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The following is an excerpt from a 10-K SEC Filing, filed by TRAVELCENTERS OF AMERICA INC on 3/30/2004.
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TRAVELCENTERS OF AMERICA INC - 10-K - 20040330 - PART_I

PART I

ITEM 1. BUSINESS

BUSINESS OVERVIEW

We are 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 general motorists. Our network is the largest, and only nationwide, full-service travel center network in the United States. At December 31, 2003, our geographically diverse network consisted of 150 sites located in 41 states and the province of Ontario, Canada. In January 2003, we began operating in Canada through the acquisition of a travel center located in Woodstock, Ontario. Our operations are conducted through three distinct types of travel centers:

- sites owned or leased and operated by us, which we refer to as company-operated sites;
- sites owned by us and leased to independent lessee-franchisees, which we refer to as leased sites; and
- sites owned and operated by independent franchisees, which we refer to as franchisee-owned sites.

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. Most of our network properties were developed more than 20 years ago when prime real estate locations along the interstate highway system were more readily available than they are today, making a network such as ours difficult to replicate. Operating under the "TravelCenters of America" and "TA" brand names, 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.

One of the primary strengths of our business is the diversity of our revenue sources. We have a broad range of product and service offerings, including diesel fuel and gasoline, truck repair and maintenance services, full-service restaurants, more than 20 different brands of fast food restaurants, which we refer to as quick service restaurants, or QSRs, 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 facilities designed to meet the needs of long-haul trucking fleets and their drivers, independent truck drivers and general 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, of which we consider approximately 500 to be full-service facilities. Further, only eight chains in the United States have 25 or more travel center and truck stop locations on the interstate highways, which we believe is the minimum number of locations needed to provide even regional coverage to truck drivers and trucking fleets.

HISTORY AND ORGANIZATION

We were formed in December 1992 by a group of institutional investors. We were originally incorporated as National Auto/Truckstops Holdings Corporation but changed our name to TravelCenters of America, Inc. in March 1997. We primarily have created our network through the following series of acquisitions:

- In April 1993, we acquired the truckstop network assets of a subsidiary of Unocal Corporation, which sites we refer to as the "Unocal network." The Unocal network included a total of 139 facilities, of which 95 were leased sites, 42 were franchisee-owned sites and two sites were company-operated sites.

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- In December 1993, we acquired the truckstop network assets of certain subsidiaries of The British Petroleum Company p.l.c., which assets we refer to as the "BP network." The BP network included 38 company-operated sites and six franchisee-owned sites.

- In December 1998, we acquired substantially all of the truckstop network assets of Burns Bros., Inc. and certain of its affiliates, which assets we refer to as the Burns Bros. network. The Burns Bros. network included 17 company-operated sites, located in nine western and northwestern states.

- In June 1999, we acquired the travel center and truck stop network assets of Travel Ports of America, Inc. through the acquisition of 100% of the stock of Travel Ports. The Travel Ports network consisted of 16 company-operated sites in seven states, primarily in the northeastern region of the United States.

Historically, until 1997, the Unocal network operated principally as a fuel wholesaler and franchisor, with relatively few company-operated sites. In contrast to the Unocal network, the BP network operated principally as an owner-operator of travel centers. In January 1997, we instituted a plan to combine the Unocal network and the BP network, which had been previously managed and financed separately, into a single network to be operated under the "TravelCenters of America" and "TA" brand names under the leadership of a single management team. Prior to combining the Unocal and BP networks, the Unocal network was operated through National Auto/Truckstops, Inc. and the BP network was operated through TA Operating Corporation, each of National Auto/Truckstops, Inc. and TA Operating Corporation being a wholly owned subsidiary of ours. At the time we approved the plan to combine our networks, there were 122 sites operating in the Unocal network and 49 sites operating in the BP network. In November 2000, National Auto/Truckstops, Inc. merged with and into TA Operating Corporation.

In July 1999, we signed an agreement with Freightliner LLC to become an authorized provider of express service, minor repair work and a specified menu of warranty repairs to Freightliner's customers through the Freightliner ServicePoint Program. Under the agreement, our truck repair facilities have been added to Freightliner's 24-hour customer assistance center database as a major referral point for emergency and roadside repairs and also have access to Freightliner's parts distribution, service and technical information systems. Freightliner, a DaimlerChrysler company, is a leading manufacturer of heavy trucks in North America. Freightliner also acquired a minority ownership interest in us at that time.

On May 31, 2000, we and shareholders owning a majority of our voting stock entered into a recapitalization agreement and plan of merger, as amended, with TCA Acquisition Corporation, a newly created corporation formed by Oak Hill Capital Partners, L.P. and its affiliates ("Oak Hill"), 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 and a refinancing that included the following:

- TCA Acquisition Corporation issued 6,456,698 shares of common stock to Oak Hill and a group of other institutional investors, which we refer to as the Other Investors, for proceeds of $205.0 million and then merged TCA Acquisition Corporation with and into us. At the time of the merger, the Other Investors were Olympus Growth Fund III, L.P., Olympus Executive Fund, L.P., Monitor Clipper Equity Partners, L.P., Monitor Clipper Equity Partners (Foreign), L.P., UBS Capital Americas II, LLC, Credit Suisse First Boston LFG Holdings 2000, L.P. and Credit Suisse First Boston Corporation, each of whom is an affiliate of certain of our former shareholders. Since that time, certain of these investors have sold their shares to other investors, including affiliates of certain of the Other Investors. Such sales of our shares are not frequent but could occur in the future.

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- 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 $15.0 million that were retained by continuing stockholders, and cancelled all then outstanding common stock options and warrants, for cash payments totaling $263.2 million.

- We repaid all amounts outstanding under our then existing debt agreements.

- We borrowed $328.3 million under a secured credit agreement with a group of lenders and issued units consisting of Senior Subordinated Notes due 2009 with a face amount of $190.0 million and initial warrants and contingent warrants that in the aggregate could be exercised in exchange for 277,165 shares of our common stock.

- We merged National Auto/Truckstops, Inc. with and into TA Operating Corporation.

Prior to the closing of the transactions described above, we issued 137,572 shares of common stock for cash proceeds of $3.7 million upon the exercise of stock options held by existing shareholders, which shares remained outstanding. 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 market value of our equity capitalization after these transactions was $220.0 million.

At December 31, 2003, we had two wholly owned subsidiaries, TA Operating Corporation, which is our primary travel center operating entity, and TA Franchise Systems Inc, which maintains our franchise agreements and relationships. TA Operating Corporation had the following direct or indirect wholly owned subsidiaries:

- TA Licensing, Inc.

- TA Travel, L.L.C.

- TravelCenters Properties, L.P.

- TravelCenters Realty, L.L.C.

- 3073000 Nova Scotia Company

- TravelCentres Canada Inc.

- TravelCentres Canada Limited Partnership

NETWORK DEVELOPMENT

Due to historical competition between the Unocal and BP networks, there were certain markets in which each of these networks had an existing site at the time we instituted our plan to combine these two networks. Likewise, there was competition in certain markets between our networks and the networks of Burns Bros. and of Travel Ports. In addition, there were certain franchisee-owned sites in the Unocal network that were not considered to be in strategic locations. Further, there were, and continue to be, locations on the interstate highway system that we consider to be strategic but in which we do not have an adequate presence. As a result, since 1997 we have significantly reshaped the composition of our network through the following:

- 17 company-operated sites were acquired from Burns Bros. in 1998;

- 16 company-operated sites in the Travel Ports network were acquired in 1999;

- 46 leased sites were converted to company-operated sites, six during 2003, five during 2002, three during 2000, five during 1998 and 27 during 1997;

- one franchisee-owned site was converted to a company-operated site during 2000;

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- five new network sites were constructed, one in 2002, one in 2001, one in 2000 and two in 1999;

- six sites were razed and rebuilt, two in 1999, two in 2000, one in 2001 and one in 2003;

- four company-operated sites were added to our network through individual site acquisitions, two during 2003 and two during 2000;

- franchise agreements covering 28 franchisee-owned sites were terminated, one in 2000 and 27 in 1997;

- 34 sites we owned were sold, three during 2003, three during 2002, four during 2001, two during 2000, five during 1999, two during 1998 and 15 during 1997;

- three franchisee-owned sites were added to our network, one in 2002, one in 1999 and one in 1998; and

- three company-operated sites were closed, one during 2003, and two during 1999 (one was sold during 2002 and our selling efforts are continuing for the other two).

In 1997, we initiated a capital program to upgrade, rebrand and re-image our travel centers and to build new travel centers. This capital program was substantially completed during 2002. Under this capital program, as revised as a result of the Burns Bros. acquisition and the Travel Ports acquisition, we invested approximately $465 million in our sites by the end of 2003. Through December 31, 2003, we had completed full re-image projects at 38 of our sites at an average investment of $2.2 million per site. These full re-image projects typically include expanding the square footage of the travel and convenience store, adding a fast food court with two or three QSRs, upgrading showers and restrooms and updating the full-service restaurant. We also had completed smaller scale re-image projects at another 57 sites at an average cost of $0.3 million. In addition to improving our existing sites, we have identified several new interstate areas available for our network's expansion. We have designed a "protoype" facility and a smaller "protolite" facility to standardize our travel centers and expand our brand name into new geographic markets while also increasing our appeal to motorists. The prototype and protolite designs combine an improved and efficient facility layout with nationally branded QSRs and gasoline brands as well as expanded product and service offerings. Since May 1999, we have completed construction of eight prototype facilities and three protolite facilities. Further, we are currently developing one prototype facility and one protolite facility, each of which we expect to open during 2005. Most of our future expansion will be with the protolite format, which requires significantly less land and capital investment than the prototype design and enables us to quickly and cost efficiently gain a presence in smaller markets. We also intend to pursue strategic acquisitions and additional franchisee-owned sites. Our franchisees will also continue to invest additional amounts of their own capital for reimaging and other projects at the sites they operate.

REFINANCING

As part of the transactions we completed to consummate our merger with TCA Acquisition Corporation and the related recapitalization, we completed a refinancing of our indebtedness, which refinancing transactions we refer to as the "2000 Refinancing." In the 2000 Refinancing, we issued $190 million of senior subordinated notes due 2009 and borrowed $328.3 million under our amended and restated senior credit facility that consists of a fully-drawn $328 million term loan facility and a $100 million revolving credit facility. The proceeds from these borrowings, along with proceeds from the issuance of common stock and other cash on hand, were used to:

- pay for the tender offer and consent solicitation for our 10 1/4% Senior Subordinated Notes due 2007, including accrued interest, premiums and a prepayment penalty;

- repay all amounts, including accrued interest, then outstanding under our existing amended and restated credit agreement;

- redeem in full all of our then existing senior secured notes and pay related accrued interest and prepayment penalties;

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- make cash payments to certain of our then current equity owners, whose shares and unexercised stock options and warrants were redeemed and cancelled pursuant to the recapitalization agreement and plan of merger; and

- pay fees and expenses related to the financings and the merger and recapitalization transactions.

The $190 million of Senior Subordinated Notes were issued as part of units that also included warrants exercisable for 277,165 shares of our common stock. See "Liquidity and Capital Resources" in Item 7 for a further discussion of our outstanding indebtedness.

OUR TRAVEL CENTERS

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

Property. The layouts of the travel centers we own vary from site to site. The facilities we own are located on properties averaging 22 acres, of which an average of approximately 19 acres are developed. The majority of the developed acreage consists of truck and car fuel islands, separate truck and car paved parking and the main building, which contains a full-service restaurant and one or more QSRs, a travel and convenience store and driver amenities and a truck maintenance and repair shop. The remaining developed acreage contains landscaping and access roads.

Product and Service Offerings. We have developed an extensive and diverse offering of products and services to complement our diesel fuel business, which includes:

- Gasoline. We sell nationally recognized branded gasoline, consistently offering one of the top three gasoline brands in each geographic region. Of our 126 company-operated sites as of December 31, 2003, we offered branded gasoline at 98 sites and unbranded gasoline at 17 sites. Eleven company-operated sites do not sell gasoline.

- Full-Service and Fast Food Restaurants. Most of our travel centers have both full-service restaurants and QSRs that offer customers a wide variety of nationally recognized brand names and food choices. Our full-service restaurants, branded under our "Country Pride," "Buckhorn Family Restaurants" and "Fork in the Road" proprietary brands, offer "home style" meals through menu table service and buffets. We also offer nationally branded QSRs such as Arby's, Burger King, Pizza Hut, Popeye's Chicken & Biscuits, Sbarro, Starbuck's Coffee, Subway, Taco Bell and 13 other brands. We generally attempt to locate QSRs within the main travel center building, as opposed to constructing stand-alone buildings. As of December 31, 2003, we had 154 QSRs in our company-operated sites, and 96 of our network travel centers offered at least one branded QSR.

- Truck Repair and Maintenance Shops. All but eight of our network travel centers have truck repair and maintenance shops. The typical repair shop has between two and four service bays, a parts storage room and trained mechanics on duty at all times. These shops, which generally operate 24 hours per day, 365 days per year, offer extensive maintenance and emergency repair and road services, ranging from basic services such as oil changes and tire repair to specialty services such as diagnostics and repair of air conditioning, air brake and electrical systems. Our work is backed by a warranty honored at all of our repair and maintenance facilities. As of December 31, 2003, all but two of our network sites that have truck repair and maintenance shops were participating in the Freightliner ServicePoint Program.

- Travel and Convenience Stores. Each travel center has a travel and convenience store that caters to truck drivers, motorists, recreational vehicle operators and bus drivers and passengers. Each travel and

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convenience store has a selection of over 4,000 items, including food and snack items, beverages, non-prescription drug and beauty aids, batteries, automobile accessories, and music and video products. In addition to complete travel and convenience store offerings, the stores sell items specifically designed for the truck driver's on-the-road lifestyle, including laundry supplies and clothing as well as truck accessories. Most stores also have a "to go" snack bar installed as an additional food offering.

- Additional Driver Services. We believe that fleets can improve the retention and recruitment of truck drivers by directing them to visit high-quality, full-service travel centers. We strive to provide a consistently high level of service and amenities to drivers at all of our travel centers, making our network an attractive choice for trucking fleets. Most of our travel centers provide truck drivers with access to specialized business services, including an information center where drivers can send and receive faxes, overnight mail and other communications and a banking desk where drivers can cash checks and receive fund transfers from fleet operators. Most sites have installed telephone rooms with 15 to 20 pay telephones. The typical travel center also has a video game room and designated "truck driver only" areas, including a television room with a VCR and comfortable seating for drivers, a laundry area with washers and dryers and an average of six to 12 private showers.

Additionally, we offer truck drivers a loyal fueler program, which we call the RoadKing Club, that is similar to the frequent flyer programs offered by airlines. Drivers receive a point for each gallon of diesel fuel purchased and can redeem their points for discounts on non-fuel products and services at any of our travel centers.

- Motels. Twenty of our company-operated travel centers offer motels, with an average capacity of 40 rooms. Seventeen of these motels are operated under franchise grants from nationally branded motel chains, including Days Inn, HoJo Inn, Super 8, Rodeway and Travelodge.

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 have been able to effectively create competition for our purchases among various diesel fuel suppliers on a daily basis. We believe that this positioning with our suppliers will help our sites avoid product outages during times of diesel fuel supply disruptions. We have a single source of supply for gasoline at most of our sites that offer branded gasoline. Sites selling unbranded gasoline do not have exclusive supply arrangements.

Other than pipeline tenders, fuel purchases made by us are delivered directly from suppliers' terminals to our travel centers. We do not contract to purchase substantial quantities of fuel for our inventory and are therefore susceptible to price increases and interruptions in supply. We hold less than three days of diesel fuel inventory at our sites. We use pipeline tenders and leased terminal space to mitigate the risk of supply disruptions. The susceptibility to market price increases for diesel fuel is substantially mitigated by the significant percentage of our total diesel fuel sales volume that is sold under pricing formulae that are indexed to market prices, which reset daily. We do not engage in any fixed-price contracts with customers. We may engage, from time to time, in a minimal level of hedging of our fuel purchases with futures and other derivative instruments that primarily are traded on the New York Mercantile Exchange.

The Environmental Protection Agency has promulgated regulations to decrease the sulfur content of diesel fuel by 2006. The enactment of these regulations could reduce the supply and/or increase the cost of diesel fuel. A material decrease in the volume of diesel fuel sold for an extended period of time or instability in the prices of diesel fuel could have a material adverse effect on us.

Non-fuel products supply. There are many sources for the large variety of non-fuel products that we purchase and 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

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ExxonMobil for Mobil brand lubricants and oils. We believe that our relationships with these and our other suppliers are satisfactory and that supply of the non-fuel products we require is adequate.

Centralized Purchasing and Distribution. We maintain a distribution and warehouse center that services our network. The distribution center is located near Nashville, Tennessee and has approximately 85,000 square feet of storage space. Approximately every two weeks, the distribution center delivers products to our network sites using a combination of contract carriers and our fleet of trucks and trailers. In 2003, the distribution center shipped approximately $47.1 million of products. We believe the distribution center provides us with cost savings by using its consolidated purchasing power to negotiate volume discounts with third-party suppliers. The distribution center is also able to obtain further price reductions from suppliers in the form of reduced shipping charges, as suppliers need only deliver their products to the distribution center warehouse, as opposed to each site individually.

COMPETITION

The U.S. travel center and truck stop industry in which we operate consists of travel centers, truck stops, diesel fuel outlets and similar facilities designed to meet the needs of long-haul trucking fleets and their drivers, independent truck drivers and general motorists. The travel center and truck stop industry is highly competitive and fragmented. According to NATSO, there are in excess of 3,000 travel center and truck stops located on or near highways nationwide, of which we consider approximately 500 to be full-service facilities. Further, only eight chains in the United States have 25 or more travel center and truck stop locations on the interstate highways, which we believe is the minimum number of locations needed to provide even regional coverage to truck drivers and trucking fleets. There are generally two types of facilities 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 general motorists, such as diesel fuel and gasoline; full-service and fast food dining; truck repair and maintenance; travel and convenience stores; secure parking areas and other driver amenities; and,

- pumper-only truck stops, which provide diesel fuel, typically at discounted prices, with a more limited mix of additional services than a full-service travel center.

Fuel and non-fuel products and services can be obtained by long-haul truck drivers from a wide variety of sources other than us, including regional full-service travel center and pumper-only truck stop chains, independently owned and operated truck stops, some large service stations and fleet-operated fueling terminals.

We believe that we experience substantial competition from pumper-only truck stop chains and that this competition is based principally on diesel fuel prices. In the pumper-only truck stop segment, the largest networks, based on the number of facilities, are Pilot Travel Centers LLC, with approximately 270 sites, Flying J Inc., with approximately 157 sites, and Love's Travel Stops & Country Stores, Inc., with approximately 96 sites. We experience additional substantial competition from major full-service travel center networks and independent chains, which is based principally on diesel fuel prices, non-fuel product and service offerings and customer service. In the full-service travel center segment, the only large network, other than ours, is operated by Petro Stopping Centers, L.P., with approximately 60 sites. Our truck repair and maintenance shops 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 and auto parts service centers. We also compete with a variety of establishments located within walking distance of our travel centers, including full-service restaurants, QSRs, electronics stores, drugstores and travel and convenience stores.

A significant portion of all intercity diesel fuel consumption by trucking fleets and companies with their own trucking capability occurs through self-fueling at both dedicated terminals and at fuel depots strategically located across the country. These terminals often provide facilities for truck repair and maintenance. Our pricing decisions for diesel fuel and truck repair and maintenance services cannot be made without considering the existence of these operations and their capacity for expansion. We believe that a long-term trucking industry trend has been to

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reduce the use of these terminals and to outsource fuel, repair and maintenance services to maximize the benefits of competitive fuel pricing, superior driver amenities and reduced environmental compliance expenditures. However, during the past few years of a struggling United States economy and historically high fuel prices, this long-term trend has been somewhat slowed, at least temporarily, as trucking fleets have utilized their existing terminals to supply an increased level of their fuel and repair service needs.

A potential additional source of competition in the future could result from the possible commercialization of state-owned interstate rest areas. Historically, these rest areas have been precluded from offering for sale fuel and non-fuel products and services similar to that of a travel center. State governments that want to earn additional revenues from these rest areas have repeatedly requested that the federal government allow for commercialization. Past attempts for such commercialization historically have been successfully opposed by a group of opponents that includes NATSO, fast food restaurant operators and others. If commercialized, these rest areas will increase the number of outlets competing with us for the business of highway travelers. It is possible we may have an opportunity to play a role in these commercialization efforts, which would reduce any negative effects of such commercialization on our travel center business. As of early 2004, language in the pending highway reauthorization bill clearly sets forth a continued ban on commercialization of state-owned interstate rest areas.

RELATIONSHIPS WITH THE OPERATORS AND FRANCHISEE-OWNERS

TA Licensing, Inc., a wholly owned subsidiary of TA Operating Corporation, licenses its trademarks to TA Operating Corporation and TA Franchise Systems. We enter into franchise agreements with operators and franchisee-owners of travel centers through TA Franchise Systems, and TA Franchise Systems collects franchise fees and royalties under these agreements. TA Franchise System's assets consist primarily of the rights under the original franchise agreements, the network franchise agreements and its trademark license from TA Licensing. TA Franchise Systems has no tangible assets.

Network Franchise Agreement

As of December 31, 2003, there were 17 sites operating under network franchise agreements. The more significant provisions of the network franchise agreement are described in the following paragraphs.

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 being offered to prospective franchisees at the time of the franchisee's renewal. We reserve the right to decline renewal under certain circumstances or if specified terms and conditions are not satisfied by the franchisee. The average remaining term of these agreements, including all renewal periods, is approximately 19 years. The initial terms of the current network franchise agreements expire in July 2012 through July 2013.

Protected Territory. Subject to specified exceptions, including existing operations, so long as the franchisee is not in default under the network franchise agreement, we agree not to operate, or allow another person to operate, a travel center or travel center business that uses the "TA" brand, within 75 miles in either direction along the primary interstate on which the franchised site is located.

Restrictive Covenants. Except for the continued operation of specified businesses identified by the franchisee at the time of execution of the network franchise agreement, the franchisee cannot, during the term of the agreement, operate any travel center or truck stop-related business under a franchise agreement, licensing agreement or marketing plan or system of its own or another person or entity. If the franchisee owns the franchised premises, the franchisee may continue to operate a travel center at the franchised premises after termination of the franchise agreement, but if the termination is for any reason other than a default by TA Franchise System, the franchisee is restricted for a two-year period from re-branding the facility with any other truck stop or travel center company or other organization offering similar services and/or fleet billing services.

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Royalty Payments. Franchisees are required to pay us a continuing services and royalty fee generally equal to 3.75% of all non-fuel revenues. If branded fast food is sold from the franchised premises, the franchisee must pay us 3% of all net revenues earned directly or indirectly in connection with those sales after deduction of royalties paid to the fast food franchisor.

Advertising, Promotion and Image Enhancement. The network franchise agreement requires the franchisees to contribute 0.6% of their non-fuel revenues and net revenues from fast food sales to partially fund system-wide advertising, marketing and promotional expenses we incur. We are required to match the amounts of the franchisees' contributions.

Fuel Purchases and Sales. Under the network franchise agreement for those franchisees operating leased sites, we agree to sell to franchisees, and franchisees agree to buy from us, 100% of their requirements of diesel fuel. Those franchisees operating franchisee-owned sites are not required to purchase their diesel fuel from us. The franchisee agrees to purchase gasoline from only those suppliers that we approve in writing. The franchisee generally must pay a $0.03 per gallon royalty fee to us on all gallons of gasoline sold.

Non-fuel Product Offerings. Franchisees are required to operate their sites in conformity with guidelines that we establish and offer any products and services that we deem integral to the network.

Termination/Nonrenewal. We may terminate the network franchise agreement for the following reasons, among others:

- the default of the franchisee;

- our withdrawal from the marketing of motor fuel in the state, county or parish where the franchise is located; or

- the default or termination of the lease.

The foregoing reasons also constitute grounds for nonrenewal of the network franchise agreement. In addition, we can decline to renew the network franchise agreement for the following reasons, among others:

- we and the operator fail to agree to changes or additions to the network franchise agreement;

- we make a good faith determination not to renew the network franchise agreement because it would be uneconomical to us; or

- if we own the franchise premises, we make a good faith determination to sell the premises or convert it to a use other than for a truck stop or travel center.

If we do not renew the network franchise agreement due to any of the three foregoing reasons, we may not enter into another network franchise agreement relating to the same franchised premises with another party within 180 days of the expiration date on terms materially different from those offered to the prior franchisee, unless the prior franchisee is offered the right, for a period of 30 days, to accept a renewal of the network franchise agreement on those different terms. If we do not renew the network franchise agreement because we make a good faith determination to withdraw from the marketing of fuel in the area of the franchised premises, we may not sell the franchised premises or franchised business for 90 days following the expiration of the network franchise agreement. The prior franchisee does not have a right of first refusal on the sale of the franchised premises.

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Network Lease Agreement

In addition to franchise fees, we also collect rent from those franchisees that operate a travel center owned by us. As of December 31, 2003, there were 14 leased sites. Each operator of a leased site that enters into a network franchise agreement also must enter into a network lease agreement. The more significant provisions of the network lease agreement are described in the following paragraphs.

Term of Agreement. The lease agreements we have with our franchisees have a term of ten years and allow for two renewals of five years each. We reserve the right to decline renewal under certain circumstances or if specified terms and conditions are not satisfied by the operator. The average remaining term of these agreements, including all renewal periods, is approximately 19 years. The initial terms of the current network lease agreements expire in July 2012 through December 2012.

Rent. Under the network lease, an operator must pay annual fixed rent equal to the sum of

- base rent agreed upon by the operator and us, plus

- improvement rent, if any, which is defined as an amount equal to 14% of the cost of all capital improvements we fund that we and the operator mutually agree will enhance the value of the leased premises and which cost in excess of $2,500, plus

- an annual inflator equal to the percentage increase in the consumer price index.

The base rent will not be increased by the improvement rent if the operator elects to pay for the capital improvements. If we and the operator agree upon an amortization schedule for a capital improvement funded by the operator, we will, upon termination of the network lease, reimburse the operator for an amount equal to the unamortized portion of the cost of the capital improvement. The operator is responsible for the payment of all charges and expenses in connection with the operation of the leased sites, including environmental registration fees and certain maintenance costs.

Use of the Leased Site. The operator must operate the leased site as a travel center in compliance with all laws, including all environmental laws. The operator must submit to quality inspections that we request and appoint a manager that we approve, who is responsible for the day-to-day operations at the leased site.

Termination/Nonrenewal/Transferability/Right of First Refusal. The network lease agreement contains terms and provisions regarding termination, nonrenewal, transferability and our right of first refusal which are substantially the same as the terms and provisions of the network franchise agreement.

Original Franchise Agreement with BP Network Independent Franchisees

There are seven sites that continue to operate under the franchise agreements they had with TA Franchise Systems prior to the network franchise agreement being revised to its current form in 2002. The terms of these franchise agreements are generally the same as the network franchise agreement, but they do not require the franchises to purchase their diesel fuel from us and their provisions vary. At the expiration of these agreements, the respective franchisees may be offered an option to renew their franchises under a form of our then-current franchise agreement for franchisee-owned sites.

Term of Agreement. In general, the initial terms of the original franchise agreements are 10 years. The original franchise agreements provide for one or two renewals for an aggregate of 10 years. The original franchise agreements offer no assurance that the terms of the renewal will be the same as those of the initial franchise agreements. We may decline renewal under some circumstances or if specified terms and conditions are not satisfied by the franchisee. The average remaining term of these agreements is approximately five years.

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Protected Territory. So long as the franchisee is not in default under the franchise agreement, we agree not to operate, or allow another person to operate, a travel center or travel center business that uses the "TA" brand, within a specified area in either direction along one or more interstates at which the franchised site is located.

Restrictive Covenants. Although the restrictive covenants in the original franchise agreements may vary slightly from franchise to franchise, each franchisee is subject to restrictions that prohibit two or more of the following during the term of the franchise agreement and for two years after its expiration:

- operation of any other truck stop or travel center within its protected territory;

- operation of the franchise location under any national brand other than "TA";

- operation of the branded facility within a certain distance of any other TA facility; and

- operation of any competitive business or a business that trades upon the franchise within the area adjacent to the franchise location.

Royalty Payments. In general, we require franchisees to pay us a continuing services and royalty fee generally equal to 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 of branded fast food. As part of the royalty fee, we generally require the franchisee to pay us $0.004 per gallon on all sales of qualified diesel fuel.

Advertising, Promotion and Image Enhancement. The network franchise agreement requires the franchisees to contribute 0.25% of all revenues, including revenues from fuel and fast food sales, to partially fund system-wide advertising, marketing and promotional expenses we incur, and mandates certain minimum franchisee expenditures on advertising. We are required to match the amounts of the franchisees' contributions towards the system-wide expenses.

Fuel Purchases and Sales. We do not require franchisees to purchase gasoline or diesel fuel from us. However, we charge royalty fees generally on diesel fuel sales as described above.

Non-fuel Product Offerings. Franchisees are required to operate their travel centers in conformity with our guidelines, participate in and comply with all programs that we prescribe as mandatory and offer any products and services we deem integral to the network.

Termination of an Original Franchise Agreement. We may terminate the franchise agreement upon the occurrence of certain defaults, upon notice and without affording the franchisee an opportunity to cure the defaults. When other defaults occur, we may terminate the franchise agreement if, after receipt of a notice of default, the franchisee has not cured the default within the applicable cure period. The franchisee may terminate the franchise agreement upon thirty days notice, if we are in material default under the franchise agreement and we fail to cure or attempt to cure the default within a reasonable period after notification.

REGULATION

Franchise Regulation. State franchise laws apply to TA Franchise Systems, and some of these laws require TA Franchise Systems to register with the state before it may offer a franchise, require TA Franchise Systems to deliver specified disclosure documentation to potential franchisees, and impose special regulations upon petroleum franchises. Some state franchise laws also impose restrictions on TA Franchise Systems' ability to terminate or not to renew its respective franchises, and impose other limitations on the terms of the franchise relationship or the conduct of the franchisor. Finally, 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 antitrust laws at the federal and state levels.

12

The Federal Trade Commission, or the FTC, regulates us under their rule entitled "Disclosure Requirements and Prohibitions Concerning Franchising and Business Opportunity Ventures." Under this rule, the FTC requires that franchisors make extensive disclosure to prospective franchisees but does not require registration. We believe that we are in compliance with this rule.

We cannot predict the effect of any future federal, state or local legislation or regulation on our franchising operations.

Environmental Regulation. Our operations and properties are extensively regulated by Environmental Laws that:

- govern operations that may have adverse environmental effects, such as discharges to air, soil and water, as well as the management of Hazardous Substances or

- 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 facilities. These tanks 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. At some locations, we must also comply with Environmental Laws relating to vapor recovery and discharges to water. We have completed necessary upgrades to underground storage tanks to comply with federal regulations that took effect on December 22, 1998, and believe that all of our travel centers are in material compliance with applicable requirements of Environmental Laws.

We have received notices of alleged violations of Environmental Laws, or are otherwise aware of the need to undertake corrective actions to comply with Environmental Laws, at travel centers owned by us in a number of jurisdictions. We do not expect that any financial penalties associated with these alleged violations, or instances of noncompliance, 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 that have occurred subsequent to the acquisition of the BP network and also regarding historical contamination at certain of the former Unocal, Burns Bros. and Travel Ports facilities. 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 assure you that additional contamination does not exist at these or additional network properties, 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. As of December 31, 2003, we had a reserve for those matters of $4.6 million. In addition, we have obtained environmental insurance of up to $35.0 million for unanticipated costs regarding certain known environmental liabilities and for up to $40.0 million regarding certain unknown environmental liabilities.

As part of the acquisition of the Unocal network, Phase I environmental assessments were conducted at the 97 Unocal network properties purchased by us. Under an environmental indemnification agreement with Unocal, Phase II environmental assessments of all Unocal network properties were completed by Unocal by December 31, 1998. Under the terms of this environmental agreement, Unocal was responsible for all costs incurred for:

- remediation of environmental contamination, and

- otherwise bringing the properties into compliance with Environmental Laws as in effect at the date of the acquisition of the Unocal network,

13

with respect to the matters identified in the Phase I or Phase II environmental assessments, which matters existed on or prior to the date of the acquisition of the Unocal network. Under the terms of this agreement, Unocal also was required to indemnify us against any other environmental liabilities that arise out of conditions at, or ownership or operations of, the Unocal network prior to the date of the 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 $2.6 million of cash, funded an escrow account with $5.4 million to be drawn by us as we incur related remediation costs, and purchased insurance policies that cap our total future expenditures 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 $8.2, which amount we expect will be fully covered by the cash received from Unocal and reimbursements from state tank funds. The liability we assumed was recorded in 2004. We estimate that the cash outlays related to the matters for which we assumed responsibility in January 2004 will be approximately $1.1 million in 2004; $2.2 million in 2005; $1.5 million in 2006; $1.2 million in 2007; $0.9 million in 2008 and $1.3 million thereafter. 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. We have just recently assumed responsibility for these matters and expect that our knowledge of the specific facts, related costs and timing of payments for each site will improve over time.

Prior to the acquisition of the BP network, all of the 38 company-owned locations purchased by us were subject to Phase I and Phase II environmental assessments, undertaken at BP's expense. The environmental agreement with BP provides that, with respect to environmental contamination or non-compliance with Environmental Laws identified in the Phase I or Phase II environmental assessments, BP is responsible for:

- all costs incurred for remediation of the environmental contamination, and

- for otherwise bringing the properties into compliance with Environmental Laws as in effect at the date of the acquisition of the BP network.

The remediation must achieve compliance with the Environmental Laws in effect on the date the remedial action is completed. The environmental agreement with BP requires BP to indemnify us against any other environmental liabilities that arise out of conditions at, or ownership or operations of, the BP network locations prior to the date of the acquisition of the BP network. We must make claims for indemnification before December 11, 2004. BP must also indemnify us for liabilities relating to non-compliance with Environmental Laws for which claims were made before December 11, 1996. Except as described above, BP does not have any responsibility for any environmental liabilities arising out of the ownership or operations of the BP network after the date of the acquisition of the BP network. We cannot be certain that BP, if additional environmental claims or liabilities were to arise under the environmental agreement, would not dispute our claims for indemnification.

As part of the Burns Bros. acquisition, Phase I environmental assessments were conducted on all 17 sites acquired. Based on the results of those assessments, Phase II environmental assessments were conducted on nine of the sites. The purchase price paid to Burns Bros. was adjusted based on the findings of the Phase I and Phase II environmental assessments. Under the asset purchase agreement with Burns Bros., we released Burns Bros. from any environmental liabilities that may have existed as of the Burns Bros. acquisition date, other than specified non-waived environmental claims as described in the agreement with Burns Bros.

As part of the Travel Ports acquisition, Phase I environmental assessments were conducted on all 16 sites acquired. Based on the results of those assessments, Phase II environmental assessments were conducted on five of these sites. The results of these assessments were taken into account in recognizing the related environmental contingency accrual for purchase accounting purposes.

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EMPLOYEES

As of December 31, 2003, we employed approximately 10,500 people on a full- or part-time basis. Of this total, approximately 10,110 were employees at our company-operated sites, approximately 340 performed managerial, operational or support services at our headquarters or elsewhere and approximately 50 employees staffed the distribution center. All but nine of our employees are non-union. We believe that our relationship with our employees is satisfactory.

ITEM 2. 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 a leased facility located at 1450 Gould Boulevard, LaVergne, Tennessee 37086-3535.

Of our 140 owned sites in operation as of December 31, 2003, the land and improvements at 13 are leased, the improvements but not the land at eight are leased, four are subject to ground leases of the entire site and seven are subject to ground leases of portions of these sites. We consider our facilities suitable and adequate for the purposes for which they are used. In addition to these 140 sites, we own two sites that will be developed as travel centers and two sites that are closed and held for sale.

ITEM 3. LEGAL PROCEEDINGS

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. 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.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during the fourth quarter of 2003.

PART II

ITEM 5. MARKET FOR OUR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market information. The outstanding shares of our common stock were issued in transactions not involving a public offering. As a result, there is no public market for our common stock.

Holders. As of December 31, 2003, the outstanding shares of our common stock were held of record by 37 stockholders.

Dividends. We have never paid or declared any cash dividends on our common stock, and we do not anticipate paying any cash dividends in the foreseeable future. We intend to retain our future earnings, if any, to fund the development and growth of our business. Our future decisions concerning the payment of dividends on the common stock will depend upon our results of operations, financial condition and capital expenditure plans, as well as other factors as the board of directors, in its sole discretion, may consider relevant. In addition, our existing indebtedness restricts, and we anticipate our future indebtedness may restrict, our ability to pay dividends.

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Recent sales of unregistered securities. During 2001, 2002 and 2003, we sold or issued the unregistered securities described below. None of the following transactions involved any public offering. All sales were made in reliance on Section 4(2) of the Securities Act of 1933, as amended (the "Securities Act"), Rule 701 promulgated under the Securities Act and/or Regulation D promulgated under the Securities Act. These sales were made without general solicitation or advertising. The recipients in each such transaction represented their intention to acquire the securities for investment only and not with a view to sell or for sale in connection with any distribution thereof.

(1) In a series of sales to management, we sold the following:

- In 2001, we sold 2,434 shares at $31.75 per share. The proceeds from this sale were used for general corporate purposes.

- In 2002, we sold 7,302 shares at $31.75 per share. The proceeds from these sales were used for general corporate purposes.

- In 2003, we sold 10,000 shares at $30.26 per share. These shares had been purchased from the estate of a deceased former management stockholder at this same price. The proceeds from these sales were used to fund the related purchase.

Summary of Equity Compensation Plans. The following table sets forth information about all our equity compensation plans in effect as of December 31, 2003, which consisted solely of the 2001 Stock Incentive Plan, which plan was approved by our stockholders during 2001. All of our equity compensation plans currently in effect have been approved by our stockholders.

Equity Compensation Plan Information

                                                                                           (C)
                                                                                        Number of
                                                                                       securities
                                                                                        remaining
                                            (A)                     (B)                available for
                                         Number of               Weighted-            future issuance
                                     securities to be             average               under equity
                                        issued upon            exercise price           compensation
                                        exercise of            of outstanding         plans (excluding
                                        outstanding                options               securities
                                      options, warrants            warrants             reflected in
        Plan Category                    and rights               and rights             column (A))
        -------------                    ----------               ----------             -----------
Equity compensation .....                  944,881                  $31.75                    --
plans approved by
stockholders
Equity compensation plans
  not approved by
  stockholders ..........                       --                      --                    --
                                           -------                  ------                   ----
Total ...................                  944,811                  $31.75                    --
                                           =======                  ======                   ====

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ITEM 6. SELECTED FINANCIAL DATA

The following table sets forth our selected historical consolidated financial data for each of the last five fiscal years. Such data should also be read in conjunction with "Management's Discussion and Analysis" and our audited consolidated financial statements included elsewhere in this annual report.

                                                                         YEAR ENDED DECEMBER 31,
                                                 -----------------------------------------------------------------------
                                                    1999(1)       2000(2)         2001           2002(3)         2003
                                                 -----------    -----------    -----------    -----------    -----------
                                                    (IN THOUSANDS OF DOLLARS, EXCEPT GALLONAGE AND SITE COUNT AMOUNTS)
INCOME STATEMENT DATA:
      Revenues:
            Fuel .............................   $   955,105    $ 1,485,732    $ 1,331,807    $ 1,237,989    $ 1,513,648
            Non-fuel .........................       478,963        554,219        585,314        617,342        649,502
            Rent and royalties ...............        20,460         18,822         17,491         15,539         13,080
                                                 -----------    -----------    -----------    -----------    -----------
                 Total revenues ..............     1,454,528      2,058,773      1,934,612      1,870,870      2,176,230
      Gross profit (excluding depreciation) ..       403,048        447,853        466,859        481,190        501,464
      Income from operations .................        37,964         (3,919)        39,949         51,937         59,977
      Net income (loss) ......................          (653)       (38,673)       (10,054)         1,271          8,891

 BALANCE SHEET DATA (END OF PERIOD):
      Total assets ...........................   $   649,636    $   736,301    $   679,940    $   660,767    $   650,567
      Long-term debt (net of unamortized
               discount) .....................       404,369        546,166        547,534        523,934        502,033
      Mandatorily redeemable preferred
              stock(4) .......................        79,739             --             --             --             --
      Working capital ........................        35,447         38,093         27,366         19,354         19,630
OTHER FINANCIAL AND OPERATING DATA:
      Total diesel fuel sold (in thousands of
             gallons) ........................     1,370,017      1,384,759      1,369,251      1,349,741      1,341,125
      Capital expenditures, excluding business
             acquisitions ....................   $    87,401    $    68,107    $    54,490    $    42,640    $    44,196
      Cash flows (used in) provided by:
            Operating activities .............        44,648         65,106         30,381         75,574         77,324
            Investing activities .............      (136,016)       (77,115)       (46,234)       (42,110)       (50,486)
            Financing activities .............        20,208         22,988          6,722        (39,305)       (26,086)
      Adjusted EBITDA(5) .....................       100,712        102,755        105,189        113,561        121,921
NUMBER OF SITES (END OF PERIOD):
      Company-operated sites .................           118            122            119            122            126
      Leased sites ...........................            29             26             25             20             14
      Franchisee-owned sites .................            11              9              9             10             10
                                                 -----------    -----------    -----------    -----------    -----------
            Total network sites ..............           158            157            153            152            150
                                                 ===========    ===========    ===========    ===========    ===========

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Notes to Selected Financial Data

(1) Reflects the operating results of 16 sites we acquired as part of our acquisition of Travel Ports on June 3, 1999, beginning on the acquisition date.

(2) For the year ended December 31, 2000, income from operations was reduced by $22,004,000 of merger and recapitalization expenses incurred in connection with the transactions we completed to consummate our merger with TCA Acquisition Corporation and related recapitalization and by $20,910,000 of losses from the early extinguishment of debt related to the recapitalization. Prior to 2003, the loss from the early extinguishment of debt was classified, net of the related income tax benefits, as an extraordinary loss in our statement of operations and comprehensive income. Statement of Financial Accounting Standards No. 145, "Rescission of SFAS Nos. 4, 44, and 64, Amendment of SFAS 13, and Technical Corrections as of April 2002," which was issued in April 2002, required the reclassification into income from operations of the amount previously presented as an extraordinary loss.

(3) Beginning in 2002, as a result of adopting a new accounting pronouncement, we ceased amortization of our goodwill and trademark intangible assets.

(4) "Mandatorily redeemable preferred stock" was comprised of two series of convertible preferred stock that were redeemed as part of our merger and recapitalization transactions in November 2000.

(5) Adjusted EBITDA, as used here, is based on the definition of "EBITDA" in our bank debt agreement and consists of net income plus the sum of (a) income taxes, (b) interest expense, net, (c) depreciation, amortization and other noncash charges, (d) transition expense, (e) extraordinary losses and cumulative effects of accounting changes and (f) the costs of the merger and recapitalization transactions. We have included this information concerning Adjusted EBITDA because Adjusted EBITDA is a primary component for calculating the two key financial ratio covenants in our debt agreements, the interest coverage ratio and the leverage ratio. See further discussion of our debt covenant compliance and a reconciliation of net income (loss) to Adjusted EBITDA in the "Liquidity and Capital Resources" section of Management's Discussion and Analysis under the heading "Adjusted EBITDA and Debt Covenant Compliance." We also use Adjusted EBITDA as a basis for determining bonus payments to our corporate and site-level management employees and as a key component in the formula for calculating the fair value of our redeemable common stock and stock options. Adjusted EBITDA should not be considered in isolation from, or as a substitute for, net income, income from operations, cash flows from operating activities or other consolidated income or cash flow statement data prepared in accordance with generally accepted accounting principles. While the non-GAAP measures "EBITDA" and "Adjusted EBITDA" are frequently used by other companies as measures of operations and/or ability to meet debt service requirements, Adjusted EBITDA as we use the term is not necessarily comparable to similarly titled captions of other companies due to differences in methods of calculation. See further discussion and disclosure concerning Adjusted EBITDA under the heading "Adjusted EBITDA and Debt Covenant Compliance" in Item 7, Management's Discussion and Analysis.

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS

CRITICAL ACCOUNTING POLICIES

Our discussion and analysis of our financial position and results of operations is based upon, and should be read in conjunction with, our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. Management believes the critical accounting policies and areas that require the most significant judgments and estimates to be used in the preparation of our consolidated financial statements are the allowance for doubtful accounts, asset impairment, environmental liabilities, income tax accounting, recognition of stock compensation expense related to stock options and redeemable common stock held by employees, and consolidation of special purpose entities.

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. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.

We record impairment losses on long-lived assets used in operations when events and circumstances indicate that the assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying value of those assets, 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. The net carrying value of assets not recoverable is then reduced to fair value. Our estimated cash flows are 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. If these estimates or their underlying assumptions change in the future, we may be required to record additional impairment charges for these assets or to reverse previously recognized impairment charges.

For purposes of assessing our goodwill for impairment, we have determined that we are 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 our trademark intangible assets, the estimated fair value, based on a discounted cash flow analysis, exceeded the carrying value. Accordingly, we have not recognized an impairment charge with respect to any of our 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. Our goodwill and trademark intangible assets will be assessed for impairment annually as of January 1 of each year.

We establish an environmental contingency reserve when the responsibility to remediate is probable and the amount of associated costs is reasonably determinable. The estimates of these costs are based on our best estimates of our future obligations given current and pending laws and the currently available facts concerning each environmental incident, as well as our estimate of amounts recoverable under indemnification agreements and/or state or private insurance plans. Should the actual costs to remediate an incident differ from our estimates, or should new facts come to light or laws become enacted that modify the scope of our remediation projects, revisions to the estimated environmental contingency reserve would be required.

As part of the process of preparing our consolidated financial statements, we are required to estimate income taxes in each of the jurisdictions in which we operate. The process involves 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 result in deferred tax assets and liabilities, which are included

19

in our consolidated balance sheet. We are required to record a valuation allowance to reduce our deferred tax assets if we are not able to conclude that it is more likely than not they will be realized, although we have not to date recognized such a valuation allowance as we believe realization of our deferred tax assets is more likely than not. Increases in the valuation allowance would result in additional expenses to be reflected within the tax provision in the consolidated statement of operations. For further discussion regarding the realization of our deferred tax assets, see the "Results of Operations - Income Taxes" section of this "Management's Discussion and Analysis."

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. 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. 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. In addition to these redeemable shares of common stock purchased by management employees, we have granted to certain of our executives non-qualified stock options to purchase 944,881 shares of our common stock under a stock incentive plan. Each option grant consists of 41.67% time options and 58.33% performance options. Time options become exercisable with the passage of time, while performance options become exercisable if certain investment return targets are achieved. Time options generally vest 20% per year over a period of five years. Performance options vest if Oak Hill achieves specified internal rates of return on specified measurement dates. The time options are subject to fixed plan accounting and, accordingly, no charge to earnings will be required with respect to them since the exercise price equaled the fair value at the date of grant. The performance options are subject to variable plan accounting and, accordingly, a non-cash charge to earnings will be required when it becomes probable that the performance triggers for such options will be achieved. Because our common stock is privately held, determining its value is subject to estimates and to factors, such as multiples being paid in the mergers and acquisitions market at the time of the measurement and/or the state of the capital markets at that time, that are not easily forecasted or controlled and which may not have a direct relationship to our financial results or condition. It is not possible to determine at this time, nor may it be possible until close to the end of the five-year performance period, whether it will be probable that we will achieve the performance triggers. It is not possible to predict whether any such required non-cash charge will be material to our results for the period in which the charge is recognized, as we expect that the performance triggers can only be attained as a result of a significant increase in our results of operations.

We have entered into lease transactions of travel centers with a special purpose entity. These lease transactions are evaluated for lease classification in accordance with Statement of Financial Accounting Standards (FAS) No. 13, "Accounting for Leases." We do not consolidate the lessor entity so long as the owners of the special purpose entity maintain a substantial residual equity investment of at least three percent that is at risk during the entire term of the lease, which has been the case to date. In December 2003, the FASB issued a revised FASB Interpretation No. (FIN) 46R "Consolidation of Variable Interest Entities." We must adopt this accounting guidance effective January 1, 2005. Under FIN 46R, we will be required to consolidate the lessor in our consolidated financial statements. Consolidating the lessor would affect our consolidated balance sheet by increasing property and equipment, other assets and long-term debt and would affect our consolidated statement of operations by reducing operating expenses, increasing depreciation expense and increasing interest expense. Consolidating the lessor will not result in a violation of our debt covenants or have an effect on our liquidity.

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OVERVIEW

We are 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 general motorists. Our network is the largest, and only nationwide, full-service travel center network in the United States. At December 31, 2003, our geographically diverse network consisted of 150 sites located in 41 states in the United States and in the province of Ontario, Canada. Our operations are conducted through three distinct types of travel centers:

- sites owned or leased and operated by us, which we refer to as company-operated sites;

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

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

Our travel centers are located at key points along the U.S. interstate highway system and in Canada, typically on 20- to 25-acres sites. Most of our network properties were developed more than 22 years ago when prime real estate locations along the interstate highway system were more readily available than they are today, making a network such as ours difficult to replicate. Operating under the "TravelCenters of America" and "TA" brand names, our nationwide network provides an advantage to long-haul trucking fleets by enabling them to route their trucks within a single network from coast to coast.

One of the primary strengths of our business is the diversity of our revenue sources. We have a broad range of product and service offerings, including diesel fuel and gasoline, truck repair and maintenance services, full-service restaurants, more than 20 different brands of fast food restaurants, travel and convenience stores and other driver amenities.

The non-fuel products and services we offer to our customers complement our fuel business and provide us a means to increase our revenues and gross profit despite price pressure on fuel as a result of competition and volatile crude oil and petroleum product prices. For the years ended December 31, 2001, 2002, and 2003, our revenues and gross profit were composed as follows:

                                                                           YEAR ENDED
                                                                          DECEMBER 31,
                                                                    ------------------------
                                                                     2001     2002     2003
                                                                    ------   ------   ------
Revenues:
    Fuel ........................................................    68.8%    66.2%    69.5%
    Non-fuel ....................................................    30.3%    33.0%    29.9%
    Rent and royalties ..........................................     0.9%     0.8%     0.6%
                                                                    -----    -----    -----
            Total revenues ......................................   100.0%   100.0%   100.0%
                                                                    =====    =====    =====
Gross profit (excluding depreciation):
    Fuel ........................................................    22.1%    21.1%    20.9%
    Non-fuel ....................................................    74.2%    75.7%    76.5%
    Rent and royalties ..........................................     3.7%     3.2%     2.6%
                                                                    -----    -----    -----
            Total gross profit (excluding depreciation) .........   100.0%   100.0%   100.0%
                                                                    =====    =====    =====

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COMPOSITION OF OUR NETWORK

The changes in the number of sites within our network and in their method of operation (company-operated, leased or franchisee-owned) are significant factors influencing the changes in our results of operations. The following table summarizes the changes in the composition of our network from December 31, 2000 through December 31, 2003:

                                              COMPANY-             FRANCHISEE-
                                              OPERATED     LEASED    OWNED     TOTAL
                                               SITES       SITES     SITES     SITES
                                               -----       -----     -----     -----
Number of sites at December 31, 2000(1) ..      122         26         9        157

2001 Activity:
   Sales of sites ........................       (3)        (1)       --         (4)
                                               ----        ---        --       ----
Number of sites at December 31, 2001 .....      119         25         9        153

2002 Activity:
   New Sites .............................        1         --         1          2
   Sales of sites ........................       (3)        --        --         (3)
   Conversions of leased sites to company-
      operated sites .....................        5         (5)       --         --
                                               ----        ---        --       ----
Number of sites at December 31, 2002 .....      122         20        10        152
                                               ----        ---        --       ----

2003 Activity:
   New sites .............................        2         --        --          2
   Sales of sites ........................       (3)        --        --         (3)
   Closed sites ..........................       (1)        --        --         (1)
   Conversions of leased sites to
      company-operated sites .............        6         (6)       --         --
                                               ----        ---        --       ----
Number of sites at December 31, 2003 .....      126         14        10        150
                                               ====        ===        ==       ====

(1) Includes one company-operated site held for development until its construction was completed during 2001.

SAME-SITE RESULTS COMPARISONS

As part of our discussion and analysis of operating results we refer to increases and/or decreases in results on a same-site basis. For purposes of these comparisons, we include a site in the same-site comparisons if it was open for business under the same method of operation (company-operated, leased or franchisee-owned) for the entire period under discussion in both years being compared. Sites are not excluded from the same-site comparisons as a result of expansions in the square footage of the sites or in the amenities offered at the sites.

RESULTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 2003 COMPARED TO YEAR ENDED DECEMBER 31, 2002

Revenues. Our consolidated revenues for the year ended December 31, 2003 were $2,176.2 million, which represents an increase from the year ended December 31, 2002 of $305.4 million, or 16.3%, that is primarily attributable to an increase in fuel revenue. It is important to understand that fuel revenue, due to the market pricing of these commodity products and the pricing arrangements we have with our fuel customers, is not a reliable metric for analyzing our relative results from period to period. Due to changes in crude oil and refined products market prices, our fuel revenue balances 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 margin per gallon.

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Fuel revenue for the year ended December 31, 2003 increased by $275.7 million, or 22.3%, as compared to the same period in 2002. The increase was attributable principally to increases in diesel fuel and gasoline average selling prices. Average diesel fuel and gasoline sales prices for the year ended December 31, 2003 increased by 25.7% and 23.2%, respectively, as compared to the same period in 2002, primarily reflecting increases in commodity prices. The fuel revenue increase also resulted from an increase in our total fuel sales volumes. Diesel fuel sales volumes decreased 8.6 million gallons, or 0.6%, while gasoline sales volumes increased 30.5 million gallons, or 19.0%, as compared to the same period in 2002. For the year ended December 31, 2003, we sold 1,341.1 million gallons of diesel fuel and 191.1 million gallons of gasoline, as compared to 1,349.7 million gallons of diesel fuel and 160.6 million gallons of gasoline for the year ended December 31, 2002. The diesel fuel sales volume decrease resulted from a 4.6% decrease in same-site diesel fuel sales volumes, partially offset by a net increase in sales volumes at company-operated sites we added to or eliminated from our network during 2002 and 2003 of 24.0 million gallons and an increase in our wholesale diesel fuel sales of 2.5 million gallons, or 1.2%. The gasoline sales volume increase was primarily attributable to a 9.3% increase in same-site gasoline sales volumes and also resulted from a 2.7 million gallon net increase in gasoline sales volume at company-operated sites we added to or eliminated from our network during 2002 and 2003, as well as an 11.6 million increase in wholesale gasoline sales volume. We believe the same-site diesel fuel sales volume decrease resulted from a relatively flat level of trucking activity in the United States in 2003 as compared to 2002, in conjunction with an increase in the level of freight carried by train instead of trucks and an increase in trucking fleets' self-fueling at their own terminals due to the wide fluctuation in diesel costs this year and the absolute high level of diesel fuel prices. We believe the same-site increase in gasoline sales volume resulted primarily from increased general motorist visits to our sites as a result of our gasoline and QSR offering upgrades and additions under our capital program, as well as our competitive retail gasoline pricing.

Non-fuel revenues for the year ended December 31, 2003 of $649.5 million reflected an increase of $32.2 million, or 5.2%, from the same period in 2002. The increase was primarily attributable to the net increase in sales at the company-operated sites added to, or eliminated from, our network during 2002 and 2003, and also to an increase in non-fuel sales on a same-site basis of 2.3% for the year ended December 31, 2003 versus the same period in 2002. We believe the same-site increase reflected increased customer traffic resulting, in part, from the significant capital improvements that we have made in the network under our capital investment program to re-image, re-brand and upgrade our travel centers.

Rent and royalty revenues for the year ended December 31, 2003 reflected a $2.5 million, or 15.8%, decrease from the same period in 2002. This decrease was primarily attributable to the rent and royalty revenue lost as a result of the conversions of leased sites to company-operated sites, partially offset by a 2.5% increase in same-site royalty revenue that results from increased levels of retail sales by our franchisees, and a 2.1% increase in same-site rent revenue.

Gross Profit (excluding depreciation). Our gross profit for the year ended December 31, 2003 was $501.5 million, compared to $481.2 million for the same period in 2002, an increase of $20.3 million, or 4.2%. The increase in our gross profit was due to increased total fuel sales volumes, increased non-fuel sales, increased average total fuel margin per gallon and higher non-fuel profit margin percentage, partially offset by the decline in rent and royalty revenues. The increase in average total fuel margin per gallon resulted from unusually high margins in certain months in the first half of 2003 and is not indicative of an expected trend. On the contrary, fuel margins declined in the second half of 2003 and we expect that trend to continue into 2004.

Operating and Selling, General and Administrative Expenses. Operating expenses included the direct expenses of company-operated sites and the ownership costs of leased sites. Selling, general and administrative expenses included corporate overhead and administrative costs.

Our operating expenses increased by $9.8 million, or 3.0%, to $342.0 million for the year ended December 31, 2003 compared to $332.2 million for the same period in 2002. This increase was attributable to an $8.8 million net increase resulting from company-operated sites we added to our network or eliminated from our network during 2002 and 2003, and a 1.2% increase in operating expenses on a same-site basis. The increases in

23

operating expenses were partially offset by the recognition of a $3.75 million cash receipt upon the settlement of a legal claim in the fourth quarter of 2003. On a same-site basis, operating expenses as a percentage of non-fuel revenues for the year ended December 31, 2003 were 52.5%, compared to 53.0% for the same period in 2002, reflecting the results of our cost-control measures at our sites.

Our selling, general and administrative expenses for the year ended December 31, 2003 were $40.5 million, which reflected an increase of $2.7 million, or 7.2% from the same period in 2002. This increase is primarily attributable to increased insurance premiums and increased legal and audit fees, as well as higher personnel costs driven largely by increased benefit costs.

Depreciation and Amortization Expense. Depreciation and amortization expense for the year ended December 31, 2003 was $60.4 million, compared to $60.3 million for the same period in 2002. This increase of $0.1 million, or 0.1%, was attributable to depreciation of an increased level of depreciable assets as compared to 2002 and an increase of $0.4 million related to asset retirement obligations, partially offset by a $1.2 million decrease in amortization of intangible assets and a $0.6 million decrease in the amount of impairment charges recognized in 2003 as compared to 2002.

Income from Operations. We generated income from operations of $60.0 million for the year ended December 31, 2003, compared to income from operations of $51.9 million for the same period in 2002. This increase of $8.0 million, or 15.5%, was primarily attributable to the increase in gross profit that was partially offset by the increase in operating expenses and selling, general and administrative expenses. The $0.4 million increase in gains on sales of property and equipment also contributed to the increase in operating income.

Interest and Other Financial Costs--Net. Interest and other financial costs, net, for the year ended December 31, 2003 decreased by $4.5 million, or 8.8%, compared to 2002. This decrease resulted from the decline in interest rates during 2002 and 2003 as well as from the decrease in our indebtedness.

Income Taxes. Our effective income tax rates for the years ended December 31, 2003 and 2002 were 34.0% and a 3.2% benefit, respectively. These rates differed from the federal statutory rate due primarily to state income taxes and nondeductible expenses, partially offset by the effect of certain tax credits. The change between years in the effective tax rate was primarily the result of the change from a relatively low level of pre-tax income earned in 2002, as well as an adjustment in 2002 of estimated prior year tax liabilities, to a higher level of taxable income in 2003. As a result of the relatively low level of pre-tax earnings in 2002, permanent differences had a larger effect on the effective rate in 2002 than in 2003. We have not recognized a valuation allowance for our net deferred tax assets, as we believe we are more likely than not to realize those assets. We need to generate $53.0 million of future taxable income to fully realize our net deferred tax assets. The existing level of pre-tax earnings generated in 2003 would be sufficient to generate enough future taxable income to fully realize our net deferred tax assets. The following table sets forth the historical relationship between pretax earnings for financial reporting purposes and taxable income for income tax purposes.

                                       YEAR ENDED DECEMBER 31,
                                       -----------------------
                                        2001    2002     2003
                                       ------  ------   ------
                                       (IN MILLIONS OF DOLLARS)
Pretax earnings (loss) for financial
      reporting purposes ...........   $(17.6)  $ 1.2    $13.5
State income tax expense ...........     (1.6)   (1.2)    (1.1)
Accelerated tax depreciation .......    (11.4)   (1.5)    (5.3)
Benefit of tax credits .............      0.9     0.6      0.6
Non-deductible expenses ............      1.6     0.5      0.7
Temporary differences, net .........     (6.9)    5.1     (0.4)
                                       ------   -----    -----
Federal taxable income (loss) ......   $(35.0)  $ 4.7    $ 8.0
                                       ======   =====    =====

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Of our total net operating loss carryforwards at December 31, 2003 of $65.0 million, the $37.0 million remaining carryforward generated in 2000 expires in 2020 and the $28.0 million carryforward generated in 2001 expires in 2021. United States tax law limits the amount of the $49.3 million net operating loss carryforward we generated in 2000 that can be utilized each year to approximately $12 million (unused limitation can be carried forward). As a total of $12.7 million of the 2000 net operating loss has been utilized through 2003, the usage of the net operating loss generated in 2000 will be limited to approximately $35.3 million for 2004. We do not anticipate a need to use more than this amount in our federal tax return for 2004. Use of the net operating loss generated in 2001 is unlimited.

YEAR ENDED DECEMBER 31, 2002 COMPARED TO YEAR ENDED DECEMBER 31, 2001

Revenues. Our consolidated revenues for the year ended December 31, 2002 were $1,870.9 million, which represents a decrease from the year ended December 31, 2001 of $63.7 million, or 3.3%, that is primarily attributable to a decrease in fuel revenue.

Fuel revenue for the year ended December 31, 2002 decreased by $93.8 million, or 7.0%, as compared to the same period in 2001. The decrease was attributable principally to decreases in diesel fuel and gasoline average selling prices. Average diesel fuel and gasoline sales prices for the year ended December 31, 2002 decreased by 8.4% and 7.4%, respectively, as compared to the same period in 2001, primarily reflecting decreases in commodity prices and also reflecting our more competitive retail fuel pricing. The fuel revenue decline also resulted from a decrease in our diesel fuel sales volumes that was partially offset by an increase in gasoline sales volumes. Diesel fuel and gasoline sales volumes for the year ended December 31, 2002 decreased 1.4% and increased 27.5%, respectively, as compared to the same period in 2001. For the year ended December 31, 2002, we sold 1,349.7 million gallons of diesel fuel and 160.6 million gallons of gasoline, as compared to 1,369.3 million gallons of diesel fuel and 125.9 million gallons of gasoline for the year ended December 31, 2001. The diesel fuel sales volume decrease resulted from a 0.9% decrease in same-site diesel fuel sales volumes and a net reduction in sales volumes at sites we added to or eliminated from our network during 2001 and 2002 of 11.6 million gallons, partially offset by an increase in our wholesale diesel fuel sales of 1.6 million gallons, or 2.7%. The gasoline sales volume increase was primarily attributable to a 20.2% increase in same-site gasoline sales volumes and also resulted from a 2.8 million net increase in gasoline sales volume at company-operated sites we added to or eliminated from our network during 2001 and 2002, as well as an 8.2 million increase in wholesale gasoline sales volume. We believe the same-site diesel fuel sales volume decrease resulted from a decline in trucking activity in 2002 as compared to 2001, resulting from the general condition of the United States economy, and occurred in spite of our continued emphasis on competitively pricing our diesel fuel. The increased level of wholesale diesel fuel sales volumes reflects our renewed efforts in this area made possible by software and control process improvements we implemented during 2002. We believe the same-site increase in gasoline sales volume resulted primarily from increased general motorist visits to our sites as a result of our gasoline and QSR offering upgrades and additions under our capital program, as well as our more competitive retail gasoline pricing.

Non-fuel revenues for the year ended December 31, 2002 of $617.3 million reflected an increase of $32.0 million, or 5.5% from the same period in 2001. The increase was primarily attributable to an increase in non-fuel sales on a same-site basis of 3.9% for the year ended December 31, 2002 versus the same period in 2001. We believe the same-site increase reflected increased customer traffic resulting, in part, from the significant capital improvements that we have made in the network under our capital investment program to re-image, re-brand and upgrade our travel centers. The increase was also attributable to the net increase in sales at the company-operated sites added to, or eliminated from, our network during 2001 and 2002.

Rent and royalty revenues for the year ended December 31, 2002 reflected a $2.0 million, or 11.2%, decrease from the same period in 2001. This decrease was primarily attributable to the rent and royalty revenue lost as a result of the conversions of leased sites to company-operated sites, partially offset by a 2.0% increase in same-site royalty revenue that results from increased levels of retail sales by our franchisees, and a 3.3% increase in same-site rent revenue.

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Gross Profit (excluding depreciation). Our gross profit for the year ended December 31, 2002 was $481.2 million, compared to $466.9 million for the same period in 2001, an increase of $14.3 million, or 3.1%. The increase in our gross profit was primarily due to increased margin resulting from the increased level of non-fuel sales, partially offset by the decline in rent and royalty revenues and a decline in fuel margin that resulted from decreased diesel fuel sales volumes and a 2.6% decrease in fuel margin per gallon.

Operating and Selling, General and Administrative Expenses. Operating expenses included the direct expenses of company-operated sites and the ownership costs of leased sites. Selling, general and administrative expenses included corporate overhead and administrative costs.

Our operating expenses increased by $6.6 million, or 2.0%, to $332.2 million for the year ended December 31, 2002 compared to $325.7 million for the same period in 2001. This increase was attributable to a $4.4 million net increase resulting from company-operated sites we added to our network or eliminated from our network during 2001 or 2002, and a 0.6% increase in operating expenses on a same-site basis. On a same-site basis, operating expenses as a percentage of non-fuel revenues for the year ended December 31, 2002 were 53.1%, compared to 54.8% for the same period in 2001, reflecting reduced utility costs and the results of our cost-control measures at our sites.

Our selling, general and administrative expenses for the year ended December 31, 2002 were $37.8 million, which reflected a decrease of $0.9 million, or 2.2% from the same period in 2001.

Depreciation and Amortization Expense. Depreciation and amortization expense for the year ended December 31, 2002 was $60.3 million, compared to $64.3 million for the same period in 2001. This decrease of $4.0 million, or 6.3%, was attributable to a $1.8 million decrease in amortization of intangible assets, a $1.0 million decrease in the amount of impairment charges recognized in 2002 as compared to 2001 and the change we made in depreciable lives of certain assets effective April 1, 2001. During the year ended December 31, 2002 we recognized impairment charges aggregating $1.5 million with respect to certain of the sites we were holding for sale as a result of reductions in the estimated sales proceeds of certain of those sites. During 2002, we sold four of the facilities that we were holding for sale as of December 31, 2001. On January 3, 2003, we sold the one remaining site held for sale that had been impaired. The other three sites we had been holding for sale were not sold within the one-year period required by FAS 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," and so were no longer accounted for as assets to be disposed of but as assets held for use. In the fourth quarter of 2002, we recognized a charge to depreciation expense of $0.2 million for the depreciation expense related to these unsold sites that had not been recognized during 2002 when these sites were being accounted for as held for sale.

As a result of adopting FAS 142, "Goodwill and Other Intangible Assets," effective January 1, 2002, our goodwill and trademark intangible assets are no longer amortized. Pursuant to FAS 142, intangible assets must be periodically tested for impairment. During the first quarter of 2002, we completed our transitional impairment review of our trademark intangible assets and determined that there was no impairment. During the second quarter of 2002 we completed the transitional impairment review of goodwill and determined that there was no impairment. We also adopted FAS 144 effective January 1, 2002. The adoption of FAS 144 did not have a material effect on our consolidated results of operations.

Income from Operations. We generated income from operations of $51.9 million for the year ended December 31, 2002, compared to income from operations of $39.9 million for the same period in 2001. This increase of $12.0 million, or 30.0%, was primarily attributable to the increase in gross profit that was partially offset by the increase in operating expenses. The net decrease in depreciation and amortization expense and in gains on sales of property and equipment also contributed to the increase in operating income.

Interest and Other Financial Costs--Net. Interest and other financial costs, net, for the year ended December 31, 2002 decreased by $6.5 million, or 11.2%, compared to 2001. This decrease resulted from the decline in interest rates during 2001 and 2002 as well as from the decrease in our indebtedness.

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Income Taxes. Our effective income tax benefit rates for the years ended December 31, 2002 and 2001 were 3.2% and 42.8%, respectively. These rates differed from the federal statutory rate due primarily to state income taxes and nondeductible expenses, partially offset by the effect of certain tax credits. The change between years in the effective tax rate was primarily the result of the swing from a taxable loss incurred in 2001 as compared to a relatively low level of pre-tax income earned in 2002, as well as an adjustment in 2002 of estimated prior year tax liabilities. As a result of the relatively low level of pre-tax earnings in 2002, permanent differences had a larger effect on the effective rate in 2002 than in 2001.

LIQUIDITY AND CAPITAL RESOURCES

Our principal liquidity requirements are to meet our working capital and capital expenditure needs, including expenditures for acquisitions and expansion, and to service the payments of principal and interest on outstanding indebtedness. Our principal source of liquidity to meet these requirements is operating cash flows. The revolving credit facility of our Senior Credit Facility provides us a secondary source of liquidity, primarily to better match the timing of cash expenditures to the timing of our cash receipts primarily due to effects of changes in petroleum product prices, the uneven level of capital expenditures throughout the year and the timing of debt and interest payments. The primary risks we face with respect to the expected levels of operating cash flows are a decrease in the demand of our customers for our products and services, increases in crude oil and/or petroleum product prices and increases in interest rates. It is reasonably likely that the United States economy could either worsen, or make a slower recovery than expected. Similarly, it is reasonably likely that interest rates and petroleum product prices will increase during 2004 from levels that existed during 2003, possibly to levels greater than that contemplated in our expectations. If the economy stagnates or worsens, our customers could be adversely affected, which could further intensify competition within our industry and reduce the level of cash we could generate from our operations. A one-percentage point increase in interest rates increases our annual cash outlays by approximately $3.9 million. A significant increase in diesel fuel and gasoline prices increases our cash investment in working capital and can also have a depressing effect on our sales volumes and fuel margins per gallon. The primary risk we face with respect to the expected availability of borrowing under our revolving credit facility are the limitations imposed upon us by the covenants contained in our Senior Credit Facility. Should our level of sales volume or interest rate and petroleum products price levels vary adversely and significantly from expectations, it is reasonably likely that we would need to reduce our capital expenditures or be effectively barred from further revolving credit facility borrowings in order to maintain compliance with our debt covenants, in the absence of a debt covenant waiver or an amendment to the related agreement. We were in compliance with all of our debt covenants throughout 2003 and as of December 31, 2003, and we expect to remain in compliance with all of our debt covenants throughout 2004. See "Adjusted EBITDA and Debt Covenant Compliance" below for further discussion.

We anticipate that we will be able to fund our 2004 working capital requirements and capital expenditures primarily from funds generated from operations, supplemented, to the extent necessary, from borrowings under our revolving credit facility. Our long-term liquidity requirements, including capital expenditures, are expected to be financed by a combination of internally generated funds, borrowings and other sources of external financing as needed. Our ability to fund our capital investment requirements, interest and principal payment obligations and working capital requirements and to comply with all of the financial covenants under our debt agreements depends on our future operations, performance and cash flow. These are subject to prevailing economic conditions and to financial, business and other factors, some of which are beyond our control.

The amounts we have invested for capital improvements have declined since 2000. The declining level of cash investments is in line with our development plans and reflects our response to the slowing and then stagnant U.S. economy in 2000 through 2003. Our capital investment program to re-image, rebrand and upgrade our network has been substantially completed. Since 1997, we have invested approximately $465 million to maintain, re-image, rebrand, upgrade and expand our network. We also invested $115 million to acquire the travel center networks of Burns Bros. and Travel Ports during that period. We now are positioned to spend approximately $15 million to $25 million annually for sustaining capital projects and then to discriminately choose the growth-related projects that will compose the remainder of our annual capital expenditure plans. These growth-related projects include expenditures

27

to construct and/or acquire additional sites, re-image sites, add additional non-fuel offerings, such as truck maintenance and repair shops and QSRs, at existing sites, and purchase, install and upgrade our information systems. The expected level of capital expenditures, including business acquisitions but net of proceeds from asset sales, for 2004 is approximately $41 million. Given our forecasted level of cash flows from operations for 2004 and our planned level of capital expenditures and barring a downturn in the U.S. economy or a significant event or series of events affecting petroleum supplies and/or prices, we expect that during 2004 we will make our scheduled debt payments of $3.4 million, make a mandatory term loan prepayment of $12.7 million and will also repay an additional amount of outstanding borrowings under our term loan and revolving credit facilities.

HISTORICAL CASH FLOWS

Net cash provided by operating activities totaled $77.3 million in 2003, $75.6 million in 2002 and $30.4 million in 2001. The $1.7 million increase in cash from operations in 2003 as compared to 2002 was primarily due to the $8.0 million increase in operating income and $4.6 million decrease in interest expense, partially offset by a $7.1 million reduction in cash generated from working capital changes. The $45.2 million increase in cash provided by operations in 2002 as compared to 2001 primarily resulted from a $12.0 million increase in operating income, a $6.5 million decrease in interest and other financial costs and a $24.2 million increase in cash from working capital. In 2002, we generated $12.0 million of cash from working capital while in 2001 we invested $12.2 million of cash in working capital.

Net cash used in investing activities for 2003 was $50.5 million, as compared to $42.1 million in 2002 and $46.2 million in 2001. During 2003, we invested $10.2 million to acquire two operating travel centers and to convert six leased sites to company-operated sites. In 2003 we also generated proceeds from asset sales of $3.9 million and invested $44.2 million of capital expenditures in our network, including the purchase of a parcel of land on which to construct a future travel center. During 2002, we made capital expenditures of $42.6 million, invested $4.2 million to convert five leased sites to company-operated sites and generated proceeds from the sales of assets of $4.8 million. During 2001, we invested $54.5 million of capital expenditures into our network and generated $8.3 million of proceeds from sales of assets for net capital expenditures of $46.2 million.

During 2003, we used $26.1 million of cash in financing activities, primarily paying down our term loan and revolving loan facility by $23.3 million. We used $39.3 million of cash in financing activities during 2002, primarily to reduce our debt. We made net repayments of outstanding borrowings under our revolving credit facility of $21.5 million and made scheduled debt payments of $3.4 million. We also reduced the amount of our outstanding checks in excess of funds on deposit by $14.1 million. For the year ended December 31, 2001, cash flows provided by financing activities were $6.7 million, resulting from an increase in the amount of our outstanding checks in excess of funds on deposit. During 2001, we made net borrowings of $3.6 million under our revolving credit facility, paid $3.3 million of costs of our merger and recapitalization transactions of November 2000, and had net payments of $0.3 million for other financing activities.

DESCRIPTION OF INDEBTEDNESS

The Senior Credit Facility provides senior secured financing of up to $428.0 million, consisting of a $328.0 million term loan facility with a maturity of eight years and a $100.0 million revolving credit facility with a maturity of six years. We have pledged substantially all of our assets as collateral under the Senior Credit Facility. At December 31, 2003, we had outstanding borrowings and issued letters of credit of $13.6 million and $21.8 million, respectively, leaving $64.6 million of our $100 million revolving credit facility available for borrowings. The term loan facility and the revolving credit facility bear interest at a rate equal to:

- in the case of the revolving credit facility, Adjusted LIBOR plus a margin of 2.75% or, at our election, the alternate base rate plus a margin of 1.75%; or

- in the case of the term loan facility, Adjusted LIBOR plus a margin of 3.25% or, at our election, the alternate base rate plus a margin of 2.25%.

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In addition to paying interest on outstanding principal under the Senior Credit Facility, we are required to pay a commitment fee to the lenders under the revolving credit facility equal to 0.50% per year of the unused commitments thereunder.

The Senior Credit Facility obligates us to make annual mandatory prepayments of term loan indebtedness equal to one-half of the Excess Cash Flow amount (as defined in the agreement) generated in the previous year. For the year ended December 31, 2003 we generated approximately $25.3 million of Excess Cash Flow and, therefore, are obligated to prepay $12.7 million of the term loan by April 15, 2004. We will use borrowings under our revolving credit facility to fund this prepayment. This $12.7 million mandatory prepayment will reduce the amounts otherwise scheduled to be repaid in each quarter after the prepayment, on a pro rata basis. After giving effect to this prepayment, the term loan facility will amortize each year in quarterly amounts in the following approximate aggregate principal amounts for each year set forth below.

YEAR ENDED                                        PRINCIPAL
DECEMBER 31,                                      REPAYMENTS
------------                                      ----------
2004 ........................................     $ 15,724,000
2005 ........................................        3,036,000
2006 ........................................        3,036,000
2007 ........................................       74,381,000
2008 ........................................      214,035,000
                                                  ------------
Total .......................................     $310,212,000
                                                  ============

Principal amounts outstanding under the revolving credit facility are due and payable in full at maturity in November 2006.

The Senior Credit Facility contains a number of covenants that, among other things, restrict our ability to dispose of assets, incur additional indebtedness, incur guarantee obligations, repay other indebtedness, make certain restricted payments and dividends, create liens on assets, make investments, loans or advances, make certain acquisitions, engage in mergers or consolidations, engage in material businesses other than our current businesses, make capital expenditures, enter into sale and leaseback transactions, or engage in certain transactions with affiliates.

We have outstanding at December 31, 2003, Senior Subordinated Notes due in 2009 with an aggregate face amount of $190 million. The Senior Subordinated Notes due 2009 were issued in November 2000. Our obligations under the notes are junior in right of payment to all of our existing and future senior indebtedness, including all indebtedness under the Senior Credit Facility. The indenture restricts, among other things, our ability to incur additional indebtedness, issue shares of disqualified stock and preferred stock, pay dividends or make certain other restricted payments and enter into certain transactions with affiliates, and prohibits certain restrictions on the ability of our subsidiaries to pay dividends or make certain payments to us, and contains certain restrictions on our ability to merge or consolidate with any other person or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of our assets.

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.

As of December 31, 2003, $4.1 million was outstanding under a note payable by us to a former operator of a site, which we refer to as the Santa Nella Note. The note bears interest at an annual rate of 5%, requires quarterly principal and interest payments of $98,000 through October 1, 2018 and is secured by the real estate and improvements located at the site.

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ADJUSTED EBITDA AND DEBT COVENANT COMPLIANCE

Adjusted EBITDA, as used here, is based on the definition of "EBITDA" in our bank debt agreement and consists of net income plus the sum of (a) income taxes, (b) interest expense, net, (c) depreciation, amortization and other noncash charges, (d) transition expense, (e) extraordinary losses and cumulative effects of accounting changes and (f) the costs of the merger and recapitalization transactions. We have included this information concerning Adjusted EBITDA because Adjusted EBITDA is a primary component for calculating the financial ratio covenants in our debt agreements. We also use Adjusted EBITDA as a basis for determining bonus payments to our corporate and site-level management employees and as a key component in the formula for calculating the fair value of our redeemable common stock and stock options. Adjusted EBITDA should not be considered in isolation from, or as a substitute for, net income, income from operations, cash flows from operating activities or other consolidated income or cash flow statement data prepared in accordance with generally accepted accounting principles. While the non-GAAP measures "EBITDA" and "Adjusted EBITDA" are frequently used by other companies as measures of operations and/or ability to meet debt service requirements, Adjusted EBITDA as we use the term is not necessarily comparable to similarly titled captions of other companies due to differences in methods of calculation.

We consider our Senior Credit Facility to be a material agreement. A majority of our outstanding indebtedness has been borrowed under the Senior Credit Facility. Further, the Senior Credit Facility requires us to maintain compliance with a variety of affirmative and negative covenants which primarily act to limit the types of business activities we can undertake; limits the amounts we can spend for items such as capital expenditures, dividends and distributions, investments, operating leases, etc.; and limits the amount of additional indebtedness we can incur and the liens that can be placed on our assets. We have maintained compliance with all of these covenants for all periods presented and expect to remain in compliance with all of the debt covenants to which we are subject through 2004. Of the many debt covenants to which we are subject, there are two primary financial ratio covenants against which our quarterly results are compared. These two key debt covenant financial ratios are (a) an interest expense coverage ratio and (b) a leverage ratio. The interest expense coverage ratio is calculated by dividing Adjusted EBITDA for the trailing four quarters by interest expense (excluding the interest expense related to the amortization of debt discount and deferred financing costs) for the trailing four quarters. The leverage ratio is calculated by dividing net debt by Adjusted EBITDA for the trailing four quarters. Net debt is calculated by subtracting from total debt the cash balance in excess of $2.5 million. Failure to meet either of the financial ratio debt covenants could result in the lenders under our Senior Credit Facility declaring our indebtedness under the Senior Credit Facility immediately due and payable. However, the more likely consequence would be the negotiation of a waiver and/or amendment of the covenants, which is reasonably likely to require us to pay a significant amount of fees to the lenders and legal counsel and to further limit our ability to make cash disbursements, such as for capital expenditures. The following table sets forth the calculation of Adjusted EBITDA and information related to the debt covenant financial ratios.

                                                                                YEAR ENDED DECEMBER 31,
                                                                           ----------------------------------
                                                                             2001         2002         2003
                                                                           ----------------------------------
                                                                         (IN THOUSANDS OF DOLLARS, EXCEPT RATIOS)
Net income (loss) ......................................................   $ (10,054)   $   1,271    $  8,891
Adjustments to reconcile net income (loss) to Adjusted EBITDA:
    Cumulative effect of a change in accounting principle ..............          --           --         253
    Provision (benefit) for income taxes ...............................      (7,521)         (39)      4,719
    Interest and other financial costs, net ............................      57,924       51,423      46,878
    Depreciation and amortization expense ..............................      64,347       60,301      60,375
    Other non-cash charges (credits), net ..............................         493          605         805
                                                                           ---------    ---------    --------
Adjusted EBITDA ........................................................   $ 105,189    $ 113,561    $121,921
                                                                           =========    =========    ========

30

                                                                     YEAR ENDED DECEMBER 31,
                                                                   2001        2002       2003
                                                                   ----        ----       ----
                                                              (IN THOUSANDS OF DOLLARS, EXCEPT RATIOS)
Interest expense coverage ratio:
    Actual ratio at period end .................................      1.94x      2.42x      2.91x
    Required ratio at period end (no less than) ................      1.60x      1.80x      2.00x
    Minimum amount of Adjusted EBITDA to meet required ratio      $ 86,537   $ 84,625   $ 83,913

Leverage ratio:
    Actual ratio at period end .................................      5.09x      4.55x      4.04x
    Required ratio at period end (no greater than) .............      5.25x      4.65x      4.15x
    Minimum amount of Adjusted EBITDA to meet required ratio....  $101,884   $111,192   $118,767

OFF-BALANCE SHEET ARRANGEMENTS

On September 9, 1999, we entered into a master lease program with a lessor that has been used to finance the construction of eight travel centers on land we own. The initial term of the lease expires on September 9, 2006, at which time, if the lease is not renewed and extended, we have the option to purchase the improvements for approximately $58.2 million. Alternatively, we could return the travel centers to the lessor. In this case, we would be required to make a residual value guarantee payment to the lessor of $44.1 million. However, the lessor would be required to remit to us any portion of the payment which, when combined with the net sale proceeds of the property, exceeded the lessor's $58.2 million investment in the property.

These lease transactions were evaluated for lease classification in accordance with FAS 13. We have not consolidated the lessor because the owners of the lessor have maintained a substantial residual equity investment of at least three percent that is at risk during the entire term of the lease. In December 2003, the FASB issued revised FIN 46R "Consolidation of Variable Interest Entities." We must adopt this accounting guidance effective January 1, 2005. Under FIN 46R, we will be required to consolidate the lessor in our consolidated financial statements. Consolidating the lessor would affect our consolidated balance sheet by increasing property and equipment, other assets and long-term debt and would affect our consolidated statement of operations by reducing operating expenses, increasing depreciation expense and increasing interest expense. Consolidating the lessor will not result in a violation of our debt covenants or have an effect on our liquidity.

Under the related lease agreement, our quarterly lease payments are based on the capitalization and weighted-average cost of capital of the lessor. The lessor was initially capitalized with $2.4 million of equity and entered into a loan and security agreement through which it borrowed $69.7 million. The lessor's equity holders receive a return on their contributed capital equal to LIBOR plus 10.75%, while the interest rate for the indebtedness is equal to LIBOR plus a spread that will decrease from 4.0% to 3.0% as our leverage ratio (as defined in our bank debt agreement) improves. Our quarterly rent payments are calculated to equal the quarterly interest expense, return on equity and debt amortization requirements of the lessor, based on a straight-line amortization schedule that ensures 20% of the underlying indebtedness is repaid by the expiration of the initial lease term on September 9, 2006. We do not guarantee the indebtedness of the lessor and the lessor's creditors have no recourse against us beyond our obligation to continue our rent payments.

31

The following are additional amounts related to the master lease program (all amounts are as of or for the year ended December 31, 2003):

- The lessor's total capitalization of $66.5 million consisted of $64.1 million of a term loan secured by the related travel centers assets and underlying leasehold interests, and $2.4 million of general and limited partners' contributed capital.

- The historical cost of the lessor's assets related to the master lease program consisted of $67.5 million of tangible fixed assets, $1.7 million of capitalized interest and $2.9 million of deferred financing costs.

- During 2003, we recognized lease rent expense under this master lease program of $5.4 million. Excluding this rent expense, these eight sites generated income of $11.4 million for the year ended December 31, 2003.

- The depreciation expense and interest expense we would have recognized with respect to these leased travel centers if we had capitalized them and not leased them was approximately $5.1 million and $3.9 million, respectively, for the year ended December 31, 2003.

SUMMARY OF CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

The following table summarizes our expected obligations to make future required payments under various types of agreements.

                                                         PAYMENTS DUE BY PERIOD
                                           ------------------------------------------------------
   CONTRACTUAL OBLIGATIONS                 TOTAL       2004    2005-2006  2007-2008   THEREAFTER
   -----------------------                 -----       ----    ---------  ---------  ------------
                                                    (IN MILLIONS OF DOLLARS)
Long-term debt(1) ................         $517.9     $ 15.9     $ 20.1     $288.9     $193.0
Operating leases(2) ..............          198.3       20.2       79.8       16.4       81.9
Other long-term liabilities(3) ...            5.5         --        2.5        1.0        2.0
                                           ------     ------     ------     ------     ------
Total contractual cash obligations         $721.7     $ 36.1     $102.4     $306.3     $276.9
                                           ======     ======     ======     ======     ======

(1) Excludes interest.

(2) Assumes that the master lease facility is not renewed at the expiration of the initial lease term and we would make a residual value guarantee payment of $44.1 million.

(3) We have an obligation to make future payments to redeem common stock of certain of our management employees upon the death, disability or scheduled retirement of the employees. Neither the timing nor the amounts of any such payments can be accurately estimated and no amount for these payments is included in the table above. As of December 31, 2003, the aggregate amount of these future redemption payments, assuming our Board of Directors would not modify the formula for calculating the fair market value per share, would be approximately $5.3 million.

Our only commercial commitments of any significance as of December 31, 2003 were the $21.8 million of standby letters of credit we had outstanding.

LEVERAGED 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.

32

- TCA Acquisition Corporation issued 6,456,698 shares of common stock to Oak Hill and the Other Investors for proceeds of $205.0 million and then merged with and into us. We incurred $3.0 million 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 $15.0 million that were retained by continuing stockholders, and cancelled all outstanding common stock options and warrants, for cash payments totaling $263.2 million.

- 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 $220.0 million. The transactions described above, which resulted in a change of control of 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 $179.0 million 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. Based on a limited appraisal of our owned network sites performed in connection with the merger and recapitalization transactions, the estimated fair value of our sites at June 15, 2000 was approximately $1.05 billion.

ENVIRONMENTAL MATTERS

We own and operate underground storage tanks and aboveground storage tanks at company-operated sites and leased sites that must comply with Environmental Laws. We have estimated the current ranges of remediation costs at currently active sites and what we believe will be our ultimate share for those costs and, as of December 31, 2003, we had a reserve of $4.6 million for unindemnified environmental matters for which we are responsible and a receivable for estimated recoveries of these estimated future expenditures of $0.9 million. We estimate that the cash outlays related to the matters for which we have accrued this reserve will be approximately $3.2 million in 2004; $0.7 million in 2005; $0.3 million in 2006; $0.3 million in 2007; $0.1 million in 2008 and $0.1 million thereafter. 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 $2.6 million of cash, funded an escrow account with $5.4 million to be drawn by us as we incur related remediation costs, and purchased insurance policies that cap our total future expenditures 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 $8.2 million, which amount we expect will be fully covered by the cash received from Unocal and reimbursements from state tank funds. The liability we assumed was recorded in 2004. We estimate that the cash outlays related to the

33

matters for which we assumed responsibility in January 2004 will be approximately $1.1 million in 2004; $2.2 million in 2005; $1.5 million in 2006; $1.2 million in 2007; $0.9 million in 2008 and $1.3 thereafter. 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. We have just recently assumed responsibility for these matters and expect that our knowledge of the specific facts, related costs and timing of payments for each site will improve over time. We have obtained insurance of up to $35.0 million for known and up to $40.0 million for unknown environmental liabilities, subject, in each case, to certain limitations. While it is not possible to quantify with certainty our environmental exposure, we believe that the potential liability, beyond that considered in the reserve, 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 our liquidity. For further discussion of environmental matters, see the "Business - Regulation" section of this annual report and the footnotes to the audited consolidated financial statements included elsewhere in this annual report.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

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 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 is installed. We will 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 deferred tax benefit of $164,000).

In December 2003, the FASB issued revised FIN 46R, "Consolidation of Variable Interest Entities." We must adopt this accounting guidance effective January 1, 2005. Under FIN 46R, we will be required to consolidate into our consolidated financial statements the entity that is the lessor under our master lease program covering eight of our sites. Consolidating the lessor would affect our consolidated balance sheet by increasing property and equipment, other assets and long-term debt and would affect our consolidated statement of operations by reducing operating expenses, increasing depreciation expense and increasing interest expense. Consolidating the lessor will not result in a violation of our debt covenants or have an effect on our liquidity. We are also evaluating whether FIN 46R will require consolidation of our franchisees, although we currently believe we will not be required to do so.

In November 2002, the FASB issued FIN 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others." FIN 45 requires that, at the inception of a guarantee, the guarantor recognize a liability for the noncontingent portion of that guarantee, initially measured at fair value. FIN 45 also requires certain disclosures about guarantees. The initial recognition provisions of FIN 45 must be applied only on a prospective basis for guarantees issued after December 31, 2002, while we are required to adhere, and have adhered, to the disclosure requirements in our financial statements. While we offer a warranty of our workmanship in our truck maintenance and repair shops, the annual warranty expense and corresponding liability are immaterial. We do not issue or provide guarantees and the initial recognition of FIN 45 did not have a material effect on our results of operations or financial position. Adopting FIN 45 did not affect our liquidity.

In June 2002, the FASB issued FAS 146, "Accounting for Costs Associated with Exit or Disposal Activities." This new accounting standard significantly changes how entities account for exit and disposal activities, including restructuring activities. The provisions of FAS 146 are effective for exit or disposal activities initiated after December 31, 2002. Such activities, and the related costs, have not been significant for us in previous years and we do not expect them to be in future years.

34

In December 2002, the FASB issued FAS 148, "Accounting for Stock-Based Compensation - Transition and Disclosure (an amendment of FAS 123)." FAS 148 provides alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation and also amends the disclosure requirements of FAS 123 to require prominent disclosures about the method of accounting for stock-based employee compensation and the effect of the chosen method on reported results. We have not elected to change to the fair value based method of accounting for stock-based employee compensation and have made the required disclosures in our consolidated financial statements. For further discussion of stock-based employee compensation, see the footnotes to the consolidated financial statements included elsewhere in this annual report.

In May 2003, the FASB issued FAS 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity." FAS 150 was effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective, for companies such as ours that do not have equity securities traded on an exchange, for fiscal periods beginning after December 15, 2003. FAS 150 requires the balance of mandatorily redeemable stock be presented as a liability instead of as an item between liabilities and equity. FAS 150 also requires recognition as interest expense each quarter any dividends paid with respect to the mandatorily redeemable shares and the change during that quarter in the estimated amount of cash payments that would be necessary to repurchase the mandatorily redeemable stock. Adopting FAS 150 will not affect our cash payments or liquidity and is not expected to materially affect our financial position or results of operation.

In May 2002, the FASB issued FAS 145, "Rescission of SFAS Nos. 4, 44, and 64, Amendment of SFAS 13, and Technical Corrections as of April 2002." The provisions of FAS 145 related to the rescission of FAS 4 are effective for fiscal years beginning after May 15, 2002, while provisions related to FAS 13 are effective for transactions occurring after May 15, 2002, and all remaining provisions of FAS 145 are effective for financial statements issued on or after May 15, 2002. FAS 145 eliminates FAS 4, and as a result, gains and losses from extinguishment of debt should be classified as extraordinary items only if they meet the criteria of APB 30. FAS 145 also rescinded FAS 64, which was an amendment to FAS 4. FAS 145 amends FAS 13, requiring lease modifications that have economic effects similar to sale-leaseback transactions to be accounted for in the same manner as sale-leaseback transactions. The adoption of the applicable provisions of FAS 145 did not have an effect on our financial statements, however, it led to the reclassification in 2003 of extraordinary items related to the extinguishment of debt recorded in 2000.

FORWARD-LOOKING STATEMENTS

This annual report includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to our future prospects, developments and business strategies. The statements contained in this annual report that are not statements of historical fact may include forward-looking statements that involve a number of risks and uncertainties. We have used the words "may," "will," "expect," "anticipate," "believe," "estimate," "plan," "intend" and similar expressions in this annual report to identify forward-looking statements. These forward-looking statements are made based on our expectations and beliefs concerning future events affecting us and are subject to uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control, that could cause our actual results to differ materially from those matters expressed in or implied by forward-looking statements. The following factors are among those that could cause our actual results to differ materially from the forward-looking statements:

- competition from other travel center and truck stop operators, including additional or improved services or facilities of competitors, and from the potential commercialization of state-owned interstate rest areas;

- the economic condition of the trucking industry, which in turn is dependent on general economic factors;

- increased environmental regulation;

- changes in governmental regulation of the trucking industry, including regulations relating to diesel fuel and gasoline;

35

- changes in interest rates;

- diesel fuel and gasoline pricing;

- availability of diesel fuel and gasoline supply; and

- availability of sufficient qualified personnel to staff company-operated sites.

All of our forward-looking statements should be considered in light of these factors and all other risks discussed from time to time in our filings with the Securities and Exchange Commission. We do not undertake to update our forward-looking statements or risk factors to reflect future events or circumstances.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to commodity price risk and interest rate risk. Our fuel purchase contracts provide for purchase prices based on average market prices for diesel fuel and gasoline, exposing us to commodity price risk. We mitigate this risk exposure in several ways, but primarily by holding less than three days of diesel fuel inventory at our sites and selling a large portion of our fuel volume on the basis of a daily industry index of average fuel costs plus a pumping fee, which minimize the effect on our margins of sudden sharp changes in commodity market prices. We manage the price exposure related to sales volumes not covered by the daily industry index pricing formulae through the use, from time to time, on a limited basis, of derivative instruments designated by management as hedges of anticipated purchases. We had no open derivative contracts at any point in time during the year ended December 31, 2003.

The interest rate risk faced by us results from our highly-leveraged position and our level of variable rate indebtedness, the rates for which are based on short-term lending rates, primarily the London Interbank Offered Rate. From time to time, we may use interest rate protection agreements to reduce our exposure to market risks from changes in interest rates by fixing interest rates on variable rate debt and reducing certain exposures to interest rate fluctuation. Amounts due to or from interest rate protection agreement counterparties are recorded in interest expense in the period in which they accrue. During 2003, we were involved in no interest rate protection agreements.

The following table summarizes information about our financial instruments that are subject to changes in interest rates:

                                                       DECEMBER 31, 2003
                                     ------------------------------------------------------
                                            FIXED RATE                   VARIABLE RATE
                                           INDEBTEDNESS                  INDEBTEDNESS
                                     ------------------------------------------------------
                                     PRINCIPAL     WEIGHTED       PRINCIPAL      WEIGHTED
                                      PAYMENT      AVERAGE         PAYMENT       AVERAGE
                                       AMOUNT    INTEREST RATE     AMOUNT     INTEREST RATE
                                     ---------   -------------    ---------   -------------
                                                      (DOLLARS IN THOUSANDS)
Year Ended December 31:
      2004 ......................     $    189       12.59%       $ 15,724       4.39%
      2005 ......................          198       12.60%          3,036       4.39%
      2006 ......................          209       12.60%         16,636       4.39%
      2007 ......................          219       12.61%         74,381       4.39%
      2008 ......................          230       12.62%        214,035       4.39%
Thereafter ......................      193,059       11.54%             --
                                      --------                    --------
Total ...........................     $194,104       12.49%       $323,812       4.39%
                                      ========                    ========
Fair value ......................     $221,304                    $323,812
                                      ========                    ========

36

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to Consolidated Financial Statements and Supplementary Data:

                                                                                                                               PAGE
                                                                                                                               ----
Financial Statements:
     Report of Independent Auditors ........................................................................................     38
     Consolidated Balance Sheet at December 31, 2002 and 2003 ..............................................................     39
     Consolidated Statement of Operations and Comprehensive Income for each of the three years in the
         period ended December 31, 2003 ....................................................................................     40
     Consolidated Statement of Cash Flows for each of the three years in the period ended December 31, 2003 ................     41
     Consolidated Statement of Nonredeemable Stockholders' Equity for each of the three years in the period ended
         December 31, 2003 .................................................................................................     42
      Notes to the Consolidated Financial Statements .......................................................................     43
Financial Statement Schedule:
      II - Valuation and Qualifying Accounts ...............................................................................     79

37

REPORT OF INDEPENDENT AUDITORS

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, 2003 and 2002, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2003, 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 therein when read in conjunction with the related consolidated financial statements. These financial statements and the financial statement schedule are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements and the financial statement schedule based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which 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 4, the Company adopted the provisions of Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets," as of January 1, 2002.

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.

PricewaterhouseCoopers LLP

Cleveland, Ohio
March 23, 2004

38

TRAVELCENTERS OF AMERICA, INC.
CONSOLIDATED BALANCE SHEET

                                                                                                              DECEMBER 31,
                                                                                                         -----------------------
                                                                                                           2002          2003
                                                                                                         -----------------------
                                                                                                        (IN THOUSANDS OF DOLLARS)
ASSETS
Current assets:
    Cash ............................................................................................    $  14,047     $  15,005

    Accounts receivable (less allowance for doubtful accounts of $2,025 for 2002
       and $1,707 for 2003) .........................................................................       44,295        42,987
    Inventories .....................................................................................       61,937        63,981
    Deferred income taxes ...........................................................................        4,222         3,823
    Other current assets ............................................................................        8,164         6,962
                                                                                                         ---------     ---------

           Total current assets .....................................................................      132,665       132,758
Property and equipment, net .........................................................................      444,197       438,133
Goodwill ............................................................................................       23,585        25,584
Deferred financing costs, net .......................................................................       27,452        24,012
Deferred income taxes ...............................................................................       17,781        14,519
Other noncurrent assets .............................................................................       15,087        15,561
                                                                                                         ---------     ---------
           Total assets .............................................................................    $ 660,767     $ 650,567
                                                                                                         =========     =========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
    Current maturities of long-term debt ............................................................    $   3,460     $   3,354
    Accounts payable ................................................................................       58,512        59,754
    Other accrued liabilities .......................................................................       51,339        50,020
                                                                                                         ---------     ---------
           Total current liabilities ................................................................      113,311       113,128
Commitments and contingencies .......................................................................           --            --
Long-term debt (net of unamortized discount) ........................................................      523,934       502,033
Deferred income taxes ...............................................................................        2,107         2,137
Other noncurrent liabilities ........................................................................        6,209         8,318
                                                                                                         ---------     ---------
                                                                                                           645,561       625,616

Redeemable equity ...................................................................................          681         1,909
Nonredeemable stockholders' equity:
    Common stock and other nonredeemable stockholders' equity .......................................      217,293       216,919
    Accumulated deficit (Note 15) ...................................................................     (202,768)     (193,877)
                                                                                                         ---------     ---------
        Total nonredeemable stockholders' equity ....................................................       14,525        23,042
                                                                                                         ---------     ---------
        Total liabilities, redeemable equity and nonredeemable stockholders' equity .................    $ 660,767     $ 650,567
                                                                                                         =========     =========

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

39

TRAVELCENTERS OF AMERICA, INC.
CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

                                                                                                 YEAR ENDED DECEMBER 31,
                                                                                        -------------------------------------------
                                                                                            2001            2002           2003
                                                                                        -----------     -----------     -----------
                                                                                                 (IN THOUSANDS OF DOLLARS)
Revenues:
    Fuel ............................................................................   $ 1,331,807     $ 1,237,989     $ 1,513,648
    Non-fuel ........................................................................       585,314         617,342         649,502
    Rent and royalties ..............................................................        17,491          15,539          13,080
                                                                                        -----------     -----------     -----------
          Total revenues ............................................................     1,934,612       1,870,870       2,176,230
Cost of goods sold (excluding depreciation):
    Fuel ............................................................................     1,228,544       1,136,368       1,408,728
    Non-fuel ........................................................................       239,209         253,312         266,038
                                                                                        -----------     -----------     -----------
          Total cost of goods sold (excluding depreciation) .........................     1,467,753       1,389,680       1,674,766
                                                                                        -----------     -----------     -----------

Gross profit (excluding depreciation) ...............................................       466,859         481,190         501,464

Operating expenses ..................................................................       325,668         332,223         342,045
Selling, general and administrative expenses ........................................        38,683          37,818          40,543
Depreciation and amortization expense ...............................................        64,347          60,301          60,375
(Gain) on sales of property and equipment ...........................................        (1,788)         (1,089)         (1,476)
                                                                                        -----------     -----------     -----------

    Income from operations ..........................................................        39,949          51,937          59,977

Equity in earnings of affiliate .....................................................           400             718             764
Interest and other financial costs, net .............................................       (57,924)        (51,423)        (46,878)
                                                                                        -----------     -----------     -----------

Income (loss) before income taxes and the cumulative effect of a change in accounting
    principle .......................................................................       (17,575)          1,232          13,863
Provision (benefit) for income taxes ................................................        (7,521)            (39)          4,719
                                                                                        -----------     -----------     -----------
Income (loss) before the cumulative effect of a change in accounting principle ......       (10,054)          1,271           9,144
Cumulative effect of a change in accounting, net of related taxes (Note 3) ..........            --              --            (253)
                                                                                        -----------     -----------     -----------

             Net income (loss) ......................................................       (10,054)          1,271           8,891

Other comprehensive income (expense), net of tax (Note 5):
     Change of accounting principle .................................................          (343)             --              --
     Unrealized (loss) gain on derivative instruments ...............................        (1,577)          1,920              --
     Foreign currency translation adjustments .......................................            --              --             804
                                                                                        -----------     -----------     -----------
            Comprehensive income (loss) .............................................   $   (11,974)    $     3,191     $     9,695
                                                                                        ===========     ===========     ===========

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

40

TRAVELCENTERS OF AMERICA, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS

                                                                                                      YEAR ENDED DECEMBER 31,
                                                                                                 -----------------------------------
                                                                                                   2001         2002         2003
                                                                                                 --------     --------     --------
                                                                                                     (IN THOUSANDS OF DOLLARS)
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income (loss) .......................................................................    $(10,054)    $  1,271     $  8,891
    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
        Depreciation and amortization .......................................................      64,347       60,301       60,375
        Amortization of deferred financing costs ............................................       2,620        3,050        3,440
        Deferred income tax provision .......................................................      (9,084)       2,690        3,535
        Provision for doubtful accounts .....................................................          --        1,100        1,180
        (Gain) on sales of property and equipment ...........................................      (1,788)      (1,089)      (1,476)
        Changes in assets and liabilities, adjusted for the effects of business acquisitions:
           Accounts receivable ..............................................................      34,444       (2,194)      (1,360)
           Inventories ......................................................................       4,353       (3,819)        (361)
           Other current assets .............................................................       4,103         (282)       1,233
           Accounts payable and other accrued liabilities ...................................     (55,149)      18,282        3,646
        Other, net ..........................................................................      (3,411)      (3,736)      (2,032)
                                                                                                 --------     --------     --------

        Net cash provided by operating activities ...........................................      30,381       75,574       77,324
                                                                                                 --------     --------     --------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Business acquisitions ...................................................................          --       (4,243)     (10,190)
    Proceeds from sales of property and equipment ...........................................       8,256        4,773        3,900
    Capital expenditures ....................................................................     (54,490)     (42,640)     (44,196)
                                                                                                 --------     --------     --------

        Net cash used in investing activities ...............................................     (46,234)     (42,110)     (50,486)
                                                                                                 --------     --------     --------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Increase (decrease) in checks drawn in excess of bank balances ..........................       6,725      (14,062)      (2,598)
    Revolving loan borrowings (repayments), net .............................................       3,600      (21,500)      (8,800)
    Long-term debt repayments ...............................................................        (165)      (3,409)     (14,688)
    Premiums paid on debt extinguishment ....................................................        (899)          --           --
    Merger and recapitalization expenses paid ...............................................      (2,417)        (150)          --
    Other ...................................................................................        (122)        (184)          --
                                                                                                 --------     --------     --------
        Net cash provided by (used in) financing activities .................................       6,722      (39,305)     (26,086)
                                                                                                 --------     --------     --------

        Effect of exchange rate changes on cash .............................................          --           --          206
                                                                                                 --------     --------     --------

        Net increase (decrease) in cash .....................................................      (9,131)      (5,841)         958

Cash at the beginning of the year ...........................................................      29,019       19,888       14,047
                                                                                                 --------     --------     --------

Cash at the end of the year .................................................................    $ 19,888     $ 14,047     $ 15,005
                                                                                                 ========     ========     ========

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

41

TRAVELCENTERS OF AMERICA, INC.
CONSOLIDATED STATEMENT OF NONREDEEMABLE STOCKHOLDERS' EQUITY

                                                                                 YEAR ENDED DECEMBER 31,
                                                                          -------------------------------------
                                                                            2001           2002         2003
                                                                          ---------     ---------     ---------
                                                                                (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     $ 217,290     $ 217,290
             Accretion of redeemable equity ..........................           --            --        (1,178)
                                                                          ---------     ---------     ---------
    Balance at end of year ...........................................    $ 217,290     $ 217,290     $ 216,112
                                                                          =========     =========     =========

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS):
    Balance at beginning of year .....................................    $      --     $  (1,920)    $      --
             Change in accounting principle, net of tax ..............         (343)           --            --
             Change in fair value of interest rate swap agreement, net
                 of tax ..............................................       (1,577)        1,920            --
             Foreign currency translation adjustments, net of tax ....           --            --           804
                                                                          ---------     ---------     ---------
    Balance at end of year ...........................................    $  (1,920)    $      --     $     804
                                                                          =========     =========     =========

ACCUMULATED DEFICIT:
    Balance at beginning of year .....................................    $(193,985)    $(204,039)    $(202,768)
             Net income (loss) .......................................      (10,054)        1,271         8,891
                                                                          ---------     ---------     ---------
    Balance at end of year ...........................................    $(204,039)    $(202,768)    $(193,877)
                                                                          =========     =========     =========

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

42

TRAVELCENTERS OF AMERICA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. BUSINESS DESCRIPTION AND SUMMARY OF OPERATING STRUCTURE

We are 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 general motorists. At December 31, 2003, our geographically diverse nationwide network of full-service travel centers consisted of 150 sites located in 41 states and the province of Ontario, Canada. Our operations are conducted through three distinct types of travel centers:

- sites owned or leased and operated by us, which we refer to as company-operated sites;

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

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

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, fast food 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.

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.

Principles of Consolidation

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., TravelCenters Realty, L.L.C., TravelCenters Properties, L.P., 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.

We have entered into lease transactions of travel centers with a special purpose entity. These lease transactions are evaluated for lease classification in accordance with Statement of Financial Accounting Standards (FAS) No. 13, "Accounting for Leases." We do not consolidate the special purpose entity so long as the owners of the special purpose entity maintain a substantial residual equity investment of at least three percent that is at risk during the entire term of the lease, which has been the case to date (see Note 13).

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 sites 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.

43

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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 site. As the rent increases related to these factors are contingent upon future events, the related rent revenue is not recognized until it becomes accruable.

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. Franchise royalty revenues are collected and recognized monthly and are determined as a percentage of the franchisees' revenues.

Cash

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.

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. 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.

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 FAS 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. Until December 31, 2001 goodwill and intangible assets with indefinite lives were amortized. Effective January 1, 2002, we adopted the provisions of FAS 142, "Goodwill and Other Intangible Assets." Under FAS 142, goodwill and intangible assets with indefinite lives are no longer amortized but are reviewed annually (or more frequently if impairment indicators arise) for

44

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

impairment. Accordingly, effective January 1, 2002, we stopped amortizing our goodwill and our trademarks, which have indefinite lives. All of our intangible assets with indefinite lives are subject to the impairment tests required by FAS 142, which include an annual test completed as of January 1 of each year and tests throughout the year if circumstances indicate that the intangible assets may be impaired (see Note 9).

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 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

In August 2001, the FASB issued FAS 144, "Accounting for the Impairment or Disposal of Long-Lived Assets." FAS 144 supersedes FAS 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of," and the accounting and reporting provisions of APB Opinion No. 30, "Reporting the Results of Operations - Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions." FAS 144 addresses financial reporting for the impairment or disposal of long-lived assets. We adopted FAS 144 effective January 1, 2002. Under FAS 144, impairment charges are recognized when the carrying value of a long-lived asset 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 are included in depreciation and amortization expense in our consolidated statement of operations.

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 12).

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 sites, consisting primarily of labor, maintenance, supplies, utilities and occupancy costs. Costs of advertising are expensed as incurred.

45

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Operating Lease Expense

Generally, rental on 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 account 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. For granted options that vest over time, no compensation expense is reflected in net income, as all of 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 (loss) if we had applied the fair value recognition provisions of FAS No. 123 to stock-based employee compensation.

                                                                              YEAR ENDED DECEMBER 31,
                                                                         ------------------------------------
                                                                           2001          2002          2003
                                                                         --------       -------       -------
                                                                              (IN THOUSANDS OF DOLLARS)
Net income (loss), as reported ....................................      $(10,054)      $ 1,271       $ 8,891
Add back - Stock-based employee compensation expense (benefit),
     net of related tax effects, included in net income (loss) as
     reported .....................................................            --            --            --
Deduct:  Total stock-based employee compensation expense determined
     under fair value based methods for all awards, net of related
     tax effects ..................................................          (637)         (703)         (698)
                                                                         --------       -------       -------
Pro forma net income (loss) .......................................      $(10,691)      $   568       $ 8,193
                                                                         ========       =======       =======

The fair value of these options used to calculate the pro forma compensation expense amounts was estimated 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. 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 BP, at BP's sole expense (see Note 19). 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.

46

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Asset Retirement Obligations

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 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 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. 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. 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.

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 20.

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; the fair value of our fixed-rate indebtedness that is publicly traded is estimated based on the quoted price for those notes. The fair value of our fixed-rate indebtedness that is not publicly traded is estimated based on the current borrowing rates available to us for financings with similar terms and maturities (see Note 12); and the fair values of our interest rate protection agreements are based on bank-quoted market prices.

47

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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). The pro forma effects for the years December 31, 2001 and 2002, assuming the adoption of FAS 143 as of January 1, 2001, were not material.

A reconciliation of our asset retirement obligation liability, which is included within other noncurrent liabilities in our consolidated balance sheet, for the year ended December 31, 2003 was as follows (in thousands of dollars):

Balance at January 1, 2003 .....................   $ 589
Liabilities incurred ...........................      10
Liabilities settled ............................     (13)
Accretion expense ..............................      77
Revisions to estimates .........................      --
                                                   -----
Balance at December 31, 2003 ...................   $ 663
                                                   =====

4. RECENTLY ISSUED ACCOUNTING STANDARDS

FAS 142. Effective January 1, 2002, we adopted Statement of Financial Accounting Standards (FAS) No. 142, "Goodwill and Other Intangible Assets." Under FAS 142, goodwill and intangible assets with indefinite lives are no longer amortized but are reviewed annually (or more frequently if impairment indicators arise) for impairment. Separable intangible assets that are not deemed to have indefinite lives continue to be amortized over their useful lives. Our trademark intangible assets have been deemed to have indefinite lives. During the first quarter of 2002 we completed the transitional impairment test for our trademarks and determined that the estimated fair values of these intangible assets exceeded their respective carrying amounts. Accordingly, we did not recognize an impairment loss with respect to our trademark intangible assets. For purposes of testing goodwill for impairment under the transitional accounting provisions of FAS 142, goodwill must first be allocated to reporting units. FAS 142 requires us to compare the fair value of the reporting unit to its carrying value to determine if there is potential impairment. If the fair value of the reporting unit is less than its carrying value, an impairment loss would be recognized to the extent that the fair value of the goodwill within the reporting unit is less than the carrying value. For purposes of applying the provisions of FAS 142, we have determined that we are one reporting unit. The fair value of the reporting unit exceeded the carrying value of the reporting unit at January 1, 2002. Accordingly, we did not recognize an impairment loss with respect to our goodwill.

48

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The following table provides a reconciliation of the prior-year periods' reported net income (loss) to adjusted net income (loss) had FAS 142 been applied as of the beginning of 2001.

                                                                   YEAR ENDED
                                                               DECEMBER 31, 2001
                                                            -------------------------
                                                            (IN THOUSANDS OF DOLLARS)
Reported net income (loss) ............................           $(10,054)
Add back amortization (net of tax):
   Goodwill ...........................................              1,266
   Trademarks .........................................                127
                                                                  --------
Adjusted net income (loss) ............................           $ (8,661)
                                                                  ========

FIN 46R. In December 2003, the Financial Accounting Standards Board (FASB) issued revised FASB Interpretation No. (FIN) 46R, "Consolidation of Variable Interest Entities." We must adopt this accounting guidance effective January 1, 2005. Under FIN 46R, we will be required to consolidate into our consolidated financial statements the entity that is the lessor under our master lease program (see Note 13) covering eight of our sites. Consolidating the lessor would affect our consolidated balance sheet by increasing property and equipment, other assets and long-term debt and would affect our consolidated statement of operations by reducing operating expenses, increasing depreciation expense and increasing interest expense. Consolidating the lessor will not result in a violation of our debt covenants or have an effect on our liquidity. We are also evaluating whether FIN 46R will require consolidation of our franchisees, although we currently believe we will not be required to do so. We adopted the disclosure requirements of FIN 46R in our consolidated financial statements.

FIN 45. In November 2002, the FASB issued FIN 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others." FIN 45 requires that, at the inception of a guarantee, the guarantor recognize a liability for the noncontingent portion of that guarantee, initially measured at fair value. FIN 45 also requires certain disclosures about guarantees. The initial recognition provisions of FIN 45 must be applied only on a prospective basis for guarantees issued after December 31, 2002, while we are required to adhere, and have adhered, to the disclosure requirements in our consolidated financial statements. While we offer a warranty of our workmanship in our truck maintenance and repair shops, the annual warranty expense and corresponding liability are immaterial. We do not issue or provide guarantees and the initial recognition of FIN 45 did not have a material effect on our results of operations or financial position. Adopting FIN 45 did not affect our liquidity.

FAS 146. In June 2002, the FASB issued FAS 146, "Accounting for Costs Associated with Exit or Disposal Activities." This new accounting standard significantly changes how entities account for exit and disposal activities, including restructuring activities. The provisions of FAS 146 are effective for exit or disposal activities initiated after December 31, 2002. Such activities, and the related costs, have not been significant for us in previous years and we do not expect them to be in future years.

FAS 148. In December 2002, the FASB issued FAS 148, "Accounting for Stock-Based Compensation - Transition and Disclosure (an amendment of FAS 123)." FAS 148 provides alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation and also amends the disclosure requirements of FAS 123 to require prominent disclosures about the method of accounting for stock-based employee compensation and the effect of the chosen method on reported results. We have not elected to change to the fair value based method of accounting for stock-based employee compensation and have made the required disclosures in our consolidated financial statements.

49

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FAS 150. In May 2003, the FASB issued FAS 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity." FAS 150 was effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective, for companies such as ours that do not have equity securities traded on an exchange, for fiscal periods beginning after December 15, 2003. FAS 150 requires the balance of any mandatorily redeemable stock be presented as a liability instead of as an item between liabilities and equity. FAS 150 also requires recognition as interest expense each quarter any dividends paid with respect to any mandatorily redeemable shares and the change during that quarter in the estimated amount of cash payments that would be necessary to repurchase the mandatorily redeemable stock. Adopting FAS 150 will not affect our cash payments or liquidity and is not expected to materially affect our financial position or results of operations.

5. COMPREHENSIVE INCOME

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

                                                               YEAR ENDED DECEMBER 31,
                                                               -----------------------
                                                                 2001    2002   2003
                                                                -----    ----   ----
                                                              (IN THOUSANDS OF DOLLARS)
Related to gain or loss on derivative instruments ...........   $(814)   $990   $ --
Related to change in accounting principle ...................    (176)     --     --
Related to foreign currency translation adjustments .........      --      --    320
                                                                -----    ----   ----
   Total ....................................................   $(990)   $990   $320
                                                                =====    ====   ====

6. INVENTORIES

Inventories consisted of the following:

                                                  DECEMBER 31,
                                               -----------------
                                                2002       2003
                                               -------   -------
                                            (IN THOUSANDS OF DOLLARS)
Non-fuel merchandise .......................   $55,460   $57,881
Petroleum products .........................     6,477     6,100
                                               -------   -------
       Total inventories ...................   $61,937   $63,981
                                               =======   =======

7. NOTES RECEIVABLE

We have notes receivable agreements with certain parties that financed a portion of the purchases of travel center sites we have sold. The notes have original terms ranging from five to ten years and principally accrue interest at a variable rate of the prime lending rate plus 1% to 2%.

We also have full recourse notes receivable from management stockholders received as partial consideration for purchases of common stock (see Note 18). These notes accrue interest at fixed rates between 4.86% and 7.0%, compounded semi-annually. Accrued and unpaid interest together with unpaid principal, if not sooner paid, is due and payable on the earliest of:

- the date of cessation of employment of the employee;

- the date the employee is no longer the owner of the related shares of common stock; or

- generally, 14 1/2 years from the issuance date of the note.

50

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Notes receivable consisted of the following:

                                                                   DECEMBER 31,
                                                             --------------------------
                                                               2002              2003
                                                             --------          --------
                                                             (IN THOUSANDS OF DOLLARS)
Principal amount of notes receivable outstanding ..          $  1,636          $  1,379
Less: amount due for stock purchases ..............             1,072             1,022
Less: allowance for doubtful notes ................               384               289
                                                             --------          --------
                                                                  180                68
Less: amounts due within one year, net of allowance                44                68
                                                             --------          --------
Notes receivable, net .............................          $    136          $     --
                                                             ========          ========

The amount due within one year is included within other current assets in our balance sheet and the amount of notes receivable, net is included within other assets in our balance sheet. The amount due for stock purchases is included as a reduction to the redeemable equity balance in our balance sheet (see Note 14).

8. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

                                                     DECEMBER 31,
                                              --------------------------
                                                2002              2003
                                              --------          --------
                                               (IN THOUSANDS OF DOLLARS)
Land ...............................          $ 68,253          $ 69,130
Buildings and improvements .........           391,896           424,102
Machinery, equipment and furniture .           246,584           275,642
Construction in progress ...........            34,373            14,644
                                              --------          --------
      Total cost ...................           741,106           783,518
Less: accumulated depreciation .....           296,909           345,385
                                              --------          --------
      Property and equipment, net ..          $444,197          $438,133
                                              ========          ========

At December 31, 2001, we were holding for sale eight facilities, two of which had been closed during 1999. Based on the estimated sales proceeds and costs of selling these sites, impairment charges of $1,475,000 were recognized during the year ended December 31, 2002. These charges were included in depreciation and amortization expense in our consolidated statement of operations and our consolidated statement of cash flows. During 2002, we sold four of these facilities, including one of the closed locations, and in January 2003 we sold another of these facilities. The other three sites for which we had been accounting as assets held for sale were not sold within the one-year period required by FAS 144. Accordingly, since the fourth quarter of 2002, we no longer account for these sites as assets held for sale. A charge of $231,000 was recorded in the fourth quarter to recognize the depreciation expense related to those sites that had not been depreciated throughout the year while these sites were being accounted for as held for sale.

Effective April 1, 2001, we changed our accounting estimates related to depreciation. Based upon our evaluation of our assets, our estimates of the useful lives for certain types of property and equipment were extended five years. These changes reduced depreciation expense by $8,514,000 and net loss by $5,142,000 for the year ended December 31, 2001.

51

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

9. 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 and was being amortized until our adoption of FAS 142 on January 1, 2002 (see Note 4). For the years ended December 31, 2001, 2002 and 2003, we recorded goodwill of $145,000, $4,242,000 and $1,999,000, respectively, in connection with converting leased sites to company-operated sites. The changes in the carrying amount of goodwill for the years ended December 31, 2001, 2002 and 2003 were as follows:

                                                        YEAR ENDED DECEMBER 31,
                                                -----------------------------------
                                                  2001          2002         2003
                                                --------       -------      -------
                                                      (IN THOUSANDS OF DOLLARS)
Balance as of beginning of period ........      $ 20,790       $19,343      $23,585
Goodwill recorded during the period ......           145         4,242        1,999
Amortization recorded during the period ..        (1,592)           --           --
                                                --------       -------      -------
Balance as of end of period ..............      $ 19,343       $23,585      $25,584
                                                ========       =======      =======

Intangible Assets. As part of acquisition of the Unocal network, we entered into a noncompetition agreement with Unocal pursuant to which Unocal agreed to refrain from re-entering the truckstop business for a period of ten years from the acquisition date. The intangible asset related to this noncompetition agreement represents the present value, at the time of the acquisition of the Unocal network, of the estimated cash flows we would lose due to competition resulting from re-entry of Unocal into the travel center market were they not constrained from doing so. The Unocal noncompetition agreement was being amortized over its ten year life, which expired in April 2003.

Leasehold interest represents the value, obtained through the BP acquisition, of favorable lease provisions at one location, the lease for which extended 11 1/2 years from the date of the BP acquisition. The leasehold interest is being amortized over the 11 1/2 year period.

Trademarks relate primarily to our purchase of the trademarks, service marks, trade names and commercial symbols from BP and Travel Ports. The trademarks were being amortized until our adoption of FAS 142 on January 1, 2002 (See Note 4).

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,
                                                                                    --------------------------
                                                                                       2002           2003
                                                                                    ----------     -----------
                                                                                    (IN THOUSANDS OF DOLLARS)
Amortizable intangible assets:
         Noncompetition agreements .............................................      $ 17,200      $ 17,350
         Leasehold interest ....................................................         1,724         1,724
         Other .................................................................           849           865
                                                                                      --------      --------
               Total amortizable intangible assets .............................        19,773        19,939
Less - accumulated amortization ................................................        18,848        19,534
                                                                                      --------      --------
               Net carrying value of amortizable intangible assets .............           925           405

Net carrying value of trademarks ...............................................         1,398         1,398
                                                                                      --------      --------
               Intangible assets, net ..........................................      $  2,323      $  1,803
                                                                                      ========      ========

52

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Total amortization expense for our amortizable intangible assets for the years ended December 31, 2001, 2002 and 2003 was $1,896,000, $1,896,000 and $686,000, respectively. The estimated aggregate amortization expense for our amortizable intangible assets for each of the five succeeding fiscal years are $191,000 for 2004; $87,000 for 2005; $10,000 for 2006; $10,000 for 2007; and $10,000 for 2008.

10. OTHER ACCRUED LIABILITIES

Other accrued liabilities consisted of the following:

                                                              DECEMBER 31,
                                                        ------------------------
                                                          2002           2003
                                                        ---------      ---------
                                                        (IN THOUSANDS OF DOLLARS)
Taxes payable, other than income taxes ...........      $  17,864      $  16,785
Accrued wages and benefits .......................         17,058         13,193
Interest payable .................................          4,640          6,952
Other accrued liabilities ........................         11,777         13,090
                                                        ---------      ---------

Total other accrued liabilities ..................      $  51,339      $  50,020
                                                        =========      =========

11. REVOLVING LOAN

As part of our Senior Credit Facility, we have available a revolving loan facility of $100,000,000 (see Note 12). The interest rate for borrowings under this revolving loan facility is based on either a prime rate-based alternate base rate plus 1.75% or an adjusted London Interbank Offered Rate (LIBOR) plus 2.75%. Commitment fees are calculated as 0.5% of the daily average unused amount of the revolving loan commitment. At December 31, 2002 and 2003, there were outstanding borrowings under our revolving credit facilities of $22,400,000 and $13,600,000, respectively. There were $21,815,000 of available borrowings reserved for letters of credit at December 31, 2003. The revolving loan facility matures in November 2006.

12. LONG-TERM DEBT

In November 2000, we completed a refinancing, which we refer to as the "2000 Refinancing." In the 2000 Refinancing, we issued $190,000,000 of senior subordinated notes due 2009 and borrowed $328,300,000 under our amended and restated senior credit facility that consisted of a fully-drawn $328,000,000 term loan facility and a $100,000,000 revolving credit facility.

53

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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

                                                                                        DECEMBER 31,
                                                                                    ----------------------
                                                        INTEREST
                                                          RATE        MATURITY        2002          2003
                                                        --------      --------      --------      --------
                                                                                   (IN THOUSANDS OF DOLLARS)
Senior Credit Facility - Term Loan (a) ...........        (b)             2008      $324,720      $310,212
Senior Credit Facility - Revolver (a) ............        (c)             2006        22,400        13,600
Senior Subordinated Notes due 2009 (d) ...........       12.75%           2009       190,000       190,000
Note payable (e) .................................        5.00%           2018         4,284         4,104
                                                                                    --------      --------

      Total ......................................                                   541,404       517,916
Less: amounts due within one year ................                                     3,460         3,354
Less: unamortized discount .......................                                    14,010        12,529
                                                                                    --------      --------

      Long-term debt (net of unamortized discount)                                  $523,934      $502,033
                                                                                    ========      ========


(a) On November 14, 2000, in connection with the 2000 Refinancing, we entered into a $428,000,000 Amended and Restated Credit Agreement with a group of lenders, which borrowing we refer to as our Senior Credit Facility. The Senior Credit Facility consists of a $328,000,000 term loan facility, which was fully drawn at closing, and a $100,000,000 revolving credit facility (see Note 11). Term loan principal payments are due at each quarter end. The term loan facility matures in November 2008.

(b) Interest accrues at variable rates based on either adjusted LIBOR plus 3.25% or, at our election, a prime rate-based alternate base rate plus 2.25%. 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, 2003, the term loan was comprised of borrowings at an average rate of 4.38% for various 30-day periods ending in January 2004. 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.

(c) Interest accrues at variable rates based on either adjusted LIBOR plus 2.75% or, at our election, a prime rate-based alternate base rate plus 1.75%. 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, 2003 we had $8,000,000 of LIBOR borrowings at an average rate of 3.9375% for various 30-day periods ending in January 2004 and $5,600,000 of alternate base rate borrowings at 5.75%. 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.

(d) On November 14, 2000, in connection with the 2000 Refinancing, we issued Senior Subordinated Notes with an aggregate face amount of $190,000,000. These notes were issued at a discount of 3.704% and each $1,000 note was accompanied by detachable warrants (see Note 15). The warrants had an aggregate fair value at issuance of $8,360,000. Based on the relative fair values of the notes and the warrants at the time of issuance, $8,050,000 has been recognized as unamortized debt discount in our balance sheet, as has been the original issue discount of the notes. The debt discount is being amortized into interest expense using the effective interest method over the life of the notes. Interest payments on these notes are due semiannually on May 1 and November 1. Optional prepayments are allowed under certain circumstances, any such payments reducing the required payment of $190,000,000 due on May 1, 2009.

54

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(e) On September 1, 1998, in connection with the purchase of the operating assets of a leased site, we issued a note payable to the former operator of the site 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.

Pledged Assets. The borrowings under the Senior Credit Facility 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.

Mandatory Prepayments. The Senior Credit Facility 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. We generated no Excess Cash Flow during the year ended December 31, 2001. For the year ended December 31, 2002 we generated approximately $22,627,000 of Excess Cash Flow and, therefore, prepaid $11,314,000 of the term loan in April 2003. For the year ended December 31, 2003, we generated approximately $25,312,000 of Excess Cash Flow and, therefore, are obligated to prepay $12,656,000 of the term loan by April 15, 2004. These mandatory prepayments reduce our scheduled future quarterly payments on a pro rata basis.

Debt Covenants. Under the terms of the Senior Credit Facility, 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 2003 and at December 31, 2003.

Under the terms of the Indenture for the Senior Subordinated Notes due 2009, we are required to maintain certain affirmative and negative covenants that, among other things, limit our ability to incur indebtedness, pay dividends, redeem stock or sell assets or subsidiaries. We were in compliance with the covenants throughout 2003 and at December 31, 2003.

Future Payments. Scheduled payments of long-term debt in the next five years, including the mandatory prepayment based on Excess Cash Flow generated in the year ended December 31, 2003, are $15,913,000 in 2004; $3,234,000 in 2005; $16,845,000 in 2006; $74,600,000 in 2007 and $214,265,000 in 2008. Although we are obligated to make a $12,656,000 mandatory prepayment of the term loan, based on our intent and ability to finance this short-term obligation with borrowings under the revolving credit facility that does not mature until 2006, we have continued to classify this $12,656,000 within the long-term debt balance in our consolidated balance sheet as of December 31, 2003.

Fair Value. Based on the borrowing rates currently available to us for bank loans and other indebtedness with similar terms and average maturities and the year-end quoted market price of the Senior Subordinated Notes due 2009, the fair value of long-term debt at December 31, 2002 and 2003 was $551,391,000 and $545,116,000, respectively.

55

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

13. 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, 2003, were as follows:

YEAR ENDING                                                            MINIMUM LEASE
DECEMBER 31,                                                              PAYMENTS
------------                                                     --------------------------
                                                                 (IN THOUSANDS OF DOLLARS)
2004....................................................            $           20,248
2005....................................................                        19,254
2006....................................................                        60,503
2007....................................................                         8,694
2008....................................................                         7,722
Thereafter..............................................                        81,863
                                                                    ------------------
                                                                    $          198,284
                                                                    ==================

The amount in the above table for minimum lease payments for 2006 assumes we will not renew the master lease program described below and will instead pay to the lessor the $44,077,000 residual guarantee amount. Currently, we would expect to attempt to renew and extend the lease at that time and not expend this amount.

On September 9, 1999, we entered into a master lease program with a lessor that has been used to finance the construction of eight travel centers on land we own. The initial term of the lease expires on September 9, 2006, at which time, if the lease is not renewed and extended, we have the option to purchase the improvements for approximately $58,188,000. Alternatively, we could return the travel centers to the lessor. In this case, we would be required to make a residual value guarantee payment to the lessor of $44,077,000. However, the lessor would be required to remit to us any portion of the payment which, when combined with the net sale proceeds of the property, exceeded the lessor's $58,188,000 investment in the property.

These lease transactions were evaluated for lease classification in accordance with FAS 13. We have not consolidated the lessor because the owners of the lessor have maintained a substantial residual equity investment of at least three percent that is at risk during the entire term of the lease. In December 2003, the FASB issued revised FIN 46R, "Consolidation of Variable Interest Entities." We must adopt this accounting guidance effective January 1, 2005. Under FIN 46R, we will be required to consolidate the lessor in our consolidated financial statements. Consolidating the lessor would affect our consolidated balance sheet by increasing property and equipment, other assets and long-term debt and would affect our consolidated statement of operations by reducing operating expenses, increasing depreciation expense and increasing interest expense. Consolidating the lessor will not result in a violation of our debt covenants or have an effect on our liquidity.

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 and consisted of the following:

56

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                                              YEAR ENDED DECEMBER 31,
                                    ----------------------------------------
                                      2001            2002            2003
                                    --------        --------        --------
                                           (IN THOUSANDS OF DOLLARS)
Minimum rent ................       $ 22,286        $ 23,623        $ 24,061
Contingent rent .............           (596)         (2,201)         (2,690)
                                    --------        --------        --------
   Total rent expense .......       $ 21,690        $ 21,422        $ 21,371
                                    ========        ========        ========

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

As a lessor. Twenty of the travel centers we owned during the year ended December 31, 2003 were leased to franchisees under operating lease agreements. During 2003, six of these leases were mutually terminated, and, as a result, these sites were converted to company-operated sites. At December 31, 2003, we had such lease arrangements in place at 14 of our sites. 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 $10,981,000, $9,488,000 and $7,564,000 for the years ended December 31, 2001, 2002 and 2003, respectively. At December 31, 2003, the cost and accumulated depreciation of the assets covered by these lease agreements was $30,298,000 and $12,912,000, respectively.

14. REDEEMABLE EQUITY

At each of December 31, 2002 and 2003, there were 182,800 shares 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, 2002 and 2003, the aggregate principal amount of such notes due us from the management employees was $1,072,000 and $1,022,000, respectively (see Note 7), 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 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 (currently 6.5) 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.

57

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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 Senior Credit Facility and the Senior Subordinated Notes limit 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.

15. NONREDEEMABLE STOCKHOLDERS' EQUITY

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

                                                                              DECEMBER 31,
                                                                      ---------------------------
                                                                        2002               2003
                                                                      --------           --------
                                                                       (IN THOUSANDS OF DOLLARS)
Common Stock - 20,000,000 shares authorized, $0.00001 par value,
   6,939,498 shares outstanding at December 31, 2002 and 2003 ..      $      3           $      3
Accumulated other comprehensive income .........................            --                804
Additional paid-in capital .....................................       217,290            217,071
                                                                      --------           --------
               Total ...........................................      $217,293           $217,878
                                                                      ========           ========

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 14.

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.

58

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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 years ended December 31, 2001 and 2002, we issued 2,434 and 7,302 respectively, shares of common stock to certain members of management for cash and notes receivable (see Notes 7, 14 and 18) aggregating $77,000 and $232,000, respectively.

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.

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 14).

59

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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, as warrant agent. We originally issued initial warrants in connection with a private placement of 190,000 units, each unit consisting of one Senior Subordinated Note due 2009, three initial warrants and one contingent warrant. Each warrant, whether initial or contingent, 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 share for each share issuable upon the exercise of the warrants (subject to an estimated 20% discount for the contingent warrants). The fair value of the warrants was initially recognized as unamortized debt discount and is being amortized into interest expense using the effective interest method over the life of our Senior Subordinated Notes. We have no warrants outstanding other than the 570,000 initial warrants and the 190,000 contingent warrants.

Initial Warrants. The initial warrants entitle the holders to purchase 207,874 shares of our common stock at an exercise price of $0.001 per share.

Contingent Warrants. The contingent warrants entitle the holders to purchase 69,291 shares of common stock at an exercise price of $0.001 per share. From the time of consummation of the private placement in November 2000, the contingent warrants were held in escrow under an escrow agreement between us and State Street Bank and Trust Company, as escrow agent and, subject to some conditions that have been met, were to be released from escrow and distributed to holders of the initial warrants on March 31, 2003, the contingent warrant release date. The contingent warrants were to be released from escrow and delivered to us for cancellation only if, as of December 31, 2002:

- the Consolidated Leverage Ratio, as defined in the indenture governing the notes, is equal to or less than 4.5 to 1.0 and our chief financial officer delivers a certificate to that effect to the escrow agent prior to the contingent warrant release date, or

- all of the notes have been repaid, redeemed or repurchased by us.

As neither of these conditions were met on the contingent warrant release date, the contingent warrants were distributed pro rata to all the registered holders of initial warrants determined as of the contingent warrant release date.

Exercise of Warrants. The initial warrants may be exercised at any time on or after November 14, 2001, and the contingent warrants may be exercised at any time after the contingent warrant release date. However, holders of warrants will be able to exercise their warrants only if the shelf registration statement is effective or 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.

60

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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 AWARD AND OPTION PLAN

2001 Stock Plan. During 2001, we granted to certain of our executives non-qualified stock options to purchase 944,881 shares of our common stock under a stock incentive plan our board of directors adopted in November 2000 and which was approved by a vote of our stockholders in 2001. All of the options have a term of 10 years from the date of grant, although the options will be terminated earlier if certain customary events occur. For example, if an executive's employment is terminated by us without cause or by the executive for good reason or due to death, disability or scheduled retirement, all vested options will expire 60 days following termination of employment. Under certain circumstances, the executive will be allowed to hold a limited portion of his unvested options for a longer period of time following termination of employment for further vesting. Each option grant consists of 41.67% time options and 58.33% performance options. Time options become exercisable with the passage of time, while performance options become exercisable if certain investment return targets are achieved. Time options generally vest 20% per year over a period of five years. Performance options vest if Oak Hill achieves specified internal rates of return on specified measurement dates. In general, the number of performance options that will vest is based upon Oak Hill achieving internal rates of return between 22.5% and 30.0% on a measurement date. A measurement date is generally defined as the earliest of (1) five years from the closing of the merger and recapitalization transactions (November 14, 2000), (2) specified dates following an initial public offering of our stock, depending on the date the initial public offering occurs, or (3) the date that at least 30% of our shares owned by Oak Hill are distributed to its limited partners or sold, except that a subsequent measurement date may occur if less than 100% of our shares owned by Oak Hill are so sold or distributed. Vesting is partially accelerated for time options following termination of employment due to death, disability or scheduled retirement. If a change of control occurs, the vesting of time options will fully accelerate. Option holders will have rights to require us to repurchase shares obtained upon the exercise of 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. In connection with our initial grant of options under this plan, we established and granted a discretionary pool of options that will be allocated periodically, first to new members of management who become option holders after the date of the initial grant, and then to other members on a pro rata basis. The total number of shares underlying the initial grant of options will not increase as a result. The time options are subject to fixed plan accounting and, accordingly, no charge to earnings will be required with respect to them since the exercise price equaled the fair value at the date of grant. The performance options are subject to variable plan accounting and, accordingly, a non-cash charge to earnings will be required when it becomes probable that the performance triggers for such options will be achieved. It is not possible to determine at this time, nor may it be possible until close to the end of the five-year performance period, whether it will be probable that we will achieve the performance triggers. It is not possible to predict whether any such required non-cash charge will be material to our results for the period in which the charge is recognized, as we expect that the performance triggers can only be attained as a result of a significant increase in our results of operations. The options granted to future participants in the option plan under the discretionary pool, including time options, also may be subject to a compensation charge.

61

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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

                                                                                 YEAR ENDED DECEMBER 31,
                                                                         ---------------------------------------
                                                                           2001           2002           2003
                                                                         ---------      ---------      ---------
Options outstanding, beginning of year ............................             --        944,881        944,881
Granted ...........................................................        944,881             --             --
Exercised .........................................................             --             --             --
Cancelled .........................................................             --             --             --
                                                                         ---------      ---------      ---------

Options outstanding, end of year ..................................        944,881        944,881        944,881
                                                                         =========      =========      =========
Options exercisable, end of year ..................................         78,740        157,480        236,220
Options available for grant, end of year ..........................             --             --             --

Weighted-average remaining contractual life of options outstanding,
    in years ......................................................              9              8              7

The weighted-average exercise price was $31.75 per share for those options granted during 2001 and for all outstanding options as of December 31, 2001, 2002 and 2003.

We account 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. For the years ended December 31, 2001, 2002 and 2003, no stock-based employee compensation cost is reflected in net income, as all time options granted under those plans had an excise price equal to the market value of the underlying common stock on the date of grant and the vesting of the performance options is not considered to be probable.

16. INCOME TAXES

The (benefit) provision for income taxes was as follows:

                                                 YEAR ENDED DECEMBER 31,
                                         --------------------------------------
                                           2001           2002           2003
                                         --------       --------       --------
                                               (IN THOUSANDS OF DOLLARS)
Current:
    Federal .......................      $    (44)      $ (3,956)      $     56
    State .........................         1,607          1,227          1,065
    Foreign .......................            --             --             63
                                         --------       --------       --------
                                            1,563         (2,729)         1,184
                                         --------       --------       --------
Deferred:
    Federal .......................        (8,847)         3,494          3,587
    State .........................          (237)          (804)            76
    Foreign .......................            --             --           (128)
                                         --------       --------       --------
                                           (9,084)         2,690          3,535
                                         --------       --------       --------

           Total ..................      $ (7,521)      $    (39)      $  4,719
                                         ========       ========       ========

62

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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,
                                                                    --------------------------------------
                                                                      2001           2002           2003
                                                                    --------       --------       --------
                                                                           (IN THOUSANDS OF DOLLARS)
U.S. federal statutory rate applied to income before taxes and
  extraordinary items ........................................      $ (6,152)      $    431       $  4,852
State income taxes, net of federal income tax benefit ........           808             (6)           768
Non-deductible meals and entertainment expenses ..............           172            165            187
Non-deductible amortization ..................................           240             --             --
Merger and recapitalization expenses .........................        (2,212)            --             --
Other non-deductible expenses ................................            --            142             26
Benefit of tax credits .......................................          (569)          (358)          (358)
Adjustment of estimated prior year tax liabilities ...........            --           (400)          (650)
Other - net ..................................................           192            (13)          (106)
                                                                    --------       --------       --------

           Total .............................................      $ (7,521)      $    (39)      $  4,719
                                                                    ========       ========       ========

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.

Deferred income tax assets and liabilities resulted from the following:

                                                                    DECEMBER 31,
                                                              -----------------------
                                                                2002           2003
                                                              --------       --------
                                                             (IN THOUSANDS OF DOLLARS)
Deferred tax assets:
    Accounts receivable ................................      $  1,340       $    784
    Inventory ..........................................           357            444
    Intangible assets ..................................         8,231          7,577
    Deferred revenues ..................................           334            180
    Minimum tax credit .................................         3,001          3,086
    Net operating loss carryforward (expiring 2020-2022)        24,669         22,024
    General business credits (expiring 2009-2023) ......         4,576          5,128
    Other accrued liabilities ..........................         7,245          8,212
                                                              --------       --------

           Total deferred tax assets ...................        49,753         47,435
                                                              --------       --------
Deferred tax liabilities:
    Property and equipment .............................       (29,857)       (30,910)
    Other comprehensive income .........................            --           (320)
                                                              --------       --------

           Total deferred tax liabilities ..............       (29,857)       (31,230)
                                                              --------       --------

           Net deferred tax assets .....................      $ 19,896       $ 16,205
                                                              ========       ========

63

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

At December 31, 2003, we had available to us a net operating loss carryforward of approximately $65,022,000 that consisted of $36,962,000 remaining carryforward generated in 2000 that expires in 2020, $27,999,000 carryforward generated in 2001 that expires in 2021, and $61,000 carryforward generated in 2002 that expires in 2022. Internal Revenue Code Section 382 restricts our ability to utilize in the future the net operating loss that we generated in 2000 because of the change of control we experienced as a result of our merger and recapitalization transaction in November 2000. The amount of net operating loss we can utilize will be limited to approximately $12,000,000 per year and unused amounts of the annual Section 382 limitation can be carried forward to subsequent years within the carryforward period. As $12,735,000 of the 2000 net operating loss has been utilized through 2003, usage of the net operating loss generated in 2000 will be limited to approximately $35,315,000 for 2004. Usage of the net operating losses generated in 2001 and 2002 is unlimited. 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 as a result of our merger and recapitalization transactions in November 2000. The remainder of our net operating loss carryforwards result largely from depreciation and interest deductions and the trends for these items relative to operating income are expected to decline, enabling us to generate sufficient taxable income to utilize net operating loss carryforwards. The level of tax depreciation on our significant capital investments in 1993 and 1997 through 1999 began to diminish in 2001 and our level of capital investment in 2001 through 2003 and future years as compared to prior years has been, and will be, reduced. The relative level of interest expense to operating income should diminish as the capital projects completed in 1999 through 2003 continue to mature and produce greater amounts of taxable income while our debt levels decrease or hold relatively steady, enabling us to keep our interest expense relatively constant or growing at a slower rate than operating income. Further, we could complete a sale/leaseback of certain of our travel centers. Although we would not ordinarily execute this tax planning strategy, we would do so to prevent our net operating loss carryforwards from expiring unused. The sale/leaseback would be expected to generate a sufficient taxable gain in the year consummated to fully utilize any expiring unused net operating loss carryforwards and could be expected to increase our taxable income in subsequent years as lower interest expense and depreciation deductions would, in all likelihood, more than offset the additional operating lease expense. 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 2001 through 2003 are subject to examination by the Internal Revenue Service and certain of our state income tax returns for various states for various years from 1996 through 2003 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.

17. EQUITY INVESTMENT

We own a 21.5% voting interest in Simons Petroleum, Inc. (Simons), 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. The carrying value of this investment, which is included in other noncurrent assets in our consolidated balance sheet, as of December 31, 2002 and 2003 was $6,698,000 and $7,462,000, respectively. The equity income earned from this investment for the years ended December 31, 2001, 2002 and 2003 was $400,000, $718,000, and $764,000, respectively. The sale to a new investor group of 100% of the stock of Simons, including those shares that we own, is expected to close in early April 2004. Accordingly, after that sale, we will cease recognition of equity income in the earnings of Simons. We expect our gain on the sale to be approximately $1,000,000, but the final details of the transaction are still to be determined. Summarized condensed financial information of this investee follows:

64

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                                                   YEAR ENDED DECEMBER 31,
                                            ------------------------------------
                                              2001          2002          2003
                                            --------      --------      --------
                                                 (IN THOUSANDS OF DOLLARS)
Income statement data:
     Total revenues ..................      $456,077      $413,243      $523,027
     Gross profit ....................        21,752        23,292        25,483
     Income from continuing operations         1,991         3,727         2,665
     Net income ......................         1,976         3,727         2,665

                                                               DECEMBER 31,
                                                         -----------------------
                                                           2002           2003
                                                         --------       --------
                                                        (IN THOUSANDS OF DOLLARS)
Balance sheet data:
    Current assets ...............................       $ 44,175       $ 47,626
    Noncurrent assets ............................          9,334          7,482
    Current liabilities ..........................         27,741         27,529
    Noncurrent liabilities .......................          9,324          3,674
    Convertible redeemable preferred stock .......          5,000          5,000

During the years ended December 31, 2001, 2002 and 2003, diesel fuel provided by Simons accounted for $201,291,000, $183,217,000 and $228,827,000, respectively, of our cost of goods sold. We made sales of diesel fuel to Simons in the amounts of $12,742,000, $2,888,000, and 3,328,000, respectively, for the years ended December 31, 2001, 2002 and 2003. We also lease a travel center from Simons and the rent expense related to this site for the years ended December 31, 2001, 2002 and 2003 was $408,000 each year. At December 31, 2002 and 2003, our receivables from Simons were $151,000 and $150,000, respectively, while our payables to Simons were $357,000 and $49,000, respectively.

18. RELATED PARTY TRANSACTIONS

Certain members of our senior management have purchased common stock pursuant to management subscription agreements (see Note 15 - Repurchase Rights). As a result of such purchases, we have notes and related interest receivable from the management stockholders totaling $1,497,000 and $1,490,000 at December 31, 2002 and 2003, respectively.

19. 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 these indemnifications are 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.

65

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

ENVIRONMENTAL MATTERS

Our operations and properties are extensively regulated through environmental laws and regulations ("Environmental Laws") that (1) 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 (2) 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 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 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 $3,222,000, $3,947,000 and $4,750,000 in 2001, 2002 and 2003, respectively.

We have received notices of alleged violations of Environmental Laws, or are otherwise 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 instances of noncompliance, or compliance costs incurred in connection therewith, will be material to our results of operation or financial condition. We are conducting investigatory and/or remedial actions with respect to releases and/or spills of Hazardous Substances at a number of sites. While we cannot precisely estimate the ultimate costs we will incur in connection with the investigation and remediation of these matters, based on our current knowledge, we do not expect that the costs to be incurred for these matters, individually or in the aggregate, will be material to our results of operation or financial condition. While the aforementioned matters are, to the best of our knowledge, the only proceedings for which we are currently exposed to potential liability, there can be no assurance that additional contamination does not exist at these or other of 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, which could have a material adverse effect on us. As of December 31, 2003, we had a reserve for these matters of $4,640,000 and a receivable for estimated recoveries of these estimated future expenditures of $884,000. We estimate that the cash outlays related to the matters for which we have accrued this reserve will be approximately $3,185,000 in 2004; $683,000 in 2005; $289,000 in 2006; $259,000 in 2007; $108,000 in 2008 and $116,000 thereafter. 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. While it is not possible to quantify with certainty the environmental exposure, in our opinion the potential liability, beyond that considered in the reserve, for all proceedings, based on information known to date, will not have a material adverse effect on our financial condition, results of operations or liquidity. However, it is reasonably possible that a material change in estimate will occur in the near term as new matters, or new facts regarding established matters, are identified and/or as Environmental Laws and other requirements of government agencies continue to evolve.

In connection with the acquisition of the Unocal network, Phase I environmental assessments were conducted of the 97 Unocal network properties purchased by us. Pursuant to an environmental indemnification agreement with Unocal, Phase II environmental assessments of all Unocal network properties were completed by Unocal by December 31, 1998. Under the terms of this agreement, Unocal was responsible for all costs incurred for (a) remediation of environmental contamination, and (b) otherwise bringing the properties into compliance with Environmental Laws as in effect at the date of the acquisition of the Unocal network, with respect to the matters

66

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

identified in the Phase I or Phase II environmental assessments, which matters existed on or prior to the date of the acquisition of the Unocal network. Under the terms of this agreement, Unocal was also required to indemnify us against any other environmental liabilities that arise out of conditions at, or ownership or operations of, the Unocal network prior to the date of the 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 $2.6 million of cash, funded an escrow account with $5.4 million to be drawn by us as we incur related remediation costs, and purchased insurance policies that cap our total future expenditures 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. The liability we assumed was recorded in 2004. We estimate that the cash outlays related to the matters for which we assumed responsibility in January 2004 will be approximately $1,140,000 in 2004; $2,205,000 in 2005; $1,483,000 in 2006; $1,186,000 in 2007; $923,000 in 2008 and $1,311,000 thereafter. 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. We have just recently assumed responsibility for these matters and expect that our knowledge of the specific facts, related costs and timing of payments for each site will improve over time.

Prior to the acquisition of the BP network, all of the 38 company-owned locations purchased by us were subject to Phase I and Phase II environmental assessments, undertaken at BP's expense. The environmental agreement with BP provides that, with respect to environmental contamination or noncompliance with Environmental Laws identified in the Phase I or Phase II environmental assessments, BP is responsible for (a) all costs incurred for remediation of such environmental contamination, and (b) for otherwise bringing the properties into compliance with Environmental Laws as in effect at the date of the acquisition of the BP network.

The remediation must achieve compliance with the Environmental Laws in effect on the date the remedial action is completed. The environmental agreement with BP requires BP to indemnify us against any other environmental liabilities that arise out of conditions at, or ownership or operations of, the BP network locations prior to the date of the acquisitions of the BP network. We must make such claims for indemnification before December 11, 2004. BP must also indemnify us for liabilities relating to non-compliance with Environmental Laws for which claims were made before December 11, 1996. Except as described above, BP does not have any responsibility for any environmental liabilities arising out of the ownership or operations of the BP network after the date of the acquisition of the BP network. We cannot be certain that BP, if additional environmental claims or liabilities were to arise under the environmental agreement with BP, would not dispute our claims for indemnification thereunder.

In connection with the Burns Bros. acquisition, all of the 17 sites acquired were subject to Phase I environmental assessments, and, based on the results of those assessments, nine of the sites were subject to Phase II environmental assessments. The purchase price paid to Burns was adjusted based on the findings of the Phase I and Phase II environmental assessments. Under the asset purchase agreement with Burns Bros., we released Burns Bros. from any environmental liabilities that may have existed as of the Burns Bros. acquisition date, other than specified non-waived environmental claims as described in the agreement with Burns Bros.

In connection with the Travel Ports acquisition, all of the 16 sites acquired were subject to Phase I environmental assessments, and, based on the results of those assessments, five of the sites were subject to Phase II environmental assessments. The results of these assessments were taken into account in recognizing the related environmental contingency accrual for purchase accounting purposes.

67

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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. 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.

20. 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 November 14, 2000, we entered into an interest rate swap agreement with a notional principal amount of $80,000,000 to exchange our variable rate of LIBOR plus 3.25% with a fixed interest rate of 6.0875%. The swap agreement matured on December 15, 2002. We had no swap agreements in place throughout 2003 and as of December 31, 2003.

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 agreement was 100% effective and qualified for cash flow hedge accounting.

The fair value of the interest rate swap at the time of transition resulted in a reduction of accumulated other comprehensive income of $343,000 (net of tax), which was recorded as the cumulative effect of an accounting change in the first quarter of 2001. The decline in the fair value of the swap agreement for the year ended December 31, 2001, based on bank-quoted market prices, resulted in the recognition of a further decrease in other comprehensive income of $1,577,000 (net of tax), and a liability of $2,911,000 as of December 31, 2001. During the year ended December 31, 2002, the fair value of the swap agreement increased until its maturity on December 15, 2002, resulting in the recognition of an increase in other comprehensive income of $1,920,000 (net of tax).

21. OTHER INFORMATION

                                                                                             YEAR ENDED DECEMBER 31,
                                                                                      --------------------------------------
                                                                                        2001           2002           2003
                                                                                      --------       --------       --------
                                                                                             (IN THOUSANDS OF DOLLARS)
Operating expenses and Selling, general and administrative expenses included the
following:
    Repairs and maintenance expenses ...........................................      $ 12,596       $ 12,055       $ 13,430
    Advertising expenses .......................................................      $  6,676       $  7,047       $  4,715
    Taxes other than payroll and income taxes ..................................      $  6,722       $  7,598       $  8,611
    401(k) plan contribution expense ...........................................      $  1,818       $  1,779       $  1,707

Interest and other financial costs consisted of the following:
    Cash interest expense ......................................................      $(54,206)      $(47,170)      $(42,053)
    Cash interest income .......................................................           120            157             96
    Amortization of discount on debt ...........................................        (1,218)        (1,360)        (1,481)
    Amortization of deferred financing costs ...................................        (2,620)        (3,050)        (3,440)
                                                                                      --------       --------       --------
    Interest and other financial costs, net ....................................      $(57,924)      $(51,423)      $(46,878)
                                                                                      ========       ========       ========

68

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

22. SUPPLEMENTAL CASH FLOW INFORMATION

                                                                           YEAR ENDED DECEMBER 31,
                                                                 -----------------------------------------
                                                                    2001            2002            2003
                                                                 ---------       ---------       ---------
                                                                         (IN THOUSANDS OF DOLLARS)
Revolving loan borrowings .................................      $ 669,600       $ 473,800       $ 458,100
Revolving loan repayments .................................       (666,000)       (495,300)       (466,900)
                                                                 ---------       ---------       ---------
    Revolving loan borrowings (repayments), net ...........      $   3,600       $ (21,500)      $  (8,800)
                                                                 =========       =========       =========

Cash paid during the year for:
    Interest ..............................................      $  57,830       $  47,480       $  39,645
    Income taxes (net of refunds) .........................      $  (4,356)      $  (2,559)      $     635

Inventory, property and equipment, and goodwill received in
    liquidation of trade accounts and notes receivable ....      $      --       $   2,060       $   1,226
Notes received from sales of property and equipment .......      $      --       $     250       $      --
Notes received upon common stock issuance .................      $      39       $     116       $      --

23. CONDENSED CONSOLIDATING FINANCIAL STATEMENT SCHEDULES

The following schedules set forth our condensed consolidating balance sheet schedules as of December 31, 2002 and 2003 and our condensed consolidating statement of operations schedules and condensed consolidating statement of cash flows schedules for the years ended December 31, 2001, 2002 and 2003. In the following schedules, "Parent Company" refers to the unconsolidated balances of TravelCenters of America, Inc., "Guarantor Subsidiaries" refers to the combined unconsolidated balances of TA Operating Corporation and its domestic subsidiaries, and "Nonguarantor Subsidiary" refers to the combined balances of TA Franchise Systems Inc. and our Canadian subsidiaries that are included only since their formation in January 2003. "Eliminations" represent the adjustments necessary to (a) eliminate intercompany transactions and (b) eliminate our investments in our subsidiaries.

The Guarantor Subsidiaries, (TA Operating Corporation, TA Licensing, Inc., TA Travel, L.L.C., TravelCenters Realty, L.L.C. and TravelCenters Properties, L.P.), are direct or indirect wholly-owned subsidiaries of ours and have fully and unconditionally, jointly and severally, guaranteed the indebtedness of TravelCenters of America, Inc., which consists of the Senior Credit Facility and Senior Subordinated Notes due 2009 (see Note 12).

69

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING BALANCE SHEET SCHEDULES:

                                                                                   DECEMBER 31, 2002
                                                      ----------------------------------------------------------------------------
                                                         PARENT        GUARANTOR      NONGUARANTOR
                                                        COMPANY       SUBSIDIARIES     SUBSIDIARY     ELIMINATIONS    CONSOLIDATED
                                                      ------------    ------------    ------------    ------------    ------------
                                                                                 (IN THOUSANDS OF DOLLARS)
ASSETS
Current assets:
    Cash ..........................................   $         --    $     14,047    $         --    $         --    $     14,047
    Accounts receivable, net ......................             --          44,429             857            (991)         44,295
    Inventories ...................................             --          61,937              --              --          61,937
    Deferred income taxes .........................             --           4,182              40              --           4,222
    Other current assets ..........................            445           7,719              --              --           8,164
                                                      ------------    ------------    ------------    ------------    ------------

           Total current assets ...................            445         132,314             897            (991)        132,665
Property and equipment, net .......................             --         444,197              --              --         444,197
Goodwill ..........................................             --          23,585              --              --          23,585
Deferred financing costs ..........................         27,452              --              --              --          27,452
Deferred income taxes .............................         23,696          (5,915)             --              --          17,781
Other noncurrent assets ...........................            996          14,091              --              --          15,087
Investment in subsidiaries ........................        241,515              --              --        (241,515)             --
                                                      ------------    ------------    ------------    ------------    ------------

           Total assets ...........................   $    294,104    $    608,272    $        897    $   (242,506)   $    660,767
                                                      ============    ============    ============    ============    ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
    Current maturities of long-term debt ..........   $      3,280    $        180    $         --    $         --    $      3,460
    Accounts payable ..............................             --          58,354             158              --          58,512
    Other accrued liabilities .....................          2,979          48,211           1,140            (991)         51,339
                                                      ------------    ------------    ------------    ------------    ------------

           Total current liabilities ..............          6,259         106,745           1,298            (991)        113,311
Long-term debt (net of unamortized discount) ......        521,243           2,691              --              --         523,934
Deferred income taxes .............................             --           2,107              --              --           2,107
Intercompany advances .............................       (249,859)        255,226          (5,367)             --              --
Other noncurrent liabilities ......................             --           6,209              --              --           6,209
                                                      ------------    ------------    ------------    ------------    ------------

           Total liabilities ......................        277,643         372,978          (4,069)           (991)        645,561

Redeemable equity .................................            681              --              --              --             681
Nonredeemable stockholders' equity:
    Common stock and other stockholders'
       equity .....................................        218,548         185,660              --        (186,915)        217,293
    Retained earnings (accumulated deficit) .......       (202,768)         49,634           4,966         (54,600)       (202,768)
                                                      ------------    ------------    ------------    ------------    ------------

           Total nonredeemable stockholders' equity         15,780         235,294           4,966        (241,515)         14,525
                                                      ------------    ------------    ------------    ------------    ------------

           Total liabilities, redeemable equity and
               nonredeemable stockholders' equity .   $    294,104    $    608,272    $        897    $   (242,506)   $    660,767
                                                      ============    ============    ============    ============    ============

70

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                                                                                  DECEMBER 31, 2003
                                                      ----------------------------------------------------------------------------
                                                        PARENT          GUARANTOR     NONGUARANTOR
                                                        COMPANY       SUBSIDIARIES    SUBSIDIARIES    ELIMINATIONS    CONSOLIDATED
                                                      ------------    ------------    ------------    ------------    ------------
                                                                               (IN THOUSANDS OF DOLLARS)
ASSETS
Current assets:
    Cash ..........................................   $         --    $     14,746    $        259    $         --    $     15,005
    Accounts receivable, net ......................             --          43,489           1,056          (1,558)         42,987
    Inventories ...................................             --          63,771             210              --          63,981
    Deferred income taxes .........................             --           3,820               3              --           3,823
    Other current assets ..........................            620           6,598               4            (260)          6,962
                                                      ------------    ------------    ------------    ------------    ------------

           Total current assets ...................            620         132,424           1,532          (1,818)        132,758
Property and equipment, net .......................             --         431,470           6,663              --         438,133
Goodwill ..........................................             --          25,584              --              --          25,584
Deferred financing costs, net .....................         24,012              --              --              --          24,012
Deferred income taxes .............................         21,002          (6,612)            129              --          14,519
Other noncurrent assets ...........................            896          18,949              --          (4,284)         15,561
Investment in subsidiaries ........................        266,844           1,702              --        (268,546)             --
                                                      ------------    ------------    ------------    ------------    ------------

           Total assets ...........................   $    313,374    $    603,517    $      8,324    $   (274,648)   $    650,567
                                                      ============    ============    ============    ============    ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
    Current maturities of long-term debt ..........   $      3,165    $        189    $         --    $         --    $      3,354
    Accounts payable ..............................             --          59,524             854            (624)         59,754
    Other accrued liabilities .....................          2,686          47,037           1,491          (1,194)         50,020
                                                      ------------    ------------    ------------    ------------    ------------

           Total current liabilities ..............          5,851         106,750           2,345          (1,818)        113,128
Long-term debt (net of unamortized discount) ......        499,417           2,616           4,284          (4,284)        502,033
Deferred income taxes .............................             --           2,137              --              --           2,137
Intercompany payable (receivable) .................       (217,296)        222,964          (5,668)             --              --
Other noncurrent liabilities ......................             --           8,318              --              --           8,318
                                                      ------------    ------------    ------------    ------------    ------------

           Total liabilities ......................        287,972         342,785             961          (6,102)        625,616

Redeemable equity .................................          1,919              --              --              --           1,919

Nonredeemable stockholders' equity:
    Common stock and other nonredeemable
       stockholders' equity .......................        217,370         186,155           2,125        (188,731)        216,919
       Retained earnings (deficit) ................       (193,877)         74,577           5,238         (79,815)       (193,877)
                                                      ------------    ------------    ------------    ------------    ------------

           Total nonredeemable stockholders' equity         23,493         260,732           7,363        (268,546)         23,042
                                                      ------------    ------------    ------------    ------------    ------------
           Total liabilities, redeemable equity and
               nonredeemable stockholders' equity .   $    313,374    $    603,517    $      8,324    $   (274,648)   $    650,567
                                                      ============    ============    ============    ============    ============

71

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS SCHEDULES:

                                                                               YEAR ENDED DECEMBER 31, 2001
                                                      ----------------------------------------------------------------------------
                                                         PARENT         GUARANTOR     NONGUARANTOR
                                                        COMPANY       SUBSIDIARIES     SUBSIDIARY     ELIMINATIONS    CONSOLIDATED
                                                      ------------    ------------    ------------    ------------    ------------
                                                                                (IN THOUSANDS OF DOLLARS)
Revenues:
    Fuel ..........................................   $         --    $  1,331,807    $         --    $         --    $  1,331,807
    Non-fuel ......................................             --         585,314              --              --         585,314
    Rent and royalties ............................             --          15,395           6,510          (4,414)         17,491
                                                      ------------    ------------    ------------    ------------    ------------

    Total revenues ................................             --       1,932,516           6,510          (4,414)      1,934,612
Cost of goods sold (excluding depreciation) .......             --       1,467,753              --              --       1,467,753
                                                      ------------    ------------    ------------    ------------    ------------

Gross profit (excluding depreciation) .............             --         464,763           6,510          (4,414)        466,859

Operating expenses ................................             --         325,608           4,474          (4,414)        325,668
Selling, general and
    administrative expenses .......................            958          35,343           2,382              --          38,683
Depreciation and amortization expense .............             --          64,347              --              --          64,347
(Gain) loss on sale of property and equipment .....             --          (1,788)             --              --          (1,788)
                                                      ------------    ------------    ------------    ------------    ------------

Income (loss) from operations .....................           (958)         41,253            (346)             --          39,949
Equity income (loss) ..............................          6,194             400              --          (6,194)            400
Interest and other financial costs, net ...........        (25,444)        (32,480)             --              --         (57,924)
                                                      ------------    ------------    ------------    ------------    ------------
Income (loss) before income taxes .................        (20,208)          9,173            (346)         (6,194)        (17,575)
Provision (benefit) for income taxes ..............        (10,154)          2,788            (155)             --          (7,521)
                                                      ------------    ------------    ------------    ------------    ------------

Net income (loss) .................................   $    (10,054)   $      6,385    $       (191)   $     (6,194)   $    (10,054)
                                                      ============    ============    ============    ============    ============

72

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                                                                                 YEAR ENDED DECEMBER 31, 2002
                                                      ----------------------------------------------------------------------------
                                                         PARENT         GUARANTOR     NONGUARANTOR
                                                        COMPANY       SUBSIDIARIES     SUBSIDIARY     ELIMINATIONS    CONSOLIDATED
                                                      ------------    ------------    ------------    ------------    ------------
                                                                               (IN THOUSANDS OF DOLLARS)
Revenues:
    Fuel ..........................................   $         --    $  1,237,989    $         --    $         --    $  1,237,989
    Non-fuel ......................................             --         617,342              --              --         617,342
    Rent and royalties ............................             --          13,842           6,036          (4,339)         15,539
                                                      ------------    ------------    ------------    ------------    ------------

    Total revenues ................................             --       1,869,173           6,036          (4,339)      1,870,870
Cost of goods sold  (excluding depreciation) ......             --       1,389,680              --              --       1,389,680
                                                      ------------    ------------    ------------    ------------    ------------

Gross profit (excluding depreciation) .............             --         479,493           6,036          (4,339)        481,190

Operating expenses ................................             --         332,159           4,403          (4,339)        332,223
Selling, general and
    administrative expenses .......................            813          35,524           1,481              --          37,818
Depreciation and amortization expense .............             --          60,301              --              --          60,301
(Gain) loss on sale of property and equipment .....             --          (1,089)             --              --          (1,089)
                                                      ------------    ------------    ------------    ------------    ------------

Income (loss) from operations .....................           (813)         52,598             152              --          51,937
Equity income (loss) ..............................         16,976             718              --         (16,976)            718
Interest and other financial costs, net ...........        (22,409)        (29,014)             --              --         (51,423)
                                                      ------------    ------------    ------------    ------------    ------------
Income (loss) before income taxes .................         (6,246)         24,302             152         (16,976)          1,232
Provision (benefit) for income taxes ..............         (7,517)          7,420              58              --             (39)
                                                      ------------    ------------    ------------    ------------    ------------

Net income loss ...................................   $      1,271    $     16,882    $         94    $    (16,976)   $      1,271
                                                      ============    ============    ============    ============    ============

73

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                                                                                 YEAR ENDED DECEMBER 31, 2003
                                                      ----------------------------------------------------------------------------
                                                         PARENT        GUARANTOR      NONGUARANTOR
                                                        COMPANY       SUBSIDIARIES    SUBSIDIARIES    ELIMINATIONS    CONSOLIDATED
                                                      ------------    ------------    ------------    ------------    ------------
                                                                                (IN THOUSANDS OF DOLLARS)
Revenues:
    Fuel ..........................................   $         --    $  1,502,268    $     11,380    $         --    $  1,513,648
    Non-fuel ......................................             --         646,244           3,258              --         649,502
    Rent and royalties ............................             --          11,623           5,516          (4,059)         13,080
                                                      ------------    ------------    ------------    ------------    ------------

    Total revenues ................................             --       2,160,135          20,154          (4,059)      2,176,230
Cost of goods sold  (excluding depreciation) ......             --       1,662,643          12,123              --       1,674,766
                                                      ------------    ------------    ------------    ------------    ------------

Gross profit (excluding depreciation) .............             --         497,492           8,031          (4,059)        501,464

Operating expenses ................................             --         340,008           6,096          (4,059)        342,045
Selling, general and administrative
    expenses ......................................          1,023          38,615             905              --          40,543
Depreciation and amortization expense .............             --          59,909             466              --          60,375
(Gain) loss on sale of property and
   equipment ......................................             --          (1,476)             --              --          (1,476)
                                                      ------------    ------------    ------------    ------------    ------------

Income (loss) from operations .....................         (1,023)         60,436             564              --          59,977
Equity income (loss) ..............................         25,328             651              --         (25,215)            764
Interest and other financial costs, net ...........        (23,803)        (22,806)           (269)             --         (46,878)
                                                      ------------    ------------    ------------    ------------    ------------
Income (loss) before income taxes and
   extraordinary item .............................            502          38,281             295         (25,215)         13,863
Provision (benefit) for income taxes ..............         (8,389)         13,085              23              --           4,719
                                                      ------------    ------------    ------------    ------------    ------------

Income (loss) before extraordinary item ...........          8,891          25,196             272         (25,215)          9,144
Extraordinary loss (less applicable income
   tax benefit) ...................................             --            (253)             --              --            (253)
                                                      ------------    ------------    ------------    ------------    ------------
Net income (loss) .................................   $      8,891    $     24,943    $        272    $    (25,215)   $      8,891
                                                      ============    ============    ============    ============    ============

74

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS SCHEDULES:

                                                                              YEAR ENDED DECEMBER 31, 2001
                                                      ----------------------------------------------------------------------------
                                                         PARENT        GUARANTOR      NONGUARANTOR
                                                        COMPANY       SUBSIDIARIES     SUBSIDIARY     ELIMINATIONS    CONSOLIDATED
                                                      ------------    ------------    ------------    ------------    ------------
                                                                               (IN THOUSANDS OF DOLLARS)
CASH FLOWS (USED IN) PROVIDED BY
   OPERATING ACTIVITIES: ..........................   $    (24,614)   $     54,809    $        186    $         --    $     30,381
                                                      ------------    ------------    ------------    ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Proceeds from sales of property and
        equipment .................................             --           8,256              --              --           8,256
    Capital expenditures ..........................             --         (54,490)             --              --         (54,490)
                                                      ------------    ------------    ------------    ------------    ------------

        Net cash used in investing activities .....             --         (46,234)             --              --         (46,234)
                                                      ------------    ------------    ------------    ------------    ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Increase (decrease) in checks drawn in
        excess of bank balances ...................             --           6,725              --              --           6,725
    Revolving loan borrowings (repayments, net) ...          3,600              --              --              --           3,600
    Long-term debt repayments .....................             --            (165)             --              --            (165)
    Premiums paid on debt extinguishment ..........           (899)             --              --              --            (899)
    Merger and recapitalization expenses paid .....         (2,417)             --              --              --          (2,417)
    Other .........................................           (122)             --              --              --            (122)
    Intercompany advances .........................         24,452         (24,266)            186              --              --
                                                      ------------    ------------    ------------    ------------    ------------

        Net cash (used in) provided by
           financing activities ...................         24,614         (17,706)            186              --           6,722
                                                      ------------    ------------    ------------    ------------    ------------

           Net increase (decrease) in cash ........             --          (9,131)             --              --          (9,131)

Cash at the beginning of the year .................             --          29,019              --              --          29,019
                                                      ------------    ------------    ------------    ------------    ------------

Cash at the end of the year .......................   $         --    $     19,888    $         --    $         --    $     19,888
                                                      ============    ============    ============    ============    ============

75

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                                                                                YEAR ENDED DECEMBER 31, 2002
                                                      ----------------------------------------------------------------------------
                                                         PARENT         GUARANTOR     NONGUARANTOR
                                                        COMPANY       SUBSIDIARIES     SUBSIDIARY     ELIMINATIONS    CONSOLIDATED
                                                      ------------    ------------    ------------    ------------    ------------
                                                                               (IN THOUSANDS OF DOLLARS)
CASH FLOWS (USED IN) PROVIDED BY
    OPERATING ACTIVITIES: .........................   $     (7,105)   $     82,379    $        300    $         --    $     75,574
                                                      ------------    ------------    ------------    ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Business acquisitions .........................             --          (4,243)             --              --          (4,243)
    Proceeds from sales of property and
        equipment .................................             --           4,773              --              --           4,773
    Capital expenditures ..........................             --         (42,640)             --              --         (42,640)
                                                      ------------    ------------    ------------    ------------    ------------

        Net cash used in investing activities .....             --         (42,110)             --              --         (42,110)
                                                      ------------    ------------    ------------    ------------    ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Increase (decrease) in checks drawn in
        excess of bank balances ...................             --         (14,062)             --              --         (14,062)
    Revolving loan borrowings (repayments, net) ...        (21,500)             --              --              --         (21,500)
    Long-term debt repayments .....................         (3,280)           (129)             --              --          (3,409)
    Merger and recapitalization expenses paid .....           (150)             --              --              --            (150)
    Other .........................................           (184)             --              --              --            (184)
    Intercompany advances .........................         32,219         (31,919)           (300)             --              --
                                                      ------------    ------------    ------------    ------------    ------------

        Net cash (used in) provided by
           financing activities ...................          7,105         (46,110)           (300)             --         (39,305)
                                                      ------------    ------------    ------------    ------------    ------------

           Net increase (decrease) in cash ........             --          (5,841)             --              --          (5,841)

Cash at the beginning of the year .................             --          19,888              --              --          19,888
                                                      ------------    ------------    ------------    ------------    ------------

Cash at the end of the year .......................   $         --    $     14,047    $         --    $         --    $     14,047
                                                      ============    ============    ============    ============    ============

76

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                                                                              YEAR ENDED DECEMBER 31, 2003
                                                    ----------------------------------------------------------------------------
                                                       PARENT         GUARANTOR     NONGUARANTOR
                                                      COMPANY       SUBSIDIARIES     SUBSIDIARY     ELIMINATIONS    CONSOLIDATED
                                                    ------------    ------------    ------------    ------------    ------------
                                                                            (IN THOUSANDS OF DOLLARS)
CASH FLOWS (USED IN) PROVIDED BY
    OPERATING ACTIVITIES: .......................   $     (9,255)   $     83,697    $      1,066    $      1,816    $     77,324
                                                    ------------    ------------    ------------    ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Business acquisitions .......................             --          (4,923)         (5,267)             --         (10,190)
    Proceeds from sales of property and
        equipment ...............................             --           3,900              --              --           3,900
    Capital expenditures ........................             --         (43,466)           (730)             --         (44,196)
                                                    ------------    ------------    ------------    ------------    ------------

        Net cash used in investing activities ...             --         (44,489)         (5,997)             --         (50,486)
                                                    ------------    ------------    ------------    ------------    ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Increase (decrease) in checks drawn in
        excess of bank balances .................             --          (2,598)             --              --          (2,598)
    Revolving loan borrowings (repayments), net .         (8,800)             --              --              --          (8,800)
    Long-term debt repayments ...................        (14,508)           (180)             --              --         (14,688)
    Other .......................................             --              --           1,816          (1,816)             --
    Intercompany advances .......................         32,563         (35,731)          3,168              --              --
                                                    ------------    ------------    ------------    ------------    ------------

        Net cash (used in) provided by
           financing activities .................          9,255         (38,509)          4,984              --         (26,086)
                                                    ------------    ------------    ------------    ------------    ------------

        Effect of exchange rate changes on cash .             --              --             206              --             206
                                                    ------------    ------------    ------------    ------------    ------------

           Net increase (decrease) in cash ......             --             699             259              --             958

Cash at the beginning of the year ...............             --          14,047              --              --          14,047
                                                    ------------    ------------    ------------    ------------    ------------

Cash at the end of the year .....................   $         --    $     14,746    $        259    $         --    $     15,005
                                                    ============    ============    ============    ============    ============

77

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

Not applicable.

ITEM 9A. CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures. Our Chief Executive Officer and Chief Financial Officer, after conducting an evaluation, together with other members of our management, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report, have concluded that our disclosure controls and procedures (as defined in Exchange Act Rule 13a-14
(c)) were effective to ensure that information required to be disclosed by us in our reports filed or submitted under the Securities Exchange Act of 1934 (the "Exchange Act") is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission (the "SEC").

(b) Changes in internal controls. There were no significant changes in our internal controls or in other factors that could significantly affect our internal controls subsequent to the date of our most recent evaluation of our internal controls.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information concerning our directors and executive officers required by this item is incorporated by reference to the material appearing under the headings "Our Directors and Officers," "Code of Ethics," and "Committees of the Board of Directors" in Exhibit 99.1 to this annual report.

ITEM 11. EXECUTIVE COMPENSATION

Information concerning executive compensation required by this item is incorporated by reference to the material appearing under the heading "Executive Compensation" in Exhibit 99.1 to this annual report.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Information concerning security ownership of certain of our beneficial owners and management required by this item is incorporated by reference to the material appearing under the heading "Security Ownership of Certain Beneficial Owners and Management" in Exhibit 99.1 to this annual report.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information concerning certain relationships and related transactions required by this item is incorporated by reference to the material appearing under the heading "Certain Relationships and Related Transactions" in Exhibit 99.1 to this annual report.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

Information concerning principal accounting fees and services required by this item is incorporated by reference to the material appearing under the heading "Principal Accounting Fees and Services" in Exhibit 99.1 to this annual report.

78

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

A. Documents filed as part of this report:

1. Financial Statements

Financial statements filed as part of this report are listed in the Index to Consolidated Financial Statements and Supplementary Data on page 37 of this annual report.

2. Financial Statement Schedule

Schedule II - Valuation and Qualifying Accounts

                                                      Balance at      Charged      Charged        Deductions   Balance at
                                                     Beginning of    (Credited)    to Other          from        End of
                                                        Period        To Income    Accounts        Reserves      Period
                                                        ------        ---------    --------        --------      ------
                                                                           (In Thousands of Dollars)
Year Ended December 31, 2001:
Deducted from accounts and notes
receivable for doubtful accounts .................   $      5,218    $      --    $        --    $ (2,833)(a)   $  2,385

Year Ended December 31, 2002:
Deducted from accounts and notes
receivable for doubtful accounts .................   $      2,385    $   1,100    $        --    $ (1,076)(a)   $  2,409

Year Ended December 31, 2003:
Deducted from accounts and notes
receivable for doubtful accounts .................   $      2,409    $   1,180    $        --    $ (1,593)(a)   $  1,996

(a) Uncollectible accounts and notes receivable charged off, net of amounts recovered.

All other schedules are omitted because they are not applicable, not material or the required information is shown in the financial statements listed above.

3. Exhibits

Reference is made to the Exhibit Index set forth at page 82 of this annual report.

B. Reports on Form 8-K

No reports on Form 8-K were filed during the fourth quarter of the year ended December 31, 2003.

79

SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION
15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934

No annual report or proxy statement has been furnished to our security holders. We shall furnish to the Securities and Exchange Commission for its information, at the time copies of such material are furnished to our security holders, four copies of every proxy statement, form of proxy or other proxy soliciting material sent to more than ten of our security holders with respect to our annual meeting. The foregoing material shall not be deemed to be "filed" with the Securities and Exchange Commission or otherwise subject to the liabilities of Section 18 of the Securities Exchange Act of 1934, except to the extent that we specifically incorporate it in this Form 10-K by reference.

80

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

TRAVELCENTERS OF AMERICA, INC.

                                By: /s/ James W. George
                                   ----------------------------------
                                   Name:  James W. George
        March  30, 2004            Title: Executive Vice President,
-----------------------------      Chief Financial Officer and Secretary
            (Date)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities on the date indicated.

                   Signature                                         Title                                        Date
                   ---------                                         -----                                        ----
                                                     Chairman of the Board of Directors                      March 30, 2004
/s/            Edwin P. Kuhn                             and Chief Executive Officer
------------------------------------------               (Principal Executive Officer)
               Edwin P. Kuhn

                                                     Executive Vice President, Chief Financial               March 30, 2004
/s/         James W. George                              Officer and Secretary (Principal
------------------------------------------               Financial Officer and Principal
            James W. George                              Accounting Officer)

/s/          Robert J. Branson                       Director                                                March 30, 2004
------------------------------------------
             Robert J. Branson

/s/           Michael Greene                         Director                                                March 30, 2004
------------------------------------------
              Michael Greene

/s/          Steven B. Gruber                        Director                                                March 30, 2004
------------------------------------------
             Steven B. Gruber

/s/         Louis J. Mischianti                      Director                                                March 30, 2004
------------------------------------------
            Louis J. Mischianti

/s/         Rowan G. P. Taylor
------------------------------------------           Director                                                March 30, 2004
            Rowan G. P. Taylor

81

EXHIBIT INDEX

Exhibit
 Number                                             Exhibit
-------                                             -------
  2.1       Recapitalization Agreement and Plan of Merger dated as of May 31, 2000 ................   (d)

  2.2       Amendment No. 1 to Recapitalization Agreement and Plan of Merger dated as of
            October 2, 2000 ........................................................................  (e)


  3.1       Amended and Restated Certificate of Incorporation of TravelCenters of America, Inc. ...   (e)

  3.2       Amended and Restated By-laws of TravelCenters of America, Inc. ........................   (g)

  3.3       Restated Certificate of Incorporation of TA Operating Corporation .....................   (a)

  3.4       Amended and Restated By-laws of TA Operating Corporation ..............................   (a)

  3.5       Amended and Restated Certificate of Incorporation of TA Licensing, Inc. ...............   (e)

  3.6       By-laws of TA Licensing, Inc. .........................................................   (e)

  3.7       Certificate of Limited Partnership of TravelCenters Properties, L.P. ..................   (e)

  3.8       Agreement of Limited Partnership of TravelCenters Properties, L.P. ....................   (e)

  3.9       Certificate of Conversion from a Corporation to a Limited Liability Company of
            TravelCenters Realty, Inc. ............................................................   (i)

  3.10      Certificate of Formation of TravelCenters Realty, L.L.C ...............................   (i)

  3.11      Operating Agreement of TravelCenters Realty, L.L.C ....................................   (i)

  3.12      Certificate of Formation of TA Travel, L.L.C ..........................................   (e)

  3.13      Operating Agreement of TA Travel, L.L.C ...............................................   (e)

  4.1       Indenture, dated as of November 14, 2000 by and among TravelCenters of America, Inc., .
            TA Operating Corporation, TA Travel, L.L.C., TA Licensing, Inc., TravelCenters
            Properties, L.P., TravelCenters Realty, Inc. and State Street Bank and Trust Company      (e)

  4.2       Form of 12 3/4% Senior Subordinated Note due 2009 (included in Exhibit 4.1) ...........   (e)

  4.3       Exchange and Registration Rights Agreement, dated as of November 14, 2000 by and among
            TravelCenters of America, Inc., TA Operating Corporation, TA Travel, L.L.C., TA
            Licensing, Inc., TravelCenters Properties, L.P., TravelCenters Realty, Inc., Credit
            Suisse First Boston Corporation, Chase Securities Inc. and Donaldson, Lufkin & Jenrette
            Securities Corporation ................................................................   (e)

  4.4       Form of Warrant Certificate (included in Exhibit 10.21) ...............................   (e)

  4.5       Form of Common Stock Certificate ......................................................   (f)

 10.1       Amended and Restated Credit Agreement dated as of November 14, 2000 ...................   (e)

 10.2       Amendment and Waiver dated as of January 23, 2004 to the Amended and Restated Credit
            Agreement dated as of November 14, 2000 ...............................................    +

 10.3       Stockholders' Agreement among TravelCenters of America, Inc., Oak Hill Capital
            Partners, L.P., Oak Hill Capital Management Partners, L.P., Olympus Growth Fund III,
            L.P., Olympus Executive Fund, L.P., Monitor Clipper Equity Partners, L.P., Monitor
            Clipper Equity Partners (Foreign), L.P., UBS Capital America II, LLC, Credit Suisse
            First Boston LFG Holdings 2000, LLC and Freightliner LLC dated as of November 14, 2000    (e)

 10.4       Operating Agreement of Freightliner Corporation and TA Operating Corporation dated as
            of July 21, 1999 ......................................................................   (c)

 10.5       Amendment No. 1 to Operating Agreement of Freightliner LLC and TA Operating Corporation
            dated as of November 9, 2000 ..........................................................   (e)

82

EXHIBIT INDEX

Exhibit
 Number                                             Exhibit
-------                                             -------
 10.6       Agreement for Lease, dated as of September 9, 1999, among TA Operating Corporation,
            National Auto/Truckstops, Inc. and TCA Network Funding, LP. ...........................   (c)

 10.7       Lease Agreement, dated as of September 9, 1999, among TA Operating Corporation,
            National Auto/Truckstops, Inc. and TCA Network Funding, LP ............................   (c)

 10.8       Amendment No. 2, dated as of November 27, 2001, to Agreement for Lease among TCA
            Network Funding, LP and TA Operating Corporation.......................................   (h)

 10.9*      Employment Agreement, dated as of January 1, 2000, by and among TA Operating
            Corporation, TravelCenters of America, Inc. and Timothy L. Doane ......................   (e)

 10.10*     Employment Agreement, dated as of January 1, 2000, by and among TA Operating
            Corporation, TravelCenters of America, Inc. and James W. George .......................   (e)

 10.11*     Employment Agreement, dated as of January 1, 2000, by and among TA Operating
            Corporation, TravelCenters of America, Inc. and Michael H. Hinderliter ................   (e)

 10.12*     Employment Agreement, dated as of January 1, 2000, by and among TA Operating
            Corporation, TravelCenters of America, Inc. and Edwin P. Kuhn .........................   (e)

 10.13*     Amendment No. 1 to Employment Agreement dated as of May 26, 2000, by and among TA
            Operating Corporation, TravelCenters of America, Inc. and Timothy L. Doane ............   (e)

 10.14*     Amendment No. 1 to Employment Agreement dated as of May 26, 2000, by and among TA
            Operating Corporation, TravelCenters of America, Inc. and James W. George .............   (e)

 10.15*     Amendment No. 1 to Employment Agreement dated as of May 26, 2000, by and among TA
            Operating Corporation, TravelCenters of America, Inc. and Michael H. Hinderliter ......   (e)

 10.16*     Amendment No. 1 to Employment Agreement dated as of May 26, 2000, by and among TA
            Operating Corporation, TravelCenters of America, Inc. and Edwin P. Kuhn ...............   (e)

 10.17*     Employment Agreement, dated as of January 1, 2002, by and among TA Operating
            Corporation, TravelCenters of America, Inc. and Steven C. Lee .........................   (i)

 10.18*     Amendment No. 2 to Employment Agreement, dated as of December 31, 2002, by and among TA
            Operating Corporation, TravelCenters of America, Inc. and Edwin P. Kuhn ...............   (i)

 10.19      Warrant Agreement dated as of November 14, 2000 between TravelCenters of America, Inc.
            and State Street Bank and Trust Company, as warrant agent .............................   (e)

 10.20      Contingent Warrant Escrow Agreement dated as of November 14, 2000 between TravelCenters
            of America, Inc. and State Street Bank and Trust Company, as warrant escrow agent .....   (e)

 10.21*     Form of Management Subscription Agreement .............................................   (a)

 10.22*     Schedule of Management Subscription Agreements omitted pursuant to Instruction 2 to
            Item 601 of Regulation S-K ............................................................   (b)

 10.23*     Form of Management Note ...............................................................   (b)

 10.24*     Schedule of Management Notes omitted pursuant to Instruction 2 to Item 601 of
            Regulation S-K ........................................................................   (b)

 10.25*     2001 Stock Incentive Plan of TravelCenters of America, Inc. ...........................   (h)

 10.26*     Form of 2001 Stock Incentive Plan - Nonqualified Stock Option Agreement ...............   (h)

 10.27*     Amendment to Management Subscription Agreement with Edwin P. Kuhn .....................   +

 10.28*     Form of Amendment to Management Subscription Agreement ................................   +

83

EXHIBIT INDEX

Exhibit
 Number                                             Exhibit
-------                                             -------
 10.29*     Schedule of Amendments to Management Subscription Agreements omitted pursuant to ......   +
            Instruction 2 to Item 601 of Regulation S-K

 10.30      Buy-out Agreement of Unocal and the Company dated as of December 31, 2003 .............   +

 21.1       List of Subsidiaries of TravelCenters of America, Inc. ................................   (i)

 23.1       Consent of PricewaterhouseCoopers LLP .................................................   +

 31.1       Section 302 Certification of Chief Executive Officer ..................................   +

 31.2       Section 302 Certification of Chief Financial Officer ..................................   +

 32.1       Section 906 Certification of Chief Executive Officer ..................................   +

 32.2       Section 906 Certification of Chief Financial Officer ..................................   +

 99.1       Information Required by Part III of Form 10-K .........................................   +

(a) Incorporated by reference to exhibits filed with our Annual Report on Form 10-K for the year ended December 31, 1997.

(b) Incorporated herein by reference to exhibits filed with our Annual Report on Form 10-K for the year ended December 31, 1998.

(c) Incorporated herein by reference to exhibits filed with our Quarterly Report on Form 10-Q for the quarter ended September 30, 1999.

(d) Incorporated herein by reference to exhibits filed with our Quarterly Report on Form 10-Q for the quarter ended June 30, 2000.

(e) Incorporated herein by reference to exhibits filed with our Registration Statement on Form S-4 filed on December 21, 2000.

(f) Incorporated herein by reference to exhibits filed with our Pre-Effective Amendment No. 1 to our Registration Statement on Form S-4 filed on January 18, 2001.

(g) Incorporated herein by reference to exhibits filed with our Annual Report on Form 10-K for the year ended December 31, 2000.

(h) Incorporated herein by reference to exhibits filed with our Annual Report on Form 10-K for the year ended December 31, 2001.

(i) Incorporated by reference to exhibits filed with our Annual Report on Form 10-K for the year ended December 31, 2002, that was filed on March 26, 2003.

+ Filed herewith

* Executive compensation plans.

84

Exhibit 10.2

AMENDMENT AND WAIVER dated as of January 23, 2004, to the Amended and Restated Credit Agreement dated as of November 14, 2000, as amended (the "Credit Agreement"), among TRAVELCENTERS OF AMERICA, INC. (the "Borrower"), the Lenders party thereto, , JPMORGAN SECURITIES INC. and CREDIT SUISSE FIRST BOSTON, as co-lead arrangers, JPMORGAN CHASE BANK (successor to THE CHASE MANHATTAN BANK), as administrative agent (the "Administrative Agent") CREDIT SUISSE FIRST BOSTON, as syndication agent and U.S. BANK, N.A. (successor to FIRSTAR BANK, N.A.), as documentation agent.

A. The Lenders have extended credit to the Borrower, and have agreed to extend credit to the Borrowers, in each case pursuant to the terms and subject to the conditions set forth in the Credit Agreement.

B. The Borrower has requested that certain provisions of the Credit Agreement be amended and waived as set forth herein.

C. The undersigned Lenders are willing to amend and waive certain provisions of the Credit Agreement pursuant to the terms and subject to the conditions set forth herein (a) to increase the LC Commitment and (b) to settle certain past, present and future claims and terminate any and all remaining obligations of Union Oil Company of California ("Unocal") to the Borrower and certain of its affiliates pursuant to the terms and conditions of the Environmental Agreement dated as of November 23, 1992 (as amended, supplemented or otherwise modified from time to time, the "Unocal Environmental Agreement") between Unocal and TA Operating Corporation, a wholly owned subsidiary of the Borrower.

D. Capitalized terms used but not defined herein have the meanings assigned to them in the Credit Agreement, as amended hereby.

Accordingly, in consideration of the mutual agreements herein contained and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, and subject to the conditions set forth herein, the parties hereto hereby agree as follows:

SECTION 1. Amendment to Section 1.01. Section 1.01 of the Credit Agreement is hereby amended by deleting the dollar amount of "$25,000,000" in the defined term "LC Commitment" immediately following the words "`LC Commitment' shall mean" and replacing it with the dollar amount of $50,000,000.


SECTION 2. Amendment to Section 10.04(b). Clause (i) of Section 10.04(b) of the Credit Agreement is hereby amended by replacing it in its entirety with the following:

each of the Borrower and the Administrative Agent must give their prior written consent to such assignment (which consent shall not be unreasonably withheld), provided further that (A) no consent of the Borrower shall be required for any assignment to a Lender, any Lender Affiliate of a Lender or any Federal Reserve Bank and (B) no consent of the Administrative Agent shall be required in the case of an assignment of (1) a Revolving Credit Commitment or a Revolving Loan to a Lender or a Lender Affiliate with a Revolving Credit Commitment or a Revolving Loan immediately prior to giving effect to such assignment and (2) any Term Loan to a Lender, a Lender Affiliate or any Federal Reserve Bank.

SECTION 3. Waiver of Section 7.10(g). The Required Lenders hereby waive compliance with Section 7.10(g) of the Credit Agreement to the extent necessary to permit the consummation of the settlement and termination of the Unocal Environmental Agreement contemplated by the Borrower and Unocal, in accordance with the Buyout Agreement attached hereto as Exhibit A.

SECTION 4. Representations and Warranties. The Borrower hereby represents and warrants to the Administrative Agent and to each of the Lenders that:

(a) This Amendment has been duly authorized, executed and delivered by the Borrower and constitutes a legal, valid and binding obligation of the Borrower, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

(b) The representations and warranties of the Borrower set forth in the Loan Documents are true and correct on and as of the date hereof with the same effect as though made on the date hereof, except to the extent such representations and warranties expressly relate to an earlier date or that there are changes to the factual information contained in such representations and warranties that do not reflect any violation of or failure to comply with any provision of this Amendment or any other Loan Document.

(c) The Borrower shall be in compliance with all the material terms and provisions set forth herein and in each other Loan Document on its part to be observed or performed, and at the time of and immediately after giving effect to this Amendment no Event of Default or Default shall have occurred and be continuing.

SECTION 5. Conditions to Effectiveness. This Amendment shall become effective when the Administrative Agent shall have received (a) counterparts of this Amendment that, when taken together, bear the signature of the Borrower and the Required Lenders and (b) payment of all reasonable out-of-pocket expenses incurred by the Administrative Agent, including the reasonable charges, fees and disbursements of

2

Cravath, Swaine & Moore LLP, counsel for the Administrative Agent, to the extent invoiced prior to the date hereof.

SECTION 6. Credit Agreement. Except as specifically amended hereby, the Credit Agreement shall continue in full force and effect in accordance with the provisions thereof as in existence on the date hereof. After the date hereof, any reference to the Credit Agreement shall mean the Credit Agreement as amended or modified hereby. This Amendment shall be a Loan Document for all purposes.

SECTION 7. APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

SECTION 8. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AMENDMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.

SECTION 9. Counterparts. This Amendment may be executed in two or more counterparts, each of which shall constitute an original but all of which when taken together shall constitute but one contract. Delivery of an executed signature page to this Amendment by facsimile or other electronic transmission shall be effective as delivery of a manually signed counterpart of this Amendment.

SECTION 10. Headings. The Section headings used herein are for convenience of reference only, are not part of this Amendment and are not to affect the construction of, or to be taken into consideration in interpreting, this Amendment.

3

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective authorized officers as of the day and year first written above.

TRAVELCENTERS OF AMERICA, INC.,

By

/s/         James W. George
------------------------------------
Name:  James W. George
Title: Executive Vice President and
       Chief Financial Officer

JPMORGAN CHASE BANK, individually and as Administrative Agent,

by

/s/   William J. Caggiano
------------------------------------
Name:  William J. Caggiano
Title: Managing Director

[Lender Signature Pages Omitted]

4

EXHIBIT 10.27

AMENDMENT TO MANAGEMENT EQUITY ROLLOVER AGREEMENT

AMENDMENT TO MANAGEMENT EQUITY ROLLOVER AGREEMENT ("Amendment") dated as of December 15, 2003, by and among TA Operating Corporation, a Delaware corporation (the "Company"), TravelCenters of America, Inc., a Delaware corporation ("Holdings"), and Edwin P. Kuhn (the "Employee").

WHEREAS, Holdings, as successor by merger to TCA Acquisition Corporation, and the Employee are parties to a Management Equity Rollover Agreement dated November 9, 2000 (the "Management Equity Rollover Agreement"); and

WHEREAS, the parties have previously amended the Management Equity Rollover Agreement pursuant to that certain Amendment No. 2 to Employment Agreement, dated as of December 31, 2002.

WHEREAS, the parties desire to further modify the Management Equity Rollover Agreement as hereinafter set forth; and

WHEREAS, Section 11.2(b) of the Management Equity Rollover Agreement permit the parties thereto to amend such agreement in a writing signed by each party.

NOW, THEREFORE, in consideration of the parties' mutual desire to modify the Management Equity Rollover Agreement, and the mutual covenants herein contained, the parties agree as follows effective December 15, 2003:

Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Management Equity Rollover Agreement.

1. Section 4.1 of the Management Equity Rollover Agreement shall be deleted in its entirety, and the following shall be inserted therefor:

"4.1 Repurchase - Death or Disability. In the event of a termination of Management Employee's employment with the Company (a "Termination") by reason of Management Employee's death or Disability, then the Company, by


written notice delivered within sixty (60) days after the Termination (the "Call Exercise Notice") to the Management Employee or his estate, legal representative or committee, as the case may be (the "Departing Purchaser"), shall have the right, but not the obligation to purchase, and if the Company exercises such right, the Departing Purchaser and any Permitted Transferees shall have the obligation to sell, such number of TravelCenters Common Stock specified in the Call Exercise Notice, which number may be any or all of the TravelCenters Common Stock held by the Departing Purchaser and any Permitted Transferees, at a price per share equal to the Fair Market Value thereof as of the date of such Termination. In the event that, following the Termination, the Company does not exercise its right under this section to repurchase the TravelCenters Common Stock held by the Departing Purchaser, then until sixty (60) days following the date on which the Company ceased to be entitled to purchase such TravelCenters Common Stock pursuant to this section (or affirmatively waived in writing its right to do so) such Departing Purchaser shall have the right and option (the "Put Option") to require the Company to purchase any or all of the TravelCenters Common Stock held by such Departing Purchaser and such Departing Purchasers' Permitted Transferees by delivering written notice of exercise (the "Put Exercise Notice") to the Company setting forth the number of such TravelCenters Common Stock subject to the Put Option. If the Departing Purchaser shall exercise the Put Option, then the Company shall purchase and the Departing Purchaser and such Departing Purchaser's Permitted Transferees shall sell, such number of TravelCenters Common Stock set forth in the Put Exercise Notice held by such persons at a price per share equal to the Fair Market Value thereof as of the date of such Termination.

2

IN WITNESS WHEREOF, the parties have executed this Amendment to Management Equity Rollover Agreement as of the date first above written.

TRAVELCENTERS OF AMERICA, INC.
("Holdings")

By:    /s/ James W. George
       ----------------------------------------

Name:  James W. George
       ----------------------------------------

Title: Executive VP and Chief Financial Officer
       ----------------------------------------

TA OPERATING CORPORATION
("Company")

By:    /s/Edwin P. Kuhn
       ----------------------------------------

Name:  Edwin P. Kuhn
       ----------------------------------------

Title: Chief Executive Officer
       ----------------------------------------

Edwin P. Kuhn

("Employee")

3

EXHIBIT 10.28

AMENDMENT NO. 1 TO MANAGEMENT EQUITY ROLLOVER AGREEMENT

AMENDMENT NO. 1 TO MANAGEMENT EQUITY ROLLOVER AGREEMENT ("Amendment") dated as of December 15, 2003, 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, Holdings, as successor by merger to TCA Acquisition Corporation, and the Employee are parties to a Management Equity Rollover Agreement dated November 9, 2000 (the "Management Equity Rollover Agreement"); and

WHEREAS, the parties desire to modify the Management Equity Rollover Agreement as hereinafter set forth; and

WHEREAS, Section 11.2(b) of the Management Equity Rollover Agreement permit the parties thereto to amend such agreement in a writing signed by each party.

NOW, THEREFORE, in consideration of the parties' mutual desire to modify the Management Equity Rollover Agreement, and the mutual covenants herein contained, the parties agree as follows effective December 15, 2003:

Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Management Equity Rollover Agreement.

1. Section 4.1 of the Management Equity Rollover Agreement shall be deleted in its entirety, and the following shall be inserted therefor:

"4.1 Repurchase - Death or Disability. In the event of a termination of Management Employee's employment with the Company (a "Termination") by reason of Management Employee's death or Disability, then the Company, by written notice delivered within sixty (60) days after the Termination (the "Call Exercise Notice") to the Management Employee or his estate, legal representative or committee, as the case may be (the "Departing Purchaser"), shall have the right, but not the obligation to purchase, and if the Company exercises such right, the Departing Purchaser and any Permitted Transferees shall have the obligation to sell, such number of TravelCenters Common Stock specified in the Call


Exercise Notice, which number may be any or all of the TravelCenters Common Stock held by the Departing Purchaser and any Permitted Transferees, at a price per share equal to the Fair Market Value thereof as of the date of such Termination. In the event that, following the Termination, the Company does not exercise its right under this section to repurchase the TravelCenters Common Stock held by the Departing Purchaser, then until sixty (60) days following the date on which the Company ceased to be entitled to purchase such TravelCenters Common Stock pursuant to this section (or affirmatively waived in writing its right to do so) such Departing Purchaser shall have the right and option (the "Put Option") to require the Company to purchase any or all of the TravelCenters Common Stock held by such Departing Purchaser and such Departing Purchasers' Permitted Transferees by delivering written notice of exercise (the "Put Exercise Notice") to the Company setting forth the number of such TravelCenters Common Stock subject to the Put Option. If the Departing Purchaser shall exercise the Put Option, then the Company shall purchase and the Departing Purchaser and such Departing Purchaser's Permitted Transferees shall sell, such number of TravelCenters Common Stock set forth in the Put Exercise Notice held by such persons at a price per share equal to the Fair Market Value thereof as of the date of such Termination.

2. Section 4.2 of the Management Equity Rollover Agreement shall be deleted in its entirety, and the following shall be inserted therefore:

"4.2 Repurchase - Scheduled Retirement. In the event of a Termination by reason of Management Employee's Scheduled Retirement, Management Employee shall have the right to put to the Company upon 60, but not more than 90, days' advance written notice, and if Management Employee exercises such right, the Company shall be required to purchase from Management Employee, all or any part of the TravelCenters Common Stock and equity interests held by Management Employee as follows:

(a) commencing on the date of such Scheduled Retirement, the shares of TravelCenters Common Stock held by Management Employee at the Fair Market Value therefor;

(b) commencing on the date which is one year after the date of such Scheduled Retirement, 50% of all then exercisable TravelCenters equity interests held by Management Employee at the Fair Market Value of the TravelCenters Common Stock underlying such equity interests, minus the exercise price therefor;

(c) commencing on the date which is two years after the date of such Scheduled Retirement, all remaining exercisable TravelCenters equity interests held by Management Employee at the Fair Market Value of the TravelCenters Common Stock underlying such equity interests, minus the exercise price therefor;

2

(d) notwithstanding the foregoing clauses (a), (b), and (c) of this Section 4.2, if Management Employee's Scheduled Retirement is prior to the calendar year in which he has reached or will reach age 62, and Management Employee becomes employed by or renders any services to a TA Truck-Stop Competitor or has 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 Participant may own, solely as an investment, securities of any TA Truck-Stop Competitor that are publicly traded if the Participant (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) while such Management Employee holds TravelCenters Common Stock or equity interests, Management Employee shall have the right to put to the Company upon 60, but not more than 90, days' advance notice, and if Management Employee exercises such right, the Company shall be required to purchase from Management Employee, up to 25% of the TravelCenters Common Stock and equity interests held by Management employee as of the date of such Scheduled Retirement, at a price per share equal to the Fair Market Value therefor as of such date, and if the Management Employee exercises such right, the Company shall be required to purchase the remaining 75% of the TravelCenters Common Stock and equity interests held by Management Employee as of the date of such Scheduled Retirement on each anniversary following the date of such Scheduled Retirement through the calendar year in which Management Employee reaches or will reach age 62 (with an equal number of shares and equity interests to be purchased on each anniversary date), at a price per share equal to the Fair Market Value therefor as of the anniversary date in connection with which the purchase is being made. "TA Truck-Stop Competitor," shall mean Petro, Flying J, AMBEST, PTP, Sapp Bros., All American, Rip Griffin, Bosselman's, Texaco/Equilon, Pilot, Love's, Little America, 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. Nothing in this clause (d) shall alter or affect any restrictions on Management Employee's ability to compete with the Company contained in any agreement or plan applicable to Management Employee from time to time.

where, in each case, the Fair Market Value of a share is deemed to be its Fair Market Value (i) if the put right is exercised with proper notice as of the date of Management Employee's Scheduled Retirement or the date which is one year or two years thereafter, the Fair Market Value on the last day of the fiscal quarter which includes the date on which Management Employee provided notice of the exercise of his put right; or (ii) if the put right is exercised with proper notice as of any other date, the Fair Market Value on the last day of the fiscal quarter during which Management Employee provided notice of the exercise of his put right. The foregoing put right may be exercised by Management Employee not more

3

than two times per calendar year and is intended, notwithstanding the language of Section 5.1 of the Stock Option Agreement, dated December 26, 2001, between TravelCenters of America, Inc. and Management Employee, to be in lieu of and to supersede the Company's obligation to repurchase options contained in such Section 5.1. The foregoing provisions of this Section 4.2 to the contrary notwithstanding, if there is a Change of Control which involves the sale by stockholders of the Company other than Management Employee of shares of TravelCenters Common Stock (or the receipt of cash or other property in connection with Change of Control in respect of such shares of TravelCenters Common Stock), the Company shall be required upon the consummation of the transaction which gives rise to the Change of Control to purchase (or cause the purchase of) all remaining shares of TravelCenters Common Stock and TravelCenters equity interests held by Management Employee, at a price per share equal to the price per share paid to such stockholders pursuant to the Change of Control, minus any exercise price, as the case may be."

3. Section 4.3 of the Management Equity Rollover Agreement shall be deleted in its entirety, and the following shall be inserted therefor:

"4.3 Closing of Purchase. The closing of any purchase pursuant to
Section 4.1 or 4.2 shall take place at the principal office of the Company at a mutually scheduled day and time not later than the 60th day following (a) the later of (i) the date as of which the Fair Market Value with respect to such purchase is determined or (ii) the date as of which the put right or call right is exercised, or (b) the date of the Change of Control, as the case may be."

4. Section 4.6(a) of the Management Equity Rollover Agreement shall be deleted in its entirety, and the following substituted therefor:

"(a) At any time the Company elects or is required to purchase any shares pursuant to this Section 4, the Company shall pay the purchase price for such shares it purchases first, by set-off of any of the Management Employee's Note (including accrued and unpaid interest thereon) and then, by the Company's delivery of a bank cashier's check or certified check for the remainder of such purchase price, if any; provided that in lieu of paying cash, the Company may pay the purchase price for any purchases of shares pursuant to Section 4.4 (other than a purchase in connection with a Scheduled Retirement, Termination without Cause or due to a Resignation with Good Reason and except as provided in Section 4.5 above) by delivery of a promissory note substantially in the form of Exhibit B hereto issued by the Company to the Management Employee with an aggregate principal amount equal to the purchase price, bearing interest at the Prime Rate per annum, payable annually in arrears on the outstanding principal amount of such note and accruing on a daily basis from the date payment is otherwise required pursuant to this Section 4, and with principal payments to Management Employee in four equal annual installments commencing on the first anniversary of the date of such note."

4

5. Section 4.7(a) of the Management Equity Rollover Agreement shall be deleted in its entirety, and the following substituted therefor:

"(a) For purposes of this Section 4, the terms `Cause,' `Change of Control,' `Disability,' `Good Reason' and `Scheduled Retirement' have the meanings given to such terms in the Stock Option Agreement between Management Employee and TravelCenters, dated the Closing Date, as it may be amended from time to time, entered into pursuant to the TravelCenters of America, Inc. 2001 Stock Option Plan; in addition, the following terms shall have the following meanings:"

5

IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 to Management Equity Rollover Agreement as of the date first above written.

TRAVELCENTERS OF AMERICA, INC.
("Holdings")

By:    /s/ Timothy L. Doane
       ----------------------------------------

Name:  Timothy L. Doane
       ----------------------------------------

Title: President and Chief Operating Officer
       ----------------------------------------

TA OPERATING CORPORATION
("Company")

By:    /s/ James W. George
       ----------------------------------------

Name:  James W. George
       ----------------------------------------

Title: Executive VP and Chief Financial Officer
       ----------------------------------------

James W. George

("Employee")

6

EXHIBIT 10.29

SCHEDULE OF OMITTED AMENDMENTS TO MANAGEMENT SUBSCRIPTION AGREEMENTS

The following documents have been omitted as Exhibits to this annual report because they are on substantially identical terms as Exhibit 10.28 in all material respects.

1. Amendment No. 1 to Management Equity Rollover Agreement between TravelCenters of America, Inc., a Delaware corporation, and Timothy L. Doane

2. Amendment No. 1 to Management Equity Rollover Agreement between TravelCenters of America, Inc., a Delaware corporation, and Michael H. Hinderliter

3. Amendment No. 1 to Management Equity Rollover Agreement between TravelCenters of America, Inc., a Delaware corporation, and Steven C. Lee


Exhibit 10.30

BUYOUT AGREEMENT

THIS AGREEMENT is entered into and made to be effective as of the 31st day of December, 2003, and is executed by and between UNION OIL COMPANY OF CALIFORNIA, a California corporation, d/b/a/ Unocal (hereinafter referred to as "Unocal") and TA OPERATING CORPORATION d/b/a TravelCenters of America, a Delaware corporation headquartered in Westlake, Ohio, successor in interest by merger to NATIONAL AUTO/TRUCKSTOPS, INC., (hereinafter referred to as "NATIONAL"), and TravelCenters of America, Inc., a Delaware corporation headquartered in Westlake, Ohio (TravelCenters of America, Inc. and TA OPERATING CORPORATION are hereinafter referred to jointly and severally as "T/A")

W I T N E S S E T H:

WHEREAS, Unocal and NATIONAL have heretofore entered into that certain Asset Purchase Agreement as well as the Blythe, California Asset Purchase Agreement, the Buttonwillow, California Asset Purchase Agreement, the Ontario, California Asset Purchase Agreement, the Redding, California Asset Purchase Agreement, the Sacramento, California Asset Purchase Agreement and the Santa Nella, California Asset Purchase Agreement, all dated November 23, 1992, and all amended on April 13, 1993, along with certain Schedules, Exhibits and other documents ancillary thereto, (all hereinafter collectively referred to as the "Asset Purchase Agreements") and that certain Environmental Agreement also dated November 23, 1992 (hereinafter referred to as the "Environmental Agreement"); and

WHEREAS, Unocal wishes to terminate, be released from and be indemnified with respect to, all obligations it may have to T/A and its Affiliates or any Governmental Authority or other third party with respect to the environmental condition of and environmental compliance at the seventy-three
(73) locations listed in Exhibit "A" attached hereto and incorporated herein by reference (hereinafter the "Covered Facilities"), which were originally sold to NATIONAL by Unocal pursuant to the terms and conditions of the Asset Purchase Agreements and also to terminate and be released from any and all remaining obligations it may have to T/A pursuant to the terms and conditions of the Environmental Agreement; and

WHEREAS, Unocal and T/A wish to settle any and all past, present and future claims which T/A may have or hereafter acquire against Unocal, pertaining to said liabilities;

WHEREAS, T/A is willing to enter into this Agreement in exchange for the payment of certain monies and the provision of certain environmental insurance policies, all as hereinafter more specifically provided; and

NOW THEREFORE, in consideration of the payment of said monies and provision of said environmental insurance policies as hereinafter set forth and other good and valuable

1

consideration, receipt and adequacy of which is hereby acknowledged, the parties agree as follows:

1) DEFINITIONS. Any terms not defined herein shall be deemed to have the meaning ascribed thereto in the Asset Purchase Agreements and the Environmental Agreement, as appropriate.

2) ISSUANCE OF POLICIES. Within thirty (30) days following execution of this agreement, the parties shall bind and thereafter cause American International Speciality Lines Insurance Company (hereinafter AISLIC), a member of American International Group, Inc. (hereinafter AIG) to issue an AISLIC Clean-Up Cost Cap insurance Policy in form and content substantially identical to Exhibit "B" attached hereto and incorporated herein by reference (hereinafter the "Cost Cap Policy") and amend by endorsement T/A's current Pollution Legal Liability Policy such that said policy shall thereafter be in form and content substantially identical to Exhibit "C" attached hereto and incorporated herein by reference (hereinafter the "PLL Policy"). Hereinafter the Cost Cap Policy and the PLL Policy are referred to jointly as the "Policies".

3) PAYMENT OF FUNDS. Within ten business days following the effective date of this agreement, Unocal shall pay the sum of NINE MILLION SIX HUNDRED THIRTY-SIX THOUSAND NINE HUNDRED SIXTY-NINE DOLLARS ($9,636,969.00) into an escrow account (hereinafter the "Escrow Account") held by NATIONAL CITY BANK (hereinafter the "Escrow Agent"). Said funds shall thereafter be disbursed in accordance with the terms and conditions of the Escrow Agreement attached hereto as Exhibit "D" and incorporated herein by reference. T/A hereby acknowledges that the foregoing amount includes the sum of One Million Dollars ($1,000,000.00) to offset T/A's anticipated increased administrative and overhead costs for managing the future remediation of the Covered Facilities.

4) CONDITION PRECEDENT. It shall be a condition precedent to the obligations of both Unocal and T/A hereunder that T/A obtain approval of this Agreement from certain of its lenders (hereinafter the "Bank Approval") on or before January 31, 2004 (hereinafter the "Bank Approval Period"). Upon obtaining Bank Approval, T/A shall immediately give written notice of same to Unocal and the Escrow Agent (hereinafter the "Bank Approval Notice"). This Condition Precedent shall be deemed to have been satisfied upon receipt by Unocal and the Escrow Agent of the Bank Approval Notice prior to the expiration of the Bank Approval Period. In the event that the Bank Approval Notice is not received by Unocal and the Escrow Agent prior to the expiration of the Bank Approval Period, this Agreement shall be deemed to be null and void and of no further force and effect, and all funds paid into the Escrow Account by Unocal pursuant to paragraph 3 above shall be immediately disbursed back to Unocal. Provided however, that Unocal at its sole and exclusive option, may extend the Bank Approval Period for an additional thirty (30) days, upon written notice to T/A.

5) RELEASE. Effective upon binding of the Policies, T/A does hereby release Unocal from any and all remaining duties, liabilities or obligations Unocal may have pursuant to the terms and conditions of the Environmental Agreement, Environmental Laws or otherwise, as well as any

2

and all past, present and future liability, claims, demands, Damages, actions or causes of action, suits or causes of suit of any kind or nature whatsoever, whether known or unknown and whether arising at law or in equity, pursuant to the terms of the Asset Purchase Agreements, which pertain to, arise out of, in consequence of, or on account of, the environmental condition of, or environmental compliance at, the Covered Facilities, specifically including, but not limited to, any Release or the presence of any Hazardous Substances or other environmental contaminants in, upon, under or emanating from the soils, air or groundwater of the Covered Facilities, (all of the foregoing being hereinafter referred to as the "Released Liabilities"), which T/A or its Affiliates now have or may hereafter acquire against Unocal, regardless of whether or not the Released Liabilities are or have been the subject of, or have been identified in, any Claim previously filed by T/A.

6) ASSUMPTION OF LIABILITY. Effective upon binding of the Policies, T/A hereby assumes all liability and responsibility of Unocal and its Affiliates with respect to the Released Liabilities and with respect to meeting or satisfying any and all provisions of the Environmental Laws pertaining to the Released Liabilities or the Covered Facilities.

7) INDEMNITY. Effective upon binding of the Policies, T/A does hereby indemnify, defend and hold Unocal, its Affiliates, directors, officers, agents, attorneys, employees, successors, endorsees, and assigns, harmless from and against any and all past, present and future liability, claims, demands, Damages, fines, penalties, actions or causes of action, suits or causes of suit of any kind and nature whatsoever, whether known or unknown and whether at law or in equity, pursuant to the terms of the Asset Purchase Agreements, the Environmental Agreement, the Environmental Laws or otherwise, which T/A, its Affiliates or any Governmental Authority or other third party now has or may hereafter acquire against Unocal pertaining to, arising out of, in consequence of, or on account of the Released Liabilities, specifically including, but not limited to, any and all liability for Environmental Actions, Environmental Compliance Actions, Environmental Damages and Remedial Actions at the Covered Facilities.

8) SOLD SITES RELEASE. In addition to the foregoing and effective upon binding of the Policies, T/A does hereby release Unocal from any and all past, present and future liability, claims, demands, Damages, actions or causes of action, suits or causes of suit of any kind or nature whatsoever, whether known or unknown and whether arising at law or in equity, pursuant to the terms of the Asset Purchase Agreements, the Environmental Agreement, the Environmental Laws or otherwise, which pertain to, arise out of, in consequence of, or on account of, the environmental condition of, or environmental compliance at, the twenty-four (24) locations listed in Exhibit "E" attached hereto and incorporated herein by reference (hereinafter the "Sold Sites"), which were originally sold to NATIONAL by Unocal pursuant to the terms and conditions of the Asset Purchase Agreements but which have since been sold by National to third parties, specifically including, but not limited to, any Release or the presence of any Hazardous Substances or other environmental contaminants in, upon, under or emanating from the soils, air or groundwater of the Covered Facilities, which T/A or its Affiliates now have or may hereafter acquire against Unocal, regardless of whether or not such Liabilities are or have been the subject

3

of, or have been identified in, any Claim previously filed by T/A. Provided however, that (a) T/A shall not indemnify Unocal for, nor assume any liability of Unocal with respect to, such liabilities at the Sold Sites and (b) the provisions of the preceding sentence shall not apply to liability of T/A arising directly from any claim brought against T/A by a third-party (specifically including any assignee of the Environmental Agreement for a Sold Site) or Governmental Authority, which claim pertains solely to environmental conditions or environmental compliance resulting from a Release that occurred prior to April 15, 1993 at any of the Sold Sites (hereinafter "Third-Party Sold Site Claims"). Anything herein contained to the contrary notwithstanding, the terms and conditions of the Environmental Agreement shall remain in full force and effect with respect to Third-Party Sold Site Claims.

9) POLICY DEDUCTIBLES. It is hereby agreed between Unocal and T/A that any and all deductible or retention amounts required to be paid with respect to the Policies shall be the sole and exclusive obligation of T/A, specifically including but not limited to any separate deductible or retention amount attributable solely to Unocal.

10) SURPLUS LINES TAXES AND FEES. To the extent any taxes or fees (specifically including but not limited to Surplus Lines taxes and fees) shall apply to the Policies, such taxes and fees shall be the sole and exclusive liability of T/A.

11) PLL POLICY RENEWAL. T/A hereby agrees that prior to the expiration of the Policy Period of the PLL Policy, it shall (at its sole cost and expense) use it's best reasonable efforts to either renew the PLL Policy or obtain coverage substantially similar in all respects to the coverage afforded to both T/A and Unocal under the PLL Policy. T/A shall instruct the insurer to provide Unocal with a full and complete copy of said Policy.

12) PLL POLICY REINSTATEMENT. T/A hereby agrees that if a Coverage Section Aggregate Limit is exhausted prior to the expiration of the Policy Period, it shall (at its sole cost and expense) cause the PLL Policy to be reinstated in accordance with the terms of Endorsement No. 8 thereto and that said policy as reinstated shall continue to afford the same status and levels of coverage to Unocal and the Covered Facilities.

13) SITE LIMIT. T/A hereby agrees that after the date of this Agreement, it shall not schedule more than twenty (20) additional locations onto item five (5) of the Declarations to the PLL Policy as Insured Properties. Deletion of locations from coverage as Insured Properties under the PLL Policy shall not increase the number of new locations that may be added.

14) SURVIVAL. Except as specifically set forth above, all other rights and obligations owed by T/A or Unocal to one another under the terms of the Asset Purchase Agreements shall remain and survive this Agreement, including any and all terms and conditions of the Asset Purchase Agreements not specifically released herein.

4

15) BOOKS RECORDS AND REPORTS. For a period of seven (7) years from the date of this Agreement, T/A and Unocal shall each provide and/or make available to the other for inspection during normal business hours, the following books, records and reports, as applicable:

a) On or about the 15th day of February each year, T/A shall deliver to Unocal, an annual written report in form and content reasonably satisfactory to Unocal, detailing the nature and extent of environmental assessment and remediation activities being conducted at each of the Covered Facilities, the current status of such remedial activities and the total dollar amount paid by T/A with respect to such environmental assessment and remediation activities during the preceding calendar year and cumulatively since the date of this Agreement.

b) T/A shall provide Unocal with complete copies of all requests for disbursement and supporting documentation therefore sent to the Escrow Agent.

c) T/A shall provide Unocal with complete copies of all Clean-up Cost Cap SIR Erosion Reports (commonly referred to as "Burn Reports") generated by T/A or AIG with respect to the Cost Cap Policy and the PLL Policy.

d) Upon reasonable request, T/A and Unocal shall each make available to the other for inspection, review and copying all books and records in their respective possession and control related to the environmental condition of, or environmental assessment and remediation activities conducted at, any of the Covered Facilities or Sold Sites, specifically including but not limited to all financial records related thereto and all technical reports, filings and correspondence with regulators. All such books and records shall be maintained by T/A and Unocal and be made available to each other for a period of not less than ten (10) years following the completion of such environmental assessment and remediation activities.

16) T/A REPRESENTATIONS AND WARRANTIES. T/A hereby represents and warrants to Unocal that:

a) It is the sole and exclusive owner of the Covered Facilities; and

b) It is the successor in interest to NATIONAL and all of NATIONAL's right, title and interest in and to, and duties and obligations under, the Asset Purchase Agreements and Environmental Agreement; and

c) With respect to the Covered Facilities, it has not sold, assigned or otherwise transferred any of its right, title and interest in, or duties and obligations under, the Asset Purchase Agreements or Environmental Agreement to any third party; and

5

17) AUTHORITY. Both T/A and Unocal represent and warrant that each has the sole and exclusive right and authority to enter into this Agreement.

18) REIMBURSEMENT RIGHTS. Anything herein contained to the contrary not withstanding, T/A and Unocal agree that nothing in this Agreement shall be deemed to constitute a transfer or assignment by either Party to the other of any rights to reimbursement from any state reimbursement fund for any environmental assessment or remediation activities conducted by each Party at its expense at the Covered Facilities or the Sold Sites, all of which rights each Party specifically reserves unto itself. In the event that either Party shall receive reimbursement from any state reimbursement fund for work performed by the other Party at its expense, the receiving Party shall promptly remit such reimbursement amount to the Party that incurred the corresponding expense. Unocal hereby agrees to reasonably cooperate with T/A to facilitate reimbursement from state reimbursement funds for activities conducted by T/A, at it's expense, at any of the Covered Facilities and assign to T/A its rights to such state reimbursement funds (to the extent attributable to work performed by T/A at it's expense) if requested by T/A.

19) SECTION 1542 WAIVER. The parties hereto specifically waive the protections of California Civil Code Section 1542 which provides as follows:

"A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor."

Each party has had the opportunity to speak with counsel regarding the meaning and advisability of waiving this provision

20) AFFILIATES. As used herein, the term Unocal includes each and every one of Unocal's Affiliates, as that term is defined in the Asset Purchase Agreement.

21) CONFLICTS. Except as specifically set forth herein, the Environmental Agreement and the Asset Purchase Agreements shall remain in full force and effect. In the event of a conflict between the terms of the Environmental Agreement or the Asset Purchase Agreements and this Agreement, the terms and conditions of this Agreement shall control, to the exclusion of the conflicting term in such other agreement.

22) BINDING EFFECT. This Agreement shall be binding upon, inure to the benefit of and be enforceable by the Parties hereto and their respective parent, subsidiary and affiliated corporations, directors, officers, agents, attorneys, employees, successors, endorsees, and assigns.

23) NOTICES. Any notices, which any party may be required, or may desire, to give hereunder, shall be made in the manner specified in the Environmental Agreement or the Asset Purchase Agreements, as applicable.

6

24) SEVERABILITY. All provisions contained in this Agreement are severable and the invalidity or unenforceability of any provision shall not affect or impair the validity or enforceability of the remaining provisions of this Agreement.

25) COOPERATION DURING TRANSITION PERIOD. The Parties acknowledge that a ninety
(90) day transition period will ensue after the effective date of this Agreement during which certain ongoing projects, permits, consent orders and other related items at the Covered Facilities will need to be transferred from Unocal's to T/A's responsibility and control. The Parties agree to cooperate and to perform all reasonably necessary actions to ensure a smooth and effective transition. Each Party will bear its own internal costs related to the transition during this time period. Any environmental remediation or other external costs incurred with respect to the Covered Facilities or the transition (specifically including but not limited to costs for copying Unocal's environmental files for T/A) after the effective date of this Agreement shall accrue to the account of T/A and shall be the sole and exclusive obligation and responsibility of T/A. Any such costs incurred by Unocal after said date shall be promptly paid from the Escrow Account established pursuant to paragraph 3 above.

IN WITNESS WHEREOF, this Agreement is executed as of the day and year first written above.

TA OPERATING CORPORATION                          TRAVELCENTERS OF AMERICA, INC.
d/b/a TravelCenters of America
(successor in interest by merger to
NATIONAL AUTO/TRUCKSTOPS, INC.)

BY:  /s/ James W. George                            BY:  /s/ James W. George
   -------------------------------------               ---------------------
         James W. George                                     James W. George
   -------------------------------------               ---------------------
         Name (printed)                                      Name (printed)
         EVP & CFO                                           EVP & CFO
   -------------------------------------               ---------------------
         (TITLE)                                             (TITLE)

UNION OIL COMPANY OF
CALIFORNIA, d/b/a Unocal

BY:  /s/ J. J. Dean
   -----------------------------
         J. J. Dean
   -----------------------------
         Name (printed)
         Operations Team Manager
   -----------------------------
         (TITLE)

7

- EXHIBIT A -
LIST OF COVERED FACILITIES

                                                                   SITE
#       SITE #           CITY              ST                    ADDRESS
--------------------------------------------------------------------------------------
1     9722-508       Mobile                AL    I-10 & Grand Bay Road, Exit 4
--------------------------------------------------------------------------------------
2     9884-510       Montgomery            AL    I-65 & U.S. 80/82 @ W. South Blvd.
--------------------------------------------------------------------------------------
3     000-6730       Kingman               AZ    I-40 & U.S. 93
--------------------------------------------------------------------------------------
4     000-6327       Buttonwillow          CA    I-5 & S.R. 58
--------------------------------------------------------------------------------------
5     000-6336       Ontario               CA    I-10 & Milliken Avenue Exit
--------------------------------------------------------------------------------------
6     000-6437       Redding               CA    I-5 & Knighton Road
--------------------------------------------------------------------------------------
7     000-6290       Santa Nella           CA    I-5 & Hwy. 33, Santa Nella Exit
--------------------------------------------------------------------------------------
8     000-6398       Denver                CO    I-70 & Ward Road, Exit 266
--------------------------------------------------------------------------------------
9     9856-511       Branford              CT    I-95 @ CT Exit 56
--------------------------------------------------------------------------------------
10    9784-512       Southington           CT    I-84 & Hwy. 322, Exit 28
--------------------------------------------------------------------------------------
11    9878-522       Baldwin               FL    I-10 & U.S. 301 South, Exit 50
--------------------------------------------------------------------------------------
12    9715-510       Marianna              FL    I-10 & S.R. 71
--------------------------------------------------------------------------------------
13    9879-523       St. Augustine         FL    I-95 & C.R. 210 West, Exit 96
--------------------------------------------------------------------------------------
14    9778-510       Vero Beach            FL    I-95 & S.R. 66, Exit 68
--------------------------------------------------------------------------------------
15    9880-511       Wildwood              FL    I-75 & S.R. 44, Exit 66
--------------------------------------------------------------------------------------
16    9562-510       Commerce              GA    I-85 & U.S. 441, Exit 149
--------------------------------------------------------------------------------------
17    9735-510       Jackson               GA    I-75 & Hwy 36, Exit 201
--------------------------------------------------------------------------------------
18    9882-510       Lake Park             GA    I-75 @ Exit 2
--------------------------------------------------------------------------------------
19    9725-510       Madison               GA    I-20 & U.S. 441, Exit 114
--------------------------------------------------------------------------------------
20    9783-516       Savannah              GA    I-95 & U.S. 17 South, Exit 87
--------------------------------------------------------------------------------------
21    9706-511       Council Bluffs        IA    I-80 & I-29, Exit 3
--------------------------------------------------------------------------------------
22    9753-534       Bloomington           IL    I-55, I-74, I-39 @ Route 9, Exit 160A
--------------------------------------------------------------------------------------
23    9754-516       Elgin                 IL    I-90 & U.S. 20
--------------------------------------------------------------------------------------
24    9721-510       Mt. Vernon            IL    I-57 & I-64
--------------------------------------------------------------------------------------
25    9863-510       Clayton               IN    I-70 & S.R. 39, Exit 59
--------------------------------------------------------------------------------------
26    9865-521       Whitestown            IN    I-65 & S.R. 334, Exit 130
--------------------------------------------------------------------------------------
27    9873-520       Florence              KY    I-75, Exit 181
--------------------------------------------------------------------------------------
28    9724-522       Lafayette             LA    I-10 & S.R. 182
--------------------------------------------------------------------------------------
29    9836-511       Slidell               LA    I-10, Exit 266
--------------------------------------------------------------------------------------
30    9841-512       Tallulah              LA    I-20 & U.S. 65, Exit 171
--------------------------------------------------------------------------------------
31    9779-517       Elkton                MD    I-95, Exit 109B
--------------------------------------------------------------------------------------
32    9780-513       Ann Arbor             MI    I-94, Exit 167
--------------------------------------------------------------------------------------
33    9738-515       Saginaw               MI    I-75, Exit 144
--------------------------------------------------------------------------------------
34    9893-510       Sawyer                MI    I-94, Exit 12
--------------------------------------------------------------------------------------
35    9729-510       Rogers                MN    I-94 & Hwy. 101, Exit 207
--------------------------------------------------------------------------------------
36    9815-514       Foristell             MO    I-70 & Route W, Exit 203
--------------------------------------------------------------------------------------
37    9766-512       Matthews              MO    I-55 & Hwy. 80, Exit 58
--------------------------------------------------------------------------------------
38    9826-516       Oak Grove             MO    I-70 & Route H, Exit 28
--------------------------------------------------------------------------------------

8

39    9848-510       Meridian              MS    I-20 & I-59, Exit 160
--------------------------------------------------------------------------------------
40    9722-512       Grand Island          NE    I-80, Exit 305
--------------------------------------------------------------------------------------
41    9775-510       Ogallala              NE    I-80, Exit 126
--------------------------------------------------------------------------------------
42    9854-512       Bloomsbury            NJ    I-78, Exit 7
--------------------------------------------------------------------------------------
43    000-6312       Albuquerque           NM    I-25 N., Candelaria Exit 227A
--------------------------------------------------------------------------------------
44    000-6322       Las Vegas             NV    I-15, Blue Diamond Exit 33
--------------------------------------------------------------------------------------
45    000-6375       Sparks                NV    I-80, Exit 19
--------------------------------------------------------------------------------------
46    9830-518       Pembroke              NY    I-90 & S.R. 77, Exit 48A
--------------------------------------------------------------------------------------
47    9764-531       Columbus              OH    I-70 & U.S. 42, Exit 79
--------------------------------------------------------------------------------------
48    9875-520       Hebron                OH    I-70 @ Ohio 37, Exit 126
--------------------------------------------------------------------------------------
49    9876-520       Jeffersonville        OH    I-71, Exit 65
--------------------------------------------------------------------------------------
50    9869-514       Kingsville            OH    I-90, Exit 235
--------------------------------------------------------------------------------------
51    9799-510       North Canton          OH    I-77, Exit 111
--------------------------------------------------------------------------------------
52    9870-522       Seville               OH    I-71 & U.S. 224, Exit 209
--------------------------------------------------------------------------------------
53    9872-512       Toledo                OH    I-80 & I-280, Exit 71
--------------------------------------------------------------------------------------
54    9745-514       Youngstown            OH    I-80 & S.R. 46, Exit 223A
--------------------------------------------------------------------------------------
55    9827-510       Oklahoma City         OK    I-40 & Morgan, Exit 140
--------------------------------------------------------------------------------------
56    000-6309       Portland              OR    I-5, Exit 278
--------------------------------------------------------------------------------------
57    9825-515       North East            PA    I-90 & S.R. 20, Exit 12
--------------------------------------------------------------------------------------
58    9711-530       Manning               SC    I-95 & S.R. 261, Exit 119
--------------------------------------------------------------------------------------
59    9771-510       Denmark               TN    I-40 & Hwy. 138, Exit 68
--------------------------------------------------------------------------------------
60    9886-511       Franklin              TN    I-65, Exit 61
--------------------------------------------------------------------------------------
61    9895-510       Knoxville             TN    I-40 & I-75, Exit 369
--------------------------------------------------------------------------------------
62    9741-518       Nashville             TN    I-24, Exit 62
--------------------------------------------------------------------------------------
63    9851-511       Amarillo              TX    I-40 & Whitaker Road, Exit 74
--------------------------------------------------------------------------------------
64    9812-511       Denton                TX    I-35 & U.S. 77, Exit 471
--------------------------------------------------------------------------------------
65    9833-513       Rockwall              TX    I-30 & S.R. 205, Exit 68
--------------------------------------------------------------------------------------
66    9840-510       Sweetwater            TX    I-20 & Hopkins Road, Exit 242
--------------------------------------------------------------------------------------
67    000-6334       Tooele                UT    I-80 & Lakepoint, Exit 99
--------------------------------------------------------------------------------------
68    9717-541       Ashland               VA    I-95 & S.R. 802, Exit 89
--------------------------------------------------------------------------------------
69    9713-510       Wytheville            VA    I-77, Exit 41 I-81, Exit 72
--------------------------------------------------------------------------------------
70    9860-513       Hudson                WI    I-94 & U.S. 12, Exit 4
--------------------------------------------------------------------------------------
71    9866-510       Madison               WI    I-90/I-94 & U.S. 51, Exit 132
--------------------------------------------------------------------------------------
72    9877-510       Hurricane             WV    I-64 & Rt. 34, Exit 39
--------------------------------------------------------------------------------------
73    9723-510       Martinsburg           WV    I-81 & S.R. 901, Exit 20
--------------------------------------------------------------------------------------

9

- EXHIBIT B -

[Copy of the Cost Cap Policy omitted]

10

- EXHIBIT C -

[Copy of the PLL Policy omitted]

11

EXHIBIT "D"
TO BUYOUT AGREEMENT

ESCROW AGREEMENT

DATE: DECEMBER 31, 2003

ESCROW NUMBER: _______________

This Escrow Agreement (this "Agreement") is entered into as of the date set forth above by and among NATIONAL CITY BANK, as escrow agent ("Escrow Agent"); UNION OIL COMPANY OF CALIFORNIA, a California corporation ("Unocal"); and TA OPERATING CORPORATION d/b/a TravelCenters of America, a Delaware corporation headquartered in Westlake, Ohio, successor in interest by merger to NATIONAL AUTO/TRUCKSTOPS, INC., (hereinafter referred to as "NATIONAL"), and TravelCenters of America, Inc., a Delaware corporation headquartered in Westlake, Ohio (TravelCenters of America, Inc. and TA OPERATING CORPORATION are hereinafter referred to jointly and severally as "T/A").

RECITALS

A. Unocal and T/A are parties to a certain Buyout Agreement dated as of December 31, 2003 (the "Buyout Agreement"). Pursuant to the Buyout Agreement, Unocal has agreed to pay the amount of money specified therein to T/A, upon the terms and conditions contained therein, as full and final settlement of certain environmental obligations for seventy-three (73) sites previously conveyed to T/A, a list of which is attached to this Agreement as EXHIBIT "A" which is hereby incorporated herein (the "Covered Facilities"), which obligations had been retained by Unocal in certain agreements described therein between the parties.

B. Pursuant to the terms of the Buyout Agreement, Unocal and T/A have agreed to establish an escrow upon the terms contained in this Agreement.

C. Escrow Agent has agreed to act as the escrow agent for the escrow, upon the terms contained in this Agreement.

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants contained herein, the parties agree as follows:

INSTRUCTIONS

1. Total Escrowed Funds. On or before the date which is ten (10) days from the date hereof, Unocal shall deposit into the above-referenced escrow (the "Escrow") the sum of Nine Million Six Hundred Thirty-Six Thousand Nine Hundred Sixty-Nine Dollars ($9,636,969.00) (the "Total Escrowed Funds"), which Escrow Agent is hereby instructed to invest only in such

12

investments as T/A shall specify in writing. Absent written instructions to the contrary, Escrow Agent shall invest the Total Escrowed Funds in Armada Money Market Fund (the "Armada Fund"), for which the Escrow Agent or an affiliate thereof serves as an investment advisor and receives a fee. Both Unocal and T/A shall execute a disclosure form regarding Escrow Agent's affiliation with such Armada Fund. Unocal shall pay the Acceptance Fee as further described below to Escrow Agent upon all parties' execution of this Agreement. Unocal and T/A each acknowledge that they each must provide copies of their respective articles of incorporation and W-9 either by fax or electronically to establish the Escrow.

2. Instructions Concerning Obtaining or Failure to Obtain Lender Approval. The transaction described in the Buyout Agreement is contingent upon T/A's obtaining approval of such transaction from T/A's lenders (the "T/A Lenders"). In the event T/A obtains approval from the T/A Lenders of the terms and conditions of the Buyout Agreement on or before January 31, 2004 (the "Determination Date"), T/A shall so notify Escrow Agent and Unocal in writing, and Escrow Agent shall continue to hold the Total Escrowed Funds as set forth in
Section 1 above. In the event T/A does not obtain approval from the T/A Lenders of the terms and conditions of the Buyout Agreement on or before the Determination Date, then T/A shall provide notice thereof in writing to Escrow Agent with a copy to Unocal, the Buyout Agreement shall terminate in its entirety, the Escrow shall be cancelled, and Escrow Agent shall return the Total Escrowed Funds to Unocal upon receipt of the fee then due to Escrow Agent, which fee shall consist of the first year's escrow fee and shall be paid one-half (1/2) by T/A and one-half (1/2) by Unocal (which amount payable by Unocal shall be deducted from the Total Escrowed Fees).

3. Instructions Concerning Payments of Insurance Premiums from Total Escrowed Funds. Pursuant to the Buyout Agreement, T/A is to obtain a certain Cost Cap Insurance Policy (the "Cost Cap Policy") from American International Speciality Lines Insurance Company ("AISLIC"), a member of American International Group, Inc. ("AIG") and to obtain an amendment by endorsement of T/A's current Pollution Legal Liability Policy (the "Endorsement"). As long as this Agreement has not terminated pursuant to failure to obtain approval by the T/A Lenders as described in Section 2 above, and upon such time as Escrow Agent is provided with written confirmation (the "Insurance Confirmation") from both T/A and Unocal that (i) T/A has received a binder from AIG and AIG is ready to issue the Cost Cap Policy, and (ii) AIG is ready to amend by endorsement T/A's existing Pollution Legal Liability Policy, which Insurance Confirmation shall also provide instructions as to where Escrow Agent is to direct payment, then Escrow Agent shall, within five (5) days of receipt of such written Insurance Confirmation, pay to AON Environmental, Inc. ("AON"), which company is a broker for AIG, the amount of One Million Twelve Thousand Nine Hundred Sixty-Nine Dollars ($1,012,969.00) from the Total Escrowed Funds for the Cost Cap Policy premium in accordance with the instructions contained in the Insurance Confirmation, and shall also pay to AON the amount of Four Hundred Thousand Dollars ($400,000.00) from the balance of the Total Escrowed Funds for the Endorsement premium in accordance with the instructions contained in the Insurance Confirmation. Furthermore, within five (5) days after receipt of the Insurance Confirmation, Escrow Agent shall pay to T/A the sum of Two Million Six Hundred Nine

13

Thousand Dollars ($2,609,000.00) from the Total Escrowed Funds. In the event Escrow Agent does not receive the Insurance Confirmation on or before the Determination Date, then the Buyout Agreement shall terminate in its entirety, the escrow shall be cancelled, and Escrow Agent and shall return the Total Escrowed Funds to Unocal upon receipt of the fees then due to Escrow Agent, which fee shall consist of the first year's escrow fee and shall be paid one-half (1/2) by T/A and one-half (1/2) by Unocal (which amount payable by Unocal shall be deducted from the Total Escrowed Fees).

4. Escrow Fees. In the event T/A obtains approval from T/A's Lenders as set forth in Section 2 above, and T/A further obtains the insurance described in Section 3 above, then the Escrow Agent's fees, in the amounts previously agreed among Unocal, T/A and Escrow Agent as set forth on EXHIBIT "B" to this Agreement, shall be paid as follows: except for the Acceptance Fee, which shall have been paid previously by Unocal as described in Section 1 above, and except for the sweep fees attributable to investments in the Armada Fund (which sweep fees shall be debited from the Total Escrowed Funds and interest thereon), all other escrow fees shall be paid by T/A during the term of the Escrow. If this Agreement is not terminated on or before the Determination Date, then except for the Acceptance Fee and the administrative sweep fee as designated on Exhibit "B" for investment in the Armada Fund, all fees shall be invoiced in arrears to T/A and the amounts thereof shall be deducted thirty (30) days thereafter from interest payments due to T/A.

5. Term of the Escrow. Unless terminated in accordance with
Section 2 above for failure to obtain Lender Approval, pursuant to Section 3 above regarding obtaining of insurance, or pursuant to Section 9 below in the event of a default by T/A, the Escrow is to remain in effect until the date which is seven (7) years from the Determination Date (the "Expiration Date"). All of the following instructions shall be in effect as long as the Escrow is not terminated pursuant to Sections 2 or 3 above or Section 9 below.

6. Interest. All interest earned on the Total Escrowed Funds, from the date of this Agreement and up to the date of the first disbursement of any portion of the Total Escrowed Funds, shall be paid by Escrow Agent to Unocal within five (5) days after the first disbursement of any portion of the Total Escrowed Funds in an amount as specified in a joint instruction from Unocal and T/A. All interest earned on the balance of the Total Escrow Funds following the first disbursement shall be paid to T/A in accordance with Section 8(b) below.

7. Transition Period. A portion of the Total Escrowed Funds consisting of Two Hundred Thousand Dollars ($200,000.00) (the "Transition Funds") will be separately allocated for environmental remediation and other transaction-related costs (the "Transition Costs") incurred by Unocal at the Covered Facilities during the ninety (90) day transition period after the Determination Date (the "Transition Period"). Unocal will review, approve and pay the invoices for Transition Costs received from third-party contractors for work performed during the Transition Period, and within ten (10) days after expiration of the Transition Period shall submit

14

to Escrow Agent (with a copy sent to T/A) written instructions to (i) pay directly to Unocal from the Transition Funds the amount Unocal has paid or will pay for invoices for the Transition Costs, which amount shall be specified in the written instructions; and (ii) pay the balance of any remaining Transition Funds to T/A. Escrow Agent shall disburse the amounts designated from the Transition Funds to Unocal and T/A as designated in Unocal's escrow instructions, and Escrow Agent shall be entitled to rely on instructions from Unocal alone regarding such disbursement of the Transition Funds.

8. Invoice Payments by Escrow Agent During Remaining Time Until Expiration Date. Escrow Agent shall hold the remaining balance of the Total Escrowed Funds, consisting of Five Million Four Hundred Fifteen Thousand Dollars ($5,415,000.00) (the "Escrowed Balance") for payment of environmental remediation costs incurred by T/A, or for which TA is responsible, for work performed by third-party contractors or Governmental Authorities at the Covered Facilities, and is hereby instructed to make payments from the Escrowed Balance as follows:

(a) T/A shall submit disbursement instructions in the form of EXHIBIT "C" to this Agreement (the "T/A Disbursement Instructions") to Escrow Agent on a quarterly basis, along with copies of invoices received from, and checks disbursed to, third-party contractors or Governmental Authorities, which form of T/A Disbursement Instructions contains T/A's certification that all third-party contractors or Governmental Authorities for whom reimbursement is sought from the Escrowed Balance have been paid.

(b) Escrow Agent is hereby directed to pay to T/A from the Escrowed Balance the total amount set forth on such T/A Disbursement Instructions. Escrow Agent is also hereby instructed to pay all interest on the remaining Escrowed Balance to T/A quarterly upon receipt of escrow instructions from T/A unless Escrow Agent and T/A have agreed in writing that no such escrow instructions are required, less any accrued and agreed-upon escrow fees and expenses.

(c) Within thirty (30) days following the Expiration Date, any amount remaining in Escrow, including any remaining portion of the Escrowed Balance, and any interest, shall be disbursed to T/A.

9. Events of Default by T/A.

(a) In the event either of the following occur, they shall be deemed events of default ("Event of Default") by T/A that are expressly subject to the terms of this Section 9:

(i) T/A has failed to remediate the Covered Facilities in a timely manner in accordance with the requirements of any Governmental Authority with authority over the remediation; or

15

(ii) Unocal is required by any Governmental Authority or third party to perform environmental remediation at any Covered Facility.

(b) Notwithstanding anything in this Agreement to the contrary, in the event Unocal provides written notification to Escrow Agent and T/A of any Event of Default ("Default Notice"), the Escrow Agent shall not make any distributions of the remaining portion of the Total Escrowed Funds, or any interest thereon, until the Default Notice is resolved in accordance with this Paragraph 9; provided that, no Event of Default shall be deemed to have occurred or exist, if within 30 days of receipt of a Notice of Default, T/A commences activities, in good faith, to cure or otherwise resolve such Event of Default and the Escrow Agent and Unocal have received written notice of such activities ("Notice of Cure") and Unocal does not submit a Dispute of Cure Notice in accordance with Section 9(c) below. Escrow Agent shall not be required to inquire into or consider whether a Notice of Cure is valid.

(c) If (i) T/A fails to provide a Notice of Cure in accordance with Section 9(b) and provides a written notice (a "Counter Notice") to Unocal and the Escrow Agent specifying a dispute of any Default Notice, including setting forth in particularity the basis for such dispute, and such is delivered to the Escrow Agent and Unocal within thirty (30) days following receipt by the Escrow Agent and T/A of the Default Notice, or (ii) Unocal provides a written notice ("Dispute of Cure Notice") to T/A and the Escrow Agent specifying a dispute of any Notice of Cure, including setting forth in particularity the basis for such dispute, and such is delivered to the Escrow Agent and T/A within thirty (30) days following receipt by the Escrow Agent and Unocal of the Notice of Cure (such Counter Notice or Dispute of Cure Notice to be hereinafter referred to as a "Disputed Claim") such Disputed Claim shall be resolved as provided in Section 9(d). Escrow Agent shall not be required to inquire into or consider whether a Counter Notice or Dispute of Cure Notice, as the case may be, is valid or has merit.

(d) If a Disputed Claim arises pursuant to Paragraph 9(c) herein, Unocal and T/A shall use their best efforts to resolve such Disputed Claim. If the parties are unable to resolve the Disputed Claim within fifteen (15) days after the date the Counter Notice is received by Unocal and the Escrow Agent or the Dispute of Cure Notice is received by T/A and Escrow Agent, as the case may be, then such Disputed Claim shall be settled in accordance with the dispute resolution mechanisms provided for in Section 9 (e) of this Agreement (a "Proceeding").

(e) Unocal and T/A agree that any and all Disputed Claims that are not resolved as provided in Section 9(d) hereof, shall be settled solely and exclusively by arbitration ("Arbitration") to be held in Cleveland, Ohio, in accordance with the Federal Arbitration Act and using the Commercial Arbitration Rules of the American Arbitration Association (the "AAA"). A panel of three (3) arbitrators shall be used. Each party shall

16

choose one (1) neutral arbitrator, and the third arbitrator shall be chosen by the two (2) arbitrators selected by the parties. If the first two arbitrators cannot agree within thirty (30) days after commencement of the Proceeding upon the appointment of the third arbitrator, the third arbitrator shall be appointed by the AAA in accordance with its then existing rules. For purposes of this paragraph, the "commencement of the Proceeding" shall be deemed to be the date upon which a written demand for arbitration is received by the AAA from one of the parties. The arbitrators' decision shall be final and binding, and may be entered and enforced in any court of competent jurisdiction; provided that, in no case shall the arbitrators award to Unocal (nor shall Unocal be entitled to) any remaining portion of the Total Escrow Funds in excess of the amount of costs actually incurred or paid by Unocal (including costs actually incurred by Unocal after the Arbitration) to
(x) cure the Event of Default, or (y) perform the necessary remediation as a result of the Event of Default, in each case (x) and (y), in order to comply with Environmental Laws, a requirement of any Governmental Authority pursuant to Environmental Laws or a court order.

T/A and Unocal shall bear its own expenses in connection with alternative dispute resolution procedures set forth in this paragraph, except that those parties shall split equally the costs associated with any Arbitration.

All communications made in connection with the alternative dispute resolution procedure set forth in this section shall be treated as communications for the purposes of settlement and as such shall be deemed to be confidential and inadmissible in any subsequent litigation by virtue of Rule 408 of the Federal Rules of Evidence.

(f) In the event Escrow Agent has received a Default Notice, then Escrow Agent is hereby instructed to retain the remaining portions of the Total Escrowed Funds, and any interest thereon, until any of the following occur:

(i) If T/A fails to provide a Notice of Cure in accordance with Section 9(b), and the Escrow Agent does not receive a Counter Notice from T/A within the thirty (30) day period described in Section 9(c) above, then Escrow Agent is instructed to periodically disburse to Unocal from the remaining portions of the Total Escrow Funds, the amount of costs actually incurred or paid by Unocal to (x) cure the Event of Default or (y) perform the necessary remediation as a result of the Event of Default, in each case (x) and (y), in order to comply with Environmental Laws, a requirement of any Governmental Authority pursuant to Environmental Laws or a court order, and any interest thereon, within ten (10) days thereafter; provided that, once the Escrow Agent's obligation to disburse payments to Unocal from the Total Escrow Funds following an Event of Default has been established in accordance with the preceding sentence of this Section
9(f)(i), Unocal may continue to submit requests for payment by the Escrow Agent from the remaining Total Escrow Funds for costs actually incurred or paid by

17

Unocal to (x) cure such Event of Default or (y) perform the necessary remediation as a result of such Event of Default, in each case (x) and (y), in order to comply with Environmental Laws, a requirement of any Governmental Authority pursuant to Environmental Laws or a court order.

(ii) Receipt by the Escrow Agent of a Notice of Cure, provided that the Escrow Agent does not receive a Dispute of Cure Notice from Unocal in accordance with Section 9(c) above.

(iii) If Escrow Agent receives a Counter Notice from T/A within the thirty (30) day period described in
Section 9(c) above or if Escrow Agent receives a Dispute of Cure Notice from Unocal within the thirty (30) day period described in Section 9(c) above, then Unocal and T/A shall notify Escrow Agent in writing as to the resolution of the Disputed Claim as set forth in Section 9(d) above. If Unocal and T/A have agreed mutually to a resolution of a Disputed Claim then Unocal and T/A shall provide joint written escrow instructions to Escrow Agent; provided that, in no event shall the Escrow Agent disburse, or shall Unocal be entitled to, any remaining portion of the Total Escrow Funds in excess of the amounts actually incurred or paid by Unocal to (x) cure the Event of Default or (y) perform any necessary remediation as a result of the Event of Default, in each case (x) and (y), in order to comply with Environmental Laws, a requirement of any Governmental Authority pursuant to Environmental Laws or a court order.

(iv) If the dispute is submitted to arbitration, then Escrow Agent shall continue to hold all remaining portions of the Total Escrowed Funds, and all interest thereon, until Escrow Agent is provided joint written instructions from Unocal and T/A based upon the arbitrators' final decision.

Notwithstanding any provision to the contrary, the Escrow Agent shall not disburse any payments to Unocal unless and until Unocal submits to the Escrow Agent, along with any joint disbursement instructions required in accordance with Section 9(f)(iii) above, copies of supporting documentation of the same type and nature, including the corresponding certification by Unocal, required to be submitted by T/A in accordance with Section 8(a) above.

10. Disputes Between Unocal and T/A. In the event of a dispute between Unocal and T/A not otherwise resolved in accordance with Sections 9(d) or 9(e) above, an ambiguity in the provisions governing this Escrow Agreement, or uncertainty on the part of Escrow Agent as to how to proceed, Escrow Agent may (i) refrain from taking any action other than to safely keep the escrowed funds until Escrow Agent shall have received joint written instructions from Unocal and T/A, or (ii) deposit the escrowed funds and all other escrowed items into a court of competent jurisdiction and thereupon have no further duties or responsibilities in connection therewith.

18

11. Escrow Agent.

(a) Escrow Agent's duties are purely ministerial, and Escrow Agent shall under no circumstances be deemed a fiduciary of any of the parties to this Agreement. Escrow Agent undertakes to perform only such duties as are specifically set forth herein. Escrow Agent may rely and shall be protected in acting or refraining from acting upon any written notice, instruction or request furnished to it hereunder and believed by it to be genuine and to have been signed or presented by the proper party or parties. Notwithstanding anything to the contrary contained in this Escrow Agreement, where any action is specified to be taken by Escrow Agent upon delivery by either Unocal or T/A of a notice or instructions to Escrow Agent, Escrow Agent shall not be obligated to take any action until the appropriate party has acted by delivering the notice or instructions hereunder and indicating in writing that a copy of such notice or instructions has been delivered to the other party. It is acknowledged by Unocal and T/A that Escrow Agent is bound only by the terms of this Escrow Agreement, and that Escrow Agent is not a party to the Buyout Agreement, is not bound by any of its terms, and shall not be required to refer to the Buyout Agreement for any instructions. This Agreement sets forth all matters pertinent to the duties of Escrow Agent contemplated hereunder, and no additional obligations of Escrow Agent shall be inferred from the terms of this Agreement or any other Agreement.

(b) Escrow Agent shall in all events act in good faith. Escrow Agent shall not be liable for any action taken by it in good faith and believed by it to be authorized or within the rights or powers conferred upon it by this Agreement, and may consult with counsel of its own choice and shall have full and complete authorization and protection for any action taken or suffered by it hereunder in good faith and in accordance with the opinion of such counsel.

(c) Unocal and T/A agree jointly and severally to indemnify Escrow Agent and hold Escrow Agent harmless against any and all liabilities incurred by it hereunder, except for liabilities incurred by Escrow Agent resulting from its own willful misconduct or gross negligence.

(d) Provided the terms of this Escrow Agreement can be complied with, Escrow Agent will not withhold completion and settlement thereof, unless restrained by an order of a court of competent jurisdiction or served with some other similar legal proceeding, and in so doing, Escrow Agent will not become liable to Unocal or T/A for its failure or refusal to comply with conflicting or adverse claims or demands.

(e) Unocal and T/A acknowledge that Escrow Agent will only accept further escrow instructions from the representatives of each of them who have executed this Agreement below unless such party provides a written instruction to Escrow Agent

19

executed by the below signatory authorizing Escrow Agent to accept further escrow instructions executed by another specified representative of such party.

12. Successor Agent. Escrow Agent may resign and be discharged from its duties or obligations hereunder by giving not less than thirty (30) days' notice in writing to the parties of such resignation specifying a date when such resignation shall take effect. Unocal and T/A agree to designate a successor escrow agent, by a written instrument delivered to Escrow Agent, together with the acceptance of such successor on or before such effective date. After the effective date of such resignation, Escrow Agent shall be under no further obligation to perform any of the duties of Escrow Agent under this Escrow Agreement other than to deliver the escrowed funds, and any notices or other written communications or documents received by Escrow Agent in its capacity as such, to the successor escrow agent.

13. Miscellaneous. This Escrow Agreement shall be governed by and construed in accordance with the laws of the State of Ohio. This Escrow Agreement shall inure to the benefit of and shall be binding upon the parties hereto and their respective successors and assigns. This Escrow Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute but one and the same instrument.
Section headings contained in this Escrow Agreement have been inserted for reference purposes only, and shall not be construed as part of this Escrow Agreement. In the event that the bank acting as Escrow Agent merges or consolidates with another bank or sells or transfers all or substantially all of its assets or trust business, then the successor or resulting bank shall be the Escrow Agent hereunder without the necessity of further action or the execution of any document, so long as such successor or resulting bank meets the requirements of a successor escrow agent hereunder. For purposes of this Escrow Agreement, "Governmental Authority" shall mean any foreign, domestic, federal, territorial, state or local governmental authority, quasi-governmental authority, instrumentality, court, government or self-regulatory organization, commission, tribunal or organization or any regulatory, administrative or other agency, or any political or other subdivision, department or branch of any of the foregoing.

14. Notices. Any notices, requests, approvals or elections hereunder shall be in writing and shall be deemed received when (a) personally served, (b) three (3) days after mailing by certified or registered United States mail, return receipt requested, postage prepaid, or (c) one (1) day after transmission by facsimile machine, with transmission and receipt confirmed, and an original sent by United States mail,

addressed to T/A as follows:

TA Operating Corporation dba TravelCenters of America 24601 Center Ridge Road, Suite 200 Westlake, Ohio 44145
ATTN: James W. George

20

Executive Vice President and Chief Financial Officer fax 440-808-3301

With a copy to:

TA Operating Corporation dba TravelCenters of America 24601 Center Ridge Road, Suite 200 Westlake, Ohio 44145
ATTN: Steven C. Lee
Vice President & General Counsel Fax 440-808-4310

and addressed to Unocal as follows:

Union Oil Company of California 2210 W. Pine River Road Breckenridge, MI 48615 Attn: J. J. Dean
Operations Team Manager, Real Estate and Remediation Phone: 989.842.3054
Fax: 989.842.1371

With a copy to:

Union Oil Company of California 14141 Southwest Freeway Sugar Land, TX 77478
Attn.: John F. Ashburn, Jr.

Assistant Counsel

Phone: (281)287-7218
Fax: (281)276-9077

and addressed to Escrow Agent as follows:

National City Bank
Attn: Dawn DeWerth LOC 01-2111 1900 East 9th Street
Cleveland, Ohio 44114 Telephone: 216-222-9225 Facsimile: 216-222-7044

15. Counterparts. This Agreement may be executed in several counterparts and all counterparts so executed shall constitute one Agreement binding on the parties hereto.

21

IN WITNESS WHEREOF, this Agreement is executed as of the day and year first written above.

TA OPERATING CORPORATION            TRAVELCENTERS OF AMERICA, INC.
d/b/a TravelCenters of America
(successor in interest by merger to
NATIONAL AUTO/TRUCKSTOPS, INC.)

BY:  /s/ James W. George                     BY:  /s/ James W. George
   --------------------------------             --------------------------------
         James W. George                              James W. George
   --------------------------------             --------------------------------
         Name (printed)                               Name (printed)
         EVP & CFO                                    EVP & CFO
   --------------------------------             --------------------------------
         (TITLE)                                      (TITLE)

UNION OIL COMPANY OF CALIFORNIA

BY:  /s/ J. J. Dean
   --------------------------------
         J. J. Dean
   --------------------------------
         Name (printed)
         Operations Team Manager
   --------------------------------
         (TITLE)

ESCROW AGENT: NATIONAL CITY BANK

BY:  /s/ Brian R. Utrup
   --------------------------------
         Brian R. Utrup
   --------------------------------
         Name (printed)
         Vice President
   --------------------------------
         (TITLE)

22

EXHIBIT LIST

EXHIBIT "A"                List of Covered Facilities

EXHIBIT "B"                Escrow Fees

EXHIBIT "C"                Form of Disbursement Instructions to T/A

23

EXHIBIT "A"
LIST OF COVERED FACILITIES

                                                                  SITE
#        SITE #            CITY           ST                     ADDRESS
-------------------------------------------------------------------------------------
1     9722-508       Mobile               AL    I-10 & Grand Bay Road, Exit 4
-------------------------------------------------------------------------------------
2     9884-510       Montgomery           AL    I-65 & U.S. 80/82 @ W. South Blvd.
-------------------------------------------------------------------------------------
3     000-6730       Kingman              AZ    I-40 & U.S. 93
-------------------------------------------------------------------------------------
4     000-6327       Buttonwillow         CA    I-5 & S.R. 58
-------------------------------------------------------------------------------------
5     000-6336       Ontario              CA    I-10 & Milliken Avenue Exit
-------------------------------------------------------------------------------------
6     000-6437       Redding              CA    I-5 & Knighton Road
-------------------------------------------------------------------------------------
7     000-6290       Santa Nella          CA    I-5 & Hwy. 33, Santa Nella Exit
-------------------------------------------------------------------------------------
8     000-6398       Denver               CO    I-70 & Ward Road, Exit 266
-------------------------------------------------------------------------------------
9     9856-511       Branford             CT    I-95 @ CT Exit 56
-------------------------------------------------------------------------------------
10    9784-512       Southington          CT    I-84 & Hwy. 322, Exit 28
-------------------------------------------------------------------------------------
11    9878-522       Baldwin              FL    I-10 & U.S. 301 South, Exit 50
-------------------------------------------------------------------------------------
12    9715-510       Marianna             FL    I-10 & S.R. 71
-------------------------------------------------------------------------------------
13    9879-523       St. Augustine        FL    I-95 & C.R. 210 West, Exit 96
-------------------------------------------------------------------------------------
14    9778-510       Vero Beach           FL    I-95 & S.R. 66, Exit 68
-------------------------------------------------------------------------------------
15    9880-511       Wildwood             FL    I-75 & S.R. 44, Exit 66
-------------------------------------------------------------------------------------
16    9562-510       Commerce             GA    I-85 & U.S. 441, Exit 149
-------------------------------------------------------------------------------------
17    9735-510       Jackson              GA    I-75 & Hwy 36, Exit 201
-------------------------------------------------------------------------------------
18    9882-510       Lake Park            GA    I-75 @ Exit 2
-------------------------------------------------------------------------------------
19    9725-510       Madison              GA    I-20 & U.S. 441, Exit 114
-------------------------------------------------------------------------------------
20    9783-516       Savannah             GA    I-95 & U.S. 17 South, Exit 87
-------------------------------------------------------------------------------------
21    9706-511       Council Bluffs       IA    I-80 & I-29, Exit 3
-------------------------------------------------------------------------------------
22    9753-534       Bloomington          IL    I-55, I-74, I-39 @ Route 9, Exit 160A
-------------------------------------------------------------------------------------
23    9754-516       Elgin                IL    I-90 & U.S. 20
-------------------------------------------------------------------------------------
24    9721-510       Mt. Vernon           IL    I-57 & I-64
-------------------------------------------------------------------------------------
25    9863-510       Clayton              IN    I-70 & S.R. 39, Exit 59
-------------------------------------------------------------------------------------
26    9865-521       Whitestown           IN    I-65 & S.R. 334, Exit 130
-------------------------------------------------------------------------------------
27    9873-520       Florence             KY    I-75, Exit 181
-------------------------------------------------------------------------------------
28    9724-522       Lafayette            LA    I-10 & S.R. 182
-------------------------------------------------------------------------------------
29    9836-511       Slidell              LA    I-10, Exit 266
-------------------------------------------------------------------------------------
30    9841-512       Tallulah             LA    I-20 & U.S. 65, Exit 171
-------------------------------------------------------------------------------------
31    9779-517       Elkton               MD    I-95, Exit 109B
-------------------------------------------------------------------------------------
32    9780-513       Ann Arbor            MI    I-94, Exit 167
-------------------------------------------------------------------------------------
33    9738-515       Saginaw              MI    I-75, Exit 144
-------------------------------------------------------------------------------------
34    9893-510       Sawyer               MI    I-94, Exit 12
-------------------------------------------------------------------------------------
35    9729-510       Rogers               MN    I-94 & Hwy. 101, Exit 207
-------------------------------------------------------------------------------------
36    9815-514       Foristell            MO    I-70 & Route W, Exit 203
-------------------------------------------------------------------------------------
37    9766-512       Matthews             MO    I-55 & Hwy. 80, Exit 58
-------------------------------------------------------------------------------------
38    9826-516       Oak Grove            MO    I-70 & Route H, Exit 28
-------------------------------------------------------------------------------------

24

39    9848-510       Meridian             MS    I-20 & I-59, Exit 160
-------------------------------------------------------------------------------------
40    9722-512       Grand Island         NE    I-80, Exit 305
-------------------------------------------------------------------------------------
41    9775-510       Ogallala             NE    I-80, Exit 126
-------------------------------------------------------------------------------------
42    9854-512       Bloomsbury           NJ    I-78, Exit 7
-------------------------------------------------------------------------------------
43    000-6312       Albuquerque          NM    I-25 N., Candelaria Exit 227A
-------------------------------------------------------------------------------------
44    000-6322       Las Vegas            NV    I-15, Blue Diamond Exit 33
-------------------------------------------------------------------------------------
45    000-6375       Sparks               NV    I-80, Exit 19
-------------------------------------------------------------------------------------
46    9830-518       Pembroke             NY    I-90 & S.R. 77, Exit 48A
-------------------------------------------------------------------------------------
47    9764-531       Columbus             OH    I-70 & U.S. 42, Exit 79
-------------------------------------------------------------------------------------
48    9875-520       Hebron               OH    I-70 @ Ohio 37, Exit 126
-------------------------------------------------------------------------------------
49    9876-520       Jeffersonville       OH    I-71, Exit 65
-------------------------------------------------------------------------------------
50    9869-514       Kingsville           OH    I-90, Exit 235
-------------------------------------------------------------------------------------
51    9799-510       North Canton         OH    I-77, Exit 111
-------------------------------------------------------------------------------------
52    9870-522       Seville              OH    I-71 & U.S. 224, Exit 209
-------------------------------------------------------------------------------------
53    9872-512       Toledo               OH    I-80 & I-280, Exit 71
-------------------------------------------------------------------------------------
54    9745-514       Youngstown           OH    I-80 & S.R. 46, Exit 223A
-------------------------------------------------------------------------------------
55    9827-510       Oklahoma City        OK    I-40 & Morgan, Exit 140
-------------------------------------------------------------------------------------
56    000-6309       Portland             OR    I-5, Exit 278
-------------------------------------------------------------------------------------
57    9825-515       North East           PA    I-90 & S.R. 20, Exit 12
-------------------------------------------------------------------------------------
58    9711-530       Manning              SC    I-95 & S.R. 261, Exit 119
-------------------------------------------------------------------------------------
59    9771-510       Denmark              TN    I-40 & Hwy. 138, Exit 68
-------------------------------------------------------------------------------------
60    9886-511       Franklin             TN    I-65, Exit 61
-------------------------------------------------------------------------------------
61    9895-510       Knoxville            TN    I-40 & I-75, Exit 369
-------------------------------------------------------------------------------------
62    9741-518       Nashville            TN    I-24, Exit 62
-------------------------------------------------------------------------------------
63    9851-511       Amarillo             TX    I-40 & Whitaker Road, Exit 74
-------------------------------------------------------------------------------------
64    9812-511       Denton               TX    I-35 & U.S. 77, Exit 471
-------------------------------------------------------------------------------------
65    9833-513       Rockwall             TX    I-30 & S.R. 205, Exit 68
-------------------------------------------------------------------------------------
66    9840-510       Sweetwater           TX    I-20 & Hopkins Road, Exit 242
-------------------------------------------------------------------------------------
67    000-6334       Tooele               UT    I-80 & Lakepoint, Exit 99
-------------------------------------------------------------------------------------
68    9717-541       Ashland              VA    I-95 & S.R. 802, Exit 89
-------------------------------------------------------------------------------------
69    9713-510       Wytheville           VA    I-77, Exit 41 I-81, Exit 72
-------------------------------------------------------------------------------------
70    9860-513       Hudson               WI    I-94 & U.S. 12, Exit 4
-------------------------------------------------------------------------------------
71    9866-510       Madison              WI    I-90/I-94 & U.S. 51, Exit 132
-------------------------------------------------------------------------------------
72    9877-510       Hurricane            WV    I-64 & Rt. 34, Exit 39
-------------------------------------------------------------------------------------
73    9723-510       Martinsburg          WV    I-81 & S.R. 901, Exit 20
-------------------------------------------------------------------------------------

25

EXHIBIT "B"

ESCROW FEE SCHEDULE

REVIEW AND ACCEPTANCE FEE: $ 500.00

For providing initial review of the Escrow Agreement and all supporting documents and for initial services associated with establishing the account. This is a one (1) time fee payable upon the opening of the account.

I.       FIRST YEAR ANNUAL ADMINISTRATIVE FEE              $  4000.00
         (or any portion of the year thereof)
         ANNUAL ADMINISTRATIVE FEE THEREAFTER              $  3000.00
         (or any portion of the year thereof)

II.      REMITTANCE OF CHECKS, WIRES, OR FUNDS MOVEMENT
         (in excess of 12 transactions per year)           $    25.00

III.     REMITTANCE OF INTERNATIONAL WIRES                 $    48.00     (each-
no allowance)

IV.      INVESTMENTS
         PURCHASE OR SALE OF SECURITIES                    $   100.00
         (excluding purchase or sale of sweep investment)
         or
         ANNUALIZED ADMINISTRATIVE SWEEP INVESTMENT        50 Basis Points

EXTRAORDINARY SERVICES:

For any services other than those covered by the aforementioned, a special per hour charge will be made commensurate with the character of the service, time required and responsibility involved. Such services include but are not limited to excessive administrative time, attendance at closings, specialized reports, and record keeping, unusual certifications, special delivery charges, postage, etc.

It is understood by the parties that Escrow Agent will not provide any tax withholding, reporting services, or 1099 processing for this Escrow Agreement or beneficiary of funds thereof.

FEE SCHEDULE IS SUBJECT TO ANNUAL REVIEW AND ADJUSTMENT, OR AS TERMS OF THE AGREEMENT MAY BE AMENDED FROM TIME TO TIME. THIS EXHIBIT IS INCORPORATED BY REFERENCE INTO THE ESCROW AGREEMENT.

26

EXHIBIT "C"

FORM OF DISBURSEMENT INSTRUCTIONS
FROM T/A TO ESCROW AGENT

_______________, 200__

National City Bank
1900 East 9th Street
Cleveland, Ohio 44114
Attn: ________________

Re: Escrow Agreement ("Agreement"), dated the ___ day of December, 2003, by and among NATIONAL CITY BANK, as escrow agent ("Escrow Agent"); UNION OIL COMPANY OF CALIFORNIA, a California corporation ("Unocal"); and TA OPERATING CORPORATION d/b/a TravelCenters of America, a Delaware corporation headquartered in Westlake, Ohio, successor in interest by merger to NATIONAL AUTO/TRUCKSTOPS, INC., (hereinafter referred to as "NATIONAL"), and TravelCenters of America, Inc., a Delaware corporation headquartered in Westlake, Ohio (TravelCenters of America, Inc. and TA OPERATING CORPORATION are hereinafter referred to jointly and severally as "T/A").

Dear __________________:

The purpose of this letter is to provide you with the following disbursement instructions (these "Instructions") in connection with the Agreement:

As described in Section 8 of the Agreement, you are hereby authorized and directed to disburse to T/A the total amount of _______________ ($ __________), which amount represents the total of all of the paid invoices listed on Schedule 1 hereto. Copies of the invoices listed on Schedule 1, and copies of the payment checks disbursed to, the third-party contractors who have submitted

27

the invoices are also attached to these instructions, but you are not to be concerned about such documents. A copy of these instructions, along with the attachments hereto, is concurrently being sent to Unocal. The undersigned, on behalf of T/A, hereby certify that all of such invoices have been paid. Please reimburse such amount to T/A by _____________, 200__.

Each of the undersigned declares under penalties of perjury that the foregoing is true and correct.

TA OPERATING CORPORATION            TRAVELCENTERS OF AMERICA, INC.
d/b/a TravelCenters of America
(successor in interest by merger to
NATIONAL AUTO/TRUCKSTOPS, INC.)

BY:___________________________              BY:_____________________________
______________________________                 _____________________________
         Name (printed)                                 (Name (printed)
   ___________________________               _______________________________
            (TITLE)                                        (TITLE)

28

SCHEDULE 1
TO T/A DISBURSEMENT INSTRUCTIONS
LIST OF PAID CONTRACTORS

Contractor Name   Contractor Address   Amount Previously Disbursed to Contractor
---------------   ------------------   -----------------------------------------

29

- EXHIBIT E -
LIST OF SOLD SITES

                                                                  SITE
#      SITE #                 CITY           ST                  ADDRESS
-------------------------------------------------------------------------------------
1     9885-520         Tuscaloosa            AL    I-59 & U.S. 11 By-Pass
-------------------------------------------------------------------------------------
2     9824-518         North Little Rock     AR    I-40 @ Galloway Interchange
-------------------------------------------------------------------------------------
3     9712-519         West Memphis          AR    I-40, Exit 278 & I-55 @ 7th Street
-------------------------------------------------------------------------------------
4     000-6302         Blythe                CA    I-10 @ Mesa Drive
-------------------------------------------------------------------------------------
5     000-6204         Sacramento            CA    I-80 W. of I-5 @ W. El Camino Exit
-------------------------------------------------------------------------------------
6     9883-510         Ringgold              GA    I-75 & U.S. 41, Exit 139
-------------------------------------------------------------------------------------
7     9710-510         Altoona               IA    I-80 @ Altoona Interchange
-------------------------------------------------------------------------------------
8     9708-510         Walcott               IA    I-80 & Walcott Junction Road
-------------------------------------------------------------------------------------
9     9861-511         Lemont                IL    I-55, Exit 267
-------------------------------------------------------------------------------------
10    9798-510         Monee                 IL    I-57 & Monee Road
-------------------------------------------------------------------------------------
11    9862-510         South Holland         IL    159th Street & Calumet Expressway
-------------------------------------------------------------------------------------
12    9868-530         Troy                  IL    I-55/I-70 & S.R. 162
-------------------------------------------------------------------------------------
13    9837-513         Solomon               KS    I-70 & S.R. 221, Solomon Exit
-------------------------------------------------------------------------------------
14    9839-513         Strafford             MO    I-44, Exit 88
-------------------------------------------------------------------------------------
15    9852-512         Bartonsville          PA    I-80 & U.S. 611, Exit 48 North
-------------------------------------------------------------------------------------
16    9818-531         Harrisburg            PA    I-81, Exit 27
-------------------------------------------------------------------------------------
17    9727-510         Smithton              PA    I-70 & Smithton Road, Exit 23
-------------------------------------------------------------------------------------
18    9810-523         Strattanville         PA    I-80 & S.R. 322, Exit 11
-------------------------------------------------------------------------------------
19    9720-510         Columbia              SC    I-20 & U.S. 21
-------------------------------------------------------------------------------------
20    9887-512         Lebanon               TN    I-40 & S.R. 109, Exit 232
-------------------------------------------------------------------------------------
21    9858-510         Brookshire            TX    I-10 & F.M. 359
-------------------------------------------------------------------------------------
22    000-6299         El Paso               TX    I-10 & Horizon Blvd.
-------------------------------------------------------------------------------------
23    9726-510         New Lisbon            WI    I-90/I-94 & S.R. 80
-------------------------------------------------------------------------------------
24    9867-522         Oak Creek             WI    I-94 & Rt. 100
-------------------------------------------------------------------------------------

30

Exhibit 23.1

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Registration Statement on Form S-3 (No. 333-52444) of TravelCenters of America, Inc. of our report dated March 23, 2004 relating to the financial statements and financial statement schedule, which appears in this Form 10-K.

/s/ PricewaterhouseCoopers LLP

Cleveland, Ohio
March 30, 2003


EXHIBIT 31.1

I, Edwin P. Kuhn, certify that:

I have reviewed this annual report on Form 10-K of TravelCenters of America, Inc.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

The registrant's other certifying officer(s) and I have indicated in this report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: March 30, 2004             By:      /s/ Edwin P. Kuhn
                                    --------------------------------------------
                                    Name:    Edwin P. Kuhn
                                    Title:   Chairman of the Board of Directors,
                                             Chief Executive Officer
                                             (Principal Executive Officer)


EXHIBIT 31.2

I, James W. George, certify that:

I have reviewed this annual report on Form 10-K of TravelCenters of America, Inc.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

The registrant's other certifying officer(s) and I have indicated in this report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: March 30, 2004               By:      /s/ James W. George
                                       -----------------------------------------
                                        Name:    James W. George
                                        Title:   Executive Vice President, Chief
                                                 Financial Officer and
                                                 Secretary (Principal Financial
                                                 Officer and Principal
                                                 Accounting Officer)


Exhibit 32.1

TRAVELCENTERS OF AMERICA, INC. AND CONSOLIDATED SUBSIDIARIES

CERTIFICATION PURSUANT TO
18 U. S. C. SECTION 1350
AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of TravelCenters of America, Inc. (the "Company") on Form 10-K for the period ending December 31, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Edwin P. Kuhn, Chairman of the Board and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Edwin P. Kuhn
-----------------------------
Edwin P. Kuhn
Chairman of the Board and Chief Executive Officer
March 30, 2004


Exhibit 32.2

TRAVELCENTERS OF AMERICA, INC. AND CONSOLIDATED SUBSIDIARIES

CERTIFICATION PURSUANT TO
18 U. S. C. SECTION 1350
AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of TravelCenters of America, Inc. (the "Company") on Form 10-K for the period ending December 31, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, James W. George, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ James W. George
-----------------------------------
James W. George
Executive Vice President and Chief Financial Officer
March 30, 2004


Exhibit 99.1

INFORMATION REQUIRED BY PART III OF FORM 10-K

OUR DIRECTORS AND OFFICERS

Our executive officers and members of our board of directors and their ages, are as follows:

NAME                                      AGE                                POSITION
----                                      ---                                --------
Edwin P. Kuhn........................     61       Chairman of the Board of Directors and Chief Executive Officer

Timothy L. Doane.....................     46       President and Chief Operating Officer

James W. George......................     52       Executive Vice President, Chief Financial Officer and Secretary

Michael H. Hinderliter...............     54       Senior Vice President, Sales

Joseph A. Szima......................     52       Senior Vice President, Marketing

Steven C. Lee........................     40       Vice President and General Counsel

Robert J. Branson....................     55       Director

Michael Greene.......................     42       Director

Steven B. Gruber.....................     46       Director

Louis J. Mischianti..................     44       Director

Rowan G. P. Taylor...................     36       Director

Our officers are appointed by the board of directors and serve at its discretion. The term of office for each director expires when such director's successor is elected and qualified.

Edwin P. Kuhn was named Chief Executive Officer and President of us and our subsidiaries in January 1997. In November 2000, Mr. Kuhn also became Chairman of our Board of Directors. In July 2003, Mr. Kuhn relinquished his position as President. Mr. Kuhn served as President and Chief Executive Officer of TA Operating Corporation, a wholly owned subsidiary of ours, since the closing of the acquisition of the BP network in December 1993. Mr. Kuhn served as the General Manager (the most senior executive position) of the BP network under BP's ownership from April 1992 to December 1993. Prior to joining the BP network, Mr. Kuhn spent 25 years with The Standard Oil Company of Ohio ("Sohio") and BP in a series of retail site operating positions, most recently as the Retail Marketing Regional Manager for all BP retail facilities in the states of Ohio, Pennsylvania and Kentucky.

Timothy L. Doane was named President and Chief Operating Officer of us and our subsidiaries in July 2003. Mr. Doane served as Senior Vice President, Marketing of us and our subsidiaries since January 2001. Mr. Doane served as Senior Vice President, Market Development of us and our subsidiaries since January 1997 and served as a Vice President, Market Development of TA Operating Corporation since 1995. Prior to joining TA Operating Corporation, Mr. Doane spent 15 years with Sohio and BP in a series of positions including Director of Procurement (for all purchases except crude oil), Manager of BP's Procare Automotive Service (a chain of stand-alone automobile repair garages in three midwestern states), International Brand Manager (in the United Kingdom) and Division Manager in retail marketing.

James W. George was named Executive Vice President, Chief Financial Officer and Secretary of us and our subsidiaries in July 2003. Mr. George served as Senior Vice President, Chief Financial Officer and Secretary of us and our subsidiaries since January 1997. Mr. George served as a Vice President and Chief Financial Officer of TA Operating Corporation since the closing of the acquisition of the BP network in December 1993. From August 1990 to December 1993, Mr. George served as the Controller (the most senior financial position) of the BP network under BP's ownership. Prior to joining the BP network, Mr. George spent ten years with Sohio and BP in a series of accounting and finance positions.

1

Michael H. Hinderliter was named Senior Vice President, Sales of us and our subsidiaries in January 2001. Mr. Hinderliter served as Senior Vice President, Marketing of us and our subsidiaries since January 1997 and served as Vice President, Marketing of TA Operating Corporation since the closing of the acquisition of the BP network in December 1993. From August 1992 to December 1993, Mr. Hinderliter served as the Marketing Manager of TA under BP's ownership. From 1989 to August 1992, Mr. Hinderliter was the manager of BP Truckstops Limited, BP's truckstop network in the United Kingdom. Prior thereto, Mr. Hinderliter spent 14 years with TA under Ryder System, Inc., Sohio and BP ownership in a series of positions which included serving as a Fleet Sales Manager, Division Manager and location General Manager.

Joseph A. Szima was named Senior Vice President, Marketing of us and our subsidiaries in March 2004. Mr. Szima served as a Regional Vice President of TA Operating Corporation since December 1996.

Steven C. Lee was named Vice President and General Counsel of us and our subsidiaries in December 1997. From September 1995 to November 1997, Mr. Lee served as Assistant Vice President and Corporate Counsel of Premier Farnell Corporation (formerly Premier Industrial Corporation). Mr. Lee practiced law with Calfee, Halter & Griswold from 1989 to 1995.

Robert J. Branson became a director of ours on November 14, 2000. Since 1989, Mr. Branson has been affiliated with RMB Realty, Inc., which acts as an advisor to Oak Hill with respect to real estate matters. From 1981 to 1989, Mr. Branson was a Principal of Linden & Branson, a real estate investment advisory firm, and from 1970 to 1981, he was employed by Arthur Andersen & Co. Mr. Branson is a Certified Public Accountant. Mr. Branson serves as a director of American Skiing Company.

Michael Greene was appointed a director of ours on March 14, 2001. Mr. Greene is a founding partner of UBS Capital Americas, a private investment fund. Prior to joining UBS Capital Americas, he was a senior member of the Union Bank of Switzerland's Leverage Finance Group from 1990 to 1992. Previously he was a member of the Leverage Finance Group at Marine Midland Bank. Mr. Greene serves as a director of Orphan Medical, Inc., Affordable Residential Communities, Inc. and several private companies.

Steven B. Gruber became a director of ours on November 14, 2000. From February 1999 to the present, Mr. Gruber has been a Managing Partner of Oak Hill Capital Management, Inc., the manager of Oak Hill. From March 1992 to the present, he has been a Managing Director of Oak Hill Partners, Inc. From May 1990 to March 1992, he was a Managing Director of Rosecliff, Inc. Since February 1994, Mr. Gruber has also been an officer of Insurance Partners Advisors, L.P., an investment advisor to Insurance Partners, L.P. Since October 1992, he has been a Vice President of Keystone, Inc. (formerly known as Robert M. Bass Group, Inc.). Prior to joining Keystone, Mr. Gruber was a Managing Director and co-head of High Yield Securities and held various other positions at Lehman Brothers, Inc. He is also a director of American Skiing Company, Williams Scotsman, Inc. and several private companies.

Louis J. Mischianti has been a director of ours since December 1992. Mr. Mischianti has been employed by Olympus Advisory Partners, Inc., an affiliate of Olympus Growth Fund III, L.P. and Olympus Executive Fund, L.P., since May 1994. Mr. Mischianti was employed by The Clipper Group, L.P. or one of its affiliates from 1991 to April 1994. Prior to 1991, Mr. Mischianti was employed by Credit Suisse First Boston Corporation. Mr. Mischianti serves as a director of several private companies.

Rowan G.P. Taylor became a director of ours on November 14, 2000. From March 1999 to the present, Mr. Taylor has been a Principal of Oak Hill Capital Management, Inc. From April 1991 to March 1999, Mr. Taylor was employed by The Clipper Group, L.P. or one of its affiliates, most recently as a Principal. From January 1998 to March 1999, Mr. Taylor was also a Principal of Monitor Clipper Partners, Inc. Prior to April 1991, Mr. Taylor was employed by Credit Suisse First Boston Corporation. Mr. Taylor serves as a director of one private company.

2

EXECUTIVE COMPENSATION

Summary Compensation Table. The following table sets forth the compensation awarded to, earned by or paid to our Chief Executive Officer and each of our four other most highly compensated executive officers as of December 31, 2003.

SUMMARY COMPENSATION TABLE

                                                                                      Long-Term
                                                                                     Compensation
                                                              Annual Compensation     Securities      All Other
                                                              -------------------     Underlying    Compensation
        Name and Principal Position              Year      Salary ($)   Bonus ($)(1)   Options (#)     ($) (2)
        ---------------------------              ----      ----------   ------------  ------------     -------
Edwin P. Kuhn...............................    2003          500,000        375,000         --        5,599
   Chief Executive Officer and Director         2002          492,000        369,000         --        3,617
                                                2001          475,000        178,125    198,826        7,199

Timothy L. Doane............................    2003          330,000        247,500         --        5,751
   President and Chief Operating Officer        2002          295,000        221,250         --        4,837
                                                2001          285,000        106,875     99,413        5,035

James W. George.............................    2003          315,000        236,250         --        6,597
   Executive Vice President, Chief
   Financial Officer                            2002          295,000        221,250         --        6,117
   and Secretary                                2001          285,000        106,875     99,413        6,125

Michael H. Hinderliter......................    2003          295,000        191,750         --        7,034
   Senior Vice President                        2002          295,000        177,000         --        6,039
                                                2001          285,000        106,875     99,413        6,095

Steven C. Lee...............................    2003          181,000         86,880         --        3,651
   Vice President and General Counsel           2002          175,000         87,625         --        4,571
                                                2001          150,000         37,500     26,510        2,960


(1) Represents bonus for services rendered in the indicated year.

(2) Represents life insurance premiums paid by us and our matching contributions to our defined contribution retirement plan in respect of each of these executive officers, as follows:

                               Insurance            Matching          Total All Other
                                Premiums          Contribution          Compensation
                            -----------------   ------------------    -----------------
Mr. Kuhn              2003    $      11,599       $        4,000        $     15,599
                      2002            9,617                4,000              13,617
                      2001           14,027                3,172              17,199

Mr. Doane             2003            1,751                4,000               5,751
                      2002            1,653                3,184               4,837
                      2001            1,635                3,400               5,035

Mr. George            2003            2,597                4,000               6,597
                      2002            2,554                3,563               6,117
                      2001            2,725                3,400               6,125

Mr. Hinderliter       2003            3,034                4,000               7,034
                      2002            2,855                3,184               6,039
                      2001            2,695                3,400               6,095

Mr. Lee               2003              584                3,067               3,651
                      2002              571                4,000               4,571
                      2001              560                2,400               2,960

3

Option Grants.

We granted no stock options during the year ended December 31, 2003.

Option Exercises.

The following table sets forth information concerning the value of unexercised options as of December 31, 2003 held by the named executive officers. No options were exercised by any named executive officer during 2003.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
LAST FISCAL YEAR-END OPTION VALUES TABLE

                                   NUMBER OF
                                    SHARES                   NUMBER OF SECURITIES         VALUE OF UNEXERCISED
                                   ACQUIRED                   UNDERLYING OPTIONS          IN-THE-MONEY OPTIONS
                                      ON         VALUE         AT 2003 YEAR-END           AT 2003 YEAR-END ($)
              NAME                 EXERCISE    REALIZED    EXERCISABLE/UNEXERCISABLE  EXERCISABLE/UNEXERCISABLE(1)
              ----                 --------    --------    -------------------------  ----------------------------
Edwin P. Kuhn....................       --            --         55,055 / 149,077           301,701 / 816,942

Timothy L. Doane.................       --            --         28,692 / 88,546            158,712 / 485,232

James W. George..................       --            --         28,245 / 81,542            154,783 / 446,850

Michael H. Hinderliter...........       --            --         27,527 / 74,539            150,848 / 408,474

Steven C. Lee....................       --            --          8,106 / 24,147             44,421 / 132,326


(1) At December 31, 2003, our common stock had an estimated market value of $37.23 per share.

COMPENSATION OF DIRECTORS

Employee directors are not entitled to receive any compensation for serving on the board or any committees of the board. Non-employee directors may receive compensation for their services in an amount to be determined. All directors are entitled to receive reimbursement for reasonable out-of-pocket expenses in connection with travel to and attendance at meetings.

EMPLOYMENT AGREEMENTS

We have entered into employment agreements, which have subsequently been amended, with each of Edwin P. Kuhn, Timothy L. Doane, James W. George, Michael H. Hinderliter and Steven C. Lee. Pursuant to the employment agreements, Mr. Kuhn receives an annual base salary of $500,000, Mr. Doane receives an annual base salary of $330,000, Mr. George receives an annual base salary of $315,000, Mr. Hinderliter receives an annual base salary of $295,000, and Mr. Lee receives an annual base salary of $181,000,which amounts may be increased but not decreased by action of the board of directors or its delegate. Each executive is eligible to receive an annual bonus determined by the board of directors, based on individual and company performance objectives, ranging, for each of the executives other than Mr. Lee, from 0% to 75% of base salary, with 75% of base salary being the target bonus, and for Mr. Lee ranging from 0% to 50% of base salary, with 50% of base salary being the target bonus. The employment agreement with each executive, other than Messrs. Kuhn and Lee, provided for a two-year term, with automatic extensions of the second year at the end of each year through age 65, unless notice of non-renewal is given at least one year in advance. The employment agreement with Mr. Kuhn is described further below. The employment agreement with Mr. Lee provided for a one-year term with automatic extensions at the end of each year through age 65, unless notice of non-renewal is given at least one year in advance. No such notice has been given by Messrs. Doane, George, Hinderliter or Lee through March 15, 2004 and, accordingly, the current expiration date for the employment agreements is December 31, 2005. If we terminate the executive's employment without cause or the executive resigns with good reason, the executive will be eligible to receive, among other things, a pro rata bonus for the year of termination, 24 months' base salary (12 months' base salary in the case of Mr. Lee), plus two-times target bonus (one-times in the case of Mr. Lee). Each executive agrees that during the employment term and for the 24-month (a 12-month period in the case of Mr. Lee) period that he is entitled to receive certain severance payments following a termination of employment by us without cause or by his resignation for good reason he will refrain from competing with us.

4

Effective December 31, 2002, we entered into an amendment to the employment agreement with Mr. Kuhn. Mr. Kuhn agreed to defer his scheduled retirement until no earlier than June 30, 2004. In return, he received a one-time cash bonus of $200,000, paid in January 2003, slightly improved vesting rates on his stock options and the right to assume the position of Chairman, Non-Executive, upon his scheduled retirement. In December 2003, Mr. Kuhn provided notice to the Board that he intended to step down from his position as Chief Executive Officer and assume the Chairman, Non-Executive position effective July 1, 2004. This position could provide for an annual salary at that time of $250,000, with no opportunity for bonus compensation.

OPTION PLAN

During 2001, we granted to certain of our executives non-qualified stock options to purchase 944,881 shares of our common stock. All of the options have a term of 10 years from the date of grant, although the options will be terminated earlier if certain customary events occur. For example, if an executive's employment is terminated by us without cause or by the executive for good reason or due to death, disability or scheduled retirement, all vested options will expire 60 days following termination of employment. Under certain circumstances, the executive will be allowed to hold a limited portion of his unvested options for a longer period of time following termination of employment for further vesting. Each option grant consists of 41.67% time options and 58.33% performance options. Time options become exercisable over the passage of time, while performance options become exercisable if certain investment return targets are achieved. Time options generally vest 20% per year over a period of five years. Performance options vest if Oak Hill achieves specified internal rates of return on specified measurement dates. In general, the number of performance options that will vest is based upon Oak Hill achieving internal rates of return between 22.5% and 30.0% on a measurement date. A measurement date is generally defined as the earliest of (1) November 14, 2005, (2) specified dates following an initial public offering of our stock, depending on the date the initial public offering occurs, or (3) the date that at least 30% of our shares owned by Oak Hill are distributed to its limited partners or sold, except that a subsequent measurement date may occur if less than 100% of our shares owned by Oak Hill are so sold or distributed. Vesting is partially accelerated for time options following termination of employment due to death, disability or scheduled retirement. If a change of control occurs, the vesting of time options will fully accelerate. Option holders will have rights to require us to repurchase shares obtained upon the exercise of 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. In connection with our initial grant of options under this plan, we established and granted a discretionary pool of options that will be allocated periodically, first to new members of management who become option holders after the date of the initial grant, and then to other members of management on a pro rata basis. The total number of shares underlying the initial grant of options will not increase as a result.

CODE OF ETHICS

We have adopted a written code of Ethics that applies to all of our directors, officers (including our Chief Executive Officer and our Chief Financial Officer), and employees. A copy of our Code of Ethics will be provided without charge to any person who requests it. Requests for a copy of our Code of Ethics can be made by contacting our Vice President and General Counsel by telephone at (440) 808-9100.

COMMITTEES OF THE BOARD OF DIRECTORS

We have established an executive committee; an audit and compliance committee; a health, safety and environmental committee and a compensation committee. Our board may alter the duties of these committees and may establish other committees from time to time to facilitate the management of our business and affairs.

Executive Committee. The executive committee is authorized to exercise, between meetings of our board, all the powers and authority of the board for our direction and management, except as prohibited by applicable law and except to the extent another committee has been accorded authority over the matter. The Executive Committee is comprised of Messrs. Gruber, Kuhn, Mischianti and Taylor.

Audit and Compliance Committee. The audit and compliance committee recommends the annual appointment of our auditors, with whom the audit committee reviews the scope of audit and non-audit assignments and related fees, accounting principles used by us in financial reporting, internal auditing procedures and the adequacy of our internal control procedures and other compliance programs. The Audit and Compliance Committee

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is comprised of Messrs. Branson, Greene and Taylor. The Board of Directors has determined that Mr. Branson satisfies the criteria adopted by the Securities and Exchange Commission to serve as an "audit committee financial expert, " but that Mr. Branson, because of his affiliation with an advisor to our controlling shareholder Oak Hill, does not meet the criteria to be considered an independent director pursuant to the standards set forth in the requirements under the Securities and Exchange Act of 1934.

Health, Safety and Environmental Committee. The health, safety and environmental committee oversees significant matters relating to health, safety and environmental compliance effecting us or our properties. The Health, Safety and Environmental Committee is comprised of Messrs. Branson, Greene and Taylor.

Compensation Committee. The compensation committee administers our stock option and related plans and establishes the compensation for our executive officers.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The members of the compensation committee of our board of directors are Steven B. Gruber and Rowan G. P. Taylor, both of whom are employed by Oak Hill Capital Management.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE OFFICER COMPENSATION

The Compensation Committee oversees our compensation programs, with particular attention to the compensation of our senior management team and including an even greater focus on the compensation of our Chief Executive Officer ("CEO") and the other named executive officers. The Compensation Committee is responsible for establishing and administering our executive compensation plans and determining awards under the 2001 Stock Incentive Plan.

The report of the Compensation Committee shall not be deemed incorporated by reference by any general statement incorporating by reference this Exhibit into any filing under the Securities Act of 1933, as amended (the "Securities Act") except to the extent that we specifically incorporate this information by reference, and shall not otherwise be deemed filed under the Securities Act.

Executive Compensation Philosophy and Objectives

The Compensation Committee's policies with respect to executive compensation are designed to support our primary objective of creating long term value for stockholders and are intended to achieve three principal goals: (1) to attract and retain talented and dedicated executives, (2) to provide a direct link between both individual performance and performance of the company as a whole with the executive's compensation and (3) to provide executives with a longer term incentive and reward longer term company loyalty and performance.

The Compensation Committee follows a three-pronged compensation strategy applicable to our senior management team, including our CEO, whereby such employees are compensated through three separate but related compensation programs designed to achieve the objectives listed above.

Base Salary. Base salary is designed to compensate executives and other key employees for individual performance. Base salaries are intended to take into consideration (a) the relative intrinsic value of the subject executive position to the company, as measured by the position's scope of responsibility, strategic importance, technological requirements and complexity; (b) competitive salaries; and (c) individual performance. Executives and other key employees may or may not receive annual base salary increases, depending upon performance in the prior year and upon the achievement of individual and corporate performance goals. The base salary and performance of each executive is reviewed annually by his or her immediate supervisor (or the Compensation Committee in the case of the CEO), resulting in salary actions as appropriate. The Compensation Committee reviews and approves all executive salary adjustments as recommended by the CEO. The Compensation Committee reviews the performance of the CEO and sets his base salary.

Bonus Plan. A short term bonus, generally determined annually, is established to provide reward and incentive for shorter term productivity and performance. Annual bonus awards are based equally on achieving personal goals and achieving EBITDA targets which have been established by our Board of Directors. Meeting

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such objectives will trigger awards as a percentage of base pay, dependent on management level, of 50% to 75%. The actual percentage paid can be adjusted downward for the company failing to achieve our EBITDA targets and/or for the individual failing to adequately achieve his or her personal performance goals for the year.

Stock Options. Stock options are awarded under our 2001 Stock Incentive Plan to provide an incentive for longer term performance. See "Option Plan" above.

To further promote long term performance and increased stockholder value, each member of senior management eligible to participate in the compensation programs described above is required to make an investment in shares of our common stock in addition to any shares obtained through the exercise of stock options.

CEO Compensation

Mr. Kuhn, our CEO, is compensated under the terms of his employment agreement with us. See "Employee Agreements" above. In developing Mr. Kuhn's compensation, the Compensation Committee considered Mr. Kuhn's prior performance as CEO and his prior experience in the petroleum marketing industry. The Compensation Committee also considered Mr. Kuhn's contributions with respect to the company's significant capital expenditure program, including its re-imaging program, as well as his management of us in recent periods under difficult business conditions.

Tax Policy

If an executive officer's compensation were to exceed $1 million in any taxable year (which the Compensation Committee does not now expect), the excess over $1 million, with certain exceptions, would not be deductible by us, under
Section 162(m) of the Internal Revenue Code of 1986, as amended. The Compensation Committee is aware of this rule, and will take it into account if the $1 million limit is ever applicable. One exception to the disallowance of such deductions under Section 162(m) involves compensation paid pursuant to stockholder-approved compensation plans that are performance-based. The 2001 Stock Incentive Plan contains provisions which are intended to cause grants of stock options under such plan to be eligible for this performance-based exception (so that compensation upon exercise of such options should be deductible under the Internal Revenue Code of 1986, as amended).

THE COMPENSATION COMMITTEE

/s/ Steven B. Gruber
/s/ Rowan G. P. Taylor

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

We have one class of common stock outstanding and no preferred stock outstanding. The following table sets forth certain information regarding the beneficial ownership of our common stock as of March 15, 2003, by:

- each person known by us to own beneficially more than 5% of the outstanding shares of our common stock;

- each of our directors;

- each of the executive officers named in the table under "Management
- Compensation of Executive Officers - Summary Compensation Table"; and

- all directors and executive officers as a group.

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                                                                       NUMBER OF SHARES OF           PERCENT OF
                                                                          COMMON STOCK               OUTSTANDING
NAME AND ADDRESS OF BENEFICIAL OWNER (1)                                  OWNERSHIP (2)           COMMON STOCK (2)
----------------------------------------                               -------------------        ----------------
Oak Hill Capital Partners, L.P.........................................    4,084,253                     58.9%
Oak Hill Capital Management Partners, L.P..............................      104,724                      1.5
     201 Main Street, Suite 2415
     Fort Worth, TX  76102
Olympus Growth Fund III, L.P...........................................      797,796                     11.5
Olympus Executive Fund, L.P............................................        5,356                      0.1
     Metro Center
     One Station Place
     Fourth Floor North Tower
     Stamford, CT 06902-6876
UBS Capital Americas II, LLC...........................................      834,646                     12.0
TA Private Client Investment, LLC......................................      377,953                      5.5
     299 Park Avenue
     New York, NY 10171
Edwin P. Kuhn..........................................................       88,256                      1.3
Timothy L. Doane.......................................................       28,962                       *
James W. George........................................................       28,245                       *
Michael H. Hinderliter.................................................       27,527                       *
Steven C. Lee..........................................................       12,848                       *
Robert J. Branson......................................................           --                      --
Michael Greene.........................................................           --                      --
Steven B. Gruber.......................................................           --                      --
Louis J. Mischianti....................................................           --                      --
Rowan G. P. Taylor.....................................................           --                      --
(All directors and officers as a group (10 persons))...................      237,782                      3.4

(1) Unless otherwise indicated, the address for each person listed in the table is care of TravelCenters of America, Inc., 24601 Center Ridge Road, Suite 200, Westlake, Ohio 44145-5634

(2) Reflects beneficial ownership of common stock assuming the exercise by the listed stockholder of any options or warrants to purchase common stock owned by such stockholder to the extent currently exercisable or exercisable within 60 days of March 15, 2004.

* The percentage of shares beneficially owned is less than one percent of the outstanding number of shares.

Summary of Equity Compensation Plans. The following table sets forth information about all of our equity compensation plans in effect as of December 31, 2003, which consisted solely of the 2001 Stock Incentive Plan, which plan was approved by our stockholders during 2001. All of our equity compensation plans currently in effect have been approved by our stockholders.

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Equity Compensation Plan Information

                                                                                     (C)
                                                                                  Number of
                                                                                  securities
                                         (A)                                      remaining
                                       Number of                                available for
                                    securities to be            (B)            future issuance
                                      issued upon         Weighted-average       under equity
                                      exercise of         exercise price         compensation
                                      outstanding         of outstanding       plans (excluding
                                        options,             options,             securities
                                      warrants and           warrants            reflected in
        Plan Category                    rights             and rights           column (A))
-------------------------------    ------------------     ----------------    ------------------
Equity compensation
plans approved by
stockholders.....................             944,881     $          31.75                    --
Equity compensation plans
  not approved by
  stockholders...................                  --                   --                    --
                                   ------------------     ----------------    ------------------
Total............................             944,811     $          31.75                    --
                                   ==================     ================    ==================

CERTAIN RELATIONSHIPS & RELATED TRANSACTIONS

THE STOCKHOLDERS' AGREEMENT

We, Oak Hill, a group of institutional investors, which we refer to as the Other Investors, Freightliner LLC and some members of our management team entered into a stockholders' agreement. At the time of the merger, the Other Investors were Olympus Growth Fund III, L.P., Olympus Executive Fund, L.P., Monitor Clipper Equity Partners, L.P., Monitor Clipper Equity Partners (Foreign), L.P., UBS Capital Americas II, LLC, Credit Suisse First Boston LFG Holdings 2000, L.P. and Credit Suisse First Boston Corporation, each of whom is an affiliate of certain of our former shareholders. Since that time, certain of these investors have sold their shares to other investors, including affiliates of certain of the Other Investors. Such sales of our shares are not frequent but could occur in the future. New stockholders are required to enter into the stockholders' agreement. The stockholders' agreement provides that:

- other than in connection with transfers described below or permitted transfers among certain Other Investors or to affiliates and for estate purposes, the stockholders (other than Oak Hill) cannot transfer shares prior to the earlier of:

- November 14, 2001, and

- an initial public offering of our common stock;

- following the expiration of the initial holding period described above but prior to the earlier of the (1) initial public offering of our common stock and (2) November 14, 2007, we will have the right of first purchase for any shares that any stockholder (other than Oak Hill or the management stockholders) proposes to transfer, other than transfers described below or certain permitted transfers; and

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- if we do not exercise our right to purchase the shares, then each stockholder will have the right to purchase its pro rata portion of the remaining offered shares; and

- if each stockholder does not fully exercise its right to purchase its pro rata portion of the remaining shares, then Oak Hill, and any transferee thereof who agrees to be bound by the terms of the stockholders' agreement, we will have the right to purchase all, but not less than all, of the remaining offered shares;

- during the period following the expiration of the initial holding period described above but prior to the initial public offering of our common stock, if any management stockholder proposes to transfer any shares, other than in connection with transfers described below or certain permitted transfers and the transfer of shares to us by members of management when the person's employment with us terminates or for estate purposes, then the other management stockholders will have the right of first refusal to purchase the shares; and

- if each management stockholder does not exercise its right to purchase its pro rata portion of the shares, then we will have the right to purchase the remaining offered shares; and

- if we do not exercise our right to purchase all of the remaining shares then each stockholder (other than management stockholders) will have the right to purchase its pro rata portion of the remaining offered shares; and

- if each other stockholder does not exercise its right to purchase its pro rata portion of the remaining shares, then Oak Hill, and any transferee thereof who agrees to be bound by the terms of the stockholders' agreement, will have the right to purchase all, but not less than all, of the remaining offered shares;

- if Oak Hill transfers more than 10% of the total outstanding shares of our common stock to a party (other than to a controlled affiliate), the other stockholders have the right to transfer shares pro rata to the third party on the same terms and conditions as Oak Hill;

- Oak Hill has the right to require the other stockholders to transfer a pro rata percentage of their stock to any third party in a transaction involving the acquisition of control of the total outstanding shares of our common stock by a third party on the same terms and conditions as Oak Hill;

- Freightliner continues to have a right of first refusal in connection with any proposed sale of TravelCenters of America to certain truck manufacturers;

- at any time from time to time on or after the date 180 days (or a greater number of days, not to exceed 365 days, as Oak Hill and its affiliates may agree with the underwriters for the initial public offering) after an initial public offering of our common stock, stockholders, other than management stockholders, who own at least 4% of the total issued and outstanding shares of our common stock at the time the stockholders agreement is entered into, will each have the right to demand a registration of their shares, under certain circumstances described in the stockholders' agreement;

- following an initial public offering of our common stock, stockholders will be entitled to piggyback registration rights until the later of the time (1) their shares are eligible for transfer without restriction under Rule 144 of the Securities Act and (2) the second anniversary of the consummation of the initial public offering; but the number of shares included by each shareholder may be reduced if the total number of shares of our common stock to be included in the registered offering by the underwriter of the offering is limited;

- the stockholders have the right to purchase a pro rata share in connection with other issuances of shares to our stockholders and their affiliates;

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- the stockholders may not publicly sell their shares during the seven days prior to and the 180 days (or a greater number of days as Oak Hill may agree with the underwriters) following any underwritten registration of our common stock, unless the managing underwriters consent, in which case the stockholders will be permitted to sell their shares on a pro rata basis;

- the stockholders vote together to assure the following with respect to us:

- the authorized number of directors of our board of directors will consist of at least seven directors;

- for so long as Oak Hill continues to own any shares of our common stock and Oak Hill, Freightliner and certain of the Other Investors continue to own two-thirds of their shares of our common stock, the stockholders will have the right to designate nominees to serve on our board of directors and Oak Hill will have the right to nominate a majority of our board of directors; and

- unless otherwise agreed by our board of directors, the board of directors of each of our subsidiaries will be identical to our board of directors; and

- so long as certain of the Other Investors and their affiliates continue to own at least two-thirds of their shares of our common stock or one-third of their collective amounts of shares of our common stock, such Other Investors will have observer rights for all meetings of our board of directors, reasonable access to consult and advise our management and rights to inspect our books and records.

Since September 16, 2002, Freightliner, without waiving its future rights under the Stockholders' Agreement, has elected not to designate a nominee to serve on our board of directors and instead has been granted observer rights for all meetings of our board of directors.

INDEMNIFICATION UNDER RECAPITALIZATION AGREEMENT AND PLAN OF MERGER

In connection with the recapitalization agreement and plan of merger, we have agreed to indemnify certain of our stockholders and any person who was one of our officers or directors for any losses caused by TCA Acquisition Corporation, Oak Hill or Oak Hill Capital Management Partners breaching any representation, warranty or covenant made by any of them in the recapitalization agreement and plan of merger. We have agreed to indemnify Oak Hill and its affiliates, stockholders, partners, officers, directors and employees from any losses resulting from a breach of any of our representatives, warranties or covenants in the recapitalization agreement and plan of merger.

TRANSACTIONS AND RELATIONSHIPS WITH INVESTORS

The offering in 2000 relating to 190,000 units, consisting of Senior Subordinated Notes due 2009 with an aggregate face amount of $190.0 million and warrants exercisable for an aggregate of 277,165 shares of common stock, included the offering to Oak Hill Securities Fund, L.P. ("OHSF") and Oak Hill Securities Fund II, L.P. ("OHSF II," together with OHSF, "Oak Hill Securities") of an aggregate of 10,500 units. Oak Hill Securities purchased these units from the initial purchasers at a purchase price of $941.29 per unit. The units purchased by Oak Hill Securities are identical to the other units sold in the offering. Oak Hill Securities agreed with the initial purchasers that, except for the exchange offer, it will not sell, transfer or otherwise dispose of or transfer any of the units, notes or the warrants that it purchased for a period of three months from the date of purchase without the consent of the initial purchasers. In addition, Oak Hill Securities purchased $30.0 million of the term loan facility from the co-lead arrangers at a purchase price of 99.00%. The initial purchasers and the co-lead arrangers purchased from us the number of units and the portion of the term loan facility that was sold to Oak Hill Securities at the same price as the units and portion of the term loan facility that was sold to Oak Hill Securities.

OHSF and OHSF II are Delaware limited partnerships that acquire and actively manage a diverse portfolio of primarily debt investments, principally in leveraged companies. The principals of Oak Hill Advisors, Inc., the adviser to OHSF, and the principals of Oak Hill Advisors, L.P., the adviser to OHSF II, may from time to time play an advisory and consulting role in connection with the activities of Oak Hill and have an indirect limited partnership interest in Oak Hill and its general partner. In addition, the principals of Oak Hill Capital Management may from

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time to time play an advisory and consulting role in connection with the activities of OHSF and OHSF II and have an indirect limited partnership interest in OHSF and OHSF II and their general partners.

TRANSACTIONS WITH OFFICERS

Some members of our senior management have purchased, at various times, our common stock under management subscription agreements. As of December 31, 2003, we have issued to Edwin P. Kuhn, Timothy L. Doane, James W. George, Michael H. Hinderliter and Steven C. Lee, 33,201; 15,060; 18,192; 18,692, and 4,742 shares of common stock, respectively, under management subscription agreements. We refer to these shares of common stock as the management shares.

For the purchase of certain of the management shares, each of the members of senior management who entered into the management subscription agreement also received financing from us for no more than one-half of the purchase price of the management shares. In connection with the financing, each executive executed a note in favor of us and a pledge agreement. The notes for the named executives total $289,570 in principal amount, and are payable by the following named executives in the indicated principal amount as follows: Edwin P. Kuhn, $77,260; Timothy L. Doane, $57,950; James W. George, $57,950; Michael H. Hinderliter, $57,950 and Steven C. Lee, $38,460.

Interest accrues at an annual rate of 4.76% of each of Messrs. Kuhn, George and Hinderliter and at an annual rate of 6.01% for each of Messrs. Doane and Lee, in each case compounded semi-annually. Accrued and unpaid interest, together with unpaid principal, if not sooner paid, is due and payable on the earliest of:

- the date of cessation of employment of the employee;

- the date the employee is no longer the owner of the particular management shares; or

- the tenth anniversary of the note executed by the executive.

We will continue to maintain these loans with senior management and in 2000 extended the term of the loans beyond the original term to an extension of the lesser of five years or 50% of the original term of the loan.

OUR OBLIGATION TO REPURCHASE MANAGEMENT'S EQUITY INTERESTS IN US

Some of our management employees have rights to require us to repurchase the employee's equity interest at fair market value, plus the net value of vested optioned shares, less the balance on any loans due, upon the employees termination of employment due to death, disability or scheduled retirement. Repurchase will generally be for cash at 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 due to scheduled retirement prior to age 62, except that any of our shares obtained through exercising options must be held by the management employees for at least six months before we can be required to repurchase them. With respect to Edwin P. Kuhn, if termination is due to scheduled retirement, we will, at the election of Mr. Kuhn, repurchase that portion of his equity interest on his retirement date that is attributable to shares of our common stocked then owned by Mr. Kuhn, less the balance due on any loans outstanding between us and Mr. Kuhn on his scheduled retirement date. Thereafter, Mr. Kuhn has the right to require us to purchase, at the fair market value at the time of such purchase, the balance of his equity interest as follows: up to 50% of all then exercisable equity interests on or after the 6-month anniversary of his scheduled retirement, and up to 100% of all then exercisable equity interest on or after the 18-month anniversary of his scheduled retirement. If there is a change of control of the company 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 closing of the change of control. In other cases of termination of employment, we will have call rights at fair market value which generally will be exercised for cash, although in limited circumstances the call rights may be exercised by promissory note issued by us. 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 Senior Credit Facility and the indenture for the notes place limits on our ability to repurchase the management shares.

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PRINCIPAL ACCOUNTING FEES AND SERVICES

The following table sets forth information concerning the fees billed for each month of the last two fiscal years by our principal accounting firm. All accounting and auditing fees we incur are pre-approved by our Audit and Compliance Committee. For tax services, a blanket pre-approval is provided for periodic consultations up to a limit of $25,000; separate approval is required for larger projects and/or projects that exceed the $25,000 threshold when aggregated with prior projects.

                                                       YEAR ENDED DECEMBER 31,
                                                     ---------------------------
                                                       2002               2003
                                                     --------           --------
Audit fees ...............................           $268,000           $295,000

Audit-related fees(1) ....................           $ 19,500           $129,850

Tax fees(2) ..............................           $ 16,800           $ 55,900

Other fees ...............................           $     --           $     --

(1) Audit-related fees for 2002 were primarily related to services provided with respect to our filing of a registration statement on Form S-3. Audit-related fees for 2003 primarily related to services provided with respect to research, consultation and document reviews as part of our responses to questions of the staff of the SEC stemming from their review of our Form 10-K for the year ended December 31, 2002, as well as audit procedures related to the subsequent restatement of our financial statements for the year ended December 31, 2002. Fees were also billed in 2003 with respect to research and consultations related to specific technical accounting matters we were investigating. All audit-related services were pre-approved by the Audit and Compliance Committee.

(2) Tax fees for 2002 were primarily related to services provided with respect to research and consultations regarding alternative tax structures for a prospective acquisition transaction that ultimately was not completed. Tax fees for 2003 were primarily related to services provided with respect to research and consultations regarding doing business in Canada, including structuring of legal entities, capitalization matters, assistance preparing Canadian tax returns, and ongoing tax compliance matters. Fees were also billed with respect to research and consultations related to specific matters we were investigating, primarily with respect to state income tax matters. All tax services were pre-approved by the Audit and Compliance Committee.

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BROKERAGE PARTNERS