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As filed with the Securities and Exchange Commission on December 12, 2006

Registration No.                

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

TravelCenters of America LLC
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization) 		  5541
(Primary Standard Industrial
Classification Code Number) 		  20-5701514
(I.R.S. Employer
Identification Number)

400 Centre Street
Newton, MA 02458
(617) 964-8389
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)


John G. Murray, President
c/o Hospitality Properties Trust
400 Centre Street
Newton, Massachusetts 02458
(617) 964-8389
(Name, address, including zip code, telephone number,
including area code, of agent for service)
 
Copy to:
William J. Curry, Esq.
Edwin L. Miller, Jr., Esq.
Sullivan & Worcester LLP
One Post Office Square
Boston, Massachusetts 02109
(617) 338-2800

         Approximate date of commencement of proposed distribution to the public: As soon as practicable 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.     o

        If this form is filed to register additional securities for an offering pursuant to Rule 462(b) 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.     o

        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.     o

        If this form is a post-effective amendment filed pursuant to Rule 462(d) 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.     o

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered
  Proposed Maximum Aggregate Offering Price(1)
  Amount of Registration Fee
Common Shares   $341,770,000   $36,570
(1)
Estimated solely for the purpose of calculating the amount of the registration fee pursuant to Rule 457(o) under the Securities Act, and assumes that the value of the shares to be issued in the spin off described herein will be equal to the currently estimated net book value of the registrant at the time of the spin off.

         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 this registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. These securities may not be distributed until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED DECEMBER 12, 2006

PROSPECTUS

Distribution by Hospitality Properties Trust
to its Shareholders of
All Outstanding Common Shares of
TravelCenters of America LLC

        We are furnishing this prospectus to the shareholders of Hospitality Properties Trust, or Hospitality Trust, a Maryland real estate investment trust. We are currently a wholly owned subsidiary of Hospitality Trust. Hospitality Trust will distribute all of our outstanding common shares as a special distribution to its shareholders. This distribution is contingent upon the closing of Hospitality Trust's acquisition of TravelCenters of America, Inc.

        Shareholders of Hospitality Trust will receive one of our shares for every ten Hospitality Trust common shares owned on                        , 2007. The distribution will be made on or about                         , 2007.

        We have applied for the listing of our common shares on the American Stock Exchange, or AMEX, under the symbol "TA". Hospitality Trust common shares will continue to trade on the New York Stock Exchange, or NYSE, under the symbol "HPT". This distribution of our common shares is the first public distribution of our shares. Accordingly, we can provide no assurance to you as to what the market price of our shares may be.

         Investment in our shares involves risks. You should read this entire prospectus carefully, including the section entitled "Risk Factors" that begins on page 9 of this prospectus, which describes the material risks.

        Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful and complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is            , 2007 .


TABLE OF CONTENTS

 
  Page
Questions and Answers About the Spin Off   ii
Summary   1
Risk Factors   9
The Spin Off   14
Dividend Policy   17
Capitalization   17
The Company   17
Selected Historical Financial Information   34
Management's Discussion and Analysis of Financial Condition and Results of Operations   35
Management   48
Security Ownership After the Spin Off   56
Certain Relationships   58
Federal Income Tax Considerations   59
Shares Eligible for Future Sale   68
Description of our Limited Liability Company Agreement   68
Anti-Takeover Provisions   77
Liability of Shareholders for Breach of Restrictions on Ownership   77
Transfer Agent and Registrar   78
Plan of Distribution   78
Legal Matters   78
Experts   78
Where You Can Find More Information   78
Index to Financial Statements and Schedules   F-1


ABOUT THIS PROSPECTUS

        You should rely only on the information contained in this prospectus. Neither we nor Hospitality Trust has authorized anyone to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We and Hospitality Trust believe that the information contained in this prospectus is accurate as of the date on the cover. Changes may occur after that date, and we and Hospitality Trust do not expect to update this information except as required by applicable law.

        At the present time we are, and until the time of the acquisition by Hospitality Trust of TravelCenters of America, Inc. we will be, a shell entity that has nominal assets and no liabilities, and is wholly owned by Hospitality Trust. TravelCenters of America, Inc. will become wholly owned by us after Hospitality Trust acquires it. We will then restructure the business of TravelCenters of America, Inc., after which Hospitality Trust will complete the spin off described herein. After the spin off we will continue the business of TravelCenters of America, Inc. but because of the restructuring, the business as conducted by us will be materially different than the business as it was historically conducted.

        Some of the descriptive material in this prospectus refers to the assets, liabilities, operations, results, activities or other attributes of the historical business conducted by TravelCenters of America, Inc. as if it had been conducted by us. For example, "our brands", "our assets" or similar words have been used in historical or current contexts to describe those matters which, while clearly attributable to our predecessor, will have continuing relevance to us after the acquisition, the restructuring and the spin off. However, because our business as a whole will be materially different following the restructuring and spin off from the business historically conducted by TravelCenters of America, Inc., none of these references are intended to imply that the historical business, financial position, results of operations or cash flows are indicative of our business, financial position, results of operations or cash flows at any future date or for any future period.

i


QUESTIONS AND ANSWERS ABOUT THE SPIN OFF

Q:
How many common shares of TravelCenters of America LLC will I receive?

A:     Hospitality Trust will distribute to you one of our common shares for every ten common shares of Hospitality Trust you own on                    , 2007, the distribution record date.

Q:
What are shares of TravelCenters worth?

A:     The value of our shares will be determined by their trading price after the spin off. We do not know what the trading price will be and we can provide no assurance as to value.

Q:
What will Hospitality Trust do after the spin off?

A:     Hospitality Trust will continue to operate as a real estate investment trust, or REIT. Immediately after the spin off, Hospitality Trust will own 146 travel centers leased to us and 310 hotels. In the future, Hospitality Trust may purchase additional properties, and some of these additional properties may be leased to us.

Q:
Will the spin off affect my cash distributions from Hospitality Trust?

A:     No. Hospitality Trust expects to continue quarterly cash distributions of $0.74/share ($2.96/share per year). We do not expect to make distributions to our shareholders in the foreseeable future.

Q:
Will TravelCenters shares be listed on a stock exchange?

A:     Yes. We have applied for the listing of our common shares on the AMEX under the trading symbol "TA".

Q:
Will my Hospitality Trust shares continue to be listed on an exchange?

A:     Yes. Hospitality Trust's common shares will continue to be listed on the NYSE under the symbol "HPT". The number of Hospitality Trust common shares you own will not change as a result of the spin off.

Q:
What are the tax consequences to me of the spin off?

A:     Your initial tax basis in the shares that you receive in the spin off will be determined by their trading price at the time of the spin off. The spin off will be a taxable distribution and a portion of the value you receive will be treated for tax purposes as ordinary income, capital gains or a reduction in your tax basis in your Hospitality Trust shares. Hospitality Trust will notify you after year end 2007 of the tax attributes of this spin off on Internal Revenue Service, or IRS, Form 1099.

Q:
Are there any unusual tax consequences to me arising from the fact that TravelCenters of America LLC is organized as a limited liability company?

A:     No. Despite the legal structure of our organization, we will be a corporation for U.S. federal income tax purposes.

Q:
What do I have to do to receive my TravelCenters shares?

A:     No action by you is required. If your Hospitality Trust common shares are held in a brokerage account, our common shares will be credited to that account. If you hold Hospitality Trust common shares in certificated or book entry form, your ownership of our shares will be recorded in the books of our transfer agent and a statement evidencing your ownership will be mailed to you. We will not issue certificates representing our common shares. No cash distributions will be paid and fractional shares will be recorded on the books of our transfer agent as necessary.

ii


SUMMARY

        References in this prospectus to "we", "us", "our", the "company" or "TravelCenters" mean TravelCenters of America LLC and its subsidiaries. References in this prospectus to "Hospitality Trust" mean Hospitality Properties Trust and its subsidiaries.


The Distribution

Distributing company   Hospitality Trust.

Shares to be distributed
 
All of our common shares, representing all of our limited liability company interests. Hospitality Trust will not retain any of our shares. The spin off is conditioned on the closing of Hospitality Trust's acquisition discussed below.

Distribution ratio and record date
 
One of our common shares will be distributed for every ten common shares of Hospitality Trust owned on the record date of            , 2007. No cash distributions will be paid and, if necessary, fractional shares will be distributed.

No payment required
 
No holder of Hospitality Trust shares will be required to make any payment, exchange shares or to take any other action in order to receive our common shares.

Distribution date
 
The spin off distribution date will be on or about            , 2007.

Federal income tax consequences
 
Our shares distributed to you in the spin off will be treated for tax purposes like other distributions from Hospitality Trust. The total value of this distribution, as well as your initial tax basis in our shares, will be determined by the trading price of our common shares at the time of the spin off. A portion of the value of this distribution will be taxable to you and the remainder, if any, will be a reduction in your tax basis in your Hospitality Trust shares.

 
 
Unlike many limited liability companies, we will be a corporation for U.S. federal income tax purposes.
         

1


Hospitality Trust acquisition
 
In September 2006, Hospitality Trust agreed to acquire through merger TravelCenters of America, Inc. from a group of private investors. The business of TravelCenters of America, Inc. includes the ownership of a substantial amount of real estate, the operation of this real estate as travel centers and other related business activities. Hospitality Trust expects to complete this acquisition in early 2007. The acquisition will be funded with cash; all of the debt of TravelCenters of America, Inc. will be repaid and its existing credit agreement will be terminated. The spin off will not occur if Hospitality Trust does not acquire TravelCenters of America, Inc.

Restructuring and spin off
 
Upon closing of its acquisition by Hospitality Trust, TravelCenters of America, Inc. will become our subsidiary. We will restructure the business of TravelCenters of America, Inc. The principal effect of this restructuring will be that Hospitality Trust will become the owner of 146 travel centers now owned by TravelCenters of America, Inc., and we will lease these travel centers from Hospitality Trust after the spin off. Hospitality Trust will also become the owner of the "TravelCenters" and "TA" brand names and certain other assets. We will retain the remaining assets and related liabilities of TravelCenters of America, Inc. and continue its business activities after the spin off.

Reasons for the spin off
 
Hospitality Trust is a REIT. We are not a REIT. We were created to conduct the activities of TravelCenters of America, Inc. that cannot be conducted by a REIT under the Internal Revenue Code of 1986, as amended, or IRC. Shareholders who continue to own our common shares and common shares of Hospitality Trust will be able to participate in REIT qualified ownership of real estate in Hospitality Trust, as well as in our business operations.

Conflicts of interest
 
We were formed for the benefit of Hospitality Trust and not for our own benefit. Our formation allows Hospitality Trust to acquire and retain ownership of 146 travel centers without adverse tax consequences to Hospitality Trust. Because we were formed to benefit Hospitality Trust, some of our contractual relationships and the terms of our initial business operations may provide more benefits to Hospitality Trust than to us.
         

2


 
 
We will be subject to conflicts of interest, including the following:

 
 
•
 
Two of our five directors, Mr. Barry M. Portnoy and Mr. Arthur G. Koumantzelis, are currently trustees of Hospitality Trust, and Mr. Portnoy will remain a trustee of Hospitality Trust after the spin off. Another of our directors, Mr. Thomas M. O'Brien, was an executive officer of Hospitality Trust until 2003. Initially and for the foreseeable future, a substantial majority of our business will be conducted at travel centers which we will lease from Hospitality Trust.

 
 
•
 
Mr. Portnoy is the majority owner of Reit Management & Research LLC, or Reit Management. Reit Management is the manager for Hospitality Trust and will also provide services to us. Mr. O'Brien and Mr. John R. Hoadley, our treasurer, are employed by Reit Management, will continue to be so employed after the spin off and will be active in our management.

 
 
Some of our business may be on terms which are less favorable to us than terms we might have achieved if this history and these conflicts did not exist.

Distribution agent, transfer agent and registrar
 
Wells Fargo Bank, N.A., will be the distribution agent, transfer agent and registrar for our shares.

Listing
 
There is currently no public market for our shares. We have applied to list our common shares on the AMEX under the symbol "TA". We expect trading will commence on a "when issued" basis on or around the distribution record date. The listing of our shares does not ensure that an active trading market for our shares will be available to you.


The Company

 
   
   
General   We were formed in 2006 under Delaware law as a limited liability company. Immediately after the spin off our principal place of business will be 24601 Center Ridge Road, Westlake, Ohio 44145, and our telephone number will be (440) 808-9100.
         

3


Business
 
We operate and franchise a nationwide network of 163 hospitality and fuel service areas primarily along the U.S. interstate highway system. Our network includes 162 locations in 40 states in the U.S. and one location in Ontario, Canada. Included in our 163 locations are 146 locations which we will lease from Hospitality Trust, 13 locations owned and operated by franchisees, and four locations that we own or which we lease from or manage for other parties. Our typical location includes:

 
 
•
 
over 20 acres of land with parking for 170 tractor trailers and 100 cars;

 
 
•
 
a 150 seat, full service restaurant and one to three quick service restaurants, or QSRs, operated as a franchise under various brands;

 
 
•
 
a truck repair facility and parts store;

 
 
•
 
multiple diesel and gasoline fueling points; and

 
 
•
 
a travel and convenience store, game room, lounge and other amenities for professional truck drivers and motorists.

 
 
In addition, some travel centers include a hotel.

Growth strategy
 
We expect to continue many of the growth strategies historically employed by our predecessor, TravelCenters of America, Inc.

 
 
•
 
Expansion through Organic Growth. We plan to continue to increase the standardization of the appearance of, and the services available at, our travel centers and to continue our customer loyalty and customer satisfaction programs in order to attract professional truck drivers and motorists to our travel centers.

 
 
•
 
Expansion through Acquisition. We may pursue strategic acquisitions. We believe that the financial results achievable at existing travel centers can be improved by adding them to our network. Our predecessor purchased a travel center in Illinois in November 2006 and converted it to the TA brand. We expect to regularly evaluate opportunities to expand our network through acquisitions.
         

4


 
 
•
 
Expansion through Development. Our development designs combine an efficient site layout with nationally branded QSRs and a wide variety of products and services. Our "prototype" design is generally appropriate for markets in which we can obtain large parcels of land and which have sufficient customer demand to support a full service restaurant. Our "protolite" design requires significantly less land than our prototype design, and enables us to quickly gain a presence in smaller markets. As of September 30, 2006, we owned or had under agreement three parcels of land suitable for development of new travel centers.

 
 
•
 
Expansion through Franchising. Opportunities to expand our network may not always be available to us as acquisition or development opportunities. In those cases, we may seek to expand our franchisee network.

Rights of first refusal
 
In connection with the spin off, we will give Hospitality Trust or any other public entity affiliate of Reit Management the opportunity to acquire or finance any real estate investments of the types in which those entities invest before we do so. We will also provide Hospitality Trust the right to purchase, lease, mortgage or otherwise finance any interest we own in a travel center before we sell, mortgage or otherwise finance that travel center with another party. At present, we expect that our future business will be focused principally upon leasing, operating, managing, developing, acquiring and franchising travel centers, including additional travel centers which we may lease from Hospitality Trust.

Initial capitalization
 
At the time of the spin off our principal assets will be cash, receivables and inventory. Net of trade and other payables, these assets will total about $200 million. We will have no funded debt at the time of the spin off.

Management
 
We expect several management employees of TravelCenters of America, Inc. to be named as our officers. We expect to supplement these senior management employees, initially, with senior employees of Reit Management and we will enter an agreement with Reit Management to obtain other services, including certain real estate services and certain services which are required for our operations as a publicly owned company.

Dividend policy
 
We do not expect to pay dividends.
         

5


Risk factors
 
Your ownership of our common shares will involve the following risks:

 
 
•
 
No market exists for our shares; we do not know the price at which our shares will trade.

 
 
•
 
Shareholders who receive shares in spin offs often sell those shares; such sales may lower the market price of our shares.

 
 
•
 
Our operating margins are small; small changes in our revenues or operating expenses may cause us to experience losses.

 
 
•
 
Volatility in the prices at which we buy and sell fuel may cause us to experience losses.

 
 
•
 
Interruptions in the availability of fuel may cause us to experience losses.

 
 
•
 
If we must pay for fuel before delivery, our working capital requirements may increase.

 
 
•
 
We regularly incur environmental clean up costs; these costs may become more than we can afford.

 
 
•
 
Our competitors may be able to attract our customers by offering fuel at lower prices than us.

 
 
•
 
Our growth strategy depends, in part, upon our ability to buy or develop travel centers and to obtain financing and regulatory approvals, and it may not succeed.

 
 
•
 
Our franchisees may become unable to pay the royalties and other amounts due to us.

 
 
•
 
Our management team has been recently assembled from Hospitality Trust and its affiliates and from TravelCenters of America, Inc. and it may not be able to work together successfully.

 
 
•
 
We may be unable to satisfy reporting requirements for publicly owned companies or we may have to increase our expenses to do so.

 
 
•
 
Our continuing relationships with Hospitality Trust and Reit Management may cause conflicts of interest.

 
 
•
 
Various provisions in our governing documents and our contracts with Hospitality Trust and Reit Management may prevent a change of control of us.

6


Organization and relationships

        The following charts illustrate the acquisition of TravelCenters of America, Inc. by Hospitality Trust, the reorganization and spin off and the resulting ownership and contractual relationships among us, Hospitality Trust and Reit Management.

The Acquisition

         LOGO

The Reorganization and Spin off

         LOGO

After the Spin off

         LOGO

7

Cautionary Note Regarding Forward Looking Statements

         WE HAVE MADE STATEMENTS THAT ARE NOT HISTORICAL FACTS IN THIS PROSPECTUS WHICH CONSTITUTE "FORWARD LOOKING STATEMENTS" AS THAT TERM IS DEFINED IN THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND OTHER FEDERAL SECURITIES LAWS. THESE FORWARD LOOKING STATEMENTS CONCERN:

         ALSO, WHENEVER WE USE WORDS SUCH AS "BELIEVE", "EXPECT", "ANTICIPATE", "ESTIMATE" OR SIMILAR EXPRESSIONS, WE ARE MAKING FORWARD LOOKING STATEMENTS. FORWARD LOOKING STATEMENTS ARE NOT GUARANTEES OF FUTURE EVENTS OR PERFORMANCE AND INVOLVE RISKS AND UNCERTAINTIES. OUR EXPECTED RESULTS MAY NOT BE ACHIEVED, AND ACTUAL RESULTS MAY DIFFER MATERIALLY FROM OUR EXPECTATIONS BECAUSE OF VARIOUS FACTORS, INCLUDING:

         INVESTORS SHOULD NOT RELY UPON FORWARD LOOKING STATEMENTS EXCEPT AS STATEMENTS OF OUR PRESENT INTENTIONS OR OF OUR PRESENT BELIEFS OR EXPECTATIONS WHICH MAY OR MAY NOT OCCUR.

         OTHER RISKS COULD HAVE A MATERIAL ADVERSE EFFECT ON US, AS DESCRIBED MORE FULLY UNDER "RISK FACTORS".

         EXCEPT AS MAY BE REQUIRED BY APPLICABLE LAW, WE UNDERTAKE NO OBLIGATION TO UPDATE OR REVISE ANY FORWARD LOOKING STATEMENTS AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.

8


RISK FACTORS

        Ownership of our shares involves various risks. The following are material risks:

Risks from the spin off

There has been no prior market for our common shares.

        There has been no prior trading market for our common shares and we cannot predict the price at which our common shares will trade after the spin off. Our share price will be established by the public markets. We expect that our common shares may begin to trade in the public markets on a "when issued" basis on or about the record date. However, if no regular trading market develops for our common shares, you may not be able to sell your shares at what you consider to be a fair price. The market price of our shares may fluctuate significantly and will be influenced by many factors beyond our control.

Substantial sales of our common shares could cause our share price to decline after the spin off.

        Some shareholders who receive our common shares in the spin off may sell our shares in the public markets. This may occur because some shareholders of Hospitality Trust who receive our shares are focused upon owning REIT shares and we are not a REIT. The sale of significant amounts of our common shares shortly after the spin off, or the perception in the market that this will occur, may lower the market price of our common shares.

Risks in our business

Our operating margins are narrow.

        Our total operating revenues for the nine months ended September 30, 2006, were $3.7 billion; and our cost of goods sold (excluding depreciation) and operating expenses for the same period totalled $3.5 billion. Fuel sales in particular generate low gross margins. Our fuel sales for the nine months ended September 30, 2006, were $3.0 billion and we generated a gross profit on fuel sales of $111 million. A small percentage decline in our future revenues or increase in our future expenses, especially revenues and expenses related to fuel, may have a material adverse effect upon our income or may cause us to experience losses.

The price of fuel can be volatile.

        We purchase fuel at rates that fluctuate with market prices and are reset daily. We resell fuel at rates we establish daily. In the future, numerous factors beyond our control, including global demand for fuel and other petroleum products, speculative trading, natural disasters, terrorism, wars or political events in oil producing regions of the world may result in periods of rapid fluctuations in our cost of fuel. When our cost to purchase fuel increases rapidly, we may not be able to increase our fuel sales prices at the same rate as the increase in our fuel costs. When the market price of fuel declines rapidly, the value of any inventory we have may decline, and we may have to sell our fuel inventory for less than what we paid for it. Volatility in the fuel market may have a material adverse effect on our income or cause us to experience losses.

An interruption in our fuel supplies would materially adversely affect our business.

        To mitigate the risks arising from fuel price volatility, we generally maintain limited inventories of fuel. In the future, an interruption in our fuel supplies would materially adversely affect our business. Interruptions in fuel supplies may be caused by local conditions, such as a malfunction in a particular pipeline or terminal, or by national or international conditions, such as government rationing, acts of terrorism, war and the like. Any limitation in available fuel supplies which caused a decline in truck

9


freight shipments or which caused a limit on the fuel we can offer for sale may have a material adverse effect on our sales of fuel and non-fuel products and services or may cause us to experience losses.

If we lose our ability to pay for fuel after delivery to us, our working capital requirements will increase.

        Our suppliers historically have agreed to permit our predecessor to pay for fuel after it is delivered. These terms may be changed by our suppliers. If our suppliers require us to pay for fuel prior to delivery, the working capital required to operate our business will increase. An increase in our working capital requirements may reduce our financial flexibility, increase our expenses and cause us to experience losses.

Compliance with environmental laws may be costly.

        Our business is subject to laws relating to the protection of the environment. The travel centers we operate include fueling areas, truck repair and maintenance facilities and tanks for the storage of petroleum products and other hazardous substances, all of which create the potential for environmental damage. As a result, we regularly incur environmental clean up costs. Our pro forma balance sheet as of September 30, 2006, includes an accrued liability of $11.8 million for environmental remediation costs. Because of the uncertainties associated with environmental expenditures, it is possible that future expenditures could be substantially higher than this amount. Environmental laws expose us to the possibility that we become liable to reimburse the government or third parties for damages and costs they incur in connection with environmental hazards. We cannot predict what environmental legislation or regulations may be enacted or how existing laws or regulations will be administered or interpreted with respect to our products or activities in the future; more stringent laws, more vigorous enforcement policies or stricter interpretation of existing laws in the future could cause us to experience losses.

        In addition, under the lease between us and Hospitality Trust, we have agreed to indemnify Hospitality Trust from all environmental liabilities it may incur arising at any of our travel centers during the term of the lease.

Our business is highly competitive.

        We compete with numerous other companies which provide fuel and other services to truck drivers and motorists. Some of our competitors have greater financial resources than us and are involved in other aspects of the fuel supply business. These competitors may offer fuel at prices lower than ours to attract customers and they may successfully compete with us for acquisition, development and franchising opportunities.

Our growth strategy may not succeed.

        We believe that we will have business opportunities to increase our network of travel centers by acquiring existing travel centers and by developing new travel centers. Future acquisitions and development activities may require significant capital. Although our relationship with Hospitality Trust may provide us a source of capital, Hospitality Trust is under no obligation to make growth capital available to us and we may be unable to access sufficient capital to acquire or develop travel centers. Moreover, our growth strategy will create integration risks. If we make substantial acquisitions or substantially increase our development activities, we may be unable to integrate additional travel centers into our network without substantial costs and disruption. A focus on growth strategies may divert our management's attention away from our existing business and cause it to deteriorate.

We have limited control of our franchisees.

        Ten travel centers which we lease from Hospitality Trust are subleased to franchisees. An additional 13 travel centers are owned and operated by franchisees. The rent and royalties we receive

10


from these franchisees represent a significant part of our net income. For the nine month period ended September 30, 2006, the rent and royalty revenues generated from these franchisee relationships was $7.5 million. Various laws and our existing franchise contracts limit the control we may exercise over our franchisees' business activities. A failure by our franchisees to pay rents and royalties to us may have a material adverse effect upon our financial results or may cause us to experience losses.

Risks arising from our formation and certain relationships

We have been recently reorganized.

        We are a recently reorganized business. Our board and senior management include persons formerly associated with Hospitality Trust and its affiliates, with Reit Management and with TravelCenters of America, Inc. This management team has no prior experience working together and they may not be able to do so successfully. Although we have implemented a retention bonus plan for executives of TravelCenters of America, Inc., we can provide no assurance that we will in fact retain any or all of these persons.

Our creation was, and our continuing business will be, subject to conflicts of interest with Hospitality Trust and Reit Management.

        Our creation was, and our continuing business will be, subject to conflicts of interest, as follows:


        These conflicts may have caused, and in the future may cause, adverse effects on our business, including:

Our lease with Hospitality Trust requires that we indemnify Hospitality Trust from various liabilities.

        Our lease with Hospitality Trust requires that we pay for, and indemnify Hospitality Trust from, liabilities associated with the ownership or operation of travel centers which may arise during the term

11


of our lease. Accordingly our business will be subject to all our business operating risks and all the risks associated with real estate including:

Our relationships with Hospitality Trust and Reit Management may limit the growth of our business.

        In connection with the spin off, we will enter agreements which prohibit us from acquiring or financing real estate in competition with Hospitality Trust or other affiliates of Reit Management, unless those investment opportunities are first offered to Hospitality Trust or those other entities. These restrictions may make it difficult or impossible for us to alter our business strategy to include investments in real estate. Also, because our lease with Hospitality Trust limits our ability to incur debt, ends in 2022 and prohibits ownership of more than 9.8% of our shares by any party, we may be unable to independently finance future growth opportunities.

Ownership limitations and anti-takeover provisions may prevent you from receiving a takeover premium.

        Our limited liability company agreement, or LLC agreement, places restrictions on the ability of any person or group to acquire beneficial ownership of more than 9.8% (in number of shares, vote or value, whichever is most restrictive) of any class or series of our equity securities. The terms of our lease with Hospitality Trust and our management and shared services agreement with Reit Management provide that our rights under these agreements may be cancelled by Hospitality Trust and Reit Management, respectively, upon the acquisition by any person or group of more than 9.8% of our voting shares, and upon other change in control events, as defined in those agreements. If the breach of these ownership limitations causes a lease default, shareholders causing the default may become liable to us or to other shareholders for damages. These agreements and other provisions in our limited liability company agreement may increase the difficulty of acquiring control of us by means of a tender offer, open market purchases, a proxy fight or otherwise, if the acquisition is not approved by our board of directors. Other provisions in our governing documents which may deter takeover proposals include the following:

For any of these reasons, shareholders may be unable to cause a change of control of us or to realize a change of control premium for their common shares.

We may be unable to meet financial reporting and internal control standards for a publicly owned company.

        Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is the process designed by, or under the supervision of, our CEO and CFO, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted

12


accounting principles and includes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and dispositions of assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with the authorization of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.

        In connection with their review of our September 30, 2006, interim financial statements, our predecessor's independent registered public accounting firm identified a control deficiency that represents a material weakness in our predecessor's internal control over financial reporting. A material weakness is a control deficiency, or combination of control deficiencies, that results in a more than remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. Our predecessor did not maintain effective controls over the accuracy of share based compensation expense in conformity with generally accepted accounting principles. Specifically, effective controls were not maintained to ensure the accuracy of expense recognized over the vesting period of certain option awards. This control deficiency resulted in an adjustment to reduce the amounts of the share based compensation expense and additional paid in capital accounts by a material amount and in an adjustment to the related footnote disclosures in our predecessor's interim consolidated financial statements as of, and for the nine months ended, September 30, 2006. Additionally, if not remedied, this control deficiency could result in misstatements of the aforementioned accounts and disclosures that would result in a material misstatement in our annual or interim consolidated financial statements that would not be prevented or detected. Accordingly, our predecessor's management has determined that this control deficiency constitutes a material weakness. Our predecessor's efforts to remediate the aforementioned material weakness in internal control over financial reporting consisted of strengthening processes related to accounting for share based compensation expense.

        We may identify material weaknesses in our internal control over financial reporting in the future. Beginning with our Annual Report on Form 10-K for the year ending December 31, 2007, pursuant to Section 404 of the Sarbanes Oxley Act of 2002, our management will be required to assess the effectiveness of our internal control over financial reporting, and we will be required to have our independent registered public accounting firm audit management's assessment and the design and operating effectiveness of our internal control over financial reporting. If our management or our independent registered public accounting firm were to either identify a material weakness or otherwise conclude in their reports that our internal control over financial reporting was not effective, investors could lose confidence in our reported financial information and the value of our stock could be adversely affected which, in turn, could harm our business and have an adverse effect on our future ability to raise capital funds.

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THE SPIN OFF

Key Dates

Date
  Activity
                , 2007   Prospectus Mailing Date. The date the registration statement of which this prospectus is a part was declared effective by the Securities and Exchange Commission, or SEC. We have mailed this prospectus to you on or about this date.

                , 2007
 
Record Date. Upon the closing of Hospitality Trust's acquisition of TravelCenters of America, Inc., Hospitality Trust common shareholders will receive one of our common shares for every ten Hospitality Trust common shares owned of record at the close of business on this date. After our declaration of the record date, a market for our shares may develop before the distribution date and our shares may begin to trade. A market that develops for shares that will be issued in the future is referred to as a "when issued" market. If a "when issued" market develops for our shares, a market may develop for the trading of Hospitality Trust shares which does not include the right to receive the distribution of our shares, which is referred to as a "when issued/ex dividend" market.

                , 2007
 
Distribution Date. Upon the closing of Hospitality Trust's acquisition of TravelCenters of America, Inc., all of our common shares will be delivered to the distribution agent on this date, and the spin off will be completed. If you hold Hospitality Trust common shares in a brokerage account, your account will be credited with the number of our common shares to which you are entitled. If you hold Hospitality Trust common shares in certificated or book entry form, your ownership of our shares will be recorded in the books of our transfer agent and a statement will be mailed to you. We will not issue certificates representing our common shares. If a "when issued" and "when issued/ex dividend" market has developed for our shares and for Hospitality Trust shares, it will cease on this date; and thereafter all those shares will trade "regular way".

Distribution Agent

        The distribution agent for the spin off will be Wells Fargo Bank, N.A.

Listing and Trading of Our Shares

        There is currently no public market for our shares. We have applied for the listing of our common shares on the AMEX under the symbol "TA." A "when issued" market, if one develops, may permit you and others to trade our shares on the AMEX before the shares are distributed.

        Until our shares are distributed and an orderly trading market develops, the price of our shares may fluctuate significantly. We expect "regular way" trading on the AMEX to commence on the trading day following the distribution date. The listing of our shares will not ensure that an active trading market will be available to you. Many factors beyond our control will influence the market price of our shares, including the depth and liquidity of the market which develops, investor perception of our business and growth prospects and general market conditions.

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Background and Reasons for the Spin Off

        In order to maintain its status as a REIT for federal income tax purposes, a substantial majority of Hospitality Trust's revenues must be derived from real estate rents and mortgage interest.

        In September 2006, Hospitality Trust agreed to acquire by merger TravelCenters of America, Inc. for approximately $1.9 billion. TravelCenters of America, Inc. owns substantial real estate and operates its travel center network and other related businesses. Hospitality Trust cannot operate some of the businesses of TravelCenters of America, Inc. because of limitations applicable to REITs imposed by the IRC. By completing this spin off, Hospitality Trust will be able to own the real estate of 146 travel centers we operate and collect rents from us without incurring any federal income tax on those rents. We have been formed by Hospitality Trust to meet Hospitality Trust's need for a tenant for the travel centers it will continue to own after the spin off. We will be able to lease and operate these properties because we are not a REIT.

        For a more detailed discussion of the tax provisions applicable to REITs which underlie the reasons for this spin off, see "Federal Income Tax Considerations".

The Hospitality Trust Acquisition

        TravelCenters of America, Inc. will merge with a newly formed subsidiary of Hospitality Trust, and TravelCenters of America, Inc. will be the surviving entity in the merger. Hospitality Trust expects that its acquisition of TravelCenters of America, Inc. will be funded with cash, that TravelCenters of America, Inc.'s debt will be repaid and its credit agreement will be terminated. We expect this transaction to close in early 2007. However, the transaction is subject to certain customary conditions including consents of parties to contracts with TravelCenters of America, Inc. The transaction may be terminated by Hospitality Trust for a material adverse change, as defined in the merger agreement, affecting TravelCenters of America, Inc. Also, the transaction may be terminated by either TravelCenters of America, Inc. or Hospitality Trust:

        A copy of the merger agreement between Hospitality Trust and TravelCenters of America, Inc. has been filed as an exhibit to the registration statement of which this prospectus is a part. If you want more information about the merger agreement and the various conditions to closing, you should read the entire merger agreement.

        The distribution of our shares is conditioned on the closing of Hospitality Trust's acquisition of Travel Centers of America, Inc.

The Transaction Agreement

        In order to govern relations before and after the spin off, prior to the spin off we will enter a transaction agreement with Hospitality Trust and Reit Management. The form of this transaction agreement has been filed as an exhibit to the registration statement of which this prospectus is a part. If you want more information about the actions which have been and will be taken to effect the spin off or about the agreements among us, Hospitality Trust and Reit Management concerning future

15


relations, you should read the entire transaction agreement. The material provisions of the transaction agreement are summarized as follows:

16

Manner of Effecting the Spin Off

        If you hold Hospitality Trust common shares in a brokerage account, our common shares will be credited to your account. If you hold Hospitality Trust common shares in certificated or book entry form with our transfer agent, your ownership of our shares will be recorded on the books of our transfer agent and a statement will be mailed to you. We will not issue certificates representing our common shares. No cash distributions will be paid, and we will issue fractional shares of our common stock in connection with the spin off distribution as necessary. No holder of common shares of Hospitality Trust is required to make any payment, exchange or surrender any shares or take any other action in order to receive our common shares.


DIVIDEND POLICY

        We do not expect to pay dividends in the foreseeable future.


CAPITALIZATION

        The following table describes our pro forma capitalization as of September 30, 2006, assuming the closing of Hospitality Trust's acquisition of TravelCenters of America, Inc., the related restructuring and the spin off on that date (in 000s).

 
  Pro forma for the Hospitality Trust
acquisition, the
restructuring and the spin off
Capital lease obligations(1)   $ 102,628

Debt
 
 
—

Common equity
 
 
341,770
   

Total capital
 
$
444,398
   
(1)
As a result of our application of Statement of Financial Accounting Standards No. 98 (SFAS 98), which sets forth rules related to sale leaseback transactions, to our expected lease with Hospitality Trust, 13 of the travel centers we expect to lease from Hospitality Trust do not qualify for operating lease treatment, because more than an insignificant portion of these travel centers is sublet to a third party. The amount shown as capital lease obligation will remain on our balance sheet unless and until the subleased portion of these travel centers is reduced to an insignificant level.


THE COMPANY

General

        We are a limited liability company formed under Delaware law on October 10, 2006 as a wholly owned subsidiary of Hospitality Trust. Our initial capitalization in a nominal amount was provided by Hospitality Trust on our formation date. Since that time, we have conducted no business activities. As described in more detail elsewhere in this prospectus, Hospitality Trust expects to acquire, indirectly through us, TravelCenters of America, Inc., restructure this acquired business and spin off all of our common shares to the shareholders of Hospitality Trust. Our business will include all of the assets of TravelCenters of America, Inc. not retained by Hospitality Trust, the right and obligation to lease and operate the travel centers retained by Hospitality Trust and cash which Hospitality Trust will contribute to us prior to the spin off.

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Business Overview

        We operate and franchise travel centers primarily along the U.S. interstate highway system. Our customers include long haul trucking fleets and their drivers, independent truck drivers and motorists. At December 11, 2006, our geographically diversified network included 163 travel centers located in 40 states in the U.S. and the province of Ontario, Canada. Many of our travel centers were originally developed more than 25 years ago when prime real estate locations along the interstate highway system were more readily available than they are today, a factor which we believe would make it difficult to replicate a network such as ours. We believe that our nationwide network provides an advantage to long haul trucking fleets by enabling them to reduce the number of their suppliers by routing their trucks within our network from coast to coast.

        We offer a broad range of products and services, including diesel fuel and gasoline, truck repair and maintenance services, full service restaurants, more than 20 different QSR brands, travel and convenience stores and other driver amenities.

        The U.S. travel center and truck stop industry in which we operate consists of travel centers, truck stops, diesel fuel outlets and similar properties designed to meet the needs of long haul trucking fleets and their drivers, independent truck drivers and motorists. According to the National Association of Truck Stop Operators, or "NATSO", the travel center and truck stop industry is highly fragmented, with in excess of 3,000 travel centers and truck stops located on or near interstate highways nationwide.

History of our Predecessor

        TravelCenters of America, Inc., or our predecessor, was formed in December 1992 by a group of institutional investors. In April 1993 our predecessor acquired the travel center assets of Unocal Corporation, or Unocal. The Unocal network included 139 travel centers, of which 95 were leased to operators, 42 were franchisee operated and two were operated by our predecessor. The Unocal network operated principally as a fuel wholesaler and franchisor.

        In December 1993 our predecessor acquired the travel center assets of The British Petroleum Company plc., or BP. The BP network included 38 company operated and six franchisee operated travel centers. In contrast to the Unocal network, the BP network operated principally as an owner operator of travel centers.

        In January 1997 our predecessor restructured its operating strategy to align the operation of the then 122 travel center Unocal network and the then 49 travel center BP network into a single network operated under the "TravelCenters of America" and "TA" brand names.

Network Development

        Since 1997 a number of steps have increased the consistency of our brands and otherwise made our network more appealing to potential customers. During that period, our predecessor:

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        Re-imaging Program.     Since 1997 our predecessor has pursued a capital program to upgrade, rebrand and otherwise re-image our travel centers. Through September 30, 2006, re-image projects have been completed at 40 of our travel centers at an average investment of $2.1 million each. These re-image projects typically include the addition of standardized architectural features to building facades, expansion of the square footage of travel and convenience stores, addition of a food court with two or three QSRs, renovation of showers and restrooms and updates to our full service restaurants. Also, through September 30, 2006, smaller scale re-image projects, which typically do not involve expansion of the building or addition of a food court, at another 78 travel centers have been completed at an average cost of $0.3 million each.

        Freightliner Agreement.     Since 1999 our predecessor has been party to an agreement with Freightliner LLC, a DaimlerChrysler company. Freightliner is the leading manufacturer of heavy trucks in North America. We are an authorized provider of repair work and specified warranty repairs to Freightliner's customers through the Freightliner ServicePoint Program®. Our truck maintenance and repair facilities are part of Freightliner's 24 hour customer assistance database for emergency and roadside repair referrals and we have access to Freightliner's parts distribution, service and technical information systems.

        Maintenance and Repair Capacity Expansion Program.     Since 2004 our predecessor has built additional truck maintenance and repair bays at existing travel centers in our network. We believe that additional maintenance and repair bays increase the revenue generating capacity of our maintenance and repair facilities by increasing productivity and reducing customer wait times. The number of our maintenance and repair bays has increased since 2004 by about 100 bays to over 400 bays at September 30, 2006.

Our Growth Strategy

        Expansion through Organic Growth.     We plan to continue the standardization of our travel centers and to increase the services we offer to attract professional truck drivers and motorists. We have identified eight additional travel centers that we operate that we intend to re-image and one travel center which we intend to raze and rebuild over the next two to three years. We have also identified travel centers at which we believe we can add 40 maintenance and repair bays during that same time period. We believe that we have other opportunities to increase our revenues, including, but not limited to, the expansion of the number of gasoline lanes at several of our travel centers to increase the number of gasoline customers serviced simultaneously, continued investment in our capital improvement program to keep our properties efficient and appealing to customers and continuing our customer loyalty and customer satisfaction programs.

        Expansion through Acquisition.     There are locations along the U.S. and Canadian interstate highway system that we consider to be strategic but in which we do not have an adequate presence. We believe that our existing network affords us the opportunity to make acquisitions of travel centers that may benefit from becoming part of our network, and we intend to pursue such acquisitions. Our predecessor purchased a travel center in Illinois in November 2006 and converted it to the TA brand. Although we have not identified other specific acquisition opportunities at this time, we regularly evaluate opportunities to expand our network through acquisitions, some of which may be significant in size. We expect that some or all of these acquisitions will be made by Hospitality Trust and that the acquired travel centers will be leased to us.

        Expansion through Development.     We plan to continue expansion of our network by building new travel centers. We have developed a "prototype" design and a smaller "protolite" design to standardize new travel centers. The prototype and protolite designs combine efficient site plans with nationally branded QSRs and offer a broad range of products and services. Since 1999 our predecessor has constructed seven travel centers in the prototype design and five travel centers in the protolite design.

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Our prototype design is generally appropriate for markets in which we can obtain large parcels of land and which have sufficient demand to support a full service restaurant. In contrast, our protolite design requires significantly less land and enables us to quickly gain a presence in certain markets at lower costs. As of September 30, 2006, we owned two parcels of land, one in Texas and one in California, on which development of new travel centers has begun. We also have a third parcel of land in Texas under agreement for acquisition; if we acquire this parcel, we intend to build a new travel center on it for opening in 2008.

        Expansion through Franchising.     In some cases, we may find that opportunities to expand our network are not available to us as development or acquisition opportunities. In those cases, we may seek to expand our franchisee network.

Our Network

        We expect that upon completion of the spin off our travel center network will consist of:

        Our typical travel center contains:

        In addition, some travel centers include a hotel.

        Our travel centers are designed to appeal to drivers whether they seek a quick stop or a more extended visit. Substantially all of our travel centers are full service sites located on or near an interstate highway and offer fuel and non-fuel products and services 24 hours per day, 365 days per year.

        Properties.     The physical layouts of the travel centers in our network vary from site to site. The majority of the developed acreage at our travel centers consists of truck and car fuel islands, separate truck and car parking lots, a main building, which contains a full service restaurant and one or more QSRs, a travel and convenience store, a truck maintenance and repair shop and other amenities.

        Product and Service Offering.     We offer diverse products and services to complement our diesel fuel business, including:

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Operations

        Fuel supply.     We purchase diesel fuel from various suppliers at rates that fluctuate with market prices and generally are reset daily, and resell fuel to our customers at prices that we establish daily. By establishing supply relationships with an average of four to five alternate suppliers per location, we believe we are able to effectively create competition for our purchases among various diesel fuel suppliers on a daily basis. We also believe that purchasing arrangements with multiple diesel fuel suppliers may help us avoid product outages during times of diesel fuel supply disruptions. We have a single source of supply for gasoline at most of our travel centers that offer branded gasoline; our travel centers selling unbranded gasoline generally purchase gasoline from multiple sources.

        Generally our fuel purchases are delivered directly from suppliers' terminals to our travel centers. We do not contract to purchase substantial quantities of fuel to keep as inventory. Therefore we are exposed to price increases and interruptions in supply. We generally have less than three days of diesel fuel inventory at our travel centers. We believe our exposure to market price increases for diesel fuel is mitigated by the significant percentage of our total diesel fuel sales volume that is sold under pricing formulas that are indexed to market prices, which reset daily. We do not engage in any fixed price fuel contracts with customers. We may engage, from time to time, in a minimal level of hedging of the price of our fuel purchases with futures and other derivative instruments that primarily are traded on the New York Mercantile Exchange. We had no derivative instruments as of September 30, 2006.

        Non-fuel products supply.     We have many sources for the large variety of non-fuel products that we sell. We have developed strategic relationships with several suppliers of key non-fuel products, including Freightliner LLC for truck parts, Bridgestone/Firestone Tire Sales Company for truck tires and ExxonMobil for Mobil brand lubricants and oils. We believe that our relationships with these and our other suppliers are satisfactory.

        Centralized purchasing and distribution.     We maintain a distribution center near Nashville, Tennessee with 85,000 square feet of space. Our distribution center distributes a variety of non-fuel and non-perishable products to our travel center network using a combination of contract carriers and our fleet of trucks and trailers. We believe we realize cost savings by using our consolidated purchasing power to negotiate volume discounts with our suppliers and that using our own national distribution center helps us control shipping charges.

Our Travel Centers

        Our travel centers are geographically diversified, located in 39 states in the U.S. and in Ontario, Canada. The travel centers we operate and their significant services and amenities are generally described in the chart below. Each of these properties will be owned by Hospitality Trust and leased by us.

City
  State
  Total
acres
  Building
area
  Car
parking
spaces
  Truck
parking
spaces
  Gasoline
lanes
  #
Diesel
lanes
  Store
sales
area
  Full
service
restaurant
  Truck
repair
facility
  QSRs
  Hotel
Mobile   AL   15   16,685   77   89   *   6   1,722   *   *        
Tuscaloosa   AL   15   28,619   140   151   *   10   2,491   *   *   *    
Prescott   AR   26   19,202   144   292   *   10   2,500   *   *   *    
West Memphis   AR   47   21,895   76   170   *   8   2,660   *   *   *    
Eloy   AZ   22   26,269   87   234   *   12   2,820   *   *   *    

22

Kingman   AZ   28   13,231   100   115   *   9   2,100   *   *   *    
Tonopah   AZ   53   21,475   80   407   *   12   3,000   *   *   *    
Willcox   AZ   21   16,459   75   229   *   8   2,600   *   *   *    
Barstow   CA   25   24,654   122   303   *   16   3,500   *   *   *    
Buttonwillow   CA   16   13,880   129   170   *   7   2,500   *   *   *    
Coachella   CA   17   30,458   140   205   *   12   2,880   *   *   *    
Corning   CA   24   20,945   54   254   *   14   3,696   *   *   *    
Ontario East   CA   32   32,696   132   559       16   4,224   *   *   *    
Ontario West   CA   35   23,893   76   549   *   10   1,450   *   *   *    
Redding   CA   20   17,853   87   196   *   10   2,400   *   *   *    
Santa Nella   CA   23   12,904   100   240   *   8   2,200   *   *        
Wheeler Ridge(1)   CA   20   20,514   111   130   *   8   2,800       *   *    
Denver East   CO   27   30,676   117   224   *   8   3,000   *   *   *    
Denver West   CO   13   12,660   40   163   *   7   2,200   *   *        
Limon   CO   11   16,906   60   104   *   12   3,600   *   *   *    
Milldale   CT   13   15,580   77   145   *   9   2,153   *   *        
New Haven   CT   12   12,953   64   170   *   10   3,000       *   *    
Willington   CT   43   19,870   155   240   *   8   2,696   *   *   *    
Marianna   FL   32   18,028   105   112   *   9   1,800   *   *        
Tampa   FL   10   22,094   75   158   *   6   2,500       *   *    
Vero Beach   FL   28   16,579   88   162   *   8   1,650   *   *        
Wildwood   FL   23   24,022   100   170   *   10   2,832   *   *   *    
Atlanta   GA   18   24,180   128   218       10   2,400   *   *   *   *
Brunswick(2)   GA   28   15,000   91   81       —   —       *        
Cartersville   GA   21   30,676   105   212   *   8   3,000   *   *   *    
Commerce   GA   13   14,238   80   133   *   8   1,800   *   *        
Cordele(1)   GA   29   52,198   90   114   *   12   3,884   *   *   *    
Madison   GA   12   16,446   105   149   *   7   2,400   *   *   *    
Savannah   GA   20   15,773   80   175   *   7   2,500   *   *   *    
Council Bluffs   IA   11   15,684   84   78   *   8   2,150   *   *   *    
Boise   ID   13   20,700   34   95   *   8   2,500   *   *   *    
Bloomington   IL   19   14,261   95   147       8   1,600   *   *        
Chicago North   IL   63   26,400   105   215   *   10   2,500   *   *   *    
Effingham   IL   13   30,397   127   137   *   11   2,789   *   *   *    
Elgin   IL   15   20,023   97   92   *   9   3,120   *   *   *    
Mt Vernon   IL   33   21,839   97   169   *   8   2,900   *   *   *    
Troy   IL   20   24,340   83   87   *   8   2,440   *   *        
Gary   IN   22   33,344   109   318   *   16   2,102   *   *   *    
Lake Station   IN   23   25,130   170   252   *   17   2,896   *   *   *    
Porter   IN   35   22,000   51   212   *   12   2,330   *   *   *    
Seymour   IN   16   15,807   55   167   *   9   1,440   *   *        
Whitestown   IN   39   12,953   96   172   *   8   2,800   *   *   *    
Florence   KY   11   18,783   87   123   *   8   2,600       *   *    
Walton   KY   9   15,988   46   99   *   8   2,500   *   *   *    
Lafayette   LA   14   17,034   47   94   *   7   2,400   *   *   *    
Slidell   LA   22   20,607   145   159   *   10   2,200   *   *        
Tallulah   LA   17   18,625   75   135   *   8   2,500   *   *        
Baltimore   MD   21   65,884   92   181       8   3,500   *   *   *   *
Elkton   MD   30   21,576   125   164   *   10   2,800   *   *   *    
Jessup   MD   25   88,889   100   453       10   6,400   *   *   *   *
Ann Arbor   MI   32   18,477   90   205   *   10   2,400   *   *        
Monroe   MI   33   20,383   105   156   *   8   3,000   *   *   *    
Saginaw   MI   11   13,735   84   70   *   8   1,800   *   *        
Sawyer   MI   23   27,920   100   140   *   12   3,500   *   *   *    
Rogers   MN   12   17,291   93   150   *   8   1,950   *   *        
Concordia   MO   20   24,200   100   146   *   10   2,365   *   *   *    
Foristell   MO   17   14,162   111   95   *   8   2,000   *   *        
Matthews   MO   29   16,815   62   114   *   8   1,920   *   *   *    
Oak Grove   MO   15   19,777   97   132   *   10   2,900   *   *   *    
Meridian   MS   13   17,330   41   90   *   8   2,000   *   *        
Candler   NC   20   12,853   45   98   *   8   1,536   *   *        
Greensboro   NC   29   29,508   122   186   *   12   2,798   *   *   *   *
Grand Island   NE   19   19,223   64   82   *   6   2,000   *   *        
Ogallala   NE   17   17,594   72   94   *   8   2,516   *   *        
Greenland   NH   7   17,361   33   105   *   9   2,646   *            

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Bloomsbury   NJ   13   23,660   96   129   *   10   2,840   *   *   *    
Columbia   NJ   16   17,573   90   185   *   11   2,472   *   *   *   *
Paulsboro   NJ   25   19,206   44   175   *   12   3,165   *   *        
Albuquerque   NM   12   20,318   96   150   *   8   1,700   *   *        
Gallup   NM   15   17,916   121   76   *   8   1,100   *   *   *   *
Las Cruces   NM   19   30,667   102   232   *   9   3,000   *   *   *    
Moriarity   NM   26   18,718   55   245   *   10   2,400   *   *   *    
Santa Rosa   NM   25   25,694   57   116   *   11   3,000   *   *   *    
Las Vegas   NV   12   20,207   116   144   *   10   2,600       *   *    
Mill City   NV   73   38,613   88   152   *   10   2,200   *   *   *   *
Sparks   NV   15   24,827   122   200   *   8   3,000   *   *        
Binghamton   NY   10   5,726   55   111   *   8   1,400   *   *        
Dansville   NY   16   13,580   86   102   *   12   1,900   *   *       *
Fultonville   NY   15   39,345   32   112   *   10   1,500   *   *       *
Maybrook   NY   16   20,499   85   188   *   12   2,000   *   *   *   *
Pembroke   NY   16   13,807   108   132   *   8   1,800   *   *        
Ashland   OH   7   12,888   106   —   *   —   4,000       *   *    
Dayton   OH   90   12,281   62   232   *   7   2,300   *   *   *    
Hebron   OH   17   20,337   39   141   *   10   2,800   *   *   *    
Jeffersonville   OH   12   20,257   87   125   *   8   3,120   *   *   *    
Kingsville   OH   37   23,206   51   158   *   10   3,024   *   *   *    
Lodi   OH   25   33,775   133   237   *   10   3,000   *   *   *    
London   OH   27   19,224   109   185   *   8   2,800   *   *   *    
North Canton   OH   11   8,466   77   93       8   950   *   *        
Toledo   OH   18   19,156   108   207   *   10   2,116   *   *   *    
Youngstown   OH   16   30,466   120   161       10   2,200   *   *        
Oklahoma City East   OK   19   26,327   77   175   *   10   2,500   *   *        
Oklahoma City West   OK   19   18,622   72   150   *   8   2,800   *   *   *    
Sayre   OK   20   10,439   25   101   *   9   1,900       *   *    
Portland   OR   20   17,135   30   275   *   8   2,849   *   *   *    
Troutdale   OR   25   44,282   73   225   *   10   3,000   *   *   *   *
Barkeyville   PA   61   9,426   135   112   *   8   1,050   *   *   *    
Bloomsburg   PA   13   19,105   104   190   *   8   1,885   *   *   *    
Brookville   PA   49   20,600   109   264   *   8   2,350   *   *   *   *
Greencastle   PA   24   14,149   114   194   *   12   3,335   *   *       *
Harborcreek   PA   27   25,227   138   266   *   10   2,900   *   *   *   *
Harrisburg   PA   54   20,195   110   178       9   2,200   *   *       *
Lamar   PA   68   11,625   95   168   *   9   1,500   *   *   *    
Milesburg   PA   11   8,822   30   122   *   8   1,360   *   *        
Florence(1)   SC   10   30,340   94   77   *   9   3,000           *    
Manning   SC   15   17,946   80   84   *   8   2,600   *   *   *    
Spartanburg   SC   26   31,682   122   187   *   8   1,740   *   *       *
Antioch   TN   22   20,856   158   154   *   9   2,200   *   *   *    
Franklin   TN   13   15,922   91   100   *   8   1,500   *   *        
Knoxville   TN   24   22,868   99   128       10   2,314   *   *       *
Nashville   TN   17   23,280   230   154       10   2,257   *   *        
Amarillo West   TX   25   33,226   150   243   *   8   3,000   *   *   *    
Baytown   TX   17   11,715   88   184   *   12   2,800   *   *   *    
Big Spring   TX   14   24,772   59   108   *   6   3,100   *   *   *    
Dallas South   TX   20   18,081   100   146   *   8   2,400       *   *    
Ganado   TX   11   20,030   87   104   *   8   4,400   *   *   *    
New Braunfels   TX   20   19,307   115   298   *   10   2,800   *   *   *    
Rockwall   TX   13   16,714   90   100   *   6   2,400       *   *    
San Antonio   TX   31   32,750   82   258   *   8   3,000   *   *   *    
Terrell   TX   22   21,683   125   401   *   12   4,100   *   *   *    
Parowan   UT   7   9,144   61   48   *   6   2,900       *   *    
Salt Lake City   UT   20   18,843   75   191   *   7   2,400   *   *   *    
Ashland   VA   19   25,841   98   183   *   8   2,328   *   *       *
Richmond   VA   25   20,453   81   154   *   18   3,000   *   *   *    
Roanoke   VA   12   21,033   103   129   *   8   2,000   *   *       *
Wytheville   VA   17   20,654   108   114   *   10   3,044   *   *   *    
Seattle East   WA   16   20,365   60   150       6   2,000   *   *        
Hudson   WI   15   15,443   30   100   *   7   1,800   *   *        
Madison   WI   11   16,446   102   118   *   9   1,600   *   *   *    
Hurricane   WV   21   16,544   53   76   *   10   1,500   *   *        

24

Wheeling   WV   8   12,346   36   182       10   2,958   *   *        
Cheyenne   WY   23   18,590   66   150   *   10   2,600   *   *   *    
Fort Bridger   WY   135   14,646   19   165   *   10   2,800   *   *   *    
Rawlins   WY   28   18,594   80   188   *   12   4,100   *   *   *    
Woodstock(3)   Ontario,   27   28,000   103   202   *   12   3,000   *   *        
    Canada                                            
*
Amenity present at travel center.

(1)
Property owned by a third party other than Hospitality Trust and leased to or managed by us.

(2)
In 2006, this travel center was razed and a truck maintenance and repair facility was built on this site. We expect the redevelopment of this site will be completed in 2007.

(3)
Property owned by us.

        We expect that Hospitality Trust will retain the interests in the land and buildings which were owned by our predecessor for 137 of the 146 travel centers we lease from Hospitality Trust. We also expect that Hospitality Trust will retain the ownership and leasehold interests in the land but not the buildings for the remaining nine travel centers we expect to lease from Hospitality Trust.

Our Lease with Hospitality Trust

        The lease between us and Hospitality Trust will be effective upon completion of the spin off. One of our subsidiaries is the tenant under the lease, and we and our material subsidiaries will guarantee the tenant's obligations under the lease. The form of this lease has been filed as an exhibit to the registration statement of which this prospectus is a part. The following is a summary of the material terms of this lease:

        Operating Costs.     The lease is a so called "triple net" lease which requires us to pay all costs incurred in the operation of the leased travel centers, including personnel, utilities, acquiring inventories, service to customers, insurance, real estate and personal property taxes and ground lease payments, if any.

        Minimum Rent.     The lease requires us to pay minimum rent to Hospitality Trust as follows:

Lease Year
  Annual Rent (000s)
  Per Month (000s)
1   $ 153,500   $ 12,792
2     157,000     13,083
3     161,000     13,417
4     165,000     13,750
5     170,000     14,167
Thereafter     175,000     14,583

In addition, minimum rents may increase if Hospitality Trust funds or reimburses the cost of renovations, improvements and equipment related to the leased travel centers as described below.

        Improvements.     Hospitality Trust has agreed to provide up to $25 million of funding annually for the first five years of the lease for certain specified improvements to the leased properties. This funding is cumulative, meaning if some portion of the $25 million is not spent in one year it may be drawn by us from Hospitality Trust in subsequent years; provided, however, the entire $125 million of funding must be drawn before December 31, 2015. All improvements will be owned by Hospitality Trust. There will be no adjustment in our minimum rent as these amounts are funded by Hospitality Trust.

25

        Maintenance and Alterations.     Except for Hospitality Trust's commitment to fund up to $125 million as described above, we must maintain, at our expense, the leased travel centers in good order and repair, including structural and non-structural components. The lease requires us to submit an annual budget for capital expenditures at the leased travel centers to Hospitality Trust for approval. We may request that Hospitality Trust fund approved amounts for renovations, improvements and equipment at the leased travel centers, in addition to the $125 million described above, in return for minimum annual rent increases according to a formula, generally, the minimum rent per year will be increased by an amount equal to the amount funded by Hospitality Trust times the greater of (i) 8.5% or (ii) a benchmark U.S. Treasury interest rate plus 3.5%. At the end of the lease we must surrender the leased travel centers in substantially the same condition as existed at the commencement of the lease subject to any permitted alterations and ordinary wear and tear.

        Percentage Rent.     Starting in 2012, the lease will require us to pay Hospitality Trust additional rent with respect to each lease year generally in an amount equal to three percent (3%) of increases in non-fuel gross revenues and three tenths of one percent (0.3%) of increases in gross fuel revenues at each leased travel center over the respective gross revenue amounts for the base year, which will be 2011. Percentage rent attributable to fuel sales is subject to a maximum each year calculated by reference to changes in the consumer price index.

        Term.     The lease expires on December 31, 2022.

        Assignment and Subletting.     Hospitality Trust's consent is required for any direct or indirect assignment or sublease of any of the leased travel centers. We remain liable under the lease for subleased and franchised travel centers.

        Environmental Matters.     We indemnify Hospitality Trust from liabilities which may arise from any violation of any environmental law or regulation which occurs during the term of the lease.

        Indemnification and Insurance.     With limited exceptions, we indemnify Hospitality Trust from liabilities which arise during the term of the lease from ownership or operation of the leased travel centers. We generally must maintain commercially reasonable insurance. We expect our insurance coverage as of the time the lease commences to include:

The lease requires that Hospitality Trust be named as an additional insured under our policies.

        Damage, Destruction or Condemnation.     If any leased travel center is damaged by fire or other casualty or taken by eminent domain, we are generally obligated to rebuild. If the leased travel center cannot be restored, Hospitality Trust will generally receive all insurance or taking proceeds, we are liable to Hospitality Trust for any deductible or deficiency between the replacement cost and the amount of proceeds, and the annual minimum rent will be reduced by, at Hospitality Trust's option,

26


either 8.5% of the net proceeds paid to Hospitality Trust or the fair market rental of the damaged, destroyed or condemned property, or portion thereof, as of the commencement date of the lease.

        Events of Default.     Events of default under the lease include the following:

        Remedies.     Following the occurrence of any event of default, the lease provides that, among other things, Hospitality Trust may, to the extent legally permitted:

        We are also obligated to reimburse Hospitality Trust for all costs and expenses incurred in connection with any exercise of the foregoing remedies.

        Lease Subordination.     Our lease may be subordinated to any mortgages of the leased travel centers by Hospitality Trust, but Hospitality Trust will be required to obtain a nondisturbance agreement for our benefit.

        Financing Limitations; Security.     Without Hospitality Trust's prior written consent, our tenant subsidiary may not incur debt secured by any of its assets used in the operation of the leased travel centers; provided, however, our tenant subsidiary may incur purchase money debt to acquire assets used in these operations and we may encumber such assets to obtain a line of credit secured by our tenant subsidiary receivables, inventory or certain other assets used in these operations.

        Lease Termination.     When the lease terminates, any equipment, furniture, fixtures, inventory and supplies at the leased travel centers that we own may be purchased by Hospitality Trust at their then fair market value. Also at lease termination, Hospitality Trust has the right to license any of our software used in the operation of the leased travel centers at its then fair market value, to offer employment to employees at the leased travel centers and we have agreed to cooperate in the transfer of permits, agreements and the like necessary for the then current operation of the leased travel centers.

27


        Territorial Restrictions.     Under the terms of the lease, we generally cannot own, franchise, operate, lease or manage any travel center or similar property within 75 miles in either direction along the primary interstate on which the leased travel center is located without the consent of Hospitality Trust, unless we owned, franchised or operated that travel center on the date the lease commenced or unless that travel center is owned by Hospitality Trust.

        Non-Economic Properties.     If during the lease term the continued operation of any leased travel center becomes non-economic as defined in the lease, we may offer such travel center for sale including a sale of Hospitality Trust's interest in the property, free and clear of our leasehold interests. The net sale proceeds received will be paid to Hospitality Trust and the annual minimum rent payable shall be reduced by, at Hospitality Trust's option, either the amount of such proceeds times 8.5% or the fair market rental for such property as of the commencement date of the lease. No more than a total of 15 leased properties may be offered for sale as non-economic properties during the lease term. No sale of a leased property may be completed without Hospitality Trust's consent; provided, however, if Hospitality Trust does not consent, that property will no longer be part of the lease and the minimum rent will be reduced as if the sale had been completed.

Relationships with Franchisees

        We have franchise agreements with lessees and owners of travel centers. We collect franchise, royalty and other fees under these agreements. As of September 30, 2006, there were 23 travel centers in our network which we do not operate but which are operated by our franchisees. Ten of these travel centers are leased by us from Hospitality Trust and subleased by us to a franchisee. Thirteen of these travel centers are owned, or leased from others, by our franchisees. Seventeen of these travel centers operate under our current form of franchise agreement and the remaining six operate under "legacy" franchise agreements described below. Under the terms of our lease agreement with Hospitality Trust, generally we have the right to use trademarks owned by Hospitality Trust in our franchise operation during the term of our lease with Hospitality Trust without payment of a fee. Our franchised locations as of December 11, 2006, are generally described in the following chart:

City
  State
  Total
acres
  Building
area
  Car
parking
spaces
  Truck
parking
spaces
  Gasoline
lanes
  #
Diesel
lanes
  Store
sales
area
  Full
service
restaurant
  Truck
repair
facility
  QSRs
  Hotel
Montgomery (1)   AL   10   15,739   55   125   *   8   1,442   *   *   *    
Baldwin (1)   FL   18   15,042   44   137   *   7   2,300   *   *   *    
Jacksonville South (1)   FL   19   22,855   90   90   *   7   3,000   *   *   *    
Atlanta South (1)   GA   29   20,520   100   200   *   8   3,600   *   *   *    
Lake Park (1)   GA   9   14,900   60   75   *   8   1,008   *   *   *    
Walcott (2)   IA   70   107,375   250   300   *   15   39,790   *   *   *    
Clayton (1)   IN   16   14,130   108   100   *   7   3,232   *   *   *    
Beto Junction (2)   KS   35   23,000   112   275   *   7   3,400   *   *   *    
Oakley (2)   KS   13   13,200   40   100   *   5   3,116   *   *   *    
Albert Lea (2)   MN   31   49,000   270   305   *   10   6,500   *   *   *    
Mt.Vernon (2)   MO   15   22,000   90   150   *   12   5,000   *   *        
Strafford (2)   MO   18   20,000   90   130   *   8   4,000   *   *   *    
Kenly (2)   NC   34   36,000   120   200   *   12   3,500   *   *   *    
Napoleon (2)   OH   10   9,000   100   120   *   8   3,500   *       *    
Wapakoneta (2)   OH   19   30,000   50   140   *   8   5,000   *   *        
Eugene (2)   OR   20   25,000   50   140   *   8   6,500   *   *   *   *
Breezewood (2)   PA   30   27,000   125   200   *   9   12,000   *   *   *    
Jackson (1)   TN   10   13,527   90   100   *   9   2,784   *   *   *    
Knoxville West (1)   TN   25   22,238   146   176   *   8   1,728   *   *   *    
Denton (1)   TX   15   19,247   62   110   *   8   2,604   *   *   *    
Edinburg (2)   TX   18   14,500   32   120   *   6   3,000   *   *   *   *
Sweetwater (1)   TX   18   12,600   43   160   *   8   2,750   *   *   *    
Janesville (2)   WI   5   12,000   45   85   *   7   8,500                
*
Amenity present at travel center.
(1)
Owned by Hospitality Trust and operated by franchisee subject to network lease and franchise agreements.
(2)
Owned and operated by franchisee subject to franchise agreement.

28

Network Franchise Agreements

        Material provisions of our network franchise agreements include the following:

        Initial Franchise Fee.     The initial franchise fee for a new franchise is $100,000.

        Term of Agreement.     The initial term of the network franchise agreement is ten years. The network franchise agreement provides for two five year renewals on the terms then being offered to prospective franchisees at the time of the franchise renewal. The remaining initial terms of the current network franchise agreements end in 2012 through 2015. The average remaining term of these agreements as of September 30, 2006, including all renewal periods, was 17 years.

        Protected Territory.     Generally we and Hospitality Trust have agreed not to operate, or allow another person to operate, a travel center or travel center business that uses the "TravelCenters of America" or "TA" brand within 75 miles in either direction along the primary interstate on which the franchised travel center is located.

        Restrictive Covenants.     Generally our franchisees may not operate any travel center or truck stop related business under a franchise agreement, licensing agreement or marketing plan or system of another person or entity. If the franchisee owns the franchised premises, generally for a two year period after termination of our franchise agreement the franchisee may not operate the site with a competitive brand.

        Fuel Purchases, Sales and Royalties.     Our franchisees that operate travel centers that they lease from us must purchase all of their diesel fuel from us; our franchisees that operate travel centers that they own are not required to purchase their diesel fuel from us. Our franchisees may purchase gasoline only from suppliers that we approve and generally must pay a royalty fee to us of $0.03 per gallon of gasoline sold.

        Royalty Payments on Non-Fuel Revenues.     Franchisees are required to pay us a royalty fee generally equal to 3.75% of all non-fuel revenues. If a franchisee operates one or more QSRs on the franchised premises, the franchisee must pay us 3% of all revenues in connection with those sales net of royalties paid to QSR franchisors.

        Advertising, Promotion and Image Enhancement.     Our franchisees are required to contribute 0.6% of their non-fuel revenues and net revenues from QSRs to partially fund system wide advertising, marketing and promotional expenses we incur.

        Non-fuel Product Offerings.     Franchisees are required to operate their travel centers in conformity with guidelines that we establish and offer any products and services that we deem to be a standard product or service in our network.

        Termination/Nonrenewal.     Generally, we may terminate or refuse to renew a network franchise agreement for default by the franchisee. We may also refuse to renew if we determine that renewal would not be in our economic interest or if the franchisee will not agree to the terms in our then current form of franchise agreement.

Legacy Franchise Agreements

        Six of our 23 franchised travel centers are operated under forms of our franchise agreement that were in use prior to 2002, when we adopted the franchise contract form described above as our network franchise agreement. The terms of these legacy franchise agreements are generally the same as our current network franchise agreements, except: the legacy franchise agreements generally require franchisees to pay us a royalty fee of 4% of all revenues earned directly or indirectly by the franchisee from any business conducted at or from the franchised premises, excluding fuel sales and sales at

29


QSRs; and these legacy franchise agreements do not require franchisees to purchase their diesel fuel from us, but generally require a franchisee to pay us an additional royalty fee of $0.004 per gallon on sales of qualified diesel fuel at the franchised travel center. The average remaining term of these legacy agreements as of September 30, 2006, was approximately three years.

Network Lease Agreements

        In addition to franchise fees, we also collect sublease rent from franchisees for the ten travel centers operated by franchisees that sublease travel centers from us. Each operator of a travel center that enters into a network lease agreement also must enter into a network franchise agreement. The material provisions of a network lease agreement include the following:

        Operating Costs.     The franchisee is responsible for the payment of all costs and expenses in connection with the operation of the leased travel centers, typically excluding certain environmental costs, certain maintenance costs and real property taxes.

        Term of Agreement.     The leases have an initial term of ten years and allow for two renewals of five years each. The remaining initial terms of the current network lease agreements end in 2012. The average remaining term of these agreements as of September 30, 2006, including all renewal periods, was 16 years.

        Rent.     Under the network lease, a franchisee must pay annual fixed rent equal to the sum of:

        Use of the Leased Travel Center.     The leased travel center must be operated as a travel center in compliance with all laws, including all environmental laws. The franchisee must submit to quality inspections that we request and appoint, subject to our approval, an employee as manager who is responsible for the day to day operations at the leased travel center.

        Termination/Nonrenewal.     The network lease agreements contain terms and provisions regarding termination and nonrenewal, which are substantially the same as the terms and provisions of the network franchise agreement. The network lease agreements are cross defaulted with the related network franchise agreements. In certain cases, we may reimburse the franchisee for a portion of the cost of certain capital improvements upon termination of the network lease.

Franchise Regulation

        Some states require state registration and delivery of specified disclosure documentation to potential franchisees and impose special regulations on petroleum franchises. Some state laws also impose restrictions on our ability to terminate or not to renew franchises and impose other limitations on the terms of our franchise relationships or the conduct of the business of our franchisor subsidiary. A number of states include, within the scope of their petroleum franchising statutes, prohibitions against price discrimination and other allegedly anticompetitive conduct. These provisions supplement applicable federal and state antitrust laws. Federal Trade Commission regulations require that we make extensive disclosure to prospective franchisees. We believe that we are in compliance with all franchise laws applicable to our business.

30


Competition

        The travel center and truck stop industry is fragmented and highly competitive. According to NATSO, there are in excess of 3,000 travel center and truck stops located on or near highways nationwide.

        Fuel and non-fuel products and services can be obtained by long haul truck drivers from a variety of sources, including regional full service travel center and pumper only truck stop chains, independently owned and operated truck stops and some large service stations. In addition, some trucking companies operate their own terminals to provide fuel and services to their own trucking fleets.

        There are generally two types of fueling stations designed to serve the trucking industry:

    •
    full service travel centers, such as those in our network, which offer a broad range of products and services to long haul trucking fleets and their drivers, independent truck drivers and motorists, including: diesel fuel and gasoline; full service restaurants; QSRs; truck repair and maintenance; travel and convenience stores; parking areas; and various driver amenities; and

    •
    so called "pumper only" truck stops, which provide diesel fuel, typically at discounted prices, with limited additional services.

        A pumper only chain may include a majority of travel centers which typically contain no, or only one or two QSRs, limited store facilities and no truck repair and maintenance facilities.

        We believe that we experience substantial competition from pumper only truck stop chains and that this competition is based principally on diesel fuel prices.

        We also experience substantial competition from regional and super-regional full service travel center networks, which is based principally on diesel fuel prices and non-fuel product and service offerings.

        Our truck repair and maintenance facilities compete with regional full service travel center and truck stop chains, full service independently owned and operated truck stops, fleet maintenance terminals, independent garages, truck dealerships, truck quick lube facilities and other parts and service centers.

        We also compete with other full service restaurants, QSRs, mass merchandisers, electronics stores, drugstores and travel and convenience stores.

        Many truck fleets own their own fuel, repair and maintenance facilities. Although we believe the long term trend has been toward a reduction in these facilities in favor of obtaining fuel, repair and maintenance services from third parties like us, during the last few years of historically volatile fuel prices, this long term trend appears to have slowed.

        An additional source of competition in the future could result from commercialization of state owned interstate highway rest areas. Some state governments have historically requested that the federal government allow these rest areas to offer fuel and non-fuel products and services similar to that of a travel center. If commercialized, these rest areas may materially increase the number of locations competing with us.

        We believe we will be able to compete successfully for the following reasons:

    •
    By offering consistent products and services in our nationwide locations we are able to attract fleet and independent professional truck drivers as well as motorists.

    •
    Our existing management team has substantial experience in operating our business. Personnel to be provided to us by Reit Management have substantial experience in public company

31

      operation and finance and our management and shared services agreement with Reit Management may provide us with additional experience and knowledge in real estate acquisitions, maintenance and development.

    •
    Our continuing relationship with Hospitality Trust may provide us opportunities to expand our business by acquiring new leaseholds for travel centers from Hospitality Trust and by providing a source of financing for improvement to our existing centers and for development of new travel centers.

        Although we believe our management team is highly talented, the members of our team do not have extensive experience working together. We expect we may expand our business with Hospitality Trust; however, Hospitality Trust is not obligated to provide us with opportunities to lease additional properties, and we may not be able to find other sources of capital sufficient to maintain and grow our travel center business. Also, some of our competitors have substantially more resources than we do; and some of our competitors have vertically integrated fuel businesses which may provide them competitive advantages. For all of these reasons and others, we can provide no assurance that we will be able to compete successfully.

Environmental Matters

        Our operations and properties are extensively regulated by environmental laws under which we may be required to investigate and clean up hazardous substances, including petroleum products, released at a property, and may be held liable to a governmental entity or to third parties for property damage and personal injuries and for investigation and clean up costs incurred in connection with any contamination. These laws:

    •
    govern operations that may have adverse environmental effects, such as discharges to air, soil and water, as well as the management of hazardous substances; and

    •
    impose liability for the costs of cleaning up properties affected by, and for damages resulting from, disposal or other releases of hazardous substances.

        We use underground storage tanks and above ground storage tanks to store petroleum products and waste at our travel centers. We must comply with environmental laws regarding tank construction, integrity testing, leak detection and monitoring, overfill and spill control, release reporting and financial assurance for corrective action in case of a release. At some locations, we must also comply with environmental laws relating to vapor recovery and discharges to water.

        From time to time our predecessor received notices of alleged violations of environmental laws or otherwise became aware of the need to undertake corrective actions to comply with environmental laws at its travel centers and regularly conducted investigatory and remedial actions with respect to releases of hazardous substances at the travel centers we will operate. We will be responsible for these matters after the spin off. In some cases we may receive contributions to partially offset our environmental costs from insurers, from state funds established for environmental clean up associated with the sale of petroleum products or from indemnitors who agreed to fund certain environmental related costs at travel centers purchased from such indemnitors.

        In 2006 our predecessor commissioned a third party review of currently known environmental liabilities to confirm its estimates of the likely amounts of remediation costs at currently active sites and what our predecessor believed will be its share of those costs. As of September 30, 2006, our predecessor had a reserve of $11.8 million for unindemnified environmental matters for which we will be responsible, a receivable for estimated insurance recoveries of these estimated future expenditures of $4.9 million and $4.4 million of cash in an escrow account to fund certain of these estimated expenditures, leaving an estimated net amount of $2.5 million to be funded by us in the future. While we cannot precisely estimate the ultimate costs we will incur in connection with currently known or

32


future potential environmental related violations, corrective actions, investigation and remediation, based on our current knowledge we do not expect that the costs to be incurred at our travel centers, individually or in the aggregate, will be material to our financial condition, results of operations or cash flow. However, we cannot be certain that we know of all existing contamination present in our travel center network, or that material liability will not be imposed on us in the future. If additional environmental problems arise or are discovered, or if additional environmental requirements are imposed by government agencies, increased environmental compliance or remediation expenditures may be required, which could have a material adverse effect on us.

        We expect to continue our predecessor's program and personnel dedicated to monitoring our exposure to environmental liabilities. Also, we will succeed to insurance of up to $35 million for unanticipated costs regarding certain known environmental liabilities and of up to $40 million regarding certain unknown or future environmental liabilities subject to certain limitations and deductibles. However, we can provide no assurance that:

    •
    we or a prior owner, operator or occupant of our travel centers did not create a material environmental condition not known to us at this time;

    •
    future uses or conditions (including, without limitation, changes in applicable environmental laws and regulations) will not result in the imposition of additional environmental liability upon us; or

    •
    we will be able to maintain similar environmental insurance coverage in the future under acceptable terms.

        Under our lease, we have agreed to indemnify Hospitality Trust for any environmental liabilities related to travel centers which we lease and which arise during the term of the lease.

Employees

        As of September 30, 2006, our predecessor employed approximately 11,900 people on a full time or part time basis. Of this total, approximately 11,450 were employed at travel centers we will operate, 400 performed managerial, operational or support services at TravelCenters of America, Inc.'s headquarters or elsewhere and 50 employees staffed the distribution center. Only 19 of the employees at two travel centers are covered by collective bargaining agreements. We believe that our predecessor's relations with its employees has been satisfactory and that we will be able to maintain such satisfactory relations.

Other Properties

        Our principal executive offices are leased and are located at 24601 Center Ridge Road, Suite 200, Westlake, Ohio 44145-5639. Our distribution center is leased and is located at 1450 Gould Boulevard, LaVergne, Tennessee 37086-3535.

        Our predecessor's network currently consists of 163 travel centers. Our predecessor operates 140 of these travel centers and our predecessor's franchisees operate 23 of these travel centers. Our predecessor is constructing two travel centers that are expected to be completed in 2007. Our predecessor has a parcel of land under agreement for acquisition on which we may decide to build an additional facility. Also, we expect to own one site that is closed and held for sale. We can provide no assurance that we will successfully complete the construction, acquisition or sale, as applicable, of any of these travel centers.

Legal Proceedings

        On February 27, 2006, Flying J, Inc. and certain of its affiliates filed a lawsuit against a subsidiary of our predecessor and Pilot Travel Centers, LLC and certain of its affiliates in the U.S. District Court

33


for the District of Utah. Flying J and Pilot are competitors of ours. Flying J also markets a fuel purchasing credit card to trucking companies. The Flying J lawsuit claims, in essence, that our predecessor's subsidiary and Pilot have refused to accept the Flying J fuel card, and that such refusal was the result of unlawful concerted action. Flying J is seeking, among other things, an injunction requiring our predecessor's subsidiary and Pilot to accept the Flying J fuel card and damages. We believe that there are substantial factual and legal defenses to Flying J's claims. This case is at an early stage and we cannot estimate our ultimate exposure to loss or liability, if any, related to this litigation.

        Our predecessor has been, and we expect to be, involved from time to time in various legal and administrative proceedings and threatened legal and administrative proceedings incidental to the ordinary course of our business. Except for the Flying J litigation described above, we believe that we are not now involved in any litigation which, individually or in the aggregate, could have a material adverse affect on our business, financial condition, results of operations or cash flows.


SELECTED HISTORICAL FINANCIAL INFORMATION

        Since our formation on October 10, 2006 and until the completion of the spin off, we have had and expect to have no operations, revenues, expenses, liabilities or assets except the nominal initial capitalization provided by Hospitality Trust.

        TravelCenters of America, Inc. is considered to be our predecessor under applicable rules and regulations of the SEC. The Hospitality Trust acquisition, related restructuring and the spin off will cause our future assets, liabilities, financial position, results of operations and cash flows to be materially different than those of our predecessor. The most significant of these differences include the facts that TravelCenters of America, Inc.:

whereas we expect:

        Among other things, these differences will cause us to incur substantial expenses which were not incurred by our predecessor, for example, rent payments to Hospitality Trust and costs associated with operating as a public company. For all of these reasons, the historical financial information of our predecessor is not indicative of our future financial position, results of operations or cash flows.

        The following table presents selected historical financial information of our predecessor for each of the last five fiscal years and the nine month periods ended September 30, 2005 and 2006. The information set forth below with respect to fiscal years 2003, 2004 and 2005 was derived from, and should be read in conjunction with, the audited consolidated financial statements of our predecessor included elsewhere in this prospectus. The information set forth below with respect to the fiscal years 2002 and 2001 was derived from audited consolidated financial statements of our predecessor that are not included in this prospectus. The historical unaudited consolidated financial information for the nine months ended September 30, 2005, and 2006 was derived from, and should be read in conjunction with, the unaudited consolidated financial statements of our predecessor included elsewhere in this prospectus. The unaudited consolidated financial information reflects, in our predecessor's opinion, all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position and results of operations of our predecessor for the unaudited periods. The results of

34


operations for the interim periods are not necessarily indicative of operating results for the full years of which they are parts. The following information should also be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations—Historical Results of Operations—Our Predecessor" and our pro forma financial statements and the notes thereto included elsewhere in this prospectus.

 
  Predecessor—TravelCenters of America, Inc.
 
  Year Ended December 31,
  Nine Months Ended
September 30,
 
  2001
  2002(1)
  2003
  2004(2)(3)
  2005(3)(4)
  2005(3)(4)
  2006(3)
 
  (dollars in thousands)

Income statement data:                                          
  Revenues   $ 1,934,612   $ 1,870,870   $ 2,176,230   $ 2,677,864   $ 4,075,569   $ 2,929,975   $ 3,678,468
  Income (loss) from continuing operations     (10,054 )   1,271     9,144     14,862     (2,095 )   388     25,105
Income (loss) from continuing operations per share:                                          
  Basic     (1.45 )   0.18     1.32     2.14     (0.30 )   0.06     3.62
  Diluted     (1.45 )   0.18     1.26     2.04     (0.30 )   0.05     3.32
Balance sheet data, end of period:                                          
  Total assets     679,940     660,767     650,567     897,729     939,704     953,282     1,003,707
  Long term obligations     547,534     523,934     502,033     682,892     675,638     680,328     670,464
(1)
Beginning in 2002, as a result of adopting a new accounting pronouncement, our predecessor ceased amortization of its goodwill and trademark intangible assets.

(2)
Includes the operating results of 11 travel centers our predecessor acquired on December 1, 2004, beginning on the acquisition date, as well as the acquisition of the improvements at eight sites our predecessor had been leasing until the lease was terminated in December 2004.

(3)
Our predecessor's results for the years ended December 31, 2004 and 2005 and for the nine month periods ended September 30, 2005 and 2006 included pre-tax charges for compensation expense related to stock options of $65, $8,921, $53 and $11,946, respectively.

(4)
Our predecessor's results for the year ended December 31, 2005, and the nine months ended September 30, 2005, included pre-tax charges of $39,566 and $39,375, respectively, for debt extinguishment and refinancing expenses incurred in connection with a refinancing of debt in June 2005.


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

Overview

        We were formed in October 2006 as a Delaware limited liability company. We were formed as a 100% owned subsidiary of Hospitality Trust to succeed to the operating business of TravelCenters of America, Inc. which we refer to as our predecessor and which Hospitality Trust has agreed to acquire. We have operated as a shell company subsidiary of Hospitality Trust since our formation. As a result, our brief history is not comparable to operations which we expect to conduct.

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        Because of the expected restructuring and spin off, the historical financial information of our predecessor is not indicative of our future financial position, results of operations or cash flows. You should read the following discussion in conjunction with our historical and pro forma financial statements and the financial statements of our predecessor included elsewhere in this prospectus.

Historical Results of Operations for Our Predecessor

Same Site Results Comparisons

        As part of the discussion and analysis of our predecessor's operating results we refer to increases and decreases in results on a same site basis. For purposes of these comparisons, a travel center is included in same site comparisons only for the period for which it was open for business under the same method of operation (company operated, franchisee leased and operated or franchisee owned and operated) in both years being compared. Travel centers are not excluded from the same site comparisons as a result of expansions in their square footage or in the services offered.

Relevance of Fuel Revenues

        Due to market pricing of commodity fuel products and the pricing arrangements with fuel customers, fuel revenue is not a reliable metric for analyzing our predecessor's results from period to period. As a result solely of changes in crude oil and refined products market prices, our predecessor's fuel revenue may increase or decrease significantly, in both absolute amounts and on a percentage basis, without a comparable change in fuel sales volumes or in gross profit per gallon. We consider fuel volumes to be a better measure of comparative performance than fuel revenues.

Nine Months ended September 30, 2006, Compared to Nine Months ended September 30, 2005

        Revenues.     Our predecessor's revenues for the nine month period ended September 30, 2006, were $3,678.5 million, which represents an increase from the nine month period ended September 30, 2005, of $748.5 million, or 25.5%, that was primarily attributable to an increase in fuel revenue.

        Fuel revenue for the nine month period ended September 30, 2006, increased by $715.3 million, or 31.2%, as compared to the same period in 2005. The increase was principally the result of increased average selling prices for both diesel fuel and gasoline, but also resulted from increases in sales volumes for both diesel fuel and gasoline. Average diesel fuel and gasoline sales prices for the nine months ended September 30, 2006, increased by 24.6% and 23.7%, respectively, as compared to the same period in 2005, reflecting increases in commodity prices that were attributable to higher crude oil costs, due to increased worldwide demand and political unrest in oil producing regions of the world. Diesel fuel and gasoline sales volumes for the nine months ended September 30, 2006, increased 5.4% and 4.7%, respectively, as compared to the same period in 2005. For the nine months ended September 30, 2006, our predecessor sold 1,234.8 million gallons of diesel fuel and 154.7 million gallons of gasoline, as compared to 1,171.0 million gallons of diesel fuel and 147.8 million gallons of gasoline for the nine months ended September 30, 2005. The diesel fuel sales volume increase of 63.7 million gallons resulted from a 9.2% increase in same site diesel fuel sales volumes and a net increase in sales volumes at company operated sites our predecessor added to or eliminated from its network during 2005 and 2006, somewhat offset by a 31.7 million gallon, or 35.7% decrease in wholesale diesel fuel sales volumes. The gasoline sales volume increase was primarily attributable to a 3.3% increase in same site gasoline sales volumes and a net increase in sales volumes at company operated travel centers our predecessor added to or eliminated from its network during 2005 and 2006, somewhat offset by a 3.3 million gallon, or 98.5% decrease in wholesale gasoline sales volumes that resulted from our predecessor's decision to be less active in wholesale gasoline sales. Our predecessor believes the same site fuel sales volume increase resulted from its competitive pricing strategies as well as its strong nonfuel products and services offerings. Our predecessor believes the decreases in wholesale sales

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volumes for both diesel and gasoline resulted from the sharp volatility in commodity prices during 2006 and the high level of commodity prices. Fuel revenues were 81.8% of our predecessor's total revenues for the nine month period ended September 30, 2006, as compared to 78.3% for the same period in 2005, principally as a result of higher fuel prices.

        Non-fuel revenues for the nine month period ended September 30, 2006, of $660.7 million included an increase of $33.1 million, or 5.3%, as compared to the same period in 2005. The increase was the result of a 4.6% increase in same site non-fuel revenues and the increased sales at company operated travel centers added to our predecessor's network in 2005 and 2006. Our predecessor believes the same site increase reflected increased customer traffic resulting, in part, from the capital improvements that our predecessor made to its travel centers, from a slightly expanded freight market and also from its fuel marketing strategy. Non-fuel revenues were 18.0% of our predecessor's total revenues for the nine month period ended September 30, 2006, as compared to 21.4% for the same period in 2005, principally as a result of higher fuel prices.

        Rent and royalty revenues for the nine month period ended September 30, 2006, were flat compared to the same period in 2005. This was attributable to the offsetting effects of rent and royalty revenue lost as a result of the conversions of two leased sites to company operated sites during 2005, the initial and continuing franchise fees related to three franchisee owned and operated sites added to the network in 2005 and 2006, and increases in both rent and royalty revenues on a same site basis. Royalty revenue increased 3.1% on a same site basis and there was a 3.7% increase in same site rent revenue.

        Cost of goods sold (excluding depreciation).     Our cost of goods sold for the nine month period ended September 30, 2006, was $3,174.2 million, an increase of $708.4 million, or 28.7%, as compared to the same period in 2005 that was primarily attributable to an increase in fuel cost.

        Fuel cost for the nine month period ended September 30, 2006, increased by $692.8 million, or 31.4%, as compared to the same period in 2005. The increase was attributable principally to increased market prices for our predecessor's purchases of diesel fuel and gasoline, but also resulted from the increases in sales volumes for both diesel fuel and gasoline as described above. Average diesel fuel and gasoline purchase prices for the nine months ended September 30, 2006, increased by 24.7% and 24.9%, respectively, as compared to the same period in 2005, reflecting increases in commodity prices that were attributable to higher crude oil costs due to increased worldwide demand and political unrest in oil producing regions of the world.

        Non-fuel cost of goods sold for the nine month period ended September 30, 2006, of $275.1 million included an increase of $15.6 million, or 6.0%, as compared to the same period in 2005. This increase was primarily attributable to the increased level of non-fuel sales described above.

        Operating and selling, general and administrative expenses.     Our predecessor's operating expenses included the direct expenses of company operated sites and the ownership costs of leased sites, and its selling, general and administrative expenses included corporate overhead and administrative costs. Our predecessor's operating expenses increased by $16.6 million, or 5.4%, to $325.1 million for the nine month period ended September 30, 2006, compared to $308.4 million for the same period in 2005. This increase resulted from a $19.7 million, or 6.5% increase on a same site basis and a net increase resulting from company operated travel centers added to or eliminated from our predecessor's network during 2005 and 2006. The same site increase was primarily related to the increased costs necessary to support the increased level of non-fuel sales and also reflected higher credit card transaction fees associated with increases in fuel and non-fuel revenues and an increase in energy costs. On a same site basis, operating expenses as a percentage of non-fuel revenues for the nine months ended September 30, 2006 were 49.7%, compared to 48.8% for the same period in 2005, reflecting increased credit card transaction fees and utility costs. This increase was somewhat offset by a $4.4 million net

37


reduction of operating expense recognized in June 2006 upon the settlement of certain claims as described below under the heading "Other income (expenses), net."

        Our predecessor's selling, general and administrative expenses for the nine month period ended September 30, 2006, were $48.5 million, representing a $15.8 million, or 48.4% increase from the same period in 2005 that was primarily attributable to share based compensation expense. Share based compensation expense for the nine months ended September 30, 2006, increased by $11.9 million over the same period of 2005. The remaining $3.9 million increase was primarily related to personnel cost increases. The increased level of share based compensation expense in 2006 as compared to 2005 resulted from the increase in the number of vested performance stock options in the 2006 period as compared to the 2005 period, as well as an increase in the estimated value of those options.

        Depreciation and amortization expense.     Depreciation and amortization expense for the nine month period ended September 30, 2006, was $52.1 million, as compared to $46.1 million for the same period in 2005, an increase of $6.0 million, or 13.1%. This increase resulted from our predecessor's investments in additional depreciable assets in 2006 and 2005.

        Merger and refinancing expenses.     During the nine months ended September 30, 2006, our predecessor recognized a charge of $4.8 million related to expenses incurred in marketing itself for sale, primarily costs related to debt financings that will not be pursued further.

        Gain on asset sales.     For the nine month period ended September 30, 2006, the gain on asset sales of $0.6 million primarily was generated from the sale of excess land, while the gain on asset sales of $0.2 million for the nine month period ended September 30, 2005 primarily was generated from the sale of one company operated travel center.

        Income from operations.     Our predecessor generated income from operations of $74.3 million for the nine month period ended September 30, 2006, compared to income from operations of $77.2 million for the same period in 2005. This decrease of $2.9 million, or 3.8%, as compared to the 2005 period was primarily the result of the $11.9 million increase in share based compensation expense in the 2006 period. The effect of increased share based compensation expense was somewhat offset by the $4.4 million expense reduction related to claims settlements and the increased gross profit that resulted from increased fuel and non-fuel sales volumes and fuel margins per gallon.

        Other income (expense), net.     In 2006 our predecessor reached settlements of two claims made in connection with transactions that occurred in 2000. Our predecessor incurred $1.2 million of expenses in the 2006 period prior to the settlement in pursuit of these claims. As a result of the settlements, which totalled $6.9 million, our predecessor recognized $5.6 million as a reduction of operating expenses because it represented the recovery of related expenses that had been incurred in 2006 and prior years. The remaining $1.3 million of the settlement amounts represented a gain on claim settlements and was recognized in non-operating income. During the nine months ended September 30, 2005, our predecessor incurred $39.4 million of expenses in connection with a refinancing and recognized a gain on sale of investment of $2.0 million in 2005. This gain was related to the 2004 sale of an equity investment and was recognized in 2005 when the last portion of sales proceeds was released from escrow as a result of the resolution of certain contingencies.

        Interest and other financial costs, net.     Interest and other financial costs, net, for the nine month period ended September 30, 2006, of $35.0 million decreased by $2.7 million, or 7.2%, compared to the same period in 2005. This decrease resulted from a reduction in our predecessor's weighted average effective borrowing rates as a result of its June 2005 refinancing.

        Income taxes.     Our predecessor's effective income tax rate for the nine month period ended September 30, 2005, was not meaningful, primarily due to the effect of expenses related to the 2005 refinancing transactions. Our predecessor's effective income tax rate for the nine month period ended

38


September 30, 2006, was 38.1% and, excluding the impact of the expenses related to the refinancing transactions, would have been 39.1% for the same period in 2005. These rates differed from the federal statutory rate due primarily to state income taxes partially offset by the benefit of certain tax credits. The difference in these effective tax rates between the 2006 period and the 2005 period was primarily the result of changes in effective state tax rates.

Year ended December 31, 2005 Compared to Year ended December 31, 2004

        Revenues.     Our predecessor's revenues for 2005 were $4,075.3 million, which represented an increase from 2004 of $1,397.4 million, or 52.2%, that was the result of increases in both fuel revenue and non-fuel revenues. The fuel and non-fuel revenue increases are in part the result of the addition of eleven travel centers acquired in December 2004 and in part the result of factors described below.

        Fuel revenue for 2005 increased by $1,272.6 million, or 65.0%, as compared to 2004. The increase was principally from increased average selling prices for both diesel fuel and gasoline. These prices increased by 43.7% and 28.2%, respectively, as compared to 2004, reflecting increases in commodity prices resulting from higher crude oil costs due to increased worldwide demand, refinery outages and other refined petroleum product supply disruptions, including the effects of Hurricanes Katrina and Rita in late 2005. Diesel fuel and gasoline sales volumes for 2005 increased 17.7% and 7.1%, respectively, as compared to 2004. In 2005, our predecessor sold 1,575.5 million gallons of diesel fuel and 195.9 million gallons of gasoline, as compared to 1,338.0 million gallons of diesel fuel and 182.9 million gallons of gasoline sold in 2004. The diesel fuel sales volume increase of 237.4 million gallons primarily resulted from a 115.4 million gallon net increase in sales volume at travel centers that our predecessor added to or eliminated from its network during 2004 and 2005, and a 9.3% increase in same site diesel fuel sales volumes. Our predecessor also increased sales volume of wholesale diesel fuel in 2005 by 18.8 million gallons, or 20.6%, over the 2004 level. The gasoline sales volume increase of 13.0 million gallons, or 7.1%, was primarily attributable to a 14.8 million gallon net increase in sales volumes at company operated travel centers our predecessor added to or eliminated from its network during 2004 and 2005, and a 0.2% increase in same site gasoline sales volumes, partially offset by a 2.4 million gallon decrease in wholesale gasoline sales volumes. Our predecessor believes the same site diesel fuel sales volume increase resulted from an expanded freight market in 2005 and our predecessor's competitive fuel marketing strategies, somewhat offset by an increase in the level of freight carried by train instead of truck and an increase in trucking fleets' self fueling at their own terminals due to wide fluctuations in, and high levels of, diesel prices in 2005. Our predecessor believes the same site increase in gasoline sales volume resulted primarily from increased motorist visits to our travel centers as a result of our predecessor's more aggressive retail gasoline pricing program as well as site improvements made as part of our predecessor's capital investment program, partially offset by the negative effects on motorist purchases of the high prices and the supply disruptions caused by Hurricanes Katrina and Rita in late 2005. Our predecessor believes the decreases in wholesale sales volumes for both diesel and gasoline resulted from the volatility in commodity prices during 2005, coupled with the high level of commodity prices and our predecessor's decision to be less active in wholesale gasoline sales. Fuel revenues were 79.3% of our predecessor's total revenues for 2005 as compared to 73.2% for 2004, principally as a result of higher fuel prices.

        Non-fuel revenues for 2005 of $833.5 million reflected an increase of $125.5 million, or 17.7%, as compared to 2004. The increase was primarily attributable to the $73.3 million net increase in sales at the company operated travel centers our predecessor added to or eliminated from its network during 2004 and 2005 and also was attributable to a 7.3% increase in same site non-fuel revenues. Our predecessor believes the same site increases reflected increased customer traffic resulting, in part, from the capital improvements that our predecessor made to upgrade its travel centers, from an expanded freight market and from our predecessor's competitive fuel marketing strategies. Non-fuel revenues

39


were 20.5% of our predecessor's total revenues for 2005 as compared to 26.4% for 2004, principally as a result of higher fuel prices.

        Rent and royalty revenues for 2005 decreased $0.7 million, or 6.8%, as compared to 2004, attributable to the rent and royalty revenue lost as a result of the conversions of four leased travel centers to company operated travel centers during 2004 and 2005. This decrease was partially offset by a 5.3% increase in same site royalty revenue and a 3.6% increase in same site rent revenue.

        Cost of goods sold (excluding depreciation).     Our cost of goods sold for 2005 were $3,450.8 million, which represents an increase from 2004 of $1,303.8 million, or 60.7%, that was primarily attributable to an increase in fuel cost.

        Fuel cost for 2005 increased by $1,245.4 million, or 67.1%, as compared to 2004. The increase was attributable principally to increased market prices for our predecessor's purchases of diesel fuel and gasoline, but also resulted from the increases in sales volumes for both diesel fuel and gasoline that were described above. Average diesel fuel and gasoline purchase prices for 2005 increased by 45.6% and 29.3%, respectively, as compared to 2004, reflecting increases in commodity prices that were attributable to higher crude oil costs due to increased worldwide demand and political unrest in oil producing regions of the world.

        Non-fuel cost of goods sold for 2005 of $348.3 million included an increase of $58.4 million, or 20.1%, as compared to 2004. This increase is primarily attributable to the increased level of non-fuel sales described above.

        Operating and selling, general and administrative expenses.     Our predecessor's operating expenses included the direct expenses of company operated sites and the ownership costs of leased sites, and its selling, general and administrative expenses included corporate overhead and administrative costs. Our predecessor's operating expenses increased by $57.6 million, or 15.9%, to $419.1 million for 2005 compared to $361.5 million for 2004. This increase was primarily attributable to a net increase resulting from travel centers that our predecessor added to or eliminated from its network during 2004 and 2005, and a 4.0% increase on a same site basis. The increase was also due in part to a $5.3 million charge our predecessor recorded in 2005 in connection with a seizure of funds by the government in a legal dispute concerning revenues we received from a vendor of ours operating certain video games alleged by the government to be illegal gambling devices.

        Our predecessor's selling, general and administrative expenses for 2005 were $53.1 million, which reflected a $9.9 million, or 22.9%, increase from 2004 that was primarily attributable to stock compensation costs. Stock compensation expense for 2005 was $8.9 million, primarily related to the vesting of performance stock options. Stock compensation expense for 2004 was $0.1 million. The remaining $1.0 million increase was primarily due to increased personnel costs, partially resulting from the addition of sites in late 2004.

        Depreciation and amortization expense.     Depreciation and amortization expense for 2005 was $65.0 million, compared to $58.8 million for 2004, an increase of $6.2 million, or 10.6%, that was primarily due to travel centers acquired in 2004, as well as other capital additions purchased in 2004 and 2005.

        (Gain) loss on asset sales.     For 2005, gain on asset sales of $0.2 million arose primarily from the sale of a travel center and excess land, while gain on asset sales of $2.5 million for 2004 was generated primarily from the sale of two company operated travel centers, one closed travel center and our predecessor's fractional shares of three aircraft.

        Income from operations.     Our predecessor generated income from operations of $86.3 million for 2005, compared to income from operations of $69.3 million for 2004. This increase of $17.0 million, or 24.6%, as compared to 2004 was primarily attributable to the increased level of gross margin which was

40


partially offset by the increased level of expenses, especially stock compensation expense and the write off related to funds seized by the government as described above.

        Other income (expense), net.     Until April 2004, our predecessor owned 21.5% of an equity investee and recognized $0.2 million in 2004 as its equity share of the investee's earnings. There were no such investees in 2005. Our predecessor's gain on sale of investment of $2.0 million for 2005 resulted from the 2004 sale of an equity investment. During 2004, a gain of $1.6 million was recognized when the transaction closed, and an additional gain was recognized in 2005 when the last portion of sales proceeds was released from escrow as a result of the resolution of certain contingencies. For 2005, our predecessor recognized $39.6 million of debt extinguishment and refinancing expenses in connection with refinancing transactions in that year. For 2004, our predecessor recognized $1.7 million of debt extinguishment and refinancing expenses in connection with 2004 refinancing transactions.

        Interest and other financial costs, net.     Interest and other financial costs, net, for 2005 increased by $2.5 million, or 5.3%, compared to 2004. This increase primarily resulted from the increased level of interest rates in 2005 as compared to 2004.

        Income taxes.     Our predecessor's effective income tax rate for 2005 was not meaningful, primarily due to the nondeductibility of certain expenses for tax purposes (principally those related to the $5.3 million charge related to funds seized by the government). Excluding the impact of the $5.3 million charge, our predecessor's effective income tax rate for 2005 would have been 41.7% and was 36.3% for 2004. These rates differed from the federal statutory rate due primarily to state and foreign income taxes partially offset by the benefit of certain tax credits. The difference in these effective tax rates between 2005 and 2004 was primarily the result of changes in effective state tax rates.

Year ended December 31, 2004 Compared to Year ended December 31, 2003

        Revenues.     Our predecessor's revenues for 2004 were $2,677.9 million, which represents an increase from 2003 of $501.6 million, or 23.1%, that was primarily attributable to an increase in fuel revenues but also resulted from increased non-fuel revenues.

        Fuel revenues for 2004 increased by $445.6 million, or 29.4%, as compared to 2003. The increase was attributable principally to increased average selling prices for both diesel fuel and gasoline for 2004 which increased by 31.1% and 26.4%, respectively, as compared to 2003, reflecting increases in commodity prices due to increased worldwide demand, refinery outages and other supply disruptions. These price increases were somewhat offset by decreases in diesel fuel and gasoline sales volumes which for 2004 decreased 0.2% and 4.3%, respectively, as compared to 2003. For 2004, our predecessor sold 1,338.0 million gallons of diesel fuel and 182.9 million gallons of gasoline, as compared to 1,341.1 million gallons of diesel fuel and 191.1 million gallons of gasoline for 2003. The diesel fuel sales volume decrease of 3.1 million gallons primarily resulted from a 9.9 million gallon, or 9.7%, decrease in wholesale diesel fuel sales volume that was partially offset by a 0.6% increase in same site diesel fuel sales volumes and a net increase in sales volumes at travel centers our predecessor added to or eliminated from its network during 2003 and 2004. The gasoline sales volume decrease of 8.2 million gallons was primarily attributable to a 16.9 million gallon, or 74.7%, decrease in wholesale gasoline sales volumes that was partially offset by a 2.0% increase in same site gasoline sales volumes and a net increase in gasoline volumes at company operated travel centers our predecessor added to or eliminated from its network during 2003 and 2004. Our predecessor believes the same site diesel fuel sales volume increase resulted from an expanded freight market in 2004 and our predecessor's retail diesel fuel pricing strategies, which factors were somewhat offset by an increase in the level of freight carried by train instead of truck and an increase in trucking fleets self fueling at their own terminals due to the wide fluctuations in, and high levels of, diesel prices in 2004. Our predecessor believes the same site increase in gasoline sales volume resulted primarily from increased motorist visits to our

41


predecessor's travel centers as a result of our predecessor's competitive retail gasoline pricing strategies as well as site improvements made as part of our predecessor's capital investment program. Our predecessor believes the decreases in wholesale sales volumes for both diesel and gasoline result from the sharp volatility in commodity prices during 2004 coupled with the high level of commodity prices. Fuel revenues were 73.2% of our predecessor's total revenues for 2004 as compared to 69.5% for 2003, principally as a result of higher fuel prices.

        Non-fuel revenues for 2004 of $708.0 million reflected an increase of $58.5 million, or 9.0%, as compared to 2003. The increase was primarily attributable to a 6.0% increase in same site non-fuel revenues and also to the net increase in sales at the company operated travel centers our predecessor added to or eliminated from its network during 2003 and 2004. Our predecessor believes the same site increase reflected increased customer traffic resulting, in part, from the capital improvements that our predecessor has made, from an expanded freight market and also from our predecessor's fuel pricing strategies. Non-fuel revenues were 26.4% of our predecessor's total revenues for 2004 as compared to 29.9% for 2003, principally as a result of higher fuel prices.

        Rent and royalty revenues for 2004 declined $2.4 million, or 18.4%, compared to 2003, reflecting rents and royalties lost as a result of the conversions of eight leased travel centers to company operated travel centers during 2003 and 2004. This decrease was partially offset by a 3.5% increase in same site royalty revenue and a 3.9% increase in same site rent revenue.

        Cost of goods sold (excluding depreciation).     The cost of goods sold for 2004 were $2,147.0 million, which represents an increase from 2003 of $472.3 million, or 28.2%, that was primarily attributable to an increase in fuel cost.

        Fuel cost for 2004 increased by $448.4 million, or 31.8%, as compared to 2003. The increase was attributable to increased market prices for diesel fuel and gasoline, somewhat offset by the decreases in sales volumes for both diesel fuel and gasoline as described above. Average diesel fuel and gasoline purchase prices for 2004 increased by 33.7% and 28.2%, respectively, as compared to 2003, reflecting increases in commodity prices due to increased worldwide demand and political unrest in oil producing regions of the world.

        Non-fuel cost of goods sold for 2004 of $289.9 million included an increase of $23.8 million, or 9.0%, as compared to 2003. This increase is primarily attributable to the increased level of non-fuel sales described above.

        Operating and selling, general and administrative expenses.     Our predecessor's operating expenses included the direct expenses of company operated sites and the ownership costs of leased sites, and its selling, general and administrative expenses included corporate overhead and administrative costs. Our predecessor's operating expenses increased by $19.5 million, or 5.7%, to $361.5 million for 2004 compared to $342.0 million for 2003. This increase was primarily attributable to a net increase from travel centers our predecessor added to or eliminated from its network during 2003 and 2004 and a 3.5% increase on a same site basis.

        Our predecessor's selling, general and administrative expenses for 2004 were $43.2 million, which reflected a $2.6 million, or 6.5%, increase from 2003 that was primarily attributable to personnel costs.

        Depreciation and amortization expense.     Depreciation and amortization expense for 2004 was $58.8 million, compared to $60.4 million for 2003, a decrease of $1.6 million, or 2.7%, that was primarily due to an impairment charge of $0.9 million recognized in 2003 and a $0.5 million decrease in amortization expense that resulted from an intangible asset becoming fully amortized during 2003.

        (Gain) loss on asset sales.     For 2004, the gain on asset sales of $2.5 million was generated primarily from the sale of two travel centers, one closed travel center and our predecessor's fractional

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shares of three aircraft, while the gain on asset sales of $1.5 million for 2003 was generated primarily from the sale of three travel centers.

        Income from operations.     Our predecessor generated income from operations of $69.3 million for 2004, compared to income from operations of $60.0 million for 2003. This increase of $9.3 million, or 15.5%, as compared to the 2003 period was primarily attributable to the increased level of non-fuel revenues at a modestly improved gross margin, which was partially offset by the decreased level of fuel sales volumes and fuel margins per gallon.

        Other income (expense), net.     The gain on sale of investment of $1.6 million in 2004 resulted from the sale of an equity investment for cash proceeds of $9.1 million.

        Interest and other financial costs, net.     Interest and other financial costs, net, for 2004, decreased by $0.9 million, or 1.9%, compared to 2003. This decrease primarily resulted from lower interest expense related to lower average borrowings outstanding, somewhat offset by a $1.7 million expense incurred in connection with a 2004 refinancing.

        Income taxes.     Our predecessor's effective income tax rates for 2004 and 2003 were 36.3% and 34.0%, respectively. These rates differed from the federal statutory rate due primarily to state and foreign income taxes and certain nondeductible expenses, partially offset by the benefit of certain tax credits.

        Cumulative Effect of a Change in Accounting Principle.     Effective January 1, 2003, our predecessor adopted FAS 143, "Accounting for Asset Retirement Obligations" and recognized a one time cumulative charge of $0.3 million. There was no similar accounting principle change during 2004.

Critical Accounting Policies of Our Predecessor

        The preparation of our predecessor's financial statements in accordance with accounting principles generally accepted in the U.S. required our predecessor to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. The critical accounting policies employed by our predecessor in the preparation of its consolidated financial statements are those which involve allowances for doubtful accounts and notes receivable, asset impairment, reserves for self insurance, environmental liabilities, income tax accounting and recognition of stock compensation expense.

        Our predecessor maintained its allowances for doubtful accounts and notes receivable based on historical payment patterns, aging of accounts receivable, periodic review of customers' financial condition, and actual write off history. If the financial condition of customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.

        Our predecessor's accounting policies required recording impairment losses on long lived assets to reduce the carrying value of certain assets to their fair value. This could occur under our predecessor's policies in two types of cases: (1) when assets were used in operations, events and circumstances indicated that the assets might be impaired and the undiscounted cash flows estimated to be generated by those assets were less than the carrying value of those assets; and (2) when assets were to be disposed of and their carrying value exceeded the estimated fair value of the asset less the estimated cost to sell the asset. Estimated cash flows were based on historical results adjusted to reflect the best estimate of future market and operating conditions. The estimates of fair value represent the best estimate based on industry trends and reference to market rates and transactions.

        Our predecessor assessed goodwill for impairment; for these purposes, our predecessor determined that it was one reporting unit and that the estimated fair value of that reporting unit, based on a discounted cash flow analysis, exceeded its carrying value. With respect to trademark intangible assets, the estimated fair value, based on a discounted cash flow analysis, exceeded the carrying value. Our

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predecessor has not recognized an impairment charge with respect to any of its intangible assets. A number of assumptions and methods are used in preparing the valuations underlying these impairment tests, including estimates of future cash flows and discount rates. Applying significantly different assumptions or valuation methods could result in different results of these impairment tests. Similarly, defining the reporting unit differently could lead to a different result for goodwill. The goodwill and trademark intangible assets were assessed for impairment annually as of January 1 of each year.

        Our predecessor was partially self insured with respect to general liability, workers' compensation, auto and group health benefits claims up to certain stop loss amounts ranging from $100,000 to $500,000. Provisions established under these partial self insurance programs were made for both estimated losses on known claims and claims incurred but not reported, based on claims history. The most significant risk of this methodology is its dependence on claims history, which is not always indicative of future claims. To the extent an estimate is inaccurate, expenses and net income will be understated or overstated. Although some variation to actual results occurs, historically such variability has not been material. For the years ended December 31, 2003, 2004 and 2005, our predecessor's aggregate provisions amounted to $23.1 million, $25.3 million, and $25.8 million, respectively. For the years ended December 31, 2003, 2004 and 2005, our predecessor paid $25.9 million, $23.9 million and $25.4 million, respectively, on claims related to these partial self insurance programs. At December 31, 2004 and 2005, our predecessor's aggregated liability related to these partial self insurance programs was $11.8 million and $12.2 million, respectively, which our predecessor believed was adequate to cover both reported and incurred but not reported claims.

        Our predecessor established or adjusted environmental contingency reserves when the responsibility to remediate became probable and the amount of associated costs was reasonably determinable.

        As part of the process of preparing its consolidated financial statements, our predecessor was required to estimate income taxes in each of the jurisdictions in which it operated. The process involved estimating actual current tax expense along with assessing temporary differences resulting from differing treatment of items for financial statement and tax purposes. These timing differences resulted in deferred tax assets and liabilities, which were included in our predecessor's consolidated balance sheet. Our predecessor was required to record a valuation allowance to reduce its deferred tax assets if it was not able to conclude that it was more likely than not these assets would be realized.

        Any or all of these policies, applied in the future with the benefit of additional facts or better estimates which were not known or available at the time the various required evaluations were made, could result in revisions to estimated liabilities, adjustments to reduce assets to their fair value or recognition of expenses.

        We expect that most of the policies described above will be critical accounting policies of ours.

        Our predecessor was also reliant upon other accounting policies which it considered critical, but which we believe are unlikely to have continuing importance to us, including policies regarding accounting for agreements under which certain members of our predecessor's management purchased shares of our predecessor's stock which is subject to redemption under certain conditions and for options to purchase our predecessor's stock which were granted to certain members of our predecessor's management. Each of these accounting policies was complicated by the fact that our predecessor's stock is privately held, subjecting the related accounting to subjective estimates which may not have a direct relationship to our predecessor's financial results or condition.

Change in Accounting Principle

        Effective January 1, 2006, our predecessor adopted Statement of Financial Accounting Standards (FAS) No. 123(R), "Share based Payments" (FAS 123R), which replaced FAS No. 123, "Accounting for

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Stock based Compensation," and superseded Accounting Principles Board Opinion No. 25 (APB 25), "Accounting for Stock Issued to Employees." FAS 123R requires compensation cost relating to share based payment transactions be recognized in the financial statements. Our predecessor adopted FAS 123R using the prospective approach; accordingly, prior periods were not restated. There was no effect on our predecessor's balance sheet or results of operations as a result of the adoption of FAS 123R. Prior to January 1, 2006, our predecessor measured compensation costs related to share based payments under APB 25, as permitted by FAS 123, and provided pro forma disclosure in the notes to financial statements as required by FAS 123 and FAS 148. FAS 123R does not allow the pro forma disclosure previously permitted by FAS 123.

        Under APB 25, our predecessor accounted for employee share options using the intrinsic value method of accounting. For share options that vested based on the passage of time, no share based compensation cost was reflected in our predecessor's consolidated statements of operations because for all of such options the exercise price equaled the estimated market value of the underlying share on the date of grant. For share options that vested based on attaining specified financial return performance targets, no share based compensation cost was reflected in our predecessor's consolidated statements of operations until such time as attaining of the targets was determined to be probable, which was not the case for the options granted under the 2001 stock plan until the fourth quarter of 2005. Our predecessor has not granted options since the adoption of FAS 123R, but in April 2006 modified certain outstanding options and, accordingly, began accounting for these modified options as proscribed by FAS 123R. As a result, our predecessor has recognized share based compensation expense with respect to these modified stock options in the financial statements for the nine month period ended September 30, 2006.

Recently Issued Accounting Pronouncements

        FIN 48.     In June 2006 the FASB issued Interpretation No. 48, "Accounting for Uncertainty in Income Taxes" (FIN 48). FIN 48 is effective for fiscal years beginning after December 15, 2006. FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Under this guidance, a benefit can be recognized with respect to a tax position only if it is more likely than not that the position will be sustained upon examination. In such cases, the tax position is to be measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. We are in the process of evaluating what, if any, effect adoption of FIN 48 will have on our financial statements, but do not expect that the effect will be material to its financial position, results of operations or cash flows when FIN 48 is adopted effective January 1, 2007.

        FAS 157.     In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" (FAS 157). FAS 157 is effective for fiscal years beginning after November 15, 2007. FAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements, but does not require any new fair value measurements. We are in the process of evaluating what, if any, effect adoption of FAS 157 will have on our financial statements when FAS 157 is adopted effective January 1, 2008.

Liquidity and Capital Resources

        Our predecessor's historical cash flows are not indicative of what we anticipate our future cash flows will be. On a historical basis our predecessor's expenditures, including those for debt service, capital expenditures and working capital, were provided by its operating cash flow as supplemented from time to time by borrowings under its revolving credit facility. As a result of the restructuring and spin off, our principal liquidity requirements will be to meet our operating expenses, including rent to Hospitality Trust, our capital expenditures and our working capital requirements.

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        Our sources of liquidity to meet these requirements will be our operating cash flow, our cash balance and our ability to draw improvement funding under the terms of our lease with Hospitality Trust.

        The primary risks we face with respect to our operating cash flow include decreased demand for our products and services, including that which may be caused by the volatility of prices of petroleum based products. A reduction of our revenue without an offsetting reduction in our operating expenses may cause us to use our cash at a rate which we cannot sustain for extended periods. Also, a significant increase in the prices we must pay to obtain fuel may increase our cash requirements for working capital.

        We anticipate that we will be able to fund our working capital needs and capital expenditures in the short term with funds generated by our operations and from our ability to draw improvement funding under the terms of our lease with Hospitality Trust. We also expect that funds generated by our operations and from our ability to draw improvement funding under the terms of our lease with Hospitality Trust will be sufficient to fund our longer term liquidity requirements, and that we will supplement these sources, as necessary, to fund other capital projects, including our development activities, with our cash balances.

        Over the longer term, we may seek to sell and lease back travel centers that we own, develop or acquire. Also, soon after the spin off, we expect to seek a revolving credit facility secured by some or all of our inventory and accounts receivable to supplement our sources of liquidity. Based upon current market conditions, we believe that such a credit facility may be available to us, but we have not yet engaged any bank or other party in negotiations and do not expect to do so until after the spin off.

Summary of Pro Forma Contractual Obligations and Commercial Commitments

        The following table summarizes our September 30, 2006, pro forma expected obligations to make future required payments under various agreements.

 
  Payments due by period
 
  Total
  2006(1)
  2007-2008
  2009-2010
  Thereafter
 
  (In Millions of Dollars)

Long term debt(2)   $ —   $ —   $ —   $ —   $ —
Lease with Hospitality Trust     2,731.5     38.4     312.4     328.3     2,052.4
Other operating leases     118.2     3.4     23.4     18.5     72.9
   
 
 
 
 
Total contractual obligations   $ 2,849.7   $ 41.8   $ 335.8   $ 346.8   $ 2,125.3
   
 
 
 
 
(1)
October 1, 2006, through December 31, 2006.

(2)
All of our predecessor's debt will be repaid in connection with the Hospitality Trust's acquisition and our reorganization.

        Our predecessor's $21.6 million of letters of credit were its primary outstanding trade commitments as of September 30, 2006. Until we have established a credit facility as described above, we expect to secure these letters of credit with cash. Our predecessor also had as of September 30, 2006, commitments to purchase a parcel of land for $0.6 million and a commitment to purchase a travel center for $4.0 million; such travel center was purchased in November 2006.

Seasonality

        We believe our business is modestly seasonal. Our revenues during a year are often lowest in the first quarter when movement of freight by professional truck drivers and motorist travel are historically at their lowest levels. Our revenues in the fourth quarter of a year are often somewhat lower than those of the second and third quarters because, while the fourth quarter is often positively impacted by

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increased movement of freight in preparation for various national holidays, that positive impact is often more than offset by a reduction in freight movement caused by vacation time associated with those holidays taken by professional truck drivers.

Inflation and Deflation

        Inflation in the past several years in the U.S. has been modest. Future inflation might have both positive or negative impacts on our business. Rising price levels may allow us to increase revenues, but may also impact our operating costs. Our revenues may change by either more or less than the rate of change in our expenses. Because a large component of our expenses will consist of fixed rental obligations to Hospitality Trust, we may not be able to fully capitalize on declines in general price levels or deflation.

Quantitative and Qualitative Disclosures About Market Risk

        We have no obligations for funded debt and presently are not directly affected by changes in market interest rates. However, we may seek to obtain a line of credit secured by some or all of our receivables and inventory. We expect that such a line of credit would bear interest for funded amounts at floating rates. We may from time to time consider our exposure to interest rate risks if we have or expect to have material amounts of floating rate obligations, and we may decide to purchase interest rate caps or other hedging instruments.

        As discussed above, our predecessor has been historically exposed to market risks arising from market price changes for fuel. These risks have historically resulted from changes in available supplies of fuel. Some of these changes may arise from local conditions, such as a malfunction in a particular pipeline or at a particular terminal. However, most of these risks arise from national or international conditions, such as weather related shut downs of oil drilling or refining capacities, political instability in oil producing regions of the world or terrorism. Almost all of these risks are beyond our control.

        Historically, our predecessor has attempted to mitigate its exposure to fuel price market risks in four ways which we expect to continue. First, we expect to enter supply contracts for diesel fuel with several different suppliers for each of our travel centers; if one supplier has a local problem we may be able to obtain fuel supplies from other suppliers. Second, we expect to maintain modest fuel inventories, generally about three days of fuel sales; modest inventories may mitigate the risk that we sell fuel for less than its cost in the event of rapid price declines. Third, we expect to sell a majority of our diesel fuel at contracted prices determined as cents per gallon above a benchmark which is reflective of the market costs for fuel; by selling on such terms we may be able to maintain our margin per gallon despite changes in the price we pay for fuel. Finally, we may from time to time purchase or sell futures contracts for fuel.

Off Balance Sheet Arrangements

        As of September 30, 2006, our predecessor did not have any off balance sheet arrangements, and we have no present intention to enter any such arrangements.

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MANAGEMENT

        The following table lists the names, ages and positions of the persons who will be our directors upon completion of the spin off, Mr. Hoadley, who will be our Executive Vice President and Treasurer upon completion of the spin off and our predecessor's five most highly compensated executive officers as of December 1, 2006:

Name
  Age
  Position
Barry M. Portnoy   61   Managing Director (term will expire in 2008)
Thomas M. O'Brien   40   Managing Director (term will expire in 2009)
Arthur G. Koumantzelis   76   Independent Director (term will expire in 2008)
Barbara D. Gilmore   56   Independent Director (term will expire in 2009)
Patrick F. Donelan   64   Independent Director (term will expire in 2010)
Timothy L. Doane   49   President and Chief Executive Officer
James W. George   55   Executive Vice President and Chief Financial Officer
John R. Hoadley   35   Executive Vice President and Treasurer
Joseph A. Szima   55   Executive Vice President of Marketing
Michael H. Hinderliter   57   Senior Vice President
Steven C. Lee   42   Senior Vice President and General Counsel

Directors

        Our board of directors will consist of five members and will be divided into three classes, with each class serving for a staggered three year term. At each annual meeting of our shareholders, a class of directors will be elected for a three year term to succeed the directors of the same class whose terms are then expiring.

        Our LLC agreement categorizes our board of directors into "Managing Directors" who are active in our day to day business and "Independent Directors" who are independent of our management as independence is defined in our LLC agreement and the applicable rules of the principal stock exchange on which our securities are listed. Our LLC agreement requires that a majority of our board of directors shall be independent directors.

Managing Directors

        Barry M. Portnoy has been one of the Managing Trustees or directors of Hospitality Trust, HRPT Properties Trust, or HRPT Properties, Senior Housing Properties Trust, or Senior Housing, and Five Star Quality Care, Inc., or Five Star, since each began business in 1995, 1986, 1999 and 2001, respectively. Mr. Portnoy has been a director and owner of RMR Advisors, Inc. and a trustee of each of the funds it manages since their founding beginning in 2003, including RMR Real Estate Fund, RMR Hospitality and Real Estate Fund, RMR F.I.R.E. Fund, RMR Preferred Dividend Fund and RMR Asia Pacific Real Estate Fund, collectively the RMR Funds. Mr. Portnoy has been a director and owner of Reit Management since it began business in 1986. From 1978 through March 1997, Mr. Portnoy was a partner of the law firm of Sullivan & Worcester LLP, our counsel, and he was chairman of that firm from 1994 through March 1997. Mr. Portnoy is a Group I director and will serve until our 2008 annual meeting of shareholders.

        Thomas M. O'Brien has been Senior Vice President of Reit Management since 2006 and was Vice President of Reit Management prior to that time since 1996. Mr. O'Brien has been the President and a Director of RMR Advisors, Inc. and President and Chief Executive Officer of each of the RMR Funds since their founding beginning in 2003. From 2002 through 2003, Mr. O'Brien served as Executive Vice President of Hospitality Trust, where he had previously served as Treasurer and Chief Financial Officer

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since 1996. Prior to 1996 Mr. O'Brien was a senior manager with Arthur Andersen LLP. Mr. O'Brien is a Group II director and will serve until our 2009 annual meeting of shareholders.

Independent Directors

        Prior to the completion of our spin off, the following individuals are expected to be appointed to our board of directors as independent directors:

        Arthur G. Koumantzelis has been the President and Chief Executive Officer of Gainesborough Investments LLC, a private investment company, since 1998. Mr. Koumantzelis has also been a director of Five Star since 2001 and a trustee of Hospitality Trust since 1995; prior to the completion of our spin off, Mr. Koumantzelis will resign his position as a trustee of Hospitality Trust. Mr. Koumantzelis has been a trustee of each of the funds managed by RMR Advisors, Inc. since their founding. Mr. Koumantzelis was a trustee of Senior Housing from 1999 until his resignation in October 2003. Mr. Koumantzelis has other business interests. Mr. Koumantzelis was formerly the chief financial officer of Cumberland Farms, Inc., a company engaged in the convenience store business and the sale of petroleum products principally under the name "Gulf Oil" and related trademarks. Mr. Koumantzelis is a Group I director and will serve until our 2008 annual meeting of shareholders.

        Barbara D. Gilmore has served as a clerk to Judge Joel B. Rosenthal of the United States Bankruptcy Court, Western Division of the District of Massachusetts, since 2001. Ms. Gilmore was a partner of the law firm of Sullivan & Worcester LLP from 1993 to 2000. Ms. Gilmore has been a director of Five Star since 2004. Ms. Gilmore is a Group II director and will serve until our 2009 annual meeting of shareholders.

        Patrick F. Donelan has been principally employed as a private investor since December 2003. Mr. Donelan has been a trustee of HRPT Properties since 1998. Mr. Donelan was the Non-Executive Chairman and member of the advisory board until 2003, and was Chief Executive Officer through 2002, of eSecLending (Europe) Ltd, a London based privately owned company in the business of managing securities lending programs for institutional owners of publicly owned securities. Prior to its acquisition by Dresdner Bank in 1995, Mr. Donelan was Chairman of Kleinwort Benson (North America) Inc., the U.S. based subsidiary of Kleinwort Benson Limited, a United Kingdom based bank. At the time of his retirement in 2001, Mr. Donelan was a Managing Director at Dresdner Kleinwort Wasserstein, the U.K. based investment banking subsidiary of Dresdner Bank of Germany. Mr. Donelan is a Group III director and will serve until our 2010 annual meeting of shareholders.

Executive Officers

        We expect that John R. Hoadley and all of our predecessor's officers will be appointed as our officers upon completion of our spin off. Including our predecessor's five most highly compensated executives, these individuals are described below:

        Timothy L. Doane will be our President and Chief Executive Officer. Mr. Doane has served TravelCenters of America, Inc. as President and Chief Executive Officer since January 2005, and in various positions since 1995. Prior to joining TravelCenters of America, Inc., Mr. Doane spent 15 years with The Standard Oil Company of Ohio, or Sohio, and BP in various positions in the U.S. and the U.K.

        James W. George will be our Executive Vice President, Chief Financial Officer and Secretary. Mr. George has served TravelCenters of America, Inc. as Executive Vice President, Chief Financial Officer and Secretary, since 2003 and in various other positions since 1993. Prior to joining TravelCenters of America, Inc., Mr. George spent 14 years with Sohio and BP in various financial positions. Mr. George is a certified public accountant.

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        John R. Hoadley will be our Executive Vice President, Treasurer and Assistant Secretary. Mr. Hoadley has been Senior Vice President of Reit Management since 2006 and was Vice President prior to that time since 2001. Mr. Hoadley has been Treasurer and Chief Financial Officer of Senior Housing since 2001. From 1999 to 2001, Mr. Hoadley served as the Controller of Hospitality Trust. Prior to 1998, Mr. Hoadley was a senior accountant with Arthur Andersen LLP. Mr. Hoadley is a certified public accountant.

        Joseph A. Szima will be our Executive Vice President of Marketing and Assistant Secretary. Mr. Szima has served TravelCenters of America, Inc. as Senior Vice President and Assistant Secretary since 2004 and in various positions since 1996. Prior to joining TravelCenters of America, Inc. Mr. Szima spent ten years with BP in various management positions.

        Michael H. Hinderliter will be our Senior Vice President. Mr. Hinderliter has served TravelCenters of America, Inc. in this capacity since 2001 and in various positions since 1993. We have been notified by Mr. Hinderliter that he intends to retire in 2007.

        Steven C. Lee will be our Senior Vice President, General Counsel and Assistant Secretary. Mr. Lee has served TravelCenters of America, Inc. in this capacity since September 2005, and as Vice President and General Counsel prior to that time since 1997.

        Each of our executive officers is elected by, and serves at the discretion of, the board of directors. Each of our executive officers except Mr. Hoadley will devote his full time to our affairs.

        As of the date of this prospectus, John G. Murray is our president and Mark L. Kleifges is our treasurer. Messrs. Murray and Kleifges will resign those positions upon the appointment of the officers listed above and will not be our executive officers after the spin off. Mr. Murray is president of Hospitality Trust and has been for the last five years. Mr. Kleifges is treasurer and chief financial officer of Hospitality Trust and has been since 2002. Until 2002, Mr. Kleifges was a partner with Arthur Andersen LLP for more than nine years.

Committees of the Board of Directors

        Our board of directors will establish three committees after the spin off, including an audit committee, a compensation committee and a nominating and governance committee. Each of the these committees is comprised of Mr. Koumantzelis, Ms. Gilmore and Mr. Donelan, who are independent of us under applicable AMEX listing standards and under the proposed charter of each respective committee and, in the case of the audit committee, the independence requirements of the SEC. Copies of the proposed form of audit, compensation and nominating and governance committee charters have been filed as exhibits to the registration statement of which this prospectus is a part.

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Financial Expert

        After the spin off, we expect that our board will designate Mr. Koumantzelis as the financial expert serving on our audit committee in accordance with applicable AMEX and SEC rules. We believe Mr. Koumantzelis is qualified to serve as a financial expert because of his experience as a member of the audit committees of other publicly owned companies, as the chief financial officer of a company which was required to file reports with the SEC and as a certified public accountant who was responsible for auditing companies which filed SEC reports.

Compensation of Directors

        For their services as directors, we will pay each independent director an annual fee of $25,000, plus a fee of $500 for each board and committee meeting attended to a maximum of $1,000 per day. In addition, for their services as directors, each director will receive an annual grant of 1,500 of our common shares at the first meeting of the board of directors following the spin off and following each annual meeting of shareholders commencing in 2008. Board members will not be separately compensated for serving on board committees; however, we will pay each board member serving as chairman of our audit committee, compensation committee and nominating and governance committee an additional annual fee of $7,500, $2,500 and $2,500, respectively. We will reimburse directors for reasonable out of pocket expenses incurred in attending meetings of the board of directors or board committees on which they serve. Messrs. Portnoy and O'Brien, our Managing Directors, will not receive any cash compensation for their services as directors or as members of board committees, but they will receive annual share grants and they will be reimbursed for their expenses.

Compensation Committee Interlocks and Insider Participation

        None of our compensation committee members are expected to be our employee, an employee of any of our subsidiaries or an employee of Reit Management.

        One of our managing directors, Mr. Portnoy, is an owner and director of Reit Management. Another of our managing directors, Mr. O'Brien, is an employee of Reit Management. Mr. O'Brien will be active in our day to day management. Mr. Hoadley is also an employee of Reit Management. Reit Management provides services to Hospitality Trust, HRPT Properties, Senior Housing and Five Star, and will be a party to a management and shared services agreement with us.

        Currently Mr. Portnoy and Mr. Koumantzelis are trustees of Hospitality Trust, which will become our landlord following the spin off. Upon completion of the spin off and our appointment of additional directors, no director other than Mr. Portnoy is expected to continue as a trustee of Hospitality Trust. Mr. Koumantzelis, one of our directors to be appointed prior to the spin off, will resign his position as a trustee of Hospitality Trust.

        For more information about possible relationships which might impact compensation decisions see "Certain Relationships" below.

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Executive Compensation

        We are recently organized and will not pay any compensation to our executive officers or directors prior to the spin off.

        Employment Contracts.     Travel Centers of America, Inc. has employment agreements with each of Messrs. Doane, George, Szima and Lee. Pursuant to their respective employment agreements, for 2006, Mr. Doane's annual base salary is $700,000, Mr. George's annual base salary is $450,000, Mr. Szima's annual base salary is $325,000 and Mr. Lee's annual base salary is $300,000. Each of these executives is eligible to receive an annual cash bonus determined by the board of directors, or its delegate, based on individual and company performance objectives. Each of the employment agreements provides for an initial two year term with automatic one year extensions at the end of each year through age 65. Notice of non-renewal given by TravelCenters of America, Inc. before December 31 of any year will result in expiration of the employment agreement effective December 31 of the year following the year in which notice is given, provided that after a change of control, such as the Hospitality Trust acquistion, notice of non-renewal will not result in expiration of the employment agreement sooner than the December 31 following the second anniversary of the change of control. In the case of certain types of separations from the company, each employment agreement contains terms which provide for cash payments of two times the executive's then current base salary and target bonus. Each executive has agreed to refrain from competing with us during his employment and during any period during which he is receiving payments following his termination.

        After the spin off, our executive officers will be the persons named in the table above, each of whom, except Mr. Hoadley, has been an employee of TravelCenters of America, Inc. The following table sets forth the compensation earned in 2005 from TravelCenters of America, Inc. by the individual who will serve as our chief executive officer and the four other highest paid executive officers whose salary and bonus exceeded $100,000 for services rendered in all capacities to TravelCenters of America, Inc. during 2005. We use the term "named executive officers" to refer to these five people later in this prospectus. No other executive officers who would have otherwise been includable in the following table on the basis of salary and bonus earned in 2005 have been excluded by reason of their termination of employment or change in executive status during that year.

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2005 Compensation

 
   
   
  Long Term
Compensation
Securities
Underlying
Options (#)
   
 
  Annual Compensation
   
Name and Principal Position with Our Predecessor
  All Other
Compensation
($)(1)
  Salary ($)
  Bonus ($)
Timothy L. Doane, President, Chief Executive Officer   $ 400,000   $ 350,000   —   $ 24,345
James W. George, Executive Vice President, Chief Financial Officer and Secretary     334,917     302,750   —     23,544
Michael H. Hinderliter, Senior Vice President Sales     301,250     196,625   —     24,100
Joseph A. Szima, Senior Vice President Marketing     214,500     161,850   —     12,314
Steven C. Lee, Senior Vice President and General Counsel     199,133     115,500   —     6,713
(1)
All other compensation includes the following:

 
  Matching
contributions to
defined contribution
retirement plan
  Insurance
premiums paid on
behalf of executive
  Allowance for
automobile
  Allowance for club
membership
Mr. Doane   $ 4,200   $ 6,860   $ 6,612   $ 6,673
Mr. George     4,200     8,895     3,657     6,792
Mr. Hinderliter     4,200     11,142     —     8,758
Mr. Szima     4,200     900     676     6,538
Mr. Lee     3,391     3,322     —     —

Executive Retention Plan

        Seventeen persons who currently work for TravelCenters of America, Inc. are expected to participate in our executive retention plan. The plan contemplates payments designed to encourage their continued employment by us after the Hospitality Trust acquisition. If all of the executives covered by that plan are employed by us as of December 31, 2007, we will make payments aggregating $2.6 million to them. If all of the executives covered by that plan are employed by us as of the two year anniversary of the date of the Hospitality Trust acquisition, we will make additional payments aggregating $5.4 million to them.

        Our named executive officers are expected to participate in the plan as follows:

 
  Payment for
continued employment
through 12/31/07
  Payment for continued employment through the second anniversary of the Hospitality Trust acquisition
Mr. Doane   $ 350,000   $ 400,000
Mr. George     225,000     400,000
Mr. Hinderliter     244,000     —
Mr. Szima     162,500     500,000
Mr. Lee     150,000     200,000

Other Transaction Benefits

        Sixteen persons who currently work for TravelCenters of America, Inc. own shares of TravelCenters of America, Inc. and options to acquire such shares that were purchased by or awarded to them during their employment by TravelCenters of America, Inc. As a result of the Hospitality Trust acquisition, TravelCenters of America, Inc. shares and share options will be redeemed for cash. As a result of the

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Hospitality Trust acquisition, it is expected that all TravelCenters of America, Inc. shares and share options owned by employees of TravelCenters of America, Inc. will be valued in the aggregate at $137.6 million. TravelCenters of America, Inc. has agreed to pay $5.5 million to certain of its employees who maintain their employment through the date of the closing of the Hospitality Trust acquisition. The amounts expected to be paid to our named executive officers are as follows:

 
  Payment for
owned shares
  Net cash settlement of
option awards
  Other cash payments
  Total
transaction
benefits
Mr. Doane   $ 2,251,319   $ 15,030,335   $ 1,450,000   $ 18,731,654
Mr. George     2,719,522     13,774,520     1,325,000     17,819,042
Mr. Hinderliter     2,794,267     11,417,248     244,000     14,455,515
Mr. Szima     670,313     5,817,769     162,500     6,650,582
Mr. Lee     708,882     4,117,015     350,000     5,175,897

        In connection with their purchase of stock from TravelCenters of America, Inc., certain executives are obligated on notes payable to TravelCenters of America, Inc. All of these notes and related accrued interest will be repaid in cash upon the closing of the Hospitality Trust acquisition; there will be no notes or other credit extended to any of our executives after the spin off. These notes plus accrued interest for our named executive officers are expected to be as follows on December 31, 2006:

 
  Outstanding note balance,
including accrued interest
Mr. Doane   $ 108,186
Mr. George     108,439
Mr. Hinderliter     108,439
Mr. Szima     66,464
Mr. Lee     61,711

Our Equity Compensation Plan

        We plan to adopt the TravelCenters of America LLC 2006 Equity Compensation Plan. Under this plan, we are authorized to grant our employees, officers, directors and other individuals rendering services to us and our subsidiaries equity based awards, including common shares, restricted common shares, options to purchase our common shares and share appreciation rights. The plan will be administered by our compensation committee or by our board of directors. The plan provides that the compensation committee or the board has the authority to select the participants and determine the terms of the awards granted under the plan. The aggregate number of common shares which may be issued under the plan is 2,000,000. No awards have been made to date under the plan and none are expected to be made before the first meeting of our board of directors after June 30, 2007. If you want more information about this plan, you should review the copy of the plan, which has been filed as an exhibit to the registration statement of which this prospectus is a part.

Management and Shared Services Agreement with Reit Management

        Effective upon completion of the spin off, we will enter a management and shared services agreement with Reit Management. The following is a summary of the material provisions of the management and shared services agreement between us and Reit Management. If you want more information, you should read the entire shared services agreement, which has been filed as an exhibit to the registration statement of which this prospectus is a part.

        Services.     Reit Management will oversee and assist us with various aspects of our business, including, but not limited to, maintenance of our travel centers, site selection for properties on which

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new travel centers may be developed, identification of, and purchase negotiation for, travel centers and travel center companies, accounting and financial reporting, compliance with various laws and rules applicable to our status as a publicly owned company, capital markets and financing activities, investor relations and general oversight of all our daily business activities, including legal matters, human resources, insurance programs, management information systems and the like.

        Compensation to Reit Management.     For these services, we will pay Reit Management a fee equal to 0.6% of our fuel gross margin and 0.6% of our total non-fuel revenues. The fee will be payable monthly based upon the prior month's margin or revenues, as applicable. We will also reimburse Reit Management for its reasonable out of pocket third party expenses and for our share, if any, of internal audit costs which are provided to us and other companies by Reit Management, as may be approved by our compensation committee.

        Subordination of Reit Management Fees to Hospitality Trust Rent.     No fees will be paid to Reit Management if any rent we owe Hospitality Trust is past due. Unpaid fees will accrue, together with interest at the prime rate, and will be payable when the condition preventing their payment is no longer in effect or upon termination of, or the occurrence of certain events of default by us under, the management and shared services agreement. The fees due Reit Management are not subordinated to any of our other obligations.

        Conflicts of Interest with Hospitality Trust.     We have acknowledged that Reit Management may continue to serve as the manager for Hospitality Trust and we have agreed that, regarding issues and in circumstances where there is a conflict of interest between us and Hospitality Trust, Reit Management will serve as the manager for Hospitality Trust and will not be required to consider our interests.

        Non-Competition with Reit Management.     We will afford any publicly owned company which Reit Management manages during the term of the management and shared services agreement the opportunity to acquire or finance any real estate investments of the types in which such entity invests before we do.

        Terminations.     The initial term of the agreement expires on December 31, 2008, and it will renew automatically from year to year unless either we or Reit Management terminate it due to default, or provide written notice of termination at least 90 days prior to the termination date.

        Indemnification, Default and Damages.     We have agreed to indemnify Reit Management, its owners, directors, officers and employees for any damages, liabilities, losses or out of pocket expenses incurred by them in the course of performing services other than any such damage, liability or loss resulting from Reit Management's gross negligence or bad faith. In the event of a termination because of our default, we must pay the fees due Reit Management for the remainder of the then current term. In the event of Reit Management's default, our remedy is limited to termination of the agreement and we cannot collect damages unless Reit Management is determined to have taken action willfully and in bad faith.

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SECURITY OWNERSHIP AFTER THE SPIN OFF

Security Ownership of Certain Beneficial Owners and Management

        The following table sets forth certain information regarding beneficial ownership of our common shares following the distribution of our common shares pursuant to the spin off by:

        Information in the following table for beneficial owners of more than 5% of our common shares is based upon public filings as of November 30, 2006, relating to the holders of Hospitality Trust's common shares. Unless otherwise noted, each beneficial owner has sole voting and investing power over the shares shown as beneficially owned except to the extent authority is shared by spouses under applicable law.

        The following table sets forth our common share ownership following the spin off. For purposes of the following table, we have assumed: (1) a distribution ratio of one of our common shares for every ten Hospitality Trust common shares; and (2) no change in the number of shares of Hospitality Trust outstanding, or owned by any person or entity listed.

 
  Beneficial Ownership(1)
 
Name and Address(2)
  Number of
Shares
  Percent
 
Beneficial Owners of More Than 5% of Our Common Shares          
Barclays Global Investors, NA(3)(4)   549,591.1   7.6 %
Capital Research and Management(5)(6)   386,560.0   5.4 %
Morgan Stanley(7)(8)   364,878.3   5.1 %

Directors and Executive Officers
 
 
 
 
 
Timothy L. Doane   —   *  
Patrick F. Donelan   —   *  
James W. George   —   *  
Barbara D. Gilmore   —   *  
Michael H. Hinderliter   —   *  
John R. Hoadley   260   *  
Arthur G. Koumantzelis   561.4   *  
Steven C. Lee   —   *  
Thomas M. O'Brien   2,017.5   *  
Barry M. Portnoy(9)   22,411.6   *  
Joseph A. Szima   —   *  
All directors and executive officers as a group (11 persons)   25,250.5   *  
*
Less than 1%

(1)
Our LLC agreement and other agreements to which we are a party place restrictions on the ability of any person or group to acquire beneficial ownership of more than 9.8% of any class or series of our shares.

(2)
Unless otherwise indicated, the address of each identified person or entity is: c/o TravelCenters of America LLC, 24601 Center Ridge Road, Westlake, Ohio 44145.

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(3)
This information is as of December 31, 2005, and is based solely on a Schedule 13G filed with the SEC on January 30, 2006, by Barclays Global Investors, NA and relating to beneficial and legal ownership of shares of Hospitality Trust. Based on the information provided in such Schedule 13G, the relevant members of the filing group, together with their respective addresses are: Barclays Global Investors, NA and Barclays Global Fund Advisors, each with an address of 45 Freemont Street, San Francisco, California 94105 and Barclay Global Investors, Ltd, 1 Royal Mint Court, London EC3N 4HH, England. Based solely upon the information in such Schedule 13G, if the same number of shares are owned on the record date for our spin off, these entities will have sole voting power over 373,523.8 shares, 100,403.1 shares and 31,966.5 shares, respectively, and sole dispositive power over 415,676.6 shares, 100,403.1 shares and 33,511.4 shares, respectively.

(4)
A Form 13F-NT filed on August 3, 2006, by Barclay's Global Investors NA, which we believe is the investment advisor to all of the funds referenced in footnote (3) above, claims voting responsibility as of June 30, 2006, of 4,928,000 shares of Hospitality Trust which would entitle these funds to receive 492,800 of our shares; but this filing does not provide sufficient information to allow us to calculate the actual or beneficial owner or owners of these shares as of that date.

(5)
This information is as of December 31, 2005, and is based solely on a Schedule 13G filed with the SEC on February 10, 2006, by Capital Research and Management, or Capital Research, and relating to beneficial and legal ownership of shares of Hospitality Trust. Based on the information provided in such Schedule 13G, the address of Capital Research is 333 South Hope Street, Los Angeles, California 90071. Based solely upon the information in such Schedule 13G, following the spin off, if the same number of shares are owned on the record date for our spin off, Capital Research will have sole voting power over 49,050.0 shares and sole dispositive power over 386,560.0 shares.

(6)
A Form 13F-HR filed on August 14, 2006, by Capital Research and Management Co., which we believe is the investment advisor to all of the funds referenced in footnote (5) above, claims voting responsibility as of June 30, 2006, of 4,252,000 shares of Hospitality Trust which would entitle these funds to receive 425,200 of our shares; but this filing does not provide sufficient information to allow us to calculate the actual or beneficial owner or owners of these shares as of that date.

(7)
This information is as of December 31, 2005, and is based solely on a Schedule 13G/A filed with the SEC on February 16, 2006, by Morgan Stanley and relating to beneficial and legal ownership of shares of Hospitality Trust. The address of Morgan Stanley is 1585 Broadway, New York City, New York 10036. Based solely upon the information in such Schedule 13G, if the same number of shares are owned on the record date for our spin off, Morgan Stanley will have sole voting and dispositive power over 364,878.3 of our shares.

(8)
A Form 13F-HR filed on August 15, 2006, by Morgan Stanley, which we believe is the investment advisor to various funds managed by Morgan Stanley, claims voting responsibility as of June 30, 2006, of 5,814,000 shares of Hospitality Trust, which would entitle these funds to receive 581,400 of our shares; but this filing does not provide sufficient information to allow us to calculate the actual or beneficial owner or owners of these shares as of that date.

(9)
Includes common shares owned by a corporation of which Mr. Portnoy is the sole stockholder.

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CERTAIN RELATIONSHIPS

        Our formation was, and our continuing business operations will be, subject to possible conflicts of interest. These conflicts may have caused, and in the future may cause, our business to be adversely affected. These conflicts and their possible adverse effects upon us include the following:

    •
    Two of the persons expected to serve as our directors following the spin off were trustees of Hospitality Trust at the time we were created, and one of them will remain a managing trustee of Hospitality Trust after the spin off. Upon completion of the spin off, most of our travel centers will be leased from Hospitality Trust. We believe that our lease terms with Hospitality Trust are commercially reasonable. Nonetheless, it is possible that, if the lease were negotiated on an arm's length basis, the rent and other lease terms might be more favorable to us. We also believe that our continuing relationships with Hospitality Trust will provide us with a competitive advantage in locating business expansion opportunities. Nonetheless, we will afford Hospitality Trust and other public companies managed by Reit Management the opportunity to acquire or finance any real estate investments of the type in which they invest before we do. Also, our future business dealings with Hospitality Trust could be on terms less favorable to us than would be possible if there were no historical or continuing relationship between Hospitality Trust and us.

    •
    In addition to being active in our management activities, Messrs. Portnoy, O'Brien and Hoadley are also officers and employees of Reit Management and of other companies managed by Reit Management, and they will remain so after the spin off. At present, we expect that Messrs. O'Brien and Hoadley will devote a substantial majority of their business time to our affairs and the remainder of their business time to the business of Reit Management and its affiliates and managed companies, which is separate from us, and all of their compensation, other than awards, if any, made under our 2006 Equity Compensation Plan and awards to Mr. O'Brien for his services as one of our directors, will be paid by Reit Management and its affiliates. Similarly, Mr. Portnoy may devote substantial time to our business on a selected project basis, and all of his compensation other than his share awards as one of our directors will be paid by Reit Management. Because of these arrangements, we may have to compete with Reit Management for the time and attention of these persons.

    •
    Mr. Portnoy is an owner of Reit Management. Reit Management is the manager for Hospitality Trust and has other business interests. After the spin off, we will enter a management and shared services agreement with Reit Management under which Reit Management will provide certain services to us. Under this management and shared services agreement, we will pay Reit Management a fee equal to 0.6% of the sum of our gross fuel margin and our total non-fuel revenues. On a pro forma basis, assuming completion of the spin off, this fee would have been $4.7 million for the nine months ended September 30, 2006. We believe this fee arrangement will provide reasonable compensation to Reit Management for the services to be provided to us. The management and shared services agreement is terminable by us or Reit Management upon at least 90 days notice prior to the expiration date of the then current term. However, despite our belief and this termination provision, equivalent services might be available from parties other than Reit Management on more favorable terms to us, including for a lesser fee. Also, the fact that Reit Management has responsibilities to other entities, including our landlord, Hospitality Trust, could create conflicts; and, in the event of such conflicts between Hospitality Trust and us, the management and shared services agreement allows Reit Management to prefer its responsibilities to Hospitality Trust. See "Management—Shared Services Agreement with Reit Management".

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FEDERAL INCOME TAX CONSIDERATIONS

        The IRC imposes various REIT qualification tests upon Hospitality Trust discussed more fully in Hospitality Trust's filings with the SEC. For example, in order to maintain its status as a REIT for federal income tax purposes, a substantial majority of Hospitality Trust's gross income must generally be derived from real estate rents and mortgage interest; this imposes limits on Hospitality Trust's ability to own properties that it or others operate for Hospitality Trust's account. Even in circumstances where Hospitality Trust is permitted to own properties operated for its own account, the IRC encourages leasing the properties to one or more qualified tenants. A qualified tenant is a tenant in whom Hospitality Trust has at all times during the taxable year an actual or constructive ownership interest of less than 10% by vote and by value. In particular, Hospitality Trust must generally pay federal corporate income tax on its net income from operated property, whereas Hospitality Trust generally does not pay any corporate income tax on its rental income from qualified tenants that is distributed to shareholders. In these circumstances, Hospitality Trust has determined to lease to us, as a qualified tenant, the travel centers that were held by TravelCenters of America, Inc. and that Hospitality Trust will retain.

        Sullivan & Worcester LLP has rendered a legal opinion that the discussions in the following summary are accurate in all material respects and fairly summarize the federal income tax considerations of the spin off and of your ownership of our common shares, and the opinions of counsel referred to in this section represent Sullivan & Worcester LLP's opinions on those subjects. Specifically, subject to qualifications and assumptions contained in its opinion and in this section, Sullivan & Worcester LLP has given opinions to the effect that Hospitality Trust has been organized and has qualified as a REIT under the IRC, for each taxable year commencing with its taxable year ending December 31, 1995, and that its current investments and plan of operation will enable it to continue to meet the requirements for qualification and taxation as a REIT under the IRC. These opinions are conditioned upon the assumption that Hospitality Trust's lease and other contracts with us, Hospitality Trust's charter and bylaws, Hospitality Trust's other agreements, our operating agreement and all other legal documents to which we or Hospitality Trust are or have been a party, have been and will be complied with by all parties to these documents, upon the accuracy and completeness of the factual matters described in this prospectus and the registration statement of which this prospectus is a part, and upon representations that we and Hospitality Trust have made as to the current expectations of the final terms of the lease and other contracts. The opinions of Sullivan & Worcester LLP are based on the law as it exists today, but the law may change in the future, possibly with retroactive effect. Also, an opinion of counsel is not binding on the IRS or the courts. The IRS or a court could, for example, take a different position, which could result in significant tax liabilities for applicable parties, from that expressed by counsel with respect to the acquisition of TravelCenters of America, Inc., the restructuring so as to divide the travel center business between us and Hospitality Trust, our spin off from Hospitality Trust, or any other matter described in this summary.

        The following summary of federal income tax considerations is based on existing law, and is limited to investors who will own our common shares, and who own Hospitality Trust shares, as investment assets rather than as inventory or as property used in a trade or business. The summary does not discuss the particular tax consequences that might be relevant to you if you are subject to special rules under the federal income tax law, for example if you are:

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        The sections of the IRC that govern the federal income tax qualification and treatment of a REIT and its shareholders are complex. This summary is based on applicable IRC provisions, related rules and regulations and administrative and judicial interpretations, all of which are subject to change, possibly with retroactive effect. Future legislative, judicial or administrative actions or decisions could affect the accuracy of statements made in this summary. Neither we nor Hospitality Trust have sought a ruling from the IRS with respect to the restructuring and spin off, and we cannot assure you that the IRS or a court will agree with the statements made in this summary. In addition, the following summary is not exhaustive of all possible tax consequences, and does not discuss any gift, estate, generation skipping transfer, state, local or foreign tax consequences. We encourage you to consult with a tax advisor about the federal income tax and other tax consequences of your acquisition, ownership and disposition of our common shares and Hospitality Trust shares.

        Your federal income tax consequences may differ depending on whether or not you are a "U.S. person". For purposes of this summary, a U.S. person for federal income tax purposes is:

whose status as a U.S. person is not overridden by an applicable tax treaty. Conversely, a "non-U.S. person" is a beneficial owner of our common shares or Hospitality Trust shares who is not a U.S. person. If a partnership (including any entity treated as a partnership for federal income tax purposes) is a beneficial owner of our common shares or Hospitality Trust shares, the tax treatment of a partner in the partnership generally will depend upon the status of the partner and the activities of the partnership. A beneficial owner that is a partnership and partners in such a partnership should consult their tax advisors about the federal income tax consequences of the spin off and of the acquisition, ownership and disposition of our common shares and Hospitality Trust Shares.

Federal Income Tax Consequences of the Spin Off to Hospitality Trust Common Shareholders

        In general.     Hospitality Trust's distribution of our common shares will generally affect Hospitality Trust shareholders in the same manner as any other distribution of cash or property Hospitality Trust makes on its common shares. These tax consequences are summarized as follows:

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        The spin off of our common shares will be treated as a distribution by Hospitality Trust to you in the amount of the fair market value of our common shares distributed. Because Hospitality Trust expects the value of its 2007 distributions to exceed its 2007 current and accumulated earnings and profits, Hospitality Trust expects that a portion of each distribution in 2007 will be taxable to you as a dividend and a portion will be treated as a reduction in your adjusted tax basis in Hospitality Trust's common shares. You will have a tax basis in our common shares received in the spin off equal to the fair market value of our common shares at the time of the spin off, and your holding period in those common shares commences on the day after the spin off.

        We believe that for federal income tax purposes the fair market value of our common shares may be properly determined at the time of the spin off as the average of the reported high and low trading prices of our common shares in the public market on the distribution date, and we and Hospitality Trust will perform all tax reporting, including statements supplied to you and to the IRS, on the basis of this average price, called the distribution price. Because of the factual nature of value determinations, Sullivan & Worcester LLP is unable to render an opinion on the fair market value of our common shares.

        As described in more detail below, Hospitality Trust currently expects to recognize minimal gain and no loss as a result of its distribution of our common shares. Any gain that Hospitality Trust does recognize will increase its 2007 current earnings and profits.

        The tax impact of the spin off distribution will be affected by a number of factors which are unknown at this time, including Hospitality Trust's final taxable income for 2007, any gain Hospitality Trust recognizes in the spin off, the distribution price and the amount and timing of other distributions made by Hospitality Trust which relate to its 2007 taxable year. Thus, a definitive calculation of the federal income tax impact on you from the spin off will not be possible until after the close of Hospitality Trust's 2007 taxable year. However, at this time Hospitality Trust expects that:

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        Taxation of tax-exempt entities.     Tax-exempt entities are generally not subject to federal income taxation except to the extent of their "unrelated business taxable income", often referred to as UBTI, as defined in Section 512(a) of the IRC. As with Hospitality Trust's other distributions, the distribution of our common shares to you if you are a tax-exempt entity should generally not constitute UBTI, provided that you have not financed your acquisition of Hospitality Trust common shares with acquisition indebtedness within the meaning of Section 514 of the IRC. However, if you are a tax exempt pension trust, including a so-called 401(k) plan but excluding an individual retirement account or government pension plan, that owns more than 10% by value of a pension held REIT, then you may have to report a portion of the dividends that you receive from that REIT as UBTI. Although Hospitality Trust cannot provide complete assurance on this matter, it believes that it has not been and will not become a pension held REIT.

        Taxation of non-U.S. persons.     If you are a non-U.S. person who holds Hospitality Trust common shares, the spin off of our common shares will generally be taxable to you in the same manner as any other distribution of cash or property that Hospitality Trust makes to you. The rules governing the federal income taxation of non-U.S. persons are complex, and the following discussion is intended only as a summary of these rules. If you are a non-U.S. person, you should consult with your own tax advisor to determine the impact of federal, state, local and foreign tax laws, including any tax return filing and other reporting requirements, with respect to the spin off of our common shares and your ownership of Hospitality Trust common shares.

        You will generally be subject to regular federal income tax in the same manner as a U.S. person with respect to the spin off of our common shares and your investment in Hospitality Trust common shares if this investment is effectively connected with your conduct of a trade or business in the U.S. In addition, if you are a corporate shareholder of Hospitality Trust, your income that is effectively connected with a trade or business in the U.S. may also be subject to the 30% branch profits tax under Section 884 of the IRC, which is payable in addition to regular federal corporate income tax. The balance of this portion of the summary addresses only those non-U.S. persons whose investment in Hospitality Trust common shares is not effectively connected with the conduct of a trade or business in the U.S.

        Hospitality Trust is not at this time designating the distribution of our common shares as a capital gain dividend that is subject to 35% withholding for non-U.S. persons, and accordingly withholding at the rate of 30% or applicable lower treaty rate withholding will be imposed. Hospitality Trust or other applicable withholding agents will collect the amount required to be withheld by reducing to cash for remittance to the IRS a sufficient portion of our common shares that you would otherwise receive, and you may bear brokerage or other costs for this withholding procedure. Because Hospitality Trust cannot determine its current and accumulated earnings and profits until the end of its taxable year, withholding at the rate of 30% or applicable lower treaty rate may be imposed on the gross fair market value of our common shares distributed to you. Notwithstanding this and other withholding on distributions in excess of Hospitality Trust's current and accumulated earnings and profits, these distributions are a nontaxable return of capital to the extent that they do not exceed your adjusted basis in Hospitality Trust common shares, and the nontaxable return of capital will reduce your adjusted basis in Hospitality Trust common shares. To the extent that distributions in excess of Hospitality Trust's allocable current and accumulated earnings and profits exceed your adjusted basis in its common shares, the distributions will give rise to tax liability only if you would otherwise be subject to tax on any gain from the sale or exchange of its common shares. Your gain from the sale or exchange of Hospitality Trust common shares will not be taxable if: (1) Hospitality Trust common shares are "regularly traded" within the meaning of Treasury regulations under Section 897 of the IRC and you have at all times during the preceding five years owned 5% or less by value of Hospitality Trust's outstanding common shares, or (2) Hospitality Trust is a "domestically controlled" REIT within the meaning of Section 897 of the IRC. Although Hospitality Trust cannot provide complete assurance

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on this matter, Hospitality Trust believes that its shares have been and are regularly traded, and that it has been and is a domestically controlled REIT. You may seek a refund of amounts withheld on distributions to you in excess of Hospitality Trust's allocable current and accumulated earnings and profits, provided that you furnish the required information to the IRS.

        Some of Hospitality Trust's 2007 distributions may be treated for federal income tax purposes as attributable to dispositions of U.S. real property interests. But even if a portion of any of Hospitality Trust's distributions to you, including the distribution of our common shares in the spin off, is attributable to a disposition by Hospitality Trust of U.S. real property interests, you will nevertheless be subject to the taxation and withholding regime applicable to ordinary income dividends described above provided that (1) Hospitality Trust common shares are "regularly traded" within the meaning of Treasury regulations under Section 897 of the IRC, and (2) you have at all times during the one year period ending on the date of distribution owned 5% or less by value of Hospitality Trust's outstanding common shares; that is, if both conditions are satisfied, Hospitality Trust's distributions to you will be subject to U.S. federal income tax and withholding as ordinary dividends at the 30% or applicable lower treaty rate. Although Hospitality Trust cannot provide complete assurance on this matter, it believes that its shares have been and are regularly traded, and that it has been and is a domestically controlled REIT. In contrast, if either of the two conditions is not satisfied, you will be subject to tax on the portion of Hospitality Trust's distributions attributable to dispositions of U.S. real property interests as though it were gain effectively connected with a trade or business conducted in the U.S. In that event, you would be taxed on these amounts at the capital gain tax rates applicable to a U.S. person, subject to any applicable alternative minimum tax and to a special alternative minimum tax in the case of nonresident alien individuals; you would be required to file a U.S. federal income tax return reporting these amounts, even if applicable 35% withholding is imposed as described below; and, if you are a corporation, you may owe the 30% branch profits tax under Section 884 of the IRC in respect of these amounts.

        Effective generally from and after 2006, a special "wash sale" rule applies to a non-U.S. person who owns Hospitality Trust shares if (1) the shareholder owns more than 5% of that class of shares at any time during the one year period ending on the date of the distribution described below, or (2) that class of Hospitality Trust shares is not "regularly traded" within the meaning of applicable Treasury regulations. Again, although Hospitality Trust cannot provide complete assurance on this matter, Hospitality Trust believes that its shares have been and are regularly traded. Hospitality Trust thus anticipates this new wash sale rule will apply, if at all, only to a non-U.S. person that owns more than 5% of a class of its shares. Such a non-U.S. person will be treated as having made a "wash sale" of Hospitality Trust shares if it (1) disposes of an interest in Hospitality Trust shares during the 30 days preceding the ex-dividend date of a distribution by Hospitality Trust that, but for such disposition, would have been treated by the non-U.S. person in whole or in part as gain from the sale or exchange of a U.S. real property interest, and then (2) acquires or enters into a contract to acquire a substantially identical interest in Hospitality Trust shares, either actually or constructively through a related party, during the 61 day period beginning 30 days prior to the ex-dividend date. In the event of such a wash sale, the non-U.S. person will have gain from the sale or exchange of a U.S. real property interest in an amount equal to the portion of the distribution that, but for the wash sale, would have been a gain from the sale or exchange of a U.S. real property interest. As discussed above, a non-U.S. person's gain from the sale or exchange of a U.S. real property interest can trigger increased U.S. taxes, such as the branch profits tax applicable to non-U.S. corporations, and increased U.S. tax filing requirements.

        If you are a non-U.S. person ineligible for the 30% or applicable lower treaty withholding described above, then Hospitality Trust and other applicable withholding agents will be required to withhold from distributions to you, and to remit to the IRS, 35% of the maximum amount of any distribution that could be designated as a capital gain dividend by Hospitality Trust. In addition, if

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Hospitality Trust at a later time designates any of its prior distributions as capital gain dividends, then its subsequent distributions up to the amount of the designated prior distributions will be treated as capital gain dividends for purposes of this 35% withholding rule. After the close of Hospitality Trust's 2007 taxable year, Hospitality Trust expects to designate to the maximum extent possible a portion of one or more of its 2007 distributions as capital gain dividends, and accordingly 35% withholding will be imposed upon its subsequent distributions to you to that extent if you are ineligible for the exception described above. Hospitality Trust or other applicable withholding agents will collect the amount required to be withheld by reducing to cash for remittance to the IRS a sufficient portion of our common shares that you would otherwise receive, and you may bear brokerage or other costs for this withholding procedure.

Federal Income Tax Consequences to Hospitality Trust

        The IRC imposes upon Hospitality Trust various REIT qualification tests discussed more fully in Hospitality Trust's filings with the SEC. Hospitality Trust believes that it has operated in a manner to satisfy these various REIT qualification tests; while Hospitality Trust also believes that it will operate in a manner that continues to satisfy these various REIT qualification tests, counsel has not reviewed and will not review Hospitality Trust's compliance with these tests on a continuing basis. The following discussion summarizes how the restructuring and spin off will affect Hospitality Trust's REIT qualification and taxation issues under the IRC.

        Earnings and profits.     As described above, Hospitality Trust needs to distribute all of the earnings and profits that it inherits from TravelCenters of America, Inc. not later than December 31, 2007. If Hospitality Trust fails to do so, it will not qualify to be taxed as a REIT for 2007 and a number of years thereafter, unless it is able to rely on the relief provision described below.

        Although Sullivan & Worcester LLP is unable to render an opinion on factual determinations such as the amount of undistributed earnings and profits, Hospitality Trust has retained accountants to compute the amount of earnings and profits which it will inherit as a result of its acquisition of TravelCenters of America, Inc. and believes this amount will not be more than $20 million. In such case, Hospitality Trust's total 2007 distributions, including the spin off, are expected to be more than sufficient to distribute both its 2007 earnings and profits and the undistributed earnings and profits that it inherits from TravelCenters of America, Inc.

        Upon examination, the IRS may propose adjustments to Hospitality Trust's calculation of the undistributed earnings and profits that it inherits from TravelCenters of America, Inc., including adjustments that might be deemed necessary by the IRS as a result of its examination of the historical tax returns of TravelCenters of America, Inc. If Hospitality Trust discovers that it has inherited undistributed earnings and profits that would not be eliminated by way of regular distributions to shareholders by December 31, 2007, then it will elect to preserve its qualification as a REIT by making a special distribution for Hospitality Trust's 2007 taxable year. If, despite Hospitality Trust's best efforts, it is subsequently determined that Hospitality Trust has not distributed these earnings and profits before December 31, 2007, it may be eligible for a relief provision similar to the "deficiency dividends" procedure described in its filings with the SEC.

        Taxation of the distribution and other dispositions of built in gain assets.     Hospitality Trust's distribution of our common shares in the spin off will be treated for federal income tax purposes as though it disposed of each of our and our principal subsidiaries' individual assets in a taxable transaction in which individual asset gains, but no losses, are recognized. The amount realized on each asset in this taxable disposition will be equal to the fair market value of that asset at the time of the spin off, and Hospitality Trust's tax basis in the asset will be the carryover tax basis inherited from TravelCenters of America, Inc. prior to the acquisition. Employing the methodology below, Hospitality Trust currently expects to have few or no recognized gains from the distribution. Accordingly, even

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though some or all of the gains Hospitality Trust recognizes on the distributed assets will not be qualifying gross income under the 75% and 95% gross income tests of Section 856(c) of the IRC, it does not expect recognized gains from the distribution to materially affect its ability to comply with these tests.

        Sullivan & Worcester LLP is unable to render an opinion on factual determinations such as the fair market values of individual assets, but Hospitality Trust expects to employ the following methodology, which Sullivan & Worcester LLP has advised Hospitality Trust is reasonable, for purposes of computing its recognized gains and unrecognized losses on individual assets as a result of the spin off. Though some applicable judicial precedent suggests that the aggregate amount realized by Hospitality Trust in the disposition of assets could be unrelated to the per share fair market value of our common shares that you receive, Hospitality Trust believes that its aggregate amount realized may be properly computed as the sum of: (1) the distribution price described above, being the average of the reported high and low trading prices for our common shares in the public market on the distribution date, multiplied by the number of our common shares distributed, plus (2) the aggregate liabilities retained by us at the time of the spin off. Hospitality Trust will then allocate this aggregate amount first to liquid assets, next to working capital, next to tangible assets, and finally to intangible assets and goodwill, and then apportion within each tier based on the relative fair market values of individual assets within that tier. Consistent with the foregoing, Hospitality Trust intends to report the amount of the spin off distribution, for purposes of its 2007 distributions and distribution requirements, as the distribution price described above multiplied by the number of our common shares distributed.

        If Hospitality Trust sells and recognizes gain on an asset acquired from TravelCenters of America, Inc. during the ten year period following the acquisition, then it will generally pay tax at the highest regular corporate tax rate, currently 35%, on the lesser of (1) the excess at the time Hospitality Trust acquired the asset, if any, of the asset's fair market value over its then adjusted tax basis, or (2) Hospitality Trust's gain recognized in the disposition. Any gain subject to this tax may generally be reduced by net operating loss carryforwards, if any, Hospitality Trust inherits from its acquisition of TravelCenters of America, Inc. Other than the assets that Hospitality Trust will distribute in the spin off as described above, Hospitality Trust has no present plan or intent to dispose of any other assets acquired from TravelCenters of America, Inc. Hospitality Trust currently expects to recognize few or no gains from the distribution, and it also currently expects that some net operating loss carryforwards will be available to it so as to significantly reduce or eliminate any tax that it may owe in respect of any such gains.

        To the extent of Hospitality Trust's gains in a taxable year that are subject to the built in gains tax described above, net of any taxes paid on such gains during that taxable year, Hospitality Trust's taxable dividends paid to you in the following year will be eligible for treatment as qualified dividends that are taxed to Hospitality Trust's noncorporate shareholders at the maximum capital gain rate of 15% while that rate is in effect.

        Hospitality Trust's post spin off relationship with us.     Because we and our principal subsidiaries were entities which were not regarded as separate from Hospitality Trust for tax purposes prior to the spin off, we expect that we and our subsidiaries will be, after the spin off, tenants in whom Hospitality Trust has at all times during the taxable year an actual and constructive ownership interest of less than 10% by vote and by value. We further anticipate that our lease with Hospitality Trust, our limited liability company operating agreement, and the contemplated transaction agreement governing the spin off will collectively contain restrictions upon the ownership of our common shares and will require us to refrain from taking any actions that may result in any affiliation with Hospitality Trust that would jeopardize its qualification as a REIT under the IRC. Accordingly, subject to the personal property considerations discussed in the following paragraph, Hospitality Trust expects that the rental income it receives from us and our subsidiaries will be "rents from real property" under Section 856(d) of the IRC, and therefore qualifying income under the 75% and 95% gross income tests of Section 856(c) of the IRC.

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        Hospitality Trust has received opinions from its counsel Sullivan & Worcester LLP that, (i) its underground storage tanks should constitute real estate assets, rather than personal property, for purposes of the various REIT qualification tests, and (ii) although the matter is not free from doubt, for purposes of applying the 15% incidental personal property test, regarding rent attributable to incidental personal property leased in connection with real property, the test will be applied in the aggregate to all the travel center sites leased under our lease with Hospitality Trust, rather than on a site by site basis. If the IRS or a court determines that one or both of these opinions is incorrect, then a portion of the rental income Hospitality Trust receives from us could be nonqualifying income for purposes of the 75% and 95% gross income tests, possibly jeopardizing Hospitality Trust's compliance with the 95% gross income test. Under those circumstances, Hospitality Trust expects it would qualify for the gross income tests' relief provision and thereby preserve its qualification as a REIT.

Federal Income Taxation of Us and Our Shareholders

        In general.     After the spin off distribution, we will be subject to all of the federal tax requirements ordinarily applicable to subchapter C corporations under the IRC. Accordingly, we will pay federal income taxes on our income, and we will not be subject to the distribution and other requirements applicable to REITs. Under the contemplated transaction agreement that will govern the spin off, we will be generally responsible for our and our predecessor's tax liabilities and filings, as well as those of all of our and of our predecessor's subsidiaries, in each case for all taxable periods whether preceding or following the spin off.

        After the spin off, although organized as a limited liability company, we will be taxed as a subchapter C corporation because we will be publicly traded and we do not expect to meet the income test for exemption from treatment as a subchapter C corporation. Because we and our principal subsidiaries were disregarded entities prior to the spin off, we will be treated as a new corporation after the spin off. Our holding period in our initial assets will generally start the day after the spin off and our basis in our initial assets will generally be equal to the aggregate amount realized by Hospitality Trust in the disposition, which we intend to apportion among our initial assets in the same manner as Hospitality Trust will apportion the amount realized, as described above.

        Distributions on our common shares.     At the present time, we do not expect to pay any dividends. However, if we later decide to do so, tax consequences arising from your ownership of our common shares would generally be as follows.

        If you are a U.S. person, distributions to you on our common shares will be treated as ordinary income dividends to the extent attributable to our current or accumulated earnings and profits, and thereafter as a return of basis to the extent of that basis, with any excess being treated as gain from a deemed disposition of our common shares. If you are a corporation, dividends paid to you on our common shares will generally be eligible for the dividends received deduction, subject to the limitations of the IRC with respect to the corporate dividends received deduction. Also, our ordinary income dividends will generally be eligible for treatment as qualified dividends that are taxed to noncorporate recipients at the maximum capital gains tax rate of 15% while that rate is in effect.

        If you are a non-U.S. person, dividends paid to you will be subject to withholding of federal income tax at a 30% rate or a lower rate as may be specified by an applicable income tax treaty. If you are eligible for a reduced rate of withholding pursuant to a tax treaty, you may obtain a refund of any excess amounts previously withheld by filing an appropriate claim for refund with the IRS. To claim the benefits of an income tax treaty, you are required to satisfy the applicable certification requirements, generally by executing an applicable IRS Form W-8.

        Dispositions of our common shares.     If you are a U.S. person, you will generally recognize gain or loss on a disposition of our common shares in an amount equal to the difference between the amount realized on the disposition and your adjusted basis in the disposed of common shares. This gain or loss

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will be capital gain or loss, and will be long term capital gain or loss if your holding period in the disposed of common shares exceeds one year. Special rates of tax may apply to long term capital gains recognized by noncorporate U.S. persons.

        If you are a non-U.S. person, you will generally not be subject to U.S. federal income tax in respect of gain you recognize on a disposition of our common shares. However, you may be subject to taxation if you are an individual who is present in the U.S. for 183 or more days in the taxable year of the disposition. In addition, you may be subject to taxation if we are or have been a "United States real property holding corporation" for federal income tax purposes; however, this taxation will not apply if our common shares are "regularly traded" within the meaning of Treasury regulations under Section 897 of the IRC and you have at all times during the preceding five years owned 5% or less by value of our common shares. At this time, we are not sure whether we are or will become a "United States real property holding corporation" for federal income tax purposes, and we can provide no assurance in this regard.

Information Reporting and Backup Withholding

        Information reporting and backup withholding may apply to distributions or proceeds paid to our shareholders and to Hospitality Trust shareholders in the circumstances discussed below. Amounts withheld under backup withholding are generally not an additional tax and may be refunded or credited against your federal income tax liability, provided that you furnish the required information to the IRS. The current backup withholding rate is 28%.

        The distribution of our common shares is an in kind distribution to Hospitality Trust shareholders, and thus Hospitality Trust, or other applicable withholding agents, will have to collect any applicable backup withholding by reducing to cash for remittance to the IRS a sufficient portion of our common shares that you would otherwise receive, and you may bear brokerage or other costs for this withholding procedure.

        If you are a U.S. person:     You may be subject to backup withholding when you receive distributions on, or proceeds upon the sale, exchange, redemption, retirement or other disposition of, our common shares or Hospitality Trust shares. Thus, backup withholding may apply to our common shares that you receive in the spin off distribution. In general, you can avoid this backup withholding if you have properly executed under penalties of perjury an IRS Form W-9 or substantially similar form on which you:

        If you have not previously provided and do not provide your correct taxpayer identification number on the IRS Form W-9 or substantially similar form, you may be subject to penalties imposed by the IRS and the withholding agent may also have to withhold a portion of any capital gain distributions paid to you.

        Unless you have established on a properly executed IRS Form W-9 or substantially similar form that you are a corporation or come within another exempt category, distributions and other payments paid to you during the calendar year on our common shares or Hospitality Trust shares, and the amount of tax withheld, if any, will be reported to you and to the IRS.

        If you are a non-U.S. person:     Distributions paid to you during each calendar year on our common shares or on Hospitality Trust shares, and the amount of tax withheld if any, will generally be reported

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to you and to the IRS. This information reporting requirement applies regardless of whether you were subject to withholding, or whether the withholding was reduced or eliminated by an applicable tax treaty. Also, distributions and other payments to you on our common shares or on Hospitality Trust shares may be subject to backup withholding as discussed above, unless you have properly certified your non-U.S. person status on an applicable IRS Form W-8 or substantially similar form. Similarly, information reporting and backup withholding will not apply to proceeds you receive upon the sale, exchange, redemption, retirement or other disposition of our common shares or Hospitality Trust shares if you have properly certified your non-U.S. person status on an applicable IRS Form W-8 or substantially similar form.

Other Tax Consequences

        You should recognize that our and our shareholders' federal income tax treatment, as well as Hospitality Trust's and its shareholders' federal income tax treatment, may be modified by legislative, judicial or administrative actions at any time, and these actions may be retroactive in effect. The rules dealing with federal income taxation are constantly under review by the Congress, the IRS and the Treasury Department, and statutory changes as well as promulgation of new regulations, revisions to existing regulations and revised interpretations of established concepts occur frequently. No prediction can be made as to the likelihood of passage of new tax legislation or other provisions either directly or indirectly affecting us or Hospitality Trust, or any of our respective shareholders. Revisions in federal income tax laws and interpretations of these laws could adversely affect the tax consequences of an investment in our common shares and in Hospitality Trust shares. Hospitality Trust, as well as our and Hospitality Trust's respective shareholders, may also be subject to state or local taxation in various state or local jurisdictions, including those in which we, Hospitality Trust and our respective shareholders transact business or reside. State and local tax consequences may not be comparable to the federal income tax consequences discussed above.


SHARES ELIGIBLE FOR FUTURE SALE

        Our shares being distributed as part of the spin off will be freely transferable, except for shares held by persons that are our "affiliates" as defined in the rules under the Securities Act of 1933. Affiliates are individuals or entities that control, are controlled by or are under common control with one another, with us, and may include our officers, directors and principal shareholders. Shares held by affiliates may only be sold pursuant to an effective registration statement under the Securities Act of 1933 or Rule 144 under the Securities Act of 1933. We cannot predict whether substantial amounts of our shares will be sold in the open market following the distribution. Sales of substantial amounts of our shares in the public market, or the perception that substantial sales may occur, could lower their market price.


DESCRIPTION OF OUR LIMITED LIABILITY COMPANY AGREEMENT

        The following is a summary of the material provisions of our LLC agreement, and our limited liability company interests (to be known as common shares). The form of our LLC agreement is included as an exhibit to the registration statement of which this prospectus is a part.

Organization

        We were formed in October 2006 under the Delaware Limited Liability Company Act, or the Delaware LLC Act, and will remain in existence until we are dissolved in accordance with our LLC agreement.

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Purposes

        Under our LLC agreement, we are permitted to engage in any activity that a limited liability company formed under Delaware law may lawfully conduct. Our board of directors is authorized to perform all acts it deems necessary or appropriate to conduct our business.

Fiduciary Duties

        Our LLC agreement provides that our business shall be managed under the direction of our board of directors, which shall have the power to appoint our officers. Our LLC agreement further provides that, except as otherwise specifically stated in our LLC agreement or in Delaware law, the authority and function of our board of directors and officers generally shall be identical to the authority and functions of a board of directors and officers of a corporation organized for profit under the Delaware General Corporation Law, or DGCL.

        Our LLC agreement provides that, except as provided therein, the fiduciary duties and obligations owed to our company and to our shareholders by our directors and officers shall be the same as the respective duties and obligations owed by directors and officers of a corporation organized under the DGCL to their corporation and stockholders, respectively. However, notwithstanding any duty (including and fiduciary duty) that might otherwise exist in law or equity, our LLC agreement specifically permits our directors and their affiliates to invest or engage in any other businesses or activities, including those that compete with us, and that business opportunities that become available to our directors or their affiliates need not first be presented to us. In addition, our LLC agreement eliminates the personal liability of each member of our Board of Directors to us and our shareholders for monetary damages for breach of fiduciary duty as a director; provided, however, that, to the extent required by applicable law, the foregoing shall not eliminate the liability of a director (i) for any breach of such director's duty of loyalty to us or our shareholders as modified by our LLC agreement, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) for improper distributions under the Delaware LLC Act or (iv) for any transaction from which such director derived an improper personal benefit.

Agreement to be Bound by Limited Liability Company Agreement

        By acquiring a common share in us, you will be admitted as a member of our company (which we call a "shareholder") and will be bound by the terms of our LLC agreement. Pursuant to this agreement, each shareholder and each person who acquires a share from a shareholder grants our board of directors the power to, among other things, execute and file documents required for our qualification, continuance or dissolution, and the authority to make amendments to, and to make consents and waivers under and in accordance with, our LLC agreement.

Conduct of Business

        Our LLC agreement provides that our day to day business shall be conducted by or under the direction of our board of directors and such officers with such titles and duties as our board of directors may from time to time appoint. Our board of directors is authorized to adopt bylaws to govern our activities and to appoint committees, each of which shall have at least one director.

Capital Contributions

        Shareholders are not obligated to make capital contributions to us.

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Limited Liability

        Limited Liability in Jurisdictions in Which We Do Business.     Although limitations on the liability of shareholders for the obligations of a limited liability company have not been clearly established in some jurisdictions, we will operate in a manner that our board of directors considers reasonably appropriate to preserve the limited liability of our shareholders.

        Unlawful Distributions.     We do not currently intend to make any distributions to our shareholders. However, a shareholder who knowingly receives a distribution made in violation of the Delaware LLC Act is liable for return of that distribution for three years from the date of the distribution if an action to recover the distribution from such shareholder is commenced prior to the end of such three year period and an adjudication of liability against such shareholder is made. Under the Delaware LLC Act, we generally cannot make a distribution that would cause our liabilities to exceed the fair value of our assets.

Description of the Rights of Our Common Shares

        Our common shareholders are entitled to one vote for each share held of record on our books for all matters submitted to a vote of shareholders. The holders of our common shares are entitled to receive distributions, if any, ratably when, as and if authorized by our board of directors out of assets legally available therefor, subject to any preferential distribution rights of any newly created class or series of shares. Upon our dissolution, liquidation or winding up, the holders of common shares are entitled to receive our net assets available after the satisfaction (whether by payment or reasonable provision for payment) of all debts and other liabilities, ratably subject to the preferential rights of any newly created class or series of shares. Holders of common shares have no preemptive, subscription, redemption or conversion rights.

Shareholder Voting Rights

        Generally, our board of directors has broad powers to conduct our business and manage our affairs without shareholder approval or voting. Whenever shareholder approval is required for any action either by the terms of our LLC agreement or by applicable law, the general rule under our LLC agreement is that the affirmative vote of 75% of each class and series of shares outstanding, voting separately, will be required unless applicable law requires a lesser vote; provided, however, if our board of directors approves in advance a particular action, only a plurality of voting shares voting together as a single class shall be required, unless applicable law requires a greater vote. Generally the election of directors requires the affirmative vote of a plurality of shareholders voting, but our board of directors has the power to revise this requirement as may be allowed by law.

Our Board of Directors May Issue Additional Securities, including Preferred Shares

        Our LLC agreement authorizes us to issue an unlimited number of additional securities and rights to buy securities for the consideration and on the terms and conditions determined by our board of directors without the approval of our shareholders, including the right to issue any number of common shares and preferred shares or class or series of common or preferred shares. Our board of directors is authorized to set the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption for each such class or series.

        Regardless of any rights of our common shareholders that are described in this section, the rights, preferences and privileges of our common shares and common shareholders are subject to, and may be adversely affected by, the rights of the holders of shares of any new class or series that our board of directors may designate and issue in the future.

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        We believe that the ability of our board of directors to issue one or more classes or series of shares with specified preferences will provide us with flexibility in structuring possible future financings and acquisitions, and in meeting other business needs that may arise. All shares are available for issuance without action by our shareholders, unless such action is required by applicable law or the rules of the principal stock exchange on which our securities may be listed. Nonetheless, the unrestricted ability of our board to issue additional shares, classes and series of shares may have adverse consequences to existing shareholders. Please also see "Anti-Takeover Provisions".

Restrictions on Share Ownership and Transfers

        Our LLC agreement provides that no person or group of persons acting together may own, or be deemed to own by virtue of the attribution provisions of the IRC, more than 9.8% of the number or value of any class or series of our outstanding shares. Any person who acquires or attempts to acquire ownership of our shares that will or may violate this 9.8% ownership limitation must give notice to us and provide us with any other information that we may request. The ownership limitations in our LLC agreement are effective against all of our shareholders as of our spin off date. Our board of directors may grant an exemption from the ownership limitation if it is satisfied that the shareholder's ownership is in our interest, provided that any duties of our board of directors, including fiduciary duties, to the shareholder requesting the exemption shall not apply to such determination.

        If a person attempts a transfer of our shares in violation of our ownership limitations, then that number of shares which would cause the violation will be automatically transferred to a trust for the exclusive benefit of one or more charitable beneficiaries designated by us. The prohibited owner will not acquire any rights in the shares held in trust, will not benefit economically from ownership of the shares held in trust, will have no rights to distributions and will not possess any rights to vote the shares held in trust. This automatic transfer will be deemed to be effective as of the close of business on the business day prior to the date of the violative transfer.

        Within 20 days after receiving notice from us that shares have been transferred to the trust, the trustee will sell the shares held in the trust to a person selected by the trustee whose ownership of the shares will not violate the ownership limitations. Upon this sale, the interest of the charitable beneficiary in the shares sold will terminate and the trustee will distribute the net proceeds of the sale to the prohibited owner and to the charitable beneficiary as follows:

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        Also, shares held in the trust will be offered for sale to us, or our designee, at a price per share equal to the lesser of:

        We will have the right to accept the offer until the trustee has sold the shares held in the trust. The net proceeds of the sale to us will be distributed similarly to any other sale by the trustee.

        Every owner of 5% or more of any class or series of our shares is required to give written notice to us within 30 days after our request or after the end of each taxable year stating the name and address of the owner, the number of shares of each class and series of our shares which the owner beneficially owns, and a description of the manner in which those shares are held. In addition, each shareholder is required to provide us upon demand with any additional information that we may request in order to assist us in ensuring compliance with the foregoing share ownership limitations.

        The restrictions described above will not preclude the settlement of any transaction entered into through the facilities of any securities exchange through which our shares are traded. Our LLC agreement provides, however, that the fact that the settlement of any transaction occurs will not negate the effect of any of the foregoing limitations and any transferee in this kind of transaction is subject to all of the provisions and limitations described above.

        These ownership limitations could have the effect of delaying, deferring or preventing a takeover or other transaction in which our common shareholders might receive a premium for their shares over the then prevailing market price or which such holders might believe to be otherwise in their best interest.

Election and Removal of Members of Our Board of Directors

        At the time of the spin off, our board of directors will consist of five members. Our LLC agreement provides that our board of directors establishes the number of our directors. However, there may not be less than three nor more than seven directors, unless the directors then in office unanimously determine to change the permitted number of directors. In the event of a vacancy on our board, a majority of the remaining directors will fill the vacancy and the director elected to fill the vacancy will serve for the remainder of the full term of the directorship in which the vacancy occurred.

        Other than in the event of a vacancy, our LLC agreement provides that our directors will be elected by majority vote of common shareholders entitled to vote. Our LLC agreement divides our board of directors into three classes effective on the date of the spin off. The initial term of the first class will expire in 2008; the initial term of the second class will expire in 2009; and the initial term of the third class will expire in 2010. Beginning in 2008, shareholders will elect directors of each class for three year terms upon the expiration of their current terms. Shareholders will elect only one class of directors each year. There will be no cumulative voting in the election of directors, and, at each annual meeting of shareholders, a majority of the shares outstanding and entitled to vote will be able to elect all of the successors of the class of directors whose term expires at that meeting.

        We believe that classification of the board of directors will help to ensure continuity of our business strategies and policies. However, the classified board provision could have the effect of making the replacement of incumbent directors more time consuming and difficult. At least two annual meetings of shareholders will generally be required to effect a change of a majority of our directors. Also, because our board of directors may increase the number of directors and set the classification of the expanded board, it may take more than two years to change a majority of our directors.

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        Our LLC agreement provides that a director may be removed only for cause by the unanimous vote of the other directors then in office or by the affirmative vote of at least 75% of the shares entitled to vote in the election of directors voting as a single class.

        The provisions described in this section and any other provisions relating to the rights of a class or series of our shares may be subject to the rights of any class or series of shares that the board of directors may authorize from time to time.

Amendment of Our Limited Liability Company Agreement

        General.     Amendments to our LLC agreement may be proposed only by or with the consent of our board of directors. In the event that applicable law requires that amendments may be proposed by our shareholders, the ownership percentage of shareholders required to propose an amendment shall be the ownership percentage specified by law, or, if shareholders are permitted by law to propose amendments but no required ownership percentage is set, then shareholders holding at least twenty five percent (25%) of our outstanding shares shall be required. Amendments proposed by our board which require a vote of our shareholders may be adopted by a plurality of common shares voting, unless applicable law requires a greater number. Amendments proposed by shareholders, if any, which are not approved by our board shall require the affirmative vote of 75% of each class and series of outstanding shares, unless applicable law requires a lesser vote.

        No Shareholder Approval.     Our board of directors generally may make amendments to our LLC agreement without the approval of our shareholders as follows:

        In addition, our board of directors may make amendments to our LLC agreement without the approval of our shareholders if our board of directors determines that those amendments:

73

Merger, Sale or Other Disposition of Assets

        Except with respect to any transaction having as its principal purpose of changing our legal form of existence and/or jurisdiction of organization (as described above), any merger, combination or consolidation of us into another entity or the sale or other disposition of substantially all of our assets may only be affected by an agreement approved by our board of directors and by our shareholders; provided, however, our board of directors without shareholder approval may mortgage, sell and leaseback, pledge, hypothecate or grant a security interest in all or substantially all of our assets and permit the sale upon foreclosure or other realization of such an encumbrance. If applicable law permits the foregoing action without board approval, the shareholder vote required shall be 75% of each class and series of outstanding shares voting separately, at the time of the vote, unless applicable law requires a lesser amount; but any such transaction which is approved by our board may be approved by shareholders holding a plurality of all classes and series of our shares, voting as a single class, unless applicable law requires a greater amount.

Termination and Dissolution

        We were formed as a perpetual entity to continue in existence until dissolved pursuant to the terms of our LLC agreement. We will dissolve upon: (1) the election of our board of directors to dissolve us which is approved by our shareholders; (2) the entry of a decree of judicial dissolution of us or (3) the reduction of the number of our members to zero. The shareholder vote required to approve our board's decision to dissolve us shall be a plurality of voting common shares, unless a greater amount or separate class voting is required by applicable law. In the event applicable law requires that our dissolution may be ordered by our shareholders without our board's approval, the required vote shall be 75% of each class and series of shares then outstanding, voting separately, unless applicable law requires a lesser amount.

Shareholder Meetings, Quorums and Proxies

        Actions by our shareholders may only be taken at a duly called annual or special meeting of shareholders and not by written consent or otherwise.

        The chairman of our board of directors, if any, or a majority of our entire board of directors may call an annual or special meeting of our shareholders. Our LLC Agreement requires that a meeting of shareholders be held each year except in 2007, when no shareholder's meeting is expected to be held. Shareholders may cause a special meeting of the shareholders to be held only if applicable law so requires, and then the percentage of shareholders required to cause a special meeting of shareholders shall be the maximum percentage specified by applicable law. If applicable law requires such an action

74


but does not specify a maximum percentage, the percentage shall be specified from time to time by our board of directors, provided, however, that such percentage shall not be higher than seventy five percent (75%). If the shareholders have the right to call a special meeting, upon written request by the requisite number of shareholders in accordance with the procedures contained in our LLC Agreement, our secretary shall call such a meeting.

        Shareholders may vote either in person or by proxy at meetings. Only shareholders of record may vote. The holders of a majority of the outstanding shares of the class or classes or series for which a meeting has been called represented in person or by proxy shall constitute a quorum unless any action by the shareholders requires approval by holders of a greater percentage of the shares, in which case the quorum for approval of that action shall be the greater percentage.

Advance Notice of Director Nominations and Shareholder Proposals

        Our LLC agreement provides that nominations of persons for election to our board of directors and other business may only be considered at our shareholders meetings if the nominations or other business are included in the notice of the meeting made or proposed by our board of directors or made or proposed by a shareholder who:


        Under our LLC agreement, a shareholder's notice of nominations for director or business to be transacted at an annual meeting of shareholders must be delivered to our secretary at our principal office not later than the close of business on the 90th day, and not earlier than the close of business on the 120th day, prior to the first anniversary of the date of mailing of our notice for the preceding year's annual meeting. If the date of mailing of our notice of the annual meeting is advanced or delayed by more than 30 days from the anniversary date of the mailing of our notice for the preceding year's annual meeting, a shareholder's notice must be delivered to us not earlier than the close of business on the 120th day prior to the mailing of notice of such annual meeting and not later than the close of business on the later of: (1) the 90 th day prior to the date of mailing of the notice for an annual meeting, or (2) the 10th day following the day on which we first make a public announcement of the date of such meeting. The public announcement of a postponement of the mailing of the notice for an annual meeting or of an adjournment or postponement of an annual meeting to a later date or time will not commence a new time period for the giving of a shareholder's notice. If the number of directors to be elected to our board of directors at a shareholders meeting is increased and we make no public announcement of such action or do not specify the size of the increased board of directors at least 100 days prior to the first anniversary of the date of mailing of notice for our preceding year's annual meeting, a shareholder's notice also will be considered timely, but only with respect to nominees for any new positions created by such increase, if the notice is delivered to our secretary at our principal office not later than the close of business on the 10th day following the day on which such public announcement is made. This provision does not apply to new directors who are elected by the board of directors to fill a vacancy, including a vacancy created by board action which increases the number of directors.

75

        For special meetings of shareholders, our LLC agreement requires a shareholder who is nominating a person for election to our board of directors at a special meeting at which directors are to be elected to give notice of such nomination to our secretary at our principal office not earlier than the close of business on the 120th day prior to such special meeting and not later than the close of business on the later of: (1) the 90th day prior to such special meeting or (2) the 10th day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the directors to be elected at such meeting. The public announcement of a postponement or adjournment of a special meeting to a later date or time will not commence a new time period for the giving of a shareholder's notice as described above.

        Any notice from a shareholder of nominations for director or business to be transacted at a shareholders meeting must be in writing and include the following:

        We may request that any shareholder proposing a nominee for election to our board of directors provide, within three business days of such request, written verification of the accuracy of the information submitted by the shareholder.

        Shareholder nominations for directors which are properly made in accordance with the foregoing rules will be considered by our nominating and governance committee and by our board; and, if they are endorsed by our board, they will be included in our proxy solicitation. Shareholder nominations which are properly made but are not endorsed by our board will not appear in our proxy solicitation unless otherwise required by law. Shareholder proposals other than nominations which are properly made in accordance with the foregoing rules will be considered by our nominating and governance committee and by our board, and they will appear on our proxy solicitation if they are endorsed by our board or if they are supported by at least twenty-five percent (25%) of the shares entitled to vote regarding the proposal (or such lesser amount as applicable law may establish for inclusion in the proxy solicitation, if any). Whether or not included in our proxy solicitation, shareholder nominations or proposals which are properly made may be considered at a shareholders meeting.

Indemnification and Exculpation

        Our LLC agreement requires that we indemnify all of our directors, officers, employees and agents, as well as Hospitality Trust and Reit Management, from any and all liabilities or claims which may arise by reason of any action any of them have taken or may take on our behalf affecting our creation or affecting our continuing business activities, to the full extent permitted by applicable law

76


subject to such limitations as may be set forth in our LLC agreement or in bylaws which may be adopted by our board. Our LLC agreement eliminates the personal liability of each of our directors to us and our shareholders for monetary damages for breach of fiduciary duty as a director; provided, however, that, to the extent required by applicable law, the foregoing does not eliminate the liability of a director (i) for any breach of such director's duty of loyalty to our shareholders as modified by our LLC agreement, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) for improper distributions under the Delaware LLC Act or (iv) for any transaction from which such director derived an improper personal benefit.


ANTI-TAKEOVER PROVISIONS

        The following provisions, among others, of our LLC agreement may delay or prevent a change of control of us:

        These requirements may prevent you from realizing a takeover premium for any of our shares which you own.


LIABILITY OF SHAREHOLDERS FOR
BREACH OF RESTRICTIONS ON OWNERSHIP

        Our travel centers leases and our management and shared services agreement are terminable by Hospitality Trust and Reit Management, respectively, in the event that any shareholder or group of shareholders acting in concert becomes an owner of more than 9.8% of our shares. If a breach of the ownership limitation results in a lease default or a loss of the benefits of our management and shared services agreement, the shareholder or shareholders causing the breach may be liable to us or to our other shareholders for damages. These damages may be in addition to the loss of beneficial ownership and voting rights of the shares owned by the breaching shareholder or shareholders, as described above, and these damages may be material.

77



TRANSFER AGENT AND REGISTRAR

        Upon completion of the spin off, our transfer agent and registrar for the common shares will be Wells Fargo Bank, N.A.


PLAN OF DISTRIBUTION

        Our common shares will be distributed by Hospitality Trust by the declaration and payment of a distribution to Hospitality Trust common shareholders. This distribution is conditioned on the closing of Hospitality Trust's acquisition of TravelCenters of America, Inc. as described elsewhere in this prospectus. As of the date of this prospectus, Hospitality Trust has 74,281,951 common shares outstanding. Hospitality Trust may sell additional common shares and it may have a greater number of shares outstanding on the spin off record date; but we do not expect the distribution ratio to change if this occurs.

        This distribution is not being underwritten by an investment bank or otherwise. The purpose of the spin off is described in the section of this prospectus entitled "The Spin off—Background and Reasons for the Spin off". Hospitality Trust will pay any fees or other expenses incurred in connection with this distribution and the listing of our common shares on the AMEX. We anticipate the aggregate fees and expenses in connection with the spin off distribution to be approximately $[            ].


LEGAL MATTERS

        Sullivan & Worcester LLP, Boston, Massachusetts, is passing on certain tax matters related to the spin off. Richards, Layton & Finger, P.A., Wilmington, Delaware will pass upon the validity of our distributed common shares under Delaware law.


EXPERTS

        The consolidated financial statements of TravelCenters of America, Inc. as of December 31, 2004 and 2005, and for each of the three years in the period ended December 31, 2005, and the consolidated balance sheet of TravelCenters of America LLC as of October 10, 2006, included in this prospectus have been so included in reliance on the reports of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.


WHERE YOU CAN FIND MORE INFORMATION

        We have filed with the SEC a registration statement on Form S-1 (including the exhibits, schedules and any amendments thereto) under the Securities Act of 1933 with respect to the shares being distributed pursuant to this prospectus. This prospectus is part of the registration statement and does not contain all of the information set forth in the registration statement. Statements contained in this prospectus as to the content of any agreement or other document filed as an exhibit are not necessarily complete, and you should consult a copy of those contracts or other documents filed as exhibits to the registration statement. For further information regarding us, please read the registration statement and the exhibits and schedules thereto.

        You may read and copy the registration statement and its exhibits and schedules or other information on file at the SEC's public reference room at 100 F Street, NE, Room 1580, Washington, D.C. 20549. You can request copies of those documents upon payment of a duplicating fee to the SEC. When our registration statement on Form S-1 becomes effective, we will be subject to the reporting requirements of the Securities Exchange Act of 1934 and the reports, proxy statements and other information filed by us with the SEC can be copied at the SEC's public reference room. You may call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference room. You

78


can review our SEC filings and the registration statement by accessing the SEC's website at http://www.sec.gov.

        We intend to furnish to our shareholders annual reports containing financial statements audited by an independent registered public accounting firm.

79


INDEX TO FINANCIAL STATEMENTS AND SCHEDULES

 
  Page
TravelCenters of America LLC Unaudited Pro Forma Financial Statements    
  Introduction to Unaudited Pro Forma Financial Statements   F-2
  Unaudited Pro Forma Consolidated Balance Sheet as of September 30, 2006   F-3
  Unaudited Pro Forma Consolidated Statement of Operations for the year ended December 31, 2005   F-4
  Unaudited Pro Forma Consolidated Statement of Operations for the nine months ended September 30, 2006   F-5
  Notes to Unaudited Pro Forma Consolidated Financial Statements   F-6

TravelCenters of America LLC Audited Financial Statement
 
 
  Report of Independent Registered Public Accounting Firm   F-10
  Balance Sheet as of October 10, 2006 (inception)   F-11
  Notes to Financial Statement   F-12

TravelCenters of America, Inc. (predecessor) Unaudited Historical Financial Statements
 
 
  Unaudited Consolidated Balance Sheet as of September 30, 2006 and December 31, 2005   F-13
  Unaudited Consolidated Statement of Operations and Comprehensive Income (Loss) for the Nine Month Periods ended September 30, 2006 and 2005   F-14
  Unaudited Consolidated Statement of Cash Flows for the Nine Month Periods ended September 30, 2006 and 2005   F-15
  Unaudited Consolidated Statement of Nonredeemable Stockholders' Equity for the Nine Month Period ended September 30, 2006   F-16
  Notes to Unaudited Consolidated Financial Statements   F-17

TravelCenters of America, Inc. (predecessor) Audited Financial Statements
 
 
  Report of Independent Registered Public Accounting Firm   F-28
  Consolidated Balance Sheet at December 31, 2005 and 2004   F-29
  Consolidated Statement of Operations and Comprehensive Income (Loss) for the Years ended December 31, 2005, 2004 and 2003   F-30
  Consolidated Statement of Cash Flows for the Years ended December 31, 2005, 2004 and 2003   F-31
  Consolidated Statement of Nonredeemable Stockholders' Equity for the Years Ended December 31, 2005, 2004 and 2003   F-32
  Notes to Consolidated Financial Statements   F-33
 
Schedule II—Valuation and Qualifying Accounts for the Years ended December 31, 2005, 2004 and 2003
 
II-4

F-1


TravelCenters of America LLC

Introduction to Unaudited Pro Forma Financial Statements

        The unaudited pro forma balance sheet at September 30, 2006, presents the financial position of TravelCenters of America LLC as if Hospitality Trust's acquisition of TravelCenters of America, Inc., the restructuring of that business and the spin off of TravelCenters of America LLC had been completed as of September 30, 2006, as described in the notes thereto. The unaudited pro forma statements of operations for the year ended December 31, 2005, and nine months ended September 30, 2006, present the results of operations of TravelCenters of America LLC, as if Hospitality Trust's acquisition of TravelCenters of America, Inc., the restructuring of that business and the spin off of TravelCenters of America LLC had been completed as of January 1, 2005, as described in the notes thereto.

        Our registration statement relating to the anticipated spin off has not been declared effective by the Securities and Exchange Commission, or SEC, and may be amended prior to its effectiveness. Our common shares may not be distributed prior to the time the registration statement becomes effective. Furthermore, we have not yet entered into definitive agreements with Hospitality Trust regarding the terms of the spin off and related transactions, including the lease we describe in this registration statement. The description in this registration statement of the lease and the other agreements that we expect to enter with Hospitality Trust include the material terms which we expect as of the date of this registration statement. The final terms may be different from those that we now expect. Final terms are subject to negotiation between us and Hospitality Trust, and are subject to approval by our board of directors and Hospitality Trust's board of trustees. Changes could affect the terms of the lease and other agreements described in this registration statement and may include, for example, an increase or decrease in our initial capital on the date of the spin off, an increase or decrease in annual minimum rent, percentage rent or term of the lease. Consequently, amounts presented in the unaudited pro forma financial statements related to these agreements could change.

        The allocation of the purchase price of Hospitality Trust's acquisition of TravelCenters of America, Inc. and the assets and liabilities distributed in the spin off of TravelCenters of America LLC as reflected in these unaudited pro forma consolidated financial statements have, with the assistance of independent valuation specialists, been based upon preliminary estimates of the fair value of assets acquired and liabilities assumed. A final determination of the fair value of the assets and liabilities distributed in the spin off of TravelCenters of America LLC, which cannot be made prior to the completion of the transactions, will be based on the actual net tangible and intangible assets of TravelCenters of America, Inc. that exist as of the date of the completion of the transactions. Consequently, amounts preliminarily allocated to assets and liabilities could change significantly from those used in the pro forma unaudited consolidated financial statements. In the opinion of management, all adjustments necessary to reflect the effects of the transactions described above have been included in the pro forma financial statements.

        These unaudited pro forma financial statements do not represent our financial condition or results of operations for any future date or period. Actual future results may be materially different from pro forma results. Differences could arise from many factors, including, but not limited to, those related to our operation as a separate publicly owned company, competition in our business, our ability to successfully attract or retain customers and employees, our ability to control operating expenses, our capital structure and other changes. These unaudited pro forma financial statements should be read in conjunction with our and our predecessor's audited and unaudited financial statements and the related Management's Discussion and Analysis of our predecessor's results of operations included elsewhere in this prospectus.

F-2


TravelCenters of America LLC

Unaudited Pro Forma Consolidated Balance Sheet at September 30, 2006

(dollars in thousands)

 
  TravelCenters
of America
LLC
Historical
  TravelCenters
of America,
Inc.
Historical
  Merger,
Restructuring
and Spin Off
Adjustments
   
  Pro Forma
 
  A

  B

   
   
   
Current assets:                            
  Cash   $ —   $ 93,565   $ 119,640   C,D1   $ 213,205
  Accounts receivable, net     —     89,459     —   D2     89,459
  Inventories     —     88,323     4,690   D3     93,013
  Deferred income taxes     —     9,753     (9,753 ) E     —
  Other current assets     —     8,991     —   D4     8,991
   
 
           
    Total current assets     —     290,091               404,668
Property and equipment, net     —     635,812     (558,963 ) F     197,938
                  18,461   D5      
                  102,628   G      
Goodwill     —     49,681     (15,548 ) D6     34,133
Deferred financing costs, net     —     16,257     (16,257 ) H     —
Deferred income taxes     —     306     (306 ) E     —
Intangible assets, net     —     1,922     19,867   D7     21,789
Other non-current assets     —     9,638     (685 ) D8     8,953
   
 
           
    Total assets   $ —   $ 1,003,707             $ 667,481
   
 
           
Current liabilities                            
  Current maturities of debt   $ —   $ 7,014   $ (7,014 ) H   $ —
  Accounts payable     —     124,729     —   D9     124,729
  Other accrued liabilities     —     86,227     (6,288 ) H,D10     79,939
   
 
           
    Total current liabilities     —     217,970               204,668

Commitments and contingencies
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Long term debt, net of unamortized discount
 
 
—
 
 
670,464
 
 
(670,464
)
H
 
 
—
Capital lease obligations     —     —     102,628   G     102,628
Deferred income taxes     —     8,812     (8,812 ) E     —
Other non-current liabilities     —     22,760     (4,345 ) D11     18,415
   
 
           
    Total liabilities     —     920,006               325,711

Redeemable equity
 
 
—
 
 
13,403
 
 
(13,403
)
I
 
 
—

Total nonredeemable shareholders' equity
 
 
—
 
 
70,298
 
 
119,640
 
C,I
 
 
341,770
                  151,832          
   
 
           
    Total liabilities and shareholders' equity   $ —   $ 1,003,707             $ 667,481
   
 
           

F-3


TravelCenters of America LLC

Unaudited Pro Forma Consolidated Statement of Operations

For the Year Ended December 31, 2005

(in thousands except per share data)

 
  TravelCenters
of America
LLC
Historical
  TravelCenters
of America, Inc.
Historical
  Merger,
Restructuring
and Spin Off
Adjustments
   
  Pro Forma
 
 
  A

  J

   
   
   
 
Revenues   $ —   $ 4,075,296   $ —       $ 4,075,296  
Cost of goods sold (excluding depreciation)     —     3,450,780     —         3,450,780  

Operating expenses
 
 
—
 
 
420,367
 
 
—
 
 
 
 
420,367
 
Selling, general and administrative (including $8,921 of noncash share based compensation expense)     —     53,051     5,777   K,L     58,828  
Rent to Hospitality Trust     —     —     160,245   M     160,245  
Depreciation and amortization     —     64,981     (47,261 ) N     17,720  
(Gain) loss on asset sales     —     (207 )   —         (207 )
   
 
           
 
  Income (loss) from operations     —     86,324               (32,437 )

Other income (expense), net
 
 
—
 
 
(37,592
)
 
—
 
O
 
 
(37,592
)
Interest and other financial costs, net     —     (48,518 )   49,097   P     (9,895 )
                  (10,474 ) M        
   
 
           
 
  Income (loss) before taxes     —     214               (79,924 )
Income taxes expense (benefit)     —     2,309     (32,281 ) Q     (29,972 )
   
 
           
 
  Net income (loss)   $ —   $ (2,095 )           $ (49,952 )
   
 
           
 

Weighted shares outstanding
 
 
—
 
 
6,937
 
 
491
 
R
 
 
7,428
 
   
 
           
 
Basic and diluted net (loss) per common share   $ —   $ (0.30 )           $ (6.72 )
   
 
           
 

F-4


TravelCenters of America LLC

Unaudited Pro Forma Consolidated Statement of Operations

For Nine Months Ended September 30, 2006

(in thousands except per share amounts)

 
  TravelCenters
of America
LLC
Historical
  TravelCenters
of America, Inc.
Historical
  Merger,
Restructuring
and Spin Off
Adjustments
   
  Pro Forma
 
 
  A

  J

   
   
   
 
Revenues   $ —   $ 3,678,468   $ —       $ 3,678,468  
Cost of goods sold (excluding depreciation)     —     3,174,227     —         3,174,227  

Operating expenses
 
 
—
 
 
325,062
 
 
—
 
 
 
 
325,062
 
Selling, general and administrative (including $11,946 of noncash share based compensation expense)     —     48,532     4,631   K,L     53,163  
Rent and royalty fees to Hospitality Trust     —     —     120,183   M     120,183  
Depreciation and amortization     —     52,124     (38,834 ) N     13,290  
Merger and refinancing expenses     —     4,773     —   O     4,773  
(Gain) loss on asset sales     —     (579 )   —         (579 )
   
 
           
 
  Income (loss) from operations     —     74,329               (11,651 )

Other income (expenses), net
 
 
—
 
 
1,250
 
 
—
 
O
 
 
1,250
 
Interest and other financial costs, net     —     (35,016 )   36,321   P     (6,551 )
                  (7,856 ) M        
   
 
           
 
  Income (loss) before taxes     —     40,563               (16,952 )
Income taxes expense (benefit)     —     15,458     (21,815 ) Q     (6,357 )
   
 
           
 
  Net income (loss)   $ —   $ 25,105             $ (10,595 )
   
 
           
 

Weighted shares outstanding
 
 
—
 
 
6,937
 
 
491
 
R
 
 
7,428
 
   
 
           
 
Net income (loss) per common share:                              
  Basic   $ —   $ 3.62             $ (1.43 )
   
 
           
 
  Diluted   $ —   $ 3.32             $ (1.43 )
   
 
           
 

F-5


TravelCenters of America LLC

Notes to Unaudited Pro Forma Consolidated Financial Statements

(amounts in thousands, except share and per share amounts)

Pro Forma Balance Sheet Adjustments


 
  Predecessor's historical carrying amount
  Estimate of fair
market value
based upon
appraisal or
management
estimates
  Adjustment
  Ref.
 
  Column I

  Column II

  Column II less Column I

   
Assets:                
Cash   93,565   93,565   —   D1
Accounts receivable   89,459   89,459   —   D2
Inventories   88,323   93,013   4,690   D3
Other current assets   8,991   8,991   —   D4
Property and equipment   76,849   95,310   18,461   D5
Goodwill   49,681   34,133   (15,548 ) D6
Intangible assets   1,922   21,789   19,867   D7
Other non-current assets   9,638   8,953   (685 ) D8

Liabilities:
 
 
 
 
 
 
 
 
Accounts payable   124,729   124,729   —   D9
Other accrued liabilities   86,227   79,939   (6,288 ) D10,H
Other non-current liabilities   22,760   18,415   (4,345 ) D11

F-6

Pro Forma Statement of Operations Adjustments


 
  Year Ended
December 31,
2005
  Nine Months Ended
September 30,
2006
 
Pro forma fuel gross profit   $ 129,340   $ 111,095  
Pro forma non-fuel revenues     833,500     660,674  
   
 
 
Total   $ 962,840   $ 771,769  
Contract rate     0.6 %   0.6 %
   
 
 
Management and shared services fee   $ 5,777   $ 4,631  
   
 
 

F-7


 
  Year Ended
December 31,
2005
  Nine Months Ended
September 30,
2006
 
Minimum base rent (cash)   $ 153,500   $ 114,975  
Required straight line rent adjustment     17,219     13,064  
   
 
 
Total   $ 170,719   $ 128,039  
Less amount recognized as interest (see Note G)     (10,474 )   (7,856 )
   
 
 
Total adjustment   $ 160,245   $ 120,183  
   
 
 

 
  Year Ended
December 31,
2005
  Nine Months Ended
September 30,
2006
 
Elimination of historical depreciation and amortization   $ (64,981 ) $ (52,124 )
Addition of depreciation and amortization     17,720     13,290  
   
 
 
Net adjustment   $ (47,261 ) $ (38,834 )
   
 
 

 
  Year Ended
December 31,
2005
  Nine Months
Ended
September 30,
2006
Debt extinguishment and refinancing costs   $ (39,566 ) $ —
Gain on sale of investment     1,974     —
Gain related to claims settlement     —     1,250
   
 
  Other income (expense), net   $ (37,592 ) $ 1,250
   
 

F-8


Total outstanding shares of Hospitality Trust   74,282  
Spin off ratio   1:10  
   
 
Total shares distributed   7,428  
Elimination of predecessor's outstanding shares   (6,937 )
   
 
Net Adjustment   491  
   
 

F-9


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholder and Board of
Directors of TravelCenters of America LLC

        In our opinion, the accompanying balance sheet presents fairly, in all material respects, the financial position of TravelCenters of America LLC at October 10, 2006 in conformity with accounting principles generally accepted in the United States of America. This financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit of this statement in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the balance sheet is free of material misstatement. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the balance sheet, assessing the accounting principles used and significant estimates made by management, and evaluating the overall balance sheet presentation. We believe that our audit of the balance sheet provides a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

Cleveland, Ohio
December 8, 2006

F-10


TravelCenters of America LLC

Consolidated Balance Sheet

October 10, 2006

Cash   $ 1
   
  Total assets   $ 1
   

Total liabilities
 
 
—
Shareholder's equity—common shares, 1 share issued and outstanding   $ 1
   
  Total liabilities and shareholder's equity   $ 1
   

The accompanying notes are an integral part of this consolidated financial statement.

F-11


TravelCenters of America LLC

Notes to Consolidated Balance Sheet

October 10, 2006

1.    Organization

        TravelCenters of America LLC was formed as a Delaware limited liability company on October 10, 2006. TravelCenters of America LLC is a 100% owned subsidiary of Hospitality Trust, or Hospitality Trust, and TravelCenters of America LLC's initial capitalization of $1 was provided by Hospitality Trust on Travel Centers of America LLC's formation date. Since that time, TravelCenters of America LLC has conducted no business activities.

2.    Acquisition of TravelCenters of America, Inc.

        In September 2006 Hospitality Trust agreed to acquire 100% of Travel Centers of America, Inc. This acquistion will be effected through a merger of a subsidiary of ours with and into TravelCenters of America, Inc. Hospitality Trust expects to complete this acquisition in 2007. When the acquisition is consummated, we will restructure the business of TravelCenters of America, Inc. after which Hospitality Trust will distribute our shares to its shareholders in a spin off transaction. Our spin off will not occur if Hospitality Trust does not acquire TravelCenters of America, Inc.

F-12


TravelCenters of America, Inc.

Unaudited Consolidated Balance Sheet

 
  December 31,
2005
  September 30,
2006
 
 
  (In Thousands of Dollars)

 
Assets              
Current assets:              
  Cash   $ 47,547   $ 93,565  
  Accounts receivable (less allowance for doubtful accounts of $1,715 for 2005 and $1,548 for 2006)     75,075     89,459  
  Inventories     87,702     88,323  
  Deferred income taxes     9,623     9,753  
  Other current assets     10,454     8,991  
   
 
 
    Total current assets     230,401     290,091  
Property and equipment, net     629,253     635,812  
Goodwill     49,681     49,681  
Deferred financing costs, net     18,605     16,257  
Deferred income taxes     207     306  
Intangible assets, net     1,967     1,922  
Other noncurrent assets     9,590     9,638  
   
 
 
    Total assets   $ 939,704   $ 1,003,707  
   
 
 

Liabilities and Stockholders' Equity
 
 
 
 
 
 
 
Current liabilities:              
  Current maturities of long-term debt   $ 7,009   $ 7,014  
  Accounts payable     117,271     124,729  
  Other accrued liabilities     69,482     86,227  
   
 
 
    Total current liabilities     193,762     217,970  
Commitments and contingencies     —     —  
Long-term debt (net of unamortized discount)     675,638     670,464  
Deferred income taxes     1,226     8,812  
Other noncurrent liabilities     21,771     22,760  
   
 
 
      892,397     920,006  

Redeemable equity
 
 
1,935
 
 
13,403
 
Nonredeemable equity:              
  Common stock and other stockholders' equity     226,482     226,303  
  Accumulated deficit     (181,110 )   (156,005 )
   
 
 
    Total nonredeemable equity     45,372     70,298  
   
 
 
    Total liabilities, redeemable equity and nonredeemable stockholders' equity   $ 939,704   $ 1,003,707  
   
 
 

The accompanying notes are an integral part of these consolidated financial statements.

F-13


TravelCenters of America, Inc.

Unaudited Consolidated Statement of Operations and Comprehensive Income (Loss)

 
  Nine Months Ended
September 30,
 
 
  2005
  2006
 
 
  (In Thousands of Dollars)

 
Revenues:              
  Fuel   $ 2,294,946   $ 3,010,251  
  Nonfuel     627,527     660,674  
  Rent and royalties     7,502     7,543  
   
 
 
    Total revenues     2,929,975     3,678,468  
Cost of goods sold (excluding depreciation):              
  Fuel     2,206,346     2,899,156  
  Nonfuel     259,486     275,071  
   
 
 
    Total cost of goods sold (excluding depreciation)     2,465,832     3,174,227  
Operating expenses     308,418     325,062  
Selling, general and administrative expenses (including $53 and $11,946 of noncash share based compensation expense for the nine months ended September 30, 2005 and 2006, respectively)     32,702     48,532  
Depreciation and amortization expense     46,078     52,124  
Merger and refinancing expenses     —     4,773  
Gain on asset sales     (208 )   (579 )
   
 
 
Income from operations     77,153     74,329  
Other income (expense), net (Note 11)     (37,401 )   1,250  
Interest and other financial costs, net     (37,722 )   (35,016 )
   
 
 
Income before income taxes     2,030     40,563  
Provision for income taxes     1,642     15,458  
   
 
 
Net income     388     25,105  
Other comprehensive income (expense), net of tax (Note 5):              
  Unrealized gain (loss) on derivative instruments     394     (674 )
  Foreign currency translation adjustments     272     343  
   
 
 
Comprehensive income   $ 1,054   $ 24,774  
   
 
 
Basic earnings per common share   $ 0.06   $ 3.62  
   
 
 
Diluted earnings per common share   $ 0.05   $ 3.32  
   
 
 

The accompanying notes are an integral part of these consolidated financial statements.

F-14


TravelCenters of America, Inc.

Unaudited Consolidated Statement of Cash Flows

 
  Nine Months Ended
September 30,
 
 
  2005
  2006
 
 
  (In Thousands of Dollars)

 
Cash flows from operating activities:              
  Net income   $ 388   $ 25,105  
  Adjustments to reconcile net income to net cash provided by operating activities:              
    Share based compensation expense     53     11,946  
    Financing costs expensed upon extinguishment of debt     39,375     —  
    Tender premium and debt discount paid     (32,308 )   —  
    Depreciation and amortization expense     46,078     52,124  
    Amortization of deferred financing costs     3,097     2,348  
    Deferred income tax provision     699     7,605  
    Provision for doubtful accounts     400     75  
    (Gain) on asset sales     (2,182 )   (579 )
    Changes in assets and liabilities, adjusted for the effects of business acquisitions:              
      Accounts receivable     (31,259 )   (15,463 )
      Inventories     (7,989 )   (599 )
      Other current assets     (2,593 )   443  
      Accounts payable and other accrued liabilities     52,885     27,475  
    Other, net     (1,820 )   (1,443 )
   
 
 
        Net cash provided by operating activities     64,824     109,037  
   
 
 
Cash flows from investing activities:              
  Business acquisitions     (935 )   —  
  Proceeds from asset sales     2,676     2,606  
  Capital expenditures     (54,397 )   (56,948 )
   
 
 
  Net cash used in investing activities     (52,656 )   (54,342 )
   
 
 
Cash flows from financing activities              
  Increase (decrease) in checks drawn in excess of bank balances     (937 )   (3,450 )
  Revolving loan borrowings (repayments), net     (25,000 )   —  
  Long-term debt borrowings     680,000     —  
  Long-term debt repayments     (647,171 )   (5,255 )
  Debt issuance costs     (5,039 )   —  
  Debt extinguishment and refinancing expenses paid     (2,603 )   —  
  Common shares sold (repurchased)     38     —  
   
 
 
  Net cash (used in) provided by financing activities     (712 )   (8,705 )
   
 
 
  Effect of exchange rate changes on cash     44     28  
   
 
 
        Net increase (decrease) in cash     11,500     46,018  
Cash at the beginning of the period     45,846     47,547  
   
 
 
Cash at the end of the period     57,346     93,565  
   
 
 

The accompanying notes are an integral part of these consolidated financial statements.

F-15


TravelCenters of America, Inc.

Unaudited Consolidated Statement of Nonredeemable Stockholders' Equity

 
  Nine Months Ended
September 30,
 
 
  2005
  2006
 
 
  (In Thousands of Dollars)

 
Common stock:              
  Balance at beginning and end of period   $ 3   $ 3  
   
 
 

Additional paid-in capital:
 
 
 
 
 
 
 
  Balance at beginning of period   $ 215,743   $ 224,413  
    Stock options     —     152  
   
 
 
  Balance at end of period   $ 215,743   $ 224,565  
   
 
 

Accumulated other comprehensive income (loss):
 
 
 
 
 
 
 
  Balance at beginning of period   $ 1,122   $ 2,066  
    Change in fair value of interest rate swap agreements, net of tax     394     (674 )
    Foreign currency translation adjustments, net of tax     272     343  
   
 
 
  Balance at end of period   $ 1,788   $ 1,735  
   
 
 

Accumulated Deficit:
 
 
 
 
 
 
 
  Balance at beginning of period   $ (179,015 ) $ (181,110 )
    Net income     388     25,105  
   
 
 
  Balance at end of period   $ (178,627 ) $ (156,005 )
   
 
 

The accompanying notes are an integral part of these consolidated financial statements.

F-16


TravelCenters of America, Inc.

Selected Notes to Unaudited Consolidated Financial Statements

Nine Months Ended September 30, 2005 and 2006

1.    Business Description and Summary of Operating Structure

        TravelCenters of America, Inc. ("we," "us" or "the Company") is a holding company which, through our wholly owned subsidiaries, owns, operates and franchises travel centers along the United States interstate highway system to serve long haul trucking fleets and their drivers, independent truck drivers and motorists. At September 30, 2006, our geographically diverse nationwide network of full service travel centers consisted of 162 sites located in 40 states and the province of Ontario, Canada. Substantially all of our operations are conducted through three distinct types of travel centers:

    •
    travel center sites operated by us, which we refer to as company operated sites;

    •
    travel center sites owned by us and leased to independent lessee franchisees, which we refer to as leased sites; and

    •
    travel center sites owned and operated by independent franchisees, which we refer to as franchisee owned sites.

        At September 30, 2006, our network consisted of 139 company operated sites, 10 leased sites and 13 franchisee owned sites. We operate as one reportable segment. We aggregate our travel centers into one reportable segment because they have similar economic and operating characteristics. Because only one of our 162 travel centers is located in Canada, the amounts of revenues and long lived assets located in Canada are not material.

        Our travel centers are located along the U.S. interstate highway system, typically on 20- to 25-acre sites. Operating under the "TravelCenters of America" and "TA" brand names, our nationwide network provides our customers with diesel fuel and gasoline as well as non-fuel products and services such as truck repair and maintenance services, full service restaurants, more than 20 different brands of quick service restaurants, travel and convenience stores with a selection of over 4,000 items and other driver amenities. We also collect rents and franchise royalties from the franchisees who operate the leased sites and franchisee owned sites.

        The consolidated financial statements include the accounts of TravelCenters of America, Inc. and its wholly owned subsidiaries, TA Operating Corporation and TA Franchise Systems Inc., as well as TA Licensing, Inc., TA Travel, L.L.C., 3073000 Nova Scotia Company, TravelCentres Canada Inc., and TravelCentres Canada Limited Partnership, which are all direct or indirect wholly owned subsidiaries of TA Operating Corporation. Intercompany accounts and transactions have been eliminated.

        The accompanying consolidated financial statements of the Company have been prepared without audit. Certain information and footnote disclosures required by generally accepted accounting principles for complete financial statements have been condensed or omitted. We believe that the disclosures made are adequate to make the information presented not misleading. However, the accompanying financial statements should be read in conjunction with the financial statements and notes contained in our audited consolidated financial statements as of and for the year ended December 31, 2005. In the opinion of our management, all adjustments, which include only normal recurring adjustments considered necessary for a fair presentation, have been included. Our operating results for interim periods are not necessarily indicative of the results that may be expected for the full year.

F-17


2.    Change in Accounting Principle

        Effective January 1, 2006, we adopted Statement of Financial Accounting Standards (FAS) No. 123(R), "Share Based Payments" (FAS 123R), which replaced FAS No. 123, "Accounting for Stock-based Compensation," and superseded Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" (APB 25). FAS 123R requires compensation cost relating to share based payment transactions be recognized in the financial statements. We adopted FAS 123R using the prospective approach; accordingly, prior periods were not restated. There was no effect on our balance sheet or results of operations as a result of the adoption of FAS 123R. Prior to January 1, 2006, we measured compensation costs related to share based payments under APB 25, as permitted by FAS 123, and provided pro forma disclosure in the notes to financial statements as required by FAS 123 and FAS 148.

        Under APB 25, we accounted for share based compensation using the intrinsic value method of accounting. For options that vested based on the passage of time, no share based compensation expense was reflected in our consolidated statements of operations because for all such options the exercise price equaled the estimated market value of the underlying share on the date of grant. For options that vested based on attaining specified financial return performance targets, no share based compensation cost was reflected in our consolidated statements of operations until such time as attaining of the targets was determined to be probable, which was not the case for the options granted under the 2001 stock plan until the fourth quarter of 2005. We have not granted options since the adoption of FAS 123R, but in April 2006 we modified certain of our outstanding options and, accordingly, we began accounting for these modified options as prescribed by FAS 123R. As a result, we have recognized share based compensation expense with respect to these modified options in the financial statements for the nine month period ended September 30, 2006. See Note 8 for additional discussion of our share based compensation.

3.    Recently Issued Accounting Pronouncements

        FIN 48.     In June 2006 the FASB issued Interpretation No. 48, "Accounting for Uncertainty in Income Taxes" (FIN 48). FIN 48 is effective for fiscal years beginning after December 15, 2006. FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Under this guidance, a benefit can be recognized with respect to a tax position only if it is more likely than not that the position will be sustained upon examination. In such cases, the tax position is to be measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. We are in the process of evaluating what, if any, effect adoption of FIN 48 will have on our financial statements, but do not expect that the effect will be material to our financial position, results of operations or cash flows when we adopt it effective January 1, 2007.

        FAS 157.     In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" (FAS 157). FAS 157 is effective for fiscal years beginning after November 15, 2007. FAS 157 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements, but does not require any new fair value measurements. We are in the process of evaluating what, if any, effect adoption of FAS 157 will have on our financial statements when we adopt it effective January 1, 2008.

F-18


4.    Earnings Per Share

        The following represents a reconciliation from basic earnings per common share to diluted earnings per common share.

 
  Nine Months Ended
September 30,
 
  2005
  2006
 
  (In Thousands, except per share data)

Determination of shares:            
  Weighted average common shares oustanding     6,937     6,937
  Incremental shares attributable to the assumed exercise of dilutive stock options     80     348
  Incremental shares attributable to the assumed exercise of warrants     277     277
   
 
Diluted weighted average common shares outstanding     7,294     7,562
   
 
Basic earnings per common share   $ 0.06   $ 3.62
Diluted earnings per common share   $ 0.05   $ 3.32

5.    Comprehensive Income

        Income tax provision (benefit) related to other comprehensive income consisted of the following:

 
  Nine Months Ended
September 30,
 
 
  2005
  2006
 
 
  (In Thousands of Dollars)

 
Related to gain (loss) on derivative instruments   $ 203   $ (347 )
Related to foreign currency translation adjustments   $ 90   $ 108  
   
 
 
  Total   $ 293   $ (239 )
   
 
 

6.    Inventories

        Inventories consisted of the following:

 
  December 31,
2005
  September 30,
2006
 
  (In Thousands of Dollars)

Non-fuel merchandise   $ 72,341   $ 71,663
Petroleum fuel products     15,361     16,660
   
 
Total inventories   $ 87,702   $ 88,323
   
 

F-19

7.    Goodwill and Intangible Assets

        The changes in the carrying amount of goodwill for the nine month periods ended September 30, 2005 and 2006 were as follows:

 
  Nine Months Ended September 30,
 
  2005
  2006
 
  (In Thousands of Dollars)

Balance as of beginning of period   $ 48,898   $ 49,681
Goodwill recorded during the period     743     —
   
 
Balance as of end of period   $ 49,641   $ 49,681
   
 

        During the nine month period ended September 30, 2005 we recorded $743,000 of goodwill as a result of the business acquisition in connection with our converting one leased site to a company operated site. No goodwill was recognized during the nine months ended September 30, 2006.

        Intangible assets, net consisted of the following:

 
  December 31,
2005
  September 30,
2006
 
  (In Thousands of Dollars)

Amortizable intangible assets:            
  Noncompetition agreements   $ 650   $ 650
   
 
    Total amortizable intangible assets     650     650
  Less—accumulated amortization     81     126
   
 
    Net carrying value of amortizable intangible assets     569     524
Net carrying value of trademarks     1,398     1,398
   
 
    Intangible assets, net   $ 1,967   $ 1,922
   
 

        Total amortization expense for our amortizable intangible assets for the nine month periods ended September 30, 2005 and 2006 was $96,000 and $45,000, respectively. The estimated aggregate amortization expense for our amortizable intangible assets for the year ending December 31, 2006 and each of the four succeeding fiscal years is $60,000 for each year.

8.    Share Based Employee Compensation

        During 2001, we granted to certain of our executives non-qualified options to purchase 944,881 of our common shares. The options have a term of 10 years but could be terminated earlier if certain customary events occur. Each option grant consisted of 41.67% time options and 58.33% performance options. In April 2006, we amended the option agreements, primarily affecting vesting of the performance options. Option holders have rights to require us to repurchase shares obtained by exercising vested options upon a termination of employment due to disability, death or, subject to a six month holding period, scheduled retirement, and, in certain limited cases, upon a change of control.

F-20


        Time options became exercisable with the passage of time, generally vesting 20% per year over a period of five years. As of December 31, 2005, all outstanding time options were fully vested and exercisable. The time options are subject to fixed plan accounting.

        Performance options become exercisable based on our stockholders achieving certain investment return targets. Class A and Class B performance options differ only in vesting. Class A performance options vested if the achieved internal rate of return was at least 22.5%. The Class B performance options vested on a pro-rata basis if the achieved rate of return exceeded 22.5%, up to 30.0%. A measurement date was generally defined in the original option agreements as the earliest of (1) November 14, 2005, (2) specified dates following an initial public offering of our shares, or (3) the date that at least 30% of our shares owned by a specified stockholder are distributed to its limited partners or sold. The April 2006 amendments replaced the November 14, 2005 date with December 31, 2005, which was the earliest of the various possible measurement dates enumerated in the option agreements and, therefore, was the measurement date for purposes of determining the vesting of the Class A performance options. The estimated value of our common shares as of December 31, 2005 was $86.83 per share, which resulted in a rate of return of 22.5% and, therefore, the Class A performance options were fully vested as of December 31, 2005. The April 2006 amendments also revised the measurement date for the Class B performance options such that one half of those options had a measurement date of April 6, 2006 and vested as of that date, and the other half of those options will vest on a pro-rata basis as of the date of any future change of control if the share price realized is between $102.73 and $117.83 per share.

        We accounted for the stock options under the recognition and measurement principles of both APB 25 and FAS 123R. The time options and Class A performance options were accounted for under APB 25. There was no share based compensation expense related to the time options. Share based compensation expense was recognized with respect to the Class A performance options through the end of the related vesting period in December 2005. As the amendments to the Class B performance options were made after January 1, 2006, the date we adopted FAS 123R (see Note 2), the recognition of share based compensation expense related to those options is subject to the requirements of FAS 123R. For the Class B performance options that vested in April 2006, we used the Black-Scholes option pricing model to estimate the grant date fair value of the options of $59.08. The following assumptions were used in this calculation: a risk free interest rate of 4.85%, a dividend yield of 0.0%, a volatility factor of 42.0% and an expected life of the options of six months. We recognized share based compensation expense of $11,620,000 with respect to these options. The intrinsic value of these options was $58.31 on the date of the modification and, as a result, $11,468,000 of the share based compensation expense was classified as redeemable equity in our consolidated balance sheet. For the remaining unvested options that vest upon a change of control, we used a binomial lattice based option pricing model to estimate the grant date fair value of the options of $21.70. The following assumptions were used in this calculation: a risk-free interest rate of 4.85%, a dividend yield of 0.0%, a volatility factor of 42.0% and an expected life of the options of six to twelve months. We have not recognized share based compensation expense with respect to these options.

        In addition to the compensation expense charges made in connection with options as described above, we also recognized share based compensation expense with respect to redeemable shares of

F-21


common stock that are considered to be probable of being redeemed. The following table sets forth the composition of share compensation expense.

 
  Nine Months Ended
September 30,
 
  2005
  2006
 
  (In Thousands of Dollars)

Share based compensation expense consisted of:            
  Expense under FAS 123R related to vested Class B performance options   $ —   $ 11,620
  Expense related to outstanding redeemable shares     53     326
   
 
  Total share compensation expense   $ 53   $ 11,946
   
 

        The following table illustrates the effect on net income (loss) if we had applied the fair value recognition provisions of FAS No. 123 to all share based payment transactions.

 
  Nine Months Ended
September 30, 2005
 
 
  (In Thousands of Dollars)

 
Net income, as reported   $ 388  
Add back: share based compensation expense, net of related tax effects, included in net income as reported     32  
Deduct: Total share based compensation expense determined under fair value based methods for all awards, net of related tax effects     (509 )
   
 
Pro forma net income (loss)   $ (89 )
   
 
Pro forma net income (loss) per common share   $ (0.01 )
   
 

        The fair value of the options subject to APB 25 accounting, all of which were granted in 2001, that was used to calculate the pro forma compensation expense amounts was estimated to be $13.43 per option at the date of grant using the Black Scholes option pricing model with the following weighted average assumptions: a risk-free interest rate of 5.5%, a dividend yield of 0.0%, a volatility factor of 0.0001%, and an expected life of the options of ten years.

F-22


        Option Status Summary.     The following table reflects the status and activity of options under our share plans:

 
  Nine Months Ended
September 30, 2006
Options outstanding, beginning of period   939,375
Granted   —
Exercised   —
Cancelled   —
   
Options outstanding, end of period   939,375
   
Options exercisable, end of period   742,708
Options available for grant, end of period   —
Weighted average remaining contractual life of options outstanding, in years   4.25

        The exercise price was $31.75 per share for all outstanding options as of September 30, 2006.

9.    Commitments and Contingencies

Guarantees

        In the normal course of business we periodically enter into agreements that incorporate indemnification provisions. While the maximum amount to which we may be exposed under such agreements cannot be estimated, it is the opinion of management that any potential indemnification is not expected to have a material adverse effect on our consolidated financial position or result of operations. We also offer a warranty of our workmanship in our truck maintenance and repair shops, but the annual warranty expense and corresponding liability are immaterial.

Environmental Matters

        Our operations and properties are extensively regulated by environmental laws and regulations ("Environmental Laws") that (i) govern operations that may have adverse environmental effects, such as discharges to air, soil and water, as well as the management of petroleum products and other hazardous substances ("Hazardous Substances"), or (ii) impose liability for the costs of cleaning up sites affected by, and for damages resulting from, disposal or other releases of Hazardous Substances. We own and use underground storage tanks and above ground storage tanks to store petroleum products and waste at our facilities. We must comply with requirements of Environmental Laws regarding tank construction, integrity testing, leak detection and monitoring, overfill and spill control, release reporting, financial assurance and corrective action in case of a release from a storage tank into the environment. At some locations, we must also comply with Environmental Laws relating to vapor recovery and discharges to water. We believe that all of our travel centers are in material compliance with applicable Environmental Laws. Historically the costs of compliance for these matters have not had a material adverse impact on us, but it is impossible to predict accurately the ultimate effect compliance or changing Environmental Laws may have on us in the future.

F-23


        We have received notices of alleged violations of Environmental Laws, or are aware of the need to undertake corrective actions to comply with Environmental Laws, at company owned travel centers in a number of jurisdictions. We do not expect that any financial penalties associated with these alleged violations, or compliance costs incurred in connection with these violations or corrective actions, will be material to our results of operations or financial condition. We are conducting investigatory and remedial actions with respect to releases of Hazardous Substances at a number of our sites. While we cannot precisely estimate the ultimate costs we will incur in connection with the investigation and remediation of these properties, based on our current knowledge, we do not expect that the costs to be incurred at these properties, individually or in the aggregate, will be material to our financial condition, results of operations or liquidity. We cannot be certain that additional contamination does not exist at our properties, or that material liability will not be imposed in the future. If additional environmental problems arise or are discovered, or if additional environmental requirements are imposed by government agencies, increased environmental compliance or remediation expenditures may be required, and such expenditures or the requirement to make such expenditures could have a material adverse effect on us.

        We have obtained insurance of up to $35,000,000 for known environmental liabilities and up to $40,000,000 for unknown environmental liabilities, subject, in each case, to certain limitations and deductibles. While it is not possible to quantify with certainty our environmental exposure, in our opinion, the potential liability, beyond that considered in the reserve we have recorded, for all environmental proceedings, based on information known to date, will not have a material adverse effect on our financial condition, results of operations or liquidity.

        At September 30, 2006, we had a reserve for environmental matters of $11,783,000. We also had receivables for expected recoveries relating to certain of these estimated future expenditures and cash in an escrow account to fund certain of these estimated future expenditures totalling $9,274,000. The following table sets forth the various amounts recorded in our consolidated balance sheet as either current or noncurrent assets or liabilities related to environmental matters:

 
  As of September 30, 2006
 
  (In Thousands of Dollars)

Gross liability for environmental matters:      
  Included in the accrued liabilities balance   $ 4,232
  Included in the noncurrent liabilities balance     7,551
   
  Total recorded liabilities     11,783
Less expected recoveries of future expenditures:      
  Included in the accounts receivable balance     2,064
  Included in the other noncurrent assets balance     2,797

Less cash in escrow account included in other noncurrent assets
 
 
4,413
   
  Net environmental costs to be funded by future operating cash flows   $ 2,509
   

F-24

        The following table sets forth the estimated gross amount of the cash outlays related to the matters for which we have accrued our environmental reserve. These cash expenditure amounts do not reflect any amounts for the expected recoveries as we cannot accurately predict the timing of those cash receipts. These estimated future cash disbursements are subject to change based on, among other things, changes in the underlying remediation activities and changes in regulatory requirements.

Year Ending December 31,
  Estimated Gross
Future Expenditures
 
  (In Thousands of Dollars)

The remainder of 2006   $ 1,180
2007     4,069
2008     2,472
2009     1,563
2010     994
Thereafter     1,505
   
    $ 11,783
   

Pending Litigation

        We are involved from time to time in various legal and administrative proceedings and threatened legal and administrative proceedings incidental to the ordinary course of our business. Except for the Flying J litigation described below, we believe that we are not now involved in any litigation, individually, or in the aggregate, which could have a material adverse affect on our business, financial condition, results of operations or cash flows.

        In February 2006, Flying J, Inc. and certain of its affiliates ("Flying J") filed a lawsuit against certain travel center operators, including us. Flying J is a competitor of ours and, like us, operates a network of travel centers. Flying J also markets a fuel purchasing credit card to trucking companies. The Flying J lawsuit claims, in essence, that we and other travel center operators have refused to accept the Flying J fuel card, and that such refusal was the result of unlawful concerted action. We believe that there are substantial defenses to Flying J's claims, but this case is at an early stage and we are unable to evaluate it further at this time.

        On December 7, 2005, the Internal Revenue Service, or IRS, seized approximately $5,325,000 from our bank account pursuant to a seizure warrant alleging that these funds were proceeds of alleged illegal gambling operations conducted by a game vendor of ours in space leased from us at three of our travel centers in Maryland. A complaint for forfeiture was filed by the Maryland U.S. Attorney's Office, and we filed a statement of interest in the seized funds and an answer denying liability. To date there has been only an informal discovery process between us and the U.S. Attorney and a trial date has not been set. We are prepared to defend against the complaint for forfeiture and seek return to us of the seized funds, but have discussed potential settlement of the matter with the IRS. Should we be successful in defending against the claim in litigation, or in coming to a settlement with the IRS, we would be repaid some portion, or all, of the seized funds. However, due to our loss of control over these funds, we expensed as an operating expense the full amount seized in December 2005. We have been indemnified by the game vendor, but it is uncertain whether we will be able to recover all or a

F-25


portion of our losses from the game vendor and a receivable for any indemnification proceeds has not been recognized.

10.    Supplemental Cash Flow Information

 
  Nine Months Ended
September 30,
 
 
  2005
  2006
 
 
  (In Thousands of Dollars)

 
Revolving loan borrowings   $ 258,500   $ 18,800  
Revolving loan repayments     (283,500 )   (18,800 )
   
 
 
  Revolving loan borrowings (repayments), net   $ (25,000 ) $ —  
   
 
 
Cash paid during the period for:              
  Interest   $ 37,529   $ 32,197  
  Income taxes (net of refunds)   $ 1,130   $ 740  
Inventory received in liquidation of trade accounts receivable   $ 324   $ —  

11.    Other Information

 
  Nine Months Ended
September 30,
 
 
  2005
  2006
 
 
  (In Thousands of Dollars)

 
Interest and other financing costs consisted of the following:              
  Cash interest expense   $ (33,803 ) $ (33,887 )
  Cash interest income     245     1,305  
  Amortization of discount on debt     (1,067 )   (86 )
  Amortization of deferred financing costs     (3,097 )   (2,348 )
   
 
 
    Interest and other financing costs, net   $ (37,722 ) $ (35,016 )
   
 
 
Other income (expense), net consisted of the following:              
  Debt extinguishment and refinancing expenses   $ (39,375 ) $ —  
  Gain on sale of investment     1,974     —  
  Gain on claim settlements     —     1,250  
   
 
 
    Other income (expense), net   $ (37,401 ) $ 1,250  
   
 
 

        In July 2006 we agreed to settle two claims made in connection with our November 2000 merger and recapitalization transactions, one settlement with an insurer from whom we had purchased a policy related to the transaction and one settlement concerning the portion of the purchase price held in escrow by the former shareholders of the Company. The total amount received in July and August 2006 as a result of these settlements was $6,850,000, which was recognized in June 2006, together with $1,200,000 of related expenses. Of the total settlement amount, $5,600,000 was recognized as a reduction of operating expenses as it represented the recovery of related costs that had been incurred

F-26


in the current and prior years. This $5,600,000 was partially offset by the $1,200,000 of related expenses that were also recorded to operating expenses in June 2006. The remaining $1,250,000 of the settlement amounts represented a gain on claim settlements and was recognized in non-operating income.

        In the process of marketing ourselves for sale, we incurred various costs, primarily with respect to arranging various financing alternatives. As a result of the agreement and plan of merger we signed in September 2006 (see Note 13), we will not pursue further these various financing alternatives. Accordingly, we have charged $4,773,000 to expense to write-off the $773,000 of such costs we have paid through September 30, 2006 and to accrue a liability for the $4,000,000 of such costs that have been incurred but not yet paid.

        In June 2005, we consummated a refinancing of our indebtedness, which included a tender offer and consent solicitation for the Senior Subordinated Notes we then had outstanding. In connection with this refinancing, we incurred charges to expense aggregating $39,375,000, which was comprised of $17,331,000 of tender premiums paid for the Senior Subordinated Notes, $19,193,000 to write off unamortized debt issuance costs and debt discount related to the Senior Subordinated Notes, and $2,851,000 of other fees paid.

        In September 2005, we recognized a gain of $1,974,000 in connection with the 2004 sale of our investment in Simons Petroleum, Inc. Due to uncertainty surrounding the future realization of this amount, which was held in escrow until October 2005, this portion of the gain was not recognized in 2004. However, during the third quarter of 2005 the conditions to receive these funds were met, and accordingly, the gain was recognized.

12.    Related Party Transactions

        Certain members of our senior management have purchased common stock pursuant to management subscription agreements. As a result of such purchases, we have notes and related interest receivable from the management stockholders totaling $1,639,000 and $1,707,000 at December 31, 2005 and September 30, 2006, respectively.

13.    Merger Transaction

        On September 15, 2006, we and stockholders owning a majority of our voting stock entered into an agreement and plan of merger with Hospitality Properties Trust ("HPT"), pursuant to which HPT, through a subsidiary, will acquire 100% of our outstanding common stock for approximately $1.9 billion and HPT's subsidiary will merge with and into us. The merger is expected to occur in 2007. Upon the closing, our business will be restructured. The principal effect of the restructuring will be that we will become a 100% subsidiary of TravelCenters of America LLC, a subsidiary of HPT, and that subsidiaries of HPT that we do not own will own the real estate of substantially all of the travel centers we currently own and we will enter into a lease of that real estate. We expect to retain the balance of our tangible and intangible assets and will continue our operations. After the restructuring, HPT, a publicly owned real estate investment trust, will spin off the shares of TravelCenters of America LLC to its common shareholders and TravelCenters of America LLC, which will be our parent after the acquisition and restructuring, will be a publicly owned company.

F-27


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders
of TravelCenters of America, Inc.:

        In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all material respects, the financial position of TravelCenters of America, Inc. and its subsidiaries at December 31, 2005 and December 31, 2004, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2005 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the accompanying index presents fairly, in all material respects, the information set forth therin when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

        As described in Note 3, the Company adopted the provisions of Statement of Financial Accounting Standards No. 143, "Accounting for Asset Retirement Obligations" as of January 1, 2003.

/s/ PricewaterhouseCoopers LLP

Cleveland, Ohio
May 30, 2006, except for Note 24, as to which
the date is September 15, 2006 and Note 6, as
to which the date is November 17, 2006

F-28


TravelCenters of America, Inc.

Consolidated Balance Sheet

 
  December 31,
 
 
  2004
  2005
 
 
  (In Thousands of Dollars)

 
Assets              
Current assets:              
  Cash and cash equivalents   $ 45,846   $ 47,547  
  Accounts receivable (less allowance for doubtful accounts of $1,606 for 2004 and $1,715 for 2005)     61,484     75,075  
  Inventories     75,907     87,702  
  Deferred income taxes     6,952     9,623  
  Other current assets     8,347     10,454  
   
 
 
    Total current assets     198,536     230,401  
Property and equipment, net     604,359     629,253  
Goodwill     48,898     49,681  
Deferred financing costs, net     28,289     18,605  
Deferred income taxes     4,363     207  
Other noncurrent assets     13,284     11,557  
   
 
 
    Total assets   $ 897,729   $ 939,704  
   
 
 

Liabilities and Stockholders' Equity
 
 
 
 
 
 
 
Current liabilities:              
  Current maturities of long-term debt   $ 198   $ 7,009  
  Accounts payable     88,754     117,271  
  Other accrued liabilities     61,800     69,482  
   
 
 
    Total current liabilities     150,752     193,762  
Commitments and contingencies     —     —  
Long-term debt (net of unamortized discount)     682,892     675,638  
Deferred income taxes     1,156     1,226  
Other noncurrent liabilities     23,212     21,771  
   
 
 
      858,012     892,397  

Redeemable equity
 
 
1,864
 
 
1,935
 
Nonredeemable stockholders' equity (Note 16):              
  Common stock and other nonredeemable stockholders' equity     216,868     226,482  
  Accumulated deficit     (179,015 )   (181,110 )
   
 
 
    Total nonredeemable stockholders' equity     37,853     45,372  
   
 
 
    Total liabilities, redeemable equity and nonredeemable stockholders' equity   $ 897,729   $ 939,704  
   
 
 

The accompanying notes are an integral part of these consolidated financial statements.

F-29


TravelCenters of America, Inc.

Consolidated Statement of Operations and Comprehensive Income (Loss)

 
  Year Ended December 31,
 
 
  2003
  2004
  2005
 
 
  (In Thousands of Dollars)

 
Revenues:                    
  Fuel   $ 1,513,648   $ 1,959,239   $ 3,231,853  
  Non-fuel     649,502     707,958     833,500  
  Rent and royalties     13,080     10,667     9,943  
   
 
 
 
    Total revenues     2,176,230     2,677,864     4,075,296  

Cost of goods sold (excluding depreciation):
 
 
 
 
 
 
 
 
 
 
  Fuel     1,408,728     1,857,160     3,102,513  
  Non-fuel     266,038     289,867     348,267  
   
 
 
 
    Total cost of goods sold (excluding depreciation)     1,674,766     2,147,027     3,450,780  
Operating expenses     342,045     362,169     420,367  
Selling, general and administrative expenses (including $65 and $8,921 of noncash stock compensation expense for 2004 and 2005, respectively)     40,543     43,180     53,051  
Depreciation and amortization expense     60,375     58,750     64,981  
Gain on asset sales     (1,476 )   (2,547 )   (207 )
   
 
 
 
  Income from operations     59,977     69,285     86,324  
Other income (expense), net     764     110     (37,592 )
Interest and other financial costs, net     (46,878 )   (46,061 )   (48,518 )
   
 
 
 
Income (loss) before income taxes and the cumulative effect of a change in accounting principle     13,863     23,334     214  
Provision for income taxes     4,719     8,472     2,309  
   
 
 
 
Income (loss) before the cumulative effect of a change in accounting principle     9,144     14,862     (2,095 )
Cumulative effect of a change in accounting, net of related taxes (Note 3)     (253 )   —     —  
   
 
 
 
  Net income (loss)     8,891     14,862     (2,095 )
Other comprehensive income (loss), net of tax (Note 7):                    
  Unrealized gain on derivative instruments     —     —     674  
  Foreign currency translation adjustments     804     318     270  
   
 
 
 
    Comprehensive income (loss)   $ 9,695   $ 15,180   $ (1,151 )
   
 
 
 
Basic earnings (loss) per common share:                    
  Income (loss) from continuing operations   $ 1.32   $ 2.14   $ (0.30 )
  Cumulative effect of change in accounting, net of tax     (0.04 )   —     —  
   
 
 
 
  Net income (loss)   $ 1.28   $ 2.14   $ (0.30 )
   
 
 
 
Diluted earnings (loss) per common share:                    
  Income (loss) from continuing operations   $ 1.26   $ 2.04   $ (0.30 )
  Cumulative effect of change in accounting, net of tax     (0.03 )   —     —  
   
 
 
 
  Net income (loss)   $ 1.23   $ 2.04   $ (0.30 )
   
 
 
 

The accompanying notes are an integral part of these consolidated financial statements.

F-30


TravelCenters of America, Inc.

Consolidated Statement of Cash Flows

 
  Year Ended December 31,
 
 
  2003
  2004
  2005
 
 
  (In Thousands of Dollars)

 
Cash flows from operating activities:                    
  Net income (loss)   $ 8,891   $ 14,862   $ (2,095 )
  Adjustments to reconcile net income (loss) to net cash provided by operating activities:                    
    Cumulative effect of a change in accounting principle, net of related tax     253     —     —  
    Stock compensation expense     —     65     8,921  
    Tender premium and debt discount paid     —     —     (32,610 )
    Depreciation and amortization     60,375     58,750     64,981  
    Amortization of deferred financing costs     3,440     3,882     3,908  
    Financing costs expensed upon extinguishment of debt     —     1,699     39,566  
    Deferred income tax provision     3,535     5,974     1,235  
    Provision for doubtful accounts     1,180     307     975  
    (Gain) on asset sales     (1,476 )   (4,162 )   (2,181 )
    Changes in assets and liabilities, adjusted for the effects of business acquisitions:                    
      Accounts receivable     (1,360 )   (19,235 )   (14,836 )
      Inventories     (361 )   (6,321 )   (11,237 )
      Other current assets     1,233     (1,255 )   (1,078 )
      Accounts payable and other accrued liabilities     3,646     40,439     27,073  
    Other, net     (2,032 )   2,141     (1,640 )
   
 
 
 
    Net cash provided by operating activities     77,324     97,146     80,982  
   
 
 
 

Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
 
  Business acquisitions     (10,190 )   (126,117 )   (1,180 )
  Proceeds from asset sales     3,900     13,816     2,785  
  Capital expenditures     (44,196 )   (122,919 )   (85,403 )
   
 
 
 
    Net cash used in investing activities     (50,486 )   (235,220 )   (83,798 )
   
 
 
 

Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
 
  Increase (decrease) in checks drawn in excess of bank balances     (2,598 )   2,934     7,190  
  Revolving loan borrowings (repayments), net     (8,800 )   11,400     (25,000 )
  Long-term debt repayments     (14,688 )   (310,401 )   (650,110 )
  Long-term debt borrowings     —     475,000     680,000  
  Debt issuance costs     —     (9,857 )   (5,039 )
  Debt extinguishment and refinancing costs paid     —     —     (2,603 )
  Common stock sold (repurchased)     —     (158 )   38  
   
 
 
 
    Net cash provided by (used in) financing activities     (26,086 )   168,918     4,476  
   
 
 
 
    Effect of exchange rate changes on cash     206     (3 )   41  
   
 
 
 
    Net increase in cash     958     30,841     1,701  
Cash and cash equivalents at the beginning of the year     14,047     15,005     45,846  
   
 
 
 
Cash and cash equivalents at the end of the year   $ 15,005   $ 45,846   $ 47,547  
   
 
 
 

The accompanying notes are an integral part of these consolidated financial statements.

F-31


TravelCenters of America, Inc.

Consolidated Statement of Nonredeemable Stockholders' Equity

 
  Year Ended December 31,
 
 
  2003
  2004
  2005
 
 
  (In Thousands of Dollars)

 
Common stock:                    
  Balance at beginning and end of year   $ 3   $ 3   $ 3  
   
 
 
 

Additional paid-in capital:
 
 
 
 
 
 
 
 
 
 
  Balance at beginning of year   $ 217,290   $ 216,112   $ 215,743  
  Accretion of redeemable equity     (1,178 )   (369 )   —  
  Stock options     —     —     8,670  
   
 
 
 
  Balance at end of year   $ 216,112   $ 215,743   $ 224,413  
   
 
 
 

Accumulated other comprehensive income:
 
 
 
 
 
 
 
 
 
 
  Balance at beginning of year   $ —   $ 804   $ 1,122  
  Change in fair value of interest rate swap agreement, net of tax     —     —     674  
  Foreign currency translation adjustments, net of tax     804     318     270  
   
 
 
 
  Balance at end of year   $ 804   $ 1,122   $ 2,066  
   
 
 
 

Accumulated deficit:
 
 
 
 
 
 
 
 
 
 
  Balance at beginning of year   $ (202,768 ) $ (193,877 ) $ (179,015 )
  Net income (loss)     8,891     14,862     (2,095 )
   
 
 
 
  Balance at end of year   $ (193,877 ) $ (179,015 ) $ (181,110 )
   
 
 
 

The accompanying notes are an integral part of these consolidated financial statements.

F-32


TravelCenters of America, Inc.

Notes to Consolidated Financial Statements

Years Ended December 31, 2003, 2004 and 2005

1.    Business Description and Summary of Operating Structure

        TravelCenters of America, Inc. ("we" or "the Company") is a holding company which, through our wholly owned subsidiaries, owns, operates and franchises travel centers along the North American highway system to serve long-haul trucking fleets and their drivers, independent truck drivers and general motorists. At December 31, 2005, our geographically diverse nationwide network of full-service travel centers consisted of 160 sites located in 40 states and the province of Ontario, Canada. Our operations are conducted through three distinct types of travel centers:

    •
    those operated by us, which we refer to as company operated sites;

    •
    those owned by us and leased to independent lessee franchisees, which we refer to as leased sites; and

    •
    those owned and operated by independent franchisees, which we refer to as franchisee owned sites.

        At December 31, 2005, our network consisted of 139 company operated sites, ten leased sites and 11 franchisee owned sites. During 2005, we converted two leased travel centers to company operated sites, sold one company operated sites and added one franchisee owned sites to our network. We operate as one reportable segment. We aggregate our travel centers into one reportable segment because they have similar economic and operating characteristics. With only one of our 162 travel centers located in Canada, the amounts of revenues and long-lived assets located in Canada are not material.

        Our travel centers are located at key points along the U.S. interstate highway system and in Canada, typically on 20- to 25-acre sites. Operating under the "TravelCenters of America" and "TA" brand names, our nationwide network provides our customers with diesel fuel and gasoline as well as non-fuel products and services such as truck repair and maintenance services, full-service restaurants, quick service restaurants, travel and convenience stores and other driver amenities. We also collect rents and franchise royalties from the franchisees who operate the leased sites and franchisee owned sites and, as a franchisor, assist our franchisees in providing service to long haul trucking fleets and their drivers, independent truck drivers and general motorists.

        The consolidated financial statements include the accounts of TravelCenters of America, Inc. and its wholly owned subsidiaries, TA Operating Corporation and TA Franchise Systems Inc., as well as TA Licensing, Inc., TA Travel, L.L.C., 3073000 Nova Scotia Company, TravelCentres Canada Inc., and TravelCentres Canada Limited Partnership, which are all direct or indirect wholly owned subsidiaries of TA Operating Corporation. Intercompany accounts and transactions have been eliminated.

2.    Summary of Significant Accounting Policies

Use of Estimates

        The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

F-33


Revenue Recognition

        Sales revenues and related costs are recognized at the time of delivery of motor fuel to customers at either the terminal or the customer's facility for wholesale fuel sales and at the time of final sale to consumers at our company operated travel centers for retail fuel and non-fuel sales. The estimated cost to us of the redemption by customers of our loyalty program points is recorded as a discount against gross sales in determining the net sales amount presented in our consolidated statement of operations and comprehensive income (loss).

        For those travel centers that we own but lease to a franchisee, rent revenue is recognized based on the rent payment due for each period. These leases specify rent increases each year based on inflation rates for the respective periods or capital improvements we make at the travel center. As the rent increases related to these factors are contingent upon future events, the related rent revenue is not recognized until it becomes accruable.

        Franchise royalty revenues are collected and recognized monthly and are determined as a percentage of the franchisees' revenues. Initial franchise fee revenues are recognized at the point when the franchisee opens for business under our brand name, which is when we have fulfilled all of our initial obligations under the related agreements. Initial franchise fees were $100,000 in each of the years ended December 31, 2004 and 2005 and there were no initial franchise fees recognized during the year ended December 31, 2003.

Earnings Per Share

        Basic earnings per common share is calculated by dividing net income (and income from continuing operations, cumulative effect of a change in accounting, extraordinary items and/or discontinued operations, if applicable) by the weighted average number of common shares outstanding during the year. Diluted earnings per common share is calculated by adjusting weighted average outstanding shares, assuming conversion of all potentially dilutive stock options and warrants, using the treasury stock method. See Note 6 for further discussion.

Cash and Cash Equivalents

        For purposes of the statement of cash flows, we consider all highly liquid investments with an initial maturity of three months or less to be cash.

Accounts Receivable and Allowance for Doubtful Accounts

        Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is our best estimate of the amount of probable losses in our existing accounts receivable. We determine the allowance based on customer risk assessment and historical write-off experience. We review our allowance for doubtful accounts monthly. Past due balances over specific mounts and in excess of specified amounts are reviewed individually for collectibility. All other balances are reviewed on a pooled basis by type of receivable. Account balances are charged off against the allowance when we feel it is probable the receivable will not be recovered. We do not have any off-balance-sheet credit exposure related to our customers.

F-34


Inventories

        Inventories are stated at the lower of cost or market value, cost being determined principally on the weighted average cost method.

Property and Equipment

        Property and equipment are stated at cost. Depreciation is computed on a straight-line basis over the following estimated useful lives of the assets:

Buildings and site improvements   15-20 years
Pumps and underground storage tanks   5-20 years
Machinery and equipment   3-15 years
Furniture and fixtures   5-10 years

        Repair and maintenance costs are charged to expense as incurred, while major renewals and betterments are capitalized. Included in the amounts capitalized is an allocation of certain internal payroll and other overhead costs associated with the direct oversight of the capital investment and development program and the projects included therein. These costs are amortized over twelve years, the estimated composite life of our property and equipment. The cost and related accumulated depreciation of property and equipment sold, replaced or otherwise disposed of are removed from the accounts. Any resulting gains or losses are recognized in operations. See Note 9.

Intangible Assets

        Acquired intangible assets, other than goodwill, are initially recognized based on their fair value. Those intangible assets acquired in a business combination are initially recognized in accordance with Statement of Financial Accounting Standards (FAS) No. 141, "Business Combinations." FAS 141 requires an allocation of purchase price to all assets and liabilities acquired, including those intangible assets that arise from contractual or other legal rights or are otherwise capable of being separated or divided from the acquired entity (but excluding goodwill), based on the relative fair values of the acquired assets and liabilities. Any excess of acquisition cost over the fair value of the acquired net assets is recorded as goodwill. Costs of internally developing, maintaining, or restoring intangible assets that are not specifically identifiable, that have indeterminate lives or that are inherent in a continuing business and related to the entity as a whole are expensed as incurred. Intangible assets with finite lives are amortized on a straight-line basis over their estimated lives, principally the terms of the related contractual agreements giving rise to them. Goodwill and intangible assets with indefinite lives are not amortized but are reviewed on January 1 of each year (or more frequently if impairment indicators arise) for impairment (see Note 10).

Internal-Use Software Costs

        During the application development stage of an internal-use computer software project, we capitalize (i) the external direct costs of materials and services consumed in developing or obtaining the internal-use computer software, (ii) to the extent of time spent directly on the project, payroll costs of employees directly associated with and who devote time to the project, and (iii) related interest costs incurred. Internal and external costs incurred in the preliminary project stage and post-implementation

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stage, such as for exploring alternative technologies, vendor selection and maintenance, are expensed as incurred, as are all training costs. The costs of significant upgrades and enhancements that result in additional functionality are accounted for in the same manner as similar costs for new software projects. The costs of all other upgrades and enhancements are expensed as incurred.

Impairment of Long Lived Assets

        Impairment charges are recognized when the carrying value of a long lived asset group to be held and used in the business is not recoverable and exceeds its fair value, and when the carrying value of a long-lived asset to be disposed of exceeds the estimated fair value of the asset less the estimated cost to sell the asset. Such impairment charges are recognized in the period during which the circumstances surrounding an asset to be held and used have changed such that the carrying value is no longer recoverable, or during which a commitment to a plan to dispose of the asset is made. Such tests are performed at the individual travel center level. In addition, intangible assets are subjected to further evaluation and impairment charges are recognized when events and circumstances indicate the carrying value of the intangible asset exceeds the fair market value of the asset. Impairment charges, when required, are included in depreciation and amortization expense in our consolidated statement of operations and comprehensive income (loss). We recognized impairment charges of $855,000, $0 and $195,000 during the years ended December 31, 2003, 2004 and 2005, respectively.

Deferred Financing Costs

        Deferred financing costs were incurred in conjunction with issuing long term debt and are amortized into interest expense over the lives of the related debt instruments using the effective interest method (see Note 13).

Classification of Costs and Expenses

        Cost of goods sold (excluding depreciation) represents the costs of fuels and other products sold, including freight. Operating expenses principally represent costs incurred in operating our travel centers, consisting primarily of labor, maintenance, supplies, utilities and occupancy costs.

Operating Lease Expense

        Rental on most operating leases is charged to expense over the lease term as it becomes payable. Certain operating leases specify scheduled rent increases over the lease term. The effects of those scheduled rent increases, which are included in minimum lease payments, are recognized in rent expense over the lease term on a straight-line basis.

Stock-Based Employee Compensation

        We accounted for our stock-based employee compensation plans under the recognition and measurement principles of APB Opinion No. 25, "Accounting for Stock Issued to Employees," and related interpretations. Options were granted to certain members of our management in 2001. There have been no grants of options since that time. Stock compensation expense is included in selling, general and administrative expenses in our consolidated statement of operations and comprehensive income (loss). For granted options that vest over time, no compensation expense is recognized, as all of

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those options had an exercise price equal to or greater than the market value of the underlying common stock at the date of grant. For granted options that vest based on attaining certain measures of performance, compensation expense is recognized when it becomes probable that the performance triggers for such options will be achieved. The following table illustrates the effect on net income if we had applied the fair value recognition provisions of FAS No. 123 to stock-based employee compensation.

 
  Year Ended December 31,
 
 
  2003
  2004
  2005
 
 
  (In Thousands of Dollars)

 
Net income (loss), as reported   $ 8,891   $ 14,862   $ (2,095 )
Add back: Stock-based employee compensation expense, net of related tax effects, included in net income as reported     —     41     5,237  
Deduct: Total stock-based employee compensation expense determined under fair value based methods for all awards, net of related tax effects     (698 )   (715 )   (2,008 )
   
 
 
 
Pro forma net income   $ 8,193   $ 14,188   $ 1,134  
   
 
 
 

        The fair value of the options subject to APB 25 accounting, all of which were granted in 2001, that was used to calculate the pro forma compensation expense amounts was estimated to be $13.43 per option at the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions: a risk-free interest rate of 5.5%, a dividend yield of 0.0%, a volatility factor of 0.0001%, and an expected life of the options of ten years.

Environmental Remediation

        We provide for remediation costs and penalties when the responsibility to remediate is probable and the amount of associated costs is reasonably determinable. Remediation expenses are included within operating expenses in our consolidated statement of operations and comprehensive income (loss). Generally, the timing of remediation accruals coincides with completion of a feasibility study or the commitment to a formal plan of action. If recoveries of remediation costs from third parties are probable, a receivable is recorded. Accruals are not recorded for the costs of remediation activities undertaken on our behalf by certain subsidiaries of The British Petroleum Company p.l.c. ("BP"), at BP's sole expense (see Note 20) for existing matters at the time we acquired certain travel centers from BP. In our consolidated balance sheet, the accrual for environmental matters is included in other noncurrent liabilities, with the amount estimated to be expended within the subsequent year reported as a current liability within the other accrued liabilities balance.

Defined Contribution Plan

        We sponsor a 401(k) defined contribution plan to provide eligible employees with additional income upon retirement. Our contributions to the plans are based on employee contributions and compensation and are recognized in operating expenses in the period incurred.

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Asset Retirement Obligations

        As of January 1, 2003, we began recognizing the future costs to remove our underground storage tanks, and to remove leasehold improvements as required at expiration of the respective leases, over the estimated useful lives of each tank, or leasehold improvement, in accordance with the provisions of FAS 143, "Accounting for Asset Retirement Obligations." A liability for the fair value of an asset retirement obligation with a corresponding increase to the carrying value of the related long-lived asset is recorded at the time an underground storage tank or leasehold improvement is installed. We amortize the amount added to property and equipment and recognize accretion expense in connection with the discounted liability over the remaining life of the respective underground storage tank or leasehold improvement. The estimated liability is based on historical experiences in removing these assets, estimated useful lives, external estimates as to the cost to remove the assets in the future and regulatory and/or contractual requirements. The liability is a discounted liability using a credit-adjusted risk-free rate. Revisions to the liability could occur due to changes in removal costs, asset useful lives or if new regulations regarding the removal of such tanks are enacted and/or amendments to the lease contracts are negotiated. See Note 3.

Income Taxes

        Deferred income tax assets and liabilities are established to reflect the future tax consequences of differences between the tax bases and financial statement bases of assets and liabilities. The measurement of deferred tax assets is reduced, if necessary, by a valuation allowance.

Concentration of Credit Risk

        We grant credit to our customers and may require letters of credit or other collateral. Allowances for doubtful accounts and notes receivable are maintained based on historical payment patterns, aging of accounts receivable, periodic review of our customers' financial condition, and actual write-off history.

Derivative Instruments

        We recognize derivatives as either assets or liabilities on the balance sheet and measure those instruments at fair value. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation. We designate our derivatives based upon criteria established by FAS 133, "Accounting for Derivative Instruments and Hedging Activities." For a derivative designated as a fair value hedge, the change in fair value is recognized in earnings in the period of change together with the offsetting loss or gain on the hedged item attributed to the risk being hedged. For a derivative designated as a cash flow hedge, the effective portion of the derivative's gain or loss is initially reported as a component of accumulated other comprehensive income (loss) and subsequently reclassified into earnings when the hedged exposure affects earnings. The ineffective portion of the gain or loss is reported in earnings immediately. We use derivatives to manage risk arising from changes in interest rates. Our objectives for holding derivatives are to decrease the volatility of earnings and cash flows associated with changes in interest rates. See Note 21.

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Fair Value of Financial Instruments

        The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which estimation is practicable: the fair values of financial instruments classified as current assets or liabilities approximate the carrying values due to the short-term maturity of the instruments; until its redemption during 2005, the fair value of our fixed-rate indebtedness that was publicly traded was estimated based on the quoted price for those notes. The fair value of our fixed-rate indebtedness that was not publicly traded was estimated based on the current borrowing rates available to us for financings with similar terms and maturities (see Note 13); and the fair values of our interest rate protection agreements are based on bank-quoted market prices.

Reclassifications

        Certain insignificant reclassifications of 2004 data have been made to conform to the current year presentation.

3.    Change in Accounting Principle

        As of January 1, 2003, we began recognizing the future costs to remove our underground storage tanks over the estimated useful lives of each tank in accordance with the provisions of Statement of Financial Accounting Standards (FAS) No. 143, "Accounting for Asset Retirement Obligations." A liability for the fair value of an asset retirement obligation with a corresponding increase to the carrying value of the related long-lived asset is recorded at the time an underground storage tank is installed. We amortize the amount added to property and equipment and recognize accretion expense in connection with the discounted liability over the remaining life of the respective underground storage tank. The estimated liability is based on historical experiences in removing these tanks, estimated tank useful lives, external estimates as to the cost to remove the tanks in the future and regulatory requirements. The liability is a discounted liability using a credit-adjusted risk-free rate of approximately 12.8%. Revisions to the liability could occur due to changes in tank removal costs, tank useful lives or if new regulations regarding the removal of such tanks are enacted.

        Upon adoption of FAS 143, we recorded a discounted liability of $589,000, increased property and equipment by $172,000 and recognized a one-time cumulative effect charge of $253,000 (net of a deferred tax benefit of $164,000).

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        A reconciliation of our asset retirement obligation liability, which is included within other noncurrent liabilities in our consolidated balance sheet, for the years ended December 31, 2003, 2004 and 2005 was as follows:

 
  Year Ended December 31,
 
 
  2003
  2004
  2005
 
 
  (In Thousands of Dollars)

 
Balance at January 1,   $ 589   $ 663   $ 760  
  Liabilities incurred     10     33     —  
  Liabilities settled     (13 )   (19 )   (10 )
  Accretion expense     77     83     95  
  Revisions to estimates     —     —     —  
   
 
 
 
Balance at December 31,   $ 663   $ 760   $ 845  
   
 
 
 

4.    Recently Issued Accounting Pronouncements

        FAS 123R.     In December 2004, the Financial Accounting Standards Board (FASB) issued a revision of FAS 123, "Share-Based Payment" (FAS 123R). FAS 123R requires that the compensation cost relating to share-based payment transactions be recognized in financial statements, based on the fair value of the equity or liability instruments issued. The scope of FAS 123R includes a wide range of share-based compensation arrangements including share options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. As originally issued in 1995, FAS 123 established as preferable a fair-value-based method of accounting for share-based payment transactions with employees. However, that statement permitted entities the option of continuing to apply the guidance of APB 25 as long as the footnotes to the financial statements disclosed what net income would have been had the preferable fair-value-based method been used. At that time, we determined to continue to apply the guidance of APB 25 and make the required disclosures in our financial statement footnotes. Accordingly, we will be required to change our method of accounting for stock compensation costs. We will be required to adopt FAS 123R as of January 1, 2006. We will follow the prospective method of adoption and do not expect there to be an effect on our balance sheet or results of operation as a result of the adoption of FAS 123R. FAS 123R applies to our awards granted after January 1, 2006 and to awards modified, repurchased, or cancelled after that date. As is more fully described in Note 15, certain of our stock option awards were amended in April 2006 and, accordingly, we will be required to account for those option awards under the FAS 123R model.

        FIN 48.     In June 2006 the FASB issued Interpretation No. 48, "Accounting for Uncertainty in Income Taxes" (FIN 48). FIN 48 is effective for fiscal years beginning after December 15, 2006. FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Under this guidance, a benefit can be recognized with respect to a tax position only if it is more likely than not that the position will be sustained upon examination. In such cases, the tax position is to be measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. We are in the process of evaluating what, if any, effect adoption of FIN 48 will have on our financial

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statements, but do not expect that the effect will be material to our financial position, results of operations or cash flows when we adopt it effective January 1, 2007.

        FAS 157.     In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" (FAS 157). FAS 157 is effective for fiscal years beginning after November 15, 2007. FAS 157 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and expands disclosures about fair value measurements, but does not require any new fair value measurements. We are in the process of evaluating what, if any, effect adoption of FAS 157 will have on our financial statements when we adopt it effective January 1, 2008.

5.    Acquisition

        On December 1, 2004, we acquired from Rip Griffin Truck Service Center, Inc. the assets related to eleven travel centers located in seven states, primarily in the southwestern region of the United States. The acquisition was completed to strengthen our presence in the southwestern United States and included the land, buildings, equipment, inventories and certain prepaid assets at the eleven travel centers. The results from these eleven travel centers were included in our consolidated financial statements from December 1, 2004. The aggregate purchase price was $129,142,000, all of which was paid in cash or assumed liabilities. The acquisition was funded with borrowings under our 2004 Credit Agreement as part of the 2004 Refinancing (see Note 13). We expect that all of the goodwill resulting from this acquisition will be tax deductible. The following table summarizes the amounts assigned to the assets acquired and the liabilities assumed at the date of acquisition.

 
  (In Thousands of Dollars)

Current assets   $ 5,799
Property and equipment     99,360
Goodwill     22,993
Intangible assets     500
Other noncurrent assets     490
   
  Total assets acquired     129,142
Current liabilities     995
Noncurrent liabilities     1,515
   
Net assets acquired   $ 126,632
   

        The following unaudited pro forma information presents our results of operations as if the acquisition of the Rip Griffin travel centers had taken place on January 1, 2003.

 
  Year Ended December 31,
 
  2003
  2004
 
  (In Thousands of Dollars)

Total revenue   $ 2,361,314   $ 2,879,984
Gross profit   $ 550,098   $ 577,851
Income before extraordinary item and accounting change   $ 11,713   $ 18,086
Net income   $ 11,460   $ 18,086

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        These pro forma results of operations have been prepared for comparative purposes only and do not purport to be indicative of the results of operations that actually would have resulted had the acquisition occurred on January 1, 2003, or that may result in the future.

        During the years ended December 31, 2003, 2004 and 2005, we paid aggregate amounts of $10,190,000, $636,000 and $1,180,000, respectively, to convert six, two and two, respectively, leased sites to company operated sites.

6.    Earnings Per Share

        The following represents a reconciliation from basic earnings per common share to diluted earnings per common share. The assumed exercise of stock options and warrants would have had an anti-dilutive effect on earnings per share for 2005.

 
  Year Ended December 31,
 
 
  2003
  2004
  2005
 
 
  (In Thousands, except per share data)

 
Determination of shares:                    
  Weighted average common shares oustanding     6,939     6,937     6,937  
  Incremental shares attributable to the assumed exercise of dilutive stock options     22     62     —  
  Incremental shares attributable to the assumed exercise of warrants     277     277     —  
   
 
 
 
Diluted weighted average common shares outstanding     7,238     7,276     6,937  
   
 
 
 

Basic earnings per common share
 
$
1.28
 
$
2.14
 
$
(0.30
)
Diluted earnings per common share   $ 1.23   $ 2.04   $ (0.30 )

7.    Comprehensive Income

        Income tax provision related to other comprehensive income consisted of the following:

 
  Year Ended December 31,
 
  2003
  2004
  2005
 
  (In Thousands of Dollars)

Related to gain on derivative instruments   $ —   $ —   $ 347
Related to foreign currency translation adjustments     320     83     89
   
 
 
  Total   $ 320   $ 83   $ 436
   
 
 

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8.    Inventories

        Inventories consisted of the following:

 
  December 31,
 
  2004
  2005
 
  (In Thousands of Dollars)

Non-fuel merchandise   $ 65,663   $ 72,341
Petroleum products     10,244     15,361
   
 
  Total inventories   $ 75,907   $ 87,702
   
 

9.    Property and Equipment

        Property and equipment consisted of the following:

 
  December 31,
 
  2004
  2005
 
  (In Thousands of Dollars)

Land   $ 82,382   $ 83,596
Buildings and improvements     575,944     606,482
Machinery, equipment and furniture     310,454     330,513
Construction in progress     20,685     50,804
   
 
  Total cost     989,465     1,071,395
Less: accumulated depreciation     385,106     442,142
   
 
  Property and equipment, net   $ 604,359   $ 629,253
   
 

Total depreciation expense for the years ended December 31, 2003, 2004, and 2005 was $58,834,000, $58,561,000 and $64,655,000, respectively. We have capitalized certain internal costs associated with our capital investment and development program. For the years ended December 31, 2003, 2004 and 2005 the amounts capitalized were $3,029,000, $2,531,000 and $3,110,000, respectively. The unamortized balance of such costs as of December 31, 2005 was $16,787,000.

10.    Goodwill and Intangible Assets

        Goodwill.     Goodwill results from our business acquisitions and represents the excess of amounts paid to the sellers over the fair values of the tangible assets acquired. For the years ended December 31, 2003, 2004 and 2005, we recorded goodwill of $1,999,000, $23,314,000 and $783,000, respectively, in connection with converting leased sites to company operated sites and, in 2004, the Rip

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Griffin acquisition (see Note 5). The changes in the carrying amount of goodwill for the years ended December 31, 2003, 2004 and 2005 were as follows:

 
  Year Ended December 31,
 
  2003
  2004
  2005
 
  (In Thousands of Dollars)

Balance as of beginning of period   $ 23,585   $ 25,584   $ 48,898
Goodwill recorded during the period     1,999     23,314     783
   
 
 
Balance as of end of period   $ 25,584   $ 48,898   $ 49,681
   
 
 

        Intangible Assets.     Leasehold interest represents the value, obtained through acquisition, of favorable lease provisions at one location, the lease for which extended 11 1 / 2 years from the date of the acquisition. The leasehold interest was being amortized over the 11 1 / 2 year period, which ended during 2005. Trademarks relate primarily to our purchase of the trademarks, service marks, trade names and commercial symbols used in our business. The trademarks have indefinite lives and, therefore, are not amortized. Other intangible assets primarily includes noncompetition agreements that are amortized over their contractual lives.

        The net carrying amount of intangible assets is included within other noncurrent assets in our consolidated balance sheet. Intangible assets, net, consisted of the following:

 
  December 31,
 
  2004
  2005
 
  (In Thousands of Dollars)

Amortizable intangible assets:            
  Leasehold interest   $ 1,724   $ 1,724
  Other     1,396     1,396
   
 
    Total amortizable intangible assets     3,120     3,120
Less—accumulated amortization     2,421     2,551
   
 
    Net carrying value of amortizable intangible assets     699     569

Carrying value of trademarks
 
 
1,398
 
 
1,398
   
 
    Intangible assets, net   $ 2,097   $ 1,967
   
 

        Total amortization expense for our amortizable intangible assets for the years ended December 31, 2003, 2004 and 2005 was $686,000, $189,000 and $130,000, respectively. The estimated aggregate amortization expense for our amortizable intangible assets for each of the five succeeding fiscal years is $60,000 for each year.

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11.    Other accrued liabilities

        Other accrued liabilities consisted of the following:

 
  December 31,
 
  2004
  2005
 
  (In Thousands of Dollars)

Taxes payable, other than income taxes   $ 19,375   $ 26,082
Accrued wages and benefits     17,323     17,778
Interest payable     5,962     1,904
Other accrued liabilities     19,140     23,718
   
 
Total other accrued liabilities   $ 61,800   $ 69,482
   
 

12.    Revolving Loan

        We have available to us a revolving credit facility of $150,000,000. The revolving credit facility includes a $115,000,000 sublimit for letters of credit. The interest rate for each borrowing under this revolving credit facility is based, at our election, on either a prime rate-based alternate base rate (ABR) or an adjusted London Interbank Offered Rate (LIBOR). Added to either the ABR or LIBOR rates are the following interest rate spreads that decline as our Leverage Ratio (as defined in the 2005 Credit Agreement) declines:

Leverage Ratio
  ABR
Spread
  LIBOR
Spread
 
Equal to or greater than 4.0 to 1.0   1.25 % 2.25 %
Less than 4.0 to 1.0 but equal to or greater than 3.5 to 1.0   1.00 % 2.00 %
Less than 3.5 to 1.0   0.75 % 1.75 %

        Commitment fees are calculated as 0.5% of the daily average unused amount of the revolving loan commitment. Interest payments are due at each quarter end for interest related to alternate base rate borrowings and at the end of each loan period, but not less frequently than quarterly, for LIBOR borrowings. At December 31, 2004, there were outstanding borrowings under our revolving credit facilities of $25,000,000 and there were no outstanding borrowings under our revolving credit facility at December 31, 2005. There were $30,428,000 of available borrowings reserved for letters of credit at December 31, 2005. The revolving loan facility matures in October 2008. See Note 13 for additional information regarding this facility and all of our indebtedness.

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13.    Long Term Debt

        Long-term debt (net of unamortized discount) consisted of the following:

 
   
  December 31,
 
  Maturity
  2004
  2005
 
   
  (In Thousands of Dollars)

2005 Term Loan   2011   $ —   $ 680,000
2004 Term Loan   —     475,000     —
Revolving Credit Facility   2008     25,000     —
Senior Subordinated Notes due 2009   —     190,000     —
Note payable   2018     3,915     3,717
       
 
Total         693,915     683,717
Less: amounts due within one year         198     7,009
Less: unamortized discount         10,825     1,070
       
 
  Long-term debt (net of unamortized discount)       $ 682,892   $ 675,638
       
 

        2004 Term Loan.     On December 1, 2004, we completed a refinancing, which we refer to as the "2004 Refinancing." In the 2004 Refinancing, we borrowed $500,000,000 under an Amended and Restated Credit Agreement that we refer to as the 2004 Credit Agreement. The 2004 Credit Agreement included a fully-drawn $475,000,000 term loan facility and a $125,000,000 revolving credit facility under which $25,000,000 was drawn at closing. The then outstanding balance of the 2004 Term Loan was repaid in June 2005.

        2005 Term Loan.     On June 30, 2005, we completed a refinancing, which we refer to as the "2005 Refinancing." In the 2005 Refinancing, we borrowed $680,000,000 under our Amended and Restated Credit Agreement dated June 30, 2005, which we refer to as the "2005 Credit Agreement" and which consisted of a fully drawn $680,000,000 term loan facility and an undrawn $150,000,000 revolving credit facility (see Note 12). Term loan principal payments of $1,700,000 are due at each quarter end, beginning March 31, 2006, through September 30, 2011, with the remaining balance due at maturity. The term loan facility matures on December 1, 2011 and the revolving credit facility matures on October 1, 2008. Interest accrues at variable rates based, at our election, on adjusted LIBOR plus 1.75% or a prime rate-based alternate base rate (ABR) plus 0.75%. We have the option to select which rate will be applied at the beginning of each loan period, the term of which, for LIBOR borrowings, varies, at our election, from one to six months and, for alternate base rate borrowings, extends until we elect to convert to LIBOR borrowings. At December 31, 2005, the term loan was comprised of borrowings at an average rate of 6.28% for interest periods that end in March 2006 and June 2006. Interest payments are due at each quarter end for interest related to ABR borrowings and at the end of each loan period, but not less frequently than quarterly, for LIBOR borrowings.

        Senior Subordinated Notes due 2009.     On November 14, 2000, in connection with the 2000 Refinancing, we issued Senior Subordinated Notes with an aggregate face amount of $190,000,000 and a stated interest rate of 12.75%. These notes were redeemed as part of the 2005 Refinancing. These notes were issued at a discount of 3.704% and each $1,000 note was accompanied by detachable warrants (see Note 16). The warrants had an aggregate fair value at issuance of $8,360,000. Based on

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the relative fair values of the notes and the warrants at the time of issuance, $8,050,000 was recognized as unamortized debt discount in our balance sheet, as was the original issue discount of the notes. The debt discount was being amortized into interest expense using the effective interest method over the life of the notes. Interest payments on these notes were due semiannually on May 1 and November 1. As part of the 2005 Refinancing, we received valid tenders and consents from holders of $187,000,000 aggregate principal amount of the outstanding Notes. We redeemed the remaining $3,000,000 aggregate principal amount of outstanding Notes on November 1, 2005, at which time they were callable by us at 106.375% of their face value.

        Note Payable.     On September 1, 1998, in connection with the purchase of the operating assets of a leased travel center, we issued a note payable to the former operator of the travel center for $4,919,000. The note bears interest at 5% and requires quarterly payments of principal and interest of $98,000 through October 1, 2018. The note was recorded net of a discount of $1,875,000. This note is collateralized by a mortgage interest in the related travel center.

        Debt Extinguishments Expense and Debt Issuance Costs.     As part of the 2004 Refinancing, we amended and restated our 2000 Credit Agreement, and the borrowings thereunder. In 2004 we recognized a charge to debt extinguishment and refinancing expense of $1,699,000 and we capitalized as deferred financing costs $8,720,000 of costs associated with the additional borrowings under the 2004 Credit Agreement. As part of the 2005 Refinancing, we recognized a charge to debt extinguishment and refinancing expense of $39,566,000 and we capitalized as deferred financing costs $5,039,000 of costs associated with the additional borrowings under the 2005 Credit Agreement.

        Pledged Assets.     The borrowings under the 2005 Credit Agreement are collateralized by mortgages on substantially all of our property and equipment, liens on all of our accounts receivable and inventories and security agreements related to our cash balances and significant operating contracts.

        Change of Control.     In the event of a change in control (as defined in the relevant instruments) of the company, the total amount outstanding under the debt agreements described above may be declared immediately due and payable. See Note 24 regarding a subsequent event related to a planned change of control.

        Mandatory Prepayments.     The 2005 Credit Agreement obligates us to make annual mandatory prepayments of term loan indebtedness equal to one-half of the Excess Cash Flow (as defined in the agreement) amount generated in the previous year. No such payments were required for the years ended December 31, 2004 and 2005.

        Debt Covenants.     Under the terms of the 2005 Credit Agreement, we are required to maintain certain affirmative and negative covenants, that, among other things, limit the amount of indebtedness we can incur, limit the amount of lease payments we can make, limit the amount of dividend payments and debt prepayments we can make, limit the amount of capital expenditures we can make and require us to maintain a minimum interest coverage ratio and a maximum leverage ratio. We were in compliance with the covenants throughout 2005 and at December 31, 2005.

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        Under the terms of the indenture for the Senior Subordinated Notes due 2009, until June 30, 2005, we were required to maintain certain affirmative and negative covenants that, among other things, limited our ability to incur indebtedness, pay dividends, redeem stock or sell assets or subsidiaries. We believe we were in compliance with the covenants throughout the first half of 2005, until the covenants were eliminated on June 30, 2005.

        Future Payments.     Scheduled payments of long-term debt in the next five years are $7,009,000 in 2006; $7,019,000 in 2007; $7,030,000 in 2008; $7,042,000 in 2009; and $7,054,000 in 2010.

        Fair Value.     The fair value of long-term debt at December 31, 2004 and 2005 was $723,130,000 and $683,717,000, respectively.

14.    Leasing Transactions

        As a lessee.     We have entered into lease agreements covering certain of our travel center locations, warehouse and office space, computer and office equipment and vehicles. Most long-term leases include renewal options and, in certain cases, they include escalation clauses and purchase options. Future minimum lease payments required under operating leases that had remaining noncancelable lease terms in excess of one year, as of December 31, 2005, were as follows:

Year Ending December 31,
  Minimum Lease
Payments
 
  (In Thousands of Dollars)

2006   $ 13,504
2007     12,017
2008     11,405
2009     9,389
2010     9,137
Thereafter     72,901
   
    $ 128,353
   

        Rent expense under our operating leases is included in both operating expenses and selling, general and administrative expenses in our consolidated statement of operations and comprehensive income (loss) and consisted of the following:

 
  Year Ended December 31,
 
  2003
  2004
  2005
 
  (In Thousands of Dollars)

Minimum rent   $ 24,061   $ 23,780   $ 15,978
Contingent rent     (2,690 )   (2,294 )   101
   
 
 
  Total rent expense   $ 21,371   $ 21,486   $ 16,079
   
 
 

        Contingent rent represents the increases or decreases in lease payments that result from changes after the inception of the lease in the factors on which the lease payments are based. For us, contingent rent relates to those leases that provide for increases in rent payments based on changes in the

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consumer price index, increases in rent payments based on the level of sales and/or operating results of the leased travel center, and changes in rent payments based on changes in interest rates, specifically LIBOR.

        As a lessor.     Twelve of the travel centers we owned were leased to franchisees under operating lease agreements during all or a portion of the year ended December 31, 2005. During 2005, two of these leases were mutually terminated, and, as a result, these travel centers were converted to company operated sites. At December 31, 2005, we had such lease arrangements in place at ten of our travel centers. Our lease agreements provide for initial terms of ten years with two renewal terms of five years each. These leases include rent escalations that are contingent on future events, namely inflation or capital improvements. Rent revenue from such operating lease arrangements totaled $7,564,000, $5,655,000 and $4,907,000 for the years ended December 31, 2003, 2004 and 2005, respectively. At December 31, 2005, the cost and accumulated depreciation of the assets covered by these lease agreements was $28,901,000 and $15,996,000, respectively. Future minimum lease payments receivable under these operating leases as of December 31, 2005 were as follows:

Year Ending December 31,
  Minimum Lease
Payments
 
  (In Thousands of Dollars)

2006   $ 3,979
2007     3,979
2008     3,979
2009     3,979
2010     3,979
Thereafter     6,329
   
    $ 26,224
   

15.    Redeemable Equity

        At each of December 31, 2004 and 2005, there were 177,871 and 180,305 shares, respectively, of our common stock owned by certain of our management employees. We refer to these shares of common stock as management shares. For the purchase of management shares, each of the management employees who entered into the management subscription agreement received financing from us for no more than one-half of the purchase price of the management shares. In connection with this financing each management employee executed a note in our favor and a pledge agreement. At December 31, 2004 and 2005, the aggregate principal amount of such notes due us from the management employees was $983,000 and $1,022,000, respectively, and is reflected as a reduction to the redeemable common stock balance.

        Under the terms of the management subscription agreements and other agreements governing the management shares, the management employees have rights to require us to repurchase the management shares at fair market value upon the employee's termination of employment due to death, disability or scheduled retirement. Repurchase will generally be for cash at the fair market value on the date of termination if termination is due to death or disability or scheduled retirement at or after age 62, or for cash in installments over a period of years at fair market value each year if termination is

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due to scheduled retirement prior to age 62. Prior to an initial public offering of our common stock, the fair market value is determined by a formula set forth in the agreement that can be modified by the Board of Directors. The formula to calculate the fair market value is (A) the product of (1) a multiplier and (2) EBITDA (as defined in our bank debt agreement) for the most recent four consecutive full fiscal quarters, plus (B) consolidated cash and cash equivalents in excess of $10,000,000, minus (C) consolidated indebtedness, divided by (D) the total number of shares of common stock outstanding on a fully diluted basis assuming full conversion and exercise of all common stock equivalents and similar stock rights.

        If there is a change of control of us which involves the sale by stockholders of their equity interest to a third party during the time that installments are being paid to the management employees, we will accelerate the installment payments at the time of the close of the change of control. In other cases of termination, we will have call rights at fair market value that generally will be exercised for cash, although in limited circumstances the call rights may be exercised by promissory note. In all cases, repurchase rights are restricted under law, credit agreements, financing documents and other contracts, and our board's good faith determination that repurchases would not cause undue financial strain on us. The 2005 Credit Agreement limits our ability to repurchase the management shares. The amount paid upon repurchase of any management shares will be reduced by the principal balance of and unpaid accrued interest on the related notes receivable. At the point in time that redemption of shares of redeemable common stock becomes probable, the fair value of the shares will be accreted to their estimated redemption value by a charge to nonredeemable stockholders' equity. Such a charge to nonredeemable stockholders' equity will occur only if our value, and therefore the fair value of our common stock, has increased. Our policy is to consider redemption of an individual stockholder's shares probable at the time that the stockholder provides notice of his or her intention to retire, dies or is declared disabled.

16.    Nonredeemable Stockholders' Equity

        Common stock and other nonredeemable stockholders' equity consisted of the following:

 
  December 31,
 
  2004
  2005
 
  (In Thousands of Dollars)

Common Stock—20,000,000 shares authorized, $0.00001 par value, 6,934,569 and 6,937,003 shares issued and outstanding at December 31, 2004 and 2005, respectively   $ 3   $ 3
Accumulated other comprehensive income     1,122     2,066
Additional paid-in capital     215,743     224,413
   
 
  Total   $ 216,868   $ 226,482
   
 

        The numbers of outstanding shares of common stock in the table include the redeemable shares owned by certain of our management employees as discussed in Note 15.

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Merger and Recapitalization

        On May 31, 2000, we and shareholders owning a majority of our voting stock entered into a recapitalization agreement and plan of merger, as subsequently amended, with TCA Acquisition Corporation, a newly created corporation formed by Oak Hill Capital Partners, L.P. and its affiliates, under which TCA Acquisition Corporation agreed to merge with and into us. This merger was completed on November 14, 2000. Concurrent with the closing of the merger, we completed a series of transactions to effect a recapitalization that included the following.

    •
    TCA Acquisition Corporation issued 6,456,698 shares of common stock to Oak Hill and other institutional investors for proceeds of $205,000,000 and then merged with and into us. We incurred $3,015,000 of fees and expenses related to the issuance of these shares of common stock. These stock issuance costs were charged against additional paid-in capital.

    •
    We redeemed all shares of our common and preferred stock outstanding prior to the closing of the merger, with the exception of 473,064 shares of common stock with a market value at that time of $15,020,000 that were retained by continuing stockholders, and cancelled all outstanding common stock options and warrants, for cash payments totaling $263,153,000.

    •
    All shares of treasury stock were cancelled.

        After the transactions described above, Oak Hill owned 60.5% of our outstanding common stock, the Other Investors owned, in the aggregate, 32.7% of our outstanding common stock, Freightliner owned 4.3% of our outstanding common stock and certain members of our management owned 2.5% of our outstanding common stock. The total amount of our equity capitalization after these transactions, given the $31.75 per share merger consideration that was paid in our merger and recapitalization transactions, was $220,020,000. The transactions described above, which resulted in a change of control over us, have been accounted for as a leveraged recapitalization, as opposed to a purchase business combination, since the change of control was effected through issuance of new shares to our new control group in conjunction with a redemption of most of our then outstanding equity securities. We followed leveraged recapitalization accounting because of the significance of the ownership interest in us that was retained by continuing stockholders. In accounting for our leveraged recapitalization, we retained the historical cost bases of our assets and liabilities and consequently recorded charges totaling $178,965,000 to our equity accounts upon the redemption of equity securities. This accounting treatment contrasts with that followed in a purchase business combination, in which a company reflects the new basis in its assets and liabilities of its new control group by increasing or decreasing its historical balances based on the estimated fair values at that time and avoids the charge to equity that accompanies the redemption of equity securities.

Other Common Stock Issuances

        During the year ended December 31, 2005, we issued 2,434 shares of common stock to a member of management for cash and notes receivable (see Notes 15 and 19) aggregating $77,000.

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Preferred Stock

        The board of directors has the authority to issue preferred stock in one or more classes or series and to fix the designations, powers, preferences and dividend rates, conversion rights, terms of redemption, and liquidation preferences and the number of shares constituting each class or series. Our authorized capital stock includes 5,000,000 shares of preferred stock with a par value of $0.00001. No preferred stock has been issued.

Common Stock

        Voting Rights.     Each share of common stock entitles the holder to one vote on all matters submitted to a vote of our stockholders.

        Dividends.     Holders of common stock are entitled to receive dividends if, as and when declared by our board of directors out of funds legally available. Our debt agreements limit the amount of dividends we are able to pay.

        Liquidation Rights and Other Rights.     Upon our liquidation, dissolution or winding up, the holders of our common stock will be entitled to share pro rata in the distribution of all of our assets remaining after satisfaction of all of our liabilities and the payment of the liquidation preference of any outstanding preferred stock. The holders of our common stock do not have any conversion, redemption or preemptive rights.

        Repurchase Rights.     Certain members of our senior management have purchased shares of our common stock pursuant to individual management subscription agreements. We have the right to repurchase, and the employees have the right to require us to repurchase, subject to certain limitations, at fair market value, these shares of common stock upon termination of employment due to death, disability or a scheduled retirement. These shares are classified as redeemable equity in our consolidated balance sheet (see Note 15).

Registration Rights

        Under a stockholders' agreement to which all of our stockholders are party, certain of our stockholders have the right, under certain circumstances, to require us to register under the Securities Act of 1933 shares of our common stock held by them and allow them to include shares of common stock held by them in a registration under the Securities Act commenced by us.

Common Stock Warrants

        In connection with the issuance of our Senior Subordinated Notes due 2009 as part of our merger and recapitalization transactions, we issued warrants exercisable for shares of our common stock. The warrants were issued under a warrant agreement between us and State Street Bank and Trust Company (now US Bank), as warrant agent. We originally issued the warrants in connection with a private placement of 190,000 units, each unit consisting of one Senior Subordinated Note due 2009 and four warrants. Each warrant entitles its holder to purchase 0.36469 shares of our common stock at an exercise price of $0.001 per share, subject to anti-dilution adjustments under some circumstances. At the time of their issuance in November 2000, each warrant had a fair value of $11.579, or $31.75 per

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share for each share issuable upon the exercise of the warrants. We have no warrants outstanding other than the 760,000 warrants issued as part of the unit offering in 2000.

        Exercise of Warrants.     The warrants may be exercised at any time. However, holders of warrants will be able to exercise their warrants only if the exercise of the warrants is exempt from the requirements of the Securities Act and only if the shares of common stock are qualified for sale or exempt from qualification under the applicable securities laws of the states or other jurisdiction in which the holders reside. Unless earlier exercised, the warrants will expire on May 1, 2009.

        At our option, fractional shares of common stock may not be issued upon exercise of the warrants. If any fraction of a share of common stock would, except for the foregoing provision, be issuable upon the exercise of any warrants, we will pay an amount in cash equal to the current market value per share of common stock, as determined on the day immediately preceding the date the warrant is presented for exercise, multiplied by the fraction, computed to the nearest whole cent.

        The exercise price and the number of shares of common stock issuable upon exercise of a warrant are both subject to adjustment in certain cases.

        No Rights as Stockholders.     The holders of unexercised warrants are not entitled, as such, to receive dividends, to vote, to consent, to exercise any preemptive rights or to receive notice as our stockholders of any stockholders meeting for the election of our directors or any other purpose, or to exercise any other rights whatsoever as our stockholders.

Stock Option Plan

        During 2001, we granted to certain of our executives non-qualified options to purchase 944,881 of our common shares. The options have a term of 10 years but could be terminated earlier if certain customary events occur. Each option grant consisted of 41.67% time options and 58.33% performance options. In April 2006, we amended the option agreements, primarily affecting vesting of the performance options. Option holders have rights to require us to repurchase shares obtained by exercising vested options upon a termination of employment due to disability, death or, subject to a six month holding period, scheduled retirement, and, in certain limited cases, upon a change of control.

        Time options became exercisable with the passage of time, generally vesting 20% per year over a period of five years. As of December 31, 2005, all outstanding time options were fully vested and exercisable. The time options are subject to fixed plan accounting.

        Performance options become exercisable based on our stockholders achieving certain investment return targets. Class A and Class B performance options differ only in vesting. Class A performance options vested if the achieved internal rate of return was at least 22.5%. The Class B performance options vested on a pro-rata basis if the achieved rate of return exceeded 22.5%, up to 30.0%. A measurement date was generally defined in the original option agreements as the earliest of (1) November 14, 2005, (2) specified dates following an initial public offering of our shares, or (3) the date that at least 30% of our shares owned by a specified stockholder are distributed to its limited partners or sold. The April 2006 amendments replaced the November 14, 2005 date with December 31, 2005, which was the earliest of the various possible measurement dates enumerated in the option agreements and, therefore, was the measurement date for purposes of determining the vesting of the

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Class A performance options. The estimated value of our common shares as of December 31, 2005 was $86.83 per share, which resulted in a rate of return of 22.5% and, therefore, the Class A performance options were fully vested as of December 31, 2005. The April 2006 amendments also revised the measurement date for the Class B performance options such that one half of those options had a measurement date of April 6, 2006 and vested as of that date, and the other half of those options will vest on a pro-rata basis as of the date of any future change of control if the share price realized is between $102.73 and $117.83 per share. The performance options were subject to variable plan accounting and, accordingly, a non-cash charge to earnings was required when it became probable that the performance triggers for such options would be achieved. Until the fourth quarter of 2005, we did not believe it was probable the performance triggers would be achieved. For the year ended December 31, 2005, a charge to compensation expense of $8,670,000 was recognized with respect to the Class A performance options that vested effective December 31, 2005.

        We accounted for the stock options under the recognition and measurement principles of both APB 25 and FAS 123R. The time options and Class A performance options were accounted for under APB 25. There was no compensation expense related to the time options. Share based compensation expense was recognized with respect to the Class A performance options through the end of the related vesting period in December 2005. As the amendments to the Class B performance options were made after January 1, 2006, the date we adopted FAS 123R (see Note 2), the recognition of share based compensation expense related to those options is subject to the requirements of FAS 123R (see Note 4).

        Stock Option Status Summary.     The following table reflects the status and activity of options under our stock plans:

 
  Year Ended December 31,
 
  2003
  2004
  2005
Options outstanding, beginning of year   944,881   944,881   939,375
Granted   —   —   —
Exercised   —   —   —
Cancelled   —   (5,506 ) —
   
 
 
Options outstanding, end of year   944,881   939,375   939,375
   
 
 
Options exercisable, end of year   236,220   309,454   546,032
Options available for grant, end of year   —   —   —
Weighted-average remaining contractual life of options outstanding, in years   7   6   5

        The exercise price was $31.75 per share for all outstanding options as of December 31, 2003, 2004 and 2005.

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17.    Income Taxes

        The provision for income taxes was as follows:

 
  Year Ended December 31,
 
 
  2003
  2004
  2005
 
 
  (In Thousands of Dollars)

 
Current:                    
  Federal   $ 56   $ 210   $ (135 )
  State     1,065     2,264     1,249  
  Foreign     63     24     (40 )
   
 
 
 
      1,184     2,498     1,074  
   
 
 
 

Deferred:
 
 
 
 
 
 
 
 
 
 
  Federal     3,587     7,333     1,341  
  State     76     (1,359 )   (44 )
  Foreign     (128 )   —     (62 )
   
 
 
 
      3,535     5,974     1,235  
   
 
 
 
  Total   $ 4,719   $ 8,472   $ 2,309  
   
 
 
 

        The difference between taxes calculated at the U. S. federal statutory tax rate of 35% and our total income tax provision is as follows:

 
  Year Ended December 31,
 
 
  2003
  2004
  2005
 
 
  (In Thousands of Dollars)

 
U.S. federal statutory rate applied to income before taxes and extraordinary items   $ 4,852   $ 8,167   $ 75  
State income taxes, net of federal income tax benefit     768     113     781  
Non-deductible meals and entertainment expenses     187     214     236  
Non-deductible loss related to seized funds     —     —     1,810  
Other non-deductible expenses     26     58     126  
Benefit of tax credits     (358 )   (358 )   (438 )
Adjustment of estimated prior year tax liabilities     (650 )   210     (166 )
Taxes on foreign income at different than U.S. rate     (2 )   (31 )   (113 )
Other—net     (104 )   99     (2 )
   
 
 
 
  Total   $ 4,719   $ 8,472   $ 2,309  
   
 
 
 

        For 2003, income tax benefits of $164,000 allocated to the cumulative effect of a change in accounting principle of $417,000 differ from the amount calculated at the federal statutory rate of 35% by $18. This difference is due to state taxes and graduated tax rates.

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        Deferred income tax assets and liabilities resulted from the following:

 
  December 31,
 
 
  2004
  2005
 
 
  (In Thousands of Dollars)

 
Deferred tax assets:              
  Accounts receivable   $ 614   $ 652  
  Inventory     569     659  
  Intangible assets     5,269     2,480  
  Deferred revenues     2,299     1,957  
  Minimum tax credit     3,001     3,455  
  Net operating loss carryforward (expiring 2020-2024)     20,321     16,759  
  Foreign tax credit carryforwards     —     111  
  General business credits (expiring 2009-2025)     5,680     6,357  
  Other accrued liabilities     9,691     12,544  
   
 
 
    Total deferred tax assets     47,444     44,974  
   
 
 
Deferred tax liabilities:              
  Property and equipment     (36,882 )   (35,547 )
  Other comprehensive income     (403 )   (823 )
   
 
 
    Total deferred tax liabilities     (37,285 )   (36,370 )
   
 
 
    Net deferred tax assets   $ 10,159   $ 8,604  
   
 
 

        The following table sets forth the composition of our federal net operating loss carryforwards by expiration date.

Year of Expiration
  Amount of Net
Operating Loss
 
  (In Thousands of Dollars)

2020   $ 16,870
2021     27,897
2022     248
2023     81
2024     74
   
Total net operating loss carryforward   $ 45,170
   

        Realization of our net deferred tax assets is dependent on future taxable income. We believe it is more likely than not such net deferred tax assets will be realized and, accordingly, we have not recognized a valuation allowance with respect to our net deferred tax assets. Most of our net operating loss carryforwards were generated in 2000 and 2001. The net operating loss in 2000 resulted from the significant level of expenses recognized as a result of the merger and recapitalization transactions in November 2000. For 2001, the net operating loss primarily resulted from the relatively higher ratio of interest and depreciation deductions to our operating income. The trend since then for these items

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relative to operating income has been downward and is expected to continue decline, enabling us to generate sufficient taxable income to utilize our net operating loss carryforwards. However, ultimate realization of our net deferred tax assets could be negatively affected by market conditions and other variables not known or anticipated at this time.

        Our federal income tax returns for 2002 through 2005 are subject to examination by the Internal Revenue Service, or IRS, and certain of our state income tax returns for various states for various years from 2001 through 2005 are subject to examination by the respective state tax authorities. We believe we have made adequate provision for income taxes and interest that may become payable for years not yet examined.

18.    Equity Investment

        We owned a 21.5% of the voting stock of Simons Petroleum, Inc., a privately held company that is a diversified marketer of diesel fuel and other petroleum products to trucking fleets and other customers in the energy-related and trucking industries, until April 9, 2004 when we sold the Simons shares we owned. The carrying value of this investment, which was included in other noncurrent assets in our consolidated balance sheet, as of December 31, 2003 was $7,462,000. The equity income earned from this investment for the years ended December 31, 2003 and 2004 was $764,000 and $194,000, respectively. Summarized condensed financial information of this investee follows. In the tables below, income statement data for 2004 is shown for the three months ended March 31, 2004, and balance sheet data is shown as of March 31, 2004, as that was the last full month prior to the sale of our investment in Simons.

 
  Year Ended
December 31, 2003
  Three Months Ended
March 31, 2004
 
  (In Thousands of Dollars)

Income statement data:            
  Total revenues   $ 523,027   $ 144,507
  Gross profit     25,483     7,530
  Income from continuing operations     2,665     1,072
  Net income     2,665     1,072

        After the sale on April 9, 2004, Simons was no longer an equity investee of ours and, therefore, no longer a related party. The following disclosures include transactions and balances related to our business activities with Simons only for the period while we were a Simons stockholder. During the year ended December 31, 2003 and the period from January 1, 2004 through April 9, 2004, diesel fuel provided by Simons accounted for $228,827,000 and $70,652,000, respectively, of our cost of goods sold and we made sales of diesel fuel to Simons in the amounts of $3,328,000 and $152,000, respectively. We also leased a travel center from Simons and the rent expense related to this travel center for the years ended December 31, 2003 and the period from January 1, 2004 through April 9, 2004 was $408,000 and $102,000 respectively.

        We received cash proceeds from the sale of our Simons shares of $9,073,000. This sale represented a prepayment event under the 2000 Credit Agreement and, therefore, in April 2004 we made a mandatory prepayment of our term loan borrowings in the amount of $9,073,000. The merger agreement pursuant to which we sold these shares provided two opportunities for us to receive

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additional sales proceeds in late 2005: an additional $921,000 based on Simons achieving specified earnings targets, and an additional $1,053,000 if certain conditions were met and certain representations and warranties were maintained. Due to the uncertainty surrounding the future realization of these receivables, the gain on sale we recognized in 2004 of $1,615,000 did not reflect these amounts. However, during the third quarter of 2005, the conditions to receive these funds were met, the funds were received and, accordingly, we recognized the related $1,974,000 as gain on sale of investment during the third quarter of 2005.

19.    Related Party Transactions

        Certain members of our senior management have purchased common stock pursuant to management subscription agreements (see Note 16—Repurchase Rights). As a result of such purchases, we have notes and related interest receivable from the management stockholders totaling $1,514,000 and $1,639,000 at December 31, 2004 and 2005, respectively. We also had, until April 2004, transactions with an equity investee that are described in Note 18.

20.    Commitments and Contingencies

Guarantees

        In the normal course of business we periodically enter into agreements that incorporate indemnification provisions. While the maximum amount to which we may be exposed under such agreements cannot be estimated, it is the opinion of management that any potential indemnification is not expected to have a material adverse effect on our consolidated financial position or result of operations. We also offer a warranty of our workmanship in our truck maintenance and repair shops, but the annual warranty expense and corresponding liability are immaterial.

Environmental Matters

        Our operations and properties are extensively regulated through environmental laws and regulations ("Environmental Laws") that (i) govern operations that may have adverse environmental effects, such as discharges to air, soil and water, as well as the management of petroleum products and other hazardous substances ("Hazardous Substances"), or (ii) impose liability for the costs of cleaning up sites affected by, and for damages resulting from, disposal or other releases of Hazardous Substances. We own and use underground storage tanks and aboveground storage tanks to store petroleum products and waste at our travel centers. We must comply with requirements of Environmental Laws regarding tank construction, integrity testing, leak detection and monitoring, overfill and spill control, release reporting, financial assurance and corrective action in case of a release from a storage tank into the environment. At some locations, we must also comply with Environmental Laws relating to vapor recovery and discharges to water. We believe that all of our travel centers are in material compliance with applicable requirements of Environmental Laws. While the costs of compliance for these matters have not had a material adverse impact on us, it is impossible to predict accurately the ultimate effect changing laws and regulations may have on us in the future. We incurred capital expenditures, maintenance, remediation and other environmental related costs of approximately $4,750,000, $4,365,000 and $7,299,000 in the years ended December 31, 2003, 2004 and 2005, respectively.

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        We have received notices of alleged violations of Environmental Laws, or are aware of the need to undertake corrective actions to comply with Environmental Laws, at company-owned travel centers in a number of jurisdictions. We do not expect that any financial penalties associated with these alleged violations, or compliance costs incurred in connection with these violations or corrective actions, will be material to our results of operations or financial condition. We are conducting investigatory and/or remedial actions with respect to releases of Hazardous Substances at a number of our sites. While we cannot precisely estimate the ultimate costs we will incur in connection with the investigation and remediation of these properties, based on our current knowledge, we do not expect that the costs to be incurred at these properties, individually or in the aggregate, will be material to our results of operations or financial condition.

        While the matters discussed above are, to the best of our knowledge, the only proceedings for which we are currently exposed to potential liability, we cannot be certain that additional contamination does not exist at these or additional network properties, or that material liability will not be imposed in the future. If additional environmental problems arise or are discovered, or if additional environmental requirements are imposed by government agencies, increased environmental compliance or remediation expenditures may be required, and this could have a material adverse effect on us.

        Under the environmental agreement entered into as part of the acquisition of the BP network, BP is required to provide indemnification for, and conduct remediation of, certain pre-closing environmental conditions. Until January 2004, Unocal similarly was required to provide indemnification for, and conduct remediation of, certain environmental conditions that existed prior to our April 1993 acquisition of the Unocal network. In January 2004, a Buy-Out Agreement between Unocal and us became effective and Unocal's obligations to us under the April 1993 environmental agreement were terminated. In consideration for releasing Unocal from its obligations under the environmental agreement, Unocal paid us $2,609,000 of cash, funded an escrow account with $5,415,000 to be drawn on by us as we incur related remediation costs, and purchased insurance policies that cap our total future expenditures for these matters at $9,648,000 and provide protection against significant unidentified matters that existed prior to April 1993. We are now responsible for all remediation at the former Unocal sites that we still own. We estimate the costs of the remediation activities for which we assumed responsibility from Unocal in January 2004 to be approximately $8,248,000 which amount we expect will be fully covered by the cash received from Unocal and reimbursements from state tank funds. Accordingly, we recognized no income or expense as a result of entering into the Unocal Buy-Out Agreement. Of the cash paid to us by Unocal, $1,000,000 was to reimburse us for the future costs of administering the remediation projects assumed from Unocal and was recorded as a deferred credit that will be recognized to offset our costs as the related remediation activities are completed.

        We have obtained insurance of up to $35,000,000 for known environmental liabilities (which includes the insurance coverage purchased by Unocal as described above) and up to $40,000,000 for unknown environmental liabilities, subject, in each case, to certain limitations and deductibles. While it is not possible to quantify with certainty the environmental exposure, in our opinion, the potential liability, beyond that considered in the reserve we have recorded, for all environmental proceedings, based on information known to date, will not have a material adverse effect on our financial condition, results of operations or cash flows.

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        At December 31, 2005, we had a reserve for environmental matters of $11,536,000, a receivable for expected recoveries of certain of these estimated future expenditures and cash in an escrow account to fund certain of these estimated future expenditures, leaving an estimated net amount of $2,979,000 to be funded from future operating cash flows. The following table sets forth the various amounts recorded in our consolidated balance sheet as either current or noncurrent assets or liabilities.

 
  As of December 31, 2005
 
  (In Thousands of Dollars)

Gross liability for environmental matters:      
  Included in the accrued liabilities balance   $ 4,173
  Included in the noncurrent liabilities balance     7,363
   
  Total recorded liabilities     11,536
Less—expected recoveries of future expenditures:      
  Included in the accounts receivable balance     1,911
  Included in the other noncurrent assets balance     1,751
Less-cash in escrow account included in other noncurrent assets     4,895
   
  Net environmental costs to be funded by future operating cash flows   $ 2,979
   

        The following table sets forth the estimated gross amount of the cash outlays related to the matters for which we have accrued the environmental reserve. These cash expenditure amounts do not reflect any amounts for the expected recoveries as we cannot accurately predict the timing of those cash receipts. These estimated future cash disbursements are subject to change based on, among other things, changes in the underlying remediation activities and changes in the regulatory environment.

Year Ending December 31,
  Estimated Gross
Future Expenditures
 
  (In Thousands of Dollars)

2006   $ 4,173
2007     2,908
2008     1,396
2009     1,072
2010     682
Thereafter     1,305
   
    $ 11,536
   

Pending Litigation

        On December 7, 2005, the IRS seized approximately $5,325,000 from our bank account pursuant to a seizure warrant alleging that these funds were proceeds of alleged illegal gambling operations conducted by a game vendor of ours in space leased from us at three of our travel centers in Maryland. A complaint for forfeiture was filed by the Maryland U.S. Attorney's Office, and we filed a statement of interest in the seized funds and an answer denying liability. To date there has been only an informal discovery process between us and the U.S. Attorney and a trial date has not been set. We are prepared

F-60


to vigorously defend against the complaint for forfeiture and believe that we have meritorious defenses to the claims made by the IRS with respect to the full amount seized, which, should we be successful, would result in the return to us of the seized funds. However, due to our loss of control over those assets, we have expensed the full amount seized in December 2005. This charge was included in operating expenses in our statement of operations and comprehensive income (loss). Any amounts recovered in the future would increase our operating income in the period received. It is reasonably possible that the IRS could ultimately prevail in its claim for some portion or all of the amount seized. We have been indemnified by the game vendor and expect to recover any losses in this matter from the game vendor, but it is uncertain that we would be able to recover all or a portion of our losses from the game vendor and a receivable for any indemnification proceeds has not been recognized as of December 31, 2005.

        We are involved from time to time in various legal and administrative proceedings and threatened legal and administrative proceedings incidental to the ordinary course of our business. With the exception of the matter described above, we believe we are currently not involved in any litigation, individually or in the aggregate, which could have a material adverse effect on our business, financial condition, results of operations or cash flows.

21.    Derivative Financial Instruments and Hedging Activities

        We attempt to manage the risk arising from changes in interest rates by using derivative financial instruments such as interest rate swaps. On August 31, 2005, we entered into five interest rate swap agreements with an aggregate notional principal amount of $272,000,000 to exchange our variable rate of LIBOR plus 1.75% with a fixed interest rate of between 4.12% and 4.135%. The swap agreements mature on September 1, 2006. Payments due to or from us under the swap agreements are due quarterly on December 1, March 1, June 1 and September 1. The counterparties to these swap agreements are five of the largest U.S. banks, each of which is a lender under the 2005 Credit Agreement. We had no swap agreements in place throughout 2003 and 2004 and as of December 31, 2004.

        To qualify for hedge accounting, derivative contracts must meet defined correlation and effectiveness criteria, be designated as hedges and result in cash flows and financial statement effects which substantially offset those of the position being hedged. Amounts receivable or payable under derivative financial instrument contracts, when recognized, are reported in our consolidated balance sheet. Pursuant to the provisions of FAS 133, we determined that the interest rate swap agreements were 100% effective and qualified for cash flow hedge accounting.

        During the year ended December 31, 2005, the fair value of the swap agreement increased from inception through December 31, 2005, resulting in the recognition of an asset of $1,021,000 and an increase in other comprehensive income of $674,000 (net of tax).

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22.    Other Information

 
  Year Ended December 31,
 
 
  2003
  2004
  2005
 
 
  (In Thousands of Dollars)

 
Operating expenses and Selling, general and administrative expenses included the following:                    
  Repairs and maintenance expenses   $ 13,430   $ 12,361   $ 12,866  
  Advertising expenses   $ 4,715   $ 5,885   $ 8,650  
  Taxes other than payroll and income taxes   $ 8,611   $ 8,350   $ 9,629  
  401(k) plan contribution expense   $ 1,707   $ 1,577   $ 2,254  
  Expense related to loss of control of seized funds   $ —   $ —   $ 5,325  

Interest and other financial costs, net consisted of the following:
 
 
 
 
 
 
 
 
 
 
  Cash interest expense   $ (42,053 ) $ (40,795 ) $ (44,371 )
  Cash interest income     96     320     579  
  Capitalized interest     —     —     312  
  Amortization of discount on debt     (1,481 )   (1,704 )   (1,130 )
  Amortization of deferred financing costs     (3,440 )   (3,882 )   (3,908 )
   
 
 
 
      Interest and other financial costs, net   $ (46,878 ) $ (46,061 ) $ (48,518 )
   
 
 
 
Other income (expense), net consisted of the following:                    
  Equity in earnings of affiliate   $ 764   $ 194   $ —  
  Gain on sale of investment     —     1,615     1,974  
  Debt extinguishment and refinancing expenses     —     (1,699 )   (39,566 )
   
 
 
 
      Other income (expense), net   $ 764   $ 110   $ (37,592 )
   
 
 
 

23.    Supplemental Cash Flow Information

 
  Year Ended December 31,
 
 
  2003
  2004
  2005
 
 
  (In Thousands of Dollars)

 
Revolving loan borrowings   $ 458,100   $ 337,400   $ 259,000  
Revolving loan repayments     (466,900 )   (326,000 )   (284,000 )
   
 
 
 
  Revolving loan borrowings (repayments), net   $ (8,800 ) $ 11,400   $ (25,000 )
   
 
 
 

Cash paid during the year for:
 
 
 
 
 
 
 
 
 
 
  Interest (net of amount capitalized)   $ 39,645   $ 41,815   $ 47,537  
  Income taxes (net of refunds)   $ 635   $ 1,611   $ 1,256  
Inventory, property and equipment, and goodwill received in liquidation of trade accounts and notes receivable   $ 1,226   $ 637   $ 616  
Notes received upon common stock issuance   $ —   $ —   $ 38  

24.    Subsequent Event

        On September 15, 2006, we and stockholders owning a majority of our voting stock entered into an agreement and plan of merger with Hospitality Properties Trust ("HPT"), pursuant to which HPT, through a subsidiary, will acquire 100% of our outstanding common stock for approximately $1.9 billion

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and HPT's subsidiary will merge with and into us. The merger is expected to occur in 2007. Upon the closing, our business will be restructured. The principal effect of the restructuring will be that we will become a 100% subsidiary of TravelCenters of America LLC, a subsidiary of HPT, and that subsidiaries of HPT that we do not own will own the real estate of substantially all of the travel centers we currently own and we will enter into a lease of that real estate. We expect to retain the balance of our tangible and intangible assets and will continue our operations. After the restructuring, HPT, a publicly owned real estate investment trust, will spin off the shares of TravelCenters of America LLC to its common shareholders and TravelCenters of America LLC, which will be our parent after the acquisition and restructuring, will be a publicly owned company.

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Distribution by Hospitality Properties Trust
to its Shareholders of
All Outstanding Common Shares of
TravelCenters of America LLC

PROSPECTUS

        Until [                        ], 2007 (25 days after the date of this prospectus), all dealers that effect transactions in these securities may be required to deliver this prospectus.


PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13.    Other Expenses of Issuance and Distribution

        Set forth below is an estimate of the fees and expenses to be incurred in connection with the issuance and distribution of the shares covered by this registration statement. All such fees and expenses are to be paid by Hospitality Trust.

 
  Amount
Securities and Exchange Commission registration fee   $ 36,570
American Stock Exchange filing fee and expenses     *
Printing and engraving expenses     *
Legal fees and expenses     *
Accounting fees and expenses     *
Distribution and transfer agent fees and expenses     *
Miscellaneous     *
   
Total   $ *
   
*
To be filed by amendment.


Item 14.    Indemnification of Directors and Officers

        Subject to standards and restrictions as are set forth in our limited liability company agreement, Section 18-108 of the Delaware Limited Liability Company Act empowers a Delaware limited liability company to indemnify and hold harmless any member or manager or other persons from and against all claims and demands whatsoever.

        To the fullest extent permitted by law but subject to the limitations expressly provided in the registrant's Limited Liability Company Agreement (the "LLC Agreement"), all the directors and officers of the registrant and other specified indemnitees ("Indemnitees") shall be indemnified and held harmless by the registrant from and against any and all claims, damages and expenses or other amounts arising from any and all claims, demands, actions, suits or proceedings, whether civil, criminal, administrative or investigative and whether by or in the right of the registrant, in which any Indemnitee may be involved, or is threatened to be involved, as a party or otherwise, by reason of its status as an Indemnitee; provided, that the Indemnitee shall not be indemnified and held harmless if there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that, in respect of the matter for which the Indemnitee is seeking indemnification, the Indemnitee acted in bad faith or engaged in fraud, willful misconduct, or in the case of a criminal matter, acted with knowledge that the Indemnitee's conduct was unlawful. To the fullest extent permitted by law, expenses incurred by an Indemnitee who is indemnified pursuant to the LLC Agreement in defending any such claim, demand, action, suit or proceeding shall, from time to time, be advanced by the Company prior to a determination that the Indemnitee is not entitled to be indemnified upon receipt by the Company of any undertaking by or on behalf of the Indemnitee to repay such amount if it shall be determined that the Indemnitee is not entitled to be indemnified as authorized in the LLC Agreement. The indemnification, advancement of expenses and other provisions of the LLC Agreement shall be in addition to any other rights to which an Indemnitee may be entitled under any agreement, pursuant to any vote of the shareholders entitled to vote on such matter, as a matter of law or otherwise, both as to actions in the Indemnitee's capacity as an Indemnitee and as to actions in any other capacity, and shall continue as to an Indemnitee who has ceased to serve in such capacity.

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        To the extent that the indemnification provisions of the LLC Agreement purport to include indemnification for liabilities arising under the Securities Act of 1933, in the opinion of the SEC, such indemnification is contrary to public policy and is therefore unenforceable.


Item 15.    Recent Sales of Unregistered Securities

        The only securities sold by the registrant to date have been common shares sold for nominal consideration to its parent, Hospitality Trust. No underwriters were used in the foregoing transaction. The sale was made in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act for transactions by an issuer not involving a public offering.


Item 16.    Exhibits and Financial Statement Schedules

(a)
Exhibits:

Exhibit
Number
   
  Description
  2.1   —   Agreement and Plan of Merger by and among TravelCenters of America, Inc., Hospitality Trust, HPT TA Merger Sub Inc. and Oak Hill Capital Partners
3.1   —   Certificate of Formation of TravelCenters of America LLC
3.2   *   Amended and Restated Limited Liability Company Operating Agreement of TravelCenters of America LLC
5.1   *   Legal Opinion of Richards, Layton & Finger, P.A.
8.1   *   Tax Opinion of Sullivan & Worcester LLP
10.1   *   Form of Transaction Agreement by and among Hospitality Properties Trust, HPT TA Properties Trust, HPT TA Properties LLC, TravelCenters of America LLC and Reit Management & Research LLC
10.2   *   Form of Shared Services Agreement between TravelCenters of America LLC and Reit Management & Research LLC
10.3   *   Form of Master Lease Agreement by and among HPT TA Properties Trust and HPT TA Properties LLC, as Landlord, and TA Leasing LLC, as Tenant
10.4   *   Form of Guaranty Agreement made by TravelCenters of America LLC, TravelCenters of America Holding Company LLC, TA Operating LLC and TA Franchise Systems LLC, as Guarantors, for the benefit of the Landlord under the Master Lease Agreement
10.5   —   Freightliner Express Operating Agreement, dated as of July 21, 1999, by and among Freightliner LLC, TA Operating Corporation, and TA Franchise Systems Inc.
10.6   —   Amendment No. 1 to Freightliner Express Operating Agreement, dated as of November 9, 2000, by and among Freightliner LLC, TA Operating Corporation, and TA Franchise Systems Inc.
10.7   —   Amendment No. 2 to Freightliner Express Operating Agreement, dated as of April 15, 2003, by and among Freightliner LLC, TA Operating Corporation, and TA Franchise Systems Inc.
10.8   —   Amendment No. 3 to Freightliner Express Operating Agreement, dated as of July 26, 2006 by and among Freightliner LLC, TA Operating Corporation, and TA Franchise Systems Inc.
10.9   —   Employment Agreement, dated as of January 1, 2000, by and between TravelCenters of America, Inc. and Timothy L. Doane
10.10   —   Amendment No. 1 to Employment Agreement, dated as of May 26, 2000, by and between TravelCenters of America, Inc. and Timothy L. Doane
10.11   —   Amendment No. 2 to Employment Agreement, dated as of December 14, 2004, by and between TravelCenters of America, Inc. and Timothy L. Doane
         

II-2

10.12   —   Amendment No. 3 to Employment Agreement, dated as of March 30, 2006, by and between TravelCenters of America, Inc., and Timothy L. Doane.
10.13   —   Employment Agreement, dated as of January 1, 2000, by and between TravelCenters of America, Inc. and James W. George
10.14   —   Amendment No. 1 to Employment Agreement, dated as of May 26, 2000, by and between TravelCenters of America, Inc. and James W. George
10.15   —   Employment Agreement, dated January 1, 2005, by and between TravelCenters of America, Inc. and Joseph A. Szima
10.16   —   Employment Agreement, dated as of January 1, 2006, by and between TravelCenters of America, Inc. and Steven C. Lee
10.17   *   2006 Equity Compensation Plan of TravelCenters of America LLC including form of Share Option Agreement
21.1   *   Subsidiaries of TravelCenters of America LLC
23.1   *   Consent of Sullivan & Worcester LLP (contained in Exhibit 8.1)
23.2   *   Consent of Richards, Layton & Finger, P.A. (contained in Exhibit 5.1)
23.3   —   Consent of PricewaterhouseCoopers LLP with respect to TravelCenters of America LLC
23.4   —   Consent of PricewaterhouseCoopers LLP with respect to TravelCenters of America, Inc.
99.1   —   Consent of Patrick F. Donelan to being named a Director
99.2   —   Consent of Barbara D. Gilmore to being named a Director
99.3   —   Consent of Arthur G. Koumantzelis to being named a Director
99.4   *   Form of Audit Committee Charter of TravelCenters of America LLC
99.5   *   Form of Compensation Committee Charter of TravelCenters of America LLC
99.6   *   Form of Nominating and Governance Committee Charter of TravelCenters of America LLC
*
To be filed by amendment.

II-3

(b)
Financial Statement Schedules:
 
  Balance at
Beginning
of Period
  Charged
(Credited)
To Income
  Charged to
Other Accounts
  Deductions from
Reserves
  Balance at
End of Period
 
  (In Thousands of Dollars)

Year Ended December 31, 2003:                              
Deducted from accounts and notes receivable for doubtful accounts   $ 2,409   $ 1,180   $ —   $ (1,593 )(a) $ 1,996

Year Ended December 31, 2004:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deducted from accounts and notes receivable for doubtful accounts   $ 1,996   $ 307   $ —   $ (697 )(a) $ 1,606

Year Ended December 31, 2005:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deducted from accounts and notes receivable for doubtful accounts   $ 1,606   $ 975   $ —   $ (866 )(a) $ 1,715
(a)
Uncollectible accounts and notes receivable charged off, net of amounts recovered.

        All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are not applicable, and therefore have been omitted.


Item 17.    Undertakings

        The registrant hereby undertakes:

        Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions described under "Indemnification of Directors and Officers" above, 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


SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Newton, Massachusetts on December 12, 2006.

    TRAVELCENTERS OF AMERICA LLC

 
 
By:
/s/   JOHN G. MURRAY       
Name: John G. Murray
Title: President

        Each person whose signature appears below appoints John G. Murray and Mark L. Kleifges, and each of them, any of whom may act without the joinder of the other, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement and any Registration Statement (including any amendment thereto) for this offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he or she might or would do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them or their or his or her substitute and substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed below by the following persons in the capacities indicated on December 12, 2006.


Signature

 
Title


 

 

 

/s/   JOHN G. MURRAY       
John G. Murray
 
President (principal executive officer)


/s/   MARK L. KLEIFGES       
Mark L. Kleifges

 

Treasurer (principal financial and accounting officer)

/s/   BARRY M. PORTNOY       
Barry M. Portnoy
 
Managing Director

/s/   THOMAS M. O'BRIEN       
Thomas M. O'Brien
 
Managing Director

II-5


EXHIBIT INDEX

Exhibit
Number
   
  Description
2.1   —   Agreement and Plan of Merger by and among TravelCenters of America, Inc., Hospitality Trust, HPT TA Merger Sub Inc., and Oak Hill Capital Partners
3.1   —   Certificate of Formation of TravelCenters of America LLC
3.2   *   Amended and Restated Limited Liability Company Operating Agreement of TravelCenters of America LLC
5.1   *   Legal Opinion of Richards, Layton & Finger, P.A.
8.1   *   Tax Opinion of Sullivan & Worcester LLP
10.1   *   Form of Transaction Agreement by and among Hospitality Properties Trust, HPT TA Properties Trust, HPT TA Properties LLC, TravelCenters of America LLC and Reit Management & Research LLC
10.2   *   Form of Shared Services Agreement between TravelCenters of America LLC and Reit Management & Research LLC
10.3   *   Form of Master Lease Agreement by and among HPT TA Properties Trust and HPT TA Properties LLC, as Landlord, and TA Leasing LLC, as Tenant
10.4   *   Form of Guaranty Agreement made by TravelCenters of America LLC, TravelCenters of America Holding Company LLC, TA Operating LLC and TA Franchise Systems LLC, as Guarantors, for the benefit of the Landlord under the Master Lease Agreement
10.5   —   Freightliner Express Operating Agreement, dated as of July 21, 1999, by and among Freightliner LLC, TA Operating Corporation, and TA Franchise Systems Inc.
10.6   —   Amendment No. 1 to Freightliner Express Operating Agreement, dated as of November 9, 2000, by and among Freightliner LLC, TA Operating Corporation, and TA Franchise Systems Inc.
10.7   —   Amendment No. 2 to Freightliner Express Operating Agreement, dated as of April 15, 2003, by and among Freightliner LLC, TA Operating Corporation, and TA Franchise Systems Inc.
10.8   —   Amendment No. 3 to Freightliner Express Operating Agreement, dated as of July 26, 2006 by and among Freightliner LLC, TA Operating Corporation, and TA Franchise Systems Inc.
10.9   —   Employment Agreement, dated as of January 1, 2000, by and between TravelCenters of America, Inc. and Timothy L. Doane
10.10   —   Amendment No. 1 to Employment Agreement, dated as of May 26, 2000, by and between TravelCenters of America, Inc. and Timothy L. Doane
10.11   —   Amendment No. 2 to Employment Agreement, dated as of December 14, 2004, by and between TravelCenters of America, Inc. and Timothy L. Doane
10.12   —   Amendment No. 3 to Employment Agreement, dated as of March 30, 2006, by and between TravelCenters of America, Inc., and Timothy L. Doane.
10.13   —   Employment Agreement, dated as of January 1, 2000, by and between TravelCenters of America, Inc. and James W. George
10.14   —   Amendment No. 1 to Employment Agreement, dated as of May 26, 2000, by and between TravelCenters of America, Inc. and James W. George
10.15   —   Employment Agreement, dated January 1, 2005, by and between TravelCenters of America, Inc. and Joseph A. Szima
10.16   —   Employment Agreement, dated as of January 1, 2006, by and between TravelCenters of America, Inc. and Steven C. Lee
10.17   *   2006 Equity Compensation Plan of the Company including form of Share Option Agreement
21.1   *   Subsidiaries of TravelCenters of America LLC
23.1   *   Consent of Sullivan & Worcester LLP (contained in Exhibit 8.1)
         

23.2   *   Consent of Richards, Layton & Finger, P.A. (contained in Exhibit 5.1)
23.3   —   Consent of PricewaterhouseCoopers LLP with respect to TravelCenters of America LLC
23.4   —   Consent of PricewaterhouseCoopers LLP with respect to TravelCenters of America, Inc.
99.1   —   Consent of Patrick F. Donelan to being named a Director
99.2   —   Consent of Barbara D. Gilmore to being named a Director
99.3   —   Consent of Arthur G. Koumantzelis to being named a Director
99.4   *   Form of Audit Committee Charter of TravelCenters of America LLC
99.5   *   Form of Compensation Committee Charter of TravelCenters of America LLC
99.6   *   Form of Nominating and Governance Committee Charter of TravelCenters of America LLC
*
To be filed by amendment.



QuickLinks

TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
QUESTIONS AND ANSWERS ABOUT THE SPIN OFF
SUMMARY
The Distribution
The Company
Organization and relationships
RISK FACTORS
THE SPIN OFF
DIVIDEND POLICY
CAPITALIZATION
THE COMPANY
SELECTED HISTORICAL FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
MANAGEMENT
SECURITY OWNERSHIP AFTER THE SPIN OFF
CERTAIN RELATIONSHIPS
FEDERAL INCOME TAX CONSIDERATIONS
SHARES ELIGIBLE FOR FUTURE SALE
DESCRIPTION OF OUR LIMITED LIABILITY COMPANY AGREEMENT
ANTI-TAKEOVER PROVISIONS
LIABILITY OF SHAREHOLDERS FOR BREACH OF RESTRICTIONS ON OWNERSHIP
TRANSFER AGENT AND REGISTRAR
PLAN OF DISTRIBUTION
LEGAL MATTERS
EXPERTS
WHERE YOU CAN FIND MORE INFORMATION
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
TravelCenters of America LLC Introduction to Unaudited Pro Forma Financial Statements
TravelCenters of America LLC Unaudited Pro Forma Consolidated Balance Sheet at September 30, 2006 (dollars in thousands)
TravelCenters of America LLC Unaudited Pro Forma Consolidated Statement of Operations For the Year Ended December 31, 2005 (in thousands except per share data)
TravelCenters of America LLC Unaudited Pro Forma Consolidated Statement of Operations For Nine Months Ended September 30, 2006 (in thousands except per share amounts)
TravelCenters of America LLC Notes to Unaudited Pro Forma Consolidated Financial Statements (amounts in thousands, except share and per share amounts)
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TravelCenters of America LLC Consolidated Balance Sheet October 10, 2006
TravelCenters of America LLC Notes to Consolidated Balance Sheet October 10, 2006
TravelCenters of America, Inc. Unaudited Consolidated Balance Sheet
TravelCenters of America, Inc. Unaudited Consolidated Statement of Operations and Comprehensive Income (Loss)
TravelCenters of America, Inc. Unaudited Consolidated Statement of Cash Flows
TravelCenters of America, Inc. Unaudited Consolidated Statement of Nonredeemable Stockholders' Equity
TravelCenters of America, Inc. Selected Notes to Unaudited Consolidated Financial Statements Nine Months Ended September 30, 2005 and 2006
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TravelCenters of America, Inc. Consolidated Balance Sheet
TravelCenters of America, Inc. Consolidated Statement of Operations and Comprehensive Income (Loss)
TravelCenters of America, Inc. Consolidated Statement of Cash Flows
TravelCenters of America, Inc. Consolidated Statement of Nonredeemable Stockholders' Equity
TravelCenters of America, Inc. Notes to Consolidated Financial Statements Years Ended December 31, 2003, 2004 and 2005
PART II INFORMATION NOT REQUIRED IN PROSPECTUS
SIGNATURES
EXHIBIT INDEX

Exhibit 2.1

AGREEMENT AND PLAN OF MERGER

among

TravelCenters of America, Inc.

Hospitality Properties Trust

HPT TA Merger Sub Inc.

and

Oak Hill Capital Partners, L.P.

September 15, 2006 

                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----
ARTICLE I DEFINITIONS                                                         1
   Section 1.01. Certain Definitions                                          1

ARTICLE II THE MERGER                                                         6
   Section 2.01. The Merger                                                   6
   Section 2.02. Effect of Merger                                             6
   Section 2.03. Additional Actions                                           6
   Section 2.04. Certificate of Incorporation By-laws, Directors and
                 Officers of the Surviving Corporation                        7
   Section 2.05. Effect of Merger on Capital Stock of Constituent
                 Corporations                                                 7
   Section 2.06. Effect of Merger on Company Stock Options and Company
                 Warrants                                                     9
   Section 2.07. Withholding                                                 10

ARTICLE III PAYMENT OF MERGER CONSIDERATION                                  10
   Section 3.01. Merger Consideration                                        10
   Section 3.02. Post-Closing Adjustment of Merger Consideration             11
   Section 3.03. Escrow Agreement and Escrow Fund                            14
   Section 3.04. Exchange of Certificates Representing Company Securities    14

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY                     16
   Section 4.01. Organization                                                16
   Section 4.02. Subsidiaries                                                17
   Section 4.03. Capitalization                                              17
   Section 4.04. Authorization                                               18
   Section 4.05. No Violation                                                18
   Section 4.06. Approvals                                                   19
   Section 4.07. Financial Statements                                        19
   Section 4.08. Absence of Certain Transactions                             20
   Section 4.09. Taxes                                                       21
   Section 4.10. Litigation                                                  23
   Section 4.11. Environmental Matters                                       23
   Section 4.12. Title to Property                                           25
   Section 4.13. Condition of Property                                       26
   Section 4.14. Contracts                                                   26
   Section 4.15. Employee and Labor Matters and Plans                        27
   Section 4.16. Insurance Policies                                          30
   Section 4.17. Intellectual Property                                       30
   Section 4.18. Permits                                                     30
   Section 4.19. Compliance with Laws                                        31
   Section 4.20. Brokerage Fees                                              31
   Section 4.21. Affiliate Agreements                                        31
   Section 4.22. No Other Representations or Warranties                      31


                                        i

ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB            32
   Section 5.01. Organization                                                32
   Section 5.02. Authorization                                               32
   Section 5.03. No Violation                                                32
   Section 5.04. Approvals                                                   33
   Section 5.05. Litigation                                                  33
   Section 5.06. Available Funds                                             33
   Section 5.07. Brokerage Fees                                              34
   Section 5.08. No Other Representations or Warranties                      34

ARTICLE VI COVENANTS                                                         34
   Section 6.01. Interim Operations of the Company                           34
   Section 6.02. Access to Information                                       36
   Section 6.03. Consents and Approvals                                      37
   Section 6.04. Employment Matters                                          38
   Section 6.05. Publicity                                                   39
   Section 6.06. Notification of Certain Matters                             40
   Section 6.07. Directors' and Officers' Indemnification                    40
   Section 6.08. Additional Agreements                                       41
   Section 6.09. Cooperation with Financing                                  41
   Section 6.10. Conduct of Business of Parent and Merger Sub
                 Pending the Merger                                          42
   Section 6.11. No Adverse Change in Financial Commitments                  42
   Section 6.12. Termination of Affiliate Contracts                          42
   Section 6.13. Stockholder Approval; Stockholder Notice                    43
   Section 6.14. No Solicitation or Negotiation                              43
   Section 6.15. Repayment of Outstanding Indebtedness                       43
   Section 6.16. Consultation                                                44
   Section 6.17. Real Property Matters                                       44
   Section 6.18. Additional Financial Statements                             44
   Section 6.19. No Control of Other Party's Business                        45

ARTICLE VII CONDITIONS                                                       45
   Section 7.01. Conditions to the Obligations of All Parties                45
   Section 7.02. Conditions to the Obligations of Parent and
                 Merger Sub                                                  45
   Section 7.03. Conditions to the Obligations of the Company                46

ARTICLE VIII CLOSING; TERMINATION                                            47
   Section 8.01. Closing                                                     47
   Section 8.02. Termination                                                 48
   Section 8.03. Effect of Termination                                       48

ARTICLE IX GENERAL PROVISIONS                                                49
   Section 9.01. Non-Survival of Representations and Warranties              49
   Section 9.02. Costs and Expenses                                          49
   Section 9.03. Notices                                                     49


                                       ii

   Section 9.04. Stockholders Representative                                 51
   Section 9.05. Counterparts                                                51
   Section 9.06. Entire Agreement                                            51
   Section 9.07. Governing Law; Exclusive Jurisdiction                       51
   Section 9.08. Third Party Rights; Assignment                              52
   Section 9.09. Waivers and Amendments                                      52
   Section 9.10. Schedules                                                   52
   Section 9.11. Enforcement                                                 52
   Section 9.12. [Reserved.]                                                 53
   Section 9.13. Headings; Interpretation                                    53
   Section 9.14. Nonliability of Trustees                                    53


                                       iii














INDEX OF SCHEDULES





The Disclosure Schedules to the Agreement and Plan of Merger have been
omitted and will be supplementally furnished to the Securities and Exchange
Commission upon request.




iv












INDEX OF DEFINED TERMS











Accounting Firm                                                              12
Actual Balance Sheet                                                         11
Actual Net Working Capital                                                   11
Additional Financial Statements                                              44
Additional Transaction Bonuses                                                1
Affiliate                                                                     2
Agreement                                                                     1
Antitrust Division                                                           37
Balance Sheet Date                                                           19
Certificate of Merger                                                         6
Certificates                                                                 14
Closing                                                                      47
Closing Date                                                                  2
Closing Transaction Bonus Payout Amount                                      10
Code                                                                          2
Company                                                                       1
Company Balance Sheet                                                        19
Company Closing Costs                                                         2
Company Common Stock                                                          2
Company Material Adverse Effect                                               2
Company Preferred Stock                                                      17
Company Securities                                                           13
Company Stock                                                                 2
Company Stock Option                                                          9
Company Stock Option Exercise Price                                           9
Company Subsidiary                                                            2
Company Warrant                                                               2
Company Warrant Exercise Price                                                9
Confidentiality Agreement                                                    36
Constituent Corporations                                                      6
Covered Parties                                                              40
Covered Party                                                                40
D&T                                                                          12
Dataroom                                                                      3
Declaration                                                                  53
DGCL                                                                          1
Dissenting Shares                                                             8
Effective Time                                                                3
Employee Plan                                                                27
Environmental Law                                                             3
Environmental Permit                                                          3
ERISA                                                                         3
ERISA Affiliate                                                               3
Escrow Agent                                                                 14
Escrow Agreement                                                             14
Escrow Amount                                                                14
Escrow Fund                                                                  14
Estimated Merger Consideration                                               11
Estimated Net Working Capital                                                11
Estimated Per Share Merger Consideration                                     11
Excess Payment                                                               13
Exchange Act                                                                  3
Exchange Agent                                                               14
Exchange Fund                                                                14
Final Statement                                                              13
Financial Statements                                                         19
Financing                                                                    33
Financing Commitment                                                         33
FIRPTA Certificate                                                           15
FTC                                                                          37
Fully Diluted Basis                                                           3
GAAP                                                                          3
Good Faith Deposit                                                           47
Governmental Antitrust Authority                                             37
Governmental Entity                                                           3
Hazardous Materials                                                           3
HSR Act                                                                       3
Indebtedness                                                                  4
Intellectual Property                                                        30
Intercompany Indebtedness                                                     4
Interest Factor                                                               4
IRS                                                                           4
Judgment                                                                      4
knowledge                                                                     4
Law                                                                           4
Leased Premises                                                              25
Letter of Transmittal                                                        14
Liabilities                                                                   4
Lien                                                                          4
Material Contracts                                                           27
Merger                                                                        1
Merger Consideration                                                         10
Merger Sub.                                                                   1
Net Working Capital                                                          11
Notice of Disagreement                                                       12
Oak Hill                                                                      1














v

















Owned Property                                                               25
Parent                                                                        1
Parent Closing Costs                                                          4
Payment Shortfall                                                            13
Per Share Merger Consideration                                               11
Permits                                                                       5
Person                                                                        5
Proceeding                                                                    5
PWC                                                                          44
Recipients                                                                   13
Requisite Regulatory Approvals                                                5
SEC                                                                           5
Secretary of State                                                            6
Securities                                                                   41
Securities Act                                                                5
Special Costs                                                                 5
Stock Option Plan                                                             9
Stockholder Approval                                                          5
Stockholder Notice                                                           43
Stockholders                                                                  1
Stockholders Agreement                                                        5
Stockholders Representative                                                   1
Subsidiary                                                                    5
Surveys                                                                      26
Surviving Corporation                                                         6
Target Net Working Capital                                                    5
Tax Return                                                                   23
Taxes                                                                        23
Transaction Bonus Agreements                                                  6
Warrant Agreement                                                             6
Working Capital Adjustment Amount                                            11
Working Capital Statement                                                    11
Written Consent                                                               1




















AGREEMENT AND PLAN OF MERGER





This AGREEMENT AND PLAN OF MERGER (the "AGREEMENT"), dated September
15, 2006, among TravelCenters of America, Inc., a Delaware corporation (the
"COMPANY"), Hospitality Properties Trust, a Maryland real estate investment
trust ("PARENT"), HPT TA Merger Sub Inc., a Delaware corporation and a
wholly-owned subsidiary of Parent ("MERGER SUB"), and Oak Hill Capital Partners,
L.P., a Delaware limited partnership ("OAK HILL"), solely in its capacity as the
representative for the stockholders of the Company as further provided herein
(in such capacity, the "STOCKHOLDERS REPRESENTATIVE").




WHEREAS, the Board of Directors of the Company has (i) determined that
it is in the best interests of the Company and the stockholders of the Company,
and declared it advisable, to enter into this Agreement with Parent and Merger
Sub providing for the merger (the "MERGER") of Merger Sub with and into the
Company in accordance with the General Corporation Law of the State of Delaware
(the "DGCL"), upon the terms and subject to the conditions set forth herein,


(ii) approved this Agreement in accordance with the DGCL, upon the terms and
subject to the conditions set forth herein, and (iii) resolved to recommend
adoption of this Agreement by the stockholders of the Company;




WHEREAS, the Boards of Directors of Parent and Merger Sub have each
approved, and the Board of Directors of Merger Sub has declared it advisable for
Merger Sub to enter into, this Agreement providing for the Merger in accordance
with the DGCL, upon the terms and subject to the conditions set forth herein;
and




WHEREAS, simultaneously herewith, each of the stockholders of the
Company listed on SCHEDULE 4.04(b) hereto (the "STOCKHOLDERS"), who collectively
own in excess of 90% of the voting power of the Company, will execute and
deliver a written consent (the "WRITTEN CONSENT") (i) approving this Agreement,
the Merger and the other transactions contemplated hereby, and (ii) designating
Oak Hill as the Stockholders Representative.




NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements of the parties hereto contained herein, and other good
and valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, and subject to the satisfaction or waiver of the conditions
hereof, the parties hereto agree as follows:





ARTICLE I






DEFINITIONS





SECTION 1.01. CERTAIN DEFINITIONS.




Certain terms used in this Agreement and the Schedules hereto are
defined as follows:




"ADDITIONAL TRANSACTION BONUSES" means the transaction bonuses granted
by the Company to senior executives of the Company between the date hereof and
the Closing Date.




1









"AFFILIATE" of a Person shall mean another Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such Person.




"CLOSING DATE" shall mean the date on which the Closing occurs.




"CODE" shall mean the Internal Revenue Code of 1986, as amended.




"COMPANY CLOSING COSTS" shall mean (i) any and all costs and expenses
of the Company or its Affiliates incurred prior to the Effective Time in
connection with, or as a result of or related to, the sale process with respect
to the Company and the negotiation, preparation, execution and closing of the
transactions contemplated hereby, including, but not limited to, the fees and
expenses of all professional advisors, investment bankers, brokers, accountants,
attorneys, consultants, engineers and representatives of the Company or its
Affiliates and (ii) the amount of any Additional Transaction Bonuses; PROVIDED,
HOWEVER, any Special Costs shall not be deemed to be, or included in the
calculation of, Company Closing Costs.




"COMPANY COMMON STOCK" shall mean the Common Stock, $0.0001 par value
per share, of the Company.




"COMPANY MATERIAL ADVERSE EFFECT" shall mean any change or effect that
is materially adverse to the business, properties, assets, financial condition
or results of operations of the Company and the Company Subsidiaries taken as a
whole, other than any change or effect resulting from (i) changes in general
economic conditions, (ii) general changes or developments in the industries in
which the Company and the Company Subsidiaries operate, including changes in
refined product margin, (iii) the announcement of this Agreement and the
transactions contemplated hereby, including any termination of, reduction in or
similar negative impact on relationships, contractual or otherwise, with any
customers, suppliers, distributors, partners or employees of the Company and the
Company Subsidiaries, or the performance of this Agreement and the transactions
contemplated hereby, including compliance with the covenants set forth herein,


(iv) changes in any Tax Laws or applicable accounting regulations or principles
or (v) any attack on, or by, outbreak or escalation of hostilities or acts of
terrorism involving, the United States, any declaration of war by the United
States or any other national or international calamity, unless, in the case of
the foregoing clauses (i) and (ii), such changes referred to therein have a
materially disproportionate effect on the Company and the Company Subsidiaries
taken as a whole relative to other participants in the industries in which the
Company and the Company Subsidiaries operate.




"COMPANY STOCK" shall mean all shares of the Company's capital stock
authorized, issued or outstanding prior to the Effective Time, of whatever class
or series, including all of the Company Common Stock.




"COMPANY SUBSIDIARY" shall mean any Subsidiary of the Company.




"COMPANY WARRANT" shall mean each Initial Warrant or Contingent
Warrant (as defined in the Warrant Agreement) issued by the Company to purchase
shares of Company Common Stock.




2









"DATAROOM" shall mean the online data rooms (Intralinks and ENFOS)
established by Lehman Brothers for purposes of the transactions contemplated by
this Agreement.




"EFFECTIVE TIME" shall mean such date and time as mutually agreed by
the parties hereto and set forth in the Certificate of Merger.




"ENVIRONMENTAL LAW" shall mean any and all applicable Laws of any
Governmental Entity relating to protection of natural resources, the environment
or human health (as relating to exposure to hazardous or toxic substances,
materials or chemicals including petroleum, gasoline, diesel fuel, asbestos and
polychlorinated biphenyls).




"ENVIRONMENTAL PERMIT" shall mean any license, permit, authorization
or registration required by any Environmental Law for the operation of business
of the Company or any Company Subsidiary.




"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.




"ERISA AFFILIATE" shall mean each trade or business (whether or not
incorporated) which together with the Company would be deemed to be a 'single
employer' within the meaning of Section 4001(b)(1) of ERISA or subsections (b),


(c), (m) or (o) of Section 414 of the Code.




"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.




"FULLY DILUTED Basis" means, when used with respect to the outstanding
number of shares of Company Stock as of any date, the sum of (i) all shares of
Company Stock outstanding on that date PLUS (ii) the number of shares of Company
Common Stock issuable upon the exercise, exchange or conversion of (A) all
Company Stock Options vested prior to the date hereof and vesting and
exercisable at the Effective Time pursuant to their terms and (B) the Company
Warrants.




"GAAP" shall mean United States generally accepted accounting
principles consistently applied.




"GOVERNMENTAL ENTITY" shall mean any federal, state, local or foreign
government or political subdivision thereof, or any court, administrative agency
or commission, or other governmental authority or instrumentality or any
subdivision thereof.




"HAZARDOUS MATERIALS" shall mean any substance, material, waste,
pollutant, or contaminant that is regulated as toxic or hazardous or other term
of similar regulatory import or that is subject to remedial, investigatory or
reporting obligations under any Environmental Law including petroleum and
petroleum products (including oil, gasoline and diesel fuel), friable asbestos
and polychlorinated biphenyls.




"HSR ACT" shall mean the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended, and the rules and regulations thereunder.




3









"INDEBTEDNESS" means, with respect to the Company and the Company
Subsidiaries, without duplication and exclusive of Intercompany Indebtedness,
all indebtedness for borrowed money, including the aggregate principal amount
of, and any accrued interest and applicable prepayment charges or premiums
(including any "make-whole" or similar premium or penalty payable in connection
with redemption or otherwise extinguishing such indebtedness whether or not then
due) with respect to all borrowed money, purchase money financing and
capitalized lease obligations.




"INTERCOMPANY INDEBTEDNESS" means, with respect to the Company and the
Company Subsidiaries, all outstanding Indebtedness owed by the Company or any
Company Subsidiary to the Company or any other Company Subsidiary.




"INTEREST FACTOR" means an amount equal to the Merger Consideration
(calculated excluding the Interest Factor) times the interest rate set forth in
SCHEDULE 1.01 hereto (accruing on a per diem basis), compounded monthly, for the
period, if any, from and including February 1, 2007 to and including the Closing
Date.




"IRS" shall mean the United States Internal Revenue Service, or any
successor agency thereto.




"JUDGMENT" shall mean any and all judgments, orders, writs,
directives, rulings, decisions, injunctions (temporary, preliminary or
permanent), decrees or awards of any Governmental Entity.




"KNOWLEDGE" in the phrase "TO ITS KNOWLEDGE" or a similar phrase, when
used to qualify a representation of a party, shall be deemed to be the actual
knowledge, after reasonable investigation, of (i) the individuals listed on
SCHEDULE 1.01(a) hereto, if the Company is making such representation, and (ii)
the individuals listed on SCHEDULE 1.01(b) hereto, if Parent or Merger Sub is
making such representation, in each case, at the time such representation is
made.




"LAW" shall mean all laws (whether statutory or otherwise),
ordinances, codes, rules, regulations and Judgments of all Governmental
Entities.




"LIABILITIES" shall mean any liabilities or obligations of any nature,
whether accrued, absolute, contingent or otherwise, whether due or to become
due.




"LIEN" shall mean, with respect to any property or asset, any
mortgage, pledge, security interest, lien (statutory or other), charge,
encumbrance or other similar restrictions or limitations of any kind or nature
whatsoever on or with respect to such property or asset.




"PARENT CLOSING COSTS" shall mean any and all costs and expenses of
Parent, Merger Sub or their Affiliates incurred in connection with, or as a
result of, the negotiation, preparation, execution and closing of the
transactions contemplated hereby, including, but not limited to, the fees and
expenses of all professional advisors, investment bankers, brokers, accountants,
attorneys, consultants, engineers and representatives of Parent, Merger Sub or
their Affiliates.




4









"PERMITS" shall mean all franchises, licenses, authorizations,
approvals, permits (excluding Environmental Permits), consents or other rights
granted by any Governmental Entity and all certificates of convenience or
necessity, immunities, privileges, licenses, concessions, consents, grants,
ordinances and other rights, of every character whatsoever required for the
conduct of business and the use of properties by the Company and the Company
Subsidiaries as currently conducted or used.




"PERSON" shall mean any individual, corporation, partnership, limited
liability company, joint venture, trust, unincorporated organization or other
entity or government or any agency or political subdivision thereof.




"PROCEEDING" shall mean any action, claim, suit, or legal,
administrative, arbitration or other alternative dispute resolution proceeding
or investigation.




"REQUISITE REGULATORY APPROVALS" shall mean all permits, approvals,
consents and filings required to be obtained or made with or by any Governmental
Entity under any Law or Judgment, and all waiting periods required to expire
prior to the Merger under applicable Laws, including notifications, approvals
and filings pursuant to the HSR Act.




"SEC" shall mean the Securities and Exchange Commission.




"SECURITIES ACT" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.




"SPECIAL COSTS" shall mean (i) any costs incurred by the Company
related to the Evaluation of Environmental Liabilities Associated with
TravelCenters of America, dated August 2006, prepared by Environ International
Corporation, (ii) any and all costs and expenses incurred by the Company in
connection with any title searches, title insurance commitments or title
insurance policies, including endorsements, obtained in connection with the
Merger or the Financing, and (iii) any and all out of pocket costs and expenses,
as specifically requested or approved by Parent or Merger Sub in writing, (x)
paid by the Company or any Company Subsidiary prior to the Effective Time or (y)
accrued by the Company or any Company Subsidiary on the Actual Balance Sheet, in
order for the Company or any Company Subsidiary to comply with its obligations
pursuant to Section 6.09 or otherwise.




"STOCKHOLDER APPROVAL" shall mean the adoption and approval of this
Agreement and the Merger by the affirmative vote of or the written consent by
the holders of a majority of outstanding shares of all classes of the Company
Stock voting together as a single class.




"STOCKHOLDERS AGREEMENT" shall mean the Stockholders' Agreement, dated
as of November 14, 2000, as amended, among the Company, the Stockholders
Representative, the other Stockholders and the other parties thereto.




"SUBSIDIARY" shall mean, in respect of any specified Person, any
company or other entity of which 50% or more of the outstanding share capital or
other equity interest is owned, directly or indirectly, by such specified
Person.





"TARGET NET WORKING CAPITAL" shall mean $100,000,000.





5









"TRANSACTION BONUS AGREEMENTS" shall mean those agreements between the
Company and certain employees of the Company or a Company Subsidiary set forth
on SCHEDULE 3.01(ix).




"WARRANT AGREEMENT" shall mean that Warrant Agreement, dated as of
November 14, 2000, as amended, between the Company and State Street Bank and
Trust Company, as warrant agent.





ARTICLE II






THE MERGER





SECTION 2.01. THE MERGER.




On the Closing Date, subject to the terms and conditions of this
Agreement, Merger Sub shall be merged with and into the Company in accordance
with the DGCL, with the Company being the surviving corporation (following the
Merger, the "SURVIVING CORPORATION"). The Company and Merger Sub are sometimes
collectively referred to as the "CONSTITUENT CORPORATIONS." The Merger shall be
effective at the Effective Time when a Certificate of Merger, together with any
other documents required by the Laws of the State of Delaware to effectuate the
Merger (collectively, the "CERTIFICATE OF MERGER"), properly executed shall be
filed with the Secretary of State of the State of Delaware (the "SECRETARY OF
STATE"), which filing shall be made on the Closing Date, as provided for in


Section 8.01(a).




SECTION 2.02. EFFECT OF MERGER.




By virtue of the Merger, as of the Effective Time, all rights,
privileges, immunities, powers and purposes of the Company and Merger Sub, and
all the property, real and personal, including causes of action, and every other
asset of the Company and Merger Sub, shall vest in the Surviving Corporation,
without any further act or deed, and the separate existence of Merger Sub shall
cease and the corporate existence of the Company as the Surviving Corporation
and a corporation organized under the DGCL shall continue unaffected and
unimpaired by the Merger. The Surviving Corporation shall assume and be liable
for all the Liabilities, obligations and penalties of the Company and Merger
Sub. No liability or obligation due or to become due, and no claim or demand for
any cause of action existing against either the Company or Merger Sub, or any
stockholder, officer or director thereof, shall be released or impaired by the
Merger. No Proceeding, whether civil or criminal, then pending by or against
either the Company or Merger Sub or any stockholder, officer or director
thereof, shall abate or be discontinued as a result of or by the Merger, but may
be enforced, prosecuted, settled or compromised as if the Merger had not
occurred, or the Surviving Corporation may be substituted in such Proceeding in
place of either the Company or Merger Sub.




SECTION 2.03. ADDITIONAL ACTIONS.




If, at any time after the Effective Time, the Surviving Corporation
shall consider or be advised that any deeds, bills of sale, assignments,
assurances or any other actions or things are necessary or desirable to (i)
vest, perfect or confirm, of record or otherwise, in the Surviving Corporation,
its right, title or interest in, to or under, any of the rights, properties or
assets of the




6









Company or Merger Sub acquired or to be acquired by the Surviving Corporation as
a result of, or in connection with, the Merger or (ii) otherwise carry out the
purposes of this Agreement, the Company and its officers and directors and
Merger Sub and its officers and directors shall be deemed to have granted the
Surviving Corporation an irrevocable power of attorney to execute and deliver
all such deeds, bills of sale, assignments and assurances and to take and do all
such other actions and things as may be necessary or desirable to vest, perfect
or confirm any and all rights, title, properties or assets in the Surviving
Corporation or to otherwise carry out the purposes of this Agreement; and the
officers and directors of the Surviving Corporation are fully authorized in the
name of the Company and of Merger Sub or otherwise to take any and all such
actions.




SECTION 2.04. CERTIFICATE OF INCORPORATION BY-LAWS, DIRECTORS AND
OFFICERS OF THE SURVIVING CORPORATION.




(a) At the Effective Time, the certificate of incorporation of the
Surviving Corporation shall, subject to the requirements of Section 6.07(b)
hereof, be amended to read in its entirety as the certificate of incorporation
of Merger Sub read immediately prior to the Effective Time, except that the name
of the Surviving Corporation shall be TravelCenters of America, Inc. and the
provision in the certificate of incorporation of Merger Sub naming its
incorporator shall be omitted.




(b) At the Effective Time, the by-laws of the Surviving Corporation
shall, subject to the requirements of Section 6.07(b) hereof, be amended so as
to read in their entirety as the by-laws of Merger Sub as in effect immediately
prior to the Effective Time, until thereafter amended in accordance with
applicable Law, except the references to Merger Sub's name shall be replaced by
references to TravelCenters of America, Inc.




(c) The directors of the Company immediately prior to the Effective
Time shall submit their resignations to be effective as of the Effective Time.
Immediately after the Effective Time, Parent shall take the necessary action to
cause the directors of Merger Sub immediately prior to the Effective Time to be
the directors of the Surviving Corporation, each to hold office in accordance
with the certificate of incorporation and by-laws of the Surviving Corporation
and applicable Law. The officers of the Company immediately prior to the
Effective Time shall be the initial officers of the Surviving Corporation, each
to hold office until the earlier of their resignation or removal.




SECTION 2.05. EFFECT OF MERGER ON CAPITAL STOCK OF CONSTITUENT
CORPORATIONS.




At the Effective Time, by virtue of the Merger and without any action
on the part of the holders of any class of capital stock of the Constituent
Corporations, the following shall occur:




(a) CONVERSION OF COMPANY STOCK. Each share of Company Stock issued
and outstanding immediately prior to the Effective Time (other than (x) shares
to be canceled pursuant to Section 2.05(c) and (y) Dissenting Shares) shall, at
the Effective Time, by virtue of the Merger and without any action on the part
of the holder thereof, be converted into the right to receive cash from Parent
in an amount equal to the Per Share Merger Consideration payable to




7









the holder thereof, without interest thereon, upon the surrender of the
certificate previously representing such share of Company Common Stock.




(b) SHARES OF MERGER SUB. Each share of the common stock, $0.01 par
value per share, of Merger Sub, issued and outstanding immediately prior to the
Effective Time, shall, at the Effective Time, by virtue of the Merger and
without any action on the part of Merger Sub or any other Person, be converted
into one fully paid and nonassessable share of common stock, $0.01 par value per
share, of the Surviving Corporation.




(c) TREASURY SHARES OF COMPANY; PARENT OWNED SHARES. All shares of
Company Stock held in the treasury of the Company and each share of Company
Stock owned or otherwise held by Parent, Merger Sub or any direct or indirect
wholly-owned subsidiary of Parent or the Company immediately prior to the
Effective Time shall be canceled and retired without any conversion thereof and
no payment or distribution shall be made with respect thereto.




(d) SHARES OF DISSENTING STOCKHOLDERS.




(i) Notwithstanding anything in this Agreement to the contrary,
any shares of Company Stock that are issued and outstanding as of the
Effective Time and that are held by a holder who has properly exercised
such holder's appraisal rights (the "DISSENTING SHARES") under the DGCL
shall not be converted into the right to receive the consideration provided
for in this Section 2.05, unless and until such holder shall have failed to
perfect, or shall have effectively withdrawn or lost, his or her right to
dissent from the Merger under the DGCL and to receive such consideration as
may be determined to be due with respect to such Dissenting Shares pursuant
to and subject to the requirements of the DGCL. If any such holder shall
have so failed to perfect or have effectively withdrawn or lost such right,
each share of such holder's Company Stock shall thereupon be deemed to have
been converted into and to have become, as of the Effective Time, the right
to receive, without any interest thereon, the consideration provided for in
this Section 2.05.




(ii) The Company shall give Parent prompt notice of any notice or
demands for appraisal or payment for shares of Company Stock received by
the Company. The Company shall not, without the prior written consent of
Parent (not to be unreasonably withheld), make any payment with respect to,
or settle, offer to settle or otherwise negotiate, with respect to any such
demands.




(iii) Dissenting Shares, if any, after payments of fair value in
respect thereto have been made to the holders thereof pursuant to the DGCL,
shall be canceled.




(e) STOCK TRANSFER BOOKS. At the Effective Time, the stock transfer
books of the Company shall be closed and there shall be no further registration
of transfers of shares of Company Stock on the records of the Company. If, after
the Effective Time, certificates previously representing shares of Company Stock
are presented to the Surviving Corporation, they shall be canceled and exchanged
for cash pursuant to the provisions of this Section 2.05.




8









(f) CANCELLATION AND RETIREMENT OF SHARES OF COMPANY STOCK. At and
after the Effective Time, holders of certificates which immediately prior to the
Effective Time represented outstanding shares of Company Stock shall cease to
have any rights as stockholders of the Company, except the right to receive the
cash into which their shares of Company Stock have been converted by the Merger
as provided in Section 2.05(a).




SECTION 2.06. EFFECT OF MERGER ON COMPANY STOCK OPTIONS AND COMPANY
WARRANTS.




(a) At the Effective Time, each stock option granted under the 2001
Stock Incentive Plan of TravelCenters of America, Inc. (the "2001 STOCK OPTION
PLAN") that is outstanding and unexercised at the Effective Time (a "COMPANY
STOCK OPTION") shall be cancelled at the Effective Time. In exchange for such
cancellation, the holder of such Company Stock Option shall receive the right to
payment from Parent immediately following the Effective Time (subject to any
applicable withholding taxes), in respect of the portion of the Company Stock
Option that is exercisable at the Effective Time by its terms (prior to giving
effect to such cancellation), of an amount in cash equal to (1) the total number
of shares of Company Common Stock subject to such exercisable portion of such
Company Stock Option held by such holder, MULTIPLIED BY (2) the excess, if any,
of the Per Share Merger Consideration (calculated based on the Estimated Merger
Consideration, subject to subsequent adjustment pursuant to Section 3.02) over
the exercise price per share of the Company Stock set forth in such Company
Stock Option subject to such exercisable portion of such Company Stock Option
held by such holder (such exercise price, the "COMPANY STOCK OPTION EXERCISE
PRICE").




(b) As soon as practicable following the date of this Agreement, the
Company shall use commercially reasonable efforts to take such actions and
obtain such consents as are necessary under the Warrant Agreement to amend the
Warrant Agreement in order to provide that each Company Warrant that is
outstanding and unexercised at the Effective Time shall be cancelled at the
Effective Time. In exchange for such cancellation, the holders of the Company
Warrants shall receive the right to payment from Parent immediately following
the Effective Time (subject to any applicable withholding taxes), of an amount
in cash equal to (1) the total number of shares of Company Common Stock for
which such Company Warrant was exercisable for immediately prior to
cancellation, MULTIPLIED BY (2) the excess of the Per Share Merger Consideration
(calculated based on the Estimated Merger Consideration, subject to subsequent
adjustment pursuant to Section 3.02) over the exercise price per share of the
Company Common Stock set forth in such Company Warrant (such exercise price, the
"COMPANY WARRANT EXERCISE PRICE"). If the Warrant Agreement is not so amended,
immediately following the Effective Time, Parent shall deposit with the Warrant
Agent (as defined in the Warrant Agreement) an amount equal to the excess of the
Per Share Merger Consideration (calculated based on the Estimated Merger
Consideration, subject to subsequent adjustment pursuant to Section 3.02)
multiplied by the total number of shares of Company Common Stock for which all
Company Warrants were exercisable for immediately prior to the Effective Time
over the aggregate sum of the Company Warrant Exercise Price for all Company
Warrants outstanding and unexercised immediately prior to the Effective Time.




9









SECTION 2.07. WITHHOLDING.




Each of Parent and the Surviving Corporation shall be entitled to
deduct and withhold from the consideration otherwise payable to any Person under
this Article II, such amounts as are required to be deducted and withheld under
any provision of applicable Law.





ARTICLE III






PAYMENT OF MERGER CONSIDERATION





SECTION 3.01. MERGER CONSIDERATION.




The "MERGER CONSIDERATION" shall be an amount equal to:




(i)    One billion, nine hundred twenty-five million Dollars
($1,925,000,000.00),




(ii)   PLUS the aggregate sum of the Company Stock Option
Exercise Price for all Company Stock Options (or portions
thereof) that are exercisable at the Effective Time by
their terms,




(iii)  PLUS the aggregate sum of the Company Warrant Exercise
Price for all Company Warrants,




(iv)   PLUS an amount equal to any Special Costs to the extent
paid prior to the Effective Time or accrued as a Liability
on the Actual Balance Sheet,




(v)    MINUS the aggregate amount of Indebtedness of the Company
and the Company Subsidiaries as of the close of business
on the day immediately preceding the Closing Date,




(vi)   MINUS the amount, if any, by which the Estimated Net
Working Capital (as defined below) is less than the Target
Net Working Capital;




(vii)  PLUS the amount, if any, by which the Estimated Net
Working Capital is greater than the Target Net Working
Capital;




(viii) PLUS OR MINUS, as the case may be, the amount of any
upward or downward adjustment (if any) of the Merger
Consideration, respectively, pursuant to Section 3.02 in
an amount equal to the Working Capital Adjustment Amount
(as defined below),




(ix)   MINUS 50% of the aggregate amount of all amounts payable
to employees of the Company or a Company Subsidiary
pursuant to the Transaction Bonus Agreements (the "CLOSING
TRANSACTION BONUS PAYOUT AMOUNT");




10









(x)    MINUS the amount of any Company Closing Costs to the
extent payable by the Company or a Company Subsidiary
after the close of business on the day immediately
preceding the Closing Date; and




(xi)   PLUS an amount equal to the Interest Factor.




The "PER SHARE MERGER CONSIDERATION" shall be (A) the Merger Consideration
DIVIDED BY (B) the aggregate number of shares of Company Stock outstanding
immediately prior to the Effective Time (calculated on a Fully Diluted Basis).


The "ESTIMATED MERGER CONSIDERATION" and the "ESTIMATED PER SHARE MERGER


CONSIDERATION" shall mean the Merger Consideration and the Per Share Merger
Consideration (in each case, calculated without giving effect to Section
3.01(viii)) as estimated in good faith by the Company no more than three (3)
days prior to the Closing. Copies of such estimates (and the Company's
calculation thereof) shall be provided to Parent and Merger Sub prior to the
Closing Date.




SECTION 3.02. POST-CLOSING ADJUSTMENT OF MERGER CONSIDERATION.




(a) ESTIMATED NET WORKING CAPITAL. The Company shall, concurrently
with the delivery to Parent and Merger Sub of its calculations of the Estimated
Merger Consideration and Estimated Per Share Merger Consideration, cause to be
prepared and delivered to Parent and Merger Sub a statement setting forth the
estimated calculation of the Net Working Capital (as defined below) (the
"ESTIMATED NET WORKING CAPITAL") as of the close of business on the day
immediately preceding the Closing Date. "NET WORKING CAPITAL" shall mean the
current assets less the current liabilities of the Company and the Company
Subsidiaries, all as determined in accordance with GAAP applied in a manner
consistent with the Company Balance Sheet; PROVIDED that, in determining Net
Working Capital, the following shall be excluded: (i) the current portion of any
Indebtedness; (ii) Company Closing Costs to the extent a deduct in calculating
the Merger Consideration pursuant to Section 3.01(x) and (iii) the Closing
Transaction Bonus Payout Amount.




(b) ACTUAL BALANCE SHEET AND WORKING CAPITAL STATEMENT. Within
forty-five (45) days following the Closing Date, Parent shall deliver to the
Stockholders Representative and the Escrow Agent a consolidated balance sheet of
the Company and the Company Subsidiaries as of the close of business on the day
immediately preceding the Closing Date prepared in accordance with GAAP applied
on a basis consistent with the Company Balance Sheet and shall reflect a pro
rata portion of all known adjustments which would be required in a year-end
closing of the books of the Company and the Company Subsidiaries but shall not
give effect to any changes in accruals (including tax accruals with respect to
the exercise or cancellation of Company Stock Options between January 1, 2006
and the Effective Time) for any items resulting from the transactions
contemplated hereby (the "ACTUAL BALANCE SHEET"). The Actual Balance Sheet shall
be accompanied by a statement, certified by the Chief Financial Officer of the
Surviving Corporation (the "WORKING CAPITAL STATEMENT"), that sets forth in
reasonable detail the Actual Net Working Capital, the Working Capital Adjustment
Amount, and the final calculation of the Merger Consideration. The "ACTUAL NET
WORKING CAPITAL" shall mean the Net Working Capital of the Company and the
Company Subsidiaries as of the close of business on the day immediately
preceding the Closing Date. The "WORKING CAPITAL ADJUSTMENT AMOUNT" shall mean
the difference between the Estimated Net Working Capital and the Actual Net




11









Working Capital. The Surviving Corporation shall give the Stockholders
Representative reasonable access to its books, records, work papers (including,
to the extent applicable, accountants' work papers, subject to such
confidentiality restrictions as the Surviving Corporation's accountants shall
reasonably request) and employees in connection with the review by the
Stockholders Representative of the Actual Balance Sheet and the Working Capital
Statement. In the course of preparing the Actual Balance Sheet and the Working
Capital Statement, Parent may consult with the Stockholders Representative in
order to resolve any issues that otherwise might become the subject of a dispute
under Section 3.02(c).




(c) DISPUTE RESOLUTION. The Stockholders Representative may dispute
the calculation of the Actual Net Working Capital, the Working Capital
Adjustment Amount or the calculation of the Merger Consideration set forth in
the Working Capital Statement by delivering a written notice (a "NOTICE OF
DISAGREEMENT") to Parent, the Surviving Corporation and the Escrow Agent within
thirty (30) days following the delivery of the Working Capital Statement to the
Stockholders Representative. Any Notice of Disagreement delivered pursuant to
this Section 3.02(c) shall specify in reasonable detail the nature and dollar
amount of any disagreement so asserted. If the Stockholders Representative fails
to deliver a timely Notice of Disagreement, Parent's calculation of the Actual
Net Working Capital, the Working Capital Adjustment Amount or the calculation of
the Merger Consideration (as set forth in the Working Capital Statement) shall
be deemed the final Actual Net Working Capital, the Working Capital Adjustment
Amount and/or Merger Consideration, as applicable. During the thirty (30) days
following the delivery of a Notice of Disagreement, Parent and the Stockholders
Representative shall seek in good faith to resolve in writing any differences
which they may have with respect to the matters specified in the Notice of
Disagreement and such final resolution shall be the final Merger Consideration.
If at the end of such 30-day period, the parties are unable to resolve such
dispute, the parties shall submit the dispute to Deloitte & Touche LLP ("D&T")
or, if D&T is unavailable, another mutually satisfactory (to Parent and the
Stockholders Representative) independent "big-four" accounting firm (the
"ACCOUNTING FIRM") for its review and resolution of all matters (but only such
matters) which remain in dispute and which were properly included in the Notice
of Disagreement, and the Accounting Firm shall make final determinations of the
Actual Net Working Capital, the Working Capital Adjustment Amount and/or the
Merger Consideration in accordance with the guidelines and procedures set forth
in this Agreement. If the parties are unable to mutually agree on the selection
of the Accounting Firm, the "big-four" accounting firm that is not D&T or the
independent public accountants of the Company and Parent shall serve as the
Accounting Firm. The parties will cooperate with the Accounting Firm during the
term of its engagement. In resolving any matters in dispute with respect to any
assets or liabilities as to which both the Stockholders Representative and
Parent have assigned values, the Accounting Firm may not assign a value to any
item in dispute greater than the greatest value for such item assigned by the
Stockholders Representative, on the one hand, or by Parent, on the other hand,
or less than the smallest value for such item assigned by the Stockholders
Representative, on the one hand, or by Parent, on the other hand. The Accounting
Firm's determination will be based solely on presentations (including work
papers) by the Stockholders Representative and Parent or by their respective
representatives which are in accordance with the guidelines and procedures set
forth in this Agreement (I.E., not on the basis of an independent review). The
determination of the Actual Net Working Capital, Working Capital Adjustment
Amount and the Merger Consideration shall become final and binding on the
parties and such determination of the Merger Consideration shall be deemed the
final Merger Consideration on




12









the date the Accounting Firm delivers to the Stockholders Representative, Parent
and the Surviving Corporation its final resolution in writing (such resolution,
the "FINAL STATEMENT") (and the parties will direct the Accounting Firm to
complete its determination and deliver the Final Statement within thirty (30)
days following the submission of the disputed matters to it). The fees and
expenses of the Accounting Firm shall be paid by (i) Parent if the final
calculation of the Merger Consideration, as set forth in the Final Statement, is
greater than the amount of the Merger Consideration as set forth in the Working
Capital Statement and (ii) the holders of shares of Company Stock, Company Stock
Options and the Company Warrants (collectively, the "COMPANY SECURITIES") (but
only such holders of Company Stock Options all or a portion of which are
exercisable at the Effective Time by their terms) on a pro rata basis based upon
their respective percentages of the Merger Consideration, if the final
calculation of the Merger Consideration, as set forth in the Final Statement, is
less than or equal to the amount of the Merger Consideration as set forth in the
Working Capital Statement. To the extent such fees and expenses of the
Accounting Firm are payable by the holders of the Company Securities, such fees
and expenses shall be paid using the funds deposited into the Escrow Fund to the
extent such holders are entitled to such funds.




(d) PAYMENT OF ADJUSTMENT TO MERGER CONSIDERATION.




(i) EXCESS PAYMENT. If the Estimated Merger Consideration is
GREATER THAN the Merger Consideration as finally determined pursuant to this


Section 3.02 (such difference, an "EXCESS PAYMENT"), then an aggregate amount
equal to such Excess Payment shall be distributed to Parent from the Escrow Fund
(after deducting any applicable fees and expenses of the Accounting Firm payable
by Parent (if any) in accordance with Section 3.02(c)). Any remaining funds in
the Escrow Fund (after deducting any applicable fees and expenses of the
Accounting Firm payable by the holders of the Company Securities (if any) in
accordance with Section 3.02(c)) shall be distributed to the holders of the
Company Securities eligible to receive such distributions from the Escrow Fund
as determined based on the final Per Share Merger Consideration (such holders
collectively, the "RECIPIENTS") pursuant to the Escrow Agreement. If the Excess
Payment exceeds the aggregate amount of the Escrow Fund, then each Recipient
entitled to receive distributions from the Escrow Fund shall, on demand, pay to
Parent a pro rata amount of such excess based upon their respective rights to
receive the Merger Consideration.




(ii) PAYMENT SHORTFALL. If the Estimated Merger Consideration is
LESS THAN the final Merger Consideration (such difference, a "PAYMENT
SHORTFALL"), then (A) Parent shall pay to the holders of Company Securities an
aggregate amount (after deducting any applicable fees and expenses of the
Accounting Firm payable by the holders of the Company Securities (if any) in
accordance with Section 3.02(c)) equal to the Payment Shortfall, to be
distributed based on their respective rights to receive the Merger Consideration
and (B) each Recipient, as appropriate and depending upon such Recipient's
interest in and to the Escrow Fund, shall receive from such fund such
Recipient's relative interest in the Escrow Fund pursuant to the Escrow
Agreement.




(iii) DISTRIBUTIONS. The parties hereto agree that any and all
distributions which are required to be made from the Escrow Fund under this


Section 3.02 shall be made in accordance with the Escrow Agreement.




13









SECTION 3.03. ESCROW AGREEMENT AND ESCROW FUND.




At or prior to the Closing, Parent, the Company, the Stockholders
Representative and The Bank of New York (the "ESCROW AGENT") shall enter into an
Escrow Agreement on mutually agreeable terms consistent with the terms of this
Agreement or as may be acceptable to the parties thereto (the "ESCROW
AGREEMENT"). The Escrow Agreement shall provide for the creation of an escrow
fund (the "ESCROW FUND") consisting of Ten Million Dollars ($10,000,000) of the
Merger Consideration (the "ESCROW AMOUNT") to be applied to any downward
adjustment of the Merger Consideration pursuant to Section 3.02. The Escrow
Agreement shall contain provisions with respect to the timing and procedure of
distributions of funds from the Escrow Fund consistent with the terms hereof.




SECTION 3.04. EXCHANGE OF CERTIFICATES REPRESENTING COMPANY
SECURITIES.




(a) EXCHANGE AGENT. Immediately following the Effective Time (but in
any event on the Closing Date), Parent shall deposit with an exchange agent
selected by the Parent and reasonably acceptable to the Company (the "EXCHANGE
AGENT"), for the benefit of the holders of Company Securities (other than the
Company Warrants if they have not been amended), for exchange in accordance with
this Agreement, an amount equal to (i) the Estimated Merger Consideration MINUS


(ii) the Escrow Amount, MINUS (iii) the product of (A) the Per Share Merger
Consideration (calculated based on the Estimated Merger Consideration) and (B)
the total number of Dissenting Shares, and, if the Company Warrants have not
been amended, MINUS (iv) an amount equal to the excess, if any, of the Per Share
Merger Consideration (calculated based on the Estimated Merger Consideration)
MULTIPLIED BY The total number of shares of Company Common Stock for which all
Company Warrants were exercisable for immediately prior to the Effective Time
over the aggregate sum of the Company Warrant Exercise Price for all Company
Warrants outstanding and unexercised immediately prior to the Effective Time
(the "EXCHANGE FUND") (it being understood that any adjustment to the Estimated
Merger Consideration pursuant to Section 3.02 shall be paid in accordance with
such section). Immediately following the Effective Time (but in any event on the
Closing Date), Parent shall deposit the Escrow Amount with the Escrow Agent,
which shall be held and disbursed by the Escrow Agent in accordance with the
Escrow Agreement. Promptly after the Effective Time, the Exchange Agent shall
mail to each record holder of an outstanding certificate, certificates or
instruments as of the Effective Time (other than instruments representing
Company Warrants, if they have not been amended) which immediately prior to the
Effective Time represented Company Securities (the "CERTIFICATES"), a letter of
transmittal and instructions for use in effecting the surrender of the
Certificates for payment therefor (collectively, the "LETTER OF TRANSMITTAL"),
which Letter of Transmittal shall include (i) representations of the holder for
the benefit of the Surviving Corporation regarding title to the Company
Securities, due authorization to sell or transfer the Company Securities
pursuant to the terms of this Agreement, and the absence of any conflicts or
breaches by such holder in connection therewith, (ii) an agreement for the
benefit of Parent that such holder shall pay to Parent, to the extent
applicable, such stockholders' pro rata portion of the amounts required to be
paid pursuant to Section 3.02(d)(i) plus any cost of collection thereof, (iii)
such information as the Stockholders Representative may reasonably request be
included therein, including an agreement for the benefit of the Stockholders
Representative that such holder agrees to Oak Hill's designation as the
Stockholders Representative and that Oak Hill shall have the full and exclusive
authority to, in its capacity as the Stockholders Representative,




14









execute any and all instruments or other documents on behalf of such holder, and
do any and all other acts or things on behalf of such holder, which the
Stockholders Representative may deem necessary or advisable, or which may be
required pursuant to this Agreement or otherwise, in connection with the
consummation of the Merger and the other transactions contemplated hereby,
including (w) agreeing with Parent or Merger Sub with respect to any matter or
thing required or deemed necessary by the Stockholders Representative in
connection with the provisions of this Agreement calling for the agreement of
the holder and giving and receiving notices on behalf of the holder, all in the
absolute discretion of the Stockholders Representative, (x) in general, doing
all things and performing all acts, including executing and delivering all
agreements, certificates, receipts, consents, elections, instructions, and other
instruments or documents contemplated by, or deemed by the Stockholders
Representative to be necessary or advisable in connection with, this Agreement,


(y) executing and delivering the Escrow Agreement, and (z) negotiating,
settling, compromising and otherwise handling the post-closing adjustment of the
Merger Consideration pursuant to Section 3.02, and (iv) such other documents as
may reasonably be required in connection with such surrender, in customary form
to be agreed upon by the Company and Parent prior thereto, including a
certificate of each holder of Company Stock conforming to the requirements of
Treasury Regulation Section 1.1445-2(b)(2) certifying that such holder is not a
"foreign person" for purposes of Section 1445 of the Code (a "FIRPTA
CERTIFICATE") or, for those holders of Company Stock who are "foreign persons"
for purposes of Section 1445 of the Code, a statement to that effect.




(b) EXCHANGE PROCEDURES.




(i) After the Effective Time, each holder of Certificate(s)
shall, upon surrender to the Exchange Agent of such Certificate(s) and a
fully and properly completed Letter of Transmittal and acceptance thereof
by the Exchange Agent, be entitled to receive the amount of the Merger
Consideration into which such surrendered Certificate(s) have been
converted or exchanged pursuant to this Agreement.




(ii) After the Effective Time, there shall be no further transfer
on the records of the Company or its transfer agent of Certificates, and if
Certificates are presented to the Company for transfer, they shall be
canceled against delivery of the Merger Consideration into which such
Certificates have been converted or exchanged pursuant to this Agreement.
If any Merger Consideration is to be paid to a Person other than the Person
in whose name the surrendered Certificate is registered, it shall be a
condition of such exchange that the Certificate so surrendered shall
properly be endorsed, with signature guaranteed, or otherwise in proper
form for transfer and that the Person requesting such exchange shall pay to
the Surviving Corporation or its transfer agent any transfer or other taxes
required, or establish to the satisfaction of the Surviving Corporation or
its transfer agent that such taxes have been paid or are not applicable.




(iii) Until surrendered as contemplated by this Section 3.04(b),
each Certificate (for the purposes of clarification, excluding certificates
relating to Company Warrants, if the Company Warrants have not been amended
prior to the Effective Time) shall be deemed at any time after the
Effective Time to represent only the right to receive upon such surrender
the Merger Consideration into which such Certificate has been converted or
exchanged pursuant to this Agreement and after the Effective Time the




15









holders thereof shall cease to have any other rights as holders of Company
Securities. No interest will be paid or will accrue on any amount payable
to holders of Company Securities as Merger Consideration.




(c) NO FURTHER RIGHTS IN COMPANY SECURITIES. All Merger Consideration
paid upon the surrender for exchange of Certificates in accordance with the
terms of this Agreement shall be deemed to have been issued and paid in full
satisfaction of all rights pertaining to the Company Securities represented
thereby.




(d) TERMINATION OF EXCHANGE FUND. Any portion of the Exchange Fund
which remains undistributed to the holders of Certificates upon the expiration
of two years following the Effective Time shall be delivered to the Surviving
Corporation upon demand, and any holders of Company Securities who have not
theretofore complied with this Article III shall thereafter look only to the
Surviving Corporation, and only as general creditors thereof, for payment of any
claim for Merger Consideration.




(e) NO LIABILITY. None of the Surviving Corporation, Parent, Merger
Sub or the Exchange Agent shall be liable to any Person in respect of any cash
or other assets from the Exchange Fund delivered to a public official pursuant
to any applicable abandoned property, escheat or similar law. If any Certificate
has not been surrendered prior to the later of (i) two years after the Effective
Time and (ii) immediately prior to the date on which any cash or other assets,
if any, in respect of such Certificate would otherwise escheat to or become the
property of any Governmental Entity, any such cash or other assets in respect of
such Certificate shall, to the extent permitted by applicable Law, become the
property of the Surviving Corporation, free and clear of all claims or interests
of any Person previously entitled thereto.




(f) INVESTMENT OF EXCHANGE FUND. The Exchange Agent shall invest the
cash included in the Exchange Fund in a money market deposit account selected by
Parent prior to the Closing. Any interest and other income resulting from such
investments shall be paid to Parent.





ARTICLE IV






REPRESENTATIONS AND WARRANTIES OF THE COMPANY





The Company hereby represents and warrants to Parent and Merger Sub as
follows:




SECTION 4.01. ORGANIZATION.




Each of the Company and each Company Subsidiary is a corporation or
other entity duly organized, validly existing and (to the extent the concept of
good standing is applicable to such entity) in good standing under the laws of
the jurisdiction of its incorporation or organization and has full corporate
power and authority to conduct its business as it is now being conducted and to
own, operate or lease the properties and assets it currently owns, operates or
holds under lease. Each of the Company and each Company Subsidiary is duly
qualified or licensed to do business and is in good standing as a foreign entity
in each jurisdiction where such qualification or licensing is necessary, except
where the failure to so qualify or be so licensed would not, individually or in
the aggregate, have a Company Material Adverse Effect.




16









SECTION 4.02. SUBSIDIARIES.




SCHEDULE 4.02 sets forth a list, as of the date hereof of (a) all
Company Subsidiaries and (b) all other entities in which the Company or any
Company Subsidiary has an aggregate equity investment in excess of $100,000
(other than through a mutual fund or similar investment account). Except as set
forth in SCHEDULE 4.02, all outstanding shares of stock of any Company
Subsidiary have been duly authorized and validly issued and are fully paid and
non-assessable, and are owned, directly or indirectly, by the Company free and
clear of any Liens, and there are no outstanding options, warrants, convertible
securities, calls, rights, commitments, preemptive rights or agreements or
instruments or understandings of any character, obligating the Company or any
Company Subsidiary to issue, deliver or sell, or cause to be issued, delivered
or sold, contingently or otherwise, additional shares of such Company Subsidiary
or any securities or obligations convertible or exchangeable for such shares or
to grant, extend or enter into any such option, warrants, convertible security,
call, right, commitment, preemptive right or agreement. Except for transactions
among Company Subsidiaries or among the Company and Company Subsidiaries, with
respect to any Company Subsidiary or other entity in which the Company or any
Company Subsidiary has an equity investment (other than through a mutual fund or
similar investment account), neither the Company nor any Company Subsidiary has


(i) an obligation to make a loan or other capital contribution, (ii) any
liability for the obligations of such entity or (iii) any other obligations to
such entity.




SECTION 4.03. CAPITALIZATION.




(a) The authorized capital stock of the Company consists of 20,000,000
shares of Company Common Stock and 5,000,000 shares of Preferred Stock, par
value $0.0001 per share (the "COMPANY PREFERRED STOCK"). As of the date of this
Agreement:




(i)   6,937,003 shares of Company Common Stock were issued and
outstanding,




(ii)  no shares of Company Preferred Stock were issued and
outstanding,




(iii) Company Warrants to purchase an aggregate 277,165 shares of
Company Common Stock were issued and outstanding, and




(iv)  939,375 shares of Company Common Stock were reserved and
available for issuance upon or otherwise deliverable in
connection with the grant of equity-based awards or the exercise
of Company Stock Options issued pursuant to the 2001 Stock
Option Plan.




(b) SCHEDULE 4.03(b) sets forth the number, class or series and record
owner of all Company Stock and Company Stock Options as of the date of this
Agreement. All outstanding shares of Company Stock have been duly authorized,
validly issued and are fully paid and non-assessable. Except for the Company
Stock Options and the Company Warrants or as set forth in the Stockholders
Agreement and except as set forth in SCHEDULE 4.03(b), there are no authorized
or outstanding options, warrants, convertible securities, calls, rights,
commitments, preemptive rights or agreements or instruments or understandings of
any character, to which the Company is a party or by which the Company is bound,
obligating the Company to issue, deliver




17









or sell, or cause to be issued, delivered or sold, contingently or otherwise,
additional shares of Company Stock or any securities or obligations convertible
into or exchangeable for such shares or to grant, extend or enter into any such
option, warrant, convertible security, call, right, commitment, preemptive right
or agreement. No bonds, notes or other indebtedness having the right to vote on
matters on which stockholders may vote are issued or outstanding.




SECTION 4.04. AUTHORIZATION.




(a) THE COMPANY. The Company has all requisite corporate power and
authority to enter into this Agreement and to perform its obligations hereunder.
The execution and delivery of this Agreement by the Company and the consummation
by it of the transactions contemplated hereby have been duly and validly
authorized by all necessary action of the Board of Directors of the Company, and
no other corporate proceedings on the part of the Company are necessary to
authorize the Merger, this Agreement and the transactions contemplated hereby.
This Agreement has been duly and validly executed and delivered by the Company,
and assuming due authorization, execution and delivery by each other party
hereto, constitutes a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as such
enforcement may be subject to (i) bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or other similar laws relating to creditors'
rights generally, (ii) general principles of equity (whether applied in a
proceeding at law or in equity) and (iii) any implied covenant of good faith and
fair dealing.




(b) THE STOCKHOLDERS. The class and total number of shares of Company
Stock owned by each Stockholder is as set forth in SCHEDULE 4.04(b). Such
shares, taken in the aggregate, represent in excess of 90% of the voting power
of the Company.




SECTION 4.05. NO VIOLATION.




Except as set forth on SCHEDULE 4.05, the execution and delivery of
this Agreement by the Company does not, and the consummation by the Company of
the transactions contemplated by this Agreement will not, (i) conflict with, or
result in any violation of or default or loss of any benefit under, any
provision of the Company's or any Company Subsidiary's Certificate of
Incorporation or By-Laws; (ii) subject to the matters described in Section 4.06,
conflict with or result in any violation of or default or loss of any benefit
under, any Law or Judgment of any Governmental Entity to which the Company or
any Company Subsidiary is a party or to which any of its property is subject; or


(iii) conflict with, or result in a breach, termination (or right of
termination) or violation of or default or loss of any benefit under the terms
of any agreement, contract, indenture or other instrument to which the Company
or any Company Subsidiary is a party or to which any of its property is subject,
or constitute a default or loss of any right thereunder or any event which, with
the lapse of time or notice or both, might result in a default or loss of any
right thereunder, except with respect to clauses (ii) and (iii) hereof, where
the conflict, breach, termination, violation, default, loss of benefit,
acceleration or loss of right would not, individually or in the aggregate, have
a Company Material Adverse Effect.




18









SECTION 4.06. APPROVALS.




The execution and delivery of this Agreement and the consummation of
the transactions contemplated by this Agreement by the Company will not require
any consent, approval, order, authorization or Permit of any counterparty to a
Material Contract or a lease pursuant to which the Company or a Company
Subsidiary leases the Leased Premises, or a party to any agreement, declaration,
covenant, restriction, option agreement or right of first refusal affecting
title to the Owned Property or Leased Premises, or any other third party, or any
Governmental Entity under any Law or Judgment, other than consents, approvals,
orders, authorizations, Permits and Requisite Regulatory Approvals disclosed in
SCHEDULE 4.06 and no declaration, filing or registration with any Governmental
Entity is required by the Company or any Company Subsidiary in connection with
the execution and delivery of this Agreement and the consummation of
transactions contemplated by this Agreement, except for (i) the filing of the
Certificate of Merger as required by the DGCL and the filing of appropriate
documents with the relevant authorities of other states in which the Company or
any Company Subsidiary is qualified to do business, (ii) filings pursuant to the
HSR Act, and the expiration or termination of the applicable waiting period
under the HSR Act, or (iii) such other consents, approvals, orders,
authorizations, actions, registrations, declarations and filings the failure of
which to be obtained or made individually or in the aggregate has not had and
would not reasonably be expected to (w) have a Company Material Adverse Effect,


(x) impair in any material respect the ability of the Company to perform its
obligations under this Agreement, (y) prevent or materially impede, interfere
with, hinder or delay the consummation of the transactions contemplated by this
Agreement, or (z) filings and notices not required to be made or given until
after the Effective Time.




SECTION 4.07. FINANCIAL STATEMENTS.




(a) SCHEDULE 4.07(a) contains copies of the following consolidated
financial statements of the Company and the Company Subsidiaries (collectively,
the "FINANCIAL STATEMENTS"): (i) the audited consolidated balance sheet of the
Company and the Company Subsidiaries as of December 31, 2005 and December 31,
2004 and the related statements of income and cash flows for each of the three
years in the period ending December 31, 2005 (together with the notes thereto);
and (ii) the unaudited consolidated balance sheet (the "COMPANY BALANCE SHEET")
of the Company and the Company Subsidiaries as of June 30, 2006 (the "BALANCE
SHEET DATE") and the related unaudited statements of income and cash flows for
the six month period ending on the Balance Sheet Date. The Financial Statements


(i) present fairly in all material respects the consolidated financial condition
and results of operations of the Company and the Company Subsidiaries as of the
dates thereof or for the periods covered thereby, except as otherwise noted
therein (subject, in the case of the unaudited Financial Statements, to normal
year-end adjustments) and (ii) have been prepared in accordance with GAAP
applied on a consistent basis for the periods involved (except as may be
indicated in the notes thereto or as described on SCHEDULE 4.07(a)).




(b) Except as set forth in SCHEDULE 4.07(b), neither the Company nor
any Company Subsidiary has any Liabilities, other than Liabilities (i) that have
been specifically disclosed or accrued or reserved for in the Company Balance
Sheet, (ii) that have been incurred in the ordinary course of business since the
date thereof, (iii) of the type that are not required by




19









GAAP to be included in or, in the notes to, a balance sheet prepared in
accordance with GAAP, (iv) relating to operating leases incurred in accordance
with the terms of such leases in the ordinary course of business and which with
respect to clauses (ii) and (iii) that have not had, and would not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect.




SECTION 4.08. ABSENCE OF CERTAIN TRANSACTIONS.




Except as set forth on SCHEDULE 4.08 and except for the transactions
expressly contemplated hereby, since the Balance Sheet Date, the Company and the
Company Subsidiaries have conducted their respective businesses in the ordinary
and usual course consistent with past practices. Since the Balance Sheet Date,
there have not been any events, changes, effects or developments which have had
or would reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect. Except as set forth on SCHEDULE 4.08 and except
for actions following the date of this Agreement undertaken in accordance with
the other provisions of this Agreement, since the Balance Sheet Date:




(a)  Neither the Company nor any Company Subsidiary has (i) declared
or paid any dividend or made any other distribution with respect
to Company Stock or the capital stock of any Company Subsidiary
(other than dividends or distributions made by any Company
Subsidiary to the Company), (ii) redeemed, purchased, canceled or
otherwise acquired, directly or indirectly, any outstanding
shares of Company Stock or any shares of capital stock of any
Company Subsidiary (other than repurchases or acquisitions of
Company Stock from management pursuant to subscription agreements
entered into with such members of management), (iii) issued
additional stock (other than upon the exercise or conversion of
outstanding options, warrants or convertible securities),
warrants, options or any other similar rights to acquire Company
Stock or any shares of capital stock of any Company Subsidiary,
or (iv) split, combined or reclassified any shares of Company
Stock or any shares of capital stock of any Company Subsidiary or
issued or authorized the issuance of any other securities in
respect of, in lieu of or in substitution for shares of, shares
of Company Stock or any shares of capital stock of any Company
Subsidiary;




(b)  Neither the Company nor any Company Subsidiary has merged or
consolidated with any other Person or reorganized, restructured,
recapitalized, liquidated or filed a voluntary petition in
bankruptcy;




(c)  Neither the Company nor any Company Subsidiary has incurred any
obligation for borrowed money or entered into or modified any
material contract, agreement, commitment or arrangement with
respect to borrowed money, except borrowings in the ordinary
course of business pursuant to the Company's existing revolving
credit facilities;




20









(d)  Neither the Company nor any Company Subsidiary has granted any
increase in compensation to any salaried employees or paid any
bonus, except for increases in salary or wages or payment of
bonuses in the ordinary course of business or in accordance with
existing Employee Plans;




(e)  Other than provision of services or sales in the ordinary course
of business, neither the Company nor any Company Subsidiary has


(i) sold, leased, transferred or otherwise disposed of any of its
assets having a book or market value in excess of $1,000,000
individually or $10,000,000 in the aggregate, or (ii) entered
into, or consented to the entering into of, any agreement
granting a preferential right to sell, lease or otherwise dispose
of any of such assets;




(f)  Neither the Company nor any Company Subsidiary has (i) incurred
or committed to incur any capital expenditures or liabilities in
connection therewith other than capital expenditures or
liabilities that do not individually exceed $1,000,000; (ii)
acquired or agreed to acquire by merging or consolidating with,
or acquired or agreed to acquire by purchasing a substantial
portion of the assets of, or in any other manner, any business or
Person; or (iii) except with respect to inventory purchased or to
be purchased for resale to customers in the ordinary course of
business, acquired or agreed to acquire any other assets or made
any individual lease commitments involving payments in excess of
$500,000 in any one year;




(g)  The Company has not made any material Tax election;




(h)  The Company has not changed its methods of accounting in effect
at December 31, 2005, except as required by GAAP;




(i)  Neither the Company nor any Company Subsidiary has entered into
or amended any Material Contract other than in the ordinary
course of business; and




(j)  Neither the Company nor any Company Subsidiary has agreed or
committed to do any of the foregoing.




SECTION 4.09. TAXES.




Except as disclosed on SCHEDULE 4.09,




(a)  all material Tax Returns that are required to be filed (taking
into account all extensions) before the Effective Time for, by,
on behalf of or with respect to the Company or any Company
Subsidiary have been or will be filed with the applicable
Governmental Entity when due and all such Tax Returns are correct
and complete in all material respects and were prepared in
accordance with all applicable Tax Laws;




21









(b)  none of such Tax Returns are now under audit or examination by
any Governmental Entity the outcome of which would, individually
or in the aggregate, have a Company Material Adverse Effect;




(c)  each of the Company and each Company Subsidiary has paid or will
pay in full when due all Taxes due and payable or has made
adequate provision in the Company Balance Sheet for all material
Taxes, and neither the Company nor any Company Subsidiary has
knowledge of any reason for any Governmental Entity to assess any
material additional Taxes for any period for which Tax Returns
have been filed except with respect to those additional Taxes for
which reserves have been recorded by the Company;




(d)  no claim which currently remains unresolved has been made in
writing by an authority in a jurisdiction where the Company or
any Company Subsidiary does not file Tax Returns that the Company
or such Subsidiary currently is or may be subject to taxation by
that jurisdiction;




(e)  there are no material liens for Taxes upon any asset of the
Company or any Company Subsidiary other than with respect to
Taxes not yet due and payable;




(f)  there are no outstanding agreements or waivers extending the
statutory period of limitations applicable to the Tax Returns of
the Company or any Company Subsidiary, and neither the Company
nor any Company Subsidiary has requested or received any
extension of time within which to file any Tax Return, which Tax
Return has not yet been filed;




(g)  the Company and each Company Subsidiary has, within the time and
manner prescribed by Law, withheld, paid over and reported all
Taxes required to have been withheld, paid and reported in
connection with the amounts paid or owing to any employee,
independent contractor, creditor, stockholder, foreign Person or
other third party, except where such failure would not,
individually or in the aggregate, have a Company Material Adverse
Effect;




(h)  neither the Company nor any Company Subsidiary is a party to, is
bound by or has any obligation under any tax sharing agreement or
similar arrangement;




(i)  neither the Company nor any Company Subsidiary (i) is, or has
been, a member of an affiliated group filing a consolidated
federal income Tax Return other than a group the common parent of
which is the Company, nor (ii) has any material liability for the
Taxes of any entity under Treas. Reg. Section 1.1502-6 (or any
similar provision of Law), or as a transferee or successor, by
contract or otherwise;




22









(j)  none of the Company or any Company Subsidiary has agreed to make
any adjustment pursuant to Section 481(a) of the Code (or any
predecessor provision) or pursuant to any similar provision of
Law, and neither the IRS nor any other taxing authority has
proposed any such adjustment or change in accounting method; and




(k)  the Company and each Company Subsidiary have made available to
Parent complete and correct copies of all federal income Tax
Returns and a summary of all material federal, state, local and
foreign examination reports and statements of deficiencies
assessed against or agreed to by the Company or any Company
Subsidiary, in each case, filed or received since January 1,
2003.




For purposes of this Agreement, "TAXES" mean all United States federal, state,
local or foreign income, profits, estimated, gross receipts, windfall profits,
environmental (including taxes under Code Section 59A), severance, property,
intangible property, occupation, production, sales, use, license, excise,
emergency excise, franchise, capital gains, capital stock, employment,
withholding, social security (or similar), disability, transfer, registration,
stamp, payroll, goods and services, value added, alternative or add-on minimum
tax, estimated, or any other tax, custom, duty or governmental fee, or other
like assessment or charge of any kind whatsoever, together with any interest,
penalties, fines, related liabilities or additions to tax that may become
payable in respect thereof imposed by any Governmental Entity, whether disputed
or not. For purposes of this Agreement, "TAX RETURN" means any return,
declaration, report or similar statement required to be filed with respect to
any Taxes (including any attached schedules) including any information return,
claim for refund, amended return or declaration of estimated Tax.




SECTION 4.10. LITIGATION.




Except as set forth on SCHEDULE 4.10 and except as would not have a
Company Material Adverse Effect, as of the date of this Agreement, (i) there are
no Proceedings pending or, to the Company's knowledge, threatened against the
Company or any Company Subsidiary by or before any Governmental Entity or by any
Person; and (ii) neither the Company nor any Company Subsidiary is a party to
or, to the Company's knowledge, bound by any Judgment.




SECTION 4.11. ENVIRONMENTAL MATTERS.




(a) Except as set forth on SCHEDULE 4.11(a), (i) the Company and each
Company Subsidiary has been, and is, in compliance with all applicable
Environmental Laws, including requirements of Environmental Permits, except
where failure to comply would not, individually or in the aggregate, have or
reasonably be expected to have, a Company Material Adverse Effect; and (ii) the
Company and the Company Subsidiaries have all Environmental Permits, except for
those Environmental Permits which the failure to have would not, individually or
in the aggregate, have or reasonably be expected to have, a Company Material
Adverse Effect. All of the Environmental Permits are in full force and effect
and have not been repealed, except where any such failure to be in effect or
such repeal would not, individually or in the aggregate, have or reasonably be
expected to have, a Company Material Adverse Effect




23









and there is no proceeding or investigation pending, or to the knowledge of the
Company, threatened which would reasonably be expected to lead to the
revocation, amendment, failure to renew, or suspension of any such Environmental
Permit which would, individually or in the aggregate, have a Company Material
Adverse Effect. Each of the Company and each Company Subsidiary has filed when
due all materially accurate and complete applications necessary to timely renew
such Environmental Permits and all materially accurate and complete documents
required to be filed with any Governmental Entity in connection with such
Environmental Permits except where the failure to file such applications or
documents would not, individually or in the aggregate, have or reasonably be
expected to have, a Company Material Adverse Effect;




(b) Except as set forth in SCHEDULE 4.11(b) and except as would not,
individually or in the aggregate, have a Company Material Adverse Effect, there
are no outstanding or, to the Company's knowledge, threatened claims against the
Company or any Company Subsidiary (i) for damages or penalties relating to the
presence, generation, transportation, treatment, storage or disposal of
Hazardous Materials in, under or from any Owned Property, any Leased Premises,
or any property formerly owned, leased or operated by the Company or any Company
Subsidiary; or (ii) otherwise arising under Environmental Law; and neither the
Company nor any Company Subsidiary has received any written request for
information from any Governmental Entity regarding the disposal or release of
Hazardous Materials which would, individually or in the aggregate, have a
Company Material Adverse Effect;




(c) Except as set forth in SCHEDULE 4.11(c) and except as would not,
individually or in the aggregate, have a Company Material Adverse Effect,
neither the Company nor any Company Subsidiary, and, to the Company's knowledge,
no other Person has disposed of, spilled, or otherwise released any Hazardous
Materials at any Owned Property, any Leased Premises or any property formerly
owned, leased or operated by the Company or any Company Subsidiary, other than
in compliance with Environmental Laws and Hazardous Materials are not otherwise
present in the environment at such properties in amounts or conditions that
would reasonably be expected to result in liability under Environmental Law and
none of the Company and the Company Subsidiaries has released Hazardous
Materials at any other location which would reasonably be expected to result in
liability under Environmental Law;




(d) Except as set forth in SCHEDULE 4.11(d) and except as would not,
individually or in the aggregate, have a Company Material Adverse Effect, (i)
all Hazardous Materials generated by the Company or any Company Subsidiary have
been stored, transported, treated and disposed of by transporters and/or
treatment, storage and disposal facilities authorized under applicable
Environmental Laws or maintaining valid Environmental Permits, and (ii) to the
Company's knowledge, neither the Company nor any Company Subsidiary has disposed
of, transported, or arranged for the disposal or transportation of any Hazardous
Materials at or to any location at which there is or has been a release of
Hazardous Materials into the environment which, regarding each of the foregoing,
would reasonably be expected to result in liability to the Company or any
Company Subsidiary under Environmental Law;




(e) Except as would not, individually or in the aggregate, have a
Company Material Adverse Effect, the Company has made available to Parent
through the Dataroom




24









materially true, correct and complete copies of all material reports, studies,
and analyses that are in the possession, custody or control of the Company or
any Company Subsidiary and relate to compliance by the Company or any Company
Subsidiary with Environmental Law or contamination by Hazardous Materials as
they relate to the Owned Properties and Leased Premises;




(f) Except as set forth on Schedule 4.11(f) and except as would not,
individually or in the aggregate, have a Company Material Adverse Effect,
neither the Company nor any Company Subsidiary has retained or assumed by
contract any liability or responsibility for any environmental claims or
conditions; and




(g) Except as would not, individually or in the aggregate, have a
Company Material Adverse Effect, completion of the transaction contemplated by
this Agreement does not require permission of any Governmental Entity pursuant
to any so-called "transaction trigger" or other Environmental Law.




SECTION 4.12. TITLE TO PROPERTY.




(a) SCHEDULE 4.12 identifies by street address or freeway interchange,
all material real estate leased by the Company or any Company Subsidiary (the
"LEASED PREMISES") or owned by the Company or any Company Subsidiary ("OWNED
PROPERTY"). The Leased Premises are leased to the Company or such Company
Subsidiary pursuant to written leases, true and complete copies of which
(together with all amendments thereto) have been made available to Parent
through the Dataroom. Except as set forth in SCHEDULE 4.12, neither the Company
nor any Company Subsidiary is in material default under any material term of any
lease or, to the knowledge of the Company, any declaration, restriction,
covenant, option agreement or right of first refusal relating to the Leased
Premises or Owned Property, nor do any state of facts exist which with the
passage of time would constitute a material default of the Company or any
Company Subsidiary under any material term of any lease or, to the knowledge of
the Company, any declaration, restriction, covenant, option agreement or right
of first refusal relating to the Leased Premises or Owned Property. True and
complete copies of all title policies of the Company and the Company
Subsidiaries, in the possession of the Company as of the date hereof, relating
to the Owned Property and the Leased Premises have been made available to Parent
through the Dataroom. The Company or a Company Subsidiary has good and valid
title to the Owned Property, and good and valid leasehold title to the Leased
Premises, free and clear of all Liens, except (i) for Taxes, installments of
special assessments and governmental charges or levies not yet delinquent, (ii)
defects or irregularities in title, recorded easements, rights of way,
covenants, and other restrictions and utility easements, building restrictions,
zoning restrictions, encroachments, and other similar matters and other
easements and restrictions existing generally which do not and will not detract
in any material respect from the value, as currently operated, of any Owned
Property or Leased Premises, and do not and will not affect, in any material
respect, the ability of the Company or any Company Subsidiary to conduct its
business as it is currently being conducted on the Owned Property or the Leased
Premises, and (iii) mechanics', carriers', construction, workers', repairers'
and similar Liens arising or incurred in the ordinary course of business and


(iv) as otherwise set forth on SCHEDULE 4.12.




25









(b) The Company or a Company Subsidiary has good and merchantable
title to all personalty of any kind or nature owned by the Company or a Company
Subsidiary, free and clear of all Liens, (including, to the Company's knowledge,
Liens on the lessor's interest in leasehold estates leased to the Company),
except for (i) Liens identified on SCHEDULE 4.12, (ii) Liens for taxes,
assessments and governmental charges or levies not yet due and payable, (iii)
Liens imposed by Law, including statutory Liens of landlords, (iv) pledges or
deposits to secure obligations under workers' compensation laws or similar
legislation or to secure public or statutory obligations, (v) mechanics',
carriers', construction, workers', repairers' and similar Liens arising or
incurred in the ordinary course of business, (vi) Liens incurred or deposits
made in the ordinary course of business of the Company or any Company
Subsidiary, (vii) Liens of lessors of personal property; or (viii) minor
irregularities of title which do not materially detract from the value or use of
said property and assets. The Company or a Company Subsidiary as lessee has the
right under valid and subsisting leases to use, possess and control all
personalty leased by and material to the Company or such Company Subsidiary as
now used, possessed and controlled by the Company or such Company Subsidiary.




SECTION 4.13. CONDITION OF PROPERTY.




(a) All buildings, machinery, equipment and other tangible assets
currently being used by the Company or any Company Subsidiary which are owned or
leased by the Company or any Company Subsidiary are in good operating condition,
maintenance and repair, ordinary wear and tear and casualty damage excepted, are
usable in the ordinary course of business and are reasonably adequate and
suitable for the uses to which they are being put, except where any other
conditions of any building, machinery, equipment or other tangible asset would
not, individually or in the aggregate, have a Company Material Adverse Effect.




(b) True and complete copies of all surveys of the Company and the
Company Subsidiaries relating to the Owned Property and the Leased Premises in
possession of the Company as of the date hereof have been made available to
Parent through the Dataroom (the "SURVEYS"). Except as set forth in SCHEDULE
4.13(b) and except as would not individually or in the aggregate have a Company
Material Adverse Effect, the buildings and structures located on each of the
Owned Properties and Leased Premises currently have valid legal access to (i)
public roads or valid easements over private streets or private property for
such ingress to and egress from all such buildings and structures, and (ii)
water supply, telephone, gas and electric connections, and fire protection, in
each case as is necessary for the operation of such Owned Property or Leased
Premises as heretofore conducted. Except as set forth in SCHEDULE 4.13(b) or as
disclosed on the Surveys and except as would not individually or in the
aggregate have a Company Material Adverse Effect, to the Company's knowledge, no
material portion of such buildings or structures substantially encroaches upon
real property of another Person and no structure of any other Person
substantially encroaches upon any of the Owned Property or Leased Premises.




SECTION 4.14. CONTRACTS.




Except for such items with respect to the purchase of goods for resale
in the ordinary course of business or intercompany transactions between or among
the Company and/or Company Subsidiaries, SCHEDULE 4.14 is a complete list of all
written contracts, agreements,




26









commitments, leases, sales contracts and other agreements to which the Company
or any of the Company Subsidiaries is a party as of the date of this Agreement


(i) which provide for the receipt or expenditure by the Company or any Company
Subsidiary after the date of this Agreement, of more than $1,000,000 (or, in
either case, its equivalent in non-cash consideration) per year; (ii) which
provide for the acquisition, issuance or transfer of any securities of the
Company other than this Agreement, the Company Stock Options or the Company
Warrants, (iii) which create Liens on assets of the Company or any of the
Company Subsidiaries as security for indebtedness for borrowed money, (iv) with
any fast-food or motel franchisors; or (v) with any Stockholder (or any
affiliate of any Stockholder) pursuant to which the Company (or any Company
Subsidiary) will have any Liability or obligation following the Closing, (vii)
all agreements with a labor union, or (viii) any agreement that limits the
freedom of the Company or any Company Subsidiary to compete in any line of
business with any Person or in any geographic area (all agreements, arrangements
or commitments required to be identified in SCHEDULE 4.14 being hereinafter
referred to as the "MATERIAL CONTRACTS"). True and complete copies of all the
Material Contracts (including all written amendments thereto) identified in
SCHEDULE 4.14 have been made available to Parent through the Dataroom. Except as
set forth on SCHEDULE 4.14, (i) all Material Contracts are valid and existing,
and the Company and the Company Subsidiaries, have duly performed their
obligations thereunder in all material respects to the extent such obligations
have accrued, and (ii) no breach or default thereunder by the Company or any
Company Subsidiary has occurred and is continuing, except in each case, for
those failures to be valid and existing or breaches or defaults which would not,
individually or in the aggregate, have, or reasonably be expected to have, a
Company Material Adverse Effect.




SECTION 4.15. EMPLOYEE AND LABOR MATTERS AND PLANS.




(a) SCHEDULE 4.15(a) lists each of the following plans, policies,
arrangements and contracts which is sponsored, maintained or contributed to by
the Company or any Company Subsidiary, or, in the case of any "employee pension
plan" (as defined in Section 3(2) of ERISA), an ERISA Affiliate or for the
benefit of any current or former employee, director or officer: (i) any
"employee benefit plan," as such term is defined in Section 3(3) of ERISA,
whether or not subject to the provisions of ERISA; and (ii) any other
employment, consulting, collective bargaining, stock option, stock bonus, stock
purchase, phantom stock, incentive, bonus, deferred compensation, retirement,
severance, change-in-control, fringe, insurance, disability, post-employment
(including compensation, pension, health, medical or life insurance or other
benefits), vacation, medical or dental contract, policy or arrangement which is
not an employee benefit plan as defined in Section 3(3) of ERISA (each such
plan, contract, policy and arrangement being herein referred to as an "EMPLOYEE
PLAN").




(b) With respect to each Employee Plan, except as set forth on
SCHEDULE 4.15(b), the Company has made available to Parent through the Dataroom
true and complete copies (including amendments) of each contract, plan document
and summary plan description (including any related trust agreement or insurance
company contract) or, if there are no such written materials, a summary
description of the Employee Plan, plus a copy of the most recent determination
letter, if applicable, and a copy of the most recent Form 5500. Except as set
forth on SCHEDULE 4.15(b), there have been no amendments to, written
interpretations of or announcements by the Company or any Company Subsidiary
published to employees relating to, or any changes in employee participation or
coverage under, any Employee Plan that would




27









increase materially the expense of maintaining such Employee Plan above the
level of expense incurred in respect thereof for the most recent fiscal year
ended prior to the date hereof, for which financial statements have been
provided. SCHEDULE 4.03(b) contains a complete and accurate listing of all
outstanding Company Stock Options, indicating the extent vested or unvested, the
extent exercisable or not, the exercise price and the name of the optionee.




(c) Each Employee Plan has been maintained in compliance in all
respects with its terms and the requirements prescribed by any and all
applicable statues, orders, rules and regulations, including, but not limited
to, ERISA and the Code except where the failure to be in compliance therewith
would not, individually or in the aggregate, have a Company Material Adverse
Effect. Except as set forth on SCHEDULE 4.15(c), with respect to each Employee
Plan, (1) no actions, suits or claims (other than routine claims for benefits in
the ordinary course) are pending, or to the Company's knowledge, threatened, and


(2) to the Company's knowledge, there are no facts or circumstances that would
reasonably be expected to form the basis of any such actions, suits or claims,
and (3) no administrative investigation, audit or other administrative
proceeding by the Department of Labor, the Pension Benefit Guaranty Corporation,
the Internal Revenue Service or other Governmental Entities are in progress or
pending, or to the Company's knowledge, threatened. With respect to each
Employee Plan which is an "employee benefit plan" within the meaning of Section
3(3) of ERISA or which is a "plan" within the meaning of Section 4975(e) of the
Code, there has occurred no transaction which is prohibited by Section 406 of
ERISA or which constitutes a "prohibited transaction" under Section 4975(c) of
the Code and with respect to which a prohibited transaction exemption has not
been granted and is not currently in effect, except where such "prohibited
transaction" would not, individually or in the aggregate, have a Company
Material Adverse Effect.




(d) SCHEDULE 4.15(d) identifies each funded Employee Plan which is an
employee pension plan within the meaning of Section 3(2) of ERISA (including a
multi-employer plan within the meaning of Section 3(37) of ERISA). With respect
to each such Employee Plan, (i) the Employee Plan is a qualified plan under


Section 401(a) or 403(a) of the Code, and its related trust is exempt from
federal income taxation under Section 501(a) of the Code; (ii) a favorable IRS
determination letter has been received and, since the date of such IRS
submission, the Employee Plan has not been amended or operated in a manner which
would be reasonably likely to have a Company Material Adverse Effect, nor would
there result any material cost or liability to remedy any such defect; (iii)
there has been no termination or partial termination within the meaning of


Section 41l(d)(3) of the Code; (iv) no Employee Plan is covered by Section 412
of the Code; and (v) no such Employee Plan is covered by Title IV of ERISA.
Neither the Company nor any ERISA Affiliate has ceased operations at a facility
so as to become subject to the provisions of Section 4068 of ERISA, withdrawn as
a substantial employer so as to become subject to the provisions of Section 4063
of ERISA or ceased making contributions on or before the Closing Date to any
Employee Plan which is a pension plan subject to Section 4064(a) of ERISA. No
event has occurred and no condition exists, with respect to any Employee Plan
that would be reasonably likely to subject the Company to any Tax, fine, Lien,
penalty or other Liability imposed by ERISA, the Code or any other applicable
Laws, which, when added to all other Liabilities under this paragraph would
reasonably be expected to have a Company Material Adverse Effect.




28









(e) Neither the Company nor any Company Subsidiary has any material
liability in respect of post-retirement health benefits for retired employees of
the Company or any Company Subsidiary except as required to avoid excise tax
under Code Section 4980B or similar provisions under state law.




(f) Except as set forth on SCHEDULE 4.15(f), the consummation of the
transactions contemplated by this Agreement will not entitle any employee,
officer or director to receive severance or other compensation or benefits from
the Company or any Company Subsidiary which would not otherwise be payable
absent the consummation of the transactions contemplated by this Agreement or
cause the acceleration of the time of payment or vesting of any award or
entitlement under any Employee Plan, whether or not such occurrence would
constitute a parachute payment within the meaning of Code Section 280G, and
whether or not another subsequent action or event (or lack thereof) in addition
to the transactions contemplated hereby would be required to trigger such
occurrence.




(g) To the Company's knowledge, since December 31, 2005, there have
been no governmental audits of the equal employment opportunity practices of the
Company or any Company Subsidiary. Except as set forth on SCHEDULE 4.15(g),
there are no unfair labor practice charges or complaints against the Company or
any Company Subsidiary pending before the National Labor Relations Board or
strikes, disputes, slowdowns or stoppages pending or, to the Company's
knowledge, threatened against or involving the Company that would reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect.




(h) Except as set forth on SCHEDULE 4.15(h) (i) neither the Company
nor any Company Subsidiary is a party to or bound by, any collective bargaining
agreement with a labor union or labor organization; (ii) there is no labor
practice proceeding or labor arbitration proceeding pending, or to the Company's
knowledge, threatened against the Company or any Company Subsidiary; and (iii)
to the Company's knowledge there are no organizational efforts with respect to
the formation of a collective bargaining unit presently being made.




(i) The Company has made available to Parent accurate and complete
copies of all material employee manuals and handbooks and a copy of the current
new hire orientation package relating to the employment of the current employees
of the Company and the Company Subsidiaries.




(j) To the knowledge of the Company, neither the Company nor any
Company Subsidiary has since January 1, 2006 engaged in any unfair labor
practice of any nature. Since January 1, 2003, there has not been any slowdown,
work stoppage, labor dispute or union organizing activity, or any similar
activity or dispute, affecting the Company or the Company Subsidiary, except for
such slowdowns, work stoppages, disputes or activities that would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect. Except as set forth on SCHEDULE 4.15(j) and except as
would not, individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect, there are no actions, suits, claims, labor
disputes or grievances pending or, to the knowledge of the Company, threatened
or reasonably anticipated relating to any labor, safety or discrimination
matters involving any Company Employee, including charges of unfair labor
practices or discrimination complaints.




29









SECTION 4.16 INSURANCE POLICIES.




SCHEDULE 4.16 contains a summary description of all material insurance
policies of the Company and the Company Subsidiaries and each such policy is in
full force and effect. All premiums with respect to the insurance policies
listed on SCHEDULE 4.16 which are due and payable prior to the Effective Time
have been paid or will be paid prior to the Effective Time, and no written
notice of cancellation or termination has been received by the Company with
respect to any such policy. To the Company's knowledge, there are no pending
claims against such insurance by the Company or any Company Subsidiary as to
which the insurers have denied coverage or otherwise reserved rights that would
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect.




SECTION 4.17. INTELLECTUAL PROPERTY.




(a) SCHEDULE 4.17 contains a list of all U.S. and foreign patents,
registrations and applications for Intellectual Property owned by the Company or
Company Subsidiary.




(b) Except as would not, individually or in the aggregate, have, or
reasonably be expected to have, a Company Material Adverse Effect, (i) the
Company and the Company Subsidiaries own or have a valid license to use all
Intellectual Property used in the conduct of their businesses as currently
conducted; (ii) neither the Company nor any Company Subsidiary has received
written notice of infringement or challenge to the right to use any Intellectual
Property; (iii) to the Company's knowledge, the conduct of the Company and the
Company Subsidiaries' businesses as currently conducted does not infringe or
violate the Intellectual Property of any other Person and their Intellectual
Property is not being infringed or violated by any other Person; and (iv) the
Company and the Company Subsidiaries take reasonable steps to protect and
maintain their Intellectual Property.




(c) For the purposes of this Section 4.17, "INTELLECTUAL PROPERTY"
shall mean all United States, state and foreign intellectual property, including
patents, inventions, discoveries, technology, and know-how, copyrights and
copyrightable works (including software and software code in any form, including
source code and executable or object code), trademarks, service marks, trade
names, brand names, corporate names, domain names, URLs, web sites, logos, trade
dress and other source indicators, trade secrets and other confidential
information.




SECTION 4.18. PERMITS.




The Company and the Company Subsidiaries have all Permits (exclusive
of any Environmental Permits and Permits with respect to state or local sales,
use or other Taxes), except for those Permits the failure to have would not,
individually or in the aggregate, have or be reasonably expected to have, a
Company Material Adverse Effect. All of the Permits are in full force and effect
except where any such failure to be so in effect would not, individually or in
the aggregate, have or be reasonably expected to have, a Company Material
Adverse Effect, and there is no proceeding or investigation pending, or to the
knowledge of the Company, threatened which would reasonably be expected to lead
to the revocation, amendment, failure to renew or suspension of any such Permit.
Each of the Company and each Company Subsidiary has filed




30









when due all documents required to be filed with any Governmental Entity in
connection with such Permits except where the failure to file such documents
would not, individually or in the aggregate, have or be reasonably expected to
have, a Company Material Adverse Effect, and, at the time of the filing thereof,
all such filings were accurate and complete in all material respects.




SECTION 4.19. COMPLIANCE WITH LAWS.




Neither the Company nor any Company Subsidiary is in violation of, or
has since December 31, 2003, violated or failed to comply with any Law (other
than Environmental Laws, ERISA and Laws with respect to Taxes which are
addressed elsewhere in Article IV) applicable to its business or operations,
except for violations and failures to comply that would not, individually or in
the aggregate, have, or be reasonably expected to have, a Company Material
Adverse Effect.




SECTION 4.20. BROKERAGE FEES.




The Company has not retained any financial advisor, broker, agent or
finder or agreed to pay a financial advisor, broker, agent or finder on account
of this Agreement or any transaction contemplated hereby or any transaction of
like nature except for Lehman Brothers Inc. and Credit Suisse Securities (USA)
LLC, the fees of which will be paid by the Company.




SECTION 4.21. AFFILIATE AGREEMENTS.




Except as set forth on SCHEDULE 4.21, there are no oral or written
agreements between the Company or any Company Subsidiary and (i) any officer or
director of the Company or any Company Subsidiary; (ii) any record or beneficial
owner of the voting stock of the Company, or (iii) any Affiliate of any such
officer, director or record of beneficial owner other than payment as
compensation for services rendered by employees in the ordinary course of
employment by the Company or any Company Subsidiary or as otherwise provided
pursuant to Employee Plans.




SECTION 4.22. NO OTHER REPRESENTATIONS OR WARRANTIES.




Except for the representations and warranties contained in this
Article IV, each of Parent and Merger Sub acknowledges that none of the Company,
any Affiliate of the Company or any other Person on behalf of the Company or any
of its Affiliates makes any other express or implied representation or warranty
with respect to the Company or with respect to any other information provided to
Parent or Merger Sub in connection with the transaction contemplated hereunder.
None of the Company, any Affiliate of the Company or any other Person will have
or be subject to any liabilities or indemnification obligation to Parent, Merger
Sub or any other Person resulting from the distribution to Parent or Merger Sub
(or any of their advisors), or Parent's or Merger Sub's (or their advisors') use
of, any such information, including any information, documents, projections,
forecasts or other material made available to Parent or Merger Sub in the Data
Room or management presentations in expectation of the transactions contemplated
by this Agreement.




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ARTICLE V






REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB





Parent and Merger Sub hereby represent and warrant to the Company as
follows:




SECTION 5.01. ORGANIZATION.




Each of Parent and Merger Sub is a real estate investment trust or
corporation, as applicable, duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its incorporation. Each of Parent
and Merger Sub has full corporate power and authority to conduct its business as
it is now being conducted and to own, operate or lease the properties and assets
it currently owns, operates or holds under lease. Each of Parent and Merger Sub
is duly qualified or licensed to do business and is in good standing as a
foreign corporation in each jurisdiction where such qualification or licensing
is necessary, except where the failure to so qualify or be so licensed would not
prevent or materially delay the consummation of the transactions contemplated by
this Agreement. Parent owns beneficially, and Parent or one of its wholly-owned
subsidiaries owns of record, all of the outstanding capital stock of Merger Sub,
in each case free and clear of all Liens. Prior to the date hereof, Parent has
provided to the Company the name of the "ultimate parent entity" for purposes of
obtaining the approvals of the Governmental Entities contemplated by this
Agreement.




SECTION 5.02. AUTHORIZATION.




Each of Parent and Merger Sub has all requisite corporate power and
authority to enter into this Agreement and to perform its obligations hereunder.
The execution and delivery of this Agreement by each of Parent and Merger Sub
and the consummation by each of Parent and Merger Sub of the transactions
contemplated hereby have been duly approved by the Board of Directors and
stockholders of each of Parent and Merger Sub, and no other corporate
proceedings on the part of Parent or Merger Sub are necessary to authorize the
Merger or this Agreement, to perform their respective obligations hereunder or
to consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by each of Parent and Merger Sub and,
assuming due authorization, execution and delivery by the Company, constitutes
the legal, valid and binding obligation of each of Parent and Merger Sub,
enforceable against each of Parent and Merger Sub in accordance with its terms,
except as such enforcement may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other similar laws relating
to creditors' rights generally, (ii) general principles of equity (whether
applied in a proceeding at law or in equity) and (iii) any implied covenant of
good faith and fair dealing.




SECTION 5.03. NO VIOLATION.




The execution and delivery of this Agreement by Parent and Merger Sub
does not, and the consummation by Parent and Merger Sub of the transactions
contemplated by this Agreement will not, (i) conflict with, or result in any
violation of or default or loss of any benefit under, any provision of Parent
and Merger Sub's respective Certificates of Incorporation or By-laws; (ii)
subject to the matters described in Section 5.04, conflict with or result in any
violation




32









of or default or loss of any benefit under, any Law or Judgment of any
Governmental Entity applicable to Parent or Merger Sub or by which any of their
respective properties are subject; or (iii) conflict with, or result in a
breach, termination (or right of termination) or violation of or default or loss
of any benefit under the terms of any agreement, contract, indenture or other
instrument to which Parent or Merger Sub is a party or by which Parent or Merger
Sub or any of their respective properties are subject, or constitute a default
or loss of any right thereunder or an event which, with the lapse of time or
notice or both, might result in a default or loss of any right thereunder,
except with respect to clauses (ii) and (iii) hereof, where the breach,
termination, violation, default, loss of benefit, acceleration or loss of right
or other occurrence would not prevent or materially delay the consummation of
the transactions contemplated hereby.




SECTION 5.04. APPROVALS.




The execution and delivery of this Agreement and the consummation of
the transactions contemplated by this Agreement by each of Parent and Merger Sub
do not and will not require the consent, approval, order, authorization or
Permit of any Governmental Entity under any Law or Judgment, and no declaration,
filing or registration with any Governmental Entity is required by Parent or
Merger Sub in connection with the execution and delivery of this Agreement and
the consummation of transactions contemplated by this Agreement, except for (i)
the filing of the Certificate of Merger as required by the DGCL and the filing
of appropriate documents with the relevant authorities of other states in which
Parent and Merger Sub are qualified to do business, (ii) filings pursuant to the
HSR Act, and the expiration or termination of the applicable waiting period
under such Act, and (iii) those other consents, approvals, orders,
authorizations, Permits, filings, declarations or registrations the failure of
which to obtain or make would not prevent or materially delay the consummation
of the transactions contemplated hereby.




SECTION 5.05. LITIGATION.




There are no Proceedings pending or, to the knowledge of Parent or
Merger Sub, threatened against Parent or any of its Affiliates by or before any
Governmental Entity or by any Person that would, or would reasonably be expected
to, prevent or materially delay the consummation of the transactions
contemplated hereby. Neither Parent nor any of its Subsidiaries nor any of their
respective properties is or are a party to or bound by any Judgment that would,
or would reasonably be expected to, prevent or materially delay the consummation
of the transactions contemplated hereby.




SECTION 5.06. AVAILABLE FUNDS.




(a) Parent has delivered to the Company true and complete copies of
the written financial commitment, dated as of the date hereof (the "FINANCING
COMMITMENT") from Merrill Lynch Capital Corporation and Merrill Lynch, Pierce,
Fenner & Smith Incorporated, addressed to Parent, pursuant to which the
financing parties have agreed to lend the amounts set forth therein (the
"FINANCING").




(b) The Financing Commitment is in full force and effect and has not
been amended or modified, and the commitments contained therein have not been
withdrawn or




33









rescinded in any respect. The Financing Commitment, in the form delivered to the
Company, is a legal, valid and binding obligation of Parent and, to the
knowledge of Parent, the other parties thereto. There are no other agreements,
side letters or arrangements relating to the Financing Commitment that could
affect the availability of the Financing. No event has occurred which, with or
without notice, lapse of time or both, would constitute a default or breach on
the part of Parent under any term or condition of the Financing Commitment, and
Parent has no reason to believe that it will be unable to satisfy on a timely
basis any term or condition of closing to be satisfied by it contained in the
Financing Commitment. Parent has fully paid any and all commitment fees or other
fees required by the Financing Commitment to be paid on or before the date of
this Agreement. There are no conditions precedent or other contingencies related
to the funding of the full amount of the Financing, other than as set forth in
or contemplated by the Financing Commitment. The aggregate proceeds contemplated
by the Financing Commitment will be sufficient for Parent, Merger Sub and the
Surviving Corporation to consummate the transactions contemplated hereby,
including payment of the aggregate Merger Consideration and any applicable fees
and expenses. As of the date of this Agreement, Parent does not have any reason
to believe that any of the conditions to the Financing will not be satisfied or
that the Financing will not be available to Parent on the Closing Date.




SECTION 5.07. BROKERAGE FEES.




Neither Parent nor Merger Sub has retained any financial advisor,
broker, agent or finder or agreed to pay any financial advisor, broker, agent or
finder on account of this Agreement or any transaction contemplated hereby or
any transaction of like nature except for Merrill Lynch Capital Corporation and
Merrill Lynch, Pierce, Fenner & Smith Incorporated, the fees of which will be
paid by Parent.




SECTION 5.08. NO OTHER REPRESENTATIONS OR WARRANTIES.




Except for the representations and warranties contained in this
Article V, the Company acknowledges that none of Parent, Merger Sub or any other
Person on behalf of Parent or Merger Sub makes any other express or implied
representation or warranty with respect to Parent or Merger Sub or with respect
to any other information provided to the Company.





ARTICLE VI






COVENANTS





SECTION 6.01. INTERIM OPERATIONS OF THE COMPANY.




During the period from the date of this Agreement to the Effective
Time, except as required by Law, specifically permitted by this Agreement or as
set forth on SCHEDULE 6.01, or as otherwise consented to in writing by Parent,
the Company will and will cause each Company Subsidiary to:




(a) use commercially reasonable efforts (consistent with operating in
the ordinary course of business and past practices) to (i) preserve intact its
present business organization, (ii) keep available the services of its present
officers and employees, (iii) preserve its relationships with clients,
suppliers, customers, distributors and others having significant




34









business dealings with it, including renewing existing leases and licenses in
the ordinary course of business, (iv) maintain all assets in good repair and
condition other than those disposed of in the ordinary course of business, (v)
maintain all insurance, (vi) maintain its books of account and records in the
usual, regular and ordinary manner and (vii) otherwise operate in the ordinary
course of business;




(b) not amend its Certificate of Incorporation or By-Laws;




(c) not acquire by merging or consolidating with, or purchasing all or
substantially all of the assets of, or otherwise acquiring, any business of any
Person or other business organization or division thereof, in each case for
consideration having a value in excess of $5,000,000 or an aggregate value in
excess of $10,000,000;




(d) not split, combine or reclassify its outstanding capital stock or
declare, set aside, make or pay any dividend or other distribution in respect of
its capital stock other than (i) cash dividends or distributions made prior to
the Effective Time; or (ii) dividends paid by the Company's wholly-owned
Subsidiaries to the Company or its wholly-owned Subsidiaries;




(e) not issue or sell (or agree to issue or sell) any shares of its
capital stock of any class or series, or any options, warrants, conversion or
other rights to purchase any such shares or any securities convertible into or
exchangeable for such shares (other than upon the exercise or conversion of
options, warrants or convertible securities outstanding on the date hereof), or
grant, or agree to grant, any such options or modify or alter the terms of any
of the above, except as contemplated under Section 2.06;




(f) not (i) incur any indebtedness for borrowed money other than
pursuant to the terms of the Company's existing credit facilities in effect on
the date hereof or vary the material terms of any existing debt securities, (ii)
issue or sell any debt securities, (iii) other than in the ordinary course of
business or pursuant to the Company's 2006 capital expenditure plan which has
previously been made available to Parent, acquire or dispose of any assets
(other than acquisitions and dispositions of goods purchased for resale in the
ordinary course of business) having a book or market value individually in
excess of $1,000,000, or (iv) other than in the ordinary course of business,
enter into, modify in any material respect or terminate any Material Contract;




(g) not take any steps to mortgage or pledge to secure any material
obligation, or to subject to any material Lien, any of its material properties
other than pursuant to the terms of the Company's existing credit facilities as
in effect on the date hereof or in the ordinary course of business;




(h) not grant to any present or former director or officer, or, except
in the ordinary course of business, consultant or other employee any increase in
compensation or benefits in any form, or any severance or termination pay, or
make any loan to or enter into any employment agreement, collective bargaining
agreement or arrangement with any such Person, except in each case as may be
required by Law or the terms of any existing Employee Plan or arrangement and
except for the Additional Transaction Bonuses;




35









(i) not adopt, enter into, amend in any material respect, announce to
participants any intention to adopt or terminate, any Employee Plan or other
employee benefit plan, program or arrangement that would be an Employee Plan if
it were in effect on the date hereof, except (i) as required by applicable Law,


(ii) as disclosed on any disclosure Schedule pursuant to Section 4.15, (iii) as
contemplated under Section 2.06, (iv) in connection with the Additional
Transaction Bonuses or (v) except, with respect to the Company's health and
medical plans, in the ordinary course of business provided such action does not
materially increase the benefits payable under such Employee Plans;




(j) not discharge or satisfy any material Lien or pay or satisfy any
material obligation or Liability (fixed or contingent) (other than in the
ordinary course of business) or commence any voluntary petition, proceeding or
action under any bankruptcy, insolvency or other similar Laws;




(k) not make or institute any material change in its accounting
procedures or practices unless mandated by GAAP;




(l) not make any material Tax election or settle or compromise any
material Tax Liability;




(m) not, other than in the ordinary course of business, enter into, or
consent to the entering into of, any agreement with any Governmental Entity
relating to the actual or threatened condemnation of any Owned Property or
Leased Premises; and




(n) not authorize or agree to take any of the actions set forth in the
foregoing subparagraphs (a) through (l).




SECTION 6.02. ACCESS TO INFORMATION.




The Company shall (and shall cause each Company Subsidiary to) afford
to the officers, employees, accountants, counsel and other representatives of
Parent and Merger Sub, reasonable access, during normal business hours, during
the period prior to the Effective Time, to all of the properties, books,
contracts, commitments and records of the Company and the Company Subsidiaries;
PROVIDED that nothing herein shall require the provision of such access to the
extent it would interfere unreasonably with the business or operations of the
Company or the Company Subsidiaries or otherwise result in any unreasonable
interference with the prompt and timely discharge by such employees of their
normal duties. Prior to Closing, Parent and Merger Sub will hold and treat and
will cause their respective officers, employees, auditors and other authorized
representatives to hold and treat in confidence all documents and information
concerning the Company and the Company Subsidiaries made available to Parent or
Merger Sub in connection with the transactions contemplated by this Agreement in
accordance with the provisions of the existing confidentiality agreement between
the Company and Reit Management & Research LLC dated as of June 13, 2006 (the
"CONFIDENTIALITY AGREEMENT"), provided public disclosure which is reasonably
believed by Parent to be necessary in connection with the Financing, issuance of
the Securities or distribution of equity of a Subsidiary of Parent to its
shareholders or which Parent or any of its Affiliates are advised by counsel is
required by Law or the rules of any national securities exchange to be disclosed
shall not be deemed a violation of




36









Parent's or Merger Sub's obligations under this Section 6.02 or under the
Confidentiality Agreement. Notwithstanding anything herein to the contrary,
neither the Company nor any of the Company Subsidiaries shall be required to
provide access to or to disclose information where such access or disclosure
would violate or prejudice the rights of its clients, jeopardize the
attorney-client privilege of the Company or the Company Subsidiaries or
contravene any Law or binding agreement entered into prior to the date of this
Agreement (it being agreed that the Company, Parent and Merger Sub shall use
their reasonable best efforts to cause such information to be provided in a
manner that does not cause such violation or jeopardization).




SECTION 6.03. CONSENTS AND APPROVALS.




(a) Each of the Company, Parent and Merger Sub shall use all
reasonable efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary, proper or advisable to consummate and
make effective the transactions contemplated by this Agreement, including,
without limitation, (i) to comply promptly with all legal requirements which may
be imposed on it with respect to this Agreement and the transactions
contemplated by this Agreement by any Governmental Entity (which actions shall
include furnishing all information required by applicable Law in connection with
approvals of or filings with any Governmental Entity), including filing, or
causing to be filed, as promptly as practicable, any required notification and
report forms (x) under the HSR Act with the Federal Trade Commission (the "FTC")
and the Antitrust Division of the United States Department of Justice (the
"ANTITRUST DIVISION"), (ii) to obtain any other Requisite Regulatory Approvals
in connection with the transactions contemplated by this Agreement or the taking
of any action contemplated by this Agreement, and (iii) to take any action
necessary to defend vigorously, lift, mitigate or rescind the effect of any
litigation or administrative proceeding involving any Governmental Entity
adversely affecting this Agreement or the transactions contemplated by this
Agreement, including promptly appealing any adverse court or administrative
decision. Without limitation of the foregoing, the Company, Parent, Merger Sub
and their respective Affiliates shall not extend any waiting period or
comparable period under the HSR Act or enter into any agreement with any
Governmental Antitrust Authority not to consummate the transactions contemplated
by this Agreement, except with the prior written consent of the other parties
hereto. For purposes of this Agreement, a "GOVERNMENTAL ANTITRUST AUTHORITY"
shall mean any Governmental Entity with regulatory jurisdiction over any
Requisite Regulatory Approval under the HSR Act or similar Laws intended to
prohibit, restrict or regulate actions having an anticompetitive effect or
purposes.




(b) Without limiting the generality of the undertakings and subsection


(a) of this Section 6.03 and subject to appropriate confidentiality protections,
the Company, on the one hand, and Parent and Merger Sub, on the other hand,
shall each furnish to the other such necessary information and reasonable
assistance as the other party may request in connection with the foregoing and
shall each promptly provide counsel for the other party with copies of all
filings made by such party, and all correspondence between such party (and its
advisors) with any Governmental Antitrust Authority and any other information
supplied by such party and such party's Affiliates to a Governmental Antitrust
Authority in connection with this Agreement and the transactions contemplated by
this Agreement. Each party shall, subject to applicable Law, permit counsel for
the other party to review in advance any proposed written and, if practicable,
oral, communication to any Governmental Antitrust Authority. Upon the terms and




37









subject to the conditions herein provided, in case at any time after the Closing
Date any further action is necessary or desirable to secure the approvals from
any and all Governmental Antitrust Authorities necessary to carry out the
purposes of this Agreement, the proper officers and/or directors of the parties
shall use all reasonable efforts to take or cause to be taken all such further
action.




(c) Without limiting the generality of the undertakings and
subsections (a) and (b) of this Section 6.03, the Company, Parent and Merger Sub
agree to take or cause to be taken the following actions: (i) provide as
promptly as practicable information and documents requested by any Governmental
Antitrust Authority necessary, proper or advisable to permit consummation of the
transactions contemplated by this Agreement, (ii) take, or cause to be taken,
all actions necessary, proper or advisable to obtain the approval for
consummation of the transactions contemplated by this Agreement by any
Governmental Antitrust Authority, which actions shall include each of Parent and
Merger Sub's agreement to (x) sell or otherwise dispose of, or hold separate and
agree to sell or otherwise dispose of, any entities, assets or facilities of the
Company or a Company Subsidiary or any entity, facility or asset of Parent or
its Affiliates, (y) terminate, amend or assign such existing relationships and
contractual rights and obligations (other than termination that would result in
a breach of a contractual obligation to a third party) and (z) amend, assign or
terminate such existing licenses or other agreements (other than a termination
that would result in a breach of a license or such other agreement with a third
party) and to enter into such new licenses or other agreements (and, in each
case, to enter into agreements with the relevant Governmental Antitrust
Authority giving effect thereto) in each case with respect to the foregoing
clauses (x), (y) or (z) if such action is necessary or advisable or as may be
required by any Governmental Antitrust Authority, PROVIDED that any such action
contemplated by this clause (ii) shall not be required to be effective prior to
the Closing and (iii) take promptly, in the event that any permanent or
preliminary injunction or other order is entered or becomes reasonably
foreseeable to be entered in any proceeding that would make consummation of the
transactions contemplated by this Agreement in accordance with the terms of this
Agreement unlawful or that would prevent or delay consummation of any such
transaction, any and all steps (including the appeal thereof, the posting of a
bond or the taking of the steps contemplated by clause (ii) of this subsection


(c)) necessary to vacate, modify or suspend such injunction or order so as to
permit such consummation on a schedule as close as possible to that contemplated
by this Agreement. The Company, Parent and Merger Sub agree to offer the other
parties, if possible, a reasonable opportunity to participate in all telephonic
conferences and all meetings with a Governmental Antitrust Authority.




(d) The filing fees under the HSR Act, as well as the fees and
disbursements of any legal counsel or other advisor jointly retained by the
parties in connection with any such filings, shall be borne by Parent.




Section 6.04. EMPLOYMENT MATTERS.




(a) After the Effective Time, the Surviving Corporation shall either


(i) continue the existing Employee Plans of the Company and the Company
Subsidiaries as disclosed on SCHEDULE 4.15(a), or (ii) provide substitutes for
some or all of such Employee Plans that provide compensation or benefits to
employees of the Company and the Company Subsidiaries that are no less favorable
in the aggregate to such employees than the replaced




38









Employee Plans until December 31, 2007; PROVIDED, HOWEVER, that in no event
shall the Surviving Corporation be obligated to continue, provide or otherwise
take into account Employee Plans that relate to stock options, restricted stock,
stock rights or any other equity-based arrangements; and PROVIDED FURTHER that
nothing herein shall be construed to mean that the Surviving Corporation cannot
amend or terminate any particular Employee Plan or Plans so long as the
aggregate benefits to such employees under the remaining Employee Plans and all
substituted plans are no less favorable to such employees than the existing
Employee Plans until such date. For purposes of any such benefit plans, (A)
Parent and the Surviving Corporation shall grant all employees of the Company
credit for purposes of eligibility and vesting for all service with the Company
and the Company Subsidiaries prior to the Effective Time for which such service
was recognized by the Company; (B) any limitations on pre-existing conditions
shall be waived (but only to the extent such conditions were covered prior to
the Effective Time unless required by Law); and (C) expenses incurred with
respect to the plan year in which the Closing occurs on or before the Effective
Time shall be taken into account for purposes of establishing satisfaction of
any applicable deductible, coinsurance and maximum out-of-pocket provisions to
the same extent taken into account prior to the Effective Time.




(b) From and after the Effective Time, the Surviving Corporation shall
honor (i) the Transaction Bonus Agreements; and (ii) the Company's severance
plan and severance agreements which are disclosed on SCHEDULE 4.15(a), in each
case, in accordance with the terms thereof.




(c) Nothing in this Agreement shall be construed as granting any
Person any rights of continuing employment, other than as provided by contract.




(d) Parent's current intention is that the Company's headquarters will
remain at its current location.




(e) As soon as reasonably practicable following the date hereof, the
Company shall provide to the employees of the Company or Company Subsidiaries
party to the Transaction Bonus Agreements an amendment thereto providing that
the payout amounts will be payable in connection with the Merger whether the
Closing is before or after December 31, 2006.




SECTION 6.05. PUBLICITY.




Prior to the Closing, none of the Company, Parent, Merger Sub or any
of their agents or representatives shall issue or cause the publication of any
press release or other public statement or announcement with respect to this
Agreement or the transactions contemplated hereby without the prior written
consent of the Company and Parent (such consent not to be unreasonably withheld
or delayed), except as may be required by Law, or by the rules of any national
securities exchange or automated quotation system to which Parent or any
Affiliate of Parent is or becomes subject, and in such case shall use its
reasonable best efforts to consult with Parent and/or the Company, as
applicable, prior to such release or announcement being issued, provided Parent
may issue such press releases or other public statements or announcements as it
reasonably determines necessary and advisable in connection with its investor
relations program, conducted in the normal course, without the prior written
consent of the Company.




39









SECTION 6.06. NOTIFICATION OF CERTAIN MATTERS.




From and after the date of this Agreement until the earlier of the
Effective Time or termination of this Agreement pursuant to and in accordance
with Section 8.02, the Company shall give prompt notice to Parent, and Parent
shall give prompt notice to the Company, of the occurrence or non-occurrence of
any event or events the occurrence or non-occurrence of which, individually or
in the aggregate, would make the timely satisfaction of any of the conditions
set forth in Article VII impossible or unlikely. This Section 6.06 shall not
constitute a covenant or agreement for the purposes of Sections 7.02(b) and
7.03(b).




SECTION 6.07. DIRECTORS' AND OFFICERS' INDEMNIFICATION.




(a) Without limiting any additional rights that any employee may have
under any Employee Plan, from and after the Effective Time, the Surviving
Corporation will indemnify and hold harmless each Person who is now, or has been
at any time prior to the date hereof, a director or officer of the Company or of
any Company Subsidiary or a Person entitled to indemnification (individually a
"COVERED PARTY" and collectively the "COVERED PARTIES"), with respect to any
Proceedings and/or damages, penalties, Judgments, assessments, losses, costs and
expenses (including, but not limited to, attorneys' fees) based in whole or in
part on, or arising in whole or in part out of any matter arising out of or
pertaining to matters existing or occurring at or prior to the Effective Time,
whether asserted or claimed prior to, at or after the Effective Time, to the
fullest extent that Parent or the Surviving Corporation is permitted under
applicable law. In the event of any such Proceeding, (i) each Covered Party will
be entitled to advancement of expenses incurred in the defense of any Proceeding
from Parent or the Surviving Corporation within ten business days of receipt by
Parent or the Surviving Corporation from the Indemnified Party of a request
therefor, (ii) neither Parent nor the Surviving Corporation shall settle,
compromise or consent to the entry of any Judgment in any existing or threatened
Proceeding (and in which indemnification could be sought by such Covered Party
hereunder), unless such settlement, compromise or consent includes an
unconditional release of such Covered Party from all Liability arising out of
such Proceeding or such Covered Party otherwise consents, and (iii) the
Surviving Corporation shall cooperate in the defense of any such matter.




(b) The certificate of incorporation and by-laws of the Surviving
Corporation shall contain provisions no less favorable with respect to
indemnification, advancement of expenses and exculpation of individuals who were
directors and officers prior to the Effective Time than are presently set forth
in the Company's Certificate of Incorporation and By-Laws, which provisions
shall not be amended, repealed or otherwise modified for a period of six years
from the Effective Time in any manner that would adversely affect the rights
thereunder of any such individuals.




(c) At or prior to the Effective Time, Parent shall obtain "tail" or
"runoff" insurance policies with a claims period of at least six years from the
Effective Time with respect to directors' and officers' liability insurance, in
either case in an amount and scope at least as favorable as the Company's
existing policies from an insurance carrier with the same or better credit
rating as the Company's current insurance carrier for the Covered Parties;
PROVIDED that the annual cost thereof shall not exceed 300% of the current
annual premium paid by the Company for its existing coverage in the aggregate.
Parent shall, and shall cause the Surviving




40









Corporation to, honor and perform under all indemnification agreements entered
into by the Company or any of the Company Subsidiaries.




(d) If the Surviving Corporation or any of its successors or assigns


(i) shall consolidate with or merge into any other Person and shall not be the
continuing or surviving corporation or entity of such consolidation or merger,
or (ii) shall transfer all or substantially all of its assets to any Person,
then, and in each such case, proper provisions shall be made so that the
successors and assigns of the Surviving Corporation shall assume all of the
obligations of the Surviving Corporation set forth in this Section 6.07. In
addition, the Surviving Corporation shall not distribute, sell, transfer or
otherwise dispose of any of its assets in a manner that would reasonably be
expected to render the Surviving Corporation unable to satisfy its obligations
under this Section 6.07.




(e) The provisions of this Section 6.07 are intended to be in addition
to the rights otherwise available to the current and former officers and
directors of the Company by Law, charter, statute, by-law or agreement, and
shall operate for the benefit of, and shall be enforceable by, each of the
Covered Parties and their heirs.




(f) This covenant is intended to be for the benefit of, and shall be
enforceable by, each of the Covered Parties and their respective heirs and legal
representatives. The indemnification provided for herein shall not be deemed
exclusive of any other rights to which an Covered Party is entitled, whether
pursuant to Law, contract or otherwise.




SECTION 6.08. ADDITIONAL AGREEMENTS.




Subject to the terms and conditions herein provided, except as
otherwise expressly provided herein, each of the parties hereto agrees to use
all reasonable efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary, proper or advisable, whether under
applicable Law or otherwise, or to remove any injunctions or other impediments
or delays, legal or otherwise, to consummate and make effective the Merger and
the other transactions contemplated by this Agreement.




SECTION 6.09. COOPERATION WITH FINANCING.




Prior to the Closing, so long as the out-of-pocket costs and expenses
of the Company and/or the Company Subsidiaries in connection therewith are
Special Costs, the Company shall provide, and shall cause the Company
Subsidiaries to, and shall use its reasonable efforts to cause the respective
officers, employees, representatives and advisors, including legal and
accounting, of the Company and the Company Subsidiaries to, provide all
cooperation reasonably requested by Parent in connection with the Financing, any
issuance by Parent of debt securities, equity securities, equity-linked
securities or hybrid securities (the "SECURITIES") principally to finance its
obligations under this Agreement and the other transactions contemplated by this
Agreement, including (i) participation in meetings, presentations, road shows,
due diligence sessions and sessions with rating agencies, (ii) assisting with
the preparation of materials for rating agency presentations, bank information
memoranda, prospectuses and similar documents required in connection with the
Financing or the issuance of the Securities, (iii) executing and delivering any
pledge and security documents, other definitive




41









financing documents, or other certificates, legal opinions or documents as may
be reasonably requested by Parent and (iv) seeking to obtain such consents from
such parties as may be required in connection with the Financing, the Merger,
any contemplated reorganizations of the Company and the Company Subsidiaries to
occur concurrently with the Merger pursuant to Contracts to which the Company or
any Company Subsidiary is a party; PROVIDED that nothing herein shall require
such cooperation to the extent it would interfere unreasonably with the business
or operations of the Company or the Company Subsidiaries or otherwise result in
any unreasonable interference with the prompt and timely discharge by such
employees of their normal duties.




SECTION 6.10. CONDUCT OF BUSINESS OF PARENT AND MERGER SUB PENDING THE
MERGER.




Each of Parent and Merger Sub agrees that, between the date of this
Agreement and the Effective Time, it shall not, directly or indirectly, take any
action (i) to cause its representations and warranties set forth in Article V to
be untrue in any material respect; or (ii) that would, or would reasonably be
expected to, individually or in the aggregate, prevent, materially delay or
materially impede the ability of Parent or Merger Sub to consummate the Merger
or the other transactions contemplated by this Agreement.




SECTION 6.11. NO ADVERSE CHANGE IN FINANCIAL COMMITMENTS.




Parent shall not, and shall cause Merger Sub not to, in any material
respect, adversely amend, change, alter, replace or modify the terms and
conditions of the Financial Commitment prior to the Closing without the prior
written consent of the Company, not to be unreasonably withheld. If, at any time
prior to the Closing, Merrill Lynch Capital Corporation or Merrill Lynch,
Pierce, Fenner & Smith Incorporated desires to, in any material respect,
adversely amend, change, alter or modify the terms and conditions of the
Financial Commitments, Parent shall promptly notify the Company of such event
and shall permit the Company (and such advisors the Company reasonably deems
appropriate) to meet with representatives of Parent and Merrill Lynch Capital
Corporation or Merrill Lynch, Pierce, Fenner & Smith Incorporated, as
applicable, regarding such event. Parent and Merger Sub shall use all reasonable
efforts to arrange the Financing as promptly as practicable on the terms and
conditions described in the Financing Commitment, including using all reasonable
efforts to (i) negotiate definitive agreements with respect thereto on the terms
and conditions contained therein and (ii) to satisfy on a timely basis all
conditions applicable to Parent in the Financing Commitment and the related
definitive agreements.




SECTION 6.12. TERMINATION OF AFFILIATE CONTRACTS.




Except as otherwise disclosed on SCHEDULE 6.12, on or prior to the
Closing Date, all agreements between the Company and the Company Subsidiaries,
on the one hand, and its Affiliates, on the other hand (other than agreements
solely between the Company and the Company Subsidiaries), shall be terminated as
of the Closing, and all obligations and liabilities thereunder shall have been
satisfied.




42









SECTION 6.13. STOCKHOLDER APPROVAL; STOCKHOLDER NOTICE.




(a) The Company shall provide Parent with copies of the Written
Consent and, if requested by Parent or Merger Sub, copies of the documentation
executed by each of the Stockholders appointing Oak Hill the Stockholders
Representative.




(b) The Company shall prepare and mail to all stockholders other than
the Stockholders which executed the Written Consent as promptly as practicable
following the execution of this Agreement the notice required by Section 228(e)
of the DGCL describing in reasonable detail the Merger and the Written Consent
(the "STOCKHOLDER NOTICE") and otherwise to comply with all legal requirements
under the DGCL in respect of the Merger.




SECTION 6.14. NO SOLICITATION OR NEGOTIATION.




The Company agrees that between the date of this Agreement and the
earlier of (a) the Closing or (b) the termination of this Agreement pursuant to


Section 8.01(b) or Section 8.02 hereof, the Company shall not, and shall cause
its directors, officers and employees not to, and shall use reasonable best
efforts to cause its representatives not to, directly or indirectly (i) solicit,
initiate, consider, encourage or accept any other proposals or offers from any
Person relating to (A) any acquisition or purchase of all or any portion of the
Company's or any Company Subsidiary's business or assets or any Company Stock or
the stock of any Company Subsidiary or (B) any merger, consolidation or other
business combination with any of the Company or any Company Subsidiary, (ii)
participate in any discussions, negotiations and other communications, regarding
or furnish to any other Person any information with respect to, or otherwise
cooperate in any way, assist or participate in, facilitate or encourage any
effort or attempt by any other Person to seek to do any of the foregoing or


(iii) consider, entertain or accept any proposal from any Person to do any of
the foregoing; PROVIDED that notwithstanding anything herein to the contrary,
any actions taken by the Company or a Company Subsidiary in accordance with or
otherwise permitted by Section 6.01 shall not be deemed to be a violation of
this Section 6.14.




SECTION 6.15. REPAYMENT OF OUTSTANDING INDEBTEDNESS.




Not less than two business days prior to the Closing Date, the Company
shall deliver to Parent payoff letters from third-party lenders, in form and
substance reasonably satisfactory to Parent, with respect to the Indebtedness of
the Company and the Company Subsidiaries identified on SCHEDULE 6.15 or incurred
after the date hereof in compliance with Section 6.01. Such payoff letters shall
specify the amount necessary to repay such Indebtedness and completely discharge
the obligations of the Company and the Company Subsidiaries with respect
thereto. At Closing, Parent shall provide to the Surviving Corporation the
aggregate amount necessary to make such repayment and discharge, and shall cause
the Surviving Corporation or a Company Subsidiary to discharge such Indebtedness
in accordance with the delivery instructions provided in such payoff letters.




43









SECTION 6.16. CONSULTATION.




Subject to applicable Law, in connection with the continued operation
of the business of the Company and the Company Subsidiaries between the date of
this Agreement and the Effective Time, the Company shall cause its officers and
the officers of the Company Subsidiaries to confer in good faith with one or
more representatives of Parent as often as Parent shall reasonably request on
operational matters of materiality and the general status of operations. After
January 31, 2007, the Company shall provide office facilities at its executive
offices for a representative of Parent.




SECTION 6.17. REAL PROPERTY MATTERS.




(a) The Company shall request estoppel certificates from the lessor
under each lease pursuant to which the Company or any Company Subsidiary leases
the Leased Premises, in a form provided by Parent and reasonably acceptable to
the Company.




(b) The Company shall provide such affidavits of title or other
certifications of title as shall be customarily and reasonably requested by the
title insurance company insuring the Surviving Corporation's or the appropriate
Company Subsidiary's title to the Owned Property and the leasehold interest in
the Leased Premises, in accordance with the provisions of Section 4.12, provided
such affidavits and certifications do not increase any obligations or
liabilities of the Company set forth in this Agreement.




SECTION 6.18. ADDITIONAL FINANCIAL STATEMENTS.




In the event required by the Securities Act or the Exchange Act and
solely in connection with obtaining the Financing or otherwise consummating the
Merger, so long as the out-of-pocket costs and expenses of the Company in
connection therewith are Special Costs, as soon as reasonably practicable upon
request of Parent, (a) the Company shall use reasonable efforts to prepare
consolidated balance sheets and statements of income, cash flows and changes in
stockholders' equity (the "ADDITIONAL FINANCIAL STATEMENTS") for the Company
(and any and all documents and consents related thereto) which comply with
Regulation S-X under the Securities Act, for inclusion in any registration
statement or other public filing of Parent or any Affiliate of Parent under the
Securities Act or the Exchange Act, and any other offering circular or document
used by Parent or any Affiliate of Parent in any other offering of securities,
whether public or private, (b) the Company shall use reasonable efforts to cause
PricewaterhouseCoopers LLP ("PWC"), its independent accountants, to cooperate
with Parent in connection with the foregoing (including, without limitation,
using reasonable efforts to cause PWC to deliver so-called "comfort letters" and
written consents relating to the foregoing). Without limiting the generality of
the foregoing, the Company agrees that, upon reasonable notice from Parent, it
will (y) consent to the use of such Additional Financial Statements in any such
registration statement, document or circular and (z) execute and deliver, and
use reasonable efforts to cause its officers to execute and deliver (if
required), such "representation" letters as are customarily delivered in
connection with audits and as PWC and Parent's independent accountants may
reasonably request under the circumstances.




44









SECTION 6.19. NO CONTROL OF OTHER PARTY'S BUSINESS.




Nothing contained in this Agreement shall give Parent, directly or
indirectly, the right to control or direct the Company's or the Company
Subsidiaries' operations prior to the Effective Time, and nothing contained in
this Agreement shall give the Company, directly or indirectly, the right to
control or direct Parent's or its Subsidiaries' operations prior to the
Effective Time. Prior to the Effective Time, each of the Company and Parent
shall exercise, consistent with the terms and conditions of this Agreement,
complete control and supervision over its and its subsidiaries' respective
operations.





ARTICLE VII






CONDITIONS





SECTION 7.01. CONDITIONS TO THE OBLIGATIONS OF ALL PARTIES.




The respective obligations of each of the Company, Parent and Merger
Sub to consummate the Merger are subject to the satisfaction (or, if
permissible, waiver by the party for whose benefit such conditions exist) at or
prior to the Effective Time of the following conditions:




(a) there shall not be any Judgment or Law restraining, enjoining or
prohibiting the consummation of the Merger; PROVIDED, HOWEVER, that no party
hereto may invoke this condition unless and until such party has complied in
full with Section 6.03; and




(b) all waiting periods applicable to the Merger under the HSR Act
shall have expired or been terminated.




SECTION 7.02. CONDITIONS TO THE OBLIGATIONS OF PARENT AND MERGER SUB.




The obligations of Parent and Merger Sub to consummate the Merger are
subject to the satisfaction (or waiver by Parent and/or Merger Sub, as
applicable) at or prior to the Effective Time of the following further
conditions; PROVIDED that notwithstanding the foregoing or anything in this
Agreement to the contrary, after January 31, 2007, neither Section 7.02(a) nor
7.02(c) shall be a condition to Parent and Merger Sub's obligations to
consummate the Merger:




(a) the representations and warranties of the Company contained in
this agreement shall be true and correct when made and at and as of the Closing
as if made at and as of the Closing (except for those representations and
warranties that address matters only as of a particular date or only with
respect to a specific period of time which need only be true and correct as of
such date or with respect to such period), except where the failure of such
representations or warranties to be true and correct (without giving effect to
any materiality qualifiers set forth in such representations and warranties)
does not have and would not reasonably be expected to have, individually or in
the aggregate, a Company Material Adverse Effect; PROVIDED, HOWEVER, that
notwithstanding the foregoing, the representations and warranties set forth in


Section 4.03 shall be true and correct in all material respects and the
representations and warranties set forth in the second sentence of Section 4.08
shall be true and correct in all respects at and as of the Closing as if made at
and as of the Closing (except for those




45









representations and warranties that address matters only as of a particular date
or only with respect to a specific period of time which need only be true and
correct as of such date or with respect to such period);




(b) the Company shall have performed in all material respects its
obligations hereunder required to be performed by it at or prior to the
Effective Time;




(c) since December 31, 2005, there shall not have been any change,
event, circumstance or effect that has had or would reasonably be expected to
have, individually or in the aggregate, a Company Material Adverse Effect;




(d) the Company shall have obtained the consents and Requisite
Regulatory Approvals listed in SCHEDULE 4.06, other than such consents and
approvals the failure of which to obtain would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect;
PROVIDED that the failure to obtain any consents or approvals due to the
identity of Parent or its Affiliates shall not be taken into account in
determining whether or not the condition in this Section 7.02(d) is satisfied;
and




(e) the Company shall have delivered to Parent a certificate (dated as
of the Closing Date), signed by an officer or officers with authority to bind
the Company as to compliance with the conditions set forth in paragraphs (a) (if
applicable), (b) and (d) of this Section 7.02.




For the avoidance of doubt, nothing in this Agreement shall be
construed to require or otherwise impose as a condition to Parent or Merger
Sub's obligation to consummate the Merger that Parent shall have received or
otherwise has available financing in order to satisfy its payment obligations
hereunder, including with respect to payment of the Merger Consideration.




SECTION 7.03. CONDITIONS TO THE OBLIGATIONS OF THE COMPANY.




The obligations of the Company to consummate the Merger are subject to
the satisfaction (or waiver by the Company) at or prior to the Effective Time of
the following further conditions:




(a) the representations and warranties of Parent and Merger Sub
contained in this Agreement which are qualified as to materiality shall be true
and correct and all such representations and warranties that are not qualified
as to materiality shall be true and correct in all material respects, in each
case when made and at and as of the Closing Date as if made at and as of the
Closing Date (except for those representations and warranties that address
matters only as of a particular date or only with respect to a specific period
of time which need only be true and accurate as of such date or with respect to
such period);




(b) each of Parent and Merger Sub shall have performed in all material
respects all of its respective obligations hereunder required to be performed by
it at or prior to the Effective Time; and




46









(c) each of Parent and Merger Sub shall have delivered to the Company
certificates (dated as of the Closing Date), signed by an officer or officers
with authority to bind such Person as to compliance with the conditions set
forth in paragraphs (a) and (b) of this Section 7.03.





ARTICLE VIII






CLOSING; TERMINATION





SECTION 8.01. CLOSING.




(a) Unless this Agreement shall have been terminated and the Merger
abandoned, the closing of the transactions contemplated hereby (the "CLOSING")
shall take place at the offices of Simpson Thacher & Bartlett LLP, 425 Lexington
Avenue, New York, New York on the third business day following the satisfaction
or waiver of the conditions set forth in Article VII (excluding conditions that,
by their terms, cannot be satisfied until the Closing, but subject to the
satisfaction or wavier of such conditions at the Closing) or at such other place
and on such other date as shall be mutually agreed to by Parent and the Company.
At the Closing, the parties shall exchange the documents referred to in Article
VII and all necessary filings with the Secretary of State to consummate the
Merger under the DGCL (including the Certificate of Merger) shall be made in
accordance with the applicable provisions of the DGCL.




(b) Notwithstanding the foregoing, if in Parent's reasonable judgment
delaying the Closing is necessary or desirable in connection with obtaining the
Financing or consummation of the "Restructuring" substantially as contemplated
by the Financing Commitment (i) so that consummation of the Merger pursuant to
this Agreement will not result in a disqualification of Parent's status as a
real estate investment trust under the Code, or (ii) in connection with any
filings with respect to the Securities or such Restructuring with the Securities
and Exchange Commission relating to the transactions contemplated by this
Agreement deemed necessary or desirable by Parent: (A) Parent shall have the
right, by notice given to the Company on or prior to the third business day
following the satisfaction of the conditions set forth in Article VII, to delay
the Closing until such date as Parent shall determine (but not later than
January 31, 2007); and (B) Parent shall have the further right (if Parent has
exercised its right to delay the Closing under subclause (A)), by notice given
to the Company on or prior to January 26, 2007, to delay the Closing to the
extent that, in Parent's reasonable judgment, such delay is necessary or
desirable in connection with obtaining the Financing for either or both of the
reasons set forth in clauses (i) and (ii) above, until such date as Parent shall
determine (but not later than June 30, 2007); PROVIDED that if Parent exercises
its right to delay the Closing under subclause (B), simultaneously with giving
notice to delay the Closing, Parent shall deposit with the Escrow Agent an
amount of cash equal to one hundred million dollars ($100,000,000.00) (the "GOOD
FAITH DEPOSIT") pursuant to an escrow agreement on mutually agreeable terms
consistent with the terms of this Agreement. If the Merger shall not have
occurred on or prior to June 29, 2007 (X) other than as a result of the failure
to be satisfied (or waived) of one or more of the applicable conditions set
forth in Sections 7.01 or Section 7.02(b), (d) and (e), the Good Faith Deposit
(and interest accrued thereon) shall be paid to the Company and may be retained
by it in addition to and not in lieu of any other remedy available to the
Company at law or in equity, and, accordingly, shall not be deemed to be a
substitute therefor or




47









approximation thereof, or (Y) as a result of the failure to be satisfied (or
waived) of one or more of the applicable conditions set forth in Section 7.01 or


Section 7.02(b), (d) and (e), the Good Faith Deposit (and interest accrued
thereon) shall be paid to Parent. The escrow agreement referred to above shall
contain provisions with respect to the timing and procedure of distributions of
the Good Faith Deposit (and interest accrued thereon) consistent with the
foregoing, and shall provide that, upon consummation of the Merger, the Good
Faith Deposit (and interest accrued thereon) shall be applied to the Exchange
Fund.




SECTION 8.02. TERMINATION.




Anything herein or elsewhere to the contrary notwithstanding, this
Agreement may be terminated and the Merger contemplated herein may be abandoned
at any time prior to the Effective Time, whether before or after obtaining the
Stockholder Approval:




(i) by mutual written consent of Parent, Merger Sub and the
Company;




(ii) by the Company or Parent, if the Merger shall not have
occurred on or prior to January 31, 2007, or if Parent has exercised its
rights under Section 8.01(b)(B), if the Merger shall not have occurred on
or prior to June 30, 2007; PROVIDED, HOWEVER, that the right to terminate
this Agreement and abandon the Merger under this clause (ii) shall not be
available to any party whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in, the failure of the Merger
to occur on or prior to such date; or




(iii) by the Company or Parent in the event that any court of
competent jurisdiction or other Governmental Entity located or having
jurisdiction within the United States shall have issued a final Judgment or
taken any other final action restraining, enjoining or otherwise
prohibiting the Merger and such Judgment or other action is or shall have
become final and nonappealable.




SECTION 8.03. EFFECT OF TERMINATION.




In the event of the termination of this Agreement as provided in


Section 8.02 hereof, written notice thereof shall forthwith be given to the
other parties specifying the provision hereof pursuant to which such termination
is made, and this Agreement shall forthwith become null and void, and there
shall be no liability on the part of any of the parties hereto except (i) for
fraud or for willful breach of this Agreement (it being understood and agreed
that any failure by Parent or Merger Sub to consummate the Merger in accordance
with the terms of this Agreement due to the failure of Parent to obtain the
Financing shall be deemed to be a willful breach of this Agreement) and (ii) as
set forth in Section 9.02.




48










ARTICLE IX






GENERAL PROVISIONS





SECTION 9.01. NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES.




None of the representations, warranties, covenants and agreements in
this Agreement or in any instrument delivered pursuant to this Agreement,
including any rights arising out of any breach of such representations,
warranties, covenants and agreements, shall survive the Effective Time, except
for (i) those covenants and agreements contained herein that by their terms
apply or are to be performed in whole or in part after the Effective Time and


(ii) this Article IX.




SECTION 9.02. COSTS AND EXPENSES.




Except as otherwise specifically provided herein, each party shall
bear its own expenses in connection with this Agreement and the transactions
contemplated hereby.




SECTION 9.03. NOTICES.




All notices or other communications required or permitted by this
Agreement shall be effective upon receipt and shall be in writing and delivered
personally or by overnight courier, or sent by facsimile, as follows:




(i)   if to Parent or Merger Sub, to:




Hospitality Properties Trust
400 Centre Street


Newton, MA 02458


Attn.: President


Facsimile: (617) 332-2261




with a copy to:




Sullivan & Worcester LLP
One Post Office Square


23rd Floor


Boston, MA 02109


Attn.: Richard Teller, Esq.




Facsimile: (617) 338-2880




49









(ii)  if to the Company, to:




TravelCenters of America, Inc.
24601 Center Ridge Road


Suite 200


Westlake, Ohio 44145-5634
Attention: General Counsel
Facsimile: (440) 808-3301




with copies to




Oak Hill Capital Partners, L.P.
201 Main Street


Fort Worth, Texas 76102


Attention: Controller


Facsimile: (817) 339-7350




Keystone Group, L.P.






201 Main Street, Suite 3100


Fort Worth, Texas 76102






Attention: Kevin G. Levy, Esq.




Facsimile: (817) 820-1623




Simpson Thacher & Bartlett LLP


425 Lexington Avenue


New York, New York 10017






Attention: William E. Curbow, Esq.




Facsimile: (212) 455-2502




(iii) if to the Stockholders Representative, to:




Oak Hill Capital Partners, L.P.
201 Main Street


Fort Worth, Texas 76102


Attention: Controller


Facsimile: (817) 339-7350




with a copy to:




Keystone Group, L.P.






201 Main Street, Suite 3100


Fort Worth, Texas 76102






Attention: Kevin G. Levy, Esq.




Facsimile: (817) 820-1623




or to such other address as hereafter shall be furnished as provided in this


Section 9.03 by any of the parties hereto to the other parties hereto.




50









SECTION 9.04. STOCKHOLDERS REPRESENTATIVE.




(a) The parties to this Agreement shall cooperate with the
Stockholders Representative and any accountants, attorneys or other agents whom
it may retain to assist in carrying out its duties hereunder. The Stockholders
Representative may communicate with any Stockholder or any other Person
concerning his responsibilities hereunder, but it is not required to do so. The
Stockholders Representative has a duty to serve in good faith the interests of
the Stockholders and other stockholders of the Company who designate the
Stockholders Representative to act as such, and to perform its designated role
under this Agreement and the Escrow Agreement, but the Stockholders
Representative shall have no financial liability whatsoever to any Person
relating to its service hereunder (including any action taken or omitted to be
taken), except that it shall be liable for harm which it directly causes by an
act of willful misconduct. The Stockholders Representative may resign at any
time by notifying in writing Parent, the Company and the Stockholders.




(a) The Stockholders Representative represents and warrants to the
Company, Parent and Merger Sub: (i) that it has all necessary power, authority
and capacity to execute and deliver this Agreement and to perform its
obligations under Sections 3.02, 3.03, 3.04, 9.04, 9.08 and 9.09; (ii) the
execution, delivery and performance of this Agreement by the Stockholders
Representative has been duly and validly authorized by all necessary action on
the part of the Stockholders Representative and (iii) this Agreement has been
duly and validly executed and delivered by the Stockholders Representative and,
assuming the due authorization, execution and delivery by each other party
hereto, constitutes a legal, valid and binding obligation of the Stockholders
Representative, enforceable against it in accordance with its terms, except that
such enforceability may be limited by (x) bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other similar laws relating
to creditors' rights generally, (y) general principles of equity (whether
applied in a proceeding at law or in equity) and (z) any implied covenant of
good faith and fair dealing.




SECTION 9.05. COUNTERPARTS.




This Agreement may be executed and delivered (including by facsimile
transmission) in any number of counterparts, and by the different parties hereto
in separate counterparts, each of which when executed shall be deemed to be an
original but all of which taken together shall constitute a single instrument.




SECTION 9.06. ENTIRE AGREEMENT.




This Agreement (including the Schedules referred to herein) and the
Confidentiality Agreement sets forth the entire understanding and agreement
between the parties as to the matters covered herein and supersedes and replaces
any prior understanding, agreement or statement of intent, in each case, written
or oral, among the parties, of any and every nature with respect thereto.




SECTION 9.07. GOVERNING LAW; EXCLUSIVE JURISDICTION.




This Agreement shall be governed in all respects, by the laws of the
State of Delaware, including validity, interpretation and effect, without regard
to principles of conflicts of




51









law. The parties hereto irrevocably and unconditionally consent to submit to the
exclusive jurisdiction of the courts of the State of Delaware for any lawsuits,
actions or other proceedings arising out of or related to this Agreement and
agree not to commence any lawsuit, action or other proceeding except in such
courts. The parties hereto further agree that service of process, summons,
notice or document by mail to their addresses set forth above shall be effective
service of process for any lawsuit, action or other proceeding brought against
them in any such court. The parties hereto irrevocably and unconditionally waive
any objection to the laying of venue of any lawsuit, action or other proceeding
arising out of or related to this Agreement in the courts of the State of
Delaware, and hereby further irrevocably and unconditionally waive and agree not
to plead or claim in any such court that any such lawsuit, action or proceeding
brought in any such court has been brought in an inconvenient forum.




SECTION 9.08. THIRD PARTY RIGHTS; ASSIGNMENT.




Except as specified in Section 6.07 and except for the rights of the
holders of Company Securities to receive Merger Consideration in accordance with
Article II and to recover, solely through an action brought by the Company,
damages from Parent in the event of a breach of this Agreement by Parent or
Merger Sub, this Agreement is intended to be solely for the benefit of the
parties hereto and is not intended to confer any benefits upon, or create any
rights in favor of, any Person other than the parties hereto and shall not be
assignable without the prior written consent of the Company, Parent and the
Stockholders Representative.




SECTION 9.09. WAIVERS AND AMENDMENTS.




(a) This Agreement may be amended by the parties hereto by action
taken by or on behalf of their respective Boards of Directors; PROVIDED,
HOWEVER, that after the date hereof, there shall be made no amendment that by
Law requires further approval by the stockholders of the Company without the
further approval of such stockholders. No modification of or amendment to this
Agreement shall be valid unless in a writing signed by the parties hereto
referring specifically to this Agreement and stating the parties' intention to
modify or amend the same.




(b) Any party hereto may (i) extend the time for the performance of
any of the obligations or other acts of the other parties hereto, (ii) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto and (iii) subject to the requirements of
applicable Law, waive compliance with any of the agreements or conditions
contained herein. Any such extension or waiver shall be valid if set forth in an
instrument in writing signed by the party or parties to be bound thereby and
referring specifically to the term or condition to be waived. The failure of any
party to assert any rights or remedies shall not constitute a waiver of such
rights or remedies.




SECTION 9.10. SCHEDULES.




Disclosure of any fact or item in any Schedule shall not be deemed to
constitute an admission that such item or fact is material for the purposes of
this Agreement.




SECTION 9.11. ENFORCEMENT.




52









The parties agree that irreparable damage would occur in the event
that any of the provisions of this Agreement were not performed in accordance
with their specific terms. It is accordingly agreed that the parties shall be
entitled to specific performance of the terms hereof and costs of enforcement
(including attorneys fees); this being in addition to any other remedy to which
such parties are entitled at law or in equity. The parties agree that,
notwithstanding anything to the contrary contained in this Agreement, in the
event of a breach of this Agreement by Parent or Merger Sub (whether or not due
to a failure to obtain the Financing), the damages recoverable by the Company
for itself and on behalf of the holders of the Company Securities shall be
determined by reference to the total amount that would have been recoverable by
the holders of Company Securities if all such holders brought an action against
Parent as intended third party beneficiaries hereunder.




SECTION 9.12. [RESERVED.]




SECTION 9.13. HEADINGS; INTERPRETATION.




The descriptive headings contained in this Agreement are included for
convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement. When reference is made in this Agreement to a
Section, such reference shall be to a Section of this Agreement unless otherwise
indicated. Whenever the words "include", "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation." The words "hereof," "herein," "hereby" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement. The word "or" shall
not be exclusive. This Agreement shall be construed without regard to any
presumption or rule requiring construction or interpretation against the party
drafting or causing any instrument to be drafted.




SECTION 9.14. NONLIABILITY OF TRUSTEES.




THE DECLARATION OF TRUST ESTABLISHING PARENT, A COPY OF WHICH,
TOGETHER WITH ALL AMENDMENTS THERETO (THE "DECLARATION"), IS DULY FILED WITH THE
DEPARTMENT OF ASSESSMENTS AND TAXATION OF THE STATE OF MARYLAND, PROVIDES THAT
THE NAME "HOSPITALITY PROPERTIES TRUST" REFERS TO THE TRUSTEES UNDER THE
DECLARATION COLLECTIVELY AS TRUSTEES, BUT NOT INDIVIDUALLY OR PERSONALLY, AND
THAT NO TRUSTEE OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF THE PARENT SHALL BE
HELD TO ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR
CLAIM AGAINST, THE PARENT. ALL PERSONS DEALING WITH THE PARENT, IN ANY WAY,
SHALL LOOK ONLY TO THE ASSETS OF PARENT FOR THE PAYMENT OF ANY SUM OR THE
PERFORMANCE OF ANY OBLIGATION.





[SIGNATURE PAGE FOLLOWS]





53









IN WITNESS WHEREOF, this Agreement has been executed and delivered as
of the date first written above.





TRAVELCENTERS OF AMERICA, INC.











By: /s/ Timothy L. Doane
    ------------------------------------
    Name:  Timothy L. Doane
    Title: President and CEO














HOSPITALITY PROPERTIES TRUST











By: /s/ John G. Murray
    ------------------------------------
    Name:  John G. Murray
    Title: President














HPT TA MERGER SUB INC.











By: /s/ John G. Murray
    ------------------------------------
    Name:  John G. Murray
    Title: President














SOLELY IN ITS CAPACITY AS "STOCKHOLDERS


REPRESENTATIVE" FOR PURPOSES OF SECTIONS



3.02, 3.03, 3.04, 9.04, 9.08 AND 9.09 OF



THE AGREEMENT:






OAK HILL CAPITAL PARTNERS, L.P.





By: OHCP GenPar, L.P., its General


Partner




By: OHCP MGP, LLC, its General Partner










By: /s/ Kevin G. Levy
    ------------------------------------
    Name:  Kevin G. Levy
    Title: Vice President














[SIGNATURE PAGE TO MERGER AGREEMENT]
















EX-3.1






TRAVELCENTERS OF AMERICA,  LLC






CERTIFICATE OF FORMATION





Pursuant to the provisions of the Delaware Limited Liability Company Act,
the undersigned hereby certifies as follows:




1. NAME.  The name of the limited liability company formed hereby (the
"COMPANY") is TravelCenters of America LLC.




2. REGISTERED OFFICE AND AGENT.  The address of the registered office of the
Company in the State of Delaware is 2711 Centerville Road, Suite 400, in the
City of Wilmington, County of New Castle.  The name of the registered agent at
such address is the Corporation Service Company.




IN WITNESS WHEREOF,  the undersigned has executed this Certificate of
Formation on October 10, 2006.










/s/ Edwin L. Miller, Jr.
---------------------------------------
Edwin L. Miller, Jr., Authorized Person
























EXHIBIT 10.5






TRAVELCENTERS OF AMERICA




FREIGHTLINER EXPRESS OPERATING AGREEMENT





This Freightliner Express Operating Agreement ("THIS AGREEMENT") is
effective as of the 21st day of July, 1999, by and among Freightliner
Corporation, a Delaware corporation ("FREIGHTLINER"), TA Operating Corporation,
dba TravelCenters of America, a Delaware corporation ("TA OPERATING"), and TA
Franchise Systems, Inc., a Delaware corporation ("TA FRANCHISE"). TA Operating
and TA Franchise (collectively, "TA OPERATIONS") are both wholly-owned
subsidiaries of TravelCenters of America, Inc., a Delaware corporation (THE
"PARENT CORPORATION").




A. Freightliner produces, distributes and markets a full range of
commercial vehicles, including heavy and medium-duty trucks.




B. TA Operations operates or franchises the operations of three
distinct types of travel centers with repair facilities known as "shops" (the
"TRAVELCENTERS LOCATIONS"): (i) sites owned or leased by TA Operating or an
affiliate and operated by TA Operating ("COCOS"), of which there are currently
110; (ii) sites owned or leased by an affiliate and leased to independent
lessee-franchises that operate such sites, of which there are currently 29; and


(iii) sites owned or leased and operated by independent franchisees that operate
on such sites, of which there are currently 9 (collectively, with the sites
described in the foregoing clause (ii), the "FRANCHISE LOCATIONS").




C. The TravelCenters Locations are operated under the "TravelCenters of
America" and "TA" trademarks (or, in the case of certain locations now operated
under other names, will be brought under such trademarks) and are truck-stop
facilities offering a broad range of fuel and nonfuel products, services and
amenities to trucking fleets, professional truck drivers and other motorists,
including truck maintenance and repair services and products, full service and
fast food dining, travel and convenience stores, telecommunications services and
various hospitality and rest-related amenities.




D. Freightliner and TA Operations desires to increase the potential to
service Freightliner Vehicles (as hereinafter defined) through the designation
and operation of TravelCenters Locations that are COCOs as Freightliner Express
Locations ("FE LOCATIONS") in accordance with the terms and conditions of this
Agreement.




E. Freightliner also desires to increase its market share of the parts
aftermarket and wishes to enter into certain arrangements intended to encourage
marketing of Freightliner-Sourced Parts.




1









In consideration of the foregoing and the mutual agreements herein
contained, the parties hereto agree as follows:




1.       DEFINITIONS.




As used herein, the following terms will have the following meanings at
any time the matter has relevance:




1.1 "ALLIANCE" is a division of Freightliner.




1.2 "CLAIM" or "CLAIMS" shall mean all actions, proceedings, claims or
demands of any kind or nature whatsoever.




1.3 "FE SERVICE MENU" shall mean the Freightliner Express Service Menu
adopted from time to time by mutual agreement of Freightliner and TA Operations
specifying the warranty and repair services to be provided by FE Locations to
Freightliner Vehicles, which the parties intend will be limited to services that
generally can be performed in 1.5 hours or less or are otherwise agreed to be
within the scope of the Services. The initial FE Service Menu is attached as
EXHIBIT 1.3.




1.4 "FREIGHTLINER PRODUCTS" shall mean Freightliner Vehicles and
Freightliner-Sourced Parts.




1.5 "FREIGHTLINER-APPROVED PARTS" shall mean the proprietary parts (as
indicated by proprietary numbering in Freightliner's parts catalogs) and vendor
parts offered for sale by Freightliner or its Alliance division, including
Freightliner or Alliance branded parts either manufactured by or on behalf of
Freightliner or otherwise specifically licensed or approved by Freightliner for
use in servicing Freightliner Vehicles.




1.6 "FREIGHTLINER-SOURCED PARTS" shall mean Freightliner-Approved Parts
purchased from Freightliner or its Alliance division.




1.7 "FREIGHTLINER VEHICLES" shall mean the trucks and chassis sold by
Freightliner or listed for sale by Freightliner in the Freightliner Truck Data
Books that bear the "Freightliner" name and utilize Freightliner-Approved Parts.




1.8 "FREIGHTLINER WARRANTY POLICIES" shall mean Freightliner's warranty
policies under the Freightliner Warranty Manual and related publications.




1.9 "INDEMNIFIED PARTY" shall have the meaning given to such term in


Section 4.4.




1.10 "LOSSES" shall mean any suit, claim, demand, damage, liability,
cost or expense, including reasonable attorneys' fees and expenses, judgment or
settlement.




1.11 "OTHER INDEMNIFIED PARTIES" shall mean the affiliates, officers,
directors, employees, members, stockholders, agents and representatives of the
primary Indemnified Party.




2









1.12 "SERVICES" shall mean the warranty and repair services
contemplated to be performed by FE Locations in accordance with this Agreement
and the FE Service Menu.




1.13 "STOCKHOLDERS' AGREEMENT" shall mean that certain Institutional
Stockholders' Agreement dated on or about the date hereof among certain
shareholders of the Parent Corporation.




2.       OPERATIONS AND RESPONSIBILITIES OF FE LOCATIONS.




2.1 GENERAL. Each FE Location will serve as a point of purchase for
Services and Freightliner-Approved Parts in accordance with the FE Service Menu
and will act as an authorized limited parts and service dealer of Freightliner
for the purpose of performing Services for Freightliner Vehicles and customers
and selling Freightliner-Approved Parts. The FE Locations will operate under
such name or names identifying the FE Locations with Freightliner as
Freightliner may propose from time to time, each of which names shall be
reasonably acceptable to and be approved by TA Operations. Notwithstanding any
provision of this Agreement apparently to the contrary, all reasonable
out-of-pocket expense necessary to any name change initiated by Freightliner
after implementation of the name or names originally used to designate the FE
Locations shall be at the sole expense of Freightliner. Designation as an FE
Location shall entitle the FE Location to conduct the operations contemplated
under this Agreement at and from the current location of the FE Location and to
display and utilize Freightliner trademarks and service marks in compliance with
the limited license granted by Freightliner for such purpose. This Agreement is
intended to apply to the COCOs. TA Operating will operate each COCO that is an
FE Location and each other COCO that is engaged in any transactions with
Freightliner contemplated by this Agreement in the manner contemplated by this
Agreement and applicable to such COCO. Freightliner and TA Operations may from
time to time enter into separate agreements with respect to any Franchise
Locations that are designated by Freightliner and TA Operations as FE Locations.




2.2 LIMITATIONS; REFERRALS TO FREIGHTLINER AND SELECTRUCKS. FE
Locations shall not have the right to engage either currently or in the future
in the sale of new or used Freightliner Vehicles. However, FE Locations may from
time to time at the election of the FE Location display new and used
Freightliner trucks as well as other Freightliner merchandise and shall refer
potential purchasers of Freightliner Vehicles to nearby Freightliner dealerships
or SelecTrucks locations.




2.3 OPERATIONS; SCOPE OF SERVICES; REFERRALS. FE Locations shall
conduct the operations contemplated under this Agreement on a 24-hour day basis.
Consistent with TA Operations' past practice or as additionally may be required
to meet the requirements of the FE Service Menu, TA Operations shall employ
qualified and adequately trained technicians and other service personnel, parts
personnel and administrative staff for purposes of conducting such operations.
FE Locations will provide local road service as well as shop-based services
consistent with FE Service Menu. FE Locations will be included in the referral
lists maintained by Freightliner's Customer Assistance Center ("CAC") and
referrals will be made by the CAC to FE Locations in accordance with the CAC's
applicable policies. Each FE Location generally




3









will be expected to refer warranty and repair services requiring on average in
excess of 1.5 hours or otherwise outside of the agreed scope of the Services
under the FE Service Menu to the nearest Freightliner dealership or, if a
Freightliner dealership is not reasonably convenient, another appropriate
service provider determined by the FE Location (which may consult with the CAC
as to suggested referrals). Freightliner will actively encourage its dealers to
make referrals to FE Locations for services within the FE Services Menu to the
extent convenient for the customer and where the dealer can not perform services
within a reasonable time.




2.4 WARRANTY SERVICES AND CLAIMS; REPLENISHMENT POLICY. FE Locations
may perform warranty services on Freightliner Products that are within the
Services under FE Service Menu. All such warranty services shall be performed in
accordance with and will be governed by Freightliner's Warranty Policies,
including the making, settlement and payment of claims. TA Operations will
administer Freightliner warranty claims on behalf of the FE Locations and
warranty payments will be made to TA Operations. Freightliner will process
warranty claims by TA Operations in accordance with Freightliner's standard
practices applicable to warranty claims by dealers. In making payments to
Freightliner, TA Operations shall not deduct any credits for warranty claims or
other amounts owed by Freightliner to TA Operations unless TA Operations shall
have given written notice to Freightliner applying for such and, in the case of
warranty claims, Freightliner has confirmed that such claims have been approved
by Freightliner. In connection with the performance of any Freightliner warranty
services, each FE Location will be required to use Freightliner-Approved Parts
and, with respect to each such part used in performing any Freightliner warranty
services, will be required to purchase identical Freightliner-Sourced Parts in
at least the same number as the number of such part used for warranty services.
Such replenishment policy shall be applied by Freightliner on an aggregate basis
with respect to TA Operations.




2.5 INSPECTION, RECALLS AND CAMPAIGNS. If approved in advance by
Freightliner and TA Operations, FE Locations may perform inspections or repairs
on Freightliner Products in connection with inspections, recalls or campaigns.
Such inspections and/or repairs shall be made in accordance with any related
Freightliner service bulletins, field modification bulletins, recall or other
campaign notices furnished to FE Locations as well as the Freightliner Service
Manual. FE Locations shall to the extent reasonably possible assist Freightliner
in notifying FE Location customers requiring such inspections or repairs of the
need or desirability of any such inspections or repairs using information
obtained through Freightliner's Service Advisor and ServicePro systems.




2.6 WORKMANSHIP; TOOLS AND EQUIPMENT; SERVICE MANUALS. FE Locations
shall perform all service work in a good and workmanlike manner in accordance
with all applicable laws and regulations in order to maintain the confidence of
the public in Freightliner, FE Locations and Freightliner Products. FE Locations
shall have and maintain in good working order on their premises the service
equipment and special tools and service manuals Freightliner and TA Operations
mutually agree from time to time are required to perform Services. The initial
agreed-upon list of service equipment, special tools and service manuals is
attached as EXHIBIT 2.6. FE Locations shall follow all service instructions
contained in the Freightliner Service Manuals, systems or other notices or
bulletins issued by Freightliner to FE Locations. Freightliner will from time to
time provide service and technical advice through periodic visits




4









from field service personnel and provision of service publications to assist FE
Locations in satisfactorily performing Services on Freightliner Vehicles.




2.7 FREIGHTLINER-APPROVED PARTS. Each FE Location shall maintain the
inventories of Freightliner-Approved Parts agreed upon from time to time by
Freightliner and TA Operations to be necessary to provide Services and shall
employ personnel familiar with such parts to manage sales of such parts. The
initial list of required Freightliner-Approved Parts is attached as EXHIBIT 2.7.
Freightliner customers have the right to expect that any part that an FE
Location sells, installs or uses in the repair or servicing of any Freightliner
Vehicle meets the high quality standards of Freightliner-Approved Parts. FE
Locations therefore will not sell, use or install on Freightliner Vehicles any
parts that are not Freightliner-Approved Parts and are not equal in quality and
design to Freightliner-Approved Parts. FE Locations also will not sell or offer
to sell as Freightliner-Approved Parts any parts that are not in fact
Freightliner-Approved Parts.




2.8 PRICE AND OTHER TERMS OF SALE OF FREIGHTLINER-SOURCED PARTS. The
price and terms of sale for Freightliner-Sourced Parts shall be as set forth in
this Section 2.8 and in EXHIBIT 2.8 attached hereto or as otherwise agreed in
writing by Freightliner and TA Operations (TA Operations being hereinafter
referred to in this Section 2.8 as "Purchaser" and Freightliner-Sourced Parts
being hereinafter referred to in this Section 2.8 as "parts"):




(a) Purchaser may return obsolete or other returnable parts in
accordance with applicable return policies under the Alliance Policies and
Procedures. Orders for parts may be cancelled by Purchaser prior to shipment
subject to applicable handling and cancellation charges.




(b) Freightliner shall have the right to change the design or
specifications of any parts ordered by Purchaser at any time with no obligation
to make such changes in similar parts previously delivered to Purchaser. In
addition, Freightliner shall have the right, subsequent to the receipt of any
order, to make design changes and substitution of materials which, in
Freightliner's opinion, are necessary to improve the part. Purchaser shall
accept any such changed part in full settlement of Freightliner's obligations
under any order submitted by Purchaser.




(c) All parts purchased by Purchaser from Freightliner shall
be sold to Purchaser freight prepaid for stock orders and freight collect for
non-stock or expedited orders, place of manufacture or other point of shipment,
if applicable. Freightliner will attempt, whenever practical, to follow
Purchaser's request with respect to routing and mode of transportation but
reserves the final decision as to the carriers and routes selected. Parts will
be invoiced on the date they are shipped. Title to parts shall pass to Purchaser
on delivery to Purchaser. The risk of loss or damage, latent or otherwise, shall
pass to Purchaser upon delivery to Purchaser. Purchaser shall cooperate fully
with Freightliner in the inspection of parts received and in the submission of
claims to carriers for any shipping damage that may have occurred.




(d) All parts shipped directly to Purchaser from Freightliner vendors are
sold to Purchaser Ex-Works the vendor's dock. Risk of loss or damage, latent or
otherwise, shall pass




5









to Purchaser upon delivery of the parts by the vendor to the carrier where
freight is contracted for by Purchaser or upon delivery to Purchaser if freight
is contracted for by the vendor.




(e) All parts returned by Purchaser to Freightliner (or to a
Freightliner authorized vendor) shall be shipped freight and insurance prepaid
Freightliner's dock (or vendor dock). At the time of receipt, parts must be
undamaged and packaged in original boxes, if practical. Claims for loss or
damage shall be filed by Purchaser directly with the carrier or other agent.




(f) Delivery dates are approximate and are based upon receipt
of all necessary information from Purchaser. Normal delivery can generally be
expected within 48 hours after the day of shipment from the facing Alliance
Parts Distribution Center.




(g) Freightliner shall not be responsible for failure to
accept Purchaser's order, for any delay in acceptance of such orders or any
failure or delay in delivering parts, if such failure or delay is due in whole
or in part to any change in Freightliner's production schedule as to which it
shall have notified Purchaser; or to any labor difficulties; or to any labor,
material, transportation or utility shortage or curtailment; or to government
regulations; or to discontinuance by Freightliner of the manufacture or sale of
any parts; or where such failure or delay is due to any cause beyond the control
or without the fault or negligence of Freightliner; or where performance by
Freightliner would be commercially impractical. In any event, any liability on
the part of Freightliner for any failure or delay in delivery of parts shall be
limited to the repayment to Purchaser of any part of the purchase price thereof
which Purchaser may have paid to Freightliner.




(h) Purchaser shall include as a part of its sale of parts to
customers Purchaser's express written warranty in the identical terms,
limitations and disclaimers as extended by Freightliner to Purchaser with
respect to the sale of such part to Purchaser. Any warranty extended by
Purchaser to customers in terms, limitations and disclaimers other than those of
the express written warranty furnished to Purchaser by Freightliner shall be the
sole responsibility of Purchaser, and Purchaser shall defend, indemnify and save
Freightliner harmless from any suit, claim, demand, damage, liability, cost or
expense, including reasonable attorneys' fees and expenses, final judgments and
settlements, arising out of or resulting from the extension by Purchaser of any
materially different warranty than the warranty extended by Freightliner to
Purchaser or from the failure of Purchaser to include in Purchaser's agreement
with its customers limitations and disclaimers substantially similar to the
limitations and disclaimers set forth in the Freightliner Warranty Policies.




2.9 LIMITATIONS RELATING TO FREIGHTLINER-SOURCED PARTS; FREIGHTLINER
WARRANTIES. FE Locations shall encourage and attempt to increase the sale of
Freightliner-Sourced Parts but, without the prior approval of Freightliner,
shall not establish satellite parts stores or engage in the active wholesaling
of Freightliner-Sourced Parts (including bulk sales, active discounting, parts
deliveries to fleets, telemarketing and sales for resale). Any part sold by an
FE Location in connection with the provision of Services to a Freightliner
Vehicle where such part is not provided under a Freightliner vehicle warranty
will be covered by Freightliner's standard warranty on parts only if such part
is a Freightliner-Sourced Part, as documented in a manner




6









acceptable to Freightliner on or in connection with the invoice supplied to the
customer by the FE Location. The invoice supplied to a customer by an FE
Location in connection with parts sales will indicate in writing in a
conspicuous manner that any parts not indicated to be covered by Freightliner's
standard parts warranty instead are covered by TA Operations' warranties to
ensure that the customer is advised that any parts that are not
Freightliner-Sourced Parts are not included in any warranties furnished by
Freightliner. Parts used by an FE Location in performing warranty services on
Freightliner Vehicles in accordance with Freightliner Warranty Policies will be
covered by the vehicle warranty for the balance of the vehicle warranty period
provided that such parts are Freightliner-Approved Parts.




2.10 TAXES. Freightliner's prices do not include federal excise tax and
do not include other excise, sales, use or similar tax or any other tax
applicable to the sale, delivery or use of Freightliner-Sourced Parts. Purchases
of Freightliner-Sourced Parts by FE Locations are presumed to be for the
purposes of resale. FE Locations shall therefore furnish to Freightliner such
certificates or other evidence that may be required by Freightliner to establish
or maintain the exemption of such purchase from state or local sales or use
taxes or any such similar taxes. If any FE Location purchases any
Freightliner-Sourced Part and uses or employs such Freightliner-Sourced Part in
a manner that requires the payment of sales, use or similar taxes with respect
to such part or its use, FE Location shall pay any such taxes directly to the
appropriate governmental authorities or, if any such taxes are paid by
Freightliner in its sole discretion, reimburse Freightliner therefor, and shall
defend, indemnify and save harmless Freightliner from and against such taxes and
all claims, demands, liability, cost or expense, including reasonable attorneys'
fees and expenses, final judgments and settlements with respect thereto.




2.11 PROMOTIONAL ACTIVITIES. FE Locations shall use customer service
promotional literature supplied by Freightliner to TA Operations and approved by
TA Operations (any such material to be supplied by Freightliner on the same
cost-sharing basis as similar material is provided to Freightliner's dealers) to
advertise and promote the sale and use of Freightliner-Sourced Parts for the
servicing of Freightliner Vehicles and similar vehicles manufactured by other
companies. FE Locations shall participate in local, regional and national FE
Location advertising and promotional programs approved by Freightliner and TA
Operations. FE Locations shall not engage in service or other promotions
relating to Freightliner Products without the advance approval of Freightliner
and TA Operations.




2.12 TRAINING. Freightliner shall at its expense make available to TA
Operations parts, service and technology training programs offered by
Freightliner to its dealers that are consistent with the FE Service Menu and, in
connection with such programs, make basic program materials available without
charge on the same basis as Freightliner generally makes the same or
substantially identical materials available to its dealers or their personnel
without charge. In addition to such training programs as TA Operations may
separately develop and provide at its expense for the FE Locations, Freightliner
and TA Operations may jointly develop customized training programs for the FE
Locations on such cost-sharing basis between Freightliner and TA Operations as
is agreed upon by Freightliner and TA Operations. Personnel of the FE Locations
shall, at FE Location expense for food, lodging, travel and program




7









materials, participate in the various parts, service and technology training
programs made available to the FE Locations.




2.13 PRODUCT MODIFICATION. FE Locations shall not modify or alter any
Freightliner Product unless the relevant FE Location either obtains
Freightliner's prior written approval of such modification or alteration or
notifies the customer in writing, prior to or at the time of such modification
or alteration, that it is being made without Freightliner's approval and will
not be covered by any warranty of Freightliner. In no event shall any FE
Location remove, alter or modify any equipment or accessories required on any
Freightliner Vehicle by law or regulation. For purposes of this Section, the
terms "modify" and "alter" and "modification" and "alteration" shall mean any
departures from manufacturer specifications and shall not mean repairs or
replacements in accordance with manufacturer specifications. Each FE Location
shall defend, indemnify and save Freightliner harmless from any suit, claim,
demand, damage, liability, cost or expense, including reasonable attorneys' fees
and expenses, final judgments and settlements, arising out of or resulting from
such modification or alteration of a Freightliner Product by such FE Location
without Freightliner's prior written approval.




2.14 CUSTOMER COMPLAINTS. Customer complaints and claims with respect
to warranty Services shall be handled in accordance with the applicable
procedures under the Freightliner Warranty Policies. Each FE Location shall
receive, investigate and attempt to remedy customer complaints and claims with
respect to non-warranty Services by owners or users of Freightliner Products in
a manner intended to secure and maintain the goodwill of the customer and the
public toward Freightliner, the FE Locations and Freightliner Products. An FE
Location shall be free to resolve any such complaints or claims provided that it
absorbs all associated cost or expense. In any such case, Freightliner shall
have no obligation to reimburse the FE Location or to absorb any such expense
unless otherwise agreed by Freightliner in writing. All complaints and claims
received by an FE Location that cannot be readily remedied by the FE Location
shall be promptly reported in detail to Freightliner, together with the name and
address of the owner or user and the serial number or other identification of
the Freightliner Product involved.




2.15 LICENSES. FE Locations shall obtain any licenses required for the
conduct of the business contemplated by this Agreement.




2.16 CONDITION OF INDIVIDUAL FE LOCATIONS; INSPECTION BY FREIGHTLINER.
The premises of each FE Location shall be maintained in a manner that meets TA
Operations' internal quality requirements as in effect from time to time
(including those reflected in its Quality Service checklist) and the general
criteria for FE Locations mutually agreed upon by Freightliner and TA Operations
from time to time. Freightliner may conduct such review and inspection of FE
Locations as it determines to be necessary or desirable from time to time. TA
Operations will respond promptly to any and all reasonable concerns of
Freightliner with respect to the operations of any FE Location.




2.17 TERMINATION OF INDIVIDUAL FE LOCATIONS. In the event that an FE
Location fails to conform in all material respects with the criteria for
designation as an FE Location (other than any such criteria expressly waived by
agreement of Freightliner and TA Operations in




8









connection with its designation as an FE Location) or engages in a pattern of
conduct that is fraudulent or that in the reasonable judgment of Freightliner is
otherwise materially and substantially injurious to the goodwill of
Freightliner, Freightliner may, after consultation with TA Operations, agreement
by Freightliner and TA Operations on a mutually acceptable cure and reasonable
cure period, and failure by the FE Location to achieve the agreed-upon cure
within such period, terminate the status of such TravelCenters Location as an FE
Location by notice to TA Operations and the FE Location. Upon any such
termination, the FE Location will promptly take all steps necessary to cease
operation as an FE Location.




2.18 EFFECT OF TERMINATION OF AGREEMENT. Upon any termination of this
Agreement and resulting termination of each FE Location, all outstanding
indebtedness or other payment obligations under this Agreement or any related
agreement of any FE Location to Freightliner, including payments for
Freightliner-Sourced Parts, or of Freightliner to or in respect of any FE
Location, including any warranty receivables, shall become immediately due and
payable without regard to any contrary term of any such indebtedness or other
payment obligation. In addition, Freightliner will at the request of an FE
Location repurchase from the FE Location any new and unused Freightliner-Sourced
Parts that are then in inventory and in the original, undamaged packages, are
then listed for sale in the Freightliner Parts Price Lists, as then current
(except discontinued or replaced parts and accessories) and are not within the
Freightliner-Sourced Parts that have been purchased by or on behalf of any FE
Location in replenishment of Freightliner-Approved Parts used in warranty
services. The purchase price for each such part shall be the price at which the
FE Locations would be permitted to buy such part from Alliance pursuant to


Section 2.8, as shown in the then-current and applicable Freightliner Parts
Price List, less handling charges equal to the handling charges for annual parts
return as then in effect and published in the Alliance Policies and Procedures,
except that handling changes shall not apply in the case of any purchases
pursuant to this Section 2.18 following a termination of this Agreement by
reason of a breach by Freightliner. Within 30 days following the effective date
of a termination of this Agreement, each FE Location that wishes to have
Freightliner purchase any eligible Freightliner-Sourced Parts shall supply
Freightliner with a list of and proper identification of all such parts and such
other information as Freightliner may reasonably require. Within 30 days from
the receipt of such list and information, Freightliner will furnish the FE
Location with written notice of all such listed parts as Freightliner has
determined it is required to purchase together with the price to be paid
therefor and transfer instructions. Within 30 days after receipt of such
instructions, each FE Location shall ship such parts as specified in such
instructions. Until shipment, each FE Location shall retain possession of such
parts at its risk and provide Freightliner with an opportunity to inspect. The
FE Location shall take such action and shall execute and deliver such
instruments as may be reasonably necessary to convey to Freightliner good
marketable title to all parts purchased by Freightliner, to comply with the
requirements of any applicable state law relating to bulk sales or transfers and
to satisfy and discharge any liens or encumbrances on such parts prior to
delivery thereof to Freightliner.




9









3.       DESIGNATION AND DEVELOPMENT OF FE LOCATIONS, ETC.




3.1 DESIGNATION. Freightliner and TA Operations will jointly designate
specific TravelCenters Locations as FE Locations pursuant to criteria mutually
agreed upon by Freightliner and TA Operations from time to time. These criteria
will include city and highway location, status of ongoing construction projects
and facility considerations. Any TravelCenters Location that does not have
service facilities or is barred under applicable law from operating as an FE
Location will not be designated or operated as an FE Location.




3.2 TRAVELCENTERS LOCATIONS NOT DESIGNATED AS FE LOCATIONS. Any
TravelCenters Location that is not jointly designated as an FE Location by
Freightliner and TA Operations will not be permitted to perform warranty
services for Freightliner Vehicles or to purchase proprietary
Freightliner-Sourced Parts. A TravelCenters Location that does not satisfy the
criteria for designation as an FE Location or that for any other reason agreed
upon by Freightliner and TA Operations is not designated as an FE Location by
Freightliner and TA Operations may nevertheless be permitted to purchase
non-proprietary Freightliner-Sourced Parts with the approval of Freightliner.




3.3 ROLL-OUT SCHEDULE. Freightliner and TA Operations intend that
eventually most, if not all, TravelCenters Locations that meet the criteria for
designation as FE Locations agreed upon by Freightliner and TA Operations under


Section 3.1 (including any such new locations acquired or developed after the
date of this Agreement and any Franchise Locations) will operate as FE
Locations. Freightliner and TA Operations will jointly agree upon a roll-out
schedule based on the designation criteria. Freightliner and TA Operations will
use reasonable efforts to cause at least one-third of the COCOs with service
facilities to be operating as FE Locations within six months after the date of
this Agreement and to cause all COCOs with service facilities to be operating as
FE Locations within 18 months after the date of this Agreement, subject to such
modifications to such projected schedule as jointly may be agreed upon by
Freightliner and TA Operations from time to time or be dictated by circumstances
beyond the control of Freightliner and TA Operations.




3.4 TEST LOCATIONS. To test and develop a methodology for converting
TravelCenters Locations into FE Locations, Freightliner and TA Operations will
as promptly as possible in accordance with the projected schedule attached as
EXHIBIT 3.4 establish and roll-out the test locations listed on EXHIBIT 3.4.




3.5 SITING OF FUTURE TRAVELCENTERS LOCATIONS; OTHER INFORMATION. TA
Operations shall confer with Freightliner concerning the service needs of
Freightliner's customers and Freightliner's capacity objectives and the related
capacity considerations with respect to the siting of new TravelCenters
Locations prior to making any final determination on the siting of any
TravelCenters Locations proposed to be developed by or on behalf of TA
Operations or commitment to the acquisition of any truck-stops or similar
businesses proposed to be acquired by or on behalf of TA Operations; provided
that, in the case of any such acquisition, the foregoing requirement shall apply
only during the period Freightliner is a shareholder in the Parent Corporation
or any successor thereto and a Freightliner nominee is serving on the Board of
Directors of the Parent Corporation. During any period Freightliner no longer
has a nominee




10









serving on the Board of Directors of the Parent Corporation, TA Operations shall
be obligated to confer with Freightliner in advance of any such determination
with respect to a proposed acquisition only if and to the extent
agreed by the other party or parties to the acquisition. TA Operations shall use
reasonable efforts to obtain the agreement of such other party or parties.
Subject to giving Freightliner the opportunity in accordance with the foregoing
to provide its input from time to time as to siting, TA Operations shall be free
to locate at whatever sites it may choose and make whatever acquisitions it may
choose. In addition, during the term of this Agreement TA Operations shall use
reasonable efforts to provide advance notice (given in a timely manner under the
applicable circumstances) to Freightliner of any proposed permanent closure or
disposition of any FE Location or any other fact, circumstance or development
that senior management of TA Operations anticipates could reasonably be expected
to have a significant impact on a substantial number of FE Locations with
respect to the FE Location program contemplated by this Agreement.




3.6 TECHNOLOGY. Freightliner and TA Operations will mutually agree on
the scope of all technology investments necessary to cause TA Operations'
information systems to be integrated with all applicable Freightliner systems
(including parts, service and warranty systems) to enable TA Operations and FE
Locations to utilize, either directly at each FE Location or indirectly through
TA Operations, the programs and information of Freightliner necessary or
desirable to the operation of FE Locations. TA Operations shall bear the expense
of all necessary investment in software, hardware and other information systems
and equipment agreed upon by Freightliner and TA Operations from time to time
and of all related fees and expenses for consulting, installation, operation and
maintenance. The initial agreed-upon technology requirements are listed on
EXHIBIT 3.6. Freightliner will consult with TA Operations concerning
alternatives and cost-saving strategies, including centralizing ordering and
other functions. Freightliner will provide TA Operations and the FE Locations
with access to the technology, training and operating information made available
to Freightliner's dealer network (i.e., internet and extranet) to the extent
consistent with the scope of Services to be provided by the FE Locations.




3.7 SERVICE CRITERIA; TRAINING PROGRAMS. Freightliner and TA Operations
will jointly develop service criteria intended to provide enhanced service for
Freightliner customers at FE Locations. TA Operations will use reasonable
efforts to cause FE Locations to achieve the goal of an average, during core
business hours of 6 am to 7 pm at each location, of a pre-service wait time for
Freightliner customers of 45 minutes or less. Freightliner will make available
appropriate training programs to personnel of TA Operating and FE Locations and
work with TA Operations on the development of joint training programs for FE
Location personnel.




3.8 PROMOTIONAL ACTIVITIES. Freightliner shall provide marketing
programs and assistance promoting the FE Locations to aid the retail parts and
service sales effort by Freightliner and TA Operations through the FE Locations
and thereby promote the sale of Freightliner Products. Freightliner and TA
Operations will develop joint advertising programs (any such advertising to be
in accordance with Freightliner's and TA Operations' respective advertising
policies) and joint marketing programs agreed upon by Freightliner and TA
Operations from time to time, including such joint advertising or marketing
programs to support the TravelCenters network as Freightliner and TA Operations
may determine to be mutually




11









beneficial and agree upon from time to time. Any joint advertising or marketing
programs shall be funded in the manner agreed upon by the participants with
respect to such specific program. TA Operations will require participation in
joint advertising or marketing programs by the relevant FE Locations and
Freightliner will actively encourage its dealers to promote the FE Locations
through service referrals and promotional and informational displays and
activities at dealer locations. TA Operations shall consult with Freightliner
and obtain Freightliner's advance approval with respect to any service or other
promotions relating to Freightliner Products that TA Operations proposes to
undertake and shall cause each FE Location to do the same with respect to any
such promotion that the FE Location proposes to undertake. Freightliner shall
consult with TA Operations and obtain TA Operations' advance approval with
respect to any service or other promotions specifically relating to FE
Locations.




3.9 REFERRALS. FE Locations will be the second referral after
Freightliner dealerships under the referral policies and lists of the CAC to the
extent consistent in any case with the needs of the specific customer.
Freightliner and TA Operations will develop processes for referrals by FE
Locations to nearby Freightliner dealerships and SelecTrucks locations both for
service and for purchases of Freightliner Products.




3.10 ACCOUNTING RECORDS AND REPORTS; BENCHMARKS. TA Operations shall
maintain accounting and other records that at all times accurately reflect the
operations of the FE Locations to enable TA Operations to prepare the reports
that are required by this Agreement or are reasonably requested hereunder by
Freightliner from time to time. TA Operations shall permit examination of its
accounts and records relating to the FE Locations, including warranty audits
and other review, to be made by Freightliner at any reasonable time upon at
least five days' prior notice. Freightliner will, to the extent practical and
not inconsistent with Freightliner's safeguarding of Freightliner's own
proprietary information, use reasonable efforts to provide to TA Operations such
information from Freightliner's systems and programs as may be relevant to
evaluating the performance of the FE Locations under this Agreement and the
establishment of benchmarks for mutually agreed-upon goals. Freightliner and TA
Operations will jointly develop mutually agreed-upon methodologies for tracking,
evaluating and recording the performance of the FE Locations.




3.11 LIMITED LICENSE TO FREIGHTLINER TRADEMARKS. Freightliner hereby
grants TA Operations and each FE Location the non-exclusive right to use
Freightliner's trademarks and service marks in connection with all FE Location
operations. Any such use shall be in accordance with this Agreement and such
other reasonable requirements as Freightliner may from time to time in writing
expressly impose on the use of the trademarks. TA Operations and each FE
Location shall not use Freightliner's trademarks or service marks in a manner
that could jeopardize Freightliner's ownership or use thereof. TA Operations
and each FE Location shall discontinue the use of any such mark or the manner in
which used if and when requested to do so by Freightliner. Upon any termination
of this Agreement, TA Operations and each FE Location shall immediately
discontinue all use of Freightliner's trademarks and service marks not permitted
by law or under any separate arrangements with Freightliner and, except to the
extent permitted by law or under any such separate arrangement with
Freightliner, shall not thereafter use any similar mark. All actions necessary
to discontinue such use shall be at the expense of TA Operations, except in the
case of any termination of this Agreement caused by Freightliner's




12









breach of this Agreement, in which case all reasonable out-of-pocket expense
incurred in connection with such discontinuation shall be borne by Freightliner.




3.12 SIGNAGE. FE Locations shall be identifiable to the public by
signage of one or more sizes and types mutually acceptable to Freightliner and
TA Operations. Freightliner and TA Operations will mutually agree upon the
selection and placement of signage, both exterior and interior, with appropriate
prominence and customer visibility in a manner consistent with Freightliner
signage guidelines and all applicable local ordinances. TA Operations will make
all arrangements for permitting and installation of jointly agreed-upon signage
and will be responsible for signage maintenance and related expense. The costs
of purchase and installation of jointly agreed-upon signage at the FE Locations
shall be borne as provided on EXHIBIT 3.12. In the event of the termination of
any TravelCenters Location as an FE Location, TA Operations will cause the
prompt removal of all signage identifying the location as an FE Location. The
costs of any such removal shall be borne in the manner contemplated by Section
3.11.




3.13 SIMILAR PROGRAMS WITH OTHERS. During the term of this Agreement,


(a) TA Operations will not participate in a similar service or warranty program
with any Freightliner Competitor (as defined in the Stockholders' Agreement) and


(b) Freightliner will not (i) participate in a similar service or warranty
program with any TA Truck-Stop Competitor (as hereinafter defined) or (ii)
permit any distributor of products of Freightliner or Freightliner's
subsidiaries to operate any satellite location at any truck stop location under
the name or names chosen for the FE Locations pursuant to Section 2.1. For
purposes of this Section 3.13, the term "TA Truck-Stop Competitor" shall mean
Petro, Flying J, AMBEST, PTP, Sapp Bros., Giant, All American, Rip Griffin (who
is also a Freightliner dealer), Bosselman's, Dixie Trucker's Home,
Texaco/Equilon, Pilot, Love's, Speedway (Emro), Little America, Total, Mapco,
Coastal, Fuel Mart and any other chain or network of national or regional "truck
stops" as such term is generally understood in the trucking industry, including
any affiliates or successors to any of the foregoing. However, during the term
of this Agreement, Freightliner intends to continue to pursue and develop
service capacity alternatives and solutions, and TA Operations acknowledges
that, except as otherwise provided in this Section 3.13, Freightliner may engage
in service or warranty programs with others, including distributors of products
of Freightliner and its subsidiaries, affiliates of Freightliner and unrelated
third parties. In addition, during the term of this Agreement Freightliner may
pursue a separate strategy with respect to its Sterling trucks or any other
separate product line (except that the name restriction set forth in Section
3.13(b)(ii) shall nevertheless apply). In the case of Sterling or any separate
product line of Class 8 vehicles, Freightliner will first consult with TA
Operations in good faith concerning the possible expansion of the service and
parts arrangements under this Agreement to include Sterling or such separate
product line of Class 8 vehicles. In connection with such consultation,
Freightliner will explore with TA Operations all applicable factors and
considerations, including capacity and expansion possibilities and constraints,
marketing strategy and separate branding, and will endeavor to develop with TA
Operations a mutually agreeable proposal for participation by TA Operations. Any
such expansion with TA Operations will be subject to mutual agreement by
Freightliner and TA Operations on all relevant terms and conditions.




13









4.       INDEMNIFICATION.




4.1 INDEMNIFICATION BY TA OPERATIONS. Upon the written request of
Freightliner, TA Operations shall defend, indemnify and hold Freightliner
harmless from and against any Losses that may be asserted, commenced or arise by
reason of or out of any actual or alleged negligence, error, omission or act of
TA Operations (including through any COCO), including (a) any negligent or
improper, or alleged negligent or improper, repair or servicing of any
Freightliner Product, including any servicing not undertaken in accordance with
the Freightliner Service Manual, but excluding any actual or alleged negligence,
error, omission or act of TA Operations to the extent it arises out of erroneous
instructions or procedures specified in the Freightliner Service Manual, (b) any
modification or alteration (as defined in Section 2.13) of any Freightliner
Product unless TA Operations has obtained Freightliner's prior written approval
of such modification or alteration, (c) any breach or alleged breach of any
agreement between TA Operations and any other party, including any warranty,
express or implied, extended to customers by TA Operations on terms other than
those published by Freightliner as Freightliner's express warranty, and (d) any
misleading statement or representation, whether in advertising (other than
advertising in accordance with materials furnished by Freightliner) or
otherwise. If TA Operations fails in any such case to undertake the defense
against any such Losses, Freightliner may conduct, but shall not be required to
conduct, such defense, and TA Operations shall be liable to Freightliner for any
and all Losses incurred in connection with such defense, together with any and
all Losses arising out of the related claim or claims.




4.2 INDEMNIFICATION BY FREIGHTLINER. Upon the written request of TA
Operations, Freightliner shall defend, indemnify and hold TA Operations harmless
from and against any Losses that may be asserted, commenced or arise by reason
of or out of any actual or alleged negligence, error, omission or act of
Freightliner, including (a) any actual or alleged defects in material, design,
assembly or manufacture of any Freightliner-Sourced Part sold to TA Operations
or any FE Location by Freightliner but only if (i) such defects existed at the
time of manufacture or sale of such Freightliner-Sourced Part by Freightliner
and (ii) TA Operations or the relevant FE Location included in the contract of
sale with the user or customer of the Freightliner-Sourced Part the
then-applicable Freightliner warranty without any modification of such warranty
as it is published by Freightliner, (b) any breach or alleged breach of any
agreement between Freightliner and any other party, including any warranty,
express or implied, extended to customers by Freightliner, (c) any misleading
statement or representation, whether in advertising (other than advertising in
accordance with materials furnished by TA Operations) or otherwise, and (d) any
erroneous instructions or procedures specified in the Freightliner Service
Manual. If Freightliner fails in any such case to undertake the defense against
any such Losses, TA Operations may conduct, but shall not be required to
conduct, such defense, and Freightliner shall be liable to TA Operations for any
and all Losses incurred in connection with such defense, together with any and
all Losses arising out of the related claim or claims.




4.3 CLAIMS AGAINST MULTIPLE PARTIES. Whenever a complaint or suit
alleges liability on the part of both TA Operations and Freightliner on the
bases set forth in Sections 4.1 and 4.2, respectively, each shall be responsible
for its own defense, including costs and attorneys' fees, unless one party
offers to undertake the total defense and the other party agrees thereto in
writing. Any such responsibility on the part of a party for its own defense
pursuant to this




14









Section, or pursuant to any other circumstances not within the scope of this
Section, shall in no way affect any legal rights which either party may have
against the other to indemnification or contribution.




4.4 PROCEDURE FOR THIRD PARTY CLAIMS. In order for a party (the
"Indemnified Party") to be entitled to any indemnification provided for under
this Agreement in respect of, arising out of or involving a Claim made by any
person (other than either party or their respective affiliates) against the
Indemnified Party (a "Third Party Claim"), such Indemnified Party must notify
the indemnifying party in writing of the Third Party Claim within a reasonable
time after receipt by such Indemnified Party of written notice of the Third
Party Claim; provided, however, that failure to give such notification shall not
affect the indemnification provided hereunder except to the extent that the
indemnifying party shall have been actually prejudiced as a result of such
failure (except that the indemnifying party shall not be liable for any expenses
incurred during the period in which the Indemnified Party failed to give such
notice). Thereafter, the Indemnified Party shall deliver to the indemnifying
party, within a reasonable time after the Indemnified Party's receipt thereof,
copies of all notices and documents (including court papers) received by the
Indemnified Party relating to the Third Party Claim. If a Third Party Claim is
made against an Indemnified Party, the indemnifying party shall be entitled to
participate in the defense thereof and, if it so chooses, to assume the defense
thereof with counsel selected by the indemnifying party; provided such counsel
is not reasonably objected to by the Indemnified Party. Should the indemnifying
party so elect to assume the defense of a Third Party Claim, the indemnifying
party shall not be liable to the Indemnified Party for any legal expenses
subsequently incurred by the Indemnified Party in connection with the defense
thereof. If the indemnifying party elects to assume the defense of a Third Party
Claim, the Indemnified Party shall (a) cooperate in all reasonable respects with
the indemnifying party in connection with such defense, (b) not admit any
liability with respect to, or settle, compromise or discharge, any Third Party
Claim without the indemnifying party's prior written consent and (c) agree to
any settlement, compromise or discharge of a Third Party Claim which the
indemnifying party may recommend and which by its terms obligates the
indemnifying party to pay the full amount of the liability in connection with
such Third Party Claim, which releases the Indemnified Party completely in
connection with such Third Party Claim. If the indemnifying party assumes the
defense of any Third Party Claim, the Indemnified Party shall be entitled to
participate in (but not control) such defense with its own counsel at its own
expense. If the indemnifying party does not assume the defense of any such Third
Party Claim, the Indemnified Party may defend the same in such manner as it may
deem appropriate, including settling such claim or litigation and the
indemnifying party shall promptly reimburse the Indemnified Party for all Losses
imposed thereon or reasonably incurred thereby in connection with such Third
Party Claim upon request.




15









5.       LIMITATION OF LIABILITY AND REMEDY.




FREIGHTLINER MAKES NO WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO
ANY PARTS, EXCEPT SUCH WRITTEN WARRANTY OR WARRANTIES AS MAY BE SET FORTH IN THE
FREIGHTLINER WARRANTY POLICIES IN EFFECT AT THE TIME FREIGHTLINER ACCEPTS A
PURCHASE ORDER HEREUNDER. SUCH WRITTEN WARRANTY IS EXCLUSIVE AND IS IN LIEU OF
ALL OTHER WARRANTIES, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.




EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, NO
CONSEQUENTIAL DAMAGES, PUNITIVE OR EXEMPLARY DAMAGES, INCIDENTAL DAMAGES OR
OTHER INDIRECT OR SPECIAL DAMAGE OR LOSS, INCLUDING LOSS OF PROFITS, LOSS OF
GOODWILL, LOSS OF BUSINESS OPPORTUNITY, LOSS OF USE OF PLANT OR EQUIPMENT OR
LOSS OF EXECUTIVE AND EMPLOYEE TIME, WILL BE RECOVERABLE BY FREIGHTLINER, TA
OPERATIONS OR ANY FE LOCATION FOR BREACH OF THIS AGREEMENT OR ANY PART OF THIS
AGREEMENT OR FOR ANY CLAIM RELATED TO FREIGHTLINER-SOURCED PARTS OR OTHER
FREIGHTLINER PRODUCTS OR THIS AGREEMENT, WHETHER SUCH DUTY OR OBLIGATION BE
CONTRACTUAL IN NATURE, STATUTORY OR OTHERWISE.




Except insofar as such liabilities and remedies are excluded or limited
or modified in this Section or elsewhere in this Agreement, TA Operations and
all FE Locations and Freightliner shall have the remedies available to them with
respect to the sale and purchase of any Freightliner-Sourced Part and shall
undertake the liabilities and duties provided in the Uniform Commercial Code as
enacted into law and as validly in force in the State of Oregon on the date of
such sale and purchase.




6.       TERM OF AGREEMENT.




6.1 TERM. This Agreement shall have an initial term of five years and
thereafter shall be terminable upon six months' advance notice given by either
party to the other. This Agreement shall also be terminable by either party in
accordance with Section 6.2 or by Freightliner in accordance with Section


8.4(c). Except as otherwise provided in Section 6.2 or Section 8.4(c), any
notice of termination may be given no earlier than the date six months prior to
the expiration date of the initial term and the effective date of termination
shall be the date six months' after the date of the giving of such notice. Until
an effective notice of termination is given by either party and the effective
date of termination is reached, this Agreement shall continue in full force and
effect.




6.2 TERMINATION UPON MATERIAL UNCURED BREACH. Notwithstanding any
provision of Section 6.1 apparently to the contrary, either party may terminate
this Agreement upon a material uncured breach of this Agreement by the other by
written notice of termination delivered by the nonbreaching party to the
breaching party not less than 90 days prior to the effective date of termination
specified in such notice. Except as hereinafter provided, any such notice of
termination shall be effective only if, no later than the giving of such notice
of




16









termination, the nonbreaching party shall also have given the breaching party
notice of the breach and an opportunity to cure within a reasonable cure period
of not less than 90 days. Notwithstanding the foregoing, however, this Agreement
shall instead be terminable upon 10 days' advance notice given by the
nonbreaching party if the breaching party defaults in payment (in which case the
10-day period shall serve as the cure period) or becomes subject to insolvency,
receivership or bankruptcy proceedings or makes an assignment for the benefit of
creditors.




6.3 RIGHTS AND OBLIGATIONS UPON TERMINATION. Termination of this
Agreement shall not operate as a cancellation of any indebtedness or other
payment obligation between Freightliner, on the one hand, and TA Operations or
any FE Location, on the other, but shall cause an acceleration of the payment
obligations owed by each to the other under this Agreement. In such event, each
party may treat all amounts then or thereafter owing to it by the other party or
parties hereto to be immediately due and payable (subject only to credits
required by law) and may exercise such lawful rights and remedies as it may have
against the other party or parties. Within 15 days after the effective date of
the termination of this Agreement, each party shall return to the other party
(or, in the case of TA Operations, shall cause each FE Location to return to
Freightliner), all materials supplied to the returning party by the other party,
including all manuals, microfiche, price lists, training programs, customer
lists and unused forms (other than any tools purchased from Freightliner or
Freightliner-Sourced Parts that have been purchased and are in inventory).




7.       ARBITRATION.




7.1 HANDLING AND FILING OF CLAIMS; TIME LIMITS. Any claim, controversy,
protest or dispute (whether for damages, stay of action or otherwise) relating
to or arising from this Agreement or the relationship of TA Operations and
Freightliner, including any claim based on any local, state or federal statute,
any claim of breach of this Agreement or any claim related to the termination of
the Agreement, shall be settled by arbitration, subject to the procedures set
forth in this Section. To initiate a claim TA Operations or Freightliner must
file a written request for arbitration no later than 90 days following any
notice of termination of this Agreement if the claim relates to or arises out of
the termination of the Agreement or, in the case of any other claim, within 180
days after the date the party making the claim first becomes aware of the claim.
A written request to arbitrate, together with the appropriate filing fee, shall
be filed with the office of the American Arbitration Association in Chicago,
Illinois (the "FACILITATOR"), which shall then become the site of the
arbitration proceedings, unless otherwise agreed between the parties. Any
arbitration request shall state clearly and completely the nature of the claim
and its basis, the amount involved, if any, and the remedies sought.




7.2 EXCLUSIVE REMEDY. Arbitration shall be the sole and exclusive
remedy under this Agreement, and the decision and award of the arbitrator shall
be final and binding on both parties.




7.3 PROCEDURES. The arbitration will be conducted in accordance with
the rules and the procedures of the Facilitator then in effect, except as
modified by mutual agreement of the parties, and in compliance with the United
States Arbitration Act (9 U.S.C. Section 1, et seq.).




17









7.4 CHOICE OF ARBITRATOR. The arbitration shall be heard by a single
arbitrator mutually agreeable to the parties selected from a panel of
arbitrators. If the parties fail to reach agreement within 15 days of any
request to arbitrate, an arbitrator having appropriate qualifications in the
judgment of the Facilitator shall be named by the Facilitator from such panel in
accordance with its normal procedure.




7.5 ARBITRATOR'S AWARD. In no event may punitive damages be awarded in
any arbitration conducted pursuant to this Agreement. The decision and award of
the arbitrator shall be conclusive as to all matters covered thereby in all
other proceedings between the parties, their successors or assigns, and judgment
upon the award may be entered in any court of competent jurisdiction.




7.6 PAYMENT OF FEES. The parties agree to compensate the arbitrator
commensurate with the professional standing of the arbitrator and in accordance
with the procedures of the Facilitator. The compensation of the arbitrator, the
administrative fees and charges of the Facilitator and the other expenses of the
arbitration shall be borne equally by the parties, provided that in all cases
each party shall pay the fees and disbursements of its own legal counsel.




7.7 TIME PERIOD. Unless the parties specifically agree to the contrary,
the arbitration hearing shall be concluded not more than 180 days after the date
of a written request to arbitrate.




8.       GENERAL PROVISIONS.




8.1 PARTIES NOT AGENTS OF EACH OTHER. Each party is an independent
contractor and the conduct of its business is within its discretion subject to
performance of its obligations under this Agreement. This Agreement does not
create an agency relationship between any of the parties hereto or on the part
of any FE Location, and nothing herein contained shall be construed or
interpreted to grant any authority to any party or any FE Location to commit or
bind another party hereto in any manner to any other person.




8.2 RIGHT OF SET-OFF. Subject to Section 2.4 with respect to warranty
claims and such specific terms of sale as may be agreed upon between the
parties, each party shall have the right to offset against any amounts then owed
by it under this Agreement such amounts, if any, as are then owed to it under
this Agreement by another party to this Agreement. Each party to any such offset
shall maintain records sufficient to establish the amount and timing of any such
offset.




18









8.3 NOTICES. Any notice given by TA Operations to Freightliner or by
Freightliner to TA Operations under this Agreement shall be in writing and be
directed to the recipient party at the following address or to such other person
or address as an officer of the recipient party may have specified by notice
given in accordance with this Section:












If to Freightliner, to:      Freightliner Corporation
                             4747 North Channel Avenue
                             Portland, OR 97217
                             PO Box 3849
                             Portland, OR  97208-3849
                             Telecopy No.:  (503) 735-5999
                             Attention:  James T. Hubler

with a copy to:              Stoel Rives LLP
                             900 SW Fifth Avenue, Suite 2600
                             Portland, OR 97204-1268
                             Telecopy No.: (503) 220-2480
                             Attention: Margaret B. Kushner

If to TA Operations, to:     TA Operating Corporation
                             TA Franchise Systems, Inc.
                             c/o TravelCenters of America, Inc.
                             24601 Center Ridge Road, Suite 200
                             Westlake, Ohio  44145-5634
                             Telecopy No.:  (440) 808-3301
                             Attention:   Edwin P. Kuhn, President and
                                          C.E.O.
                                          Michael Hinderliter, Senior
                                          Vice President
                                          Steven Lee, Vice President
                                          and General Counsel














Couriered notices shall be deemed delivered when delivered as addressed.
Telecommunicated notices shall be deemed delivered when receipt is either
confirmed by confirming transmission equipment or acknowledged by the addressee
or its office. Personal delivery shall be effective when accomplished. Mailed
notice shall be deemed delivered 5 days after being deposited in the United
States Mail as certified or registered mail, postage prepaid, in an envelope
properly addressed to the person to whom notice is required to be directed in
accordance with this Agreement.




8.4 ASSIGNMENT. This Agreement and the rights and obligations hereunder
may not be assigned, delegated, sold, transferred or encumbered in whole or in
part by Freightliner or TA Operations without the prior written approval of the
other party. The foregoing prohibition on assignment without prior written
approval shall not apply, however, to any direct or indirect assignment of this
Agreement (including by merger) by TA Operations in connection with a Change of
Control (as defined in the Stockholders' Agreement); provided that, in the case
of any Change of Control that triggers the right of first refusal provided for
under Section 5 of the Stockholders' Agreement, (a) Freightliner shall have
first been given the opportunity in accordance with said Section 5 to exercise
its right of first refusal, (b) there shall have been no




19









effective exercise by Freightliner of such right of first refusal and (c)
Freightliner shall not have elected, by notice delivered to TA Operations prior
to the expiration of Freightliner's right of first refusal under said Section 5,
to terminate this Agreement (which termination shall be effective only in the
event a Change of Control transaction is consummated) effective as of the date
of the Change of Control.




8.5 ENTIRE AGREEMENT; AMENDMENTS. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof. The
parties anticipate that, over time, the terms and conditions applicable to FE
Locations will evolve and change as contemplated by this Agreement or as agreed
upon from time to time by the parties, and the parties will from time to time
amend this Agreement accordingly. However, any understanding, amendment,
modification, alteration or waiver not expressly set forth or provided for in
this Agreement shall not be valid or binding on the parties with respect to the
subject matter of this Agreement unless, in each instance, such understanding,
amendment, modification, alteration or waiver is expressed in a written
instrument executed by the duly authorized officers of Freightliner and TA
Operations, such instrument specifically refers to this Agreement and such
instrument specifically states an intent to amend, alter or modify this
Agreement. The following documents and any other material issued by Freightliner
in substitution for or in addition to the documents identified below shall be
deemed to be incorporated herein except as otherwise expressly provided herein
or as otherwise agreed to in writing by the parties from time to time and shall
be deemed to be amended for purposes of this Agreement when an amendment has
been duly executed on behalf of Freightliner and furnished to TA Operations in
the same manner required for notices from Freightliner to TA Operations: (a)
Freightliner Parts Price Lists; (b) Freightliner Warranty Policies; (c) Alliance
Policies and Procedures; and (d) Freightliner Service Manuals.




8.6 EACH PARTY TO BEAR OWN EXPENSES. Freightliner and TA Operations
will each bear its own expenses in connection with the preparation and
negotiation of this Agreement and all other documents effecting the transactions
contemplated by this Agreement.




8.7 WAIVER. The failure of either of Freightliner or TA Operations to
enforce, at any time or for any period of time, any provision of this Agreement
shall not be construed as a waiver of such provision or of the right of
Freightliner or TA Operations thereafter to enforce each and every such
provision.




8.8 GOVERNING LAW. This Agreement has been made in and shall be
construed and interpreted according to the substantive laws of the State of
Oregon without regard to choice of law rules.




8.9 SEVERABILITY. Any provision of this Agreement that in any way
contravenes any law of any relevant jurisdiction shall be deemed not to be a
part of this Agreement in such jurisdiction and shall not, because of such
contravention, be deemed to in any way invalidate this Agreement or any other
part thereof.




8.10 COMPLIANCE WITH LOCAL LAW. If the valid law of any jurisdiction
is applicable to the performance of any obligation or the exercise of any right
under this Agreement, the




20









obligation shall be exercised in accordance with such law to the extent, and
only to the extent, that such law shall make mandatory the performance of such
obligation or the exercise of such right other than in accordance with the
provisions of this Agreement. All the provisions of this Agreement shall be
construed in light of this Section.




8.11 TITLES. Designations and titles of the Articles and Sections
contained in this Agreement are for convenience only and in no way control,
alter or modify the meaning of the language used.




8.12 CONFIDENTIAL INFORMATION. Each party agrees that (a) all
information indicated as confidential and communicated to it by the other party,
including, in the case of communications by TA Operations, by any FE Location
(hereafter "Confidential Information"), shall be received in confidence and
shall be used and copied only for purposes of and in accordance with this
Agreement and (b) no such Confidential Information shall be disclosed to any
third party by the recipient or its employees or representatives without the
prior written consent of the party owning such Confidential Information, EXCEPT
as may be necessary by reason of legal, accounting or regulatory requirements
beyond the reasonable control of the recipient. Confidential Information shall
not include any information disclosed by one party to the other party hereunder
or developed hereunder that: (a) is publicly available at the time of disclosure
or development, or becomes publicly available after disclosure or development,
through no fault of the receiving party; (b) was developed by agents or
employees of the receiving or non-owning party independently of, and without
knowledge of or reliance on, the disclosed information; (c) is obtained by the
receiving or non-owning party outside of the performance of work hereunder
without any violation of the rights of the other party; or (d) was rightfully in
the receiving or non-owning party's possession prior to the time of disclosure,
if such Confidential Information was not obtained in confidence. Each party
shall take no less than such precautions as it takes with respect to its own
confidential and trade secret information, whether by instruction, agreement or
otherwise, to ensure the confidentiality of Confidential Information received
from the other. At a minimum, each party shall take reasonable steps to advise
its affiliates, employees and representatives of the confidential nature of the
Confidential Information and ensure that they abide by the restrictions in this


Section 8.12 on its use, reproduction and disclosure. The provisions of this


Section 8.12 shall survive termination of this Agreement for any reason. The
parties acknowledge that the violation of this Section 8.12 shall cause
irreparable injury for which there will be no adequate remedy at law and that
each party shall be entitled to preliminary and other injunctive relief against
any such violation, which injunctive relief shall be in addition to, and not in
lieu of, any other remedies or rights the party may have at law or in equity.




8.13 INTERPRETATION. All terms defined in the singular have the same
meanings when used in the plural and vice versa. The words "including,"
"includes" and "include" as used herein shall be deemed to be followed by the
words "without limitation" or "but not limited to" or words of similar import.
Unless the context otherwise requires, (a) any reference to an Article or


Section is a reference to an Article or Section of this Agreement, (b) the terms
"hereof," "herein," "hereto," "hereunder," and "herewith" and "this Agreement"
refer to this Agreement as a whole, (c) reference to any law or regulation is to
that law as amended or modified from time to time or to any corresponding
provisions of any succeeding law or regulation, (d) reference to an




21









agreement or instrument is a reference to that agreement or instrument as
originally executed, and as modified, amended, supplemented and restated from
time to time, and to all exhibits and/or schedules thereto, and (e) accounting
terms have the meanings given to them by generally accepted accounting
principles.




IN WITNESS WHEREOF, FREIGHTLINER AND TA OPERATIONS HAVE EXECUTED THIS
FREIGHTLINER EXPRESS OPERATING AGREEMENT EFFECTIVE AS OF THE DAY AND YEAR FIRST
ABOVE WRITTEN.





FREIGHTLINER CORPORATION











BY   /s/ JAMES L. HEBE
   ---------------------------------------------
     TITLE:  PRESIDENT














TA OPERATING CORPORATION,


DBA TRAVELCENTERS OF AMERICA











BY   /s/ EDWIN P. KUHN
   ---------------------------------------------
     TITLE:  PRESIDENT & CHIEF EXECUTIVE OFFICER














TA FRANCHISE SYSTEMS, INC.











BY   /s/ EDWIN P. KUHN
   ---------------------------------------------
     TITLE:  PRESIDENT & CHIEF EXECUTIVE OFFICER













22









The Exhibits to the Freightliner Express Operating Agreement have
been omitted and will be supplementally furnished to the Securities and
Exchange Commission upon request.















EXHIBIT 10.6






AMENDMENT NO. 1 TO


OPERATING AGREEMENT





THIS AMENDMENT NO. 1 TO OPERATING AGREEMENT ("Amendment") is executed
as of November 9, 2000 by and among TA Operating Corporation, a Delaware
corporation ("TA Operating"), TA Franchise Systems, Inc., a Delaware corporation
("TA Franchise") and Freightliner LLC, a Delaware limited liability company that
was formerly a Delaware corporation known as Freightliner Corporation
("Freightliner").





WITNESSETH:





WHEREAS, TA Operating, TA Franchise and Freightliner are parties to that
certain Freightliner Express Operating Agreement dated July 21, 1999 (the
"Operating Agreement"); and




WHEREAS, TA Operating, TA Franchise and Freightliner have agreed to amend
the Operating Agreement, in accordance with Section 8.5 thereof, pursuant to the
terms set forth herein;




NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:




1. Section 6.1 of the Operating Agreement shall be deleted in its entirety
and replaced as follows:




"6.1 TERM. This Agreement shall have an initial term of ten
years and thereafter shall be terminable upon six months' advance notice given
by either party to the other. This Agreement shall also be terminable by either
party in accordance with Section 6.2 or by Freightliner in accordance with


Section 8.4. Except as otherwise provided in Section 6.2 or Section 8.4, any
notice of termination may be given no earlier than the date six months prior to
the expiration date of the initial term and the effective date of termination
shall be the date six months after the date of the giving of such notice. Until
an effective notice of termination is given by either party and the effective
date of the termination is reached, this Agreement shall continue in full force
and effect."









2. Section 8.4 of the Operating Agreement shall be deleted in its entirety
and replaced as follows:




"8.4     ASSIGNMENT; FREIGHTLINER'S RIGHT TO TERMINATE IN
CONNECTION WITH CHANGE OF CONTROL WITH OFFEROR. This Agreement and the rights
and obligations hereunder may not be assigned, delegated, sold, transferred or
encumbered in whole or in part by Freightliner or TA Operations without the
prior written approval of the other party. The foregoing prohibition on
assignment without prior written approval shall not apply, however, to any
direct or indirect assignment of this Agreement (including by merger) that would
occur in connection with any transaction involving any of TravelCenters, TA
Operations or any successor to TravelCenters or TA Operations that would result
in a Change of Control as defined in that certain Stockholders' Agreement
relating to TravelCenters of America, Inc. attached as Exhibit A to that certain
Freightliner Equity Rollover Agreement dated November 9, 2000 between
Freightliner and TCA Acquisition Corporation, a Delaware corporation ("2000
Stockholders' Agreement"). Notwithstanding the foregoing, however, Freightliner
shall have the right to elect to terminate this Agreement in the case of any
proposed Change of Control transaction with an Offeror (as defined in the 2000
Stockholders' Agreement) regardless of whether the 2000 Stockholders' Agreement
is then in effect; provided that if the 2000 Stockholders' Agreement is then in
effect and the Change of Control therefore would trigger the right of first
purchase provided for under Section 3.7 of the 2000 Stockholders' Agreement,
Freightliner shall have first been given the opportunity in accordance with said


Section 3.7 to exercise its right of first purchase and there shall have been no
effective exercise by Freightliner of such right of first purchase. Any election
by Freightliner to terminate this Agreement in accordance with this Section 8.4
shall be made by a notice of termination delivered to TA Operations prior to the
expiration of Freightliner's right of first purchase under Section 3.7 of the
2000 Stockholders' Agreement (if the 2000 Stockholders' Agreement is then in
effect) or within 30 days after notice from TA Operations of the proposed Change
in Control transaction (if the 2000 Stockholders' Agreement is not in effect).
Any such termination shall be effective only in the event a Change of Control
transaction with an Offeror is consummated, in which case the termination shall
be effective as of the date of the Change of Control.




3.       Except as set forth in this Amendment, all other terms and
conditions of the Operating Agreement shall remain in full force and effect.




IN WITNESS WHEREOF, the parties hereto, intending to be legally bound,
have executed this Amendment as of the date first above written.





FREIGHTLINER LLC











By:    /s/ John Pangborn
       ----------------------------
Name:      John Pangborn
       ----------------------------
Title:     Sr. Vice President
       ----------------------------













2










TA OPERATING CORPORATION d/b/a


TRAVELCENTERS OF AMERICA, INC.











By:    /s/ Edwin P. Kuhn
       ----------------------------
Name:      Edwin P. Kuhn
       ----------------------------
Title:     President & CEO
       ----------------------------














TA FRANCHISE SYSTEMS INC.











By:    /s/ Edwin P. Kuhn
       ----------------------------
Name:      Edwin P. Kuhn
       ----------------------------
Title:     President & CEO
       ----------------------------













3















EXHIBIT 10.7






Amendment No. 2 to Operating Agreement





THIS AMENDMENT NO. 2 TO OPERATING AGREEMENT ("Amendment") is made and
effective as of April 15, 2003, by and among TA Operating Corporation, a
Delaware Corporation ("TA Operating"), TA Franchise System, Inc., a Delaware
Corporation ("TA Franchise") and Freightliner LLC, a Delaware Limited
Liability Company ("Freightliner").





WITNESSETH:





WHEREAS, TA Operating, TA Franchise and Freightliner are parties to
that certain Freightliner Express Operating Agreement dated July 21, 1999
(the "Operating Agreement"); and




WHEREAS, TA Operating, TA Franchise and Freightliner have agreed to
amend the Operating Agreement, in accordance with Section 8.5 thereof,
pursuant to the terms set forth herein;




NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:




1.    The Definitions listed below that are found in the "Definitions"


Section of the Operating Agreement are hereby added or deleted
and replaced as follows:




"FCCC" shall mean Freightliner Custom Chassis Corporation, a
wholly owned subsidiary of Freightliner headquartered in Gaffney,
South Carolina that manufactures, among other things, vehicle
chassis.




"FE Service Menu" shall mean the Freightliner Express Service
Menu adopted from time to time by mutual agreement of
Freightliner and TA Operations specifying the warranty and repair
services to be provided by FE Locations to Freightliner Vehicles,
which the parties intend will be limited to services that
generally can be performed in 1.5 hours or less or are otherwise
agreed by Freightliner and TA Operations to be within the scope
of the Services, as set forth on EXHIBIT 1.3 as updated from time
to time by Freightliner and TA Operations.  "FE Service Menu"
shall also include certain warranty repairs and services on
vehicle chassis manufactured by FCCC, as set forth on EXHIBIT 1.4
as updated from time to time by mutual agreement of Freightliner
and TA Operations.




"Freightliner Products" shall mean Freightliner Vehicles,
Freightliner-Sourced Parts and vehicle chassis and parts
manufactured by FCCC.




"Freightliner Vehicles" shall mean the trucks and chassis sold by
FCCC or Freightliner or those listed for sale by Freightliner
that bear the "Freightliner" name and utilize
Freightliner-approved parts.









2.    This Amendment shall be effective for a period of one year from
the effective date.  Upon expiration of this one-year term, the
original terms and conditions of the Operating Agreement shall be
controlling in all respects unless this Amendment is extended by
mutual written agreement of TA Operating, TA Franchise and
Freightliner.  This Amendment shall apply to the FE location at
Brunswick, Georgia, and any additional FE Locations added by
mutual agreement of TA Operating, TA Franchise and Freightliner.




3.    Except as set forth in this Amendment, all other terms and
conditions of the Operating Agreement shall remain in full force
and effect.





TA OPERATING CORPORATION d/b/a


TRAVELCENTERS OF AMERICA











By:                 /s/    Randy A. Graham
            ---------------------------------------------

Name:                      Randy A. Graham
            ---------------------------------------------

Title:                   Vice President and Marketing
            ---------------------------------------------














TA FRANCHISE SYTEMS, INC.











By:                 /s/   Peter P. Ward
            ---------------------------------------------

Name:                     Peter P. Ward
            ---------------------------------------------

Title:                   Vice President, Franchising
            ---------------------------------------------














FREIGHTLINER LLC











By:                 /s/    C. W. Patterson
            ---------------------------------------------

Name:                      C. W. Patterson
            ---------------------------------------------

Title:                   Senior Vice President
            ---------------------------------------------
                         Service & Parts
























EXHIBIT 10.8






AMENDMENT NO. 3 TO


OPERATING AGREEMENT





THIS AMENDMENT NO. 3 TO OPERATING  AGREEMENT  ("AMENDMENT")  is executed
as of  July  26,  2006 by and  among  TA  Operating  Corporation,  a  Delaware
corporation  ("TA   OPERATING"),   TA  Franchise   Systems  Inc.,  a  Delaware
corporation  ("TA  FRANCHISE")  and  Freightliner   LLC,  a  Delaware  limited
liability   company  that  was  formerly  a  Delaware   corporation  known  as
Freightliner Corporation ("FREIGHTLINER").





WITNESSETH:





WHEREAS,  TA  Operating,  TA Franchise and  Freightliner  are parties to
that certain  Freightliner Express Operating Agreement dated July 21, 1999, as
previously  amended by that certain  Amendment  No. 1 to  Operating  Agreement
dated  November  9,  2000,  and that  certain  Amendment  No.  2 to  Operating
Agreement dated April 15, 2003 (the "OPERATING AGREEMENT"); and




WHEREAS,  TA  Operating,  TA Franchise and  Freightliner  have agreed to
amend  further  the  Operating  Agreement,  in  accordance  with  Section  8.5
thereof, pursuant to the terms set forth herein;




NOW,  THEREFORE,  for good and valuable  consideration,  the receipt and
sufficiency  of which is hereby  acknowledged,  the  parties  hereto  agree as
follows:




1.    Section  6.1 of the  Operating  Agreement  shall be deleted in its
entirety and replaced as follows:




"6.1  TERM.  This Agreement  shall have an initial term of fifteen
years and  thereafter  shall be  terminable  upon six months'  advance  notice
given by  either  party to the  other.  For  purposes  of  clarification,  the
initial  term shall  expire on July 20,  2014.  This  Agreement  shall also be
terminable by either party in accordance with Section 6.2 or









by Freightliner  in accordance with Section 8.4. Except as otherwise  provided
in Section  6.2 or Section  8.4,  any  notice of  termination  may be given no
earlier than the date six months prior to the  expiration  date of the initial
term and the effective date of termination  shall be the date six months after
the  date  of the  giving  of  such  notice.  Until  an  effective  notice  of
termination   is  given  by  either  party  and  the  effective  date  of  the
termination  is  reached,  this  Agreement  shall  continue  in full force and
effect."




2.    Except  as set  forth  in this  Amendment,  all  other  terms  and
conditions of the Operating Agreement shall remain in full force and effect.




IN WITNESS WHEREOF,  the parties hereto,  intending to be legally bound,
have executed this Amendment as of the date first above written.





FREIGHTLINER LLC











By:      /s/ Jack Conlan
         ---------------

Name:    Jack Conlan
         -----------

Title:   Senior Vice President
         ---------------------














TA OPERATING CORPORATION d/b/a


TRAVELCENTERS OF AMERICA











By:      /s/ Joseph A. Szima
         -------------------

Name:    Joseph A. Szima
         ---------------

Title:   Senior Vice President
         ---------------------














TA FRANCHISE SYSTEMS INC.











By:      /s/ Joseph A. Szima
         -------------------

Name:    Joseph A. Szima
         ---------------

Title:   Senior Vice President
         ---------------------













2















EXHIBIT 10.9






EMPLOYMENT AGREEMENT





EMPLOYMENT AGREEMENT dated as of January 1, 2000, by and among TA
Operating Corporation, a Delaware corporation (the "Company"), TravelCenters
of America, Inc., a Delaware corporation ("Holdings") and Timothy L. Doane
(the "Employee").




In consideration of the parties' desire to assure the Company and
Holdings of the services of the Employee, and the mutual covenants herein
contained, the parties agree as follows:




1.     Employment.




1.1 Employment, Acceptance and Term. Subject to Section 5 hereof, the
Company and Holdings hereby agree to employ the Employee, and the Employee
agrees to serve the Company and Holdings, during the term of this Agreement (the
"Term") which shall commence January 1, 2000 (the "Effective Date") and end on
December 31, 2001 (the "Initial Term"), and shall be renewed automatically for
successive one calendar year periods thereafter through December 31 of the
calendar year in which the Employee reaches age sixty-five (65), unless the
Company gives the Employee or the Employee gives the Company written notice of
its or his intent not to renew this Agreement, which notice must be given not
later than December 31, 2000 if this Agreement is to expire at the end of the
Initial Term or December 31 of the year last preceding the final calendar year
of the Term if this Agreement is to expire after the Initial Term; provided,
however, that no such notice given by either the Company or the Employee after a
"Change of Control" as defined in Section 1.2 hereof shall have the effect of
terminating this Agreement prior to the December 31 coinciding with or next
following the second anniversary of the date on which such Change of Control
occurs. The Employee acknowledges that neither the Company nor Holdings shall
have any obligation to extend the Term beyond the









Initial Term or to renew the Agreement after any extension, or to enter into a
new employment agreement upon the expiration of the Term. Unless otherwise
agreed between the parties in writing, any continuation of the Employee's
employment beyond the expiration of the Term shall constitute an employment at
will and shall not extend the terms of this Agreement.




1.2 Change of Control. Any of the following events shall constitute a
"Change of Control":




(i) any "person," as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), becomes the
beneficial owner (as defined in Rule 13d-3 promulgated under the Exchange Act)
of fifty-one percent (51%) or more of the voting power of the then-outstanding
voting securities of Holdings; provided, however, that the foregoing does not
apply to any such acquisition that is made by (i) the Company or any Affiliate
or (ii) any employee benefit plan maintained either by the Company or any
Affiliate; or




(ii) Holdings merges into itself, or is merged or consolidated with,
another corporation and as a result of such merger or consolidation less than
fifty-one (51%) of the voting power of the then-outstanding voting securities of
the surviving or resulting corporation immediately after such transaction are
owned in the aggregate by the former shareholders of Holdings immediately prior
to such transaction;




(iii) all or substantially all the assets accounted for on the consolidated
balance sheet of the Company and the Affiliates, in the aggregate, are sold or
transferred to one or more corporations or persons, and as a result of such sale
or transfer less than fifty-one percent (51%) of the voting power of the
then-outstanding voting securities of such corporation or person immediately
after such sale or transfer is




2









held in the aggregate by the former shareholders of Holdings immediately
prior to such transaction or series of transactions;




(iv) fifty-one percent (51%) or more of the assets accounted for in the
consolidated balance sheet of Company and its Affiliates, in the aggregate, are
sold or transferred to one or more corporations or persons, whether such sale or
transfer is accomplished by the sale or transfer of assets directly, the sale or
transfer of stock of the Company or one or more Affiliates or otherwise with, in
any case, an aggregate value of fifty-one percent (51%) or more of the aggregate
value of the Company and its Affiliates, or any combination of methods by which
fifty-one percent (51%) or more of the aggregate value of the Company and its
Affiliates are sold or transferred, if, immediately after such sale or transfer,
the purchaser or transferee is less than fifty-one percent (51%) owned, in the
aggregate, by the persons who are the shareholders of Holdings immediately prior
to such sale or transfer; or




(v) during any period of two (2) consecutive years, including, without
limitation, the year 1999, individuals who at the beginning of any such period
constitute the Board of Directors of Holdings cease, for any reason, to
constitute at least a majority thereof, unless the election or nomination for
election of each Director first elected during such period was approved by a
vote of at least a majority of the members of the Board of Directors of Holdings
who were members of the Board of Directors of Holdings on the date of the
beginning of any such period.




Without otherwise limiting the generality of the foregoing, an
initial public offering of the Common Stock of Holdings shall not be deemed a
"Change of Control" for purposes of this Agreement.




3









2.     Duties and Authority.




2.1 Office. Subject to Section 5 hereof, during the Term the Employee will
serve as the Senior Vice President - Development of the Company and Holdings, in
accordance with the Certificates of Incorporation and By-Laws of the Company and
Holdings, respectively, and subject to the direction of, and in accordance with
the authority delegated to the Employee by, the Boards of Directors of the
Company and Holdings, and reporting to the President and Chief Executive
Officer.




2.2 Duties. Subject to Section 5 hereof, during the Term the Employee
shall devote all of his full working time and energies to the business and
affairs of the Company and, in connection therewith, shall perform such
duties, functions and responsibilities as are commensurate with and
appropriate to the position of an officer of the Company. Throughout the
Term, the Employee will use his best efforts, skills and abilities to promote
the interests of the Company and its Affiliates. For purposes of this
Agreement, the term "Affiliates" shall mean, collectively, Holdings, National
Auto/Truckstops, Inc., a Delaware corporation ("National"), TA Franchise
Systems, Inc., a Delaware corporation ("TAFSI"), TA Licensing, Inc., a
Delaware corporation ("Licensing"), and all subsidiaries and affiliates of
the Company, Holdings, National, TAFSI, and Licensing.




3.     Compensation.




3.1 Base Salary. As compensation for services to be rendered during the
Term pursuant to this Agreement, the Company shall pay the Employee a base
salary at the rate of Two Hundred Seventy Thousand Dollars ($270,000) per annum
(the "Base Salary"), which amount shall be reviewed not less frequently than
annually and which may be increased but not decreased by action of the Board of
Directors of the Company or the Compensation




4









Committee (as defined in Section 3.2 hereof) in a manner consistent with the
treatment of other employees of the Company as approved by the Compensation
Committee and payable currently in equal biweekly installments or otherwise in
accordance with the payroll policies of the Company as from time to time in
effect.




3.2 Annual Bonus. For each fiscal year of the Company during the
Term (a "Fiscal Year"), commencing with the Fiscal Year ending December 31,
2000, the Company shall pay to the Employee an annual bonus (the "Annual
Bonus"). The amount of each Annual Bonus shall be determined by the Compensation
Committee of the Board of Directors of the Company (the "Compensation
Committee"), based fifty percent (50%) upon corporate performance (EBITDA goals)
and fifty percent (50%) upon the Employee's individual performance (MBO
targets), and shall range from zero (0) to seventy-five percent (75%) of the
Base Salary in effect as of the first day of the Fiscal Year (seventy-five
percent (75%) of such Base Salary being the "Target Bonus"). The MBO targets for
the following Fiscal Year shall be presented to and approved by the Board of
Directors or Compensation Committee of the Company in December of each year in a
manner consistent with past practice. The Annual Bonus shall be paid within
thirty (30) days after the completion of the audit by the Company's independent
auditors of the financial statements of the Company and its Affiliates for the
Fiscal Year to which the Annual Bonus applies.




4.     Additional Benefits.




4.1 Benefit Plans. The Employee shall be entitled during the Term, if and
to the extent eligible, to participate in all employee benefit plans of the
Company or Holdings which the Company or Holdings provides to its executive
employees or officers generally, including, without limitation, a health and
medical insurance plan, basic life insurance,




5









supplemental life insurance, basic disability benefit plan, supplemental
disability benefit plan, relocation, retirement or pension plan or similar
benefit plans, whether now in existence or hereafter adopted; provided, however,
that neither the Company nor Holdings shall be obligated to adopt, maintain or
contribute to any such benefit plans which, in their discretion, the Company and
Holdings believe would be imprudently expensive or otherwise inappropriate. Any
new benefit plan which the Company or Holdings provides to its executive
employees, and any change to a benefit plan which the Company or Holdings
provides to its executive employees, shall be applied consistently to all such
executive employees.




4.2 Director's and Officer's Insurance. Holdings has purchased and
Holdings or the Company will use reasonable efforts to maintain during the Term,
at Holdings' or the Company's expense, Director's and Officer's liability
insurance in a reasonable amount covering all insurable acts of the Employee
pursuant to this Agreement provided that the Employee's coverage will not be
less extensive than that provided by Holdings or the Company to any other
director or officer of Holdings, the Company or any Affiliate.




4.3 Fringe Benefits. The Employee shall be entitled during the
Term to the following additional benefits: (i) a company-owned automobile of a
make and model approved by the Compensation Committee as appropriate for an
officer of the position of the Employee; (ii) company-owned club membership (or
to the extent the club does not permit company membership, reimbursement for
individual membership) for fees, dues and fixed expenses only, paid by the
Company and/or the Employee, which shall not exceed Ten Thousand Dollars
($10,000.00) per year; (iii) paid vacation days in accordance with standard
Company policy for similarly situated officers; and (iv) participation in a
nonqualified unfunded elective salary deferral plan adopted or to be adopted by
the Compensation Committee having such terms




6









as the Compensation Committee determines in its sole discretion are appropriate
for the purpose of providing certain benefits in excess of the benefits
otherwise available under the Company's employee benefit plan established
pursuant to Code sections 401(a) and 401(k) of the Internal Revenue Code of
1986, as amended (the "Code"), which nonqualified plan provides or is expected
to provide tax-deferred savings opportunities through elective salary deferrals
in excess of certain of the limits set forth in Subchapter D of Chapter I of
Subtitle A of the Code.




5. Termination of Employment. The Employee's employment with the
Company shall terminate upon the death of the Employee, and the Company shall
have the right, at any time during the Term, by delivery of written notice to
the Employee, to terminate the Employee's employment as a result of the
Employee's Permanent Disability (as such term is defined in Section 5.1 hereof),
for Cause (as such term is defined in Section 5.3 hereof) or for any other
reason, and the Employee shall have the right to resign, the consequences of any
such termination or resignation being as specified in this Section 5:




5.1 Death; Disability. If the Employee's employment with the Company is
terminated by reason of the Employee's death or Permanent Disability during the
Term, the obligations of the Company and Holdings under this Agreement shall be
satisfied by providing the benefits set forth in the Company's life insurance or
disability benefit plan or plans, as the case may be. The Employee shall not be
entitled to any other payments or compensation under this Agreement except for


(i) Base Salary accrued and unpaid to the date of death or Permanent Disability,


(ii) any vested benefits as of the date of death or termination for Permanent
Disability under any awards to the Employee pursuant to the National
Auto/Truckstops Holdings Corporation 1993 Stock Incentive Plan, the
TravelCenters of America, Inc. 1997 Stock Incentive Plan, and any other such
plan or individual agreement




7









adopted after the date of this Agreement (collectively, the "Stock Incentive
Plans"), or any amount payable under any other benefit plan of the Company or
any Affiliate, in accordance with the terms of any such plan, (iii) an amount
equal to the product of (x) the Annual Bonus, if any, determined by the
Compensation Committee for the year in which the termination occurs, multiplied
by (y) the fraction, the numerator of which equals the number of days the
Employee was employed by the Company during the Fiscal Year in which such
termination occurs and the denominator of which is three hundred sixty-five


(365), and (iv) if the Employee and/or his spouse and dependents properly elect
continued medical coverage ("COBRA") in accordance with Code section 4980B, the
Company will pay the entire cost of the premiums for such continued medical
coverage for the maximum required period of coverage under Code section
4980B(f). "Permanent Disability," as used in this Section 5.1, shall mean the
physical or mental inability of the Employee to perform, consistent with past
practice, the essential functions of such Employee's duties as specified in


Section 2.1 hereof, with reasonable accommodation to the extent required by the
applicable requirements of the Americans with Disabilities Act, for at least
twelve (12) consecutive months. Determination of Permanent Disability shall be
made initially by the Board of Directors of the Company. If there is a
disagreement between the Employee and the Company as to the existence of such a
Permanent Disability, such disagreement shall be resolved by the determination
of two physicians, one selected by the Employee and one selected by the Company.
If such physicians shall disagree, the decision shall be made by a third
physician selected by the first two physicians. The fees and expenses of all of
the physicians shall be paid by the Company.




5.2 Resignation. If the Employee's employment with the Company is
terminated during the Term by reason of the Employee's resignation (other than
for "Good




8









Reason" as defined in Section 5.5 hereof), all obligations of the Company and
Holdings, including, without limitation, the obligation to pay salary or other
amounts payable under this Agreement to or for the benefit of the Employee,
shall terminate upon the effective date of such resignation, and the Employee
shall not be entitled to any compensation under this Agreement except for Base
Salary accrued and unpaid through, and any vested benefits under any awards to
the Employee pursuant to the Stock Incentive Plans, or any amount payable under
any other benefit plan of the Company or any Affiliate in accordance with the
terms of such plan, as of the effective date of such resignation. The Employee
agrees to give the Company one hundred twenty (120) days notice of his
resignation (other than for Good Reason).




5.3 Company's Right to Terminate for Cause. If the Employee shall
be discharged for "Cause" (as defined below) during the Term, all obligations of
the Company and Holdings, including, without limitation, the obligation to pay
salary or other amounts payable under this Agreement to or for the benefit of
the Employee, shall terminate upon the effective date of such discharge, and the
Employee shall not be entitled to any compensation under this Agreement except
for Base Salary accrued and unpaid through, and vested benefits under any awards
to the Employee pursuant to the Stock Incentive Plans, or any amount payable
under any other benefit plan of the Company or any Affiliate in accordance with
the terms of such plan, as of the effective date of such discharge. As used in
this Agreement, "Cause" shall mean a discharge in one or more of the following
events:




(i) the Employee's misappropriation of money or other assets or property,
breach of fiduciary duty, tortious conduct or other act of dishonesty with
respect to the Company or any Affiliate; the Employee's conviction of, or plea
of guilty or nolo contendere to, any act of fraud, embezzlement, tortious
conduct or any crime for




9









an offense that constitutes a felony, or the Employee's indictment for any
crime involving dishonesty or moral turpitude;




(ii) the Employee's continuing, repeated willful failure or refusal to
follow written directions of the Board of Directors of the Company or Holdings
which failure or refusal continues following the Employee's receipt of written
notice from such Board of Directors advising him of the acts or omissions that
constitute the failure to perform his duties as an officer of the Company or
Holdings, if such failure continues after the Employee shall have had a
reasonable opportunity to correct the act or omissions so complained of;




(iii) the Employee's violation of the Company's drug abuse or alcohol abuse
policy; or




(iv) the Employee's breach of any covenant set forth in Section 6 hereof.




5.4 Termination for Any Other Reason or Resignation for a Good
Reason. If (a) the Employee is discharged by the Company during the Term for any
reason (other than for "Cause" (as defined in Section 5.3 hereof) or by reason
of the Employee's death or "Permanent Disability" (as defined in Section 5.1
hereof)) or (b) the Employee's employment with the Company is terminated by
reason of the Employee's resignation for a "Good Reason" (as defined in Section
5.5 hereof) occurring during the Term, then all obligations of the Company and
Holdings hereunder shall cease except that the Employee shall be entitled to the
following from the Company:




(i) any Base Salary accrued and unpaid to the date of such discharge or
resignation, which shall be payable within thirty (30) days of such discharge




10









or resignation, plus an amount equal to the product of (A) multiplied by (B),
where (A) equals his Annual Bonus, if any, determined by the Compensation
Committee for the year in which his discharge or resignation occurred and where
(B) equals a fraction, the numerator of which equals the number of days in the
calendar year during which the Employee was employed by the Company, and the
denominator of which equals three hundred sixty-five (365), which amount shall
be payable on the same date that active officers are paid similar Annual
Bonuses;




(ii) during the twenty-four (24) month period following the date of his
discharge or termination, a monthly amount equal to the greater of (i) his
monthly rate of Base Salary in effect as of the date immediately preceding any
Change of Control or (ii) his monthly rate of Base Salary in effect as of the
date of his discharge or termination, which shall be payable in such manner and
at such times as active employees of the Company are paid base salaries;




(iii) an amount equal to two hundred percent (200%) of the greater of the
Employee's Target Bonus as set forth in Section 3.2 hereof for the Fiscal Year
ended December 31, 2000 or the Employee's Target Bonus as set forth in Section
3.2 hereof for the Fiscal Year in which his Termination of Employment occurs,
which amount shall be payable in two separate payments each equal to one-half of
such amount (i.e., each payment equal to one hundred percent (100%) of the
Target Bonus amount). The first such payment shall be payable at such time and
in such manner as active officers of the Company customarily are paid similar
bonuses for the Fiscal Year next following the Fiscal Year in which his
discharge or resignation occurs (or in accordance with past practice if such
bonuses are not being paid to such active officers), and the




11









second such payment shall be payable at such time and in such manner as active
officers of the Company customarily are paid similar bonuses for the second
Fiscal Year following the Fiscal Year in which his discharge or resignation
occurs (or in accordance with past practice if such bonuses are not being paid
to such active officers), provided that the second payment shall be made not
later than the date of the last scheduled payment payable pursuant to Section
5.4(ii) hereof;




(iv)   any vested benefits as of the date of such
resignation or discharge under any awards to the Employee pursuant to the Stock
Incentive Plans, or any amount payable under any other benefit plan of the
Company or any Affiliate in accordance with the terms of such plan; and




(v)    if the Employee (and/or his spouse and/or
dependents) properly elect continued COBRA medical coverage, the Company and the
Employee (and/or his spouse and/or dependents) each shall pay their same
portions of the premiums for such medical coverage as if the Employee had
remained in the employ of the Company until the Participant shall elect to
discontinue such coverage, provided that the obligation of the Company under
this Section 5.4(v) shall cease upon the expiration of the later of (A) the
maximum required period of coverage under Code Section 4980B(f), or (B)
twenty-four (24) months after the date of such discharge or resignation;




provided, however, that, in each case in clauses (i) through (v) above in this


Section 5.4, if at any time during which the Company is obligated to make
payments thereunder the Employee engages in any activity violative of Section 6
hereof, then, as of the date the Employee commences engaging in such activity,
all of the Company's obligations to pay compensation or other amounts under this
Agreement to or for the benefit of the Employee shall terminate except




12









for (i) Base Salary then accrued and unpaid, (ii) any vested benefits under any
awards to the Employee pursuant to the Stock Incentive Plans, and (iii) any
amount payable under any other benefit plan of the Company or any Affiliate in
accordance with the terms of such plan.




5.5    Resignation for Good Reason. As used in this
Agreement, "Good Reason" shall mean a resignation by the Employee as a result of
one or more of the following events occurring during the Term:




(i)    a material reduction in the Employee's
compensation (including the additional benefits described in Section 4 hereof)
in the aggregate or his duties or title with respect to the Company or any of
its Affiliates (other than nonsubstantive, titular or nominal changes);




(ii) the Company requires the Employee to change his principal location of
work to any location which is outside of the Cleveland, Ohio, metropolitan area,
without his prior written consent; or




(iii) a material breach of this Agreement by the Company or any of its
Affiliates unless such breach is substantially cured within a reasonable period
of time (hereby defined as thirty (30) days) after written notice advising the
Company of the acts or omissions constituting such breach is actually received
by the Company in accordance with Section 11.5 hereof.




If the Employee claims the existence of a Good Reason, he must
notify the Company in writing of the event constituting Good Reason not later
than sixty (60) days following the later to occur of the occurrence of the event
(e.g., the actual reduction in compensation, the scheduled date of relocation or
the date of the breach) constituting Good Reason or his actual knowledge
thereof. If the event which the Employee claims to be a Good




13









Reason is not cured within thirty (30) days following the date of such notice,
the Employee must resign within ten (10) days following the thirty (30) day cure
period in order to invoke his right to resign for Good Reason. If no such timely
resignation occurs or no such timely written notices are given, the Employee's
right to resign for Good Reason with respect to such event shall be permanently
waived.




5.6    Employee Benefit Plans. In addition to such payments
and benefits as may be provided to the Employee upon his termination of
employment during the Term as set forth herein, the Employee (or his estate,
legal representative or employee benefit plan beneficiary, as the case may be)
shall be entitled to receive such other benefits as are expressly so provided
under the terms of any employee benefit plan or other contractual arrangement
maintained by the Company or any Affiliate; provided, however, that the
Compensation Committee may reduce benefits under any such other plan or
arrangement, if permissible thereunder, or may reduce benefits hereunder, to the
extent it both (i) determines in good faith that such benefits are clearly
duplicative or unintended (e.g., duplicative severance benefits or more than one
company car), and (ii) permits full payment of the better (in the case of two
duplicative benefits) or the best (in the case of more than two duplicative
benefits) of the benefits. This Section 5.6 shall not be deemed to permit any
reduction in any amount otherwise payable to the Employee under any nonqualified
deferred compensation plan of the Company or any Affiliate.




6.     Covenants of the Employee.




6.1    Covenants Against Competition. The Employee
acknowledges that (a) the Company and its Affiliates are engaged in the business
of operating a truckstop network, with facilities that provide motor fuel
pumping along with one or more of the following




14









services: truck care and repair services, a fast food restaurant, a
full-service restaurant, a convenience store, showers, laundry facilities,
telephones, recreation rooms, truck weighing scales and other compatible
business services approved by the Company (the "Business"); (b) the Employee
is one of the limited number of persons who developed the Business; (c) such
Business is conducted nationally; (d) the Employee's work for the Business
has given him, and will continue to give him, trade secrets of, and
confidential information concerning, the Business; (e) the Employee
acknowledges that the Employee's knowledge of such trade secrets and of, and
confidential information concerning, the Business would be of significant
assistance and value to any "TA Truck-Stop Competitor," which for purposes of
this Section 6 shall mean Petro, Flying J, AMBEST, PTP, Sapp Bros., Giant,
All American, Rip Griffin, Bosselman's, Dixie Trucker's Home, Texaco/Equilon,
Pilot, Love's, Speedway (Emro), Little America, Total, Mapco, Coastal, Fuel
Mart and any other chain or network of national or regional "truck stops" as
such term is generally understood in the trucking industry, including any
affiliates or successors to any of the foregoing; and (f) the agreements and
covenants contained in this Section 6.1 are essential to protect the Business
and the goodwill associated with it. Accordingly, the Employee covenants and
agrees as follows:




6.1.1 Non-Compete. From the date hereof through the later of
(A) the last day of the Term and (B) the last date through which the Employee
is entitled to receive any payment pursuant to Section 5.4(ii) hereof, the
Employee shall not, in the United States of America, directly or indirectly,


(x) enter the employ of or render any services to any TA Truck-Stop
Competitor, or (y) have an interest in any TA Truck-Stop Competitor, whether
such interest is direct or indirect, and including any interest as a partner,
shareholder, trustee, consultant, officer or similarly situated person;
provided, however, that in any case, the Employee may own,




15









solely as an investment, securities of any TA Truck-Stop Competitor that are
publicly traded if the Employee (a) is not a controlling person and (b) does
not, directly or indirectly, own five percent (5%) or more of any class of
securities of such person. After the date which is the later of (A) and (B) in
the preceding sentence, the Employee shall be free to engage in any lawful
business activities, including activities for or related to a TA Truck-Stop
Competitor. The covenant contained in this Section 6.1.1 shall survive the
termination of this Agreement.




6.1.2 Confidential Information. The Employee agrees that neither
during the Term nor at any time thereafter shall he (i) disclose to any person
not employed by the Company or an Affiliate, or not engaged to render services
to the Company or an Affiliate or (ii) use for the benefit of himself or others,
any confidential information of the Company, any of the Company's Affiliates or
of the Business obtained by him, including, without limitation, "know-how,"
trade secrets, details of customers', suppliers', manufacturers' or
distributors' contracts with the Company or any of the Company's Affiliates,
pricing policies, financial data, operational methods, marketing and sales
information, marketing plans or strategies, product development techniques or
plans, plans to enter into any contract with any person or any strategies
relating thereto, technical processes, designs and design projects, and other
proprietary information of the Company, the Company's Affiliates or of the
Business or the business of any of the Company's Affiliates; provided, however,
that this provision shall not preclude the Employee from (a) making any
disclosure required by law or court order or (b) using or disclosing information


(i) known generally to the public (other than information known generally to the
public as a result of a violation of this Section 6.1.2 by the Employee), (ii)
acquired by the Employee outside of his affiliation with the Company or any of
the Company's Affiliates, or (iii) of a general nature (that is, not related
specifically to the Business) that ordinarily would be




16









learned, developed or obtained by individuals similarly active and/or employed
in similar capacities by other companies in the same Business as the Company or
any of the Company's Affiliates. The Employee agrees that all confidential
information of the Company or any of the Company's Affiliates shall remain the
Company's or the Company's Affiliates', as the case may be, property and shall
be delivered to the Company or to the Company's Affiliates, as the case may be,
promptly upon the termination of the Employee's employment with the Company or
at any other time on request. The covenant contained in this Section 6.1.2 shall
survive the termination of this Agreement.




6.1.3  Nonsolicitation by Restricted Persons. From the
date hereof through the later of (A) the last day of the Term and (B) the last
date through which the Employee is entitled to receive any payment pursuant to


Section 5.4(ii) hereof, the Employee shall not, directly or indirectly, (a)
solicit any employee to leave the employment of the Company or the employment of
any of the Company's Affiliates or (b) hire any employee who has left the employ
of the Company or the employ of any of the Company's Affiliates within six (6)
months after termination of such employee's employment with the Company or such
employee's employment with any of the Company's Affiliates, as the case may be
(unless such employee was discharged by the Company without Cause and excepting
clerical and similar employees). The covenant contained in this Section 6.1.3
shall survive the termination of this Agreement.




7.     Rights and Remedies Upon Breach of Covenants. If the
Employee breaches, or threatens to commit a breach of, any of the provisions of


Section 6 hereof (the "Restrictive Covenants"), the Company shall have the
following rights and remedies, each of which rights and remedies shall be
independent of the others and severally enforceable, and all of




17









which rights and remedies shall be in addition to, and not in lieu of, any other
rights and remedies available to the Company at law or in equity:




7.1 Specific Performance. The right and remedy to have the
Restrictive Covenants specifically enforced by any court having equity
jurisdiction, it being acknowledged and agreed that any such breach or
threatened breach will cause irreparable injury to the Company and that money
damages will not provide an adequate remedy to the Company.




7.2 Severability of Covenants. The Employee acknowledges and
agrees that the Restrictive Covenants are reasonable and valid in geographical
and temporal scope and in all other respects. If any court determines that any
of the Restrictive Covenants, or any part thereof, is invalid or unenforceable,
the remainder of the Restrictive Covenants shall not thereby be affected and
shall be given full effect to the greatest extent possible, without regard to
the invalid portions.




7.3 Blue Penciling. If any court construes any of the Restrictive
Covenants, or any part thereof, to be unenforceable because of the duration of
such provision or the area covered thereby, such court shall have the power to
reduce the duration or area of such provision and, in its reduced form, such
provision shall be enforceable and shall be enforced to the greatest extent
possible.




7.4 Enforceability in Jurisdictions. The parties intend to and
hereby do limit jurisdiction to enforce the Restrictive Covenants upon the
courts of the jurisdiction of the Employee's last principal place of business
under this Agreement and the sites of the alleged breach of the Restrictive
Covenants.




7.5    Survival. The provisions of this Section 7 shall survive
the termination of this Agreement.




18









8. Representations of Employee. The Employee hereby represents and
warrants to the Company (a) that there are no restrictions, agreements or
understandings whatsoever to which the Employee is a party which would prevent
or make unlawful the execution or performance of this Agreement or his
employment hereunder and (b) that the execution of this Agreement and the
Employee's employment hereunder shall not constitute a breach of any contract,
agreement or understanding to which he is a party or by which he is bound.




9.     Senior Management Incentive Program. The Employee shall be
a participant in the Company's Senior Management Incentive Program. Under the
Program, the Employee may become entitled to an Incentive Bonus as hereinafter
described:




9.1    Full Incentive Bonus. Subject to Section 9.3
hereof, in the event of a Change of Control on or before December 31, 2000, the
Employee shall receive as an Incentive Bonus a single sum cash payment at the
closing of the Change of Control transaction in the amount hereinafter
described:




(i)    if the "Enterprise Value," as hereinafter
defined, shall be less than or equal to Eight Hundred Million Dollars
($800,000,000.00), the Incentive Bonus shall be equal to the sum of one
year's Base Salary plus one year's Target Bonus;




(ii)   if the Enterprise Value shall be in excess
of Eight Hundred Million Dollars ($800,000,000.00), but less than One
Billion Dollars ($1,000,000,000.00), the Incentive Bonus shall increase
linearly from the sum of one year's Base Salary plus one year's Target
Bonus at the Eight Hundred Million Dollar ($800,000,000.00) level to four


(4) times the sum of one year's Base Salary plus one year's Target Bonus
at the One Billion Dollar ($1,000,000,000.00) level; and




19









(iii) if the Enterprise Value shall be in excess of
One Billion Dollars ($1,000,000,000.00), the Incentive Bonus shall be
equal to the sum of (A) plus (B) below, where:




(A) equals four (4) times the sum of one year's Base
Salary plus one year's Target Bonus; and




(B) equals an amount equal to the portion of the
Enterprise Value in excess of One Billion Dollars ($1,000,000,00
0.00) times a fraction, the numerator of which is the amount
determined under Section 9.1(iii)(A) above and the denominator of
which is One Billion Dollars ($1,000,000,000.00).




For purposes of calculating the amount of the Incentive Bonus, the Enterprise
Value shall be deemed to be equal to the "Enterprise Value" of the Company
and the Affiliates, in the aggregate, as the words "Enterprise Value" are
used to determine the payments to be made to the Company's financial advisors.




9.2    Partial Incentive Bonus. In the event that, prior to
a Change of Control, but on or before December 31, 2000, a person or group of
persons who are not shareholders of Holdings on December 31, 1999 acquires ten
percent (10%) or more of the equity of Holdings on a fully diluted basis (a "Ten
Percent Or Greater Acquisition"), then for each such Ten Percent Or Greater
Acquisition the Employee shall receive as an Incentive Bonus a single cash
payment at the closing of the Ten Percent Or Greater Acquisition transaction in
an amount equal to (i) multiplied by (ii) below, where:




(i)    equals the amount of the Incentive Bonus
which would have been payable to the Employee under Section 9.1 hereof
if the Ten Percent Or




20









Greater Acquisition had been a Change of Control based on the Enterprise
Value implicit in the transaction; and




(ii) equals the percentage of equity ownership which is
replaced by new outside equity ownership in the Ten Percent Or Greater
Acquisition transaction. Such "new outside equity ownership" shall not be
deemed to include any increase in equity ownership by any person who was
an equity owner of Holdings on December 31, 1999.




9.3 Limitations and Qualifications. Notwithstanding any provision
of this Section 9 to the contrary, the following limitations and qualifications
shall apply to Incentive Bonuses and Partial Incentive Bonuses:




(i) Upon the occurrence of a Change of Control, the
Employee shall have no right to an Incentive Bonus for any subsequent
Change of Control transaction or to a Partial Incentive Bonus for any
subsequent Ten Percent Or Greater Acquisition.




(ii) If, on or before December 31, 2000, there shall occur
more than one Ten Percent Or Greater Acquisition prior to a Change of
Control, the Employee shall be entitled to a Partial Incentive Bonus
payment for each such Ten Percent Or Greater Acquisition; provided,
however, that the aggregate amount of such Partial Incentive Bonus
payments shall not exceed an amount equal to the Incentive Bonus that
would have been payable if the Ten Percent Or Greater Acquisition having
the highest Enterprise Value had been a Change of Control transaction.




(iii) If a Change of Control shall occur on or before
December 31, 2000 but after one or more Ten Percent Or Greater
Acquisitions, the Incentive Bonus




21









payment payable to the Employee pursuant to Section 9.1 hereof in
connection with such Change of Control shall be reduced, but not below
zero, by any Partial Incentive Bonus payments payable to the Employee
pursuant to this Section 9.




10.    Rollover of Investment. The Employee and the Company agree
to the following concerning the rollover of investment in the event of a Change
of Control:




10.1   Rollover at Buyer's Request. If the buyer in the
Change of Control transaction (the "Buyer") shall request that the Employee roll
over his issued and outstanding shares of Common Stock of the Company into an
equity investment in the entity resulting from the Change of Control transaction
(the "Successor") so that the Change of Control transaction will qualify for
recapitalization accounting, the Employee agrees to such a rollover, but to no
greater extent than his pro rata portion of the total amount of issued and
outstanding shares (immediately prior to the closing of the Change of Control
transaction and calculated giving effect to Preferred Stock as if it had been
converted to Common Stock but excluding compensatory options and stock
appreciation rights) of Common Stock which the Buyer requests to be rolled over,
and agrees to take any and all such action as may be required to effect such a
rollover.




If such a rollover is to be made, the Company agrees to
make such rollover, to the extent reasonably possible, on a basis which is tax
favored to the Employee. The issued and outstanding shares of Common Stock
referred to in this Section 10.1 are only those actually owned by the Employee
immediately prior to the closing of the Change of Control transaction. The words
"issued and outstanding shares of Common Stock" shall not be deemed to include
any outstanding compensatory options or stock appreciation rights, nor any
shares of Common Stock received or receivable due to the exercise of any
compensatory options or stock




22









appreciation rights, of the Employee or any other officer or employee of the
Company or any Affiliate.




11.    Other Provisions.




11.1   Conflict. To the extent any provisions of this
Agreement conflict with the terms of any existing plan, policy or arrangement
affecting the compensation or benefits of the Employee, the provisions of this
Agreement will control.




11.2   Withholding. The Company may withhold from any
amounts payable under this Agreement such federal, state or local taxes or other
amounts as shall be required to be withheld pursuant to any applicable law or
regulation.




11.3   Code Section 280G. The Employee's right to receive
any payment or benefit hereunder in connection with his termination of
employment or otherwise which may be characterized as a "parachute payment"
(within the meaning of Code section 280G), or deemed to constitute a payment
made in connection with or contingent upon a change of control of the Company or
Holdings for purposes of Code section 280G, is contingent upon and subject to
the approval of holders of record of stock of the Company or Holdings, as
applicable, representing more than seventy-five percent (75%) of the voting
power of all outstanding stock of the Company or Holdings, as the case may be,
immediately prior to such change of control (determined without regard to any
stock actually or constructively owned by the Employee and by certain other
persons as determined by the Company).




The Company and Holdings covenant that they will present
this Agreement in a timely manner to the shareholders of the Company or Holdings
or both, as appropriate, with a unanimous recommendation of the Boards of
Directors of the Company and Holdings that it be approved by such shareholders.




23









11.4 Subsidiaries and Affiliates. Notwithstanding any contrary
provision of this Agreement, to the extent it does not adversely affect the
Employee, the Company and Holdings may provide the compensation and benefits to
which the Employee is entitled hereunder through one or more subsidiaries or
affiliates, including, without limitation, Holdings.




11.5 Notices. Any notice or other communication required or which
may be given hereunder shall be in writing and shall be delivered personally,
sent by facsimile transmission or overnight courier or sent by registered or
certified mail, return receipt requested, postage prepaid, and shall be deemed
given when so delivered personally or sent by facsimile transmission or
overnight courier, or if mailed, four days after the date of mailing, as
follows:




(i)    if to the Company or Holdings, to it at:




TravelCenters of America, Inc.
24601 Center Ridge Road, Suite 200
Westlake, Ohio 44145-5634
Attention: General Counsel
Telecopy No: (440) 808-3301




and a copy to:




Calfee, Halter & Griswold LLP
1400 McDonald Investment Center
800 Superior Avenue
Cleveland, Ohio 44114-2688
Attention: Philip M. Dawson, Esq.




Telecopy No.(216) 241-0816




and, if prior to a Change of Control, a copy to:




The Clipper Group, L.P.


650 Madison Avenue, 9th


Floor New York, New York 10022


Attention: Rolf H. Towe


Telecopy No.: (212) 940-6055




24









or at such other address as such person may hereafter
designate to the Employee by notice as provided herein; and




(ii)   if to the Employee, to him at the address set forth below
or at such other address as the Employee may hereafter
designate to each of the persons listed in clause (i) above
by notice as provided herein.




Timothy L. Doane


17852 Lake Road


Lakewood, Ohio 44107




Either party may give any notice or other communication hereunder using
any other means (including ordinary mail or electronic mail), but no such notice
or other communication shall be deemed to have been duly given unless and until
it actually is received by the individual for whom it is intended. Either party
may change the address to which notices and other communications hereunder are
to be delivered by giving the other party notice in the manner herein set forth.




11.6 Entire Agreement. This Agreement contains the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements, written or oral, with respect thereto,
including, without limitation, the employment agreement by and between the
Company and the Employee dated as of November 30, 1997. The Employee
acknowledges that, as of the date this Agreement is executed, he has received
all amounts accrued or due under any prior agreements, and that he is not
entitled to receive additional amounts pursuant to any such agreements.




11.7 Waivers and Amendments. This Agreement may be amended,
modified, superseded, canceled, renewed or extended, and the terms and
conditions hereof may be waived, only by a written instrument signed by the
parties or, in the case of a waiver, by the party waiving compliance. No delay
on the part of any




25









party in exercising any right, power or a privilege hereunder shall operate as a
waiver thereof, nor shall any waiver on the part of any party of any right,
power or privilege hereunder, nor any single or partial exercise of any right,
power or privilege hereunder, preclude any other or further exercise thereof or
the exercise of any other right, power or privilege hereunder. The rights and
remedies herein provided are cumulative and are not exclusive of any rights or
remedies which any party may otherwise have at law or in equity.




11.8 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio applicable to
agreements made and to be performed entirely within such State.




11.9 Assignment; Binding Effect. This Agreement is being executed
with the expectation that a Change of Control will occur on or before December
31, 2000 and with the further expectation that this Agreement will be assumed,
expressly or by operation of law, by the Successor in the Change of Control
transaction. This Agreement, and the Employee's rights and obligations
hereunder, may not be assigned by the Employee. The Company and Holdings,
jointly but not severally, may assign this Agreement and their rights, together
with their obligations, hereunder to any entity that controls the Company or
Holdings, is controlled by the Company or Holdings, or is under common control
with the Company or Holdings, or in connection with any sale, transfer or other
disposition of all or substantially all of the assets or business of the Company
and Holdings, whether by merger, consolidation or otherwise. The Company and
Holdings, or any direct or indirect Successor to the Company or Holdings, shall
use its reasonable efforts to cause its successor in interest to assume
explicitly the obligations of the Company and Holdings or such direct or
indirect Successor to the Company or Holdings, as the case may be, hereunder.




26









11.10 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.




11.11 Headings. The headings in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.




11.12 Arbitration. If requested by the Employee or the Company,
any claim or controversy arising out of or relating to the interpretation,
construction and performance of this Agreement, or any alleged breach hereof,
shall be finally resolved by arbitration conducted in accordance with such
rules as may be agreed upon by the parties within thirty (30) days following
written notice by either party to the other identifying the issue in dispute
and the position of the party giving notice, or failing to achieve such
agreement, in accordance with the National Rules for the Resolution of
Employment Disputes of the American Arbitration Association. Any award
rendered in connection with the foregoing arbitration shall be in writing and
shall be final and binding upon the parties, and judgment upon any such award
may be entered and enforced in any court of competent jurisdiction. The forum
for such arbitration shall be in Cleveland, Ohio and the governing law shall
be the laws of the State of Ohio without giving effect to conflict of laws
provisions. Notwithstanding any provision in this Section 11.12 to the
contrary, the Company shall have the right and power to seek and obtain
equitable relief in accordance with Section 7.1 hereof.




27









IN WITNESS WHEREOF, the parties have executed this Employment Agreement
as of the date first above written.





TRAVELCENTERS OF AMERICA, INC.





("Holdings")










By: /s/ Rolf H. Towe
   --------------------------------------------------
Name:   Rolf H. Towe
     ------------------------------------------------
Title:  Chairman, Compensation Committee of the Board
      -----------------------------------------------














TA OPERATING CORPORATION





("Company")










By: /s/ Rolf H. Towe
   --------------------------------------------------
Name:   Rolf H. Towe
     ------------------------------------------------
Title:  Chairman, Compensation Committee of the Board
      -----------------------------------------------

         /s/ Timothy L. Doane
      -----------------------------------------------
              Timothy L. Doane













("Employee")




28















EXHIBIT 10.10






AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT





AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT dated as of May 26, 2000, by and
among TA Operating Corporation, a Delaware corporation (the "Company"),
TravelCenters of America, Inc., a Delaware corporation ("Holdings"),
and Timothy L. Doane (the "Employee").




WHEREAS, the Company, Holdings and the Employee are parties to an
Employment Agreement dated as of January 1, 2000 (the "Employment Agreement");
and




WHEREAS, in light of the proposed merger between Holdings and TCA
Acquisition Corporation and to ensure the success of such transaction, the
parties to the Employment Agreement desire to modify such Employment Agreement
as hereinafter set forth.




NOW, THEREFORE, in consideration of the parties' mutual desire to
modify the Employment Agreement and the mutual covenants herein contained, the
parties agree as follows effective May 26, 2000:




1. Section 3.2 of the Employment Agreement shall be amended by the addition
of the following at the end thereof:




"Notwithstanding any provision of this Section 3.2 to the
contrary, the Employee shall be deemed to have fully satisfied his individual
MBO target for the Fiscal Year ending December 31, 2000, if a Change of Control
shall occur on or before December 31, 2000."




2. Section 9 to the Employment Agreement shall be deleted in its entirety,
and the following Section 9 shall be substituted therefor:









"9. Senior Management Incentive Program. The Employee shall be a
participant in the Company's Senior Management Incentive Program. Under the
Program, the Employee may become entitled to an Incentive Bonus as hereinafter
described:




9.1 Incentive Bonus. In the event of a Change of Control on or before
December 31, 2000, the Employee shall receive as an Incentive Bonus a single sum
cash payment at the closing of the Change of Control transaction in an amount
equal to twice the sum of one year's Base Salary at the annual rate in effect on
the date of the Change of Control plus the Employee's Target Bonus for the
Fiscal Year ending December 31, 2000; provided, however, that upon the
occurrence of a Change of Control, the Employee shall have no right to an
Incentive Bonus for any subsequent Change of Control transaction."




3. The remaining terms and provisions of the Employment Agreement shall not
be modified hereby and shall remain in full force and effect.




2









IN WITNESS WHEREOF, the parties have executed this Amendment No. 1
to Employment Agreement as of the date first above written.





TRAVELCENTERS OF AMERICA, INC.





("Holdings")










By:   /s/ Rolf H. Towe
      ----------------------------------
Name: Rolf H. Towe
      ----------------------------------
Title: Chairman, Compensation Committee
                          Of the Board
      ----------------------------------














TA OPERATING CORPORATION





("Company")










By: /s/ Rolf H. Towe
    -------------------------------------
Name: Rolf H. Towe
      -----------------------------------

Title: Chairman, Compensation Committee
                          Of the Board
      -----------------------------------

      /s/ Timothy L. Doane
      -----------------------------------
      Timothy L. Doane
      ("Employee")













3















EXHIBIT 10.11






AMENDMENT NO. 2 TO EMPLOYMENT AGREEMENT







AMENDMENT NO. 2 TO EMPLOYMENT AGREEMENT dated as of December 14, 2004, by
and among TA Operating Corporation, a Delaware corporation (the "Company"),
TravelCenters of America, Inc., a Delaware corporation ("Holdings"),
and Timothy L. Doane (the "Employee").




WHEREAS, the Company, Holdings and the Employee are parties to
an Employment Agreement dated as of January 1, 2000, which agreement was amended
by Amendment No. 1 dated as of May 26, 2000 (the "Employment Agreement"); and




WHEREAS, in connection with the promotion of Employee to Chief
Executive Officer of the Company and Holdings, the parties desire to amend
further the Employment Agreement as hereinafter set forth; and




NOW, THEREFORE, in consideration of the parties' mutual desire
to modify the Employment Agreement and the mutual covenants herein contained,
the parties agree as follows effective January 1, 2005:




1. Section 2.1 of the Employment Agreement shall be deleted in
its entirety, and the following Section 2.1 shall be substituted therefore:




"Subject to Section 5 hereof, during the Term the Employee
will serve as the President and Chief Executive Officer of the Company
and Holdings, in accordance with the Certificates of Incorporation and
By-Laws of the Company and Holdings, respectively, and subject to the
direction of, and in accordance with the authority delegated to the
Employee by, the Boards of Directors of the Company and Holdings".









2. The Base Salary amount set forth in Section 3.1 of the
Employment Agreement shall be changed to Four Hundred Thousand Dollars
($400,000).




3. The remaining terms and provisions of the Employment
Agreement shall not be modified hereby and shall remain in full force and
effect.




IN WITNESS WHEREOF, the parties have executed this Amendment No. 2 to
Employment Agreement as of the date first above written.





TRAVELCENTERS OF AMERICA, INC.





("Holdings")










By:     /s/ Edwin P. Kuhn
  --------------------------------

Title:  Chairman & CEO
     -----------------------------














TA OPERATING CORPORATION





("Company")










By:     /s/ Edwin P. Kuhn
  --------------------------------

Title:  Chairman & CEO
     -----------------------------


        /s/ Timothy L. Doane
     -----------------------------
             Timothy L. Doane
               ("Employee")













2















EXHIBIT 10.12






AMENDMENT NO. 3 TO EMPLOYMENT AGREEMENT





AMENDMENT NO. 3 TO EMPLOYMENT AGREEMENT dated as of March 30, 2006, by and
among TA Operating Corporation, a Delaware corporation (the "Company"),
TravelCenters of America, Inc., a Delaware corporation ("Holdings"), and Timothy
L. Doane (the "Employee").




WHEREAS, the Company, Holdings and the Employee are parties to an Employment
Agreement dated as of January 1, 2000, which agreement was previously amended by
that certain Amendment No. 1 dated as of May 26, 2000, and that certain
Amendment No. 2 dated as of December 14, 2004 (the "Employment Agreement"); and




WHEREAS, the parties desire to amend further the Employment Agreement as
hereinafter set forth; and




NOW, THEREFORE, in consideration of the parties' mutual desire to modify the
Employment Agreement and the mutual covenants herein contained, the parties
agree as follows effective March 1, 2006:




1. The Base Salary amount set forth in Section 3.1 of the Employment
Agreement shall be changed to Seven Hundred Thousand Dollars ($700,000).




2. The Target Bonus percentage set forth in the second sentence of Section
3.2 of the Employment Agreement shall be changed from seventy-five percent (75%)
to one hundred percent (100%).









3. The remaining terms and provisions of the Employment Agreement shall not
be modified hereby and shall remain in full force and effect.




IN WITNESS WHEREOF, the parties have executed this Amendment No. 3 to
Employment Agreement as of the date first above written.





TRAVELCENTERS OF AMERICA, INC.





("Holdings")










By:      /s/    Steven B. Gruber
      ------------------------------

Name:           Steven B. Gruber
      ------------------------------

Title:  Chairman of the Compensation
        Committee of the Board
      ------------------------------














TA OPERATING CORPORATION





("Company")










By:      /s/    Steven B. Gruber
      ------------------------------

Name:           Steven B. Gruber
      ------------------------------

Title:  Chairman of the Compensation
        Committee of the Board
      ------------------------------



















   /s/    Timothy L. Doane
------------------------------

          Timothy L. Doane













("Employee")















EXHIBIT 10.13






EMPLOYMENT AGREEMENT





EMPLOYMENT AGREEMENT dated as of January 1, 2000, by and among TA
Operating Corporation, a Delaware corporation (the "Company"), TravelCenters of
America, Inc., a Delaware corporation ("Holdings") and James W. George
(the "Employee").




In consideration of the parties' desire to assure the Company and
Holdings of the services of the Employee, and the mutual covenants herein
contained, the parties agree as follows:




1.     Employment.




1.1    Employment, Acceptance and Term. Subject to Section
5 hereof, the Company and Holdings hereby agree to employ the Employee, and the
Employee agrees to serve the Company and Holdings, during the term of this
Agreement (the "Term") which shall commence January 1, 2000 (the "Effective
Date") and end on December 31, 2001 (the "Initial Term"), and shall be renewed
automatically for successive one calendar year periods thereafter through
December 31 of the calendar year in which the Employee reaches age sixty-five


(65), unless the Company gives the Employee or the Employee gives the Company
written notice of its or his intent not to renew this Agreement, which notice
must be given not later than December 31, 2000 if this Agreement is to expire at
the end of the Initial Term or December 31 of the year last preceding the final
calendar year of the Term if this Agreement is to expire after the Initial Term;
provided, however, that no such notice given by either the Company or the
Employee after a "Change of Control" as defined in Section 1.2 hereof shall have
the effect of terminating this Agreement prior to the December 31 coinciding
with or next following the second anniversary of the date on which such Change
of Control occurs. The Employee acknowledges that neither the Company nor
Holdings shall have any obligation to extend the Term beyond the









Initial Term or to renew the Agreement after any extension, or to enter into a
new employment agreement upon the expiration of the Term. Unless otherwise
agreed between the parties in writing, any continuation of the Employee's
employment beyond the expiration of the Term shall constitute an employment at
will and shall not extend the terms of this Agreement.




1.2    Change of Control. Any of the following events shall
constitute a "Change of Control":




(i) any "person," as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), becomes the beneficial owner (as defined in Rule
13d-3 promulgated under the Exchange Act) of fifty-one percent (51%)
or more of the voting power of the then-outstanding voting
securities of
Holdings; provided, however, that the foregoing does not apply to
any such acquisition that is made by (i) the Company or any
Affiliate or (ii) any employee benefit plan maintained either by the
Company or any Affiliate; or




(ii) Holdings merges into itself, or is merged or
consolidated with, another corporation and as a result of such merger or
consolidation less than fifty-one (51%) of the voting power of the
then-outstanding voting securities of the surviving or resulting
corporation immediately after such transaction are owned in the
aggregate by the former shareholders of Holdings immediately prior to
such transaction;




(iii) all or substantially all the assets accounted for
on the consolidated balance sheet of the Company and the Affiliates, in
the aggregate, are sold or transferred to one or more corporations or
persons, and as a result of such sale or transfer less than fifty-one
percent (51%) of the voting power of the then-outstanding voting
securities of such corporation or person immediately after such sale or
transfer is




2









held in the aggregate by the former shareholders of Holdings immediately
prior to such transaction or series of transactions;




(iv) fifty-one percent (51%) or more of the assets
accounted for in the consolidated balance sheet of Company and its
Affiliates, in the aggregate, are sold or transferred to one or more
corporations or persons, whether such sale or transfer is accomplished
by the sale or transfer of assets directly, the sale or transfer of
stock of the Company or one or more Affiliates or otherwise with, in any
case, an aggregate value of fifty-one percent (51%) or more of the
aggregate value of the Company and its Affiliates, or any combination of
methods by which fifty-one percent (51%) or more of the aggregate value
of the Company and its Affiliates are sold or transferred, if,
immediately after such sale or transfer, the purchaser or transferee
is less than fifty-one percent (51%) owned, in the aggregate, by the
persons who are the shareholders of Holdings immediately prior to such
sale or transfer; or




(v) during any period of two (2) consecutive years,
including, without limitation, the year 1999, individuals who at the
beginning of any such period constitute the Board of Directors of
Holdings cease, for any reason, to constitute at least a majority
thereof, unless the election or nomination for election of each Director
first elected during such period was approved by a vote of at least a
majority of the members of the Board of Directors of Holdings who were
members of the Board of Directors of Holdings on the date of the
beginning of any such period.




Without otherwise limiting the generality of the foregoing, an
initial public offering of the Common Stock of Holdings shall not be
deemed a "Change of Control" for purposes of this Agreement.




3









2.     Duties and Authority.




2.1 Office. Subject to Section 5 hereof, during the Term the Employee will
serve as the Senior Vice President, Secretary and Chief Financial Officer of the
Company and Holdings, in accordance with the Certificates of Incorporation and
By-Laws of the Company and Holdings, respectively, and subject to the direction
of, and in accordance with the authority delegated to the Employee by, the
Boards of Directors of the Company and Holdings, and reporting to the President
and Chief Executive Officer.




2.2 Duties. Subject to Section 5 hereof, during the Term the Employee shall
devote all of his full working time and energies to the business and affairs of
the Company and, in connection therewith, shall perform such duties, functions
and responsibilities as are commensurate with and appropriate to the position of
an officer of the Company. Throughout the Term, the Employee will use his best
efforts, skills and abilities to promote the interests of the Company and its
Affiliates. For purposes of this Agreement, the term "Affiliates" shall mean,
collectively, Holdings, National Auto/Truckstops, Inc., a Delaware
corporation ("National"), TA Franchise Systems, Inc., a Delaware
corporation ("TAFSI"), TA Licensing, Inc., a Delaware corporation ("Licensing"),
and all subsidiaries and affiliates of the Company, Holdings, National, TAFSI,
and Licensing.




3.     Compensation.




3.1    Base Salary. As compensation for services to be
rendered during the Term pursuant to this Agreement, the Company shall pay the
Employee a base salary at the rate of Two Hundred Seventy Thousand Dollars
($270,000) per annum (the "Base Salary"), which amount shall be reviewed not
less frequently than annually and which may be increased but not decreased by
action of the Board of Directors of the Company or the Compensation




4









Committee (as defined in Section 3.2 hereof) in a manner consistent with the
treatment of other employees of the Company as approved by the Compensation
Committee and payable currently in equal biweekly installments or otherwise in
accordance with the payroll policies of the Company as from time to time in
effect.




3.2    Annual Bonus. For each fiscal year of the Company
during the Term (a "Fiscal Year"), commencing with the Fiscal Year ending
December 31, 2000, the Company shall pay to the Employee an annual bonus (the
"Annual Bonus"). The amount of each Annual Bonus shall be determined by the
Compensation Committee of the Board of Directors of the Company (the
"Compensation Committee"), based fifty percent (50%) upon corporate performance
(EBITDA goals) and fifty percent (50%) upon the Employee's individual
performance (MBO targets), and shall range from zero (0) to seventy-five percent
(75%) of the Base Salary in effect as of the first day of the Fiscal Year
(seventy-five percent (75%) of such Base Salary being the "Target Bonus"). The
MBO targets for the following Fiscal Year shall be presented to and approved by
the Board of Directors or Compensation Committee of the Company in December of
each year in a manner consistent with past practice. The Annual Bonus shall be
paid within thirty (30) days after the completion of the audit by the Company's
independent auditors of the financial statements of the Company and its
Affiliates for the Fiscal Year to which the Annual Bonus applies.




4.     Additional Benefits.




4.1 Benefit Plans. The Employee shall be entitled during the Term, if and
to the extent eligible, to participate in all employee benefit plans of the
Company or Holdings which the Company or Holdings provides to its executive
employees or officers generally, including, without limitation, a health and
medical insurance plan, basic life insurance,




5









supplemental life insurance, basic disability benefit plan, supplemental
disability benefit plan, relocation, retirement or pension plan or similar
benefit plans, whether now in existence or hereafter adopted; provided, however,
that neither the Company nor Holdings shall be obligated to adopt, maintain or
contribute to any such benefit plans which, in their discretion, the Company and
Holdings believe would be imprudently expensive or otherwise inappropriate. Any
new benefit plan which the Company or Holdings provides to its executive
employees, and any change to a benefit plan which the Company or Holdings
provides to its executive employees, shall be applied consistently to all such
executive employees.




4.2    Director's and Officer's Insurance. Holdings has
purchased and Holdings or the Company will use reasonable efforts to maintain
during the Term, at Holdings' or the Company's expense, Director's and Officer's
liability insurance in a reasonable amount covering all insurable acts of the
Employee pursuant to this Agreement provided that the Employee's coverage will
not be less extensive than that provided by Holdings or the Company to any other
director or officer of Holdings, the Company or any Affiliate.




4.3    Fringe Benefits. The Employee shall be entitled
during the Term to the following additional benefits: (i) a company-owned
automobile of a make and model approved by the Compensation Committee as
appropriate for an officer of the position of the Employee; (ii) company-owned
club membership (or to the extent the club does not permit company membership,
reimbursement for individual membership) for fees, dues and fixed expenses only,
paid by the Company and/or the Employee, which shall not exceed Ten Thousand
Dollars ($10,000.00) per year; (iii) paid vacation days in accordance with
standard Company policy for similarly situated officers; and (iv) participation
in a nonqualified unfunded elective salary deferral plan adopted or to be
adopted by the Compensation Committee having such terms




6









as the Compensation Committee determines in its sole discretion are appropriate
for the purpose of providing certain benefits in excess of the benefits
otherwise available under the Company's employee benefit plan established
pursuant to Code sections 401(a) and 401(k) of the Internal Revenue Code of
1986, as amended (the "Code"), which nonqualified plan provides or is expected
to provide tax-deferred savings opportunities through elective salary deferrals
in excess of certain of the limits set forth in Subchapter D of Chapter I of
Subtitle A of the Code.




5. Termination of Employment. The Employee's employment with the Company
shall terminate upon the death of the Employee, and the Company shall have the
right, at any time during the Term, by delivery of written notice to the
Employee, to terminate the Employee's employment as a result of the Employee's
Permanent Disability (as such term is defined in Section 5.1 hereof), for Cause
(as such term is defined in Section 5.3 hereof) or for any other reason, and the
Employee shall have the right to resign, the consequences of any such
termination or resignation being as specified in this Section 5:




5.1 Death; Disability. If the Employee's employment with the Company is
terminated by reason of the Employee's death or Permanent Disability during the
Term, the obligations of the Company and Holdings under this Agreement shall be
satisfied by providing the benefits set forth in the Company's life insurance or
disability benefit plan or plans, as the case may be. The Employee shall not be
entitled to any other payments or compensation under this Agreement except for


(i) Base Salary accrued and unpaid to the date of death or Permanent Disability,


(ii) any vested benefits as of the date of death or termination for Permanent
Disability under any awards to the Employee pursuant to the National
Auto/Truckstops Holdings Corporation 1993 Stock Incentive Plan, the
TravelCenters of America, Inc. 1997 Stock Incentive Plan, and any other such
plan or individual agreement




7









adopted after the date of this Agreement (collectively, the "Stock Incentive
Plans"), or any amount payable under any other benefit plan of the Company or
any Affiliate, in accordance with the terms of any such plan, (iii) an amount
equal to the product of (x) the Annual Bonus, if any, determined by the
Compensation Committee for the year in which the termination occurs, multiplied
by (y) the fraction, the numerator of which equals the number of days the
Employee was employed by the Company during the Fiscal Year in which such
termination occurs and the denominator of which is three hundred sixty-five


(365), and (iv) if the Employee and/or his spouse and dependents properly elect
continued medical coverage ("COBRA") in accordance with Code section 4980B, the
Company will pay the entire cost of the premiums for such continued medical
coverage for the maximum required period of coverage under Code section
4980B(f). "Permanent Disability," as used in this Section 5.1, shall mean the
physical or mental inability of the Employee to perform, consistent with past
practice, the essential functions of such Employee's duties as specified in


Section 2.1 hereof, with reasonable accommodation to the extent required by the
applicable requirements of the Americans with Disabilities Act, for at least
twelve (12) consecutive months. Determination of Permanent Disability shall be
made initially by the Board of Directors of the Company. If there is a
disagreement between the Employee and the Company as to the existence of such a
Permanent Disability, such disagreement shall be resolved by the determination
of two physicians, one selected by the Employee and one selected by the Company.
If such physicians shall disagree, the decision shall be made by a third
physician selected by the first two physicians. The fees and expenses of all of
the physicians shall be paid by the Company.




5.2    Resignation. If the Employee's employment with the
Company is terminated during the Term by reason of the Employee's resignation
(other than for "Good




8









Reason" as defined in Section 5.5 hereof), all obligations of the Company and
Holdings, including, without limitation, the obligation to pay salary or other
amounts payable under this Agreement to or for the benefit of the Employee,
shall terminate upon the effective date of such resignation, and the Employee
shall not be entitled to any compensation under this Agreement except for Base
Salary accrued and unpaid through, and any vested benefits under any awards to
the Employee pursuant to the Stock Incentive Plans, or any amount payable under
any other benefit plan of the Company or any Affiliate in accordance with the
terms of such plan, as of the effective date of such resignation. The Employee
agrees to give the Company one hundred twenty (120) days notice of his
resignation (other than for Good Reason).




5.3    Company's Right to Terminate for Cause. If the
Employee shall be discharged for "Cause" (as defined below) during the Term, all
obligations of the Company and Holdings, including, without limitation, the
obligation to pay salary or other amounts payable under this Agreement to or for
the benefit of the Employee, shall terminate upon the effective date of such
discharge, and the Employee shall not be entitled to any compensation under this
Agreement except for Base Salary accrued and unpaid through, and vested benefits
under any awards to the Employee pursuant to the Stock Incentive Plans, or any
amount payable under any other benefit plan of the Company or any Affiliate in
accordance with the terms of such plan, as of the effective date of such
discharge. As used in this Agreement, "Cause" shall mean a discharge in one or
more of the following events:




(i)    the Employee's misappropriation of money or
other assets or property, breach of fiduciary duty, tortious conduct or
other act of dishonesty with respect to the Company or any Affiliate; the
Employee's conviction of, or plea of guilty or nolo contendere to, any
act of fraud, embezzlement, tortious conduct or any crime for




9









an offense that constitutes a felony, or the Employee's indictment for
any crime involving dishonesty or moral turpitude;




(ii) the Employee's continuing, repeated willful
failure or refusal to follow written directions of the Board of Directors
of the Company or Holdings which failure or refusal continues following
the Employee's receipt of written notice from such Board of Directors
advising him of the acts or omissions that constitute the failure to
perform his duties as an officer of the Company or Holdings, if such
failure continues after the Employee shall have had a reasonable
opportunity to correct the act or omissions so complained of;




(iii)  the Employee's violation of the Company's
drug abuse or alcohol abuse policy; or




(iv)   the Employee's breach of any covenant set
forth in Section 6 hereof.




5.4    Termination for Any Other Reason or Resignation for
a Good Reason. If (a) the Employee is discharged by the Company during the Term
for any reason (other than for "Cause" (as defined in Section 5.3 hereof) or by
reason of the Employee's death or "Permanent Disability" (as defined in Section
5.1 hereof)) or (b) the Employee's employment with the Company is terminated by
reason of the Employee's resignation for a "Good Reason" (as defined in Section
5.5 hereof) occurring during the Term, then all obligations of the Company and
Holdings hereunder shall cease except that the Employee shall be entitled to the
following from the Company:




(i)    any Base Salary accrued and unpaid to the
date of such discharge or resignation, which shall be payable within
thirty (30) days of such discharge




10









or resignation, plus an amount equal to the product of (A) multiplied by
(B), where (A) equals his Annual Bonus, if any, determined by the
Compensation Committee for the year in which his discharge or resignation
occurred and where (B) equals a fraction, the numerator of which equals
the number of days in the calendar year during which the Employee was
employed by the Company, and the denominator of which equals three
hundred sixty-five (365), which amount shall be payable on the same date
that active officers are paid similar Annual Bonuses;




(ii)   during the twenty-four (24) month period
following the date of his discharge or termination, a monthly amount
equal to the greater of (i) his monthly rate of Base Salary in effect as
of the date immediately preceding any Change of Control or (ii) his
monthly rate of Base Salary in effect as of the date of his discharge or
termination, which shall be payable in such manner and at such times as
active employees of the Company are paid base salaries;




(iii) an amount equal to two hundred percent (200%)
of the greater of the Employee's Target Bonus as set forth in


Section 3.2 hereof for the Fiscal Year ended December 31, 2000 or
the Employee's Target Bonus as set forth in Section 3.2 hereof for the
Fiscal Year in which his Termination of Employment occurs, which amount
shall be payable in two separate payments each equal to one-half of
such amount (i.e., each payment equal to one hundred percent (100%) of
the Target Bonus amount). The first such payment shall be payable at
such time and in such manner as active officers of the Company
customarily are paid similar bonuses for the Fiscal Year next following
the Fiscal Year in which his discharge or resignation occurs (or in
accordance with past practice if such bonuses are not being paid to
such active officers), and the




11









second such payment shall be payable at such time and in such manner as
active officers of the Company customarily are paid similar bonuses for
the second Fiscal Year following the Fiscal Year in which his discharge
or resignation occurs (or in accordance with past practice if such
bonuses are not being paid to such active officers), provided that the
second payment shall be made not later than the date of the last
scheduled payment payable pursuant to Section 5.4(ii) hereof;




(iv)   any vested benefits as of the date of such
resignation or discharge under any awards to the Employee pursuant to the
Stock Incentive Plans, or any amount payable under any other benefit plan
of the Company or any Affiliate in accordance with the terms of such
plan; and




(v)    if the Employee (and/or his spouse and/or
dependents) properly elect continued COBRA medical coverage, the Company
and the Employee (and/or his spouse and/or dependents) each shall pay
their same portions of the premiums for such medical coverage as if the
Employee had remained in the employ of the Company until the Participant
shall elect to discontinue such coverage, provided that the obligation
of the Company under this Section 5.4(v) shall cease upon the expiration
of the later of (A) the maximum required period of coverage under Code


Section 4980B(f), or (B) twenty-four (24) months after the date of such
discharge or resignation;




provided, however, that, in each case in clauses (i) through (v) above in
this Section 5.4, if at any time during which the Company is obligated to make
payments thereunder the Employee engages in any activity violative of Section 6
hereof, then, as of the date the Employee commences engaging in such activity,
all of the Company's obligations to pay compensation or other amounts under this
Agreement to or for the benefit of the Employee shall terminate except




12









for (i) Base Salary then accrued and unpaid, (ii) any vested benefits under any
awards to the Employee pursuant to the Stock Incentive Plans, and (iii) any
amount payable under any other benefit plan of the Company or any Affiliate in
accordance with the terms of such plan.




5.5    Resignation for Good Reason. As used in this
Agreement, "Good Reason" shall mean a resignation by the Employee as a result of
one or more of the following events occurring during the Term:




(i)    a material reduction in the Employee's
compensation (including the additional benefits described in Section 4
hereof) in the aggregate or his duties or title with respect to the
Company or any of its Affiliates (other than nonsubstantive, titular or
nominal changes);




(ii) the Company requires the Employee to change his principal location
of work to any location which is outside of the Cleveland, Ohio, metropolitan
area, without his prior written consent; or




(iii)  a material breach of this Agreement by the
Company or any of its Affiliates unless such breach is substantially
cured within a reasonable period of time (hereby defined as thirty (30)
days) after written notice advising the Company of the acts or omissions
constituting such breach is actually received by the Company in
accordance with Section 11.5 hereof.




If the Employee claims the existence of a Good Reason, he must
notify the Company in writing of the event constituting Good Reason not later
than sixty (60) days following the later to occur of the occurrence of the event
(e.g., the actual reduction in compensation, the scheduled date of relocation or
the date of the breach) constituting Good Reason or his actual knowledge
thereof. If the event which the Employee claims to be a Good




13









Reason is not cured within thirty (30) days following the date of such notice,
the Employee must resign within ten (10) days following the thirty (30) day cure
period in order to invoke his right to resign for Good Reason. If no such timely
resignation occurs or no such timely written notices are given, the Employee's
right to resign for Good Reason with respect to such event shall be permanently
waived.




5.6 Employee Benefit Plans. In addition to such payments and benefits as
may be provided to the Employee upon his termination of employment during the
Term as set forth herein, the Employee (or his estate, legal representative or
employee benefit plan beneficiary, as the case may be) shall be entitled to
receive such other benefits as are expressly so provided under the terms of any
employee benefit plan or other contractual arrangement maintained by the Company
or any Affiliate; provided, however, that the Compensation Committee may reduce
benefits under any such other plan or arrangement, if permissible thereunder, or
may reduce benefits hereunder, to the extent it both (i) determines in good
faith that such benefits are clearly duplicative or unintended (e.g.,
duplicative severance benefits or more than one company car), and (ii) permits
full payment of the better (in the case of two duplicative benefits) or the best
(in the case of more than two duplicative benefits) of the benefits. This


Section 5.6 shall not be deemed to permit any reduction in any amount otherwise
payable to the Employee under any nonqualified deferred compensation plan of the
Company or any Affiliate.




6.     Covenants of the Employee.




6.1    Covenants Against Competition. The Employee
acknowledges that (a) the Company and its Affiliates are engaged in the business
of operating a truckstop network, with facilities that provide motor fuel
pumping along with one or more of the following




14









services: truck care and repair services, a fast food restaurant, a full-service
restaurant, a convenience store, showers, laundry facilities, telephones,
recreation rooms, truck weighing scales and other compatible business services
approved by the Company (the "Business"); (b) the Employee is one of the limited
number of persons who developed the Business; (c) such Business is conducted
nationally; (d) the Employee's work for the Business has given him, and will
continue to give him, trade secrets of, and confidential information concerning,
the Business; (e) the Employee acknowledges that the Employee's knowledge of
such trade secrets and of, and confidential information concerning, the Business
would be of significant assistance and value to any "TA Truck-Stop Competitor,"
which for purposes of this Section 6 shall mean Petro, Flying J, AMBEST, PTP,
Sapp Bros., Giant, All American, Rip Griffin, Bosselman's, Dixie Trucker's Home,
Texaco/Equilon, Pilot, Love's, Speedway (Emro), Little America, Total, Mapco,
Coastal, Fuel Mart and any other chain or network of national or regional "truck
stops" as such term is generally understood in the trucking industry, including
any affiliates or successors to any of the foregoing; and (f) the agreements and
covenants contained in this Section 6.1 are essential to protect the Business
and the goodwill associated with it. Accordingly, the Employee covenants and
agrees as follows:




6.1.1  Non-Compete. From the date hereof through the later
of (A) the last day of the Term and (B) the last date through which the Employee
is entitled to receive any payment pursuant to Section 5.4(ii) hereof, the
Employee shall not, in the United States of America, directly or indirectly, (x)
enter the employ of or render any services to any TA Truck-Stop Competitor, or


(y) have an interest in any TA Truck-Stop Competitor, whether such interest is
direct or indirect, and including any interest as a partner, shareholder,
trustee, consultant, officer or similarly situated person; provided, however,
that in any case, the Employee may own,




15









solely as an investment, securities of any TA Truck-Stop Competitor that are
publicly traded if the Employee (a) is not a controlling person and (b) does
not, directly or indirectly, own five percent (5%) or more of any class of
securities of such person. After the date which is the later of (A) and (B) in
the preceding sentence, the Employee shall be free to engage in any lawful
business activities, including activities for or related to a TA Truck-Stop
Competitor. The covenant contained in this Section 6.1.1 shall survive the
termination of this Agreement.




6.1.2  Confidential Information. The Employee agrees that
neither during the Term nor at any time thereafter shall he (i) disclose to any
person not employed by the Company or an Affiliate, or not engaged to render
services to the Company or an Affiliate or (ii) use for the benefit of himself
or others, any confidential information of the Company, any of the Company's
Affiliates or of the Business obtained by him, including, without limitation,
"know-how," trade secrets, details of customers', suppliers', manufacturers' or
distributors' contracts with the Company or any of the Company's Affiliates,
pricing policies, financial data, operational methods, marketing and sales
information, marketing plans or strategies, product development techniques or
plans, plans to enter into any contract with any person or any strategies
relating thereto, technical processes, designs and design projects, and other
proprietary information of the Company, the Company's Affiliates or of the
Business or the business of any of the Company's Affiliates; provided, however,
that this provision shall not preclude the Employee from (a) making any
disclosure required by law or court order or (b) using or disclosing information


(i) known generally to the public (other than information known generally to the
public as a result of a violation of this Section 6.1.2 by the Employee), (ii)
acquired by the Employee outside of his affiliation with the Company or any of
the Company's Affiliates, or (iii) of a general nature (that is, not related
specifically to the Business) that ordinarily would be




16









learned, developed or obtained by individuals similarly active and/or employed
in similar capacities by other companies in the same Business as the Company or
any of the Company's Affiliates. The Employee agrees that all confidential
information of the Company or any of the Company's Affiliates shall remain the
Company's or the Company's Affiliates', as the case may be, property and shall
be delivered to the Company or to the Company's Affiliates, as the case may be,
promptly upon the termination of the Employee's employment with the Company or
at any other time on request. The covenant contained in this Section 6.1.2 shall
survive the termination of this Agreement.




6.1.3 Nonsolicitation by Restricted Persons. From the date hereof through
the later of (A) the last day of the Term and (B) the last date through which
the Employee is entitled to receive any payment pursuant to Section 5.4(ii)
hereof, the Employee shall not, directly or indirectly, (a) solicit any employee
to leave the employment of the Company or the employment of any of the Company's
Affiliates or (b) hire any employee who has left the employ of the Company or
the employ of any of the Company's Affiliates within six (6) months after
termination of such employee's employment with the Company or such employee's
employment with any of the Company's Affiliates, as the case may be (unless such
employee was discharged by the Company without Cause and excepting clerical and
similar employees). The covenant contained in this Section 6.1.3 shall survive
the termination of this Agreement.




7.     Rights and Remedies Upon Breach of Covenants. If the
Employee breaches, or threatens to commit a breach of, any of the provisions of


Section 6 hereof (the "Restrictive Covenants"), the Company shall have the
following rights and remedies, each of which rights and remedies shall be
independent of the others and severally enforceable, and all of




17









which rights and remedies shall be in addition to, and not in lieu of, any other
rights and remedies available to the Company at law or in equity:




7.1 Specific Performance. The right and remedy to have the
Restrictive Covenants specifically enforced by any court having equity
jurisdiction, it being acknowledged and agreed that any such breach or
threatened breach will cause irreparable injury to the Company and that money
damages will not provide an adequate remedy to the Company.




7.2 Severability of Covenants. The Employee acknowledges and
agrees that the Restrictive Covenants are reasonable and valid in geographical
and temporal scope and in all other respects. If any court determines that any
of the Restrictive Covenants, or any part thereof, is invalid or unenforceable,
the remainder of the Restrictive Covenants shall not thereby be affected and
shall be given full effect to the greatest extent possible, without regard to
the invalid portions.




7.3 Blue Penciling. If any court construes any of the Restrictive
Covenants, or any part thereof, to be unenforceable because of the duration of
such provision or the area covered thereby, such court shall have the power to
reduce the duration or area of such provision and, in its reduced form, such
provision shall be enforceable and shall be enforced to the greatest extent
possible.




7.4 Enforceability in Jurisdictions. The parties intend to and
hereby do limit jurisdiction to enforce the Restrictive Covenants upon the
courts of the jurisdiction of the Employee's last principal place of business
under this Agreement and the sites of the alleged breach of the Restrictive
Covenants.




7.5    Survival. The provisions of this Section 7 shall survive
the termination of this Agreement.




18









8. Representations of Employee. The Employee hereby represents and
warrants to the Company (a) that there are no restrictions, agreements or
understandings whatsoever to which the Employee is a party which would prevent
or make unlawful the execution or performance of this Agreement or his
employment hereunder and (b) that the execution of this Agreement and the
Employee's employment hereunder shall not constitute a breach of any contract,
agreement or understanding to which he is a party or by which he is bound.




9.     Senior Management Incentive Program. The Employee shall be
a participant in the Company's Senior Management Incentive Program. Under the
Program, the Employee may become entitled to an Incentive Bonus as hereinafter
described:




9.1 Full Incentive Bonus. Subject to Section 9.3 hereof, in the event of a
Change of Control on or before December 31, 2000, the Employee shall receive as
an Incentive Bonus a single sum cash payment at the closing of the Change of
Control transaction in the amount hereinafter described:




(i)    if the "Enterprise Value," as hereinafter
defined, shall be less than or equal to Eight Hundred Million Dollars
($800,000,000.00), the Incentive Bonus shall be equal to the sum of one
year's Base Salary plus one year's Target Bonus;




(ii) if the Enterprise Value shall be in excess of
Eight Hundred Million Dollars ($800,000,000.00), but less than One
Billion Dollars ($1,000,000,000.00), the Incentive Bonus shall increase
linearly from the sum of one year's Base Salary plus one year's Target
Bonus at the Eight Hundred Million Dollar ($800,000,000.00) level to four


(4) times the sum of one year's Base Salary plus one year's Target Bonus
at the One Billion Dollar ($1,000,000,000.00) level; and




19









(iii) if the Enterprise Value shall be in excess of
One Billion Dollars ($1,000,000,000.00), the Incentive Bonus shall be
equal to the sum of (A) plus (B) below, where:




(A) equals four (4) times the sum of one year's Base
Salary plus one year's Target Bonus; and




(B) equals an amount equal to the portion of the
Enterprise Value in excess of One Billion Dollars
($1,000,000,000.00) times a fraction, the numerator of which is
the amount determined under Section 9.1(iii)(A) above and the
denominator of which is One Billion Dollars ($1,000,000,000.00).




For purposes of calculating the amount of the Incentive Bonus, the Enterprise
Value shall be deemed to be equal to the "Enterprise Value" of the Company
and the Affiliates, in the aggregate, as the words "Enterprise Value" are
used to determine the payments to be made to the Company's financial advisors.




9.2 Partial Incentive Bonus. In the event that, prior to a Change of
Control, but on or before December 31, 2000, a person or group of persons who
are not shareholders of Holdings on December 31, 1999 acquires ten percent (10%)
or more of the equity of Holdings on a fully diluted basis (a "Ten Percent Or
Greater Acquisition"), then for each such Ten Percent Or Greater Acquisition the
Employee shall receive as an Incentive Bonus a single cash payment at the
closing of the Ten Percent Or Greater Acquisition transaction in an amount equal
to (i) multiplied by (ii) below, where:




(i)    equals the amount of the Incentive Bonus
which would have been payable to the Employee under Section 9.1 hereof if the
Ten Percent Or




20









Greater Acquisition had been a Change of Control based on the Enterprise
Value implicit in the transaction; and




(ii)   equals the percentage of equity ownership
which is replaced by new outside equity ownership in the Ten Percent Or
Greater Acquisition transaction. Such "new outside equity ownership"
shall not be deemed to include any increase in equity ownership by any
person who was an equity owner of Holdings on December 31, 1999.




9.3    Limitations and Qualifications. Notwithstanding any
provision of this Section 9 to the contrary, the following limitations and
qualifications shall apply to Incentive Bonuses and Partial Incentive Bonuses:




(i) Upon the occurrence of a Change of Control,
the Employee shall have no right to an Incentive Bonus for any subsequent
Change of Control transaction or to a Partial Incentive Bonus for any
subsequent Ten Percent Or Greater Acquisition.




(ii)   If, on or before December 31, 2000, there
shall occur more than one Ten Percent Or Greater Acquisition prior to a
Change of Control, the Employee shall be entitled to a Partial Incentive
Bonus payment for each such Ten Percent Or Greater Acquisition; provided,
however, that the aggregate amount of such Partial Incentive Bonus
payments shall not exceed an amount equal to the Incentive Bonus that
would have been payable if the Ten Percent Or Greater Acquisition having
the highest Enterprise Value had been a Change of Control transaction.




(iii)  If a Change of Control shall occur on or
before December 31, 2000 but after one or more Ten Percent Or Greater
Acquisitions, the Incentive Bonus




21









payment payable to the Employee pursuant to Section 9.1 hereof in
connection with such Change of Control shall be reduced, but not below
zero, by any Partial Incentive Bonus payments payable to the Employee
pursuant to this Section 9.




10.    Rollover of Investment. The Employee and the Company agree
to the following concerning the rollover of investment in the event of a Change
of Control:




10.1   Rollover at Buyer's Request. If the buyer in the
Change of Control transaction (the "Buyer") shall request that the Employee roll
over his issued and outstanding shares of Common Stock of the Company into an
equity investment in the entity resulting from the Change of Control transaction
(the "Successor") so that the Change of Control transaction will qualify for
recapitalization accounting, the Employee agrees to such a rollover, but to no
greater extent than his pro rata portion of the total amount of issued and
outstanding shares (immediately prior to the closing of the Change of Control
transaction and calculated giving effect to Preferred Stock as if it had been
converted to Common Stock but excluding compensatory options and stock
appreciation rights) of Common Stock which the Buyer requests to be rolled over,
and agrees to take any and all such action as may be required to effect such a
rollover.




If such a rollover is to be made, the Company agrees to
make such rollover, to the extent reasonably possible, on a basis which is tax
favored to the Employee. The issued and outstanding shares of Common Stock
referred to in this Section 10.1 are only those actually owned by the Employee
immediately prior to the closing of the Change of Control transaction. The words
"issued and outstanding shares of Common Stock" shall not be deemed to include
any outstanding compensatory options or stock appreciation rights, nor any
shares of Common Stock received or receivable due to the exercise of any
compensatory options or stock




22









appreciation rights, of the Employee or any other officer or employee of the
Company or any Affiliate.




11.    Other Provisions.




11.1 Conflict. To the extent any provisions of this Agreement
conflict with the terms of any existing plan, policy or arrangement affecting
the compensation or benefits of the Employee, the provisions of this Agreement
will control.




11.2   Withholding. The Company may withhold from any amounts
payable under this Agreement such federal, state or local taxes or other amounts
as shall be required to be withheld pursuant to any applicable law or
regulation.




11.3   Code Section 280G. The Employee's right to receive any
payment or benefit hereunder in connection with his termination of employment or
otherwise which may be characterized as a "parachute payment" (within the
meaning of Code section 280G), or deemed to constitute a payment made in
connection with or contingent upon a change of control of the Company or
Holdings for purposes of Code section 280G, is contingent upon and subject to
the approval of holders of record of stock of the Company or Holdings, as
applicable, representing more than seventy-five percent (75%) of the voting
power of all outstanding stock of the Company or Holdings, as the case may be,
immediately prior to such change of control (determined without regard to any
stock actually or constructively owned by the Employee and by certain other
persons as determined by the Company).




The Company and Holdings covenant that they will present this
Agreement in a timely manner to the shareholders of the Company or Holdings or
both, as appropriate, with a unanimous recommendation of the Boards of Directors
of the Company and Holdings that it be approved by such shareholders.




23









11.4 Subsidiaries and Affiliates. Notwithstanding any contrary
provision of this Agreement, to the extent it does not adversely affect the
Employee, the Company and Holdings may provide the compensation and benefits to
which the Employee is entitled hereunder through one or more subsidiaries or
affiliates, including, without limitation, Holdings.




11.5 Notices. Any notice or other communication required or which
may be given hereunder shall be in writing and shall be delivered personally,
sent by facsimile transmission or overnight courier or sent by registered or
certified mail, return receipt requested, postage prepaid, and shall be deemed
given when so delivered personally or sent by facsimile transmission or
overnight courier, or if mailed, four days after the date of mailing, as
follows:




(i)      if to the Company or Holdings, to it at:




TravelCenters of America, Inc.
24601 Center Ridge Road, Suite 200
Westlake, Ohio 44145-5634
Attention: General Counsel
Telecopy No: (440) 808-3301




and a copy to:




Calfee, Halter & Griswold LLP
1400 McDonald Investment Center
800 Superior Avenue
Cleveland, Ohio 44114-2688
Attention:  Philip M. Dawson, Esq.




Telecopy No. (216) 241-0816




and, if prior to a Change of Control, a copy to:




The Clipper Group, L.P.


650 Madison Avenue, 9th Floor


New York, New York 10022


Attention: Rolf H. Towe


Telecopy No.: (212) 940-6055




24









or at such other address as such person may
hereafter designate to the Employee by notice as
provided herein; and




(ii)   if to the Employee, to him at the address set forth
below or at such other address as the Employee may
hereafter designate to each of the persons listed in
clause (i) above by notice as provided herein.




James W. George
32360 Brandon Place
Avon Lake, Ohio  44012




Either party may give any notice or other communication hereunder
using any other means (including ordinary mail or electronic mail), but no such
notice or other communication shall be deemed to have been duly given unless and
until it actually is received by the individual for whom it is intended. Either
party may change the address to which notices and other communications hereunder
are to be delivered by giving the other party notice in the manner herein set
forth.




11.6 Entire Agreement. This Agreement contains the entire agreement between
the parties with respect to the subject matter hereof and supersedes all prior
agreements, written or oral, with respect thereto, including, without
limitation, the employment agreement by and between the Company and the Employee
dated as of November 30, 1997. The Employee acknowledges that, as of the date
this Agreement is executed, he has received all amounts accrued or due under any
prior agreements, and that he is not entitled to receive additional amounts
pursuant to any such agreements.




11.7   Waivers and Amendments. This Agreement may be
amended, modified, superseded, canceled, renewed or extended, and the terms and
conditions hereof may be waived, only by a written instrument signed by the
parties or, in the case of a waiver, by the party waiving compliance. No delay
on the part of any party in exercising any right, power or a privilege hereunder
shall operate as a waiver thereof, nor shall any waiver on the part of any




25









party of any right, power or privilege hereunder, nor any single or partial
exercise of any right, power or privilege hereunder, preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder. The rights and remedies herein provided are cumulative and are not
exclusive of any rights or remedies which any party may otherwise have at law or
in equity.




11.8   Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of Ohio applicable
to agreements made and to be performed entirely within such State.




11.9   Assignment; Binding Effect. This Agreement is being
executed with the expectation that a Change of Control will occur on or before
December 31, 2000 and with the further expectation that this Agreement will be
assumed, expressly or by operation of law, by the Successor in the Change of
Control transaction. This Agreement, and the Employee's rights and obligations
hereunder, may not be assigned by the Employee. The Company and Holdings,
jointly but not severally, may assign this Agreement and their rights, together
with their obligations, hereunder to any entity that controls the Company or
Holdings, is controlled by the Company or Holdings, or is under common control
with the Company or Holdings, or in connection with any sale, transfer or other
disposition of all or substantially all of the assets or business of the Company
and Holdings, whether by merger, consolidation or otherwise. The Company and
Holdings, or any direct or indirect Successor to the Company or Holdings, shall
use its reasonable efforts to cause its successor in interest to assume
explicitly the obligations of the Company and Holdings or such direct or
indirect Successor to the Company or Holdings, as the case may be, hereunder.




26









11.10  Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.




11.11  Headings. The headings in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.




11.12  Arbitration. If requested by the Employee or the
Company, any claim or controversy arising out of or relating to the
interpretation, construction and performance of this Agreement, or any
alleged breach hereof, shall be finally resolved by arbitration conducted in
accordance with such rules as may be agreed upon by the parties within thirty


(30) days following written notice by either party to the other identifying
the issue in dispute and the position of the party giving notice, or failing
to achieve such agreement, in accordance with the National Rules for the
Resolution of Employment Disputes of the American Arbitration Association.
Any award rendered in connection with the foregoing arbitration shall be in
writing and shall be final and binding upon the parties, and judgment upon
any such award may be entered and enforced in any court of competent
jurisdiction. The forum for such arbitration shall be in Cleveland, Ohio and
the governing law shall be the laws of the State of Ohio without giving
effect to conflict of laws provisions. Notwithstanding any provision in this


Section 11.12 to the contrary, the Company shall have the right and power to
seek and obtain equitable relief in accordance with Section 7.1 hereof.




27









IN WITNESS WHEREOF, the parties have executed this Employment
Agreement as of the date first above written.





TRAVELCENTERS OF AMERICA, INC.





("Holdings")










By: /s/ Rolf H. Towe
   --------------------------------------

Name:   Rolf H. Towe
     ------------------------------------

Title:  Chairman, Compensation Committee
      -----------------------------------
        of the Board
      -----------------------------------














TA OPERATING CORPORATION





("Company")










By: /s/ Rolf H. Towe
   --------------------------------------

Name:   Rolf H. Towe
     ------------------------------------

Title:  Chairman, Compensation Committee
       ----------------------------------
        of the Board
       ----------------------------------

       /s/ James W. George
       ----------------------------------
                  James W. George













("Employee")




28















EXHIBIT 10.14






AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT





AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT dated as of May 26, 2000, by and
among TA Operating Corporation, a Delaware corporation (the "Company"),
TravelCenters of America, Inc., a Delaware corporation ("Holdings"),
and James W. George (the "Employee").




WHEREAS, the Company, Holdings and the Employee are parties to an
Employment Agreement dated as of January 1, 2000 (the "Employment Agreement");
and




WHEREAS, in light of the proposed merger between Holdings and TCA
Acquisition Corporation and to ensure the success of such transaction, the
parties to the Employment Agreement desire to modify such Employment Agreement
as hereinafter set forth.




NOW, THEREFORE, in consideration of the parties' mutual desire to
modify the Employment Agreement and the mutual covenants herein contained, the
parties agree as follows effective May 26, 2000:




1.     Section 3.2 of the Employment Agreement shall be amended by
the addition of the following at the end thereof:




"Notwithstanding any provision of this Section 3.2 to the
contrary, the Employee shall be deemed to have fully satisfied his individual
MBO target for the Fiscal Year ending December 31, 2000, if a Change of Control
shall occur on or before December 31, 2000."




2.     Section 9 to the Employment Agreement shall be deleted in
its entirety, and the following Section 9 shall be substituted therefor:









"9. Senior Management Incentive Program. The Employee shall be a
participant in the Company's Senior Management Incentive Program. Under the
Program, the Employee may become entitled to an Incentive Bonus as hereinafter
described:




9.1 Incentive Bonus. In the event of a Change of Control on or before
December 31, 2000, the Employee shall receive as an Incentive Bonus a single sum
cash payment at the closing of the Change of Control transaction in an amount
equal to twice the sum of one year's Base Salary at the annual rate in effect on
the date of the Change of Control plus the Employee's Target Bonus for the
Fiscal Year ending December 31, 2000; provided, however, that upon the
occurrence of a Change of Control, the Employee shall have no right to an
Incentive Bonus for any subsequent Change of Control transaction."




3.     The remaining terms and provisions of the Employment
Agreement shall not be modified hereby and shall remain in full force and
effect.




2









IN WITNESS WHEREOF, the parties have executed this Amendment No. 1
to Employment Agreement as of the date first above written.





TRAVELCENTERS OF AMERICA, INC.





("Holdings")










By: /s/ Rolf H. Towe
    --------------------------------------
Name: Rolf H. Towe
      ------------------------------------

Title: Chairman, Compensation Committee of
       the Board
       -----------------------------------














TA OPERATING CORPORATION





("Company")










By: /s/ Rolf H. Towe
    --------------------------------------
Name: Rolf H. Towe
      ------------------------------------

Title: Chairman, Compensation Committee of
       the Board
       -----------------------------------


       /s/ James W. George
       -----------------------------------

                James W. George













("Employee")




3















EXHIBIT 10.15






EMPLOYMENT AGREEMENT





EMPLOYMENT AGREEMENT dated as of January 1, 2005, by and among TA
Operating Corporation, a Delaware corporation (the "Company"), TravelCenters
of America, Inc., a Delaware corporation ("Holdings") and Joseph A. Szima
(the "Employee").




In consideration of the parties' desire to assure the Company and
Holdings of the services of the Employee, and the mutual covenants herein
contained, the parties agree as follows:




1. Employment.




1.1 Employment, Acceptance and Term. Subject to Section 5
hereof, the Company and Holdings hereby agree to employ the Employee, and the
Employee agrees to serve the Company and Holdings, during the term of this
Agreement (the "Term") which shall commence January 1, 2005 (the "Effective
Date") and end on December 31, 2006 (the "Initial Term"), and shall be renewed
automatically for successive one calendar year periods thereafter through
December 31 of the calendar year in which the Employee reaches age sixty-five


(65), unless the Company gives the Employee or the Employee gives the Company
written notice of its or his intent not to renew this Agreement, which notice
must be given not later than December 31, 2005 if this Agreement is to expire at
the end of the Initial Term or December 31 of the year last preceding the final
calendar year of the Term if this Agreement is to expire after the Initial Term;
provided, however, that no such notice given by either the Company or the
Employee after a "Change of Control" as defined in Section 1.2 hereof shall have
the effect of terminating this Agreement prior to the December 31 coinciding
with or next following the second anniversary of the date on which such Change
of Control occurs. The Employee acknowledges that neither the Company nor
Holdings shall have any obligation to extend the









Term beyond the Initial Term or to renew the Agreement after any extension, or
to enter into a new employment agreement upon the expiration of the Term. Unless
otherwise agreed between the parties in writing, any continuation of the
Employee's employment beyond the expiration of the Term shall constitute an
employment at will and shall not extend the terms of this Agreement.




1.2 Change of Control. Any of the following events shall
constitute a "Change of Control":




(i) any "person," as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), becomes the beneficial owner (as defined in Rule 13d-3 promulgated
under the Exchange Act) of fifty-one percent (51%) or more of the voting
power of the then-outstanding voting securities of Holdings; provided,
however, that the foregoing does not apply to any such acquisition that is
made by (i) the Company or any Affiliate or (ii) any employee benefit plan
maintained either by the Company or any Affiliate; or




(ii) Holdings merges into itself, or is merged or consolidated
with, another corporation and as a result of such merger or consolidation
less than fifty-one (51%) of the voting power of the then-outstanding
voting securities of the surviving or resulting corporation immediately
after such transaction are owned in the aggregate by the former
shareholders of Holdings immediately prior to such transaction;




(iii) all or substantially all the assets accounted for on the
consolidated balance sheet of the Company and the Affiliates, in the
aggregate, are sold or transferred to one or more corporations or persons,
and as a result of such sale or transfer less than fifty-one percent (51%)
of the voting power of the then-outstanding




2









voting securities of such corporation or person immediately after such
sale or transfer is held in the aggregate by the former shareholders of
Holdings immediately prior to such transaction or series of transactions;




(iv) fifty-one percent (51%) or more of the assets accounted
for in the consolidated balance sheet of Company and its Affiliates, in
the aggregate, are sold or transferred to one or more corporations or
persons, whether such sale or transfer is accomplished by the sale or
transfer of assets directly, the sale or transfer of stock of the Company
or one or more Affiliates or otherwise with, in any case, an aggregate
value of fifty-one percent (51%) or more of the aggregate value of the
Company and its Affiliates, or any combination of methods by which
fifty-one percent (51%) or more of the aggregate value of the Company and
its Affiliates are sold or transferred, if, immediately after such sale or
transfer, the purchaser or transferee is less than fifty-one percent (51%)
owned, in the aggregate, by the persons who are the shareholders of
Holdings immediately prior to such sale or transfer; or




(v) during any period of two (2) consecutive years, including,
without limitation, the year 2004, individuals who at the beginning of any
such period constitute the Board of Directors of Holdings cease, for any
reason, to constitute at least a majority thereof, unless the election or
nomination for election of each Director first elected during such period
was approved by a vote of at least a majority of the members of the Board
of Directors of Holdings who were members of the Board of Directors of
Holdings on the date of the beginning of any such period.




3









Without otherwise limiting the generality of the foregoing, an
initial public offering of the Common Stock of Holdings shall not be
deemed a "Change of Control" for purposes of this Agreement.




2. Duties and Authority.




2.1 Office. Subject to Section 5 hereof, during the Term the
Employee will serve as the Senior Vice President, Marketing of the Company and
Holdings, in accordance with the Certificates of Incorporation and By-Laws of
the Company and Holdings, respectively, and subject to the direction of, and in
accordance with the authority delegated to the Employee by, the Boards of
Directors of the Company and Holdings, and reporting to the President and Chief
Executive Officer.




2.2 Duties. Subject to Section 5 hereof, during the Term
the Employee shall devote all of his full working time and energies to the
business and affairs of the Company and, in connection therewith, shall
perform such duties, functions and responsibilities as are commensurate with
and appropriate to the position of an officer of the Company. Throughout the
Term, the Employee will use his best efforts, skills and abilities to promote
the interests of the Company and its Affiliates. For purposes of this
Agreement, the term "Affiliates" shall mean, collectively, Holdings, TA
Franchise Systems Inc., a Delaware corporation ("TAFSI"), TA Licensing, Inc.,
a Delaware corporation ("Licensing"), and all subsidiaries and affiliates of
the Company, Holdings, TAFSI, and Licensing.




3. Compensation.




3.1 Base Salary. As compensation for services to be rendered
during the Term pursuant to this Agreement, the Company shall pay the Employee a
base salary at the rate of Two Hundred Eight Thousand Dollars ($208,000) per
annum (the "Base Salary"), which




4









amount shall be reviewed not less frequently than annually and which may be
increased but not decreased by action of the Board of Directors of the Company
or the Compensation Committee (as defined in Section 3.2 hereof) in a manner
consistent with the treatment of other employees of the Company as approved by
the Compensation Committee and payable currently in equal biweekly installments
or otherwise in accordance with the payroll policies of the Company as from time
to time in effect.




3.2 Annual Bonus. For each fiscal year of the Company during
the Term (a "Fiscal Year"), commencing with the Fiscal Year ending December 31,
2005, the Company shall pay to the Employee an annual bonus (the "Annual
Bonus"). The amount of each Annual Bonus shall be determined by the Compensation
Committee of the Board of Directors of the Company (the "Compensation
Committee"), based fifty percent (50%) upon corporate performance (EBITDA goals)
and fifty percent (50%) upon the Employee's individual performance (MBO
targets), and shall range from zero (0) to seventy-five percent (75%) of the
Base Salary in effect as of the first day of the Fiscal Year (seventy-five
percent (75%) of such Base Salary being the "Target Bonus"). The MBO targets for
the following Fiscal Year shall be presented to and approved by the Board of
Directors or Compensation Committee of the Company in December of each year in a
manner consistent with past practice. The Annual Bonus shall be paid within
thirty (30) days after the completion of the audit by the Company's independent
auditors of the financial statements of the Company and its Affiliates for the
Fiscal Year to which the Annual Bonus applies.




4. Additional Benefits.




4.1 Benefit Plans. The Employee shall be entitled during the
Term, if and to the extent eligible, to participate in all employee benefit
plans of the Company or Holdings which the Company or




5









Holdings provides to its executive employees or officers generally, including,
without limitation, a health and medical insurance plan, basic life insurance,
supplemental life insurance, basic disability benefit plan, supplemental
disability benefit plan, relocation, retirement or pension plan or similar
benefit plans, whether now in existence or hereafter adopted; provided, however,
that neither the Company nor Holdings shall be obligated to adopt, maintain or
contribute to any such benefit plans which, in their discretion, the Company and
Holdings believe would be imprudently expensive or otherwise inappropriate. Any
new benefit plan which the Company or Holdings provides to its executive
employees, and any change to a benefit plan which the Company or Holdings
provides to its executive employees, shall be applied consistently to all such
executive employees.




4.2 Director's and Officer's Insurance. Holdings has purchased
and Holdings or the Company will use reasonable efforts to maintain during the
Term, at Holdings' or the Company's expense, Director's and Officer's liability
insurance in a reasonable amount covering all insurable acts of the Employee
pursuant to this Agreement provided that the Employee's coverage will not be
less extensive than that provided by Holdings or the Company to any other
director or officer of Holdings, the Company or any Affiliate.




4.3 Fringe Benefits. The Employee shall be entitled during the
Term to the following additional benefits: (i) a company-owned automobile of a
make and model approved by the Compensation Committee as appropriate for an
officer of the position of the Employee; (ii) company-owned club membership (or
to the extent the club does not permit company membership, reimbursement for
individual membership) for fees, dues and fixed expenses only, paid by the
Company and/or the Employee, which shall not exceed Ten Thousand




6









Dollars ($10,000.00) per year; and (iii) paid vacation days in accordance with
standard Company policy for similarly situated officers.




5. Termination of Employment. The Employee's employment with the
Company shall terminate upon the death of the Employee, and the Company shall
have the right, at any time during the Term, by delivery of written notice to
the Employee, to terminate the Employee's employment as a result of the
Employee's Permanent Disability (as such term is defined in Section 5.1 hereof),
for Cause (as such term is defined in Section 5.3 hereof) or for any other
reason, and the Employee shall have the right to resign, the consequences of any
such termination or resignation being as specified in this Section 5:




5.1 Death; Disability. If the Employee's employment with the
Company is terminated by reason of the Employee's death or Permanent Disability
during the Term, the obligations of the Company and Holdings under this
Agreement shall be satisfied by providing the benefits set forth in the
Company's life insurance or disability benefit plan or plans, as the case may
be. The Employee shall not be entitled to any other payments or compensation
under this Agreement except for (i) Base Salary accrued and unpaid to the date
of death or Permanent Disability, (ii) any vested benefits as of the date of
death or termination for Permanent Disability under any awards to the Employee
pursuant to the TravelCenters of America, Inc. 2001 Stock Option Plan, and any
other such plan or individual agreement adopted after the date of this Agreement
(collectively, the "Stock Incentive Plans"), or any amount payable under any
other benefit plan of the Company or any Affiliate, in accordance with the terms
of any such plan, (iii) an amount equal to the product of (x) the Annual Bonus,
if any, determined by the Compensation Committee for the year in which the
termination occurs, multiplied by (y) the fraction, the numerator of which
equals the number of days the Employee




7









was employed by the Company during the Fiscal Year in which such termination
occurs and the denominator of which is three hundred sixty-five (365), and (iv)
if the Employee and/or his spouse and dependents properly elect continued
medical coverage ("COBRA") in accordance with Code section 4980B, the Company
will pay the entire cost of the premiums for such continued medical coverage for
the maximum required period of coverage under Code section 4980B(f). "Permanent
Disability," as used in this Section 5.1, shall mean the physical or mental
inability of the Employee to perform, consistent with past practice, the
essential functions of such Employee's duties as specified in Section 2.1
hereof, with reasonable accommodation to the extent required by the applicable
requirements of the Americans with Disabilities Act, for at least twelve (12)
consecutive months. Determination of Permanent Disability shall be made
initially by the Board of Directors of the Company. If there is a disagreement
between the Employee and the Company as to the existence of such a Permanent
Disability, such disagreement shall be resolved by the determination of two
physicians, one selected by the Employee and one selected by the Company. If
such physicians shall disagree, the decision shall be made by a third physician
selected by the first two physicians. The fees and expenses of all of the
physicians shall be paid by the Company.




5.2 Resignation. If the Employee's employment with the Company
is terminated during the Term by reason of the Employee's resignation (other
than for "Good Reason" as defined in Section 5.5 hereof), all obligations of the
Company and Holdings, including, without limitation, the obligation to pay
salary or other amounts payable under this Agreement to or for the benefit of
the Employee, shall terminate upon the effective date of such resignation, and
the Employee shall not be entitled to any compensation under this Agreement
except for Base Salary accrued and unpaid through, and any vested benefits under
any awards to




8









the Employee pursuant to the Stock Incentive Plans, or any amount payable under
any other benefit plan of the Company or any Affiliate in accordance with the
terms of such plan, as of the effective date of such resignation. The Employee
agrees to give the Company one hundred twenty (120) days notice of his
resignation (other than for Good Reason).




5.3 Company's Right to Terminate for Cause. If the Employee
shall be discharged for "Cause" (as defined below) during the Term, all
obligations of the Company and Holdings, including, without limitation, the
obligation to pay salary or other amounts payable under this Agreement to or for
the benefit of the Employee, shall terminate upon the effective date of such
discharge, and the Employee shall not be entitled to any compensation under this
Agreement except for Base Salary accrued and unpaid through, and vested benefits
under any awards to the Employee pursuant to the Stock Incentive Plans, or any
amount payable under any other benefit plan of the Company or any Affiliate in
accordance with the terms of such plan, as of the effective date of such
discharge. As used in this Agreement, "Cause" shall mean a discharge in one or
more of the following events:




(i) the Employee's misappropriation of money or other assets
or property, breach of fiduciary duty, tortious conduct or other act of
dishonesty with respect to the Company or any Affiliate; the Employee's
conviction of, or plea of guilty or nolo contendere to, any act of fraud,
embezzlement, tortious conduct or any crime for an offense that
constitutes a felony, or the Employee's indictment for any crime involving
dishonesty or moral turpitude;




(ii) the Employee's continuing, repeated willful failure or
refusal to follow written directions of the Board of Directors of the
Company or Holdings which failure or refusal continues following the
Employee's receipt of written notice




9









from such Board of Directors advising him of the acts or omissions that
constitute the failure to perform his duties as an officer of the Company
or Holdings, if such failure continues after the Employee shall have had a
reasonable opportunity to correct the act or omissions so complained of;




(iii) the Employee's violation of the Company's drug abuse or
alcohol abuse policy; or




(iv) the Employee's breach of any covenant set forth in


Section 6 hereof.




5.4 Termination for Any Other Reason or Resignation for a Good
Reason. If (a) the Employee is discharged by the Company during the Term for any
reason (other than for "Cause" (as defined in Section 5.3 hereof) or by reason
of the Employee's death or "Permanent Disability" (as defined in Section 5.1
hereof)) or (b) the Employee's employment with the Company is terminated by
reason of the Employee's resignation for a "Good Reason" (as defined in Section
5.5 hereof) occurring during the Term, then all obligations of the Company and
Holdings hereunder shall cease except that the Employee shall be entitled to the
following from the Company:




(i) any Base Salary accrued and unpaid to the date of such
discharge or resignation, which shall be payable within thirty (30) days
of such discharge or resignation, plus an amount equal to the product of
(A) multiplied by (B), where (A) equals his Annual Bonus, if any,
determined by the Compensation Committee for the year in which his
discharge or resignation occurred and where (B) equals a fraction, the
numerator of which equals the number of days in the calendar year during
which the Employee was employed by the Company, and the denominator of
which equals three




10









hundred sixty-five (365), which amount shall be payable on the same date
that active officers are paid similar Annual Bonuses;




(ii) during the twenty-four (24) month period following the
date of his discharge or termination, a monthly amount equal to the
greater of (i) his monthly rate of Base Salary in effect as of the date
immediately preceding any Change of Control or (ii) his monthly rate of
Base Salary in effect as of the date of his discharge or termination,
which shall be payable in such manner and at such times as active
employees of the Company are paid base salaries;




(iii) an amount equal to two hundred percent (200%) of the
greater of the Employee's Target Bonus as set forth in Section 3.2 hereof
for the Fiscal Year ended December 31, 2005 or the Employee's Target Bonus
as set forth in Section 3.2 hereof for the Fiscal Year in which his
Termination of Employment occurs, which amount shall be payable in two
separate payments each equal to one-half of such amount (i.e., each
payment equal to one hundred percent (100%) of the Target Bonus amount).
The first such payment shall be payable at such time and in such manner as
active officers of the Company customarily are paid similar bonuses for
the Fiscal Year next following the Fiscal Year in which his discharge or
resignation occurs (or in accordance with past practice if such bonuses
are not being paid to such active officers), and the second such payment
shall be payable at such time and in such manner as active officers of the
Company customarily are paid similar bonuses for the second Fiscal Year
following the Fiscal Year in which his discharge or resignation occurs (or
in accordance with past practice if such bonuses are not being paid to
such active officers), provided




11









that the second payment shall be made not later than the date of the last
scheduled payment payable pursuant to Section 5.4(ii) hereof;




(iv) any vested benefits as of the date of such resignation or
discharge under any awards to the Employee pursuant to the Stock Incentive
Plans, or any amount payable under any other benefit plan of the Company
or any Affiliate in accordance with the terms of such plan; and




(v) if the Employee (and/or his spouse and/or dependents)
properly elect continued COBRA medical coverage, the Company and the
Employee (and/or his spouse and/or dependents) each shall pay their same
portions of the premiums for such medical coverage as if the Employee had
remained in the employ of the Company until the Participant shall elect to
discontinue such coverage, provided that the obligation of the Company
under this Section 5.4(v) shall cease upon the expiration of the later of
(A) the maximum required period of coverage under Code Section 4980B(f),
or (B) twenty-four (24) months after the date of such discharge or
resignation;




provided, however, that, in each case in clauses (i) through (v) above in this


Section 5.4, if at any time during which the Company is obligated to make
payments thereunder the Employee engages in any activity violative of Section 6
hereof, then, as of the date the Employee commences engaging in such activity,
all of the Company's obligations to pay compensation or other amounts under this
Agreement to or for the benefit of the Employee shall terminate except for (i)
Base Salary then accrued and unpaid, (ii) any vested benefits under any awards
to the Employee pursuant to the Stock Incentive Plans, and (iii) any amount
payable under any other benefit plan of the Company or any Affiliate in
accordance with the terms of such plan.




12









5.5 Resignation for Good Reason. As used in this Agreement,
"Good Reason" shall mean a resignation by the Employee as a result of one or
more of the following events occurring during the Term:




(i) a material reduction in the Employee's compensation
(including the additional benefits described in Section 4 hereof) in the
aggregate or his duties or title with respect to the Company or any of its
Affiliates (other than nonsubstantive, titular or nominal changes);




(ii) the Company requires the Employee to change his principal
location of work to any location which is outside of the Cleveland, Ohio,
metropolitan area, without his prior written consent; or




(iii) a material breach of this Agreement by the Company or
any of its Affiliates unless such breach is substantially cured within a
reasonable period of time (hereby defined as thirty (30) days) after
written notice advising the Company of the acts or omissions constituting
such breach is actually received by the Company in accordance with Section
9.5 hereof.




If the Employee claims the existence of a Good Reason, he must
notify the Company in writing of the event constituting Good Reason not later
than sixty (60) days following the later to occur of the occurrence of the event
(e.g., the actual reduction in compensation, the scheduled date of relocation or
the date of the breach) constituting Good Reason or his actual knowledge
thereof. If the event which the Employee claims to be a Good Reason is not cured
within thirty (30) days following the date of such notice, the Employee must
resign within ten (10) days following the thirty (30) day cure period in order
to invoke his right to resign for Good Reason. If no such timely resignation
occurs or no such timely written




13









notices are given, the Employee's right to resign for Good Reason with respect
to such event shall be permanently waived.




5.6 Employee Benefit Plans. In addition to such payments and
benefits as may be provided to the Employee upon his termination of employment
during the Term as set forth herein, the Employee (or his estate, legal
representative or employee benefit plan beneficiary, as the case may be) shall
be entitled to receive such other benefits as are expressly so provided under
the terms of any employee benefit plan or other contractual arrangement
maintained by the Company or any Affiliate; provided, however, that the
Compensation Committee may reduce benefits under any such other plan or
arrangement, if permissible thereunder, or may reduce benefits hereunder, to the
extent it both (i) determines in good faith that such benefits are clearly
duplicative or unintended (e.g., duplicative severance benefits or more than one
company car), and (ii) permits full payment of the better (in the case of two
duplicative benefits) or the best (in the case of more than two duplicative
benefits) of the benefits. This Section 5.6 shall not be deemed to permit any
reduction in any amount otherwise payable to the Employee under any nonqualified
deferred compensation plan of the Company or any Affiliate.




6. Covenants of the Employee.




6.1 Covenants Against Competition. The Employee acknowledges
that (a) the Company and its Affiliates are engaged in the business of operating
a truckstop network, with facilities that provide motor fuel pumping along with
one or more of the following services: truck care and repair services, a fast
food restaurant, a full-service restaurant, a convenience store, showers,
laundry facilities, telephones, recreation rooms, truck weighing scales and
other compatible business services approved by the Company (the "Business"); (b)




14









the Employee is one of the limited number of persons who developed the
Business; (c) such Business is conducted nationally; (d) the Employee's work
for the Business has given him, and will continue to give him, trade secrets
of, and confidential information concerning, the Business; (e) the Employee
acknowledges that the Employee's knowledge of such trade secrets and of, and
confidential information concerning, the Business would be of significant
assistance and value to any "TA Truck-Stop Competitor," which for purposes of
this Section 6 shall mean Petro, Flying J, AMBEST, PTP, Sapp Bros., Giant,
All American, Rip Griffin, Bosselman's, Dixie Trucker's Home, Texaco/Equilon,
Pilot, Love's, Speedway (Emro), Little America, Total, Mapco, Coastal, Fuel
Mart and any other chain or network of national or regional "truck stops" as
such term is generally understood in the trucking industry, including any
affiliates or successors to any of the foregoing; and (f) the agreements and
covenants contained in this Section 6.1 are essential to protect the Business
and the goodwill associated with it. Accordingly, the Employee covenants and
agrees as follows:




6.1.1 Non-Compete. From the date hereof through the later
of (A) the last day of the Term and (B) the last date through which the
Employee is entitled to receive any payment pursuant to Section 5.4(ii)
hereof, the Employee shall not, in the United States of America, directly or
indirectly, (x) enter the employ of or render any services to any TA
Truck-Stop Competitor, or (y) have an interest in any TA Truck-Stop
Competitor, whether such interest is direct or indirect, and including any
interest as a partner, shareholder, trustee, consultant, officer or similarly
situated person; provided, however, that in any case, the Employee may own,
solely as an investment, securities of any TA Truck-Stop Competitor that are
publicly traded if the Employee (a) is not a controlling person and (b) does
not, directly or indirectly, own five percent (5%) or more of any class of
securities of such person. After the date which is the later




15









of (A) and (B) in the preceding sentence, the Employee shall be free to engage
in any lawful business activities, including activities for or related to a TA
Truck-Stop Competitor. The covenant contained in this Section 6.1.1 shall
survive the termination of this Agreement.




6.1.2 Confidential Information. The Employee agrees that
neither during the Term nor at any time thereafter shall he (i) disclose to any
person not employed by the Company or an Affiliate, or not engaged to render
services to the Company or an Affiliate or (ii) use for the benefit of himself
or others, any confidential information of the Company, any of the Company's
Affiliates or of the Business obtained by him, including, without limitation,
"know-how," trade secrets, details of customers', suppliers', manufacturers' or
distributors' contracts with the Company or any of the Company's Affiliates,
pricing policies, financial data, operational methods, marketing and sales
information, marketing plans or strategies, product development techniques or
plans, plans to enter into any contract with any person or any strategies
relating thereto, technical processes, designs and design projects, and other
proprietary information of the Company, the Company's Affiliates or of the
Business or the business of any of the Company's Affiliates; provided, however,
that this provision shall not preclude the Employee from (a) making any
disclosure required by law or court order or (b) using or disclosing information


(i) known generally to the public (other than information known generally to the
public as a result of a violation of this Section 6.1.2 by the Employee), (ii)
acquired by the Employee outside of his affiliation with the Company or any of
the Company's Affiliates, or (iii) of a general nature (that is, not related
specifically to the Business) that ordinarily would be learned, developed or
obtained by individuals similarly active and/or employed in similar capacities
by other companies in the same Business as the Company or any of the




16









Company's Affiliates. The Employee agrees that all confidential information of
the Company or any of the Company's Affiliates shall remain the Company's or the
Company's Affiliates', as the case may be, property and shall be delivered to
the Company or to the Company's Affiliates, as the case may be, promptly upon
the termination of the Employee's employment with the Company or at any other
time on request. The covenant contained in this Section 6.1.2 shall survive the
termination of this Agreement.




6.1.3 Nonsolicitation by Restricted Persons. From the date
hereof through the later of (A) the last day of the Term and (B) the last date
through which the Employee is entitled to receive any payment pursuant to


Section 5.4(ii) hereof, the Employee shall not, directly or indirectly, (a)
solicit any employee to leave the employment of the Company or the employment of
any of the Company's Affiliates or (b) hire any employee who has left the employ
of the Company or the employ of any of the Company's Affiliates within six (6)
months after termination of such employee's employment with the Company or such
employee's employment with any of the Company's Affiliates, as the case may be
(unless such employee was discharged by the Company without Cause and excepting
clerical and similar employees). The covenant contained in this Section 6.1.3
shall survive the termination of this Agreement.




7. Rights and Remedies Upon Breach of Covenants. If the Employee
breaches, or threatens to commit a breach of, any of the provisions of Section 6
hereof (the "Restrictive Covenants"), the Company shall have the following
rights and remedies, each of which rights and remedies shall be independent of
the others and severally enforceable, and all of which rights and remedies shall
be in addition to, and not in lieu of, any other rights and remedies available
to the Company at law or in equity:




17









7.1 Specific Performance. The right and remedy to have the
Restrictive Covenants specifically enforced by any court having equity
jurisdiction, it being acknowledged and agreed that any such breach or
threatened breach will cause irreparable injury to the Company and that money
damages will not provide an adequate remedy to the Company.




7.2 Severability of Covenants. The Employee acknowledges and
agrees that the Restrictive Covenants are reasonable and valid in geographical
and temporal scope and in all other respects. If any court determines that any
of the Restrictive Covenants, or any part thereof, is invalid or unenforceable,
the remainder of the Restrictive Covenants shall not thereby be affected and
shall be given full effect to the greatest extent possible, without regard to
the invalid portions.




7.3 Blue Penciling. If any court construes any of the
Restrictive Covenants, or any part thereof, to be unenforceable because of the
duration of such provision or the area covered thereby, such court shall have
the power to reduce the duration or area of such provision and, in its reduced
form, such provision shall be enforceable and shall be enforced to the greatest
extent possible.




7.4 Enforceability in Jurisdictions. The parties intend to and
hereby do limit jurisdiction to enforce the Restrictive Covenants upon the
courts of the jurisdiction of the Employee's last principal place of business
under this Agreement and the sites of the alleged breach of the Restrictive
Covenants.




7.5 Survival. The provisions of this Section 7 shall survive
the termination of this Agreement.




8. Representations of Employee. The Employee hereby represents and
warrants to the Company (a) that there are no restrictions, agreements or
understandings




18









whatsoever to which the Employee is a party which would prevent or make unlawful
the execution or performance of this Agreement or his employment hereunder and


(b) that the execution of this Agreement and the Employee's employment hereunder
shall not constitute a breach of any contract, agreement or understanding to
which he is a party or by which he is bound.




9. Other Provisions.




9.1 Conflict. To the extent any provisions of this Agreement
conflict with the terms of any existing plan, policy or arrangement affecting
the compensation or benefits of the Employee, the provisions of this Agreement
will control.




9.2 Withholding. The Company may withhold from any amounts
payable under this Agreement such federal, state or local taxes or other amounts
as shall be required to be withheld pursuant to any applicable law or
regulation.




9.3 Code Section 280G. The Employee's right to receive any
payment or benefit hereunder in connection with his termination of employment or
otherwise which may be characterized as a "parachute payment" (within the
meaning of Code section 280G), or deemed to constitute a payment made in
connection with or contingent upon a change of control of the Company or
Holdings for purposes of Code section 280G, is contingent upon and subject to
the approval of holders of record of stock of the Company or Holdings, as
applicable, representing more than seventy-five percent (75%) of the voting
power of all outstanding stock of the Company or Holdings, as the case may be,
immediately prior to such change of control (determined without regard to any
stock actually or constructively owned by the Employee and by certain other
persons as determined by the Company).




19









The Company and Holdings covenant that they will present this
Agreement in a timely manner to the shareholders of the Company or Holdings or
both, as appropriate, with a unanimous recommendation of the Boards of Directors
of the Company and Holdings that it be approved by such shareholders.




9.4 Subsidiaries and Affiliates. Notwithstanding any contrary
provision of this Agreement, to the extent it does not adversely affect the
Employee, the Company and Holdings may provide the compensation and benefits to
which the Employee is entitled hereunder through one or more subsidiaries or
affiliates, including, without limitation, Holdings.




9.5 Notices. Any notice or other communication required or
which may be given hereunder shall be in writing and shall be delivered
personally, sent by facsimile transmission or overnight courier or sent by
registered or certified mail, return receipt requested, postage prepaid, and
shall be deemed given when so delivered personally or sent by facsimile
transmission or overnight courier, or if mailed, four days after the date of
mailing, as follows:




(i)    if to the Company or Holdings, to it at:




Travel Centers of America, Inc.
24601 Center Ridge Road, Suite 200
Westlake, Ohio 44145-5634
Attention: General Counsel
Telecopy No: (440) 808-3301




and a copy to:




Calfee, Halter & Griswold LLP
1400 McDonald Investment Center
800 Superior Avenue
Cleveland, Ohio 44114-2688
Attention:  Philip M. Dawson, Esq.




Telecopy No. (216) 241-0816




20









and, if prior to a Change of Control, a copy to:




Oak Hill Capital Management, Inc.
Park Avenue Tower
65 East 55th Street, 36th Floor
New York, New York 10022
Attention: Rowan G.P. Taylor
Telecopy No.: (212) 754-5685




or at such other address as such person may hereafter
designate to the Employee by notice as provided herein;
and




(ii)  if to the Employee, to him at the address set forth
below or at such other address as the Employee may
hereafter designate to each of the persons listed in
clause (i) above by notice as provided herein.




Joseph A. Szima


591 Buckhead Court
Avon Lake, Ohio  44012




Either party may give any notice or other communication hereunder
using any other means (including ordinary mail or electronic mail), but no such
notice or other communication shall be deemed to have been duly given unless and
until it actually is received by the individual for whom it is intended. Either
party may change the address to which notices and other communications hereunder
are to be delivered by giving the other party notice in the manner herein set
forth.




9.6 Entire Agreement. This Agreement contains the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements, written or oral, with respect thereto. The
Employee acknowledges that, as of the date this Agreement is executed, he has
received all amounts accrued or due under any prior agreements, and that he is
not entitled to receive additional amounts pursuant to any such agreements.




9.7 Waivers and Amendments. This Agreement may be amended,
modified, superseded, canceled, renewed or extended, and the terms and
conditions hereof may be waived, only by a written instrument signed by the
parties or, in the case of a waiver, by the




21









party waiving compliance. No delay on the part of any party in exercising any
right, power or a privilege hereunder shall operate as a waiver thereof, nor
shall any waiver on the part of any party of any right, power or privilege
hereunder, nor any single or partial exercise of any right, power or privilege
hereunder, preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder. The rights and remedies herein
provided are cumulative and are not exclusive of any rights or remedies which
any party may otherwise have at law or in equity.




9.8 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio applicable to
agreements made and to be performed entirely within such State.




9.9 Assignment; Binding Effect. This Agreement, and the
Employee's rights and obligations hereunder, may not be assigned by the
Employee. The Company and Holdings, jointly but not severally, may assign this
Agreement and their rights, together with their obligations, hereunder to any
entity that controls the Company or Holdings, is controlled by the Company or
Holdings, or is under common control with the Company or Holdings, or in
connection with any sale, transfer or other disposition of all or substantially
all of the assets or business of the Company and Holdings, whether by merger,
consolidation or otherwise. The Company and Holdings, or any direct or indirect
Successor to the Company or Holdings, shall use its reasonable efforts to cause
its successor in interest to assume explicitly the obligations of the Company
and Holdings or such direct or indirect Successor to the Company or Holdings, as
the case may be, hereunder.




22









9.10 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.




9.11 Headings. The headings in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.




9.12 Arbitration. If requested by the Employee or the
Company, any claim or controversy arising out of or relating to the
interpretation, construction and performance of this Agreement, or any
alleged breach hereof, shall be finally resolved by arbitration conducted in
accordance with such rules as may be agreed upon by the parties within thirty


(30) days following written notice by either party to the other identifying
the issue in dispute and the position of the party giving notice, or failing
to achieve such agreement, in accordance with the National Rules for the
Resolution of Employment Disputes of the American Arbitration Association.
Any award rendered in connection with the foregoing arbitration shall be in
writing and shall be final and binding upon the parties, and judgment upon
any such award may be entered and enforced in any court of competent
jurisdiction. The forum for such arbitration shall be in Cleveland, Ohio and
the governing law shall be the laws of the State of Ohio without giving
effect to conflict of laws provisions. Notwithstanding any provision in this


Section 9.12 to the contrary, the Company shall have the right and power to
seek and obtain equitable relief in accordance with Section 7.1 hereof.




23









IN WITNESS WHEREOF, the parties have executed this Employment
Agreement as of the date first above written.





TRAVELCENTERS OF AMERICA, INC.



("Holdings")










By:    /s/   Edwin P. Kuhn
    -------------------------------------
Name:     Edwin P. Kuhn
Title:    Chairman














TA OPERATING CORPORATION



("Company")










By:    /s/   Edwin P. Kuhn
   --------------------------------------
Name:     Edwin P. Kuhn
Title:    Chairman

       /s/   Joseph A. Szima
     ------------------------------------
             Joseph A. Szima













("Employee")




24















EXHIBIT 10.16






EXECUTION COPY






EMPLOYMENT AGREEMENT





EMPLOYMENT AGREEMENT dated as of January 1, 2006, by and among TA
Operating Corporation, a Delaware corporation (the "Company"), TravelCenters
of America, Inc., a Delaware corporation ("Holdings") and Steven C. Lee (the
"Employee").




In consideration of the parties' desire to assure the Company
and Holdings of the services of the Employee, and the mutual covenants herein
contained, the parties agree as follows:




1.    EMPLOYMENT.




1.1   EMPLOYMENT, ACCEPTANCE AND TERM.  Subject to Section
5 hereof, the Company and Holdings hereby agree to employ the Employee, and
the Employee agrees to serve the Company and Holdings, during the term of
this Agreement (the "Term") which shall commence January 1, 2006 (the
"Effective Date") and end on December 31, 2007 (the "Initial Term"), and
shall be renewed automatically for successive one calendar year periods
thereafter through December 31 of the calendar year in which the Employee
reaches age sixty-five (65), unless the Company gives the Employee or the
Employee gives the Company written notice of its or his intent not to renew
this Agreement, which notice must be given not later than  December 31, 2006
if this Agreement is to expire at the end of the Initial Term or December 31
of the year last preceding the final calendar year of the Term if this
Agreement is to expire after the Initial Term; provided, however, that no
such notice given by either the Company or the Employee after a "Change of
Control" as defined in Section 1.2 hereof shall have the effect of
terminating this Agreement prior to the December 31 coinciding with or next
following the second anniversary of the date on which such Change of Control
occurs. The Employee









acknowledges that neither the Company nor Holdings shall have any obligation
to extend the Term beyond the Initial Term or to renew the Agreement after
any extension, or to enter into a new employment agreement upon the
expiration of the Term.  Unless otherwise agreed between the parties in
writing, any continuation of the Employee's employment beyond the expiration
of the Term shall constitute an employment at will and shall not extend the
terms of this Agreement.




1.2   CHANGE OF CONTROL.  Any of the following events shall
constitute a "Change of Control":




(i)   any "person," as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), becomes the beneficial owner (as defined in Rule 13d-3
promulgated under the Exchange Act) of fifty-one percent (51%) or more
of the voting power of the then-outstanding voting securities of
Holdings; provided, however, that the foregoing does not apply to any
such acquisition that is made by (i) the Company or any Affiliate or


(ii) any employee benefit plan maintained either by the Company or any
Affiliate; or




(ii)  Holdings merges into itself, or is merged or
consolidated with, another corporation and as a result of such merger
or consolidation less than fifty-one (51%) of the voting power of the
then-outstanding voting securities of the surviving or resulting
corporation immediately after such transaction are owned in the
aggregate by the former shareholders of Holdings immediately prior to
such transaction;




(iii) all or substantially all the assets accounted
for on the consolidated balance sheet of the Company  and the
Affiliates, in the aggregate, are sold or transferred to one or more
corporations or persons, and as a result of such sale or




2









transfer less than fifty-one percent (51%) of the voting power of the
then-outstanding voting securities of such corporation or person
immediately after such sale or transfer is held in the aggregate by the
former shareholders of Holdings immediately prior to such transaction
or series of transactions;




(iv)  fifty-one percent (51%) or more of the assets
accounted for in the consolidated balance sheet of Company and its
Affiliates, in the aggregate, are sold or transferred to one or more
corporations or persons, whether such sale or transfer is accomplished
by the sale or transfer of assets directly, the sale or transfer of
stock of the Company or one or more Affiliates or otherwise with, in
any case, an aggregate value of fifty-one percent (51%) or more of the
aggregate value of the Company and its Affiliates, or any combination
of methods by which fifty-one percent (51%) or more of the aggregate
value of the Company and its Affiliates are sold or transferred, if,
immediately after such sale or transfer, the purchaser or transferee is
less than fifty-one percent (51%) owned, in the aggregate, by the
persons who are the shareholders of Holdings immediately prior to such
sale or transfer; or




(v)   during any period of two (2) consecutive years,
including, without limitation, the year 2005, individuals who at the
beginning of any such period constitute the Board of Directors of
Holdings cease, for any reason, to constitute at least a majority
thereof, unless the election or nomination for election of each
Director first elected during such period was approved by a vote of at
least a majority of the members of the Board of Directors of Holdings
who were members of the Board of Directors of Holdings on the date of
the beginning of any such period.




3









Without otherwise limiting the generality of the foregoing,
an initial public offering of the Common Stock of Holdings shall not be
deemed a "Change of Control" for purposes of this Agreement.




2.    DUTIES AND AUTHORITY.




2.1   OFFICE.  Subject to Section 5 hereof, during the Term
the Employee will serve as the Senior Vice President and General Counsel of
the Company and Holdings, in accordance with the Certificates of
Incorporation and By-Laws of the Company and Holdings, respectively, and
subject to the direction of, and in accordance with the authority delegated
to the Employee by, the Boards of Directors of the Company and Holdings, and
reporting to the President and Chief Executive Officer.




2.2   DUTIES.  Subject to Section 5 hereof, during the Term
the Employee shall devote all of his full working time and energies to the
business and affairs of the Company and, in connection therewith, shall
perform such duties, functions and responsibilities as are commensurate with
and appropriate to the position of an officer of the Company.  Throughout the
Term, the Employee will use his best efforts, skills and abilities to promote
the interests of the Company and its Affiliates.  For purposes of this
Agreement, the term "Affiliates" shall mean, collectively, Holdings, TA
Franchise Systems Inc., a Delaware corporation ("TAFSI"), TA Licensing, Inc.,
a Delaware corporation ("Licensing"), and all subsidiaries and affiliates of
the Company, Holdings, TAFSI, and Licensing.




3.    COMPENSATION.




3.1   BASE SALARY.  As compensation for services to be
rendered during the Term pursuant to this Agreement, the Company shall pay
the Employee a base salary at the rate of Two Hundred Eight Thousand Dollars
($210,000) per annum (the "Base Salary"), which




4









amount shall be reviewed not less frequently than annually and which may be
increased but not decreased by action of the Board of Directors of the
Company or the Compensation Committee (as defined in Section 3.2 hereof) in a
manner consistent with the treatment of other employees of the Company as
approved by the Compensation Committee and payable currently in equal
biweekly installments or otherwise in accordance with the payroll policies of
the Company as from time to time in effect.




3.2   ANNUAL BONUS.  For each fiscal year of the Company
during the Term (a "Fiscal Year"), commencing with the Fiscal Year ending
December 31, 2006, the Company shall pay to the Employee an annual bonus (the
"Annual Bonus").  The amount of each Annual Bonus shall be determined by the
Compensation Committee of the Board of Directors of the Company (the
"Compensation Committee"), based fifty percent (50%) upon corporate
performance (EBITDA goals) and fifty percent (50%) upon the Employee's
individual performance (MBO targets), and shall range from zero (0) to
sixty-five percent (65%) of the Base Salary in effect as of the first day of
the Fiscal Year (sixty-five percent (65%) of such Base Salary being the
"Target Bonus").  The MBO targets for the following Fiscal Year shall be
presented to and approved by the Board of Directors or Compensation Committee
of the Company in December of each year in a manner consistent with past
practice.  The Annual Bonus shall be paid within thirty (30) days after the
completion of the audit by the Company's independent auditors of the
financial statements of the Company and its Affiliates for the Fiscal Year to
which the Annual Bonus applies.




4.    ADDITIONAL BENEFITS.




4.1   BENEFIT PLANS. The Employee shall be entitled during
the Term, if and to the extent eligible, to participate in all employee
benefit plans of the Company or




5









Holdings which the Company or Holdings provides to its executive employees
or officers generally, including, without limitation, a health and medical
insurance plan, basic life insurance, supplemental life insurance, basic
disability benefit plan, supplemental disability benefit plan, relocation,
retirement or pension plan or similar benefit plans, whether now in existence
or hereafter adopted; PROVIDED, HOWEVER, that neither the Company nor
Holdings shall be obligated to adopt, maintain or contribute to any such
benefit plans which, in their discretion, the Company and Holdings believe
would be imprudently expensive or otherwise inappropriate.  Any new benefit
plan which the Company or Holdings provides to its executive employees, and
any change to a benefit plan which the Company or Holdings provides to its
executive employees, shall be applied consistently to all such executive
employees.




4.2   DIRECTOR'S AND OFFICER'S INSURANCE.  Holdings has
purchased and Holdings or the Company will use reasonable efforts to maintain
during the Term, at Holdings' or the Company's expense, Director's and
Officer's liability insurance in a reasonable amount covering all insurable
acts of the Employee pursuant to this Agreement provided that the Employee's
coverage will not be less extensive than that provided by Holdings or the
Company to any other director or officer of Holdings, the Company or any
Affiliate.




4.3   FRINGE BENEFITS.  The Employee shall be entitled
during the Term to the following additional benefits: (i) a company-owned
automobile of a make and model approved by the Compensation Committee as
appropriate for an officer of the position of the Employee; (ii)
company-owned club membership (or to the extent the club does not permit
company membership, reimbursement for individual membership) for fees, dues
and fixed expenses only, paid by the Company and/or the Employee, which shall
not exceed Ten Thousand




6









Dollars ($10,000.00) per year; and (iii) paid vacation days in accordance
with standard Company policy for similarly situated officers.




5.    TERMINATION OF EMPLOYMENT. The Employee's employment with
the Company shall terminate upon the death of the Employee, and the Company
shall have the right, at any time during the Term, by delivery of written
notice to the Employee, to terminate the Employee's employment as a result of
the Employee's Permanent Disability (as such term is defined in Section 5.1
hereof), for Cause (as such term is defined in Section 5.3 hereof) or for any
other reason, and the Employee shall have the right to resign, the
consequences of any such termination or resignation being as specified in
this Section 5:




5.1   DEATH; DISABILITY.  If the Employee's employment with
the Company is terminated by reason of the Employee's death or Permanent
Disability during the Term, the obligations of the Company and Holdings under
this Agreement shall be satisfied by providing the benefits set forth in the
Company's life insurance or disability benefit plan or plans, as the case may
be.  The Employee shall not be entitled to any other payments or compensation
under this Agreement except for (i) Base Salary accrued and unpaid to the
date of death or Permanent Disability, (ii) any vested benefits as of the
date of death or termination for Permanent Disability under any awards to the
Employee pursuant to the TravelCenters of America, Inc. 2001 Stock Option
Plan, and any other such plan or individual agreement adopted after the date
of this Agreement (collectively, the "Stock Incentive Plans"), or any amount
payable under any other benefit plan of the Company or any Affiliate, in
accordance with the terms of any such plan, (iii) an amount equal to the
product of (x) the Annual Bonus, if any, determined by the Compensation
Committee for the year in which the termination occurs, MULTIPLIED BY (y) the
fraction, the numerator of which equals the number of days the Employee




7









was employed by the Company during the Fiscal Year in which such termination
occurs and the denominator of which is three hundred sixty-five (365), and


(iv) if the Employee and/or his spouse and dependents properly elect
continued medical coverage ("COBRA") in accordance with Code section 4980B,
the Company will pay the entire cost of the premiums for such continued
medical coverage for the maximum required period of coverage under Code
section 4980B(f).  "Permanent Disability," as used in this Section 5.1, shall
mean the physical or mental inability of the Employee to perform, consistent
with past practice, the essential functions of such Employee's duties as
specified in Section 2.1 hereof, with reasonable accommodation to the extent
required by the applicable requirements of the Americans with Disabilities
Act, for at least twelve (12) consecutive months.  Determination of Permanent
Disability shall be made initially by the Board of Directors of the Company.
If there is a disagreement between the Employee and the Company as to the
existence of such a Permanent Disability, such disagreement shall be resolved
by the determination of two physicians, one selected by the Employee and one
selected by the Company.  If such physicians shall disagree, the decision
shall be made by a third physician selected by the first two physicians.  The
fees and expenses of all of the physicians shall be paid by the Company.




5.2   RESIGNATION.  If the Employee's employment with the
Company is terminated during the Term by reason of the Employee's resignation
(other than for "Good Reason" as defined in Section 5.5 hereof), all
obligations of the Company and Holdings, including, without limitation, the
obligation to pay salary or other amounts payable under this Agreement to or
for the benefit of the Employee, shall terminate upon the effective date of
such resignation, and the Employee shall not be entitled to any compensation
under this Agreement except for Base Salary accrued and unpaid through, and
any vested benefits under any awards to




8









the Employee pursuant to the Stock Incentive Plans, or any amount payable
under any other benefit plan of the Company or any Affiliate in accordance
with the terms of such plan, as of the effective date of such resignation.
The Employee agrees to give the Company one hundred twenty (120) days notice
of his resignation (other than for Good Reason).




5.3   COMPANY'S RIGHT TO TERMINATE FOR CAUSE.  If the
Employee shall be discharged for "Cause" (as defined below) during the Term,
all obligations of the Company and Holdings, including, without limitation,
the obligation to pay salary or other amounts payable under this Agreement to
or for the benefit of the Employee, shall terminate upon the effective date
of such discharge, and the Employee shall not be entitled to any compensation
under this Agreement except for Base Salary accrued and unpaid through, and
vested benefits under any awards to the Employee pursuant to the Stock
Incentive Plans, or any amount payable under any other benefit plan of the
Company or any Affiliate in accordance with the terms of such plan, as of the
effective date of such discharge.  As used in this Agreement, "Cause" shall
mean a discharge in one or more of the following events:




(i)   the Employee's misappropriation of money or
other assets or property, breach of fiduciary duty, tortious conduct or
other act of dishonesty with respect to the Company or any Affiliate;
the Employee's conviction of, or plea of guilty or nolo contendere to,
any act of fraud, embezzlement, tortious conduct or any crime for an
offense that constitutes a felony, or the Employee's indictment for any
crime involving dishonesty or moral turpitude;




(ii)  the Employee's continuing, repeated willful
failure or refusal to follow written directions of the Board of
Directors of the Company or Holdings which failure or refusal continues
following the Employee's receipt of written notice




9









from such Board of Directors advising him of the acts or omissions that
constitute the failure to perform his duties as an officer of the
Company or Holdings, if such failure continues after the Employee shall
have had a reasonable opportunity to correct the act or omissions so
complained of;




(iii) the Employee's violation of the Company's drug
abuse or alcohol abuse policy; or




(iv)  the Employee's breach of any covenant set forth
in Section 6 hereof.




5.4   TERMINATION FOR ANY OTHER REASON OR RESIGNATION FOR A
GOOD REASON.  If (a) the Employee is discharged by the Company during the
Term for any reason (other than for "Cause" (as defined in Section 5.3
hereof) or by reason of the Employee's death or "Permanent Disability" (as
defined in Section 5.1 hereof)) or (b) the Employee's employment with the
Company is terminated by reason of the Employee's resignation for a "Good
Reason" (as defined in Section 5.5 hereof) occurring during the Term, then
all obligations of the Company and Holdings hereunder shall cease except that
the Employee shall be entitled to the following from the Company:




(i)   any Base Salary accrued and unpaid to the date
of such discharge or resignation, which shall be payable within thirty


(30) days of such discharge or resignation, plus an amount equal to the
product of (A) multiplied by (B), where (A) equals his Annual Bonus, if
any, determined by the Compensation Committee for the year in which his
discharge or resignation occurred and where (B) equals a fraction, the
numerator of which equals the number of days in the calendar year
during which the Employee was employed by the Company, and the
denominator of which equals three




10









hundred sixty-five (365), which amount shall be payable on the same
date that active officers are paid similar Annual Bonuses;




(ii)  during the twenty-four (24) month period
following the date of his discharge or termination, a monthly amount
equal to the greater of (i) his monthly rate of Base Salary in effect
as of the date immediately preceding any Change of Control or (ii) his
monthly rate of Base Salary in effect as of the date of his discharge
or termination, which shall be payable in such manner and at such times
as active employees of the Company are paid base salaries;




(iii) an amount equal to two hundred percent (200%)
of the greater of the Employee's Target Bonus as set forth in Section
3.2 hereof for the Fiscal Year ended December 31, 2006 or the
Employee's Target Bonus as set forth in Section 3.2 hereof for the
Fiscal Year in which his Termination of Employment occurs, which amount
shall be payable in two separate payments each equal to one-half of
such amount (i.e., each payment equal to one hundred percent (100%) of
the Target Bonus amount).  The first such payment shall be payable at
such time and in such manner as active officers of the Company
customarily are paid similar bonuses for the Fiscal Year next following
the Fiscal Year in which his discharge or resignation occurs (or in
accordance with past practice if such bonuses are not being paid to
such active officers), and the second such payment shall be payable at
such time and in such manner as active officers of the Company
customarily are paid similar bonuses for the second Fiscal Year
following the Fiscal Year in which his discharge or resignation occurs
(or in accordance with past practice if such bonuses are not being paid
to such active officers), provided




11









that the second payment shall be made not later than the date of the
last scheduled payment payable pursuant to Section 5.4(ii) hereof;




(iv)  any vested benefits as of the date of such
resignation or discharge under any awards to the Employee pursuant to
the Stock Incentive Plans, or any amount payable under any other
benefit plan of the Company or any Affiliate in accordance with the
terms of such plan; and




(v)   if the Employee (and/or his spouse and/or
dependents) properly elect continued COBRA medical coverage, the
Company and the Employee (and/or his spouse and/or dependents) each
shall pay their same portions of the premiums for such medical coverage
as if the Employee had remained in the employ of the Company until the
Participant shall elect to discontinue such coverage, provided that the
obligation of the Company under this Section 5.4(v) shall cease upon
the expiration of the later of (A)  the maximum required period of
coverage under Code Section 4980B(f), or (B) twenty-four (24) months
after the date of such discharge or resignation;




PROVIDED, HOWEVER, that, in each case in clauses (i) through (v) above in
this Section 5.4, if at any time during which the Company is obligated to
make payments thereunder the Employee engages in any activity violative of


Section 6 hereof, then, as of the date the Employee commences engaging in
such activity, all of the Company's obligations to pay compensation or other
amounts under this Agreement to or for the benefit of the Employee shall
terminate except for (i) Base Salary then accrued and unpaid, (ii) any vested
benefits under any awards to the Employee pursuant to the Stock Incentive
Plans, and (iii) any amount payable under any other benefit plan of the
Company or any Affiliate in accordance with the terms of such plan.




12









5.5   RESIGNATION FOR GOOD REASON.  As used in this
Agreement, "Good Reason" shall mean a resignation by the Employee as a result
of one or more of the following events occurring during the Term:




(i)   a material reduction in the Employee's
compensation (including the additional benefits described in Section 4
hereof) in the aggregate or his duties or title with respect to the
Company or any of its Affiliates (other than nonsubstantive, titular or
nominal changes);




(ii)  the Company requires the Employee to change his
principal location of work to any location which is outside of the
Cleveland, Ohio, metropolitan area, without his prior written consent;
or




(iii) a material breach of this Agreement by the
Company or any of its Affiliates unless such breach is substantially
cured within a reasonable period of time (hereby defined as thirty (30)
days) after written notice advising the Company of the acts or
omissions constituting such breach is actually received by the Company
in accordance with Section 9.5 hereof.




If the Employee claims the existence of a Good Reason, he must
notify the Company in writing of the event constituting Good Reason not later
than sixty (60) days following the later to occur of the occurrence of the
event (e.g., the actual reduction in compensation, the scheduled date of
relocation or the date of the breach) constituting Good Reason or his actual
knowledge thereof.  If the event which the Employee claims to be a Good
Reason is not cured within thirty (30) days following the date of such
notice, the Employee must resign within ten (10) days following the thirty


(30) day cure period in order to invoke his right to resign for Good Reason.
If no such timely resignation occurs or no such timely written




13









notices are given, the Employee's right to resign for Good Reason with
respect to such event shall be permanently waived.




5.6   EMPLOYEE BENEFIT PLANS.  In addition to such payments
and benefits as may be provided to the Employee upon his termination of
employment during the Term as set forth herein, the Employee (or his estate,
legal representative or employee benefit plan beneficiary, as the case may
be) shall be entitled to receive such other benefits as are expressly so
provided under the terms of any employee benefit plan or other contractual
arrangement maintained by the Company or any Affiliate; PROVIDED, HOWEVER,
that the Compensation Committee may reduce benefits under any such other plan
or arrangement, if permissible thereunder, or may reduce benefits hereunder,
to the extent it both (i) determines in good faith that such benefits are
clearly duplicative or unintended (e.g., duplicative severance benefits or
more than one company car), and (ii) permits full payment of the better (in
the case of two duplicative benefits) or the best (in the case of more than
two duplicative benefits) of the benefits.  This Section 5.6 shall not be
deemed to permit any reduction in any amount otherwise payable to the
Employee under any nonqualified deferred compensation plan of the Company or
any Affiliate.




6.    COVENANTS OF THE EMPLOYEE.




6.1   COVENANTS AGAINST COMPETITION.  The Employee
acknowledges that (a) the Company and its Affiliates are engaged in the
business of operating a truckstop network, with facilities that provide motor
fuel pumping along with one or more of the following services: truck care and
repair services, a fast food restaurant, a full-service restaurant, a
convenience store, showers, laundry facilities, telephones, recreation rooms,
truck weighing scales and other compatible business services approved by the
Company (the "Business"); (b)




14









the Employee is one of the limited number of persons who developed the
Business; (c) such Business is conducted nationally; (d) the Employee's work
for the Business has given him, and will continue to give him, trade secrets
of, and confidential information concerning, the Business; (e) the Employee
acknowledges that the Employee's knowledge of such trade secrets and of, and
confidential information concerning, the Business would be of significant
assistance and value to any "TA Truck-Stop Competitor," which for purposes of
this Section 6 shall mean Petro, Flying J, AMBEST, PTP, Sapp Bros., Giant,
All American, Rip Griffin, Bosselman's, Dixie Trucker's Home, Texaco/Equilon,
Pilot, Love's, Speedway (Emro), Little America, Total, Mapco, Coastal, Fuel
Mart and any other chain or network of national or regional "truck stops" as
such term is generally understood in the trucking industry, including any
affiliates or successors to any of the foregoing; and (f) the agreements and
covenants contained in this Section 6.1 are essential to protect the Business
and the goodwill associated with it.  Accordingly, the Employee covenants and
agrees as follows:




6.1.1 NON-COMPETE.  From the date hereof through the later
of (A) the last day of the Term and (B) the last date through which the
Employee is entitled to receive any payment pursuant to Section 5.4(ii)
hereof, the Employee shall not, in the United States of America, directly or
indirectly, (x) enter the employ of or render any services to any TA
Truck-Stop Competitor, or (y) have an interest in any TA Truck-Stop
Competitor, whether such interest is direct or indirect, and including any
interest as a partner, shareholder, trustee, consultant, officer or similarly
situated person; PROVIDED, HOWEVER, that in any case, the Employee may own,
solely as an investment, securities of any TA Truck-Stop Competitor that are
publicly traded if the Employee (a) is not a controlling person and (b) does
not, directly or indirectly, own five percent (5%) or more of any class of
securities of such person.  After the date which is the later




15









of (A) and (B) in the preceding sentence, the Employee shall be free to
engage in any lawful business activities, including activities for or related
to a TA Truck-Stop Competitor.  The covenant contained in this Section 6.1.1
shall survive the termination of this Agreement.




6.1.2 CONFIDENTIAL INFORMATION.  The Employee agrees that
neither during the Term nor at any time thereafter shall he (i) disclose to
any person not employed by the Company or an Affiliate, or not engaged to
render services to the Company or an Affiliate or (ii) use for the benefit of
himself or others, any confidential information of the Company, any of the
Company's Affiliates or of the Business obtained by him, including, without
limitation, "know-how," trade secrets, details of customers', suppliers',
manufacturers' or distributors' contracts with the Company or any of the
Company's Affiliates, pricing policies, financial data, operational methods,
marketing and sales information, marketing plans or strategies, product
development techniques or plans, plans to enter into any contract with any
person or any strategies relating thereto, technical processes, designs and
design projects, and other proprietary information of the Company, the
Company's Affiliates or of the Business or the business of any of the
Company's Affiliates; PROVIDED, HOWEVER, that this provision shall not
preclude the Employee from (a) making any disclosure required by law or court
order or (b) using or disclosing information (i) known generally to the
public (other than information known generally to the public as a result of a
violation of this Section 6.1.2 by the Employee), (ii) acquired by the
Employee outside of his affiliation with the Company or any of the Company's
Affiliates, or (iii) of a general nature (that is, not related specifically
to the Business) that ordinarily would be learned, developed or obtained by
individuals similarly active and/or employed in similar capacities by other
companies in the same Business as the Company or any of the Company's
Affiliates.  The Employee agrees that all confidential information of the
Company or any of the




16









Company's Affiliates shall remain the Company's or the Company's Affiliates',
as the case may be, property and shall be delivered to the Company or to the
Company's Affiliates, as the case may be, promptly upon the termination of
the Employee's employment with the Company or at any other time on request.
The covenant contained in this Section 6.1.2 shall survive the termination of
this Agreement.




6.1.3 NONSOLICITATION BY RESTRICTED PERSONS. From the date
hereof through the later of (A) the last day of the Term and (B) the last
date through which the Employee is entitled to receive any payment pursuant
to Section 5.4(ii) hereof, the Employee shall not, directly or indirectly,


(a) solicit any employee to leave the employment of the Company or the
employment of any of the Company's Affiliates or (b) hire any employee who
has left the employ of the Company or the employ of any of the Company's
Affiliates within six (6) months after termination of such employee's
employment with the Company or such employee's employment with any of the
Company's Affiliates, as the case may be (unless such employee was discharged
by the Company without Cause and excepting clerical and similar employees).
The covenant contained in this Section 6.1.3 shall survive the termination of
this Agreement.




7.    RIGHTS AND REMEDIES UPON BREACH OF COVENANTS.  If the
Employee breaches, or threatens to commit a breach of, any of the provisions
of Section 6 hereof (the "Restrictive Covenants"), the Company shall have the
following rights and remedies, each of which rights and remedies shall be
independent of the others and severally enforceable, and all of which rights
and remedies shall be in addition to, and not in lieu of, any other rights
and remedies available to the Company at law or in equity:




17









7.1   SPECIFIC PERFORMANCE.  The right and remedy to have
the Restrictive Covenants specifically enforced by any court having equity
jurisdiction, it being acknowledged and agreed that any such breach or
threatened breach will cause irreparable injury to the Company and that money
damages will not provide an adequate remedy to the Company.




7.2   SEVERABILITY OF COVENANTS.  The Employee acknowledges
and agrees that the Restrictive Covenants are reasonable and valid in
geographical and temporal scope and in all other respects. If any court
determines that any of the Restrictive Covenants, or any part thereof, is
invalid or unenforceable, the remainder of the Restrictive Covenants shall
not thereby be affected and shall be given full effect to the greatest extent
possible, without regard to the invalid portions.




7.3   BLUE PENCILING.  If any court construes any of the
Restrictive Covenants, or any part thereof, to be unenforceable because of
the duration of such provision or the area covered thereby, such court shall
have the power to reduce the duration or area of such provision and, in its
reduced form, such provision shall be enforceable and shall be enforced to
the greatest extent possible.




7.4   ENFORCEABILITY IN JURISDICTIONS.  The parties intend
to and hereby do limit jurisdiction to enforce the Restrictive Covenants upon
the courts of the jurisdiction of the Employee's last principal place of
business under this Agreement and the sites of the alleged breach of the
Restrictive Covenants.




7.5   SURVIVAL.  The provisions of this Section 7 shall
survive the termination of this Agreement.




8.    REPRESENTATIONS OF EMPLOYEE.  The Employee hereby
represents and warrants to the Company (a) that there are no restrictions,
agreements or understandings




18









whatsoever to which the Employee is a party which would prevent or make
unlawful the execution or performance of this Agreement or his employment
hereunder and (b) that the execution of this Agreement and the Employee's
employment hereunder shall not constitute a breach of any contract, agreement
or understanding to which he is a party or by which he is bound.




9.    OTHER PROVISIONS.




9.1   CONFLICT. To the extent any provisions of this
Agreement conflict with the terms of any existing plan, policy or arrangement
affecting the compensation or benefits of the Employee, the provisions of
this Agreement will control.




9.2   WITHHOLDING.  The Company may withhold from any
amounts payable under this Agreement such federal, state or local taxes or
other amounts as shall be required to be withheld pursuant to any applicable
law or regulation.




9.3   CODE SECTION 280G.  The Employee's right to receive
any payment or benefit hereunder in connection with his termination of
employment or otherwise which may be characterized as a "parachute payment"
(within the meaning of Code section 280G), or deemed to constitute a payment
made in connection with or contingent upon a change of control of the Company
or Holdings for purposes of Code section 280G, is contingent upon and subject
to the approval of holders of record of stock of the Company or Holdings, as
applicable, representing more than seventy-five percent (75%) of the voting
power of all outstanding stock of the Company or Holdings, as the case may
be, immediately prior to such change of control (determined without regard to
any stock actually or constructively owned by the Employee and by certain
other persons as determined by the Company).




19









The Company and Holdings covenant that they will present
this Agreement in a timely manner to the shareholders of the Company or
Holdings or both, as appropriate, with a unanimous recommendation of the
Boards of Directors of the Company and Holdings that it be approved by such
shareholders.




9.4   SUBSIDIARIES AND AFFILIATES.  Notwithstanding any
contrary provision of this Agreement, to the extent it does not adversely
affect the Employee, the Company and Holdings may provide the compensation
and benefits to which the Employee is entitled hereunder through one or more
subsidiaries or affiliates, including, without limitation, Holdings.




9.5   NOTICES. Any notice or other communication required
or which may be given hereunder shall be in writing and shall be delivered
personally, sent by facsimile transmission or overnight courier or sent by
registered or certified mail, return receipt requested, postage prepaid, and
shall be deemed given when so delivered personally or sent by facsimile
transmission or overnight courier, or if mailed, four days after the date of
mailing, as follows:




(i)  if to the Company or Holdings, to it at:




TravelCenters of America, Inc.
24601 Center Ridge Road, Suite 200
Westlake, Ohio 44145-5634
Attention: General Counsel
Telecopy No: (440) 808-3301




and a copy to:




Calfee, Halter & Griswold LLP
1400 McDonald Investment Center
800 Superior Avenue
Cleveland, Ohio  44114-2688
Attention:  Philip M. Dawson, Esq.




Telecopy No. (216) 241-0816




20









and, if prior to a Change of Control, a copy to:




Oak Hill Capital Management, Inc.
Park Avenue Tower
65 East 55th Street, 36th Floor
New York, New York 10022
Attention: Rowan G.P. Taylor
Telecopy No.: (212) 754-5685




or at such other address as such person may
hereafter designate to the Employee by notice as
provided herein; and




(ii)  if to the Employee, to him at the address set forth
below or at such other address as the Employee may
hereafter designate to each of the persons listed in
clause (i) above by notice as provided herein.




Steven C. Lee


30455 Timber Lane
Bay Village, Ohio  44140




Either party may give any notice or other communication hereunder
using any other means (including ordinary mail or electronic mail), but no
such notice or other communication shall be deemed to have been duly given
unless and until it actually is received by the individual for whom it is
intended.  Either party may change the address to which notices and other
communications hereunder are to be delivered by giving the other party notice
in the manner herein set forth.




9.6   ENTIRE AGREEMENT. This Agreement contains the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements, written or oral, with respect thereto,
including, without limitation, the employment agreement by and between the
Company, Holdings and the Employee dated as of January 1, 2002.  The Employee
acknowledges that, as of the date this Agreement is executed, except for the
annual bonus for the Fiscal Year ending December 31, 2005, he has received
all amounts accrued or due




21









under any prior agreements, and that he is not entitled to receive any other
additional amounts pursuant to any such agreements.




9.7   WAIVERS AND AMENDMENTS. This Agreement may be
amended, modified, superseded, canceled, renewed or extended, and the terms
and conditions hereof may be waived, only by a written instrument signed by
the parties or, in the case of a waiver, by the party waiving compliance. No
delay on the part of any party in exercising any right, power or a privilege
hereunder shall operate as a waiver thereof, nor shall any waiver on the part
of any party of any right, power or privilege hereunder, nor any single or
partial exercise of any right, power or privilege hereunder, preclude any
other or further exercise thereof or the exercise of any other right, power
or privilege hereunder. The rights and remedies herein provided are
cumulative and are not exclusive of any rights or remedies which any party
may otherwise have at law or in equity.




9.8   GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of Ohio applicable to
agreements made and to be performed entirely within such State.




9.9   ASSIGNMENT; BINDING EFFECT.  This Agreement, and the
Employee's rights and obligations hereunder, may not be assigned by the
Employee.  The Company and Holdings, jointly but not severally, may assign
this Agreement and their rights, together with their obligations, hereunder
to any entity that controls the Company or Holdings, is controlled by the
Company or Holdings, or is under common control with the Company or Holdings,
or in connection with any sale, transfer or other disposition of all or
substantially all of the assets or business of the Company and Holdings,
whether by merger, consolidation or otherwise.  The Company and Holdings, or
any direct or indirect Successor to the Company or Holdings, shall




22









use its reasonable efforts to cause its successor in interest to assume
explicitly the obligations of the Company and Holdings or such direct or
indirect Successor to the Company or Holdings, as the case may be, hereunder.




9.10  COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.




9.11  HEADINGS.  The headings in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.




9.12  ARBITRATION.  If requested by the Employee or the
Company, any claim or controversy arising out of or relating to the
interpretation, construction and performance of this Agreement, or any
alleged breach hereof, shall be finally resolved by arbitration conducted in
accordance with such rules as may be agreed upon by the parties within thirty


(30) days following written notice by either party to the other identifying
the issue in dispute and the position of the party giving notice, or failing
to achieve such agreement, in accordance with the National Rules for the
Resolution of Employment Disputes of the American Arbitration Association.
Any award rendered in connection with the foregoing arbitration shall be in
writing and shall be final and binding upon the parties, and judgment upon
any such award may be entered and enforced in any court of competent
jurisdiction.  The forum for such arbitration shall be in Cleveland, Ohio and
the governing law shall be the laws of the State of Ohio without giving
effect to conflict of laws provisions.  Notwithstanding any provision in this


Section 9.12 to the contrary, the Company shall have the right and power to
seek and obtain equitable relief in accordance with Section 7.1 hereof.




23









IN WITNESS WHEREOF, the parties have executed this Employment
Agreement as of the date first above written.





TRAVELCENTERS OF AMERICA, INC.





("Holdings")










By:      /s/ James W. George
         ---------------------

Name:    James W. George
         ---------------

Title:   Executive Vice President, CFO and Secretary
         -------------------------------------------














TA OPERATING CORPORATION





("Company")










By:      /s/ James W. George
         -------------------

Name:    James W. George
         ---------------

Title:   Executive Vice President, CFO and Secretary
         -------------------------------------------

         /s/ Steven C. Lee
         -----------------

         Steven C. Lee













("Employee")




24
















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	EXHIBIT 23.3












	CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM







	        We hereby consent to the use in this Registration Statement on Form S-1 of our report dated December 8, 2006 relating to the financial
	statement of TravelCenters of America LLC, which appears in such Registration Statement. We also consent to the reference to us under the heading "Experts" in such Registration Statement.






	/s/
	PricewaterhouseCoopers LLP






	Cleveland,
	Ohio


	December 12, 2006



















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	EXHIBIT 23.4












	CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM







	        We hereby consent to the use in this Registration Statement on Form S-1 of TravelCenters of America LLC of our report dated May 30,
	2006, except for Note 24, as to which the date is September 15, 2006 and Note 6, as to which the date is November 17, 2006 relating to the financial statements and the
	financial statement schedule of TravelCenters of America, Inc., which appear in such Registration Statement. We also consent to the reference to us under the heading "Experts" in such
	Registration Statement.






	/s/
	PricewaterhouseCoopers LLP






	Cleveland,
	Ohio


	December 12, 2006



















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EXHIBIT 99.1






CONSENT OF DIRECTOR





I hereby consent to being named in the Registration Statement on Form S-1 of
TravelCenters of America LLC (the "Company") as a person who will become a
director of the Company upon consummation of the spin off of the Company from
Hospitality Properties Trust.










/s/ PATRICK F. DONELAN
--------------------------------
Patrick F. Donelan
December 6, 2006
























EXHIBIT 99.2






CONSENT OF DIRECTOR





I hereby consent to being named in the Registration Statement on Form S-1 of
TravelCenters of America LLC (the "Company") as a person who will become a
director of the Company upon consummation of the spin off of the Company from
Hospitality Properties Trust.










/s/ BARBARA D. GILMORE
--------------------------------
Barbara D. Gilmore
December 1, 2006
























EXHIBIT 99.3






CONSENT OF DIRECTOR





I hereby consent to being named in the Registration Statement on Form S-1 of
TravelCenters of America LLC (the "Company") as a person who will become a
director of the Company upon consummation of the spin off of the Company from
Hospitality Properties Trust.










/s/ ARTHUR G. KOUMANTZELIS
--------------------------------
Arthur G. Koumantzelis
December 1, 2006