- Related Persons and of local counsel, if any, who may
be retained by said counsel) in connection with the preparation, execution,
delivery and administration of this Agreement, the other Loan Documents and all
other documents provided for herein or delivered or to be delivered hereunder or
in connection herewith (including any amendments, supplements or waivers to any
Loan Documents), and all reasonable out-of-pocket costs and expenses (including
reasonable accounting fees, appraisal fees and attorneys' fees, court costs and
other legal expenses and allocated costs of staff counsel) incurred by the
Agent-Related Persons and each Bank after an Event of Default in connection with
the enforcement of this Agreement, the other Loan Documents or any such other
documents. Each Bank agrees to reimburse the Agent for such Bank's pro rata
share (based on its respective Percentage) of any such costs and expenses of the
Agent not paid by the Company. In addition, the Company agrees to pay, and to
save the Agent and the Banks harmless from all liability for, (a) any stamp or
other taxes (excluding income taxes and franchise taxes based on net income)
which may be payable in connection with the execution and delivery of this
Agreement, the borrowings hereunder, the issuance of the Notes or the execution
and delivery of any other Loan Document or any other document provided for
herein or delivered or to be delivered hereunder or in connection herewith and
(b) any fees of the Company's auditors in connection with any reasonable
exercise by the Agent and the Banks of their rights pursuant to Section 10.2.
All obligations provided for in this Section 14.6 shall survive repayment of the
Loans, cancellation of the Notes and any termination of this Agreement.

14.7 Subsidiary References. The provisions of this Agreement relating
to Subsidiaries shall apply only during such times as the Company has one or
more Subsidiaries.

14.8 Captions. Section captions used in this Agreement are for
convenience only and shall not affect the construction of this Agreement.

14.9 Assignments; Participations.

14.9.1 Assignments. Any Bank may, with the prior written consents of
the Company and the Agent (which consents shall not be unreasonably delayed or
withheld), at any time assign and delegate to one or more commercial banks or
other Persons (any Person to whom such an assignment and delegation is to be
made being herein called an "Assignee"), all or any fraction of such

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Bank's Loans and Commitments (which assignment and delegation shall be of a
constant, and not a varying, percentage of all the assigning Bank's Loans and
Commitments) in a minimum aggregate amount equal to the lesser of (i) the
assigning Bank's remaining aggregate Commitments and (ii) $5,000,000; provided,
however, that (a) no assignment and delegation may be made to any Person if, at
the time of such assignment and delegation, the Company would be obligated to
pay any greater amount under Section 7.6 or Section 8 to the Assignee than the
Company is then obligated to pay to the assigning Bank under such Sections (and
if any assignment is made in violation of the foregoing, the Company will not be
required to pay the incremental amounts) and (b) the Company and the Agent shall
be entitled to continue to deal solely and directly with such Bank in connection
with the interests so assigned and delegated to an Assignee until the date when
all of the following conditions shall have been met:

(x) five Business Days (or such lesser period of time as
the Agent and the assigning Bank shall agree) shall have passed after
written notice of such assignment and delegation, together with
payment instructions, addresses and related information with respect
to such Assignee, shall have been given to the Company and the Agent
by such assigning Bank and the Assignee,

(y) the assigning Bank and the Assignee shall have executed
and delivered to the Company and the Agent an assignment agreement
substantially in the form of Exhibit G (an "Assignment Agreement"),
together with any documents required to be delivered thereunder,
which Assignment Agreement shall have been accepted by the Agent, and

(z) the assigning Bank or the Assignee shall have paid the
Agent a processing fee of $3,500.

From and after the date on which the conditions described above have been met,
(x) such Assignee shall be deemed automatically to have become a party hereto
and, to the extent that rights and obligations hereunder have been assigned and
delegated to such Assignee pursuant to such Assignment Agreement, shall have the
rights and obligations of a Bank hereunder, and (y) the assigning Bank, to the
extent that rights and obligations hereunder have been assigned and delegated by
it pursuant to such Assignment Agreement, shall be released from its obligations
hereunder. Within five Business Days after effectiveness of any assignment and
delegation, the Company shall execute and deliver to the Agent (for delivery to
the Assignee and the Assignor, as applicable) a new Note in the principal amount
of the Assignee's Loan Commitment and, if the assigning Bank has retained a Loan
Commitment hereunder, a replacement Note in the principal amount

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<PAGE>

of the Loan Commitment retained by the assigning Bank (such Note to be in
exchange for, but not in payment of, the predecessor Note held by such assigning
Bank). Each such Note shall be dated the effective date of such assignment. The
assigning Bank shall mark the predecessor Note "exchanged" and deliver it to the
Company. Accrued interest on that part of the predecessor Note being assigned
shall be paid as provided in the Assignment Agreement. Accrued interest and fees
on that part of the predecessor Note not being assigned shall be paid to the
assigning Bank. Accrued interest and accrued fees shall be paid at the same time
or times provided in the predecessor Note and in this Agreement. Any attempted
assignment and delegation not made in accordance with this Section 14.9.1 shall
be null and void.

Notwithstanding the foregoing provisions of this Section 14.9.1 or
any other provision of this Agreement, any Bank may at any time assign all or
any portion of its Loans and its Note to a Federal Reserve Bank (but no such
assignment shall release any Bank from any of its obligations hereunder).

14.9.2 Participations. Any Bank may at any time sell to one or more
commercial banks or other Persons participating interests in any Loan owing to
such Bank, the Note held by such Bank, the Commitments of such Bank, the direct
or participation interest of such Bank in any Letter of Credit or any other
interest of such Bank hereunder (any Person purchasing any such participating
interest being herein called a "Participant"); provided that any Bank selling
any such participating interest shall give notice thereof to the Company. In the
event of a sale by a Bank of a participating interest to a Participant, (x) such
Bank shall remain the holder of its Note for all purposes of this Agreement, (y)
the Company and the Agent shall continue to deal solely and directly with such
Bank in connection with such Bank's rights and obligations hereunder and (z) all
amounts payable by the Company shall be determined as if such Bank had not sold
such participation and shall be paid directly to such Bank. No Participant
(other than a Participant which (i) is an affiliate of the participating Bank
and (ii) holds a 100% participation in the interests of such Bank hereunder)
shall have any direct or indirect voting rights hereunder except with respect to
any of the events (excluding the events described in clause (v) thereof)
described in the third to last sentence of Section 14.1. Each Bank agrees to
incorporate the requirements of the preceding sentence into each participation
agreement which such Bank enters into with any Participant. The Company agrees
that if amounts outstanding under this Agreement and the Notes are due and
payable (as a result of acceleration or otherwise), each Participant shall be
deemed to have the right of setoff in respect of its participating interest in
amounts owing under this Agreement, any Note and with respect to any Letter of
Credit to

71
<PAGE>

the same extent as if the amount of its participating interest were owing
directly to it as a Bank under this Agreement or such Note; provided that such
right of setoff shall be subject to the obligation of each Participant to share
with the Banks, and the Banks agree to share with each Participant, as provided
in Section 7.5. The Company also agrees that each Participant shall be entitled
to the benefits of Section 7.6 and Section 8 as if it were a Bank (provided that
no Participant shall receive any greater compensation pursuant to Section 7.6 or
Section 8 than would have been paid to the participating Bank if no
participation had been sold).

14.10 Governing Law. This Agreement and each Note shall be a contract
made under and governed by the internal laws of the State of Illinois. Whenever
possible each provision of this Agreement shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement. All obligations of the Company and rights of the Agent, the Banks and
any other holder of a Note expressed herein or in any other Loan Document shall
be in addition to and not in limitation of those provided by applicable law.

14.11 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts and
each such counterpart shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same Agreement. When
counterparts executed by all of the parties hereto shall have been lodged with
the Agent (or, in the case of any Bank as to which an executed counterpart shall
not have been so lodged, the Agent shall have received confirmation from such
Bank of execution of a counterpart hereof by such Bank), this Agreement shall
become effective as of the date hereof, and at such time the Agent shall notify
the Company and each Bank.

14.12 Successors and Assigns. This Agreement shall be binding upon
the Company, the Banks and the Agent and their respective successors and
assigns, and shall inure to the benefit of the Company, the Banks and the Agent
and the successors and assigns of the Banks and the Agent.

14.13 Indemnification by the Company.

(a) In consideration of the execution and delivery of this Agreement
by the Agent and the Banks and the agreement to extend the Commitments provided
hereunder, the Company hereby agrees to

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<PAGE>

indemnify, exonerate and hold the Agent, each Bank and each of the officers,
directors, employees, Affiliates and agents of the Agent and each Bank (each a
"Bank Party") free and harmless from and against any and all actions, causes of
action, suits, losses, liabilities, damages and expenses, including reasonable
attorneys' fees and charges and allocated costs of staff counsel (collectively,
for purposes of this Section 14.13, called the "Indemnified Liabilities"),
incurred by the Bank Parties or any of them as a result of, or arising out of,
or relating to (i) any tender offer, merger, purchase of stock, purchase of
assets or other similar transaction financed or proposed to be financed in whole
or in part, directly or indirectly, with the proceeds of any of the Loans, (ii)
the use, handling, release, emission, discharge, transportation, storage,
treatment or disposal of any hazardous substance at any property owned or leased
by the Company or any Subsidiary, (iii) any violation of any Environmental Laws
with respect to conditions at any property owned or leased by the Company or any
Subsidiary or the operations conducted thereon, (iv) the investigation, cleanup
or remediation of offsite locations at which the Company or any Subsidiary or
their respective predecessors are alleged to have directly or indirectly
disposed of hazardous substances or (v) the execution, delivery, performance or
enforcement of this Agreement or any other Loan Document by any of the Bank
Parties, except for any such Indemnified Liabilities arising on account of any
such Bank Party's gross negligence or willful misconduct. If and to the extent
that the foregoing undertaking may be unenforceable for any reason, the Company
hereby agrees to make the maximum contribution to the payment and satisfaction
of each of the Indemnified Liabilities which is permissible under applicable
law. Nothing set forth above shall be construed to relieve any Bank Party from
any obligation it may have under this Agreement.

(b) All obligations provided for in this Section 14.13 shall survive
repayment of the Loans, cancellation of the Notes, any foreclosure under, or any
modification, release or discharge of any or all of the Collateral Documents and
any termination of this Agreement.

14.14 FORUM SELECTION AND CONSENT TO JURISDICTION. ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE
COURTS OF THE STATE OF ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF ILLINOIS; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING
ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE
AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER
PROPERTY MAY BE

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<PAGE>

FOUND. THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION
OF THE COURTS OF THE STATE OF ILLINOIS AND OF THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS FOR THE PURPOSE OF ANY SUCH LITIGATION AS
SET FORTH ABOVE. THE COMPANY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR
WITHOUT THE STATE OF ILLINOIS. THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY
SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT THE COMPANY HAS OR
HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY
LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS
PROPERTY, THE COMPANY HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS
OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

14.15 WAIVER OF JURY TRIAL. EACH OF THE COMPANY, THE AGENT AND EACH
BANK HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY NOTE, ANY OTHER LOAN
DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH
MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING
FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH ANY OF THE FOREGOING,
AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND
NOT BEFORE A JURY.

Delivered at Chicago, Illinois, as of the day and year first above written.

UNITED ROAD SERVICES, INC.

By
--------------------------------------
Title
---------------------------------

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<PAGE>

BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent

By
--------------------------------------
Title
-----------------------------------

BANK OF AMERICA NATIONAL TRUST AND
SAVING ASSOCIATION, as Issuing Bank and
as a Bank

By
--------------------------------------
Title
-----------------------------------

BANKBOSTON, N.A., as a Bank

By
--------------------------------------
Title
-----------------------------------

COMERICA BANK, as a Bank

By
--------------------------------------
Title
-----------------------------------

FLEET NATIONAL BANK, as a Bank

By
--------------------------------------
Title
-----------------------------------

<PAGE>

EXHIBIT 10.11

AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT
---------------------------------------------------

This Amended and Restated Executive Employment Agreement ("AGREEMENT") is
made and entered into as of May 1, 1998 (the "EFFECTIVE DATE") by and between
United Road Services, Inc., a Delaware corporation (the "COMPANY") and Donald
Marr, an individual resident of the State of New York ("EXECUTIVE"), with
reference to the following:

B a c k g r o u n d

A. The Company is a newly formed entity that intends to pursue
consolidation opportunities in the towing services business (the
"BUSINESS").

B. Executive has previously served in senior management capacities in
businesses similar to the Business.

C. The Company now desires to retain the full-time services of Executive
as Chief Financial Officer of the Company, and Executive is willing to
be employed by the Company in that capacity on the terms and conditions
set forth in this Agreement.

Now Therefore, the Company and Executive hereby agree as follows:

1. Employment. The Company hereby employs Executive on the terms set forth
----------
herein and Executive hereby accepts such employment commencing on the Effective
Date and ending February 2, 2001 (the "EMPLOYMENT TERM"), unless sooner
terminated under Section 6 below.

2. Duties. During the period of his employment with the Company hereunder,
------
Executive will be employed as Chief Financial Officer of the Company. Executive
will:

(a) devote his full business time, ability, knowledge and attention,
and give his best effort and skill solely to the Company's business affairs and
interests;

(b) perform such services and assume such duties and responsibilities
appropriate to the positions identified above as well as those which may from
time to time be reasonably assigned to him by the Chief Executive Officer of the
Company or by such other person to whom he may be directed to report by the
Chief Executive Officer or the Board of Directors of the Company; and

(c) in all respects use his best efforts to further, enhance and
develop the Company's business affairs, interests and welfare.

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<PAGE>

3. Compensation. In consideration of Executive's services to the Company
------------
during the Employment Term, the Company will pay Executive a gross base salary
of $75,000 and a bonus of $50,000 per annum during the Employment Term.
Executive's base salary will be paid in equal installments (pro rated for
portions of a pay period) on the Company's regular pay days and the Company will
withhold from such compensation all applicable federal and state income, social
security, and disability and other taxes as required by applicable laws. The
Company may also pay Executive such bonuses as are determined from time to time
by the Board of Directors.

4. Change of Control. In the event of any Change of Control of the Company
-----------------
pursuant to which Executive's employment is terminated either (i) by Executive
or (ii) by the Company (or a successor entity), in either case within ninety
(90) days following the effective date of such Change of Control, then (i) any
and all of Executive's stock options that are unvested as of the effective date
of such Change of Control will become vested immediately prior to such event and
(ii) Executive will receive from the Company an aggregate payment equal to three
(3) times his gross base salary and bonus, payable in accordance with the
provisions of Section 3 above; provided however, that in the event that the
Company determines, in its sole discretion, that any portion of the same
constitutes an excess parachute payment under '280G of the Internal Revenue Code
of 1986, as amended, then the Company will have no obligation to provide such
portion to the Executive. For purposes of this Agreement, a "Change of Control"
means (a) the sale of all or substantially all of the assets of the Company to
any person or entity that, prior to such sale, did not control, was not under
common control with, or was not controlled by, the Company, or (b) a merger or
consolidation or other reorganization in which the Company is not the surviving
entity or becomes owned entirely by another entity, unless at least fifty
percent (50%) of the outstanding voting securities of the surviving or parent
corporation, as the case may be, immediately following such transaction are
beneficially held by such persons and entities in the same proportion as such
persons and entities beneficially held the outstanding voting securities of the
Company immediately prior to such transaction, or (c) the sale or other change
of beneficial ownership of at least fifty percent (50%) of the outstanding
voting securities of the Company to any person or "group" as that term is
defined under the Securities Exchange Act of 1934, as amended; it being agreed,
in any event, that the issuances of shares to the stockholders of the founding
companies consolidating with the Company at the time of the IPO, and the
issuance of shares in the IPO, shall in no event constitute a Change of Control.
For purposes of this Agreement, "Initial Public Offering" or "IPO" means the
Company's first firm commitment underwritten offering of its securities pursuant
to a registration statement under the Securities Act of 1933, as amended.

5. Benefits and Reimbursements.
---------------------------

5.1 Executive will, during the Employment Term, have the right to receive
such benefits as are generally made available to full-time executive officers of
the Company, including the right to participate in any retirement plan or
executive bonus

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<PAGE>

plan that the Company may create. In addition, or inclusive of such benefits,
the Company will provide Executive with the following:

(a) the opportunity to apply for coverage under the Company's medical,
life and disability plans, if any. If the Executive is accepted for coverage
under such plans, the Company will provide to Executive 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.

(b) in addition to normal holidays recognized by the Company,
Executive will be entitled to three weeks paid vacation annually, provided
that any vacation may be taken by Executive at any time Executive deems
appropriate, upon consultation with the Board of Directors, which may
determine that the best interests of the Company require otherwise.

5.2 The Company will reimburse Executive for travel and other out-of-
pocket expenses reasonably incurred by Executive in the performance of his
duties hereunder, provided that all such expenses will be reimbursed only (i)
upon the presentation by Executive to the Company of such documentation as may
be reasonably necessary to substantiate that all such expenses were incurred in
the performance of his duties, and (ii) if such expenses are consistent with all
policies of the Company in effect from time to time as to the kind and amount of
such expenses.

6. Termination of Employment.
-------------------------

6.1 Expiration of the Term of Agreement. This Agreement will terminate
-----------------------------------
automatically upon the expiration of the Employment Term. On or about three
months prior to the date of such termination, the Company will provide Executive
with written notice of non-renewal of this Agreement.

6.2 Death or Permanent Disability of Executive. This Agreement will
------------------------------------------
terminate upon the death or permanent disability of Executive. Executive will
be deemed permanently disabled for the purpose of this Agreement if, in the good
faith determination of the Board of Directors, based on sound medical advice,
Executive has become physically or mentally incapable of performing his duties
hereunder for a continuous period of one hundred eighty (180) days, in which
event Executive will be deemed permanently disabled upon the expiration of such
one hundred eighty (180) day period.

6.3 Executive's Discharge for Cause. The Company will have the right to
-------------------------------
terminate Executive's employment hereunder for "Cause" at any time effective
upon its giving of written notice setting forth with particularity the facts and
circumstances constituting such Cause. For such purposes, "CAUSE" means the
occurrence of one or more of the following: (i) the commission by Executive of
any act materially detrimental to the Company, including fraud, embezzlement,
theft, bad faith, gross negligence, recklessness or willful misconduct; (ii)
incompetence or repeated failure or refusal to

-3-
<PAGE>

perform the duties required by this Agreement and as may be assigned to
Executive by the Chief Executive Officer of the Company or by such other person
to whom Executive is directed to report from time to time by the Chief Executive
Officer or the Board of Directors of the Company; (iii) conviction of a felony
or of any crime of moral turpitude to the extent materially detrimental to the
Company; (iv) any material misrepresentation by Executive to the Company
regarding the operation of the business; or (v) breach of any covenant of this
Agreement, provided that the action or conduct described in clauses (ii) or (v)
above will constitute "Cause" only if such action or conduct continues after the
Company has provided Executive with written notice thereof and a reasonable
opportunity (to be not less than 30 days) to cure the same.

6.4 The Company's Right to Terminate At Will. Subject to the payment to
----------------------------------------
Executive of the applicable severance payments as provided in Section 6.5 below,
the Company will have the right (in addition to its right of termination under
Section 6.1 above), exercisable at any time during the term of this Agreement,
to terminate Executive's employment with the Company without "Cause" (as defined
in Section 6.3 above), immediately upon written notice to Executive.

6.5 Compensation Upon Termination.
-----------------------------

(a) Upon termination of Executive's employment pursuant to this
Section 6, Executive will be entitled to only: (i) the compensation provided
for in Section 3 above for the period of time ending with the date of
termination; (ii) compensation for any unused vacation that Executive may have
accrued, as well as all earned benefits, up to and including the date of
termination; (iii) "COBRA" benefits to the extent required by applicable law;
and (iv) reimbursement for such expenses as Executive may have properly incurred
on behalf of the Company as provided in Section 6.2 above prior to the date of
termination.

(b) If (i) the Company terminates Executive's employment pursuant to
Section 6.4 above or (ii) Edward T. Sheehan ceases to be employed by the Company
for any reason and Executive voluntarily terminates his employment with the
Company within 6 months thereafter, in addition to the amounts payable in
Section 6.5(a) above, Executive will be entitled to receive a severance payment
in an amount equal to the base salary and bonus payable to Executive by the
Company pursuant to Section 3 above for a period of one year. Notwithstanding
anything to the contrary in this Section 6.5(b), Executive's severance payment
from the Company immediately will cease if Executive accepts new employment with
any person, persons, company, partnership, corporation or business of whatever
nature.

(c) The Company will pay the severance payment described in Section
6.5(b) above in periodic payments, in accordance with the payment schedule set
forth in Section 3 above.

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<PAGE>

(d) The payments set forth in this Section 6.5 will fully discharge
all responsibilities of the Company to Executive under this Agreement or
relating to or arising out of the termination of Executive's employment.

7. Unfair Competition by Executive.
-------------------------------

7.1 Executive agrees that all trade secrets, confidential or proprietary
information with respect to the activities and businesses of the Company,
including, without limitation, personnel information, secret processes, know-
how, customer lists, databases, ideas, techniques, processes, inventions
(whether patentable or not), and other technical plans, business plans,
marketing plans, product plans, forecasts, contacts, strategies and information
(collectively "PROPRIETARY INFORMATION") which were learned by Executive in the
course of his employment by the Company, and any other Proprietary Information
received, developed or learned by Executive hereafter in the course of his
future employment by or in association with the Company, are confidential and
will be kept and held in confidence and trust as a fiduciary by Executive.
Executive will not use or disclose Proprietary Information of the Company except
as necessary in the normal course of the business of the Company for its sole
and exclusive benefit, unless Executive is compelled so to disclose under
process of law, in which case Executive will first notify the Company promptly
after receipt of a demand to so disclose.

7.2 During the term of this Agreement and for a period of one year
following its termination for any reason, directly or on behalf of or in
conjunction with any other person, persons, company, partnership, corporation or
business of whatever nature, Executive will not:

(a) engage, as an officer, director, shareholder, owner, partner, joint
venturer, financier, or in a managerial capacity, whether as an employee,
independent contractor, consultant, advisor, or sales representative, in any
corporation, partnership, firm or other entity engaged in the Business that is
within 100 miles of the principal places of business of the Company or any of
the Company's subsidiaries, or of any geographic location in which Executive has
represented the interests of the Company or any of its subsidiaries (the
"Territory");

(b) call upon any prospective acquisition candidate engaged in the
Business on Executive's own behalf or on behalf of any competitor of the Company
or any of its subsidiaries, which candidate was either called upon by the
Company (including its subsidiaries) for the purpose of acquiring such entity.

7.3 Except for activities expressly permitted by the prior written
approval of the Board of Directors of the Company, during the term of this
Agreement, the

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<PAGE>

Executive will not: (a) engage in business independent of the Executive's
employment by the Company that requires any substantial portion of the
Executive's time; (b) serve as an officer, general partner or member in any for-
profit corporation, partnership or firm; (c) serve as a director of any
corporation, partnership or firm having the Business as its principal
enterprise; or (d) directly, indirectly or through any Affiliate, invest in,
participate in or acquire an interest in any entity engaged in the Business. For
purposes of this Agreement, the terms: (i) "Affiliate" means as to any Person,
each other Person that directly or indirectly (through one (1) or more
intermediaries) controls, is controlled by or is under common control with such
person; and (ii) "Person" means an individual, corporation, partnership, limited
liability company, association, joint stock company, trust, associate (as
defined in regulations promulgated by the Securities Exchange Commission) or
other legally recognizable entity. The limitation in this paragraph will not
prohibit any investment by the Executive in securities that are listed on a
public exchange or the National Association of Securities Dealers Automated
Quotation National Market System and issued by a company, firm, corporation,
partnership, trust or other entity involved in the Business or otherwise.

7.4 Executive and the Company acknowledge that: (i) each covenant and
restriction contained in Sections 7.1, 7.2 and 8 of this Agreement is necessary,
fundamental, and required for the protection of the Company's business; (ii)
such relate to matters which are of a special, unique, and extraordinary
character that gives each of them a special, unique, and extraordinary value;
and (iii) a breach of any such covenant or restriction will result in
irreparable harm and damage to the Company which cannot be compensated
adequately by a monetary award. Accordingly, it is expressly agreed that, in
addition to all other remedies available at law or in equity, and
notwithstanding anything to the contrary in Section 10 below, the Company will
be entitled to the immediate remedy of a temporary restraining order,
preliminary injunction, or such other form of injunctive or equitable relief as
may be used by any court of competent jurisdiction to restrain or enjoin any of
the parties hereto from breaching any such covenant or restriction, or otherwise
specifically to enforce the provisions contained in Sections 7.1, 7.2 and 8 of
this Agreement.

8. Proprietary Matters. Executive expressly understands and agrees that any
-------------------
and all improvements, inventions, discoveries, processes, or know-how that are
generated or conceived by Executive during the term of this Agreement, whether
so generated or conceived during Executive's regular working hours or otherwise,
will be the sole and exclusive property of the Company, and Executive will,
whenever requested to do so by the Company (either during the term of this
Agreement or thereafter), execute and assign any and all applications,
assignments and/or other instruments and do all things which the Company may
deem necessary or appropriate in order to apply for, obtain, maintain, enforce
and defend patents, copyrights, trade names or trademarks of the United States
or of foreign countries for said improvements, inventions, discoveries,
processes, or know-how, or in order to assign and convey or otherwise make
available to the Company the sole and exclusive right, title, and interest in
and to said improvements, inventions, discoveries, processes, know-how,
applications, patents, copyrights, trade names or trademarks.

-6-
<PAGE>

9. Key-Person Insurance. Executive agrees to make himself available and to
--------------------
undergo, at the Company's request and expense, any physical examination or other
procedure necessary to allow the Company to obtain a key-person insurance policy
on Executive. If the Company obtains such policy, it will maintain the policy
at its expense and all proceeds will be the sole property of the Company.

10. Resolution of Disputes. The parties will attempt in good faith promptly
----------------------
by negotiations to resolve any dispute or controversy arising out of or relating
to this Agreement or to the employment or termination of Executive by the
Company. If a party intends to be accompanied at a negotiation meeting by an
attorney, the other party will be given at least three working days' notice of
such intention and may also be accompanied by an attorney. All negotiations
pursuant to this clause are confidential and will be treated as compromise and
settlement negotiations for purposes of the Federal Rules of Evidence and state
rules of evidence.

11. Miscellaneous.
-------------

11.1 Governing Law; Interpretation. This Agreement will be governed by
-----------------------------
the substantive laws of the State of New York applicable to contracts entered
into and fully performed in such jurisdiction. The headings and captions of the
Sections of this Agreement are for convenience only and in no way define, limit
or extend the scope or intent of this Agreement or any provision hereof. This
Agreement will be construed as a whole, according to its fair meaning, and not
in favor of or against any party, regardless of which party may have initially
drafted certain provisions set forth herein.

11.2 Assignment. This Agreement is personal to Executive and he may not
----------
assign any of his rights or delegate any of his obligations hereunder without
first obtaining the prior written consent of the Board of Directors of the
Company.

11.3 Notices. Any notice, request, claim or other communication required
-------
or permitted hereunder will be in writing and will be deemed to have been duly
given if delivered by hand or if sent by certified mail, postage and
certification prepaid, to Executive at his residence (as noted in the Company's
records), or to the Company at its address as set forth below its signature on
the signature page of this Agreement, or to such other address or addresses as
either party may have furnished to the other in writing in accordance herewith.

11.4 Severability. In the event any court of competent jurisdiction
------------
shall determine that the scope, time or territorial restrictions of any
provision of this Agreement 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 remaining
provisions of this Agreement will remain in full force and effect unless the
result would be manifestly unjust or would deprive either party of the benefit
of its bargain.

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<PAGE>

11.5 Entire Agreement; Amendments. This Agreement and any other exhibits
----------------------------
and attachments hereto constitutes the final and complete expression of all of
the terms of the understanding and agreement between the parties hereto with
respect to the subject matter hereof, and this Agreement replaces and supersedes
any and all prior or contemporaneous negotiations, communications,
understandings, obligations, commitments, agreements or contracts, whether
written or oral, between the parties respecting the subject matter hereof.
Except as provided in Section 11.4 above, this Agreement may not be modified,
amended, altered or supplemented except by means of the execution and delivery
of a written instrument mutually executed by both parties.

11.6 Attorneys' Fees. If it becomes necessary for any party to initiate
---------------
legal action or any other proceeding to enforce, defend or construe such party's
rights or obligations under this Agreement, the prevailing party will be
entitled to its reasonable costs and expenses, including attorneys' fees,
incurred in connection with such action or proceeding.

12. EXECUTIVE ACKNOWLEDGMENT. EXECUTIVE ACKNOWLEDGES THAT HE HAS BEEN GIVEN
------------------------
THE OPPORTUNITY TO CONSULT WITH LEGAL COUNSEL CONCERNING THE RIGHTS AND
OBLIGATIONS ARISING UNDER THIS AGREEMENT, THAT HE HAS READ AND UNDERSTANDS EACH
AND EVERY PROVISION OF THIS AGREEMENT, AND THAT HE IS FULLY AWARE OF THE LEGAL
EFFECT AND IMPLICATIONS OF THIS AGREEMENT.

-8-
<PAGE>

In Witness Whereof, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.

Company: Executive:

United Road Services, Inc. Donald Marr

By: /s/ Donald J. Marr
By: /s/ Edward T. Sheehan ------------------------
---------------------------- Name: Donald J. Marr
Name: Edward T. Sheehan ----------------------
--------------------------
Title: Chief Executive Officer
-------------------------

Address: 8 Automation Ln
Address: 8 Automation Ln -------------------
----------------------- Albany, NY 12205
Albany, NY 12205 -------------------
----------------------- Fax: (518) 446-0676
Fax: (518) 446-0676 -------------------
-----------------------

-9-

<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

June 10, 1998

<PAGE>

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