UNITED ROAD SERVICES, INC.
8% CONVERTIBLE SUBORDINATED
DEBENTURES DUE 2008
THIS DEBENTURE IS SUBJECT TO, AND IS TRANSFERRABLE ONLY
UPON COMPLIANCE WITH, THE PROVISIONS OF THE INVESTORS
AGREEMENT DATED AS OF NOVEMBER 19, 1998, BETWEEN THE
COMPANY AND CHARTER URS LLC. A COPY OF THE
ABOVE-REFERENCED AGREEMENT IS ON FILE AT
THE PRINCIPAL OFFICE OF THE COMPANY
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND MAY NOT BE SOLD EXCEPT PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT, OR AN EXEMPTION
FROM REGISTRATION UNDER SAID ACT.
No. 1 December 7, 1998
$43,500,000
FOR VALUE RECEIVED, the undersigned, UNITED ROAD SERVICES, INC. (the
"Company"), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to CHARTER URS LLC, or its registered assigns
(the "Holder"), the principal sum of FORTY-THREE MILLION FIVE HUNDRED THOUSAND
DOLLARS ($43,500,000) on December 7, 2008, with interest (computed on the basis
of a 360-day year of twelve 30-day months) (a) on the unpaid balance thereof at
the rate of 8% per annum from the date hereof, payable in equal quarterly
payments on March 31, June 30, September 30 and December 31 (each such dates
being an "Interest Payment Date") of each year (or such prorated amount as may
be applicable with respect to the first such payment) until the principal hereof
shall have become due and payable, and (b) to the extent permitted by law on any
overdue payment of principal or interest, payable quarterly as aforesaid, at a
rate equal to 10% per annum.
From the date hereof through and including January 1, 2004, such
interest shall be paid on each Interest Payment Date by the issuance to the
Holder of additional Debentures in the principal amount of the interest payable
on such Interest Payment Date. After January 1, 2004, such interest shall be
paid either (i) by the issuance of additional Debentures in the principal amount
of the interest payable on such Interest Payment Date or (ii) in cash; the
method of payment to be determined by the Company in its discretion.
Subject to Section 16.2 of the Purchase Agreement referred to below,
payments of principal of and interest (other than interest payable-in-kind as
provided in this Debenture) on this Debenture are to be made in lawful money of
the United States of America at the principal office of the Company in Albany,
New York or at such other place as the Company shall have designated by written
notice to the holder of this Debenture as provided in the Purchase Agreement.
This Debenture is one of a series of Convertible Subordinated Debentures
due 2008 (the "Debentures") issued pursuant to a Purchase Agreement, dated as of
November 19, 1998 (as from time to time amended, the "Purchase Agreement"),
between the Company and the purchaser named therein and is entitled to the
benefits of the Purchase Agreement. Each Holder of this Debenture will be
deemed, by its acceptance hereof, to have made the representation set forth in
Section 7.2 of the Purchase Agreement. Capitalized terms used herein without
definition have the meanings assigned to them in the Purchase Agreement.
Subject to and upon compliance with the provisions of the Purchase
Agreement, (i) the Holder of this Debenture is entitled, at his option, at any
time on or before the close of business on December 7, 2008, or in case this
Debenture is called for redemption, then in respect of this Debenture until and
including, but (unless the Company defaults in making the payment due upon
redemption) not after, the close of business on the Business Day prior to the
Redemption Date, to convert this Debenture (or any portion of the principal
amount hereof) into fully paid and nonassessable shares (calculated as to each
conversion to the nearest 1/100th of a share) of Common Stock of the Company at
the Conversion Price equal to $15 per share of Common Stock (or at the then
current adjusted Conversion Price if an adjustment has been made as provided in
the Purchase Agreement) by surrender of this Debenture, duly endorsed or
assigned to the Company or in blank, to the Company at its principal office in
Albany, New York, accompanied by written notice to the Company that the Holder
hereof elects to convert this Debenture, or if less than the entire principal
amount hereof is to be converted, the portion hereof to be converted. No
fractions of shares or scrip representing fractions of shares will be issued on
conversion, but instead of any fractional interest the Company shall pay a cash
adjustment as provided in the Purchase Agreement. The Conversion Price is
subject to adjustment as provided in the Purchase Agreement.
This Debenture is subordinated to the prior payment of the Senior
Obligations to the extent and in the manner set forth in the Purchase Agreement
and by its acceptance hereof, the Holder of this Debenture agrees to such
subordination.
This Debenture is a registered Debenture and, as provided in and subject
to the provisions of the Purchase Agreement, upon surrender of this Debenture
for registration of transfer, duly endorsed, or accompanied by a written
instrument of transfer duly executed, by the registered holder hereof or such
holder's attorney duly authorized in writing, a new Debenture or Debentures for
a like principal amount will be issued to, and registered in the name of, the
transferee. Prior to due presentment for registration of transfer, the Company
may treat the person in whose name this Debenture is registered as the owner
hereof for the propose of receiving payment and for all other purposes, and the
Company will not be affected by any notice to the contrary.
This Debenture is subject to redemption upon the terms set forth in the
Purchase Agreement.
If an Event of Default occurs and is continuing, the principal of this
Debenture may be declared or otherwise become due and payable in the manner, at
the price and with the effect provided in the Purchase Agreement.
THIS DEBENTURE SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
UNITED ROAD SERVICES, INC.
By:__________________________
Name:
Title:
