UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31,1997
Commission file number 333-26497
TRAVELCENTERS OF AMERICA, INC.
 (Exact name of Registrant as specified in its charter)

            DELAWARE                                           36-3856519
 (State or other jurisdiction of                              (IRS Employer
 incorporation or organization)                             Identification No.)

                     24601 Center Ridge Road, Suite 200
                          Westlake, OH  44145-5634
        (Address of principal executive offices, including zip code)

                               (440) 808-9100
            (Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:  None	

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes /X/ No / /
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. /X/
As of March 15, 1998, there were outstanding 621,011 shares of Common Stock, par value $0.01 per share. The outstanding shares of Common Stock of the registrant were issued in transactions not involving a public offering. As a result, there is no public market for the registrant's Common Stock.

INDEX

PART I
     Item 1.   Business. . . . . . . . . . . . . . . . . . . . . . . . . . .  2
     Item 2.   Properties. . . . . . . . . . . . . . . . . . . . . . . . . .  7
     Item 3.   Legal Proceedings . . . . . . . . . . . . . . . . . . . . . .  9
     Item 4.   Submission of Matters to a Vote of Security Holders . . . . . 10

PART II
     Item 5.   Market for Registrant's Common Equity and Related
               Stockholder Matters . . . . . . . . . . . . . . . . . . . . . 10
     Item 6.   Selected Financial Data . . . . . . . . . . . . . . . . . . . 11
     Item 7.   Management's Discussion and Analysis. . . . . . . . . . . . . 12
     Item 7A.  Quantitative and Qualitative Disclosures About Market Risk. . 20
     Item 8.   Financial Statements and Supplementary Data . . . . . . . . . 21
     Item 9.   Changes in and Disagreements With Accountants . . . . . . . . 59

PART III
     Item 10.  Directors and Executive Officers of the Registrant. . . . . . 59
     Item 11.  Executive Compensation. . . . . . . . . . . . . . . . . . . . 59
     Item 12.  Security Ownership of Certain Beneficial Owners and
               Management. . . . . . . . . . . . . . . . . . . . . . . . . . 60
     Item 13.  Certain Relationships and Related Transactions. . . . . . . . 60

PART IV
     Item 14.  Exhibits, Financial Statement Schedules and Reports
               on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . 60

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61	

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PART I
ITEM 1. BUSINESS
HISTORY AND ORGANIZATION
TravelCenters of America, Inc. (the "Company") was formed in 1992 by an institutional investor group (the "Investor Group") led by The Clipper Group, L.P. ("Clipper"), as well as certain then prospective franchisees and individuals who at the time were members of the Company's management. The Company was originally incorporated as National Auto/Truckstops Holdings Corporation but changed its name in March 1997. The Company is a holding company whose sole assets consist of the stock of its three direct wholly-owned subsidiaries: TA Operating Corporation, d/b/a TravelCenters of America ("TA"), National Auto/Truckstops, Inc. ("National") and TA Franchise Systems, Inc. ("TAFSI"). TA has one wholly-owned subsidiary, TA Travel, L.L.C. ("TA Travel") and participates (50% interest) in TABB, a joint venture to market to and bill fleet customers for products and services at an expanded network of sites. Prior to March 1997, the Company had two wholly-owned subsidiaries, National and TA Holdings Corporation ("TA Holdings"). TA Holdings was the parent of TA, which itself was the parent of TAFSI. In March 1997, a restructuring was completed whereby the current structure was effected and TA Holdings was merged into the Company. TA Travel was organized in October 1997.
The Company's operations are conducted through three distinct types of travel centers: sites owned or leased by the Company and operated by the Company ("Company-operated Sites"), sites owned or leased by the Company and leased to independent lessee-franchisees ("Operators") of the Company who operate the sites ("Leased Sites") and sites owned or leased and operated by independent franchisees ("Franchisee-Owners") of the Company ("Franchisee-Owner Sites").
In April 1993, the Company acquired (the "National Acquisition") the truckstop network assets (the "National Network") of a subsidiary of Unocal Corporation (together with its subsidiaries "Unocal") in a series of asset purchase transactions. The National Network included a total of 139 facilities, of which 95 were Leased Sites, 42 were Franchisee-Owner Sites, and two sites were Company-operated Sites. Included in such purchase was the acquisition of six Leased Sites located in California (the "California Properties") pursuant to separate agreements. Prior to the National Acquisition, certain of the Operators of the California Properties brought suit to challenge the sale of their respective truckstops to the Company. See Item 3 "Legal Proceedings." As part of the National Acquisition, Unocal agreed to indemnify the Company against certain environmental liabilities occurring prior to 1993 (the "Unocal Environmental Agreement," see "--Regulation--Environmental Regulation"), entered into a non-compete agreement for a ten-year period terminating on April 13, 2003, granted the Company a license to use certain Unocal trademarks, and granted the Company a royalty-free license to use the ACCESS 76 on-line information retrieval and credit card system. The National Network, which operates under the licensed "Unocal 76" and related trademarks, has been providing quality products and services for over 35 years and until 1997 had been the largest chain of full service travel centers or truckstops, based on number of locations in the United States. Pure Oil Company ("Pure") founded the National Network and Unocal acquired National in connection with Unocal's merger with Pure in 1965.
In December 1993, the Company acquired (the "TA Acquisition") the truckstop network assets (the "TA Network") of certain subsidiaries of The British Petroleum Company p.l.c. (together with its subsidiaries "BP"). The TA Network included 38 Company-operated Sites and six Franchisee-Owner Sites. As part of the TA Acquisition, BP agreed to indemnify the Company against certain environmental liabilities with respect to which claims are made prior to December 11, 2004 or December 11, 1996 (the relevant date depending upon the nature of the underlying claim) ( the "BP Environmental Agreement," see "--Regulation--Environmental Regulation"), entered into a noncompete agreement for a seven-year period commencing on December 10, 1993 and granted the Company the right, title and interest in and to certain copyrights, trademarks, service marks and other intellectual property, including, "Truckstops of America," "TA" and "Country Pride." The TA Network, which now operates under the Company-owned "TravelCenters of America" and "TA" trademarks, has been providing quality products
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and services to the trucking industry and to nonprofessional travelers for over 30 years. BP, through its subsidiary formerly known as the Standard Oil Company of Ohio ("Sohio"), acquired TA from Ryder System, Inc. ("Ryder") in 1984. Ryder founded the TA Network in 1973.
COMBINATION PLAN, CAPITAL PROGRAM AND REFINANCING
Historically, under the Company's ownership, each of the TA and National Networks (the "Existing Networks") was separately managed and financed. However, in January 1997 the Company's Board of Directors approved a management proposal (the "Combination Plan") that calls for the integration of the Existing Networks into a single network (the "Network") to be operated under the TA trademark under the leadership of a single management team.
During 1997 the Company, pursuant to the Combination Plan, significantly reshaped the composition of the Existing Networks: 27 Leased Sites were converted to Company-operated Sites, 27 Franchisee-Owner Sites were terminated, 15 Leased Sites were sold to the related Operators, all National Network Company-operated Sites were converted to TA Network Company-operated Sites and Operators of 29 National Network Leased Sites terminated their franchise agreements with National and signed franchise agreements with TAFSI.
The Company has initiated a capital program to upgrade, rebrand and reimage the Network's travel centers and to build new travel centers (the "Capital Program"). Under this Capital Program, the Company intends to invest in excess of $200 million in the Network's sites by the end of 2001, with approximately $150 million to be spent by the end of 1998, and the Operators and Franchisee-Owners will also be investing additional amounts for reimaging and other projects at the sites they operate.
To facilitate the Combination Plan and Capital Program, in March 1997 the Company refinanced the existing indebtedness of TA and National with new borrowings by the Company (the "Refinancing"). The Company issued $125 million aggregate principal amount of 10 1/4% Senior Subordinated Notes due 2007, entered into a Credit Agreement through which it obtained an $80 million senior secured term loan facility and a $40 million revolving credit facility, redeemed all of the outstanding Subordinated Notes of TA and National (the "National Old Subordinated Notes" and the "TA Old Subordinated Notes") and a portion of the Senior Notes of TA (the "TA Old Senior Notes"), and exchanged $85.5 million aggregate principal amount of Senior Secured Notes of the Company for the Senior Notes of National (the "National Old Senior Notes") and the unredeemed TA Old Senior Notes.
BUSINESS OVERVIEW
The Company owns, operates and franchises more full-service travel centers in the United States than any of its competitors, with 127 network sites nationwide, including 83 Company-owned and operated locations. The Company's travel centers are full service facilities offering a broad range of fuel and nonfuel products, services and amenities to trucking fleets, professional truck drivers and other motorists. In addition to diesel fuel and gasoline, the travel centers provide truck maintenance and repair services and products, full service and fast food dining, travel and convenience stores, telecommunications services and various hospitality and rest-related amenities. This broad range of products and services distinguishes the travel centers from traditional truckstops, which focus on the sale of diesel fuel, and provides diverse revenue sources for the Company. In addition, the Company is the only industry participant with a centralized procurement, warehousing and distribution system.
The Company's broad range of products and services, together with its comprehensive geographic coverage, has enabled the Company to become a leading supplier of diesel fuel to many of the largest long-haul trucking fleets in the United States. Management believes the Company's position as a leading supplier of diesel fuel to major trucking fleets positions it to continue to increase its sales of higher margin nonfuel products and services to fleets and their drivers as well as to independent drivers.
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The travel centers feature a variety of well recognized national brands which attract professional truck drivers, motorists and other customers who often satisfy both fuel and nonfuel needs at the same stop. The Company's nationally recognized fast food and motel brands include Burger King, Dunkin' Donuts, Kentucky Fried Chicken, Long John Silver's, Pizza Hut, Sbarro, Subway, Taco Bell, DayStop, HoJo Inn and Travelodge. The Company also offers such well recognized gasoline brands as BP, Exxon, Mobil, Shell and Unocal
76. This portfolio of brands strongly appeals to what market research indicates are customers' priorities of quality, convenience and consistency of product offerings, as well as cleanliness and safety.
CENTRALIZED PURCHASING AND DISTRIBUTION
The TA Network maintains a dedicated distribution and warehouse center (the "Distribution Center"). The Distribution Center is the only dedicated purchasing, warehousing and distribution center in the travel center and truckstop industry. The Distribution Center is located in Nashville, Tennessee and has approximately 85,000 square feet of storage space.
SUPPLY
The Company purchases fuel from various suppliers at rates that fluctuate with market prices and reset daily, and resells fuel to certain franchisees and to the public at prices that the Company establishes daily. By contracting for only a portion of its monthly diesel fuel requirements and by establishing supply relationships with an average of four or five alternate suppliers per location, the Company has been able effectively to create competition for the Company's business among the Company's various diesel fuel suppliers on a daily basis. This flexibility has improved the Company's purchasing position and helped it partially to offset the decline in retail diesel fuel margins. Purchases made by the Company are delivered directly from suppliers' terminals to the travel centers. The Company does not keep substantial quantities of fuel in inventory and is therefore susceptible to price increases and interruptions in supply. The Company currently engages in only minimal hedging in connection with its diesel fuel purchases.
COMPETITION
The travel center and truckstop industry is highly competitive and fragmented. Based on industry data, the Company believes that there are approximately 2,500 travel centers and truckstops nationwide, of which approximately 500 are full service travel centers. In the United States, there are generally two types of facilities designed to service the trucking industry: pumper-only truckstops, which provide fuel, typically at discounted prices, with limited additional services, and full service travel centers, such as those in the Company's networks, which have a broad range of product and service offerings to fleet and independent truck drivers and nontruck traffic, including fuel products, fast food and casual dining restaurants; truck maintenance and repair products and services; and secure parking areas. Fuel and nonfuel products and services can be obtained by long-haul truck drivers from a wide variety of sources other than the Company, including regional full service travel center and pumper-only truckstop chains, independently owned and operated truckstops, some large service stations and fleet-operated fueling terminals.
The Company believes that it experiences substantial competition from pumper-only truckstop chains and that such competition is based principally on diesel fuel prices. In the pumper-only truckstop segment, the largest networks (based on number of facilities and gallons of diesel fuel sold) are Marathon Ashland Petroleum LLC, selling primarily under the Speedway and SuperAmerica brandnames, and Pilot Corporation. Additional substantial competition is experienced from major full service networks and independent chains and is based principally on diesel fuel prices and customer service. In the full service travel center segment, the largest networks (other than the Company) are operated by Flying J Inc. ("Flying J") and Petro Stopping Centers, L.P.; however, only some of Flying J's sites offer full service. The Company's vehicle products and truck maintenance and repair service operations compete with regional full service travel center and truckstop chains, full service independently owned and operated truckstops, independent garages and auto parts service centers. The Company's travel centers compete with a variety of establishments located within walking distance of its sites, including full service and fast food restaurants and electronics, drug, health and beauty aid and travel and convenience stores.
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A significant portion of all intercity diesel fuel consumption by 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. Such terminals often provide facilities for truck maintenance and repair. The Company's pricing decisions for diesel fuel and repair services cannot be made without considering the existence of these operations and their capacity for expansion. However, the Company believes that a trucking industry trend has been to reduce the use of such terminals and to outsource fuel and repair services in order to maximize the benefits of competitive fuel pricing, superior driver amenities and reduced environmental compliance expenditures.
RELATIONSHIPS WITH THE OPERATORS AND FRANCHISEE-OWNERS
Pursuant to the Combination Plan, the Company offered a new TA franchise agreement (the "Network Franchise Agreement") and a new lease agreement (the "Network Lease Agreement" or "Network Lease" and, together with the Network Franchise Agreement, the "Network Agreements") to certain of National's then existing Operators, and in connection therewith, upon such franchisee's acceptance of such offer, terminated the then existing National lease (the "National Lease Agreement") and National franchise agreement (the "National Franchise Agreement," and, together with the National Lease Agreement, the "National Agreements") at those locations. During 1997, 29 former National Operators signed Network Agreements with the Company. Existing TA Franchisee-Owners will be allowed to continue their franchises under the Network Franchise Agreement upon expiration of their existing TA franchise agreements (the "Existing TA Franchise Agreements"), which have an average remaining term of approximately four years.
TA licenses its trademarks to TAFSI. The Company enters into its franchise agreements with Operators and Franchisee-Owners of travel centers in the TA Network through TAFSI, and TAFSI collects franchise fees and royalties under such agreements. TAFSI's assets consist primarily of the rights under the Existing TA Franchise Agreements, the Network Franchise Agreements and its trademark licenses from TA. TAFSI has no significant tangible assets. The National Franchise Agreements are between National and the respective Operator.
REGULATION
FRANCHISE REGULATION. The relationship between National and the National Network Operators is governed by the Petroleum Marketing Practices Act (the "PMPA"), 15 U.S.C. Section 2801 et.seq. The relationship between TAFSI and the TA Network Operators and Franchisee-Owners is not governed by the PMPA because TAFSI does not license its franchisees to sell fuel under a refiner's brand. Among other things, the PMPA limits the circumstances under which franchisors such as National may terminate or fail to renew a franchise agreement, and it imposes notification and other requirements in those cases where termination or nonrenewal is permissible.
National and TAFSI are also subject to state franchise laws, some of which require National and TAFSI to register with the state before it may offer a franchise, require National and TAFSI to deliver specified disclosure documentation to potential franchisees, and impose special regulations upon petroleum franchises. Some state franchise laws also impose restrictions on National's and TAFSI's 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. The PMPA, which applies to the National Network Operators, preempts state laws with respect to termination or nonrenewal unless such laws are consistent with the PMPA. 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.
The Company is subject to regulation under the Federal Trade Commission ("FTC") rule entitled "Disclosure Requirements and Prohibitions Concerning Franchising and Business Opportunity Ventures," and the FTC requires that franchisors make extensive disclosure to prospective franchisees but does not require registration.
The Company cannot predict the effect of any future federal, state, or local legislation or regulation on its franchising operations.
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ENVIRONMENTAL REGULATION. The Company's operations and properties are subject to extensive regulation pursuant to federal, state and local laws, regulations and ordinances that (i) govern activities and operations that may have adverse environmental effects, such as discharges to air, soil and water, as well as handling, storage and disposal practices for petroleum products and other hazardous and toxic substances ("Hazardous Substances") or
(ii) impose liability and damages for the costs of cleaning up sites affected by, and for damages resulting from, past spills and disposal or other releases of Hazardous Substances ("Environmental Laws").
The Company owns and uses underground storage tanks ("USTs") and aboveground storage tanks ("ASTs") at Company-operated Sites and Leased Sites to store petroleum products and waste. 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 from a UST or AST into the environment. At certain locations, the Company also is subject to Environmental Laws relating to vapor recovery and discharges to water. The Company believes that all of its travel centers are in material compliance with applicable requirements of Environmental Laws. The Company is making necessary upgrades to USTs to comply with federal regulations which will take effect in December 1998. These upgrades are expected to be completed in 1998 at a remaining estimated cost to the Company of approximately $6 to $8 million. The Company does not believe that such costs will have a material adverse effect on the Company and the Capital Program incorporates funds to complete such upgrades.
The Company has received notices of alleged violations of Environmental Laws, or is aware of the need to undertake corrective actions to comply with Environmental Laws, at Company-owned travel centers in a number of jurisdictions. The Company does not expect that any financial penalties associated with these alleged violations, instances of noncompliance, or compliance costs incurred in connection therewith, will be material to the Company's results of operation or financial condition. The Company is conducting investigatory and/or remedial actions with respect to releases and/or spills of Hazardous Substances that have occurred subsequent to the National Acquisition and the TA Acquisition, respectively, at fewer than 30 Network properties. While the Company cannot precisely estimate the ultimate costs it will incur in connection with the investigation and remediation of these properties, based on its current knowledge, the Company does not expect that the costs to be incurred at these properties, individually or in the aggregate, will be material to the Company's results of operation or financial condition. While the aforementioned matters are, to the best knowledge of the Company, the only proceedings for which the Company is currently exposed to potential liability (particularly given the Unocal and BP indemnities discussed below), there can be no assurance that additional contamination does not exist at these or additional Network properties, or that material liability will not be imposed in the future. If additional environmental problems arise or are discovered, or if additional environmental requirements are imposed by government agencies, increased environmental compliance or remediation expenditures may be required, which could have a material adverse effect on the Company.
In connection with the National Acquisition, Phase I environmental assessments of the then 97 Company-owned National Network properties were conducted. Pursuant to the Unocal Environmental Agreement, Phase II environmental assessments of all such National properties are required to be completed by the year 2000. As of December 31, 1997, 10 of the Phase II assessments were in progress and 87 had been completed. The Company contributed $500,000 toward the total cost of the Phase II environmental assessments, and Unocal is responsible for the remainder of the cost. The Unocal Environmental Agreement provides that Unocal is responsible for all costs incurred for remediation of environmental contamination (the remediation must achieve compliance with the Environmental Laws in effect on the date the remedial action is completed) and for otherwise bringing the properties into compliance with Environmental Laws (as in effect at the date of the National Acquisition) with respect to environmental contamination or non-compliance identified in the Phase I or Phase II environmental assessments, which environmental contamination or non-compliance existed on or prior to the date of the National Acquisition. Under the terms of the Unocal Environmental Agreement, Unocal also must indemnify the Company against any other environmental liabilities that arise out of conditions at, or ownership or operations of, the National Network prior to the date of the National Acquisition. Pursuant to the Unocal Environmental Agreement, Unocal is obligated to indemnify the Company for claims made before April 14, 2004. Except as described above, Unocal
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does not have any responsibility for any environmental liabilities arising out of the ownership or operations of the National Network after the date of the National Acquisition. There can be no assurance that, if additional environmental claims or liabilities were to arise under the Unocal Environmental Agreement, Unocal would not dispute the Company's claims for indemnification thereunder.
Prior to the TA Acquisition, all of the then 38 TA locations were subject to Phase I and Phase II environmental assessments, undertaken at BP's expense. The BP Environmental Agreement 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 such environmental contamination (the remediation must achieve compliance with the Environmental Laws in effect on the date the remedial action is completed) and for otherwise bringing the properties into compliance with Environmental Laws (as in effect at the date of the TA Acquisition). The BP Environmental Agreement further provides that BP must indemnify the Company against any other environmental liabilities that arise out of conditions at, or ownership or operations of, the TA locations prior to the date of the TA Acquisition. With respect to liabilities relating to the investigation and remediation of environmental contamination, BP is obligated to indemnify the Company for liabilities with respect to which claims are made before December 11, 2004. With respect to liabilities otherwise relating to non-compliance with Environmental Laws (for example, equipment), BP is obligated to indemnify the Company for liabilities with respect to 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 TA Network after the date of the TA Acquisition. There can be no assurance that, if additional environmental claims or liabilities were to arise under the BP Environmental Agreement, BP would not dispute the Company's claims for indemnification thereunder.
OTHER REGULATION. The Company, the Operators and the Franchisee-Owners are required to comply with federal, state and local government regulations applicable to service station and lubrication operations and consumer food services businesses generally, including those relating to the preparation and sale of food, minimum wage requirements, overtime, working, health, fire, safety and sanitation conditions, mandated health insurance coverage and citizenship requirements, as well as regulations relating to zoning, construction, business licensing and employment. The Company believes that it is in material compliance with the provisions applicable to it and has no knowledge of material violations of these provisions by its Operators and Franchisee-Owners.
EMPLOYEES
As of December 31, 1997, the Company employed approximately 8,000 people on a full- or part-time basis. Of this total, approximately 7,730 are employees at the Company-operated Sites, approximately 210 perform managerial, operational or support services at the headquarters or elsewhere and approximately 60 employees staff the Distribution Center. Except for five employees at one Company-operated Site, all of the Company's employees are non-union.
ITEM 2. PROPERTIES
The Company's principal executive offices are leased and are located at 24601 Center Ridge Road, Suite 200, Westlake, Ohio 44145-5634. The Distribution Center is a leased 85,000 square foot facility located at 1450 Gould Boulevard, LaVergne, Tennessee 37086-3535.
Of the 127 Network locations as of December 31, 1997, 83 are Company-operated Sites, 35 are Leased Sites and the remaining 9 sites are not owned by the Company. In addition to these operating travel center locations, the Company has two stand-alone truck maintenance and repair shops, two closed travel center facilities being held for sale and four undeveloped travel center sites which are to be developed pursuant to the Capital Program. Of these total 126 owned sites, the land and improvements at three are leased, five are subject to ground leases of the entire site and six are subject to ground leases of portions of such sites. Both the land and improvements at one of the four sites to be developed will be leased. The Company considers its facilities suitable and adequate for the purposes for which they are used.
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Each of the TA and National travel centers is a full service facility located on or near an interstate highway and identified with TA or Unocal 76 signage. As part of the Combination Plan, the National travel centers that have joined the Network are being rebranded under the TA trademark. All fuel and nonfuel products and services are generally available 24 hours per day and 365 days per year.
PROPERTY. The layout of the Company-owned travel centers generally vary from site to site. The Company-owned facilities are located on properties averaging 22 acres, of which an average of approximately 19 acres are developed. The majority of the developed acres contain the main building, housing one or more restaurants, a travel and convenience store and driver amenities, a truck maintenance and repair shop, separate truck and car fuel islands, separate truck and car paved parking and, in some cases, motels. The remaining developed acres contain landscaping and access roads.
FUEL ISLANDS. Company sites have diesel fuel islands that accommodate ten pumps on average, most of which are dual fill pumps that can fill each of a typical truck's two tanks simultaneously. In addition, travel centers generally have a gasoline island which can accommodate four to eight automobiles simultaneously. Certain locations also have one and sometimes two additional convenience stores located at the fuel islands.
TRUCK MAINTENANCE AND REPAIR SHOP. Virtually all travel centers have truck maintenance and repair shops nearly all of which operate 24 hours per day and 365 days per year. The typical travel center repair shop has between two and four service bays, a parts storage room and fully trained mechanics on duty at all times. These shops offer extensive maintenance and emergency repair and road services, 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.
MAIN BUILDING. The main building at each travel center contains a full service and, in many instances, one or more fast food restaurants; a travel and convenience store; a fuel desk; driver amenity areas, including a lounge, television room, private showers and laundry; and ATM machines, as well as office space and training rooms for the employees of the travel center. As part of the Capital Program, the Company has allocated funds to expand the main building floor space for a majority of the former National Network sites that have been converted to the Network in order to create adequate space within the main building to implement the Company's fast food program or to increase the size of the travel centers' store or gaming and vending areas.
FULL SERVICE AND FAST FOOD RESTAURANTS. All Company travel centers have full service restaurants that offer seating for an average of approximately 130 to 155 customers. The TA Network has associated its full service restaurants with the Company-owned "Country Pride" brand name. The Company has also promoted the installation of nationally branded fast food restaurants, such as Burger King, Dunkin' Donuts, Kentucky Fried Chicken, Long John Silver's, Pizza Hut, Sbarro, Subway and Taco Bell, at its travel centers. The Company generally attempts to locate fast food offerings within the main travel center building (as opposed to constructing stand-alone buildings). As of December 31, 1997, 52 of the 118 Company-owned travel centers offered at least one nationally branded fast food offering.
TRAVEL AND CONVENIENCE STORE. Each travel center has a travel and convenience store that caters to truck drivers, motorists, recreational vehicle and bus customers. The travel and convenience stores sell food and snack items, beverages, non-prescription drug and beauty aids, batteries, automobile accessories, music and audio products. In addition to complete convenience store offerings, the travel and convenience stores also sell items specifically designed for the truck driver's on-the-road lifestyle, including laundry supplies and clothing as well as truck accessories. The typical Company-owned store averages approximately 1,700 square feet.
MOTELS. Thirteen of TA's travel centers currently have Company-owned motels, with an average capacity of 35 rooms. Eleven of these motels are operated under franchise grants from nationally branded motel chains, including DayStop, HoJo Inn and Travelodge. The remaining two motels are TA branded motels. TA currently remits royalty and advertising fees to its motel franchisors at rates ranging from 3% to 8% of gross revenues.
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ADDITIONAL SERVICES. Travel centers provide professional 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 funds transfers from fleet operators. Most sites have installed telephone rooms with 20 to 25 pay telephones with AT&T long distance service. To meet the personal needs of truck drivers, the typical travel center has designated "truck driver only" areas, including a television room with a VCR and comfortable seating for drivers, a barber shop, a laundry area with washers and dryers, 6 to 12 private showers and dressing rooms. Travel centers located in Louisiana and Nevada also feature gaming operations. All travel centers have truck scales.
ITEM 3. LEGAL PROCEEDINGS
From time to time the Company is a party to litigation in the ordinary course of its business involving, by way of example, matters such as breach of contract, actions under PMPA or other franchise regulations, actions under Environmental Laws, bankruptcy claims, condemnation matters, employment claims, negligence and other similar claims. Certain of such claims are covered by the Company's third party insurance policies or indemnification agreements with BP or Unocal. While claims for damages in such litigation in certain instances may not be covered by an insurance policy or an indemnification agreement or may be in excess of the Company's insurance coverage, the Company does not expect its existing litigation to have a material adverse effect on the Company. The following describes the more significant pending matters in which the Company is involved as of December 31, 1997.
FORTY-NINER TRUCK PLAZA LITIGATION. This action was commenced in California Superior Court, Sacramento County, on January 28, 1993 by four Operators of National Leased Sites in California. The complaint asserts claims on behalf of each of the plaintiffs against the Company, Clipper and Unocal based upon alleged violations by Unocal of the California Business and Professions Code and of an alleged contract by failing to provide the plaintiffs with a bona fide offer or right of first refusal to purchase their truckstops in connection with the sale of the plaintiffs' truckstops by Unocal to the Company. Two of the plaintiffs settled their claims prior to commencement of the trial. The claims of two plaintiffs, who are franchisees of National in Sacramento and Santa Nella, California, were tried, and the jury rendered a verdict awarding $4.0 million in compensatory damages jointly and severally against the Company, Unocal and Clipper, and assessing punitive damages against them in the amount of $1.5 million, $7.0 million and $1.6 million, respectively. On August 1, 1995, the court granted the defendants' motions for a new trial on all issues, although it denied defendants' motions for judgment notwithstanding the verdict. On October 22, 1997, the California Court of Appeal filed a decision affirming the trial court's orders granting a new trial and denying defendants' motions for judgment notwithstanding the verdict. The Court of Appeal also reversed an order of the trial court granting a nonsuit on plaintiffs' claim against the Company and Clipper for civil conspiracy. The California Supreme Court has denied review. No date has been set for retrial. Pursuant to the asset purchase and related agreements between the Company and Unocal, the Company believes that Unocal is required to indemnify it for attorneys' fees and compensatory damages. Unocal has contested certain of the amounts comprising the Company's claim for indemnification. The indemnification agreement between the Unocal Entities and the Company does not by its terms cover punitive damages. The Company entered into an agreement indemnifying Clipper in connection with the Company's purchase of the properties in the National Network, and Clipper has asserted and the Company has concurred that this agreement obligates the Company to pay any compensatory and punitive damages assessed against Clipper.
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CHARLESTON, WEST VIRGINIA LITIGATION. This action was commenced on April 17, 1996 in the Circuit Court of Berkeley County, West Virginia. The amended complaint, brought on behalf of eighteen National Operators, alleges that the Company's fuel pricing policies and practices violate the PMPA and the Uniform Commercial Code and constitute a breach of the contractual duty of good faith and fair dealing and unjust enrichment. The amended complaint also asserts claims of fraud and fraud in the inducement, apparently based on alleged representations made by the Company concerning fuel pricing. The amended complaint asserts claims against the Company, Clipper and certain present and former directors and officers of the Company, and seeks actual and punitive damages in an unspecified sum. The Company has removed the case to federal court, and the court has granted the Company's motion to transfer the case to federal court in Nashville, Tennessee.
The Company has entered into settlement agreements with 13 of the plaintiffs pursuant to which the claims of those plaintiffs have been dismissed with prejudice.
On March 31, April 1 and April 7, 1997, three of the plaintiffs filed motions for a preliminary injunction. The motions sought an order requiring, among other things, that the Company sell to the movants all of the movants' requirements of diesel fuel at a price per gallon of not more than two cents above the Oil Price Information Service average price under the terms of the Company's existing lease and franchise agreements. In addition, on April 22, 1997, two of the movants filed a motion seeking a temporary restraining order for substantially the same relief. On May 21, 1997, the court denied the plaintiffs' motions. Plaintiffs appealed the trial court's denial of their motions to the United States Courts of Appeals for both the Fourth and the Sixth Circuits. By order dated August 1, 1997, all proceedings in the district court were stayed pending the completion of all appeals. On September 11, 1997, the Fourth Circuit dismissed plaintiffs' appeal for lack of jurisdiction. On December 16, 1997, the Sixth Circuit dismissed plaintiffs' appeal.
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 1997.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
(a) MARKET INFORMATION. The outstanding shares of Common Stock of the registrant were issued in transactions not involving any public offering. As a result, there is no public market for the registrant's Common Stock.
(b) HOLDERS. As of March 15, 1998, the outstanding shares of Common Stock were held of record by 48 stockholders, of which 27 stockholders have their shares included in a voting trust (see Item 13--"Certain Relationships and Related Transactions").
(c) DIVIDENDS. The registrant's senior indebtedness prohibits, except in very limited circumstances, the payment of cash dividends on, and sets limits on redemptions and repurchases of, the registrant's Common Stock. In addition, the indenture to which the registrant is a party prohibits, prior to April 1, 2007, the payment of cash dividends on, Uand sets limits on redemptions and repurchases of, the registrant's Common Stock. The registrant has not paid any cash dividends to holders of Common Stock and does not expect to declare or pay cash dividends to holders of Common Stock in the foreseeable future.
10

ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth selected historical financial data for the Company. As discussed elsewhere in this Report, such data presents the Company's investment in TA as net assets of subsidiary held for disposition for the period from January 1, 1994 to September 30, 1996. Accordingly, given the Company's decision to retain TA and pursue the Combination Plan, such data should be read in conjunction with "Management's Discussion and Analysis" and the audited financial statements and related notes thereto of the Company included elsewhere in this Report in order to view what the Company's results would have been had TA been fully consolidated in 1996 and 1995.

                                                                                     THE COMPANY (1)
                                                        ---------------------------------------------------------------------------
                                                                                                                        OPERATING
                                                                                                                         PERIOD
                                                                                                                     APRIL 15, 1993
                                                                           YEAR ENDED DECEMBER 31,                       THROUGH
                                                         -------------------------------------------------------        DECEMBER 31,
                                                             1997          1996           1995           1994             1993 (2)
                                                         ----------    ----------      ---------      ----------     ---------------
                                                                         (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
INCOME STATEMENT DATA:
    Revenues:
       Fuel. . . . . . . . . . . . . . . . . . . . . .   $  708,637    $   550,212     $  376,148     $  396,748      $  306,141
       Nonfuel . . . . . . . . . . . . . . . . . . . .      293,843         99,991         27,948         18,887           9,193
       Rent and royalties. . . . . . . . . . . . . . .       36,848         46,055         51,801         51,740          33,153
                                                         ----------     ----------     ----------     ----------      ----------
         Total revenues. . . . . . . . . . . . . . . .   $1,039,328     $  696,258     $  455,897     $  467,375      $  348,487
   Gross profit (excluding depreciation) . . . . . . .   $  266,244     $  127,564     $   79,074     $   76,227      $   52,706
   Income from operations. . . . . . . . . . . . . . .   $   22,345     $   24,118     $   29,884     $   29,496      $   21,841
   Extraordinary loss. . . . . . . . . . . . . . . . .   $   (5,554)    $        -     $        -     $        -      $        -
   Net income (loss) . . . . . . . . . . . . . . . . .   $   (5,763)    $    5,533     $    9,926     $    9,692      $    7,488
   Income (loss) before extraordinary item
     per common share:
       Basic . . . . . . . . . . . . . . . . . . . . .   $    (7.56)    $    (0.81)    $     3.04     $     3.43      $     6.08
       Diluted . . . . . . . . . . . . . . . . . . . .   $    (7.56)    $    (0.81)    $     0.57     $     0.64      $     1.55
BALANCE SHEET DATA (END OF PERIOD):
   Total assets. . . . . . . . . . . . . . . . . . . .   $  507,792     $  425,889     $  297,231     $  294,961      $  284,168
   Total debt (net of unamortized discount). . . . . .   $  290,125     $  224,435     $  139,991     $  153,938      $  157,310
   Mandatorily redeemable preferred
       stock(3). . . . . . . . . . . . . . . . . . . .   $   61,404     $   53,885     $   47,286     $   41,495      $   36,431
   Working capital . . . . . . . . . . . . . . . . . .   $   86,103     $   23,766     $    9,872     $   18,421      $   23,784
OTHER FINANCIAL AND OPERATING DATA:
   Total diesel fuel sold (in thousands of
       gallons). . . . . . . . . . . . . . . . . . . .      975,495        713,754        641,901        663,777         446,972
   Capital expenditures, excluding
       acquisitions of network assets. . . . . . . . .   $   60,818    $    20,545     $   19,930     $   10,993      $    2,986
   EBITDA(4) . . . . . . . . . . . . . . . . . . . . .   $   63,553     $   60,940     $   63,198     $   69,047      $   51,858
   Cash flows (used in) provided by:
       Operating activities. . . . . . . . . . . . . .   $   41,670     $   27,620     $   19,436     $   26,357      $      589
       Investing activities. . . . . . . . . . . . . .   $  (37,987)    $  (22,254)    $  (17,601)    $  (10,993)     $ (191,027)
       Financing activities. . . . . . . . . . . . . .   $   44,294     $   15,222     $  (14,141)    $   (3,446)     $  193,968
   Consolidated coverage ratio (5) . . . . . . . . . .         2.08           2.82           2.95           3.12            3.29
NUMBER OF SITES (END OF PERIOD)(6):
   Company-Owned and Operated Sites. . . . . . . . . .           83             58             46             39              40
   Company-Owned and Leased Sites. . . . . . . . . . .           35             77             89             96              95
   Franchisee-Owned Sites. . . . . . . . . . . . . . .            9             35             38             41              41
                                                         ----------     ----------     ----------     ----------      ----------
       Total Sites . . . . . . . . . . . . . . . . . .          127            170            173            176             176
                                                         ----------     ----------     ----------     ----------      ----------
                                                         ----------     ----------     ----------     ----------      ----------	

11

Notes to Selected Consolidated Financial Data
(1) For the period from January 1, 1994 to September 30, 1996, the Company's investment in TA was presented as net assets of subsidiary held for disposition and TA's results of operations were excluded from the Company's consolidated results of operations until December 31, 1994 and subsequently included therein as a single amount in the Company's consolidated income statement through September 30, 1996. Effective September 30, 1996, the decision was made to retain TA and, subsequently, the Company chose to pursue the Combination Plan. Accordingly, at such time TA was no longer carried as net assets of subsidiary held for disposition. At that date, the carrying value of the Company's investment in TA of $44.6 million was allocated to the identifiable assets and liabilities and was based on the estimated current fair values at that date. In addition, the results of operations and cash flows of TA are included in the consolidated results of operations and cash flows of the Company from October 1, 1996.
(2) Effective April 14, 1993 and December 10, 1993, the Company acquired National and TA, respectively. Although the Company was organized in 1992, business operations did not commence until April 15, 1993, when the National Acquisition was consummated. Prior to the National Acquisition, the only activities of the Company were the recruitment of employees and the negotiation of the National Acquisition. Expenses incurred during the Company's pre-operating period are immaterial and have been included in the results for the operating period from April 15, 1993 through December 31, 1993.
(3) "Mandatorily redeemable preferred stock" is comprised of two series of convertible preferred stock which accumulate dividends semi-annually at a compound annual rate of 13.5%. Both series are mandatorily redeemable in 2008 and are held by certain members of the Investor Group.
(4) "EBITDA" is defined herein as income from operations plus the sum of depreciation; amortization; refinancing, transition and development costs; gains and losses on sales of property and equipment; and other noncash charges, and is presented because it is commonly used by certain investors and analysts to analyze and compare operating performance, and to determine a company's ability to service and incur debt. EBITDA should not be considered in isolation from, or a substitute for, net income, cash flows from operating activities or other consolidated income or cash flow statement data prepared in accordance with generally accepted accounting principles or as a measure of profitability or liquidity: The EBITDA amounts herein present the Company's results as though TA had not been accounted for as a subsidiary held for disposition and had, instead, been fully consolidated (see Note 1 above).
(5) This ratio is computed by dividing EBITDA by the sum of gross interest expense and amortization of debt discount.
(6) The number of sites data shown for all years reflects the total number of Company sites in the Existing Networks.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
The following discussion should be read in conjunction with the audited financial statements.
OVERVIEW
The Company is a holding company which, through its wholly-owned subsidiaries, owns, operates and franchises more travel centers in the United States than any of its competitors with 127 network sites nationwide, including 118 Company-owned locations. The Company currently operates a network of 121 travel centers in 36 states under the "TravelCenters of America" or "TA" brand names and a network of six travel centers in four states under the licensed "Unocal 76" and related brand names.
12

The Company was formed in December 1992 to facilitate the National Acquisition in April 1993. In December 1993, the Company acquired the TA Network. In connection with the TA Acquisition, the Investor Group and certain members of TA's management granted an option to the Company whereby the Company could repurchase its equity held by such Investor Group and management members in exchange for consideration consisting of cash and all of the equity of TA (the "Repurchase"). If the Repurchase had been consummated, the Company and the National Network would have been owned by the Operator and Franchisee-Owner stockholders of the Company and certain members of National's management, and TA would have been owned by the Investor Group and certain members of TA's management. During the nine months ended September 30, 1996, TA and National were separately managed and financed and in the Company's consolidated financial statements TA was presented as net assets of subsidiary held for disposition and TA's results of operations were included in the Company's consolidated financial statements as a single amount. Effective September 30, 1996, the decision was made to retain TA, and, subsequently, the Company chose to pursue the combination of the TA and National networks. After September 30, 1996, TA was no longer carried as net assets of subsidiary held for disposition and TA's results of operations were consolidated with the Company's.
Historically, under the Company's ownership, National operated principally as a franchisor. As a result, its revenues consisted primarily of wholesale diesel fuel sales to Operators and Franchisee-Owners, rent from Operators of Leased Sites and nonfuel franchise royalty payments. Since early 1995, National has increased its number of Company-operated Sites as certain Operators terminated their franchise and lease agreements. In contrast, TA operated principally as an owner-operator of travel centers. Consequently, while TA derived the majority of its revenues from retail diesel fuel sales, the majority of its gross profit has been derived from, and its principal strategic focus has been, the sale of higher margin nonfuel products and services.
COMBINATION PLAN
During the year ended December 31, 1997, the Company incurred approximately $15.2 million of expenses related to the Combination Plan. These costs, identified as transition expenses in the Company's consolidated financial statements, are expected to total approximately $20.0 million, of which approximately $2.5 million is expected to be incurred in 1998. These expenses relate to, among other things, (i) employee separations, (ii) the costs to convert National Network travel centers to Network travel centers,
(iii) the costs to dispose of travel centers or terminate lease or franchise agreements, and (iv) the costs of integrating the management and operations of the Existing Networks into the Network, including relocation, travel, training, and legal expenses.
EMPLOYEE TERMINATIONS
As a result of the Combination Plan, which was approved by the Board of Directors in January 1997, most of National's corporate-level employees have been or will be terminated. In January 1997, certain of National's executive officers resigned and related severance costs of $0.8 million were recognized. In May 1997, management finalized its plans regarding employee terminations and, accordingly, the related costs were recognized. This expense totaled approximately $1.8 million. Pursuant to the Company's plans, 111 employees are to be terminated, 106 of which had been severed through December 31, 1997. Through December 31, 1997, approximately $2.0 million of termination benefits had been paid to such terminated employees. The remaining accrual for termination benefits of approximately $0.6 million at December 31, 1997 will be substantially paid by March 1998.
NETWORK RATIONALIZATION
Throughout 1997, the Company continued to refine and execute its plans for improving the profitability of the Network through rebranding of its sites under the TA brand name and rationalizing the number and locations of its travel centers. For the year ended December 31, 1997, 15 National Leased Sites were sold to the Operators of those sites for a net gain on sale of $11.9 million. The Company anticipates additional site sales during 1998 as it continues rationalizing the Network. During the year ended December 31, 1997, relationships with the Franchisee-Owners of 27 Franchisee-Owner Sites were terminated. Beginning in July 1997, those National Network franchisees whose sites have been selected for inclusion in the Network began to convert their franchises to TAFSI
13

from National, a process that includes rebranding of the travel centers, installation of TA's store and shop programs, training of the franchisees in TA's operating procedures and revisions to the franchise agreements and, where applicable, lease agreements, such that there will be an increase in the royalty the Company receives as a percentage of the franchisees' nonfuel revenues and a decrease in fixed rent revenue. The Company expects these new agreements will result in reduced revenue in the short term, but that in the long term increased franchisee nonfuel revenues will result in a net increase in the Company's revenue. Through December 31, 1997, 29 National franchisees had signed TAFSI franchise agreements.
SITE CONVERSIONS
During 1997, the Company converted 27 National Leased Sites to Company-operated Sites by acquiring the travel center operations from the related Operators. Such conversions typically result in decreased rent revenue and increased operating expenses, offset to varying degrees for each individual site by increased fuel and nonfuel revenues.
Management expects that, over time, the increased revenues will exceed the decreases in rent revenue and increases in operating expenses, especially as TA management, marketing, operations, safety and training programs are fully implemented at the former National Company-operated Sites converted to TA operation. In June 1997, 14 of the National Company-operated Sites were converted to TA Company-operated Sites, and in July 1997, the then remaining 21 National Company-operated Sites were so converted. National Leased Sites subsequently converted to Company-operated Sites were converted to TA Company-operated Sites at the time of the acquisitions of the site operations from the respective Operators. During the first few months of operation after both the conversion from a Leased Site and the conversion to a TA branded site (with respect to all former National travel centers), the operating results of each converted travel center are adversely affected by the costs (such as for maintenance and supplies) of bringing the travel centers into compliance with TA's standards. In addition, the Company has chosen to increase the number of employees at the converted sites in order to improve customer service and increase revenues and, as a consequence, employees were hired in anticipation of the expected revenue increases. For these reasons, the Company anticipates that the operating results of these converted travel centers will continue to improve in 1998.
The following table sets forth the number and type of ownership and management of the travel centers operating in each of the Company's networks.

                                               TA               NATIONAL
                                         --------------      --------------
                                           DECEMBER 31,        DECEMBER 31,
                                         --------------      --------------
                                         1997      1996      1997      1996
                                         ----      ----      ----      ----
Company-owned and operated sites(1)       83        40         -        18
Company-owned and leased sites            29         -         6        77
                                         ----      ----      ----      ----
        Company-owned sites              112        40         6        95
Franchisee-owner sites                     9         8         -        27
                                         ----      ----      ----      ----
        Total                            121        48         6       122
                                         ----      ----      ----      ----
                                         ----      ----      ----      ----
Stand-alone shops                          2         2         -         -
                                         ----      ----      ----      ----
                                         ----      ----      ----      ----	

(1) Excludes two closed sites.
14

The following discussions and analyses of Results of Operations and of Liquidity and Capital Resources present detail on the Company's combined results, which differ from the Company's consolidated results reflected in the audited financial statements for each of the two years ended December 31, 1996, as a result of the presentation of TA as assets of subsidiary held for disposition during all or a portion of those periods. The following table and the 1996 and 1995 amounts discussed in the Results of Operations and Liquidity and Capital Resources sections present the Company's consolidated amounts for 1996 and 1995 as though TA had not been held for disposition and had instead been fully consolidated.

                                                                 YEAR ENDED DECEMBER 31,
                                                           ---------------------------------
                                                             1997         1996         1995
                                                           --------     --------      ------
                                                                 (IN MILLIONS OF DOLLARS)
Revenues:
   Fuel                                                    $  708.6     $  752.2      $590.4
   Nonfuel                                                    293.8        236.8       198.6
   Rent and royalties                                          36.8         47.4        53.3
                                                           --------     --------      ------
   Total revenues                                           1,039.3      1,036.4       842.3
Cost of revenues (excluding depreciation)                     773.1        803.5       634.7
                                                           --------     --------      ------
Gross profit (excluding depreciation)                         266.2        232.9       207.6
Operating expenses                                            168.3        129.4       102.2
Selling, general and administrative expenses                   35.6         42.8        43.3
Refinancing, transition and development costs                  15.2          2.7         1.9
Depreciation and amortization                                  35.8         27.0        22.6
(Gain) loss on sales of property and equipment                (11.2)         1.5         0.4
Other operating (income) expense, net                           0.2         (0.2)       (0.2)
                                                           --------     --------      ------
Income (loss) from operations                                  22.3         29.7        37.4
Interest (expense), net                                       (22.9)       (20.8)      (20.9)
                                                           --------     --------      ------
Income (loss) before income taxes and extraordinary item       (0.6)         8.9        16.5
Provision (benefit) for income taxes                           (0.3)         3.4         6.6
                                                           --------     --------      ------
Income (loss) before extraordinary item                        (0.3)         5.5         9.9
Extraordinary item (net of taxes)                              (5.5)           -           -
                                                           --------     --------      ------
Net (loss) income                                             $(5.8)        $5.5        $9.9
                                                           --------     --------      ------
                                                           --------     --------      ------
EBITDA                                                        $63.6        $60.9       $63.2
                                                           --------     --------      ------
                                                           --------     --------      ------	

RESULTS OF OPERATIONS
1997 COMPARED TO 1996
REVENUES
The Company's consolidated revenues for 1997 were $1,039.3 million, which represents an increase over the prior year of $2.9 million.
Fuel revenue for 1997 reflects a decrease from 1996 of $43.6 million, or 5.8%. The decrease resulted from an approximately 5.4% decrease in average retail diesel prices, partially offset by an increase in diesel gallons sold of 7.7 million gallons (0.8%). The decrease in average retail prices is a result of petroleum industry conditions and competitive pressures. The slight volume increase stems from the success of fleet marketing efforts, including the effects of the Pathway Program (a diesel fuel hedging program offered to fleets in conjunction with Simons Petroleum, Inc.) and the TABB relationship.
15

Nonfuel revenue in 1997 has increased 24.1% over 1996, primarily due to the increased number of Company-operated Sites offering nonfuel products and services: from December 31, 1996 through December 31, 1997, 27 Leased Sites were converted to Company-operated Sites. In addition, a new TA site was opened in September 1996, and two stand-alone TA shops were opened in mid-1996.
Rent and royalty revenue for 1997 decreased 22.4% from 1996 as a result of (i) conversions of Leased Sites to Company-operated Sites, (ii) sales of Leased Sites and (iii) the rent reductions that became effective when former National franchisees signed new franchise and lease agreements with the Company. Rent revenue is expected to continue to decline in 1998, reflecting the full year effects of the 1997 activity. The new franchise and lease agreements provide for reduced fixed rents but increased franchise royalty rates to be applied to nonfuel revenues generated by the franchisees' operations. New franchise and lease agreements were signed by 29 Operators during 1997.
GROSS PROFIT
The Company's gross profit for 1997 was $266.2 million, compared to $232.9 million for 1996, an increase of $33.3 million, or 14.3%. The increase in the Company's gross profit was primarily due to increases in nonfuel revenues and diesel fuel margins, partially offset by decreased rent and royalty revenue, resulting from the conversions of travel centers from Leased Sites to Company-operated Sites, sales of Leased Sites and terminations of Franchisee-Owner Sites during 1997.
OPERATING AND SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Operating expenses include the direct expenses of Company-operated Sites and selling, general and administrative expenses ("SG&A") include corporate overhead and administrative costs.
The Company's operating expenses increased by $38.9 million, or 30.1%, to $168.3 million for 1997, as compared to 1996. The increase reflects the increased number of Company-operated Sites during 1997 as a result of the 1996 addition of three new-build TA sites (including the two stand-alone shops) and the conversion of 27 Leased Sites to Company-operated Sites during 1997.
The Company's SG&A decreased from $42.8 million in 1996 to $35.6 million in 1997, a 16.8% decrease, primarily as a result of personnel reductions at National pursuant to the Combination Plan, partially offset by increased staffing in the operational support and business development areas at TA, as well as decreased occupancy and other expenses stemming from the Combination Plan.
REFINANCING, TRANSITION AND DEVELOPMENT COSTS
Refinancing, transition and development costs for 1997 increased from $2.7 million for 1996 to $15.2 million. The 1997 costs were incurred in effecting the combination of National and TA, including recognition of employee termination benefits of $2.6 million, while the 1996 amount is comprised of $1.4 million of expenses incurred in a failed refinancing attempt by National and $1.3 million incurred at TA in connection with an attempted acquisition and the design of the travel center prototype.
DEPRECIATION AND AMORTIZATION
Depreciation and amortization of $35.8 million for 1997 increased by $8.8 million from 1996. This increase was mainly due to impairment charges of approximately $7.5 million included in 1997 depreciation and amortization expense and the effects of the capital expenditures made during 1996 and 1997, as well as the increased amortization of deferred financing costs stemming from the Refinancing.
16

INCOME FROM OPERATIONS
Income from operations for the Company for 1997 was $22.3 million as compared to $29.7 million in 1996, a decrease of $7.4 million or 24.9%. The decrease is attributable to the transition expenses and impairment charges incurred in 1997, as well as the effect of decreased rent revenue and increased operating costs resulting from the conversions of Leased Sites to Company-operated Sites, partially offset by increased nonfuel sales margins as a result of the site conversions, gains from the sales of Leased Sites and headquarters synergies, all of which is due to the execution of the Combination Plan throughout 1997. EBITDA for the Company for 1997 was $63.6 million, as compared to $60.9 million for 1996. The increased EBITDA in 1997 is largely derived from increased gross profit as a result of a greater number of Company-operated Sites and synergies realized in SG&A expense, partially offset by reduced rent revenue, primarily as a result of the Combination Plan.
INTEREST (EXPENSE), NET
Interest expense for 1997 was $22.9 million, $2.1 million higher than for 1996 as a result of the increased net debt balance after consummation of the Refinancing (discussed in Liquidity and Capital Resources below) on March 27, 1997.
OTHER ITEMS
The extraordinary loss of $5.5 million in 1997 results from the refinancing of the Company's indebtedness on March 27, 1997 and represents the write-off of the then remaining unamortized balances of deferred financing costs ($7.8 million) and debt discount ($1.3 million) related to the prior indebtedness. The reported amount of the extraordinary loss is net of the applicable income tax benefit of $3.6 million
1996 COMPARED TO 1995
REVENUES
The Company's revenues for 1996 were $1,036.4 million compared to $842.3 million for 1995, an increase of $194.1 million or 23.0%.
The increased revenue was primarily attributable to a $161.8 million, or 27.4%, increase in fuel revenue, in conjunction with a $38.2 million, or 19.2%, increase in nonfuel sales and a $5.9 million, or 11.1%, decrease in rent and royalty income.
Increases in fuel revenue were derived from increased volume and increased average selling prices. The volume increases resulted from increases in sales to fleets (including increased sales through the Pathway Program) and the addition of one TA travel center in November 1995 and another in September 1996, partially offset by lost volume from terminations of National Franchisee-Owner Sites.
The nonfuel revenue increase is primarily attributable to the 1996 conversion of eleven Leased Sites to Company-operated Sites, and full year effects of six such conversions in 1995, as well as the addition of a new travel center in November 1995, another new travel center in September 1996, two stand-alone shops opened in mid-1996 and the addition of 14 fast food kiosks during 1996.
The decrease in rent and royalty is a result of the Leased Site conversions described previously.
GROSS PROFIT
The Company's gross profit for 1996 was $232.9 million, compared to $207.6 million for 1995, an increase of $25.3 million or 12.2%. The increase in gross profit was primarily due to an increase in diesel fuel volume as described above and an increase in nonfuel revenues which is primarily a result of the site conversions described above, partially offset by decreased rent and royalty income as a result of those site conversions.
17

OPERATING AND SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
The Company's operating expenses increased from $102.2 million in 1995 to $129.4 million in 1996. The Company's SG&A decreased from $43.3 million in 1995 to $42.8 million in 1996. The operating expense increase was associated with an increase in the number of Company-operated Sites, due to the site conversions described above as well as the 1996 addition of one new travel center and two stand-alone truck maintenance and repair shops. The decrease in SG&A was primarily due to a reduction in bad debt expense and reduced levels of financial assistance to Operators and Franchisee-Owners, partially offset by costs of expanded field support and training as well as planning and development costs.
REFINANCING, TRANSITION AND DEVELOPMENT COSTS
Refinancing, transition and development costs increased from $1.9 million in 1995 to $2.7 million in 1996. Costs incurred at National for never competed refinancing attempts were $1.4 million in 1996, compared to $0.9 million for 1995. In addition, at TA, transition and development expenses for 1996 were $1.3 million compared to $1.0 million for 1995. In 1996, these costs were incurred in pursuit of a potential acquisition as well as in connection with the design of the TravelCenter prototype. In 1995, the costs primarily included expenses incurred during TA's development of its strategic plan and as TA transitioned to a stand-alone operation.
DEPRECIATION AND AMORTIZATION
Depreciation and amortization for 1996 and 1995 were $27.0 million and $22.6 million, respectively, an increase of $4.4 million. The increased level of depreciation is related to the capital expenditures discussed below.
INCOME FROM OPERATIONS
Income from operations for the Company for 1996 was $29.7 million as compared to $37.4 million in 1995, a decrease of $7.7 million. The decrease in income from operations is primarily attributable to the conversion of Leased Sites to Company-operated Sites. This decrease resulted in part from start-up costs incurred upon conversion of the Leased Sites and the lack of a corporate infrastructure at National to manage Company-operated Sites. This decrease in income from operations at National is also attributable to distractions associated with the Repurchase. EBITDA decreased from $63.2 million in 1995 to $60.9 million in 1996.
INTEREST (EXPENSE), NET
Interest expense for 1996 was $20.8 million compared to $20.9 million for the same period in 1995.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash requirements consist principally of working capital needs, payments of principal and interest on outstanding indebtedness and capital expenditures, including expenditures for acquisitions, expansion and environmental upgrades.
Net cash provided by operating activities totaled $41.7 million in 1997, $39.5 million in 1996 and $27.3 million in 1995. The increase in net cash flows provided by operating activities in 1997 compared to 1996 was primarily due to increased EBITDA in 1997, as discussed previously, partially offset by growth in working capital requirements as a result of the increased number of Company-operated Sites and increased interest expense as a result of the Refinancing.
Net cash used in investing activities for 1997 was $38.0 million versus $28.5 million in 1996 and $29.5 million in 1995. The amount for 1997 reflects a $46.6 million increase in expenditures related to capital additions and conversions of Leased Sites to Company-operated Sites, offset by a $37.0 million increase in proceeds from sales of property and equipment resulting from the sales of 15 Leased Sites to the respective Operators.
18

Net cash flows provided by financing activities were $44.3 million in 1997 while for 1996 and 1995 the net cash flows used in financing activities were $2.8 million and $18.1 million in 1995, respectively. The change in the amount of financing activity cash flows in 1997 from 1996 was due to the Company's Refinancing and recapitalization completed in March 1997. Required debt repayments for the next five years are significantly lower than they would have been in the absence of the Refinancing.
On March 27, 1997, the Company was refinanced and currently has outstanding $290.1 million of indebtedness, consisting of $125.0 million principal amount of Senior Subordinated Notes, $85.5 million principal amount of Senior Notes and a $79.6 million term loan facility. The Company also has a $40.0 million revolving credit facility, which, except for $1.5 million used for letters of credit, was not drawn upon at December 31, 1997. The Senior Notes have no amortization requirements until 2001, the Senior Subordinated Notes are due 2007 and the term facility has annual amortization requirements of $0.5 million until 2004.
The Company expects to invest in excess of $200 million in the Network between 1997 and the end of 2001 (with approximately $150 million of this amount expected to be spent by the end of 1998) in connection with the Capital Program to upgrade, rebrand, reimage and increase the number of travel centers. Approximately $50 million of the capital expenditures intended to be made represents normal ongoing maintenance and related capital expenditures. The Company has budgeted additional expenditures in order to add new sites, rebrand and reimage sites, add additional nonfuel offerings (such as fast food offerings) at existing sites, make required environmental improvements, and purchase, install and upgrade its information systems.
The Company anticipates that it will be able to fund its 1998 working capital requirements and capital expenditures primarily from funds generated from the Refinancing, funds generated from operations, funds generated from asset sales, and, to the extent necessary, from borrowings under the revolving facility. The Company's 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.
ENVIRONMENTAL MATTERS
The Company's operations and properties are subject to various Environmental Laws.
The Company owns and operates USTs and ASTs at Company-operated Sites and Leased Sites which must comply with certain statutory and regulatory requirements by December 22, 1998. The Company is making necessary upgrades to comply with those requirements. The Company expects to spend a total of approximately $6 million to $8 million in 1998 to complete the upgrade of USTs and other environmental related costs. In addition, the Company has estimated the current ranges of remediation costs at currently active sites and what it believes will be its ultimate share for such costs after required indemnification and remediation is performed by Unocal and BP under the respective Environmental Agreements and has a reserve for such matters of $0.9 million as of December 31, 1997. While it is not possible to quantify with certainty the environmental exposure, in the opinion of management, 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 the financial condition, results of operations or liquidity of the Company.
"YEAR 2000" ISSUES
The Company has made and will continue to make certain investments in its software systems and applications to ensure the Company is year 2000 compliant. The Company is currently in the process of evaluating its computer software and databases to determine the nature and extent of the modifications that will be required to prevent problems related to the year 2000. The financial impact to the Company has not been and is not anticipated to be material to its financial position or results in any given year.
19

FORWARD-LOOKING STATEMENTS
The Company is making this statement in order to satisfy the "safe harbor" provision contained in the Private Securities Litigation Reform Act of 1995. The statements contained in this report that are not statements of historical fact may include forward-looking statements that involve a number of risks and uncertainties. Moreover, from time to time the Company may issue other forward-looking statements. Such forward-looking statements are made based on management's expectations and beliefs concerning future events impacting the Company and are subject to uncertainties and factors relating to the Company's operations and business environment, all of which are difficult to predict and many of which are beyond the control of the Company, that could cause actual results of the Company to differ materially from those matters expressed in or implied by forward-looking statements. The following factors are among those that could cause actual results to differ materially from the forward-looking statements: competition from other travel center and truckstop operators, including additional or improved services or facilities of competitors; the economic condition of the trucking industry, which in turn is dependent on general economic factors; diesel and gasoline fuel pricing; availability of fuel supply; and difficulties that may be encountered by the Company or its franchisees in implementing the Combination Plan. The forward-looking statements should be considered in light of these factors.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to commodity price risk and interest rate risk. The Company's fuel purchase contracts provide for purchase prices based on average market prices for diesel and gasoline, exposing the Company to commodity price risk. The Company mitigates this risk exposure in a few ways, but primarily by maintaining only a few days of inventory on hand and selling a large portion of its fuel volume under "cost plus" pricing formulae, which minimize the effect on the Company's margins of sudden sharp changes in commodity market prices. The Company manages the price exposure related to sales volumes not covered by cost plus arrangements through the use, on a limited basis, of derivative instruments designated by management as hedges of anticipated purchases. The total volume covered by open derivative contracts during 1997 and at December 31, 1997 was immaterial. In addition, the fair market value and deferred gains and losses of open derivative contracts at December 31, 1997 was immaterial. The interest rate risk faced by the Company results from the highly-leveraged position of the Company and its level of variable rate indebtedness, the rates for which are based on short-term lending rates, primarily the London Interbank Offered Rate. The following table summarizes information about the Company's financial instruments that are subject to changes in interest rates:

                                                         DECEMBER 31, 1997
                                     ----------------------------------------------------------
                                              FIXED RATE                   VARIABLE RATE
                                             INDEBTEDNESS                  INDEBTEDNESS
                                     ---------------------------   ----------------------------
                                                      WEIGHTED                       WEIGHTED
                                        PAYMENT       AVERAGE         PAYMENT        AVERAGE
                                        AMOUNT     INTEREST RATE      AMOUNT      INTEREST RATE
                                     -----------   -------------   -----------    -------------
                                                      (DOLLARS IN THOUSANDS)
Year Ended December 31:
   1998 . . . . . . . . . . . . . .  $      -                      $    500          8.69%
   1999 . . . . . . . . . . . . . .         -                           500          8.69%
   2000 . . . . . . . . . . . . . .         -                           500          8.69%
   2001 . . . . . . . . . . . . . .    17,750          8.94%            500          8.69%
   2002 . . . . . . . . . . . . . .    17,750          8.94%            500          8.69%
Thereafter. . . . . . . . . . . . .   125,000         10.25%        127,125          8.76%
                                     --------                      --------
Total . . . . . . . . . . . . . . .  $160,500          9.96%       $129,625          8.72%
                                     --------                      --------
                                     --------                      --------
Fair value. . . . . . . . . . . . .  $155,183                      $129,625
                                     --------                      --------
                                     --------                      --------	

20

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to Consolidated Financial Statements and Supplementary Data:          PAGE
                                                                            ----
  Financial Statements:
    Report of Independent Accountants . . . . . . . . . . . . . . . . . . .  22
    Consolidated Balance Sheet at December 31, 1997 and 1996. . . . . . . .  23
    Consolidated Statement of Income and Retained Earnings for
      the three years ended December 31, 1997 . . . . . . . . . . . . . . .  24
    Consolidated Statement of Cash Flows for the three years
      ended December 31, 1997 . . . . . . . . . . . . . . . . . . . . . . .  25
    Notes to the Consolidated Financial Statements. . . . . . . . . . . . .  26
  Supplementary Data:
   Quarterly financial data - unaudited . . . . . . . . . . . . . . . . . .  59	

21

REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
and Stockholders of
TravelCenters of America, Inc.
In our opinion, the consolidated financial statements listed in the accompanying index, after the restatement described in Note 21, present fairly, in all material respects, the financial position of TravelCenters of America, Inc. and its subsidiaries at December 31, 1997 and 1996, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1997, in conformity with generally accepted accounting principles. These financial statements are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with generally accepted auditing standards 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 the opinion expressed above.

/s/ PRICE WATERHOUSE LLP

PRICE WATERHOUSE LLP
Cleveland, Ohio
March 16, 1998	

22

TRAVELCENTERS OF AMERICA, INC.
CONSOLIDATED BALANCE SHEET

                                                                                               DECEMBER 31
                                                                                       ----------------------------

                                                                                           1997            1996
                                                                                       ------------    ------------
                                                                                        (IN THOUSANDS OF DOLLARS)
                                     ASSETS
Current assets:
  Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       $ 71,756         $ 23,779
  Accounts receivable (less allowance for doubtful accounts of $2,707 for 1997
    and $3,502 for 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . .         68,433           54,371
  Inventories. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         33,718           29,082
  Deferred income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . .          3,740            3,877
  Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         10,256           10,530
                                                                                       --------         --------
        Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . .        187,903          121,639
Notes receivable, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          1,692            2,744
Property and equipment, net. . . . . . . . . . . . . . . . . . . . . . . . . . .        286,472          269,366
Intangible assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         15,651           19,657
Deferred financing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . .         11,786            8,379
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          4,288            4,104
                                                                                       --------         --------
        Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       $507,792         $425,889
                                                                                       --------         --------
                                                                                       --------         --------

                     LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Revolving loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       $      -         $ 14,000
  Current maturities of long-term debt . . . . . . . . . . . . . . . . . . . . .            500           17,250
  Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         29,035           33,399
  Other accrued liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . .         72,265           33,224
                                                                                       --------         --------
        Total current liabilities. . . . . . . . . . . . . . . . . . . . . . . .        101,800           97,873
Commitments and contingencies (Note 17)
Long-term debt (net of unamortized discount) . . . . . . . . . . . . . . . . . .        289,625          193,185
Deferred income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          4,985            9,452
Other long-term liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . .          4,479            5,914
                                                                                       --------         --------
                                                                                        400,889          306,424

Mandatorily redeemable senior convertible participating preferred stock. . . . .         61,404           53,885

Other preferred stock, common stock and other stockholders' equity . . . . . . .         43,945           50,743
Retained earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          1,554           14,837
                                                                                       --------         --------
                                                                                         45,499           65,580
                                                                                       --------         --------
        Total liabilities and stockholders' equity . . . . . . . . . . . . . . .       $507,792         $425,889
                                                                                       --------         --------
                                                                                       --------         --------	

The accompanying notes are an integral part of these consolidated financial statements.
23

TRAVELCENTERS OF AMERICA, INC.
CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS

                                                                              YEAR ENDED DECEMBER 31,
                                                                       ------------------------------------
                                                                          1997         1996         1995
                                                                       ----------   ----------   ----------
                                                                             (IN THOUSANDS OF DOLLARS
                                                                             EXCEPT PER SHARE AMOUNTS)
Revenues:
  Fuel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   $  708,637    $550,212     $376,148
  Nonfuel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      293,843      99,991       27,948
  Rent and royalties . . . . . . . . . . . . . . . . . . . . . . . .       36,848      46,055       51,801
                                                                       ----------    --------     --------
  Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . .    1,039,328     696,258      455,897
Cost of revenues (excluding depreciation). . . . . . . . . . . . . .      773,084     568,694      376,823
                                                                       ----------    --------     --------

Gross profit (excluding depreciation). . . . . . . . . . . . . . . .      266,244     127,564       79,074

Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . .      168,334      56,077       12,018
Selling, general and administrative expenses . . . . . . . . . . . .       35,619      31,265       30,965
Refinancing, transition and development costs. . . . . . . . . . . .       15,212       2,197          831
Depreciation and amortization. . . . . . . . . . . . . . . . . . . .       35,840      17,838       11,379
(Gain) loss on sales of property and equipment . . . . . . . . . . .      (11,244)      1,464          363
Other operating (income) expense, net. . . . . . . . . . . . . . . .          138        (140)        (167)
Income of subsidiary held for disposition. . . . . . . . . . . . . .            -      (5,255)      (6,199)
                                                                       ----------    --------     --------

Income from operations . . . . . . . . . . . . . . . . . . . . . . .       22,345      24,118       29,884
Interest (expense), net. . . . . . . . . . . . . . . . . . . . . . .      (22,898)    (15,236)     (13,344)
                                                                       ----------    --------     --------

(Loss) income before income taxes and extraordinary item . . . . . .         (553)      8,882       16,540
(Benefit) provision for income taxes . . . . . . . . . . . . . . . .         (344)      3,349        6,614
                                                                       ----------    --------     --------
(Loss) income before extraordinary item. . . . . . . . . . . . . . .         (209)      5,533        9,926
Extraordinary loss (less applicable income tax benefit of $3,608). .       (5,554)          -            -
                                                                       ----------    --------     --------

Net (loss) income. . . . . . . . . . . . . . . . . . . . . . . . . .       (5,763)      5,533        9,926

  Less: preferred dividends. . . . . . . . . . . . . . . . . . . . .       (7,520)     (6,599)      (5,791)
Retained earnings beginning of the year:
  As previously reported . . . . . . . . . . . . . . . . . . . . . .            -      16,994       11,948
  Adjustments (Note 21). . . . . . . . . . . . . . . . . . . . . . .            -      (1,091)        (180)
                                                                       ----------    --------     --------
  As restated. . . . . . . . . . . . . . . . . . . . . . . . . . . .       14,837      15,903       11,768
                                                                       ----------    --------     --------
Retained earnings end of the year. . . . . . . . . . . . . . . . . .   $    1,554    $ 14,837     $ 15,903
                                                                       ----------    --------     --------
                                                                       ----------    --------     --------
Earnings per common share:
  Income (loss) before extraordinary item. . . . . . . . . . . . . .   $    (7.56)   $  (0.81)    $   3.04
  Extraordinary loss . . . . . . . . . . . . . . . . . . . . . . . .        (5.44)          -            -
                                                                       ----------    --------     --------
  Net income (loss). . . . . . . . . . . . . . . . . . . . . . . . .   $   (13.00)   $  (0.81)    $   3.04
                                                                       ----------    --------     --------
                                                                       ----------    --------     --------
Earnings per common share - assuming dilution:
  Income (loss) before extraordinary item. . . . . . . . . . . . . .   $    (7.56)   $  (0.81)    $   0.57
  Extraordinary loss . . . . . . . . . . . . . . . . . . . . . . . .        (5.44)          -            -
                                                                       ----------    --------     --------
  Net income (loss). . . . . . . . . . . . . . . . . . . . . . . . .   $   (13.00)   $  (0.81)    $   0.57
                                                                       ----------    --------     --------
                                                                       ----------    --------     --------	

The accompanying notes are an integral part of these consolidated financial statements.
24

TRAVELCENTERS OF AMERICA, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS

                                                                                   YEAR ENDED DECEMBER 31,
                                                                            ------------------------------------
                                                                               1997         1996         1995
                                                                            ----------   ----------   ----------
                                                                                  (IN THOUSANDS OF DOLLARS
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss). . . . . . . . . . . . . . . . . . . . . . . . . .      $  (5,763)    $  5,533     $  9,926
  Adjustments to reconcile net income (loss) to net cash provided by
    operating activities:
    Extraordinary loss . . . . . . . . . . . . . . . . . . . . . . . .          5,554            -            -
    Net income of subsidiary held for disposition. . . . . . . . . . .              -       (3,153)      (3,754)
    Depreciation and amortization. . . . . . . . . . . . . . . . . . .         35,840       17,838       11,379
    Deferred income taxes. . . . . . . . . . . . . . . . . . . . . . .         (4,330)         394        1,693
    Provision for doubtful accounts. . . . . . . . . . . . . . . . . .          1,688        2,545        2,089
    (Gain) loss on sale of property and equipment. . . . . . . . . . .        (11,244)       1,464          363
    Changes in assets and liabilities, adjusted for the effects of
      acquisitions of network assets and the reconsolidation of a
      subsidiary previously held for disposition:
      Accounts receivable. . . . . . . . . . . . . . . . . . . . . . .        (20,773)       5,822       (3,256)
      Inventories. . . . . . . . . . . . . . . . . . . . . . . . . . .          1,422       (1,588)         284
      Other current assets . . . . . . . . . . . . . . . . . . . . . .            448       (3,617)      (4,537)
      Accounts payable . . . . . . . . . . . . . . . . . . . . . . . .         (4,364)      (2,083)       5,043
      Other current liabilities. . . . . . . . . . . . . . . . . . . .         42,648        6,005          218
    Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . .            544       (1,540)         (12)
                                                                            ---------     --------     --------
    Net cash provided by operating activities. . . . . . . . . . . . .         41,670       27,620       19,436
                                                                            ---------     --------     --------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Acquisitions of network assets . . . . . . . . . . . . . . . . . . .        (15,127)      (2,352)        (575)
  Proceeds from sales of property and equipment. . . . . . . . . . . .         37,958          643        1,404
  Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . .        (60,818)     (20,545)     (19,930)
  Refund of purchase price . . . . . . . . . . . . . . . . . . . . . .              -            -        1,500
                                                                            ---------     --------     --------
    Net cash used in investing activities. . . . . . . . . . . . . . .        (37,987)     (22,254)     (17,601)
                                                                            ---------     --------     --------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Revolving loan borrowings. . . . . . . . . . . . . . . . . . . . . .          3,750       14,000            -
  Revolving loan repayments. . . . . . . . . . . . . . . . . . . . . .        (17,750)           -            -
  Long-term debt borrowings. . . . . . . . . . . . . . . . . . . . . .        205,000            -            -
  Long-term debt repayments. . . . . . . . . . . . . . . . . . . . . .       (126,675)     (12,375)     (14,075)
  Proceeds from issuance of stock. . . . . . . . . . . . . . . . . . .            329           39            -
  Repurchase of common stock . . . . . . . . . . . . . . . . . . . . .         (7,456)        (751)         (66)
  Debt issuance costs. . . . . . . . . . . . . . . . . . . . . . . . .        (12,904)           -            -
  Reconsolidation of subsidiary previously held for disposition. . . .              -       14,309            -
                                                                            ---------     --------     --------
    Net cash (used in) provided by financing activities. . . . . . . .         44,294       15,222      (14,141)
                                                                            ---------     --------     --------
      Net increase (decrease) in cash. . . . . . . . . . . . . . . . .         47,977       20,588      (12,306)
Cash at the beginning of the year. . . . . . . . . . . . . . . . . . .         23,779        3,191       15,497
                                                                            ---------     --------     --------
Cash at the end of the year. . . . . . . . . . . . . . . . . . . . . .      $  71,756     $ 23,779     $  3,191
                                                                            ---------     --------     --------
                                                                            ---------     --------     --------	

The accompanying notes are an integral part of these consolidated financial statements.
25

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. BUSINESS DESCRIPTION AND SUMMARY OF OPERATING STRUCTURE
The Company, through its operating subsidiaries, is a nationwide marketer of truck and auto fuel and related products and services through two networks of full-service travel centers (121 operated under the "TA" and "TravelCenters of America" trademarks (the "TA Network") and six operated under the "Unocal 76" trademark (the "National Network")) in 36 states. Of the network locations at December 31, 1997, the Company owns or leases 118 locations, 35 of which are leased to independent lessee-franchisees ("Operators") of the Company ("Leased Sites"), and 83 of which are operated by the Company ("Company-operated Sites"). Nine locations are owned or leased and operated by independent franchisees ("Franchisee-Owners") of the Company ("Franchisee-Owner Sites"). The Company purchases and resells diesel fuel, gasoline and other travel center products and services to consumers, commercial fleets, operators and independent franchisees; provides fleet credit card and customer information services through its proprietary ACCESS 76 and STAR billing systems; conducts centralized purchasing programs; creates promotional programs; and, as a franchisor, assists the Operators and Franchisee-Owners in providing service to commercial fleets and the motoring public.
The Company was incorporated on December 2, 1992 as National/Auto Truckstops Holdings Corporation. The Company's name was changed to TravelCenters of America, Inc. in March 1997. In April 1993, the Company acquired (the "National Acquisition") the National Network assets from a subsidiary of Unocal Corporation ("Unocal") and in December 1993 acquired (the "TA Acquisition") the TA Network assets from subsidiaries of The British Petroleum Company p.l.c. ("BP").
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The TA Acquisition required the consent of the operators and independent franchisees who were holders of the Company's former Class A Common Stock (the "Operator Stockholders"). The Operator Stockholders consented to the TA Acquisition and, in connection therewith, the Company was granted an option to repurchase, for cash and its stock in TA Holdings Corporation ("TAHC"), all of its equity securities, including its mandatorily redeemable preferred stock, and warrants not held by the Operator Stockholders and senior management of National. Accordingly, the Company's consolidated financial statements presented the net assets of TAHC as held for disposition. The carrying value thereof represented the purchase price paid to acquire TAHC plus TAHC's results of operations subsequent to December 31, 1994. TAHC's results of operations for 1995 and through September 30, 1996 were included in the Company's consolidated statement of income and retained earnings as a single amount. Effective September 30, 1996, a decision was made to retain TAHC and, subsequently, the Company chose to pursue the combination of the operations of the TA and National Networks. Accordingly, at that date, the carrying value of the Company's investment in TAHC of $44,637,000 was allocated to the identifiable assets and liabilities based on the current fair values as of that date. In addition, the results of operations and cash flows of TAHC are included in the consolidated results of operations and cash flows of the Company from October 1, 1996. TAHC had net income of $3,153,000 and $3,754,000 for the nine months ended September 30, 1996 and the year ended December 31, 1995, respectively.
For a pro forma presentation of the Company's consolidated results of operations for each of the two years ended December 31, 1996, as though TAHC had not been held for disposition for the period January 1, 1994 through September 30, 1996, see Note 22.
26

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
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 ("TA"), TA Franchise Systems Inc. ("TAFSI") and National Auto/Truckstops, Inc. ("National"), and TA Travel, L.L.C., a wholly owned subsidiary of TA. The Company's 50% investment in TABB L.L.C., a joint venture which jointly markets to and bills fleet customers for purchases at the combined networks of the Company and its co-venturer, is accounted for by the equity method. Intercompany accounts and transactions have been eliminated. TAHC was consolidated until the time of the Company's recapitalization (see Note 3) in March 1997, at which time it was merged into the Company. TAHC had been the parent of TA, which had been the parent of TAFSI.
REVENUE RECOGNITION
Fuel sales and related costs are recognized at the time of delivery of motor fuel and other products to customers at either the terminal or the Leased Sites and Franchisee-Owner Sites and at the time of final sale to consumers at the Company-operated Sites and at those locations that operated under fuel consignment agreements.
Franchise and royalty revenues are recognized at the point such revenues are earned, typically when collectible and when the Company has fulfilled substantially all of its obligations under the related agreements.
INVENTORIES
Inventories are stated at cost, which approximates market value, cost being determined on the first in, first out basis for petroleum products and principally as the weighted average costs for nonfuel merchandise.
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost, initially determined in accordance with purchase accounting principles and based largely on independent professional appraisals. Depreciation is computed on a straight-line basis over the following estimated useful lives of the assets:

Buildings and site improvement. . . . . . . .    15  years
Pumps and underground storage tank. . . . . .  5-10  years
Machinery and equipment . . . . . . . . . . .  3-10  years
Furniture and fixture . . . . . . . . . . . .  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 are removed from the accounts. Any resulting gains or losses are recognized in operations.
27

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DEFERRED FINANCING COSTS AND INTANGIBLE ASSETS
Deferred financing costs were recorded in conjunction with issuing long-term debt and are being amortized on a basis approximating the interest method over the lives of the related debt instruments, ranging from five to ten years. The intangible assets are being amortized on a straight-line basis over their estimated lives, principally the terms of the related contractual agreements giving rise to them (see Note 8).
IMPAIRMENT OF LONG-LIVED ASSETS
In accordance with Statement of Financial Accounting Standards No. (SFAS) 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," impairment charges are recognized when the carrying values of long-lived assets to be held and used in the business exceed the estimated undiscounted future cash flows of those assets, and when the carrying values of long-lived assets to be disposed of exceed the estimated fair value less cost to sell for those assets. 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 in accordance with Accounting Principles Board Opinion 17, "Intangible Assets," and impairment charges are recognized when events and circumstances indicate the carrying value of the intangible asset exceeds the future benefit of the asset. Impairment charges are included in depreciation and amortization in the income statement.
CLASSIFICATION OF COSTS AND EXPENSES
Cost of revenues represents the costs of fuels and other products sold, including freight. Operating expenses consist primarily of labor, maintenance, supplies, utilities, warehousing, purchasing and occupancy costs. Development expenses represent costs incurred to primarily acquire and establish new Network locations. Refinancing expenses represent nonrecurring costs incurred in attempts to refinance the Company's indebtedness. Transition expenses represent the nonrecurring costs incurred by the Company in connection with effecting the Combination Plan, including severance and relocation expenses, costs to convert Leased Sites to Company-operated Sites, costs to dispose of Leased Sites and terminate Franchisee-Owner Sites and costs to consolidate management and operation of the Company's two networks into a single network. Costs of advertising are expensed as incurred.
ENVIRONMENTAL REMEDIATION
The Company provides 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 behalf of the Company by Unocal and BP, at Unocal's and BP's sole expense (see Note 17).
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.
CASH AND CASH EQUIVALENTS
For purposes of the statement of cash flows, the Company considers all highly liquid investments with an initial maturity of three months or less to be cash equivalents.
28

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
CONCENTRATION OF CREDIT RISK
The Company grants credit to its customers and may require letters of credit or other collateral.
DERIVATIVE INSTRUMENTS
On a limited basis, the Company engages in commodity risk management activities within the normal course of its business as an end-user of derivative instruments. These commodity-based instruments are used to manage exposure to price fluctuations related to the anticipated purchase of diesel fuel and gasoline.
Changes in market value of derivative instruments are deferred and are subsequently recognized in income in the same period as the underlying transaction. Recorded deferred gains or losses are reflected within other current assets or other current liabilities.
At December 31, 1997 and 1996 the amount of open derivative contracts and the related fair market value and deferred gains and losses were immaterial.
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:
CASH AND SHORT-TERM INVESTMENTS, ACCOUNTS RECEIVABLE AND ACCOUNTS PAYABLE: 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.
LONG-TERM DEBT: The fair value of the Company's fixed-rate indebtedness that is publicly traded is estimated based on the quoted price for those notes. The fair value of the Company's fixed-rate indebtedness that is not publicly traded is estimated based on the current borrowing rates available to the Company for financings with similar terms and maturities. The fair values of the Company's variable-rate indebtedness approximates the carrying value of that indebtedness. (See Note 11.)
RECLASSIFICATIONS
Certain reclassifications of prior years' data have been made to conform with the current year presentation.
3. RECAPITALIZATION, RESTRUCTURING AND COMBINATION
On March 27, 1997, the Company was recapitalized and restructured pursuant to a series of transactions in which (i) the Company's subsidiaries were restructured such that the Company directly owns its three subsidiaries, TA, TAFSI and National (the Company's former subsidiary, TAHC, was merged into the Company as of such date), (ii) the Company's indebtedness under the old National and TA debt agreements was refinanced (the "Refinancing"), and (iii) TA and National guaranteed the Company's indebtedness under its new credit facilities (see Note 11).
Consequent to the early extinguishment of the Company's prior indebtedness, the Company recognized an extraordinary loss, net of applicable income taxes, of $5,554,000 as a result of writing off the then remaining unamortized balances of deferred financing costs and debt discount related to those prior borrowings of approximately $7,847,000 and $1,315,000, respectively. The approximately $12,903,000 of financing costs associated with the Company's new borrowings have been capitalized and will be amortized over the lives of the related new debt instruments.
29

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
As a result of the combination of the Company's two networks under the existing TA management, most of National's corporate-level employees have been or will be terminated. In January 1997, certain of National's executive officers resigned and related severance costs of approximately $774,000 were recognized. In May 1997 management finalized its plans regarding the employee terminations and, accordingly, the related expense of approximately $1,833,000 was recognized. The severance expense, which totalled approximately $2,607,000 for the year ended December 31, 1997, is included in the income statement within refinancing, transition and development costs. Pursuant to the Company's plans, 111 employees have been or will be terminated. Through December 31, 1997, approximately $2,032,000 of termination benefits had been paid to the 106 employees actually terminated. At December 31, 1997, the remaining accrual for termination benefits, which will be substantially paid by March 1998, was approximately $575,000.
4. EARNINGS PER SHARE
In 1997 the Company adopted SFAS No. 128, "Earnings Per Share." The computation of basic earnings per common share is based upon the weighted-average number of shares of common stock outstanding. Previously reported earnings per share (EPS) have been restated. A reconciliation of the income and shares used in the computation follows:

                                                                 FOR THE YEAR ENDED DECEMBER 31, 1997
                                                              ----------------------------------------
                                                                INCOME         SHARES        PER-SHARE
                                                              (NUMERATOR)   (DENOMINATOR)      AMOUNT
                                                              ----------------------------------------
                                                                   (DOLLARS AND SHARES IN THOUSANDS)

Income (loss) before extraordinary item. . . . . . . . .      $   (209)
Less:  Preferred stock dividends . . . . . . . . . . . .        (7,520)
Basic EPS and Diluted EPS
                                                              ---------
   Income (loss) available to common stockholders. . . .      $ (7,729)        1,022          $(7.56)
                                                              ---------        ------         --------
                                                              ---------        ------         --------	

The assumed conversion of stock options, warrants and convertible series of preferred stock would have an anti-dilutive effect on earnings per share for 1997. Effective January 1, 1998, 157,000 options to purchase common stock were granted to management and non-employee directors.

                                                                 FOR THE YEAR ENDED DECEMBER 31, 1996
                                                              ----------------------------------------
                                                                INCOME         SHARES        PER-SHARE
                                                              (NUMERATOR)   (DENOMINATOR)      AMOUNT
                                                              ----------------------------------------
                                                                   (DOLLARS AND SHARES IN THOUSANDS)

Income before extraordinary item . . . . . . . . . . . .      $  5,533
Less:  Preferred stock dividends . . . . . . . . . . . .        (6,599)
Basic EPS and Diluted EPS                                     ---------

   Income (loss) available to common stockholders. . . .      $ (1,066)        $ 1,319        $  (0.81)
                                                              ---------        -------        ---------
                                                              ---------        -------        ---------	

30

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The assumed conversion of stock options, warrants and convertible series of preferred stock would have an anti-dilutive effect on earnings per share for 1996.

                                                                 FOR THE YEAR ENDED DECEMBER 31, 1995
                                                              ----------------------------------------
                                                                INCOME         SHARES        PER-SHARE
                                                              (NUMERATOR)   (DENOMINATOR)      AMOUNT
                                                              ----------------------------------------
                                                                   (DOLLARS AND SHARES IN THOUSANDS)

Income before extraordinary item . . . . . . . . . . . .      $  9,926
Less:  Preferred stock dividends . . . . . . . . . . . .        (5,791)
                                                              ---------
Basic EPS
   Income available to common stockholders . . . . . . .         4,135         1,361          $  3.04
                                                                                              -------
                                                                                              -------

Effect of Dilutive Securities
   Options and warrants. . . . . . . . . . . . . . . . .                         140
   Convertible preferred stock . . . . . . . . . . . . .                       5,729
                                                              ---------        -----
Diluted EPS
   Income available to common stockholders plus
   assumed conversions . . . . . . . . . . . . . . . . .      $  4,135         7,230          $  0.57
                                                              ---------        -----          -------
                                                              ---------        -----          -------	

5. INVENTORIES
Inventories consist of the following:

                                                                              DECEMBER 31,
                                                                         -------------------
                                                                           1997        1996
                                                                         -------     -------

Nonfuel merchandise. . . . . . . . . . . . . . . . . . . . . . .         $30,883     $26,090
Petroleum products . . . . . . . . . . . . . . . . . . . . . . .           2,835       2,992

   Total inventories . . . . . . . . . . . . . . . . . . . . . .         $33,718     $29,082	

6. NOTES RECEIVABLE
The Company has notes receivable agreements with certain Operators and Franchisee-Owners to finance on a long-term basis past due accounts receivable owed by those customers. Certain of these customers are related parties (see Note 16). The notes have terms ranging from six months to six years and principally accrue interest at a variable rate of the prime lending rate plus 2 percent. The Company also has notes receivable from management stockholders received as partial consideration for purchases of common stock (see Note 14). These notes have terms of nine years and accrue interest at fixed rates between 4.76 and 6.42 percent.
31

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Notes receivable consists of the following:

                                                           DECEMBER 31,
                                                        ----------------
                                                         1997      1996
                                                        ------    ------

Principal amount of notes outstanding . . . . . . .     $2,939    $5,561
Less: allowance for doubtful accounts . . . . . . .        877     1,316
                                                        ------    ------
                                                         2,062     4,245
Less: amounts due within one year . . . . . . . . .        370     1,501
                                                        ------    ------

Notes receivable, net . . . . . . . . . . . . . . .     $1,692    $2,744
                                                        ------    ------
                                                        ------    ------	

The amount due within one year is included within other current assets on the balance sheet.
7. PROPERTY AND EQUIPMENT
Property and equipment consist of the following:

                                                              DECEMBER 31,
                                                         --------------------
                                                           1997        1996
                                                         --------    --------

Land and land improvements. . . . . . . . . . . . .      $ 51,230    $ 52,028
Buildings and improvements. . . . . . . . . . . . .       206,249     213,573
Machinery, equipment and furniture. . . . . . . . .        58,464      52,225
Construction in progress. . . . . . . . . . . . . .        44,975       8,647
                                                         --------    --------

Total cost. . . . . . . . . . . . . . . . . . . . .       360,918     326,473
Less: accumulated depreciation. . . . . . . . . . .        74,446      57,107
                                                         --------    --------

Property and equipment, net . . . . . . . . . . . .      $286,472    $269,366
                                                         --------    --------
                                                         --------    --------	

During 1995, the Company received from Unocal a refund of $1,500,000 of the purchase price paid in 1993 in consideration of property improvements required by the asset purchase agreement but not yet completed by Unocal. This amount was recorded as a reduction to property and equipment.
Pursuant to the Combination Plan, nine Company-operated Sites were being held for sale as of December 31, 1997. Two of these travel centers were closed in late 1997. The Company expects all of these sales to be completed within 1998. The total carrying value of these sites at December 31, 1997 was $10,401,000. Based on the Company's estimated sales proceeds and costs of selling these sites, an impairment charge totalling $559,000 has been recognized with respect to two of the sites. This impairment charge is included in depreciation and amortization in the income statement. As Company-operated Sites during 1997, these nine sites generated income from operations of $847,000.
32

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
8. INTANGIBLE ASSETS
Intangible assets consist of the following:

                                                          DECEMBER 31,
                                                     --------------------
                                                       1997        1996
                                                     --------    --------

Noncompetition agreements. . . . . . . . . . . . .   $ 26,200    $ 26,200
Leasehold interest . . . . . . . . . . . . . . . .      1,724       1,724
Trademarks . . . . . . . . . . . . . . . . . . . .      2,313       2,313
Franchise goodwill . . . . . . . . . . . . . . . .      7,348         994
                                                     --------    --------

Total cost . . . . . . . . . . . . . . . . . . . .     37,585      31,231
Less: accumulated amortization . . . . . . . . . .     21,934      11,574
                                                     --------    --------

Intangible assets, net . . . . . . . . . . . . . .   $ 15,651    $ 19,657
                                                     --------    --------
                                                     --------    --------	

As part of the National and TA Acquisitions, the Company entered into noncompetition agreements with Unocal and BP pursuant to which Unocal and BP each agreed to refrain from re-entering the truckstop business for periods of 10 and 7 years, respectively, from the acquisition dates. The intangible assets related to these noncompetition agreements represent the present values of the estimated cash flows the Company would lose due to competition resulting from re-entry of Unocal or BP into the travel center market were they not constrained from doing so. The intangible assets are being amortized over the 10 and 7 year periods.
Leasehold interest represents the value, obtained through the TA Acquisition, of favorable lease provisions at one TA Network location, the lease for which extended 112 years from the TA Acquisition. The leasehold interest is being amortized over the 112 year period. Trademarks relates primarily to the Company's purchase of the "Truckstops of America" and "Country Pride" trademarks, service marks, trade names and commercial symbols. The trademarks are being amortized over their estimated economic life of 15 years.
Franchise goodwill results from the acquisitions during 1997 and 1996 of the businesses and operating assets related to Leased Sites, and represents the excess of amounts paid to the related Operators over the fair values of the tangible assets acquired. This goodwill was being amortized on a straight-line basis over fifteen years. During the fourth quarter of 1997, as a result of a review of the operations of the acquired travel centers, an impairment charge of $6,941,000 was recorded to write off this goodwill. This charge is included in depreciation and amortization in the income statement.
9. OTHER ACCRUED LIABILITIES
Other accrued liabilities consist of the following:

                                                           DECEMBER 31,
                                                      -------------------
                                                        1997       1996
                                                      --------   --------
                                                        (IN THOUSANDS)

Taxes payable, other than income taxes. . . . . .     $ 16,605   $  8,305
Accrued wages and benefits. . . . . . . . . . . .        9,587      4,872
Interest payable. . . . . . . . . . . . . . . . .        4,371      2,525
Other accrued liabilities . . . . . . . . . . . .       41,702     17,522
                                                      --------   --------

Total other accrued liabilities . . . . . . . . .     $ 72,265   $ 33,224
                                                      --------   --------
                                                      --------   --------	

33

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
10. REVOLVING LOAN
As a result of the Refinancing, the Company has available a revolving loan facility of $40,000,000 (see Note 11). The interest rate for borrowings under this revolving loan facility is based on either an alternate base rate (ABR) plus 1.50 percent or an adjusted London Interbank Offered Rate (LIBOR) plus 2.50 percent. After March 27, 1998, if certain conditions are satisfied, the spread added to the baseline rates will be reduced by 0.25 percent. There were no borrowings under the new revolving loan facility at December 31, 1997 (although $1,529,000 was utilized for letters of credit). There were $14,000,000 of outstanding borrowings at December 31, 1996 under the prior revolving loan facilities.
11. LONG-TERM DEBT
In March 1997, the Company refinanced its outstanding indebtedness (see Note 3).
Long-term debt consists of the following:

                                                                                          DECEMBER 31,
                                                                                    ---------------------
                                                             INTEREST     MATURITY    1997         1996
                                                             --------     --------  --------     --------
                                                                                       (IN THOUSANDS)

Senior secured term loans (a). . . . . . . . . . . .           (b)        1999      $      -     $ 39,800
Senior secured term loans (c). . . . . . . . . . . .           (d)        2000             -       42,000
Senior secured term loans (e). . . . . . . . . . . .           (f)        2005        79,625            -
Senior secured notes (g) . . . . . . . . . . . . . .          8.76%       2002             -       65,000
Senior secured notes (h) . . . . . . . . . . . . . .          8.63%       2002             -       25,000
Senior secured notes - Series I (i). . . . . . . . .          8.94%       2002        35,500            -
Senior secured notes - Series II (j) . . . . . . . .           (k)        2005        50,000            -
Subordinated notes (l) . . . . . . . . . . . . . . .         12.50%       2003             -       25,000
Subordinated notes (m) . . . . . . . . . . . . . . .         12.00%       2003             -       15,000
Senior subordinated notes (n). . . . . . . . . . . .         10.25%       2007       125,000            -
                                                                                    --------     --------

     Total. . . . . . . . . . . . . . . . . . . . .                                  290,125      211,800
Less: amounts due within one year . . . . . . . . .                                      500       17,250
Less: unamortized discount. . . . . . . . . . . . .                                        -        1,365
                                                                                    --------     --------

     Total. . . . . . . . . . . . . . . . . . . . .                                 $289,625     $193,185
                                                                                    --------     --------
                                                                                    --------     --------	

(a) On April 13, 1993, the Company entered into a $100,000,000 Credit Agreement with a group of banks. This Credit Agreement consisted of three components:
term loans of a maximum $70,000,000, swingline loans not to exceed $3,000,000, and revolving loans (see Note 10) not to exceed $30,000,000 (including any swingline loans outstanding). No borrowings under the swingline loan were outstanding at December 31, 1996. This borrowing was retired as a result of the Refinancing.
(b) Interest accrued at variable rates based on an adjusted LIBOR (5.625% at December 31, 1996) plus 2 3/4 percent. The average effective interest rates for the years ended December 31, 1996 and 1995 were 9.5 percent and 9.4 percent, respectively.
34

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(c) On December 9, 1993, the Company entered into a $73,000,000 Credit Agreement with a group of banks. This Credit Agreement consisted of three components: term loans of a maximum $53,000,000, swingline loans not to exceed $3,000,000, and revolving loans (see Note 10) not to exceed $20,000,000 (including any swingline loans outstanding and letters of credit issued). There were no borrowings under the swingline loan or revolving loan commitments. There were $1,529,000 of outstanding letters of credit under the Credit Agreement at December 31, 1996. This borrowing was retired as a result of the Refinancing.
(d) Interest accrued at variable rates based on an adjusted LIBOR plus 2 3/4 percent. The average effective interest rates for the years ended December 31, 1996 and 1995 were 8.9 percent and 9.1 percent, respectively.
(e) On March 21, 1997, in connection with the Refinancing, the Company entered into a $120,000,000 Credit Agreement with a group of banks. This Credit Agreement consists of three components: term loans of a maximum $80,000,000, swingline loans not to exceed $5,000,000, and revolving loans (see Note 10) not to exceed $40,000,000 (including any swingline loans outstanding and letters of credit issued). There have been no borrowings under the swingline loan or revolving loan commitments to date. Payments of principal, interest and commitment fees related to the Credit Agreement are scheduled at each quarter end in installments of principal ranging from $125,000 to $11,750,000, with the first payment due on June 30, 1997, and the last quarterly payment due on March 27, 2005. Optional prepayments are allowed under the Credit Agreement and, in addition, annual prepayments of principal may be required based, among other things, on excess cash flows generated by the Company. Commitment fees are calculated as 1/2 of 1 percent on the average daily unused amount of the revolving loan commitment. There were $1,529,000 of outstanding letters of credit under the Credit Agreement at December 31, 1997.
(f) Interest accrues at variable rates based on either an alternate base rate (ABR) or an adjusted LIBOR. The rate at which interest accrues is calculated as either the ABR rate plus 2.0 percent or the LIBOR rate plus 3.0 percent, each such spread being subject to a reduction should the Company meet certain conditions. Management has the option to select which rate is to be applied at the beginning of each loan period, the term of which varies from 1 month to 6 months. The Company has met the certain conditions and, accordingly, the spread added to the baseline rates has been reduced to 1 3/4 percent and 2 3/4 percent, respectively. The interest rate was set on December 31, 1997 at 8.6875 percent for 3 months. The average effective interest rate for 1997 was 8.58 percent.
(g) On April 13, 1993, the Company issued $65,000,000 of Senior Secured Notes. This borrowing was retired as a result of the Refinancing.
(h) On December 9, 1993, the Company issued $25,000,000 of Senior Secured Notes. This borrowing was retired as a result of the Refinancing.
(i) On March 21, 1997, in connection with the Refinancing, the Company issued $35,500,000 of Series I Senior Secured Notes. Interest payments on these notes are due semiannually on June 30 and December 31. Optional prepayments are allowed under the note purchase agreement and required payments are due on June 30, 2001, December 31, 2001, June 30, 2002 and December 31, 2002 in the amount of $8,875,000 each, such amounts to be reduced by certain other prepayments. In the event of certain prepayments, the Company may be subject to the make-whole provision of the note agreement, which requires payment of a prepayment premium to the holders of the Series I Senior Secured Notes. In addition, annual prepayments of principal may be required based, among other things, on excess cash flows generated by the Company.
35

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(j) On March 21, 1997, in connection with the Refinancing, the Company issued $50,000,000 of Series II Senior Secured Notes. Interest payments on these notes are due semiannually on March 31 and September 30. Optional prepayments are allowed under the note purchase agreement and required principal payments are scheduled at each quarter end in installments of principal ranging from $5,000,000 to $7,500,000, with the first payment made on June 30, 2003 and the last quarterly payment due on March 31, 2005, such amounts to be reduced by certain other prepayments. In the event of prepayments, the Company may be subject to the break funding cost provision of the note agreement. In addition, annual prepayments of principal may be required based, among other things, on excess cash flows generated by the Company.
(k) Interest accrues at a rate based on an adjusted LIBOR. The rate at which interest accrues is calculated as the LIBOR rate plus 3.0 percent, which rate can be reduced after March 27, 1998 by 0.25 percent, if certain conditions are met. The interest rate is reset at the beginning of each loan period, the term of which is 6 months. The interest rate was set on September 30, 1997 at 8.8438 percent. The average effective interest rate for 1997 was 8.86 percent.
(l) On April 13, 1993, the Company issued $25,000,000 of Subordinated Notes. The holders of the Subordinated Notes also received warrants to purchase 128,206 shares of the Company's common stock, resulting in a discount of $1,282,000 to the principal balance of these Subordinated Notes. This borrowing was retired as a result of the refinancing.
(m) On December 10, 1993, the Company issued $15,000,000 of Subordinated Notes. The holders of the Subordinated Notes also received 80,520 shares of the Company's common stock, resulting in a discount of $805,000 to the principal balance of these Subordinated Notes. This borrowing was retired as a result of the Refinancing.
(n) On March 27, 1997, in connection with the Refinancing, the Company issued $125,000,000 of Senior Subordinated Notes. Interest payments on these notes are due semiannually on April 1 and October 1. Optional prepayments are allowed under certain circumstances under the note purchase agreement, any such payments reducing the required payment of $125,000,000 due April 1, 2007.
The borrowings under the Credit Agreement and Senior Secured Note Exchange Agreement are secured by mortgages on substantially all of the Company's property and equipment in the manner described in the Master Collateral and Intercreditor Agreement negotiated between the lending banks under the Credit Agreement and the Senior Secured Note holders. In the event of a change in control of the Company, the total amount outstanding under the debt agreements described above may be declared immediately due and payable.
Under the terms of the Credit Agreement and the Senior Secured Note Exchange Agreement, the Company is required to maintain certain affirmative and negative covenants, including minimum interest coverage, minimum debt service coverage, minimum consolidated net worth, minimum current ratio, maximum leverage ratio and maximum amounts of capital expenditures. The Company was in compliance with the covenants at December 31, 1997.
Under the terms of the Indenture for the Senior Subordinated Notes due 2007, the Company is required to maintain certain affirmative and negative covenants that, among other things, provide for a minimum coverage ratio. The Company was in compliance with the covenants at December 31, 1997.
Scheduled payments of long-term debt in the next five years are $500,000 in 1998; $500,000 in 1999; $500,000 in 2000; $18,250,000 in 2001 and $18,250,000 in 2002.
36

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Based on the borrowing rates currently available to the Company for bank loans and other indebtedness with similar terms and average maturities and the year-end quoted market price of the Senior Subordinated Notes, the fair value of long-term debt at December 31, 1997 and 1996 approximated the recorded value.
12. LEASE COMMITMENTS
The Company has entered into lease agreements covering certain of its travel center locations, warehouse and office space, computer and office equipment and vehicles. Most long-term leases include renewal options and, in certain cases, purchase options. Future minimum lease payments required under operating leases that have remaining noncancelable lease terms in excess of one year, as of December 31, 1997, were as follows:

YEAR ENDING
DECEMBER 31,                                                     (IN THOUSANDS)

1998. . . . . . . . . . . . . . . . . . . . . . . . . . . .        4,800
1999. . . . . . . . . . . . . . . . . . . . . . . . . . . .        4,642
2000. . . . . . . . . . . . . . . . . . . . . . . . . . . .        5,537
2001. . . . . . . . . . . . . . . . . . . . . . . . . . . .        4,104
2002. . . . . . . . . . . . . . . . . . . . . . . . . . . .        3,781
Thereafter. . . . . . . . . . . . . . . . . . . . . . . . .       30,216
                                                                 -------

                                                                 $53,080
                                                                 -------
                                                                 -------	

Total rental expenses on all operating leases were approximately $5,658,000, $1,357,000 and $676,000 for the years ended December 31, 1997, 1996 and 1995, respectively.
13. MANDATORILY REDEEMABLE SENIOR CONVERTIBLE PARTICIPATING PREFERRED STOCK

                                                               DECEMBER 31,
                                                           ------------------
                                                            1997       1996
                                                           -------    -------
                                                             (IN THOUSANDS)

Series I--3,000,000 shares authorized, $0.01 par value;
   2,680,656 shares issued and outstanding, shown at
   redemption value. . . . . . . . . . . . . . . . . . . . $45,531    $39,956
Series II--1,000,000 shares authorized, $0.01 par value;
   934,344 shares issued and outstanding, shown at
   redemption value. . . . . . . . . . . . . . . . . . . .  15,873     13,929
                                                           -------    -------

Total. . . . . . . . . . . . . . . . . . . . . . . . . . . $61,404    $53,885
                                                           -------    -------
                                                           -------    -------	

VOTING RIGHTS. Holders of Series I Mandatorily Redeemable Senior Convertible Preferred Stock are entitled to vote on all matters, other than the election of directors (see Note 14--Common Stock-Voting Rights below), submitted to a vote of the Company's stockholders. Series II Mandatorily Redeemable Senior Convertible Preferred Stock is non-voting.
37

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DIVIDENDS. Dividends accumulate on the original $10.00 per share purchase price at a rate of 13.5 percent per annum, compounded semi-annually, and are not paid currently but accumulate and increase the liquidation preference. Such dividends accrue whether or not declared by the Board of Directors. Accrued dividends totaled $25,254,000 and $17,735,000 at December 31, 1997 and 1996, respectively. Holders also participate pro rata, on a share for share basis, with the outstanding Convertible Preferred Stock and Common Stock, in dividends and distributions, other than liquidating distributions.
CONVERSION. The conversion rights of the holders are the same as those for holders of the Series I and Series II Convertible Preferred Stock, respectively, (see Note 14--Convertible Preferred Stock-Conversion below) except, if the Company consummates an underwritten public offering of Common Stock pursuant to which the net offering price per share is equal to or greater than the Trigger Price (defined as an amount equal to $10.00 plus interest at a rate of 13.5 percent per annum, compounded semi-annually, from the closing date of the TA Acquisition to the date of such public offering) and the net proceeds raised in the offering are at least $50 million, the Company will have the right to require that each share of Series I Mandatorily Redeemable Senior Convertible Participating Preferred Stock be converted into one share of Series I Convertible Preferred Stock and that each share of Series II Mandatorily Redeemable Senior Convertible Participating Preferred Stock be converted into one share of Series II Convertible Preferred Stock.
LIQUIDATION PREFERENCE. Upon liquidation, holders are entitled to receive the Senior Liquidation Preference, defined as $10.00 plus the amount of all accrued and unpaid dividends to the liquidation date, before any payment is made to holders of Convertible Preferred Stock or Common Stock. Any remaining amounts available for distribution to the Company's equity holders will be distributed in the following order of priority:
(i) holders of Convertible Preferred Stock shall be entitled to receive $10.00 for each outstanding share,
(ii) holders of Common Stock shall be entitled to receive $10.00 for each outstanding share of Common Stock,
(iii) holders of Convertible Preferred Stock and Common Stock shall be entitled to receive an amount such that, including such amounts distributed in (i) and (ii) above, they have each received an amount equal to the Senior Liquidation Preference,
(iv) holders of Mandatorily Redeemable Senior Convertible Participating Preferred Stock, Convertible Preferred Stock and Common Stock shall be entitled to receive amounts such that the amount distributed in respect of each outstanding share of Mandatorily Redeemable Senior Convertible Participating Preferred Stock pursuant to this clause shall equal 50 percent of the amount distributed in respect of each outstanding share of Convertible Preferred Stock and Common Stock pursuant to this clause.
OPTIONAL REDEMPTION. If the Company proposes to declare and pay any dividends or other distributions in respect of Convertible Preferred Stock or Common Stock, the Company shall first offer to utilize such proceeds to redeem shares of the Mandatorily Redeemable Senior Convertible Participating Preferred Stock at a redemption price per share equal to the Senior Liquidation Preference. Any portion not used to redeem shares of Mandatorily Redeemable Senior Convertible Participating Preferred Stock may be utilized by the Company to pay dividends pari passu to the holders of outstanding shares of Mandatorily Redeemable Senior Convertible Participating Preferred Stock, Convertible Preferred Stock and Common Stock.
CALL OPTION. The Company may, at its option and at any time, call for redemption all (but not less than all) of the outstanding shares at a price per share equal to the Senior Liquidation Preference. The holders will be provided an opportunity to convert such shares into shares of Common Stock prior to the redemption.
38

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MANDATORY REDEMPTION. The Company shall redeem all of the then outstanding shares on December 10, 2008, at a redemption price per share equal to the Senior Liquidation Preference.
14. OTHER PREFERRED STOCK, COMMON STOCK AND OTHER STOCKHOLDERS' EQUITY

                                                                              DECEMBER 31,
                                                                         --------------------
                                                                            1997        1996
                                                                         --------    --------
                                                                             (IN THOUSANDS)

Convertible Preferred Stock:
  Series I--3,000,000 shares authorized, $0.01 par value;
     2,594,876 shares outstanding. . . . . . . . . . . . . . . . . . .   $    26     $    26
  Series II--1,500,000 shares authorized, $0.01 par value;
     1,237,374 shares outstanding. . . . . . . . . . . . . . . . . . .        12          12
Common Stock - 30,000,000 shares authorized, $0.01
  par value;  633,511 shares outstanding at
  December 31, 1997. . . . . . . . . . . . . . . . . . . . . . . . . .        14           -
Class A Common Stock--5,000,000 shares authorized, $0.01
  par value;  1,036,250  shares outstanding at
  December 31, 1996. . . . . . . . . . . . . . . . . . . . . . . . . .         -          11
Class B Common Stock--25,000,000 shares authorized, $0.01
  par value;  256,198 shares outstanding at
  December 31, 1996. . . . . . . . . . . . . . . . . . . . . . . . . .         -           3
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . .    52,305      51,649
Treasury stock--at cost; 780,200 and 88,200 shares at
  December 31, 1997 and 1996, respectively . . . . . . . . . . . . . .    (8,412)       (958)
                                                                         --------    --------

      Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   $43,945     $50,743
                                                                         --------    --------
                                                                         --------    --------	

In April 1993, the Company issued 1,111,250 shares of Class A Common Stock, 56,500 shares of Class B Common Stock and 3,832,250 shares of Convertible Preferred Stock, which consists of 2,594,876 shares of Series I Convertible Preferred Stock and 1,237,374 shares of Series II Convertible Preferred Stock.
In December 1993, the Company issued 165,520 shares of Class B Common Stock and 3,615,000 shares of Mandatorily Redeemable Senior Convertible Participating Preferred Stock, which consists of 2,680,656 shares of Series I Mandatorily Redeemable Senior Convertible Participating Preferred Stock and 934,344 shares of Series II Mandatorily Redeemable Senior Convertible Participating Preferred Stock (see Note 13).
As of March 6, 1997 the Amended and Restated Certificate of Incorporation (the "Restated Certificate of Incorporation") and by-laws of the Company and the by-laws of National, as the case may be, were amended to:
(i) eliminate the supermajority voting requirements of the Company's stockholders and the Company's and National's boards of directors that were applicable to certain actions taken with respect to the Company or National,
(ii) eliminate all designations of classes of common stock, the convertibility of one class of common stock into another and all class votes of holders of common stock, (iii) change the names of the Class A Common Stock and the Class B Common Stock to Common Stock, (iv) provide that all of the outstanding shares of preferred stock of the Company be convertible into Common Stock on the same basis as they previously had been into Class B Common Stock, and (v) eliminate class votes for Directors of the Company and to provide that Directors will be elected by holders of Common Stock and Series I Preferred Stock voting together as a single class.
39

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
CONVERTIBLE PREFERRED STOCK
VOTING RIGHTS. Each share of Series I Convertible Preferred Stock entitles the holder to one vote on all matters, other than the election of directors, submitted to a vote of the Company's stockholders. Series II Convertible Preferred Stock is non-voting.
DIVIDENDS. See Common Stock--Dividends below.
CONVERSION. Each share of Series I Convertible Preferred Stock is convertible into a share of Common Stock at any time at the option of the holder.
Each share of Series II Convertible Preferred Stock is convertible at any time at the option of the holder into such number of shares of Common Stock that in the aggregate do not exceed the lesser of (i) one share of Common Stock for each share of Series II Convertible Preferred Stock converted or (ii) the number that equals 25 percent of the outstanding shares of Common Stock immediately following such conversion (a total of 211,170 at December 31, 1997 for all Series II preferred shares). Following the conversion of at least 75 percent of the outstanding Convertible Preferred Stock into Common Stock, the Company is entitled to convert each remaining share of Convertible Preferred Stock into a share of Common Stock.
LIQUIDATION PREFERENCE. See Note 13--Liquidation Preference above.
COMMON STOCK
VOTING RIGHTS. Each share of Common Stock entitles the holder to one vote on all matters submitted to a vote of the Company's stockholders.
DIVIDENDS. Holders of Common Stock are entitled to receive dividends if, and when, declared by the Board of Directors of the Company. The Company is precluded from paying dividends or making distributions to the holders of any of its equity securities while any shares of Convertible Preferred Stock or Mandatorily Redeemable Senior Convertible Participating Preferred Stock are outstanding except for dividends and distributions of capital stock of the Company; unless (i) in any fiscal year the dividends and distributions do not exceed 50 percent of the Company's net income for the prior fiscal year and (ii) if immediately after payment of such dividends or the making of any such distributions, the value of the Company's stockholder equity would exceed the value of the aggregate liquidation preference of the outstanding shares of Convertible Preferred Stock and Mandatorily Redeemable Senior Convertible Participating Preferred Stock by at least one dollar.
LIQUIDATION PREFERENCE. See Note 13--Liquidation Preference above.
WARRANTS. The purchasers of the $25,000,000 Subordinated Notes issued in April 1993 received warrants with an exercise price of $0.01 per share which are exercisable for 128,206 shares of Common Stock, resulting in a discount of $1,282,000 to the principal balance of the Subordinated Notes (see Note 11).
REPURCHASE RIGHTS. Certain members of the Company's senior management have purchased shares of the Company's Common Stock pursuant to individual management subscription agreements (see Note 16). The Company has the right to repurchase, and the employees have the right to require the Company to repurchase, at formula prices, the Common Stock upon termination of employment. The formula prices are based on the consolidated operating results and indebtedness of the Company. At December 31, 1997, the formula price was $23.25 per share. Compensation expense recognized with regard to these shares during the years ended December 31, 1997 and 1996 were $54,000 and $336,000 respectively. No compensation expense was recognized with regard to these shares in 1995 as the formula price that year did not exceed the purchase price of the shares.
40

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
STOCK AWARD AND OPTION PLANS
1997 STOCK PLAN. During 1997, the Board of Directors approved the adoption of the 1997 Stock Plan (the "1997 Plan"). The principal terms and conditions of the Plan are as follows: a maximum of 750,000 shares of Common Stock (subject to adjustment) may be issued pursuant to options and stock appreciation rights granted to officers, non-employee directors and key employees of the Company designated by the Compensation Committee; the option exercise price for each option granted will be the fair market value of the stock on the respective grant date; the options will vest on the December 31 of the year of grant upon the attainment of performance targets (outstanding options and options with respect to shares reserved for future awards will vest upon a "change of control" or "initial public offering" of the Company (as such terms are defined in the 1997 Plan)), and remain exercisable for limited periods following termination of employment; shares of Common Stock acquired upon exercise of options are subject to call and put options upon termination of employment; if a change of control occurs within six months after termination of the employment of a former employee for "good reason," death, "disability" or termination other than for "cause" (as defined), an adjustment will be made to the amount paid upon exercise of any call options or put options (but, in the case of put options, only to the extent the proceeds received by the former employee upon exercise of the put option are used to repay indebtedness to the Company) so that the former employee will be able to receive any amounts in excess of the call or put price payable in the change of control transaction.
1993 STOCK PLAN. The 1993 Stock Incentive Plan (the "1993 Plan") was approved by the Board of Directors and was effective as of December 10, 1993. The 1993 Plan provided for the granting of stock options and other stock-based awards to employees and directors of the Company. Stock awards granted under the 1993 Plan could be in the form of (i) stock options, (ii) stock appreciation rights related to an option ("SAR"), and (iii) unrelated SAR's. Stock options granted under the 1993 Plan allow the purchase of Common Stock (formerly Class B Common Stock) at prices generally not less than fair market value as determined by the Compensation Committee of the Board of Directors. The total number of shares of Common Stock with respect to which awards could be granted was 572,000. Common stock obtained as a result of the exercise of the options is subject to call and put rights at formula prices upon termination of employment. The formula prices are based on the consolidated operating results and indebtedness of the Company. A portion of the options vested at the end of each year in the five year period ending December 31, 1997, based on attainment of certain specified financial objectives at the end of each year, but no more quickly than ratably from the date of grant through December 31, 1996. Vested options must be exercised within 10 years of the date of grant. All unvested options under the 1993 Plan at December 31, 1996, were cancelled upon the adoption of the 1997 Plan.
The purchase prices at December 31, 1997, 1996 and 1995 used to determine compensation expense related to options granted under the Company's stock plans were $23.25, $15.69 and $11.69, respectively. Based on these prices and the number of vested options in each year, compensation expense recognized in relation to these options for the years ended December 31, 1997 and 1996 were $1,346,000, and $331,000, respectively. No compensation expense was recognized for the year ended December 31, 1995.
41

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The following table reflects the status and activity of options under the 1997 and 1993 Plans:

                                                             YEAR ENDED DECEMBER 31,
                                                      ----------------------------------
                                                        1997         1996        1995
                                                      ---------     -------    ---------

Options outstanding, beginning of year . . . . . .     531,181      520,181     493,280
  Granted. . . . . . . . . . . . . . . . . . . . .     163,000       11,000      69,900
  Canceled . . . . . . . . . . . . . . . . . . . .    (316,152)           -     (42,999)
                                                      ---------     -------    ---------

Options outstanding, end of year . . . . . . . . .     378,029      531,181     520,181
                                                      ---------     -------    ---------
                                                      ---------     -------    ---------
Options exercisable, end of year . . . . . . . . .     378,029      330,436     213,440
Options available for grant, end of year . . . . .     587,000       40,819      51,819	

The weighted-average exercise price was $20.00 for those options granted during 1997 and $18.27 for all outstanding options as of December 31, 1997. The weighted-average exercise price of the options cancelled in 1997 and 1995, the options granted in 1996 and 1995 and all outstanding options as of each of December 31, 1996, 1995 and 1994 was $19.04. The following table summarizes information about options outstanding at December 31, 1997:

EXERCISE                                          OPTIONS         OPTIONS
PRICE                                           OUTSTANDING     EXERCISABLE
-----                                           -----------     -----------
$10.00. . . . . . . . . . . . . . . . . . .      67,988          67,988
$17.49. . . . . . . . . . . . . . . . . . .      71,757          71,757
$20.00. . . . . . . . . . . . . . . . . . .     163,000         163,000
$22.50. . . . . . . . . . . . . . . . . . .      75,284          75,284
                                                -------         -------

                                                378,029         378,029
                                                -------         -------
                                                -------         -------	

The weighted-average remaining contractual life of all options outstanding at December 31, 1997 was seven years.
15. INCOME TAXES
The (benefit) provision for income taxes is as follows:

                                                  YEAR ENDED DECEMBER 31,
                                             --------------------------------
                                               1997         1996        1995
                                             --------     -------     -------
                                                       (IN THOUSANDS)

Current:
   Federal . . . . . . . . . . . . . . .     $   378      $ 2,557     $ 4,106
   State . . . . . . . . . . . . . . . .           -          398         815
                                             --------     -------     -------
                                                 378        2,955       4,921
                                             --------     -------     -------
Deferred:
   Federal . . . . . . . . . . . . . . .        (733)          74       1,297
   State . . . . . . . . . . . . . . . .          11          320         396
                                             --------     -------     -------
                                                (722)         394       1,693
                                             --------     -------     -------

   Total . . . . . . . . . . . . . . . .     $  (344)     $ 3,349     $ 6,614
                                             --------     -------     -------
                                             --------     -------     -------	

42

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The difference between taxes calculated at the U. S. federal statutory tax rate of 35 percent and the Company's total income tax provision is as follows:

                                                                            YEAR ENDED DECEMBER 31,
                                                                        -------------------------------
                                                                         1997        1996        1995
                                                                        ------      -------     -------
                                                                                 (IN THOUSANDS)

U.S. federal statutory rate applied to income before taxes and
  extraordinary items. . . . . . . . . . . . . . . . . . . . . . .      $(194)      $3,109      $5,789
State income taxes, net of federal income tax benefit. . . . . . .          8          467         787
Benefit of tax credits . . . . . . . . . . . . . . . . . . . . . .       (227)        (150)       (141)
Other - net. . . . . . . . . . . . . . . . . . . . . . . . . . . .         69          (77)        179
                                                                        ------      -------     -------
      Total. . . . . . . . . . . . . . . . . . . . . . . . . . . .      $(344)      $3,349      $6,614
                                                                        ------      -------     -------
                                                                        ------      -------     -------	

For 1997, income tax benefits of $3,608,000 allocated to the extraordinary loss of $9,162,000 differ from the amount calculated at the federal statutory rate of 35 percent by $401,000. This difference is the result of state tax benefits, net of the federal effect.
Deferred income tax assets and liabilities resulted from the following:

                                                                   DECEMBER 31,
                                                               -------------------
                                                                 1997        1996
                                                               -------     -------
                                                                  (IN THOUSANDS)

Deferred tax assets:
   Accounts receivable . . . . . . . . . . . . . . . . . . .   $ 1,784     $ 2,252
   Inventory . . . . . . . . . . . . . . . . . . . . . . . .       245         254
   Organization and start-up costs . . . . . . . . . . . . .        35         156
   Federal benefit of state deferred tax liabilities . . . .       518         515
   Intangible assets . . . . . . . . . . . . . . . . . . . .    10,358      10,582
   Deferred revenues . . . . . . . . . . . . . . . . . . . .       125         710
   Minimum tax credit. . . . . . . . . . . . . . . . . . . .     3,323       2,647
   Net operating loss carryforwards (expiring 2012). . . . .     2,726           -
   General business credits (expiring 2009-2012) . . . . . .     1,077         769
   Other accrued liabilities . . . . . . . . . . . . . . . .     2,442       1,106
                                                               -------     -------

        Total deferred tax assets. . . . . . . . . . . . . .    22,633      18,991
                                                               -------     -------
Deferred tax liabilities:
  Property and equipment . . . . . . . . . . . . . . . . . .    23,878      24,566
                                                               -------     -------

        Total deferred tax liabilities . . . . . . . . . . .    23,878      24,566
                                                               -------     -------

        Net deferred tax liabilities . . . . . . . . . . . .   $ 1,245     $ 5,575
                                                               -------     -------
                                                               -------     -------	

The tax returns of the Company for 1994 through 1997 are subject to examination by the Internal Revenue Service and state tax authorities. The Company believes it has made adequate provision for income taxes and interest that may become payable for years not yet examined.
43

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
16. RELATED PARTY TRANSACTIONS
The Company conducts a significant amount of its business with related parties. Certain Operator Stockholders have an ownership interest in one or more of the franchisee customers to whom the Company sells fuel and from whom the Company receives rental income and/or royalty income. The transactions with related parties are at prices and terms that are the same as for similar transactions with unrelated entities.
The following table is a summary of balances and transactions with Operator Stockholders at December 31, 1997 and 1996, and for each of the three years ended December 31, 1997:

                                                DECEMBER 31,             YEAR ENDED DECEMBER 31,
                                            ------------------     ---------------------------------
                                             1997        1996       1997         1996         1995
                                            ------     -------     --------    --------     --------
                                                               (IN THOUSANDS)

Accounts receivable . . . . . . . .         $7,469     $15,052
Notes receivable. . . . . . . . . .         $  944     $ 2,307
Fuel revenue. . . . . . . . . . . .                                $187,279    $269,179     $238,343
Rent revenue. . . . . . . . . . . .                                $ 22,380    $ 32,266     $ 35,543
Other revenues. . . . . . . . . . .                                $  4,477    $  5,534     $  7,264
Cost of revenues. . . . . . . . . .                                $187,143    $268,343     $239,651	

During each of 1997, 1996 and 1995, the Company acquired the travel center businesses and operating assets of certain of its Operator Stockholders. Total consideration paid to these operators was $20,152,000 in 1997 for 23 sites, $3,185,000 in 1996 for five sites and $2,140,000 in 1995 for four sites.
During 1997, the Company sold to certain of its Operator Stockholders 12 of its travel center facilities. Total consideration received by the Company from these sales was $30,983,000.
At December 31, 1997 and 1996, $27,000,000 and $67,000,000, respectively, of the Company's indebtedness was owed to certain of the Company's preferred stockholders. The interest expense incurred related to debt owed to these stockholders was $3,636,000, $5,327,000 and $4,877,000 in 1997, 1996 and 1995, respectively.
Certain members of the Company's senior management have purchased common stock of the Company pursuant to management subscription agreements (see Note 14--Repurchase Rights). As a result of such purchases, the Company has notes receivable from the management stockholders totaling $887,000 and $909,000 at December 31, 1997 and 1996, respectively.
17. COMMITMENTS AND CONTINGENCIES
ENVIRONMENTAL MATTERS
The Company's operations and properties are subject to extensive regulation pursuant to federal, state and local laws, regulations and ordinances that (i) govern activities and operations that may have adverse environmental effects, such as discharges to air, soil and water, as well as handling, storage and disposal practices for petroleum products and other hazardous and toxic substances ("Hazardous Substances") or (ii) impose liability and damages for the costs of cleaning up sites affected by, and for damages resulting from, past spills and disposal or other releases of Hazardous Substances ("Environmental Laws").
44

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The Company owns and uses underground storage tanks ("USTs") and aboveground storage tanks ("ASTs") at Company-operated and Leased Sites to store petroleum products and waste. 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 from a UST or AST into the environment. At certain locations, the Company also is subject to Environmental Laws relating to vapor recovery and discharges to water. The Company believes that all of its travel centers are in material compliance with applicable requirements of Environmental Laws. The Company is making necessary upgrades to USTs to comply with federal regulations which will take effect in December 1998. These upgrades are expected to be completed in 1998 at a remaining estimated cost to the Company of approximately $6 to $8 million. The Company does not believe that such costs will have a material adverse effect on the Company and the Capital Program incorporates funds to complete such upgrades.
While the costs of compliance for these matters have not had a material adverse impact on the Company, it is impossible to predict accurately the ultimate effect these changing laws and regulations may have on the Company in the future. The Company incurred capital expenditures, maintenance, remediation and other environmental related costs of approximately $8,867,000, $7,172,000 and $3,968,000 in 1997, 1996 and 1995, respectively.
In connection with the National Acquisition, Phase I environmental assessments of the then 97 Company-owned National Network properties were conducted. Pursuant to an environmental agreement entered into with Unocal at the time of the National Acquisition (the "Unocal Environmental Agreement"), Phase II environmental assessments of all such National properties are required to be completed by the year 2000. As of December 31, 1997, 10 of the Phase II assessments were in progress and 87 had been completed. The Company contributed $500,000 toward the total cost of the Phase II environmental assessments, and Unocal is responsible for the remainder of the cost. The Unocal Environmental Agreement provides that Unocal is responsible for all costs incurred for remediation of environmental contamination (the remediation must achieve compliance with the Environmental Laws in effect on the date the remedial action is completed) and for otherwise bringing the properties into compliance with Environmental Laws (as in effect at the date of the National Acquisition) with respect to environmental contamination or non-compliance identified in the Phase I or Phase II environmental assessments, which environmental contamination or non-compliance existed on or prior to the date of the National Acquisition. Under the terms of the Unocal Environmental Agreement, Unocal also must indemnify the Company against any other environmental liabilities that arise out of conditions at, or ownership or operations of, the National Network prior to the date of the National Acquisition. Pursuant to the Unocal Environmental Agreement, Unocal is obligated to indemnify the Company for claims made before April 14, 2004. Except as described above, Unocal does not have any responsibility for any environmental liabilities arising out of the ownership or operations of the National Network after the date of the National Acquisition. There can be no assurance that, if additional environmental claims or liabilities were to arise under the Unocal Environmental Agreement, Unocal would not dispute the Company's claims for indemnification thereunder.
Prior to the TA Acquisition, all of the then 38 TA locations were subject to Phase I and Phase II environmental assessments, undertaken at BP's expense. An environmental agreement entered into with BP at the time of the TA Acquisition (the "BP Environmental Agreement") 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 such environmental contamination (the remediation must achieve compliance with the Environmental Laws in effect on the date the remedial action is completed) and for otherwise bringing the properties into compliance with Environmental Laws (as in effect at the date of the TA Acquisition). The BP Environmental Agreement further provides that BP must indemnify the Company against any other environmental liabilities that arise out of conditions at, or ownership or operations of, the TA locations prior to the date of the TA Acquisition. With respect to liabilities relating to the investigation and remediation of environmental contamination, BP is obligated to indemnify the Company for liabilities with respect
45

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
to which claims are made before December 11, 2004. With respect to liabilities otherwise relating to non-compliance with Environmental Laws (for example, equipment), BP is obligated to indemnify the Company for liabilities with respect to 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 TA Network after the date of the TA Acquisition. There can be no assurance that, if additional environmental claims or liabilities were to arise under the BP Environmental Agreement, BP would not dispute the Company's claims for indemnification thereunder.
The Company has received notices of alleged violations of Environmental Laws, or is aware of the need to undertake corrective actions to comply with Environmental Laws, at Company-owned travel centers in a number of jurisdictions. The Company does not expect that any financial penalties associated with these alleged violations, instances of noncompliance, or compliance costs incurred in connection therewith, will be material to the Company's results of operation or financial condition. The Company is conducting investigatory and/or remedial actions with respect to releases and/or spills of Hazardous Substances that have occurred subsequent to the National Acquisition and the TA Acquisition, respectively, at fewer than 30 Network properties. While the Company cannot precisely estimate the ultimate costs it will incur in connection with the investigation and remediation of these properties, based on its current knowledge, the Company does not expect that the costs to be incurred at these properties, individually or in the aggregate, will be material to the Company's results of operation or financial condition. While the aforementioned matters are, to the best knowledge of the Company, the only proceedings for which the Company is currently exposed to potential liability (particularly given the Unocal and BP indemnities discussed below), there can be no assurance that additional contamination does not exist at these or additional Network properties, or that material liability will not be imposed in the future. If additional environmental problems arise or are discovered, or if additional environmental requirements are imposed by government agencies, increased environmental compliance or remediation expenditures may be required, which could have a material adverse effect on the Company.
The Company has estimated the current ranges of remediation costs at currently active sites and what it believes will be its ultimate share for such costs after required indemnification and remediation is performed by Unocal and BP under the environmental agreements and has a reserve of $892,000, for such matters. While it is not possible to quantify with certainty the environmental exposure, in the opinion of management, 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 the financial condition, results of operations or liquidity of the Company.
PENDING LITIGATION
FORTY-NINER TRUCK PLAZA LITIGATION. In connection with the acquisition of the Network, the Company acquired six travel centers located in California. In January 1993, the Operators of four of these travel centers (the "California Plaintiffs") commenced litigation against Unocal, the Clipper Group, L.P. ("Clipper," leader of the institutional investor group which formed the Company) and the Company in California state court seeking, among other things, specific performance by Unocal of their alleged rights, either under the California Business and Professions Code (the "California Statute") or, in the alternative, pursuant to alleged statements made by Unocal, to purchase their travel centers at a fair market price and seeking compensatory and punitive damages against the Company and others for both tortious interference with the California Plaintiffs' alleged rights and civil conspiracy. The operator of a fifth California travel center also asserted a purchase right, but never filed suit. This property, together with the four properties operated by the California Plaintiffs, are referred to herein as the "California Properties".
46

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Under the asset purchase agreements pursuant to which the Company acquired the California Properties from Unocal, and related agreements, Unocal agreed to indemnify the Company for, among other things, claims arising under the California Statute arising out of or resulting from the sale of the California Properties, including any amounts ("Excess Amounts") by which the original purchase price paid by the Company for the California Properties exceeds the price at which the Company might be ordered by a court to resell such properties. Pursuant to such agreements, Unocal is not required to indemnify the Company for awards of punitive damages. The Company cannot predict whether it ultimately will be required to resell any or all of the California Properties to the California Plaintiffs. However, in such event, the Company would seek indemnification from Unocal for any Excess Amounts. The Company believes that the claims asserted by the California Plaintiffs against the Company are without merit and has engaged in a vigorous defense.
During 1995, the trial commenced and two of the California Plaintiffs elected to settle their portion of the litigation with Unocal and the Company. In resolution, the Company entered into an agreement whereby the Company acquired the assets and operations of one of the related travel centers and paid approximately $900,000 for the operations and certain assets used in the operations. The other operator's issues were resolved at no cost to the Company and that operator continues to operate the travel center under the existing lease and franchise agreements.
On May 1, 1995, the jury rendered a verdict in favor of the two remaining California Plaintiffs and against Unocal and the Company. The jury determined that the two remaining California Plaintiffs were entitled to total compensatory damages of $4,012,000, for which all defendants are jointly and severably liable. On May 3, 1995, the jury rendered a verdict assessing punitive damages against Unocal, Clipper and the Company in the amounts of $7,000,000, $1,600,000 and $1,500,000, respectively. The California State Court rendered a decision in favor of the defendants on the equitable claims asserted by the California Plaintiffs and denying Plaintiffs' request for rescission of the asset purchase agreements for the related California Properties. The Company then filed motions with the trial court to enter judgement in its favor on plaintiffs' damages claims notwithstanding the verdict, or in the alternative, to order a new trial. On August 1, 1995, the California Court denied the motion for judgement notwithstanding the verdict, but granted the defendants' motion for a new trial on all issues. On October 22, 1997, the California Court of Appeal filed a decision affirming the trial court's orders granting a new trial and denying defendants' motions for judgement notwithstanding the verdict. The Court of Appeal also reversed an order of the trial court granting a nonsuit on plaintiff's claim against the Company and Clipper for civil conspiracy. The California Supreme Court has denied review. No date has been set for retrial. The Company's ultimate liability in the disposition of this matter is difficult to estimate. However, it is management's belief that the outcome, while potentially material to the Company's results of operations, is not likely to have a material adverse effect on the Company's financial position.
The Company believes all compensatory damages ultimately awarded and legal fees incurred in this matter are covered under the indemnification agreement with Unocal. Legal costs incurred by the Company through December 31, 1997 total $5,689,000, of which Unocal has paid $1,000,000 to the Company to date. Unocal has contested certain of the amounts comprising the Company's claims for such indemnification. However, the Company believes that the effect on the financial statements of any amounts not ultimately collected from Unocal will not be material.
CHARLESTON, WEST VIRGINIA LITIGATION. This action was commenced on April 17, 1996 in the Circuit Court of Berkeley County, West Virginia. The amended complaint, brought on behalf of eighteen National Operators, alleges that the Company's fuel pricing policies and practices violate the PMPA and the Uniform Commercial Code and constitute a breach of the contractual duty of good faith and fair dealing and unjust enrichment. The amended complaint also asserts claims of fraud and fraud in the inducement, apparently based on alleged representations made by the Company concerning fuel pricing. The amended complaint asserts claims against the Company, Clipper and certain present and former directors and officers of the Company, and seeks actual and punitive damages in an unspecified sum. The Company has removed the case to federal court, and the court has granted the Company's motion to transfer the case to federal court in Nashville, Tennessee.
47

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The Company has entered into settlement agreements with 13 of the plaintiffs pursuant to which the claims of those plaintiffs have been dismissed with prejudice.
On March 31, April 1 and April 7, 1997, three of the plaintiffs filed motions for a preliminary injunction. The motions sought an order requiring, among other things, that the Company sell to the movants all of the movants' requirements of diesel fuel at a price per gallon of not more than two cents above the Oil Price Information Service average price under the terms of the Company's existing lease and franchise agreements. In addition, on April 22, 1997, two of the movants filed a motion seeking a temporary restraining order for substantially the same relief. On May 21, 1997, the court denied the plaintiffs' motions. Plaintiffs appealed the trial court's denial of their motions to the United States Courts of Appeals for both the Fourth and the Sixth Circuits. By order dated August 1, 1997, all proceedings in the district court were stayed pending the completion of all appeals. On September 11, 1997, the Fourth Circuit dismissed plaintiffs' appeal for lack of jurisdiction. On December 16, 1997, the Sixth Circuit dismissed plaintiffs' appeal. It is management's belief that the outcome of this matter is not likely to have a material adverse effect on the Company's results of operations, financial position or liquidity.
In addition to the above matters, the Company is the subject of, or party to, a number of pending or threatened legal actions, contingencies and commitments involving a variety of matters, including laws and regulations relating to the environment. The ultimate resolution of these contingencies could, individually or in the aggregate, be material to the Company's results of operations, but is not expected to be material to the Company's financial position or liquidity.
18. OPERATING LEASE COMMITMENTS
Of the 118 travel centers owned by the Company as of December 31, 1997, 35 locations are leased to Operators under operating lease arrangements. Of these Leased Sites, 24 are leased to Operator Stockholders (see Note 16). The lease agreements offered to related parties are the same as those offered to unrelated parties. These cancelable lease arrangements generally are for terms of three to five years. Rent revenue from such operating lease arrangements totaled $29,433,000, $41,762,000 and $47,840,000 for 1997, 1996 and 1995, respectively.
19. OTHER INFORMATION

                                                                                YEAR ENDED DECEMBER 31
                                                                          ----------------------------------
                                                                              1997        1996        1995
                                                                          ----------   ----------  ---------
                                                                                    (IN THOUSANDS)
Operating and Selling, general and administrative expenses include the
  following:
  Repairs and maintenance expenses . . . . . . . . . . . . . . . . . .      $8,528       $2,860      $1,264
  Advertising expenses . . . . . . . . . . . . . . . . . . . . . . . .      $9,141       $3,964      $3,082
  Taxes other than payroll and income taxes. . . . . . . . . . . . . .      $5,099       $2,429      $3,391
Interest (expense), net consists of the following:
  Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . .    $(26,418)    $(15,965)   $(14,190)
  Interest income. . . . . . . . . . . . . . . . . . . . . . . . . . .       3,520          729         846
                                                                          ----------   ----------  ---------
                                                                          $(22,898)    $(15,236)   $(13,344)
                                                                          ----------   ----------  ---------
                                                                          ----------   ----------  ---------	

48

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
20. SUPPLEMENTAL CASH FLOW INFORMATION

                                                            YEAR ENDED DECEMBER 31,
                                                       -------------------------------
                                                         1997         1996      1995
                                                       --------     --------  --------
                                                                 (IN THOUSANDS)
Cash paid during the year for:
  Interest . . . . . . . . . . . . . . . . . . . .     $24,611      $16,597   $14,055
  Income taxes . . . . . . . . . . . . . . . . . .     $ 3,513      $ 1,321   $   482	

During 1997, 1996 and 1995, the Company received $5,023,000, $3,207,000 and $3,201,000, respectively, of inventory and property and equipment in liquidation of trade accounts receivable and notes receivable.
Pursuant to the Refinancing (see Note 3), the Company extinguished $85,500,000 of Senior Secured Notes through the issuance of Series I Senior Secured Notes and Series II Senior Secured Notes of an aggregate equal face amount.
21. PRIOR PERIOD ADJUSTMENTS
The balance of retained earnings at December 31, 1995 has been restated from amounts previously reported to reflect the correction of errors that had been made in the calculations of accrued dividends related to the mandatorily redeemable senior convertible participating preferred stock during the period from June 1994 through June 1997. These dividend accruals do not enter into the determination of net income or loss. The total adjustment amount at December 31, 1995, is $1,091,000, of which $911,000 is applicable to 1995 and has been reflected as an increase in preferred dividends on the statement of income and retained earnings for that year, with the balance of the adjustment amount of $180,000 applicable to earlier periods reflected as a reduction in retained earnings at January 1, 1995.
The preferred dividend amount for the year ended December 31, 1996 was increased by $1,719,000 from the amount previously reported, bringing the total amount of the adjustment in retained earnings at December 31, 1996 to $2,810,000.
22. UNAUDITED PRO FORMA PRESENTATION
The following schedule sets forth the consolidated results of operations of the Company as though TAHC had not been held for disposition and instead been fully consolidated since January 1, 1994. Amounts are shown only for the years ended December 31, 1996 and 1995, as TAHC and TA were fully consolidated for the entire year ended December 31, 1997.
49

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
UNAUDITED PRO FORMA STATEMENT OF INCOME SCHEDULE:

                                                     YEAR ENDED DECEMBER 31,
                                                     -----------------------
                                                        1996         1995
                                                     ----------   ----------
                                                         (IN THOUSANDS)
Revenues:
  Fuel . . . . . . . . . . . . . . . . . . . . . .    $752,266    $590,398
  Nonfuel. . . . . . . . . . . . . . . . . . . . .     236,780     198,584
  Rent and royalties . . . . . . . . . . . . . . .      47,437      53,366
                                                     ----------   ----------
    Total revenues . . . . . . . . . . . . . . . .   1,036,483     842,348
  Cost of revenues (excluding depreciation). . . .     803,535     634,700
                                                     ----------   ----------
  Gross profit (excluding depreciation). . . . . .     232,948     207,648
  Operating expenses . . . . . . . . . . . . . . .     129,447     102,239
  Selling, general and administrative expenses . .      42,811      43,278
  Refinancing, transition and development costs. .       2,687       1,866
  Depreciation and amortization. . . . . . . . . .      26,970      22,611
  (Gain) loss on sales of property and equipment .       1,464         363
  Other (income) expense, net. . . . . . . . . . .        (140)       (116)
                                                     ----------   ----------
    Income from operations . . . . . . . . . . . .      29,709      37,407
  Interest income (expense), net . . . . . . . . .     (20,827)    (20,867)
                                                     ----------   ----------
    Income before provision for income taxes . . .       8,882      16,540
  Provision for income taxes . . . . . . . . . . .       3,349       6,614
                                                     ----------   ----------
    Net income . . . . . . . . . . . . . . . . . .      $5,533      $9,926
                                                     ----------   ----------
                                                     ----------   ----------	

23. CONDENSED CONSOLIDATING FINANCIAL STATEMENT SCHEDULES
The following schedules set forth the condensed consolidating balance sheet schedules of the Company as of December 31, 1997 and 1996 and condensed consolidating statement of income and retained earnings schedules and condensed consolidating statement of cash flows schedules of the Company for the years ended December 31, 1997, 1996 and 1995. 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 and National, and "Nonguarantor Subsidiary" refers to the balances of TAFSI. "Eliminations" represent the adjustments necessary to (a) eliminate intercompany transactions, (b) eliminate the Company's investments in its subsidiaries and (c) present TAHC as a subsidiary held for disposition until September 30, 1996 (see Note 2).
The Guarantor Subsidiaries, TA and National, are wholly-owned subsidiaries of the Company and have fully and unconditionally, jointly and severally, guaranteed the Company's indebtedness. In the 10-K filing, the Company has not presented separate financial statements and other disclosures concerning the Guarantor Subsidiaries because management has determined such information is not material to investors.
50

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
CONDENSED CONSOLIDATING BALANCE SHEET SCHEDULES:

                                                                                          DECEMBER 31, 1997
                                                              ---------------------------------------------------------------------
                                                               PARENT      GUARANTOR   NONGUARANTOR
                                                               COMPANY   SUBSIDIARIES   SUBSIDIARY     ELIMINATIONS   CONSOLIDATED
                                                              ---------  ------------  ------------    ------------   ------------
                                                                                      (IN THOUSANDS OF DOLLARS)
Current assets:
  Cash. . . . . . . . . . . . . . . . . . . . . . . . .        $59,592     $12,164       $    -         $      -          $71,756
  Accounts receivable, net. . . . . . . . . . . . . . .              -      67,927          506                -           68,433
  Inventories . . . . . . . . . . . . . . . . . . . . .              -      33,718            -                -           33,718
  Deferred income taxes . . . . . . . . . . . . . . . .              -       3,740            -                -            3,740
  Other current assets. . . . . . . . . . . . . . . . .         14,176      38,971        2,591          (45,482)          10,256
                                                              ---------  ------------  ------------    ------------   ------------

      Total current assets. . . . . . . . . . . . . . .         73,768     156,520        3,097          (45,482)         187,903
  Notes receivable, net . . . . . . . . . . . . . . . .            887         805            -                -            1,692
  Property and equipment, net . . . . . . . . . . . . .              -     286,472            -                -          286,472
  Intangible assets . . . . . . . . . . . . . . . . . .              -      15,651            -                -           15,651
  Deferred financing costs. . . . . . . . . . . . . . .         11,786           -            -                -           11,786
  Other assets. . . . . . . . . . . . . . . . . . . . .            730       3,558            -                -            4,288
  Investment in subsidiaries. . . . . . . . . . . . . .        342,860           -            -         (342,860)               -
                                                              ---------  ------------  ------------    ------------   ------------
      Total assets. . . . . . . . . . . . . . . . . . .       $430,031    $463,006       $3,097        $(388,342)        $507,792
                                                              ---------  ------------  ------------    ------------   ------------
                                                              ---------  ------------  ------------    ------------   ------------

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Revolving loans . . . . . . . . . . . . . . . . . . .       $      -    $      -       $    -        $       -         $      -
  Current maturities of long-term debt. . . . . . . . .            500           -            -                -              500
  Accounts payable. . . . . . . . . . . . . . . . . . .              -      29,387            -             (352)          29,035
  Other accrued liabilities . . . . . . . . . . . . . .         32,601      83,905          889          (45,130)          72,265
                                                              ---------  ------------  ------------    ------------   ------------
      Total current liabilities . . . . . . . . . . . .         33,101     113,292          889          (45,482)         101,800
Long-term debt (net of unamortized discount). . . . . .        289,625           -            -                -          289,625
  Deferred income taxes . . . . . . . . . . . . . . . .           (852)      5,837            -                -            4,985
  Other liabilities . . . . . . . . . . . . . . . . . .              -     230,371            -         (225,892)           4,479
                                                              ---------  ------------  ------------    ------------   ------------
      Total liabilities . . . . . . . . . . . . . . . .        321,874     349,500          889         (271,374)         400,889

Mandatorily redeemable senior
  convertible participating preferred stock . . . . . .         61,404           -            -                -           61,404

Other preferred stock, common stock and
  other stockholders' equity. . . . . . . . . . . . . .         45,199      81,179            -          (82,433)          43,945
Retained earnings . . . . . . . . . . . . . . . . . . .          1,554      32,327        2,208          (34,535)           1,554
                                                              ---------  ------------  ------------    ------------   ------------
                                                                46,753     113,506        2,208         (116,968)          45,499
                                                              ---------  ------------  ------------    ------------   ------------
      Total liabilities and stockholders'
        equity. . . . . . . . . . . . . . . . . . . . .       $430,031    $463,006       $3,097        $(388,342)        $507,792
                                                              ---------  ------------  ------------    ------------   ------------
                                                              ---------  ------------  ------------    ------------   ------------	

51

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

                                                                                          DECEMBER 31, 1996
                                                              ---------------------------------------------------------------------
                                                               PARENT      GUARANTOR   NONGUARANTOR
                                                               COMPANY   SUBSIDIARIES   SUBSIDIARY     ELIMINATIONS   CONSOLIDATED
                                                              ---------  ------------  ------------    ------------   ------------
                                                                                      (IN THOUSANDS OF DOLLARS)
Current assets:
  Cash. . . . . . . . . . . . . . . . . . . . . . . . .             $-     $23,779           $-                $-       $23,779
  Accounts receivable, net. . . . . . . . . . . . . . .              -      54,294        1,051              (974)       54,371
  Inventories . . . . . . . . . . . . . . . . . . . . .              -      29,082            -                 -        29,082
  Deferred income taxes . . . . . . . . . . . . . . . .              -       3,877            -                 -         3,877
  Other current assets. . . . . . . . . . . . . . . . .            499      10,236            2              (207)       10,530
                                                              ---------  ------------  ------------    ------------   ------------
      Total current assets. . . . . . . . . . . . . . .            499     121,268        1,053            (1,181)      121,639
Notes receivable, net . . . . . . . . . . . . . . . . .              -       2,744            -                 -         2,744
Property and equipment, net . . . . . . . . . . . . . .              -     273,219            -            (3,853)      269,366
Intangible assets . . . . . . . . . . . . . . . . . . .              -      19,657            -                 -        19,657
Deferred financing costs. . . . . . . . . . . . . . . .              -       8,379            -                 -         8,379
Other assets. . . . . . . . . . . . . . . . . . . . . .          2,500       6,439            -            (4,835)        4,104
Investment in subsidiaries. . . . . . . . . . . . . . .        119,818           -            -          (119,818)            -
                                                              ---------  ------------  ------------    ------------   ------------
      Total assets. . . . . . . . . . . . . . . . . . .       $122,817    $431,706       $1,053         $(129,687)     $425,889
                                                              ---------  ------------  ------------    ------------   ------------
                                                              ---------  ------------  ------------    ------------   ------------
LIABILITIES AND  STOCKHOLDERS' EQUITY
Current Liabilities:
  Revolving loans . . . . . . . . . . . . . . . . . . .       $      -    $ 14,000       $    -         $       -      $ 14,000
  Current maturities of long-term debt. . . . . . . . .              -      17,250            -                 -        17,250
  Accounts payable. . . . . . . . . . . . . . . . . . .          1,555      34,143            -            (2,299)       33,399
  Other accrued liabilities . . . . . . . . . . . . . .            450      33,355          105              (686)       33,224
                                                              ---------  ------------  ------------    ------------   ------------
      Total current liabilities . . . . . . . . . . . .          2,005      98,748           98            (2,978)       97,873
Long-term debt (net of unamortized
  discount) . . . . . . . . . . . . . . . . . . . . . .              -     193,185            -                 -       193,185
Deferred income taxes . . . . . . . . . . . . . . . . .             92       9,891            -              (531)        9,452
Other liabilities . . . . . . . . . . . . . . . . . . .              1       8,413            -            (2,500)        5,914
                                                              ---------  ------------  ------------    ------------   ------------
      Total liabilities . . . . . . . . . . . . . . . .          2,098     310,237           98            (6,009)      306,424

Mandatorily redeemable senior
  convertible participating preferred
  stock . . . . . . . . . . . . . . . . . . . . . . . .         53,885           -            -                 -        53,885

Other preferred stock, common stock
  and other stockholders' equity. . . . . . . . . . . .         51,997      85,033            -           (86,287)       50,743
Retained earnings . . . . . . . . . . . . . . . . . . .         14,837      36,436          955           (37,391)       14,837
                                                              ---------  ------------  ------------    ------------   ------------
                                                                66,834     121,469          955          (123,678)       65,580
                                                              ---------  ------------  ------------    ------------   ------------
      Total liabilities and
        stockholders' equity. . . . . . . . . . . . . .       $122,817    $431,706       $1,053          $129,687      $425,889
                                                              ---------  ------------  ------------    ------------   ------------
                                                              ---------  ------------  ------------    ------------   ------------	

52

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
CONDENSED CONSOLIDATING STATEMENT OF INCOME AND RETAINED EARNINGS SCHEDULES:

                                                                                     YEAR ENDED DECEMBER 31, 1997
                                                              ---------------------------------------------------------------------
                                                               PARENT      GUARANTOR   NONGUARANTOR
                                                               COMPANY   SUBSIDIARIES   SUBSIDIARY     ELIMINATIONS   CONSOLIDATED
                                                              ---------  ------------  ------------    ------------   ------------
                                                                                      (IN THOUSANDS OF DOLLARS)
Revenues:
  Fuel. . . . . . . . . . . . . . . . . . . . . . . . .             $-     $715,852            $-        $(7,215)        $708,637
  Nonfuel . . . . . . . . . . . . . . . . . . . . . . .              -      293,874             7            (38)         293,843
  Rent and royalties. . . . . . . . . . . . . . . . . .              -       41,656         3,414         (8,222)          36,848
                                                              ---------  ------------  ------------    ------------   ------------
  Total revenues. . . . . . . . . . . . . . . . . . . .              -    1,051,382         3,421        (15,475)       1,039,328
Cost of revenues (excluding
  depreciation) . . . . . . . . . . . . . . . . . . . .              -      780,299             -         (7,215)         773,084
                                                              ---------  ------------  ------------    ------------   ------------
Gross profit (excluding depreciation) . . . . . . . . .              -      271,083         3,421         (8,260)         266,244

Operating expenses. . . . . . . . . . . . . . . . . . .              -      176,350           244         (8,260)         168,334
Selling, general and
  Administrative. . . . . . . . . . . . . . . . . . . .            814       33,934           871              -           35,619
Refinancing, transition and development
  costs . . . . . . . . . . . . . . . . . . . . . . . .              -       14,961           251              -           15,212
Depreciation and amortization . . . . . . . . . . . . .          1,119       34,721             -              -           35,840
(Gain) loss on sale of property and
  equipment . . . . . . . . . . . . . . . . . . . . . .              -      (11,244)            -              -          (11,244)
Other operating (income) expense, net . . . . . . . . .              -          138             -              -              138
                                                              ---------  ------------  ------------    ------------   ------------
Income (loss) from operations . . . . . . . . . . . . .         (1,933)      21,973         2,055              -           22,345
Interest (expense), net . . . . . . . . . . . . . . . .         (2,629)     (20,269)            -              -          (22,898)
Equity income (loss). . . . . . . . . . . . . . . . . .         (5,153)           -             -          5,153                -
                                                              ---------  ------------  ------------    ------------   ------------
(Loss) income before income taxes and
  extraordinary items . . . . . . . . . . . . . . . . .         (9,715)       1,954         2,055          5,153             (553)
(Benefit) provision for income taxes. . . . . . . . . .         (3,952)         509           802          2,297             (344)
                                                               ---------  ------------  ------------    ------------   ------------
(Loss) income before extraordinary item . . . . . . . .         (5,763)       1,445         1,253          2,856             (209)
Extraordinary loss (less applicable
  income tax benefit) . . . . . . . . . . . . . . . . .              -       (5,554)            -              -           (5,554)
                                                              ---------  ------------  ------------    ------------   ------------
Net (loss) income . . . . . . . . . . . . . . . . . . .         (5,763)      (4,109)        1,253          2,856           (5,763)

Less: preferred dividends . . . . . . . . . . . . . . .         (7,520)           -             -              -           (7,520)
Retained earnings (deficit) - beginning of
  the year. . . . . . . . . . . . . . . . . . . . . . .         14,837       36,436           955        (37,391)          14,837
                                                              ---------  ------------  ------------    ------------   ------------
Retained earnings (deficit) - end of the
  year. . . . . . . . . . . . . . . . . . . . . . . . .         $1,554      $32,327        $2,208       $(34,535)          $1,554
                                                              ---------  ------------  ------------    ------------   ------------
                                                              ---------  ------------  ------------    ------------   ------------	

53

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

                                                                                     YEAR ENDED DECEMBER 31, 1996
                                                              ---------------------------------------------------------------------
                                                               PARENT      GUARANTOR   NONGUARANTOR
                                                               COMPANY   SUBSIDIARIES   SUBSIDIARY     ELIMINATIONS   CONSOLIDATED
                                                              ---------  ------------  ------------    ------------   ------------
                                                                                      (IN THOUSANDS OF DOLLARS)
Revenues:
  Fuel. . . . . . . . . . . . . . . . . . . . . . . . .             $-     $752,266           $-       $(202,054)        $550,212
  Nonfuel . . . . . . . . . . . . . . . . . . . . . . .              -      237,124            -        (137,133)          99,991
  Rent and royalties. . . . . . . . . . . . . . . . . .              -       45,711        1,382          (1,038)          46,055
                                                              ---------  ------------  ------------    ------------   ------------
  Total revenues. . . . . . . . . . . . . . . . . . . .              -    1,035,101        1,382        (340,225)       1 696,258
Cost of revenues (excluding
  depreciation) . . . . . . . . . . . . . . . . . . . .              -      802,133            -        (233,439)         568,694
                                                              ---------  ------------  ------------    ------------   ------------
Gross profit (excluding depreciation) . . . . . . . . .              -      232,968        1,382        (106,786)         127,564

Operating expenses. . . . . . . . . . . . . . . . . . .              -      130,849            -         (74,772)          56,077
Selling, general and administrative . . . . . . . . . .            736       41,075        1,000         (11,546)          31,265
Refinancing, transition and
  development costs . . . . . . . . . . . . . . . . . .              -        2,687            -            (490)           2,197
Depreciation and amortization . . . . . . . . . . . . .              -       26,970            -          (9,132)          17,838
(Gain) loss on sales of property and
  equipment . . . . . . . . . . . . . . . . . . . . . .              -        1,469            -              (5)           1,464
Other operating (income) expense,
  net . . . . . . . . . . . . . . . . . . . . . . . . .-          (145)           -            5            (140)
Income of subsidiary held for
  disposition . . . . . . . . . . . . . . . . . . . . .              -            -            -          (5,255)          (5,255)
                                                              ---------  ------------  ------------    ------------   ------------
Income from operations. . . . . . . . . . . . . . . . .           (736)      30,063          382          (5,591)          24,118
Interest (expense), net . . . . . . . . . . . . . . . .              -      (20,827)           -           5,591          (15,236)
Equity income (loss). . . . . . . . . . . . . . . . . .          9,618            -            -          (9,618)               -
                                                              ---------  ------------  ------------    ------------   ------------
Income before provision for income
  taxes . . . . . . . . . . . . . . . . . . . . . . . .          8,882        9,236          382          (9,618)           8,882
Provision for income taxes. . . . . . . . . . . . . . .          3,349        3,410          138          (3,548)           3,349
                                                              ---------  ------------  ------------    ------------   ------------
Net income. . . . . . . . . . . . . . . . . . . . . . .          5,533        5,826          244          (6,070)           5,533

Less: preferred dividends . . . . . . . . . . . . . . .         (6,599)           -            -               -          (6,599)
Retained earnings (deficit) - beginning
  of the year . . . . . . . . . . . . . . . . . . . . .         15,903       30,610          711         (31,321)          15,903
                                                              ---------  ------------  ------------    ------------   ------------
Retained earnings (deficit) - end of the
  year. . . . . . . . . . . . . . . . . . . . . . . . .        $14,837      $36,436         $955        $(37,391)         $14,837
                                                              ---------  ------------  ------------    ------------   ------------
                                                              ---------  ------------  ------------    ------------   ------------	

54

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

                                                                                     YEAR ENDED DECEMBER 31, 1995
                                                              ---------------------------------------------------------------------
                                                               PARENT      GUARANTOR   NONGUARANTOR
                                                               COMPANY   SUBSIDIARIES   SUBSIDIARY     ELIMINATIONS   CONSOLIDATED
                                                              ---------  ------------  ------------    ------------   ------------
                                                                                      (IN THOUSANDS OF DOLLARS)
Revenues:

  Fuel. . . . . . . . . . . . . . . . . . . . . . . . .             $-      $590,398           $-       $(214,250)       $376,148
  Nonfuel . . . . . . . . . . . . . . . . . . . . . . .              -       198,584            -        (170,636)         27,948
  Rent and royalties. . . . . . . . . . . . . . . . . .              -        51,801        1,565          (1,565)         51,801
                                                              ---------  ------------  ------------    ------------   ------------
  Total revenues. . . . . . . . . . . . . . . . . . . .              -       840,783        1,565        (386,451)        455,897
Cost of revenues (excluding
  depreciation) . . . . . . . . . . . . . . . . . . . .              -       632,822            -        (255,999)        376,823
                                                              ---------  ------------  ------------    ------------   ------------
Gross profit (excluding depreciation) . . . . . . . . .              -       207,961        1,565        (130,452)         79,074

Operating expenses. . . . . . . . . . . . . . . . . . .              -       104,117            -         (92,099)         12,018
Selling, general and
  administrative. . . . . . . . . . . . . . . . . . . .            168        42,160          950         (12,313)         30,965
Refinancing, transition and development
  costs . . . . . . . . . . . . . . . . . . . . . . . .              -         1,866            -          (1,035)            831
Depreciation and amortization . . . . . . . . . . . . .              -        22,611            -         (11,232)         11,379
(Gain) loss on sales of property and
  equipment . . . . . . . . . . . . . . . . . . . . . .              -           414            -             (51)            363
Other operating (income) expense,
  net . . . . . . . . . . . . . . . . . . . . . . . . .              -          (167)           -               -            (167)
Income of subsidiary held for
  disposition . . . . . . . . . . . . . . . . . . . . .              -             -            -          (6,199)         (6,199)
                                                              ---------  ------------  ------------    ------------   ------------
Income from operations. . . . . . . . . . . . . . . . .           (168)       36,960          615          (7,523)         29,884
Interest (expense), net . . . . . . . . . . . . . . . .              -       (20,867)           -           7,523         (13,344)
Equity income (loss). . . . . . . . . . . . . . . . . .         16,708             -            -         (16,708)              -
                                                              ---------  ------------  ------------    ------------   ------------
Income before provision for income
  taxes . . . . . . . . . . . . . . . . . . . . . . . .         16,540        16,093          615         (16,708)         16,540
Provision for income taxes. . . . . . . . . . . . . . .          6,614         6,454          227          (6,681)          6,614
                                                              ---------  ------------  ------------    ------------   ------------
Net income. . . . . . . . . . . . . . . . . . . . . . .          9,926         9,639          388         (10,027)          9,926

Less: preferred dividends . . . . . . . . . . . . . . .         (5,791)            -            -               -          (5,791)
Retained earnings-beginning of the
  year. . . . . . . . . . . . . . . . . . . . . . . . .         11,768        20,971          323         (21,294)         11,768
                                                              ---------  ------------  ------------    ------------   ------------
Retained earnings-end of the year . . . . . . . . . . .        $15,903       $30,610         $711        $(31,321)        $15,903
                                                              ---------  ------------  ------------    ------------   ------------
                                                              ---------  ------------  ------------    ------------   ------------	

55

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS SCHEDULES:

                                                                                     YEAR ENDED DECEMBER 31, 1997
                                                              ---------------------------------------------------------------------
                                                               PARENT      GUARANTOR   NONGUARANTOR
                                                               COMPANY   SUBSIDIARIES   SUBSIDIARY     ELIMINATIONS   CONSOLIDATED
                                                              ---------  ------------  ------------    ------------   ------------
                                                                                      (IN THOUSANDS OF DOLLARS)
CASH FLOWS (USED IN) PROVIDED BY
  OPERATING ACTIVITIES: . . . . . . . . . . . . . . . .       $(45,694)    $87,364           $-                $-         $41,670
                                                              ---------  ------------  ------------    ------------   ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Acquisitions of network assets. . . . . . . . . . . .              -     (15,127)           -                 -         (15,127)
  Proceeds from sales of property and
    equipment . . . . . . . . . . . . . . . . . . . . .              -      37,958            -                 -          37,958
  Capital expenditures. . . . . . . . . . . . . . . . .              -     (60,818)           -                 -         (60,818)
                                                              ---------  ------------  ------------    ------------   ------------
    Net cash used in investing
      activities. . . . . . . . . . . . . . . . . . . .              -     (37,987)           -                 -         (37,987)
                                                              ---------  ------------  ------------    ------------   ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Revolving loan borrowings . . . . . . . . . . . . . .              -       3,750            -                 -           3,750
  Revolving loan repayments . . . . . . . . . . . . . .              -     (17,750)           -                 -         (17,750)
  Long-term debt borrowings . . . . . . . . . . . . . .        205,000           -            -                 -         205,000
  Long-term debt repayments . . . . . . . . . . . . . .           (375)   (126,300)           -                 -        (126,675)
  Proceeds from issuance of stock . . . . . . . . . . .            329           -            -                 -             329
  Repurchase of common stock. . . . . . . . . . . . . .         (7,456)          -            -                 -          (7,456)
  Debt issuance costs . . . . . . . . . . . . . . . . .        (12,904)          -            -                 -         (12,904)
  Intercompany advances . . . . . . . . . . . . . . . .       (138,900)    138,900            -                 -               -
                                                              ---------  ------------  ------------    ------------   ------------
    Net cash (used in) provided by
      financing activities. . . . . . . . . . . . . . .         45,694      (1,400)           -                 -          44,294
                                                                ---------  ------------  ------------    ------------   ------------
      Net increase in cash. . . . . . . . . . . . . . .              -      47,977            -                 -          47,977

Cash at the beginning of the year . . . . . . . . . . .              -      23,779            -                 -          23,779
                                                              ---------  ------------  ------------    ------------   ------------
Cash at the end of the year . . . . . . . . . . . . . .             $-     $71,756            -                $-         $71,756
                                                              ---------  ------------  ------------    ------------   ------------
                                                              ---------  ------------  ------------    ------------   ------------	

56

TRAVELCENTERS OF AMERICA, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS SCHEDULES:

                                                                                     YEAR ENDED DECEMBER 31, 1996
                                                              ---------------------------------------------------------------------
                                                               PARENT      GUARANTOR   NONGUARANTOR
                                                               COMPANY   SUBSIDIARIES   SUBSIDIARY     ELIMINATIONS   CONSOLIDATED
                                                              ---------  ------------  ------------    ------------   ------------
                                                                                      (IN THOUSANDS OF DOLLARS)
CASH FLOWS (USED IN) PROVIDED BY
  OPERATING ACTIVITIES: . . . . . . . . . . . . . . . .           $712     $38,763           $-           $(11,855)      $27,620
                                                              ---------  ------------  ------------    ------------   ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Acquisitions of network assets. . . . . . . . . . . .              -      (2,352)           -                  -        (2,352)
  Proceeds from sales of property and
    equipment . . . . . . . . . . . . . . . . . . . . .              -         965            -               (322)          643
  Capital expenditures. . . . . . . . . . . . . . . . .              -     (27,089)           -              6,544       (20,545)
                                                              ---------  ------------  ------------    ------------   ------------
    Net cash used in investing
      activities. . . . . . . . . . . . . . . . . . . .              -     (28,476)           -              6,222       (22,254)
                                                              ---------  ------------  ------------    ------------   ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Revolving loan borrowings . . . . . . . . . . . . . .              -      14,000            -                  -        14,000
  Long-term debt repayments . . . . . . . . . . . . . .              -     (16,125)           -              3,750       (12,375)
  Reconsolidation of subsidiary
    previously held for disposition . . . . . . . . . .              -           -            -             14,309        14,309
  Other . . . . . . . . . . . . . . . . . . . . . . . .           (712)          -            -                  -          (712)
                                                              ---------  ------------  ------------    ------------   ------------
    Net cash (used in) provided by
      financing activities. . . . . . . . . . . . . . .           (712)     (2,125)           -             18,059        15,222
                                                              ---------  ------------  ------------    ------------   ------------
      Net increase in cash. . . . . . . . . . . . . . .              -       8,162            -             12,426        20,588
Cash at the beginning of the year . . . . . . . . . . .              -      15,617            -            (12,426)        3,191
                                                              ---------  ------------  ------------    ------------   ------------
Cash at the end of the year . . . . . . . . . . . . . .             $-     $23,779           $-                 $-       $23,779
                                                              ---------  ------------  ------------    ------------   ------------
                                                              ---------  ------------  ------------    ------------   ------------	

57

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

                                                                            YEAR ENDED DECEMBER 31, 1995
                                                         ----------------------------------------------------------------
                                                         PARENT      GUARANTOR    NONGUARANTOR
                                                         COMPANY   SUBSIDIARIES    SUBSIDIARY  ELIMINATIONS  CONSOLIDATED
                                                         -------   ------------   ------------ ------------  ------------
                                                                             (IN THOUSANDS OF DOLLARS)
CASH FLOWS (USED IN) PROVIDED BY
  OPERATING ACTIVITIES:..........................          $66         $27,341           $-       $ (7,971)      $19,436
                                                          -----        -------           ---      --------       -------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Acquisitions of network assets.................            -            (575)           -              -          (575)
  Proceeds from sales of property and
    equipment....................................            -           1,770            -           (366)        1,404
  Capital expenditures...........................                      (32,183)                     12,253       (19,930)
  Refund of purchase price.......................            -           1,500            -              -         1,500
                                                          -----        -------           ---      --------       -------
    Net cash used in investing activities........            -         (29,488)           -         11,887       (17,601)
                                                          -----        -------           ---      --------       -------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Long-term debt repayments......................            -         (18,075)           -          4,000       (14,075)
  Other..........................................          (66)              -            -              -           (66)
                                                          -----        -------           ---      --------       -------
    Net cash (used in) provided by
      financing activities.......................          (66)        (18,075)           -          4,000       (14,141)
                                                          -----        -------           ---      --------       -------
      Net increase (decrease) in cash............            -         (20,222)           -          7,916       (12,306)
Cash at the beginning of the year................            -          35,839            -        (20,342)       15,497
                                                          -----        -------           ---      --------       -------
Cash at the end of the year......................          $ -         $15,617           $-       $(12,426)      $ 3,191
                                                          -----        -------           ---      --------       -------
                                                          -----        -------           ---      --------       -------	

58

QUARTERLY FINANCIAL DATA - UNAUDITED

                                                                 FIRST       SECOND      THIRD       FOURTH
                                                                QUARTER      QUARTER    QUARTER     QUARTER(b)
                                                              -----------   ---------  ---------   -----------
                                                             (IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS)
1997 Data:
     Total Revenue                                            $265,113    $264,877     $250,312    $259,026
     Gross Profit                                              $59,235     $66,066      $69,775     $71,168
     Income (loss) before extraordinary item                     $(106)    $(2,798)      $4,858     $(2,163)
     Net income (loss)                                         $(5,660)    $(2,798)      $4,858     $(2,163)
     Earnings per common share (a):
     Income (loss) before extraordinary item
       Basic                                                    $(1.56)     $(4.13)       $2.93      $(5.52)
       Diluted                                                  $(1.56)     $(4.13)       $0.43      $(5.52)
     Net income (loss)
       Basic                                                    $(6.07)     $(4.13)       $2.93      $(5.52)
       Diluted                                                  $(6.07)     $(4.13)       $0.43      $(5.52)

1996 Data:
     Total Revenue                                            $131,409    $145,503     $143,772    $275,574
     Gross Profit                                              $20,513     $22,117      $23,523     $61,411
     Net Income                                                   $916      $3,112       $2,702     $(1,197)
     Earnings per common share (a):
       Basic                                                    $(0.50)      $1.13        $0.77      $(2.25)
       Diluted                                                  $(0.50)      $0.21        $0.14      $(2.25)	

(a) Per share amounts for all quarters other than the 1997 fourth quarter have been restated as a result of applying the new accounting standard for earnings per share.
(b) In the fourth quarter of 1997, the Company recognized impairment charges of an aggregate amount of $7,500,000. In addition, transition expenses of $4,254,00 were incurred in the 1997 fourth quarter.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information concerning the directors and executive officers of the Company required by this item is incorporated by reference to the material appearing under the heading "Directors and Officers of the Registrant" in Exhibit 99.1 to this 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 Report.
59

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information concerning security ownership of certain beneficial owners and management of the Company 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 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 Report.
PART IV
ITEM 14. 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 21.
2. Financial Statement Schedules
All 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 i of this report.
B. Reports on Form 8-K No reports on Form 8-K were filed during the last quarter of the year ended December 31, 1997.
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURUSANT TO
SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE ACT
No annual report or proxy statement has been furnished to the registrant's security holders. The registrant shall furnish to the Commission for its information, at the time copies of such material are furnished to its security holders, four copies of every proxy statement, form of proxy or other proxy soliciting material sent to more than ten of the registrant's security holders with respect to the registrant's annual meeting. The foregoing material shall not be deemed to be "filed" with the Commission or otherwise subject to the liabilities of Section 18 of the Act, except to the extent that the registrant specifically incorporates it in this Form 10-K by reference.
60

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.

March 31, 1998                 By:/s/ James W. George
--------------                    -----------------------------
   (Date)                           Name: James W. George
                                    Title: Senior Vice President,
                                    Chief Financial Officer and Secretary	

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
     ---------                          -----                              ----
/s/   Edwin P. Kuhn         President, Chief Executive Officer and
--------------------------     Director (Principal Executive Officer)       March 31, 1998
      Edwin P. Kuhn

/s/  James W. George        Senior Vice President, Chief Financial
--------------------------    Officer and Secretary (Principal
     James W. George          Financial Officer and Principal
                              Accounting Officer)                          March 31, 1998

/s/  Walter E. Smith, Jr.
--------------------------
     Walter E. Smith, Jr.   Director                                       March 31, 1998

/s/  Margaret M. Eisen
--------------------------
     Margaret M. Eisen      Director                                       March 31, 1998

/s/  Robert B. Calhoun, Jr.
--------------------------  Chairman of the Board of Directors and
     Robert B. Calhoun, Jr.   Director
                                                                           March 31, 1998

/s/  Eugene P. Lynch
--------------------------
     Eugene P. Lynch        Director                                       March 31, 1998

/s/  Louis J. Mischianti
--------------------------
     Louis J. Mischianti    Director                                       March 31, 1998

/s/  Rolf H. Towe
--------------------------
     Rolf H. Towe           Director                                       March 31, 1998

/s/  Harrison T. Bubb
--------------------------
     Harrison T. Bubb       Director                                       March 31, 1998	

61

EXHIBIT INDEX

Exhibit                            Exhibit                             Page
Number
-------- ----------------------------------------------------------  ---------
   3.1   Restated Certificate of Incorporation of the Company.......     (a)

   3.2   Restated Certificate of Incorporation of National
         Auto/Truckstops, Inc.......................................

   3.3   Restated Certificate of Incorporation of TA Operating
         Corporation................................................

   3.4   Second Amended and Restated By-laws of the Company.........

   3.5   Amended and Restated By-laws of National Auto/Truckstops,
         Inc........................................................

   3.6   Amended and Restated By-laws of TA Operating Corporation...

   4.1   Indenture, dated March 27, 1997, among the Company, TA,
         National and Fleet National Bank as Trustee ...............    (a)

   4.2   Exchange and Registration Rights Agreement, dated March
         27, 1997, among the Company, the TA Subsidiary, the
         National Subsidiary and Chase Securities, Inc..............    (a)

   4.3   Form of Face of Initial Security (included in Exhibit 4.1
         as Exhibit A)..............................................    (a)

   4.4   Form of Face of Exchange Security (included in Exhibit 4.1
         as Exhibit B)..............................................    (a)

   4.5   Supplemental Indenture, dated March 1, 1998, among the
         Company, TA, National, TA Travel and State Street Bank and
         Trust Company as Trustee

   9.1   Voting Trust Agreement, dated April 14, 1993, among the
         Company, the Voting Trustee and the Operator Stockholders
         named therein..............................................    (a)

   9.2   Amendment No. 1 to Voting Trust Agreement, dated November
         29, 1993, among the Company, the Voting Trustee and the
         Operator Stockholders......................................    (a)

   9.3   Amendment No. 2 to Voting Trust Agreement, dated March 6,
         1997, among the Company, the Voting Trustee and the
         Operator Stockholders......................................    (a)

  10.1   Amended and Restated Registration Agreement among the          (a)
         Company, National I, National II, National III, Clipper
         Truckstops, L.P., Clipper/Merchant, Olympus, Barclays
         Bank, Barclays Mellon Bank, N.A. as Trustee for First
         Plaza, UBS, Phoenix  Insurance Company and Travelers dated
         as of December 10, 1993....................................    (a)

  10.2*  1993 Stock Incentive Plan of the Company...................    (a)

  10.3*  Form of the Company's 1993 Stock Incentive
         Plan--Nonqualified Stock Option Agreement--National Awards.    (a)

  10.4*  Form of the Company's 1993 Stock Incentive
         Plan--Nonqualified Stock Option Agreement--TA Awards.......    (a)

                                       i	

  10.5*  Termination, Consulting and Release Agreement, dated as of
         January 17, 1997, among the Company, National and C.
         William Osborne............................................    (a)

  10.7   Purchase Agreement, dated March 24, 1997, among the
         Company, the TA Subsidiary, the National Subsidiary and
         Chase Securities, Inc......................................    (a)

  10.8   Credit Agreement, dated as of March 21, 1997, among the
         Company, the Chase Manhattan Bank as agent, fronting bank
         and swingline lender and the Lenders party thereto.........    (a)

  10.9   Waiver No. 1 and Agreement, dated March 1, 1998, to the
         Credit Agreement, dated March 21, 1997, among the Company,
         The Chase Manhattan Bank and the Lenders...................    (a)

 10.10   Senior Note Exchange Agreement as of March 21, 1997, among
         the Company,  TA, National and the Noteholders listed on
         Schedule 1 thereto.........................................    (a)

 10.11   Amendment and Waiver Agreement dated as of March 1, 1998,
         amending the Senior Note Exchange Agreement, dated March
         21, 1997...................................................    (a)

 10.12   Limited Liability Company Agreement of TABB, adopted as of
         November 15, 1995, between the TA Subsidiary and Burns
         Bros., Inc.................................................    (a)

 10.13*  Stockholders' Agreement, dated as of March 6, 1996, among
         the Company, the voting trust certificate holders named
         therein, the Voting Trustee, the management stockholders
         of the Company named therein, the additional stockholders
         named therein, Clipper, National I, National II, National
         III and Clipper/Merchant...................................    (a)

 10.14*  Form of Executive Employment Agreement.....................

 10.15   Schedule of Executive Employment Agreements omitted
         pursuant to Instruction 2 to Item 601 of Regulation S-K....

 10.16*  1997 Stock Incentive Plan of the Company..................    (b)

 10.17*  Form of Company's 1997 Stock Incentive Plan - Nonqualified
         Stock Option Agreement.....................................

 10.18*  Form of Management Subscription Agreement..................

 10.19*  Schedule of Management Subscription Agreements omitted
         pursuant to Instruction 2 to Item 601 of Regulation S-K....

    21   List of Subsidiaries of the Company........................

  27.1   Financial Data Schedule....................................

  27.2   Restated Financial Data Schedules..........................

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

(a) Incorporated herein by reference to exhibits filed with the Company's Registration Statement on Form S-4 (File No. 333-26497) effective July 17, 1997.
ii

(b) Incorporated herein by reference to an exhibit filed with the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1997.
* Executive compensation plans.
iii

EXHIBIT 3.2
RESTATED CERTIFICATE OF INCORPORATION
of
NATIONAL AUTO/TRUCKSTOPS, INC.
This Restated Certificate of Incorporation of National Auto/Truckstops, Inc. was duly adopted in accordance with the provisions of Sections 242 and 245 of the Delaware General Corporation Law. The original Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on October 29, 1992 under the name National Auto/Truckstops, Inc.
1. NAME. The name of the corporation is National Auto/Truckstops, Inc. (the "Corporation").
2. ADDRESS; REGISTERED OFFICE AND AGENT. The address of the Corporation's registered office is 1209 Orange Street, City of Wilmington, County of New Castle, State of Delaware; and its registered agent at such address is The Corporation Trust Company.
3. PURPOSES. The purpose of the Corporation is to engage in, carry on and conduct any lawful act or activity for which corporations may be organized under the Delaware General Corporation Law.
4. NUMBER OF SHARES. The total number of shares of stock that the Corporation shall have authority to issue is: one thousand (1,000), all of which shall be shares of Common Stock of the par value of one cent ($.01) each.

5. NAME AND ADDRESS OF INCORPORATOR. The name and mailing address of the incorporator are: James T. Janover, 1285 Avenue of the Americas, New York, New York 10019-6064.
6. ELECTION OF DIRECTORS. Members of the Board of Directors may be elected either by written ballot or by voice vote.
7. LIMITATION OF LIABILITY. No Director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a Director, except for liability (a) for any breach of the Director's duty of loyalty to the Corporation or its stockholders, (b) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (c) under Section 174 of the Delaware General Corporation Law or (d) for any transaction from which the director derived any improper personal benefits.
Any repeal or modification of the foregoing paragraph by the stockholder of the Corporation shall not adversely affect any right or protection of a Director of the Corporation existing at the time of such repeal or modification.

8. INDEMNIFICATION.
8.1 To the extent not prohibited by law, the Corporation shall indemnify any person who is or was made, or threatened to be made, a party to any threatened, pending or completed action, suit or proceeding (a "Proceeding"), whether civil, criminal, administrative or investigative, including, without limitation, an action by or in the right of the Corporation to procure a judgment in its favor, by reason of the fact that such person, or a person of whom such person is the legal representative, is or was a director or officer of the Corporation, or at the request of the Corporation, is or was serving as a director or officer of any other corporation or in a capacity with comparable authority or responsibilities for any partnership, joint venture, trust, employee benefit plan or other enterprise (an "Other Entity"), against judgments, fines, penalties, excise taxes, amounts paid in settlement and costs, charges and expenses (including attorneys' fees, disbursements and other charges). Persons who are not directors or officers of the Corporation (or otherwise entitled to indemnification pursuant to the preceding sentence) may be similarly indemnified in respect of service to the Corporation or to an Other Entity at the request of the Corporation to the extent the Board at any time specifies that such persons are entitled to the benefits of this Section 8.

8.2 The Corporation shall, from time to time, reimburse or advance to any Director or officer or other person entitled to indemnification hereunder the funds necessary for payment of expenses, including attorneys' fees and disbursements, incurred in connection with any Proceeding, in advance of the final disposition of such Proceeding; PROVIDED, HOWEVER, that, if required by the Delaware General Corporation Law, such expenses incurred by or on behalf of any Director or officer or other person may be paid in advance of the final disposition of a Proceeding only upon receipt by the Corporation of an undertaking, by or on behalf of such Director or officer (or other person indemnified hereunder), to repay any such amount so advanced if it shall ultimately be determined by final judicial decision from which there is no further right of appeal that such Director, officer or other person is not entitled to be indemnified for such expenses.
8.3 The rights to indemnification and reimbursement or advancement of expenses provided by, or granted pursuant to, this Section 8 shall not be deemed exclusive of any other rights to which a person seeking indemnification or reimbursement or advancement of expenses may have or hereafter be entitled under any statute, this Certificate of Incorporation, the By-laws of the Corporation (the "By-laws"), any agreement, any vote of stockholders or disinterested Directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office.

8.4 The rights to indemnification and reimbursement or advancement of expenses provided by, or granted pursuant to, this Section 8 shall continue as to a person who has ceased to be a Director or officer (or other person indemnified hereunder) and shall inure to the benefit of the executors, administrators, legatees and distributees of such person.
8.5 The Corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a Director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of an Other Entity, against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person's status as such, whether or not the Corporation would have the power to indemnify such person against such liability under the provisions of this Section 8, the By-laws or under Section 145 of the Delaware General Corporation Law or any other provision of law.
8.6 The provisions of this Section 8 shall be a contract between the Corporation, on the one hand, and each Director and officer who serves in such capacity at any time which this Section 8 is in effect and any other person indemnified hereunder, on the other hand, pursuant to which the Corporation and each such Director, officer, or other person intend to be legally bound. No repeal or modification of this Section 8 shall affect any rights or obligations with respect to any state of facts then or theretofore existing or thereafter arising or any proceeding theretofore or thereafter brought or threatened based in whole or in part upon any such state of facts.

8.7 The right to indemnification and reimbursement or advancement of expenses provided by, or granted pursuant to, this Section 8 shall be enforceable by any person entitled to such indemnification or reimbursement or advancement of expenses in any court of competent jurisdiction. The burden of proving that such indemnification or reimbursement or advancement of expenses is not appropriate shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, its independent legal counsel and its stockholders) to have made a determination prior to the commencement of such action that such indemnification or reimbursement or advancement of expenses is proper in the circumstances nor an actual determination by the Corporation (including its Board of Directors, its independent legal counsel and its stockholders) that such person is not entitled to such indemnification or reimbursement or advancement of expenses shall constitute a defense to the action or create a presumption that such person is not so entitled. Such a person shall also be indemnified for any expenses incurred in connection with successfully establishing his or her right to such indemnification or reimbursement or advancement of expenses, in whole or in part, in any such proceeding.
8.8 Any Director or officer of the Corporation serving in any capacity (a) another corporation of which a majority of the shares entitled to vote in the election of its directors is held, directly or indirectly, by the Corporation or (b) any employee benefit plan of the Corporation or any corporation referred to in clause (a) shall be deemed to be doing so at the request of the Corporation.

8.9 Any person entitled to be indemnified or to reimbursement or advancement of expenses as a matter of right pursuant to this Section 8 may elect to have the right to indemnification or reimbursement or advancement of expenses interpreted on the basis of the applicable law in effect at the time of the occurrence of the event or events giving rise to the applicable Proceeding, to the extent permitted by law, or on the basis of the applicable law in effect at the time such indemnification or reimbursement or advancement of expenses is sought. Such election shall be made, by a notice in writing to the Corporation, at the time indemnification or reimbursement or advancement of expenses is sought; PROVIDED, HOWEVER, that if no such notice is given, the right to indemnification or reimbursement or advancement of expenses shall be determined by the law in effect at the time indemnification or reimbursement or advancement of expenses is sought.
9. ADOPTION, AMENDMENT AND/OR REPEAL OF BY-LAWS. The Board of Directors may from time to time make, alter or repeal the By-laws of the Corporation; PROVIDED, HOWEVER, that any By-laws made, amended or repealed by the Board of Directors may be amended or repealed, and any By-laws may be made, by the stockholders of the Corporation.
WITNESS the signature of this Certificate this 27th day of March, 1998.

/s/ EDWIN P. KUHN
------------------------------------------
Name:  Edwin P. Kuhn
Title: President and Chief Executive Officer	

EXHIBIT 3.3
RESTATED CERTIFICATE OF INCORPORATION
of
TA OPERATING CORPORATION
This Restated Certificate of Incorporation of TA Operating Corporation was duly adopted in accordance with the provisions of Sections 242 and 245 of the Delaware General Corporation Law. The original Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on July 8, 1993 under the name T.S. Network Corp. A Restated Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on December 10, 1993, under the name TA Operating Corporation. A further Restated Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on March 25, 1997, under the name TA Operating Corporation.
1. NAME. The name of the corporation is TA Operating Corporation (the "Corporation").
2. ADDRESS; REGISTERED OFFICE AND AGENT. The address of the Corporation's registered office is 1209 Orange Street, City of Wilmington, County of New Castle, State of Delaware; and its registered agent at such address is The Corporation Trust Company.
3. PURPOSES. The purpose of the Corporation is to engage in, carry on and conduct any lawful act or activity for which corporations may be organized under the Delaware General Corporation Law.
4. NUMBER OF SHARES. The total number of shares of stock that the Corporation shall have authority to issue is: one thousand (1,000), all of which shall be

shares of Common Stock of the par value of one cent ($.01) each. Each such share shall be entitled to one vote per share.
5. ELECTION OF DIRECTORS. Members of the Board of Directors may be elected either by written ballot or by voice vote.
6. LIMITATION OF LIABILITY. No Director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a Director, except for liability (a) for any breach of the Director's duty of loyalty to the Corporation or its stockholders, (b) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (c) under Section 174 of the Delaware General Corporation Law or (d) for any transaction from which the Director derived any improper personal benefits.
Any repeal or modification of the foregoing paragraph by the stockholders of the Corporation shall not adversely affect any right or protection of a Director of the Corporation existing at the time of such repeal or modification.
2

7. INDEMNIFICATION.
7.1 To the extent not prohibited by law, the Corporation shall indemnify any person who is or was made, or threatened to be made, a party to any threatened, pending or completed action, suit or proceeding (a "Proceeding"), whether civil, criminal, administrative or investigative, including, without limitation, an action by or in the right of the Corporation to procure a judgment in its favor, by reason of the fact that such person, or a person of whom such person is the legal representative, is or was a director or officer of the Corporation, or at the request of the Corporation, is or was serving as a director or officer of any other corporation or in a capacity with comparable authority or responsibilities for any partnership, joint venture, trust, employee benefit plan or other enterprise (an "Other Entity"), against judgments, fines, penalties, excise taxes, amounts paid in settlement and costs, charges and expenses (including attorneys' fees, disbursements and other charges). Persons who are not directors or officers of the Corporation (or otherwise entitled to indemnification pursuant to the preceding sentence) may be similarly indemnified in respect of service to the Corporation or to an Other Entity at the request of the Corporation to the extent the Board at any time specifies that such persons are entitled to the benefits of this Section 7.
3

7.2 The Corporation shall, from time to time, reimburse or advance to any Director or officer or other person entitled to indemnification hereunder the funds necessary for payment of expenses, including attorneys' fees and disbursements, incurred in connection with any Proceeding, in advance of the final disposition of such Proceeding; PROVIDED, HOWEVER, that, if required by the Delaware General Corporation Law, such expenses incurred by or on behalf of any Director or officer or other person may be paid in advance of the final disposition of a Proceeding only upon receipt by the Corporation of an undertaking, by or on behalf of such Director or officer (or other person indemnified hereunder), to repay any such amount so advanced if it shall ultimately be determined by final judicial decision from which there is no further right of appeal that such Director, officer or other person is not entitled to be indemnified for such expenses.
7.3 The rights to indemnification and reimbursement or advancement of expenses provided by, or granted pursuant to, this Section 7 shall not be deemed exclusive of any other rights to which a person seeking indemnification or reimbursement or advancement of expenses may have or hereafter be entitled under any statute, this Certificate of Incorporation, the By-laws of the Corporation (the "By-laws"), any agreement, any vote of stockholders or disinterested Directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office.
4

7.4 The rights to indemnification and reimbursement or advancement of expenses provided by, or granted pursuant to, this Section 7 shall continue as to a person who has ceased to be a Director or officer (or other person indemnified hereunder) and shall inure to the benefit of the executors, administrators, legatees and distributees of such person.
7.5 The Corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a Director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of an Other Entity, against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person's status as such, whether or not the Corporation would have the power to indemnify such person against such liability under the provisions of this Section 7, the By-laws or under Section 145 of the Delaware General Corporation Law or any other provision of law.
7.6 The provisions of this Section 7 shall be a contract between the Corporation, on the one hand, and each Director and officer who serves in such capacity at any time while this Section 7 is in effect and any other person indemnified hereunder, on the other hand, pursuant to which the Corporation and each such Director, officer, or other person intend to be legally bound. No repeal or modification of this Section 7 shall affect any rights or obligations with respect to any state of facts then or
5

theretofore existing or thereafter arising or any proceeding theretofore or thereafter brought or threatened based in whole or in part upon any such state of facts.
7.7 The rights to indemnification and reimbursement or advancement of expenses provided by, or granted pursuant to, this Section 7 shall be enforceable by any person entitled to such indemnification or reimbursement or advancement of expenses in any court of competent jurisdiction. The burden of proving that such indemnification or reimbursement or advancement of expenses is not appropriate shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, its independent legal counsel and its stockholders) to have made a determination prior to the commencement of such action that such indemnification or reimbursement or advancement of expenses is proper in the circumstances nor an actual determination by the Corporation (including its Board of Directors, its independent legal counsel and its stockholders) that such person is not entitled to such indemnification or reimbursement or advancement of expenses shall constitute a defense to the action or create a presumption that such person is not so entitled. Such a person shall also be indemnified for any expenses incurred in connection with successfully establishing his or her right to such indemnification or reimbursement or advancement of expenses, in whole or in part, in any such proceeding.
6

7.8 Any Director or officer of the Corporation serving in any capacity (a) another corporation of which a majority of the shares entitled to vote in the election of its directors is held, directly or indirectly, by the Corporation or (b) any employee benefit plan of the Corporation or any corporation referred to in clause (a) shall be deemed to be doing so at the request of the Corporation.
7.9 Any person entitled to be indemnified or to reimbursement or advancement of expenses as a matter of right pursuant to this Section 7 may elect to have the right to indemnification or reimbursement or advancement of expenses interpreted on the basis of the applicable law in effect at the time of the occurrence of the event or events giving rise to the applicable Proceeding, to the extent permitted by law, or on the basis of the applicable law in effect at the time such indemnification or reimbursement or advancement of expenses is sought. Such election shall be made, by a notice in writing to the Corporation, at the time indemnification or reimbursement or advancement of expenses is sought; PROVIDED, HOWEVER, that if no such notice is given, the right to indemnification or reimbursement or advancement of expenses shall be determined by the law in effect at the time indemnification or reimbursement or advancement of expenses is sought.
8. AMENDMENT AND/OR REPEAL OF BY-LAWS. The Board may from time to time adopt, amend or repeal the By-laws; PROVIDED, HOWEVER, that any By-laws adopted or amended by the Board may be amended or repealed, and any By-laws may be adopted,
7

by a vote of the stockholders having at least a majority in voting power of the then issued and outstanding shares of capital stock of the Corporation.
WITNESS the signature of this Certificate this 27th day of March, 1998.

/s/ EDWIN P. KUHN
------------------------------------
Name:  Edwin P. Kuhn
Title:   President and Chief Executive Officer	

8

EXHIBIT 3.4
SECOND AMENDED AND RESTATED BY-LAWS
of
TRAVELCENTERS OF AMERICA, INC.
(A Delaware Corporation)

ARTICLE 1
DEFINITIONS
As used in these By-laws, unless the context otherwise requires, the term:
1.1 "Assistant Secretary" means an Assistant Secretary of the Corporation.
1.2 "Assistant Treasurer" means an Assistant Treasurer of the Corporation.
1.3 "Board" means the Board of Directors of the Corporation.
1.4 "Business Day" means any day other than a Saturday, Sunday or other day on which banking institutions are authorized by law to close in the City of New York.
1.5 "By-laws" means these by-laws of the Corporation, as amended from time to time.
1

1.6 "Certificate of Incorporation" means the certificate of incorporation of the Corporation, as amended, supplemented or restated from time to time.
1.7 "Chairman" means the Chairman of the Board of Directors of the Corporation.
1.8 "Chief Executive Officer" means the Chief Executive Officer of the Corporation.
1.9 "Chief Financial Officer" means the Chief Financial Officer of the Corporation.
1.10 "Corporation" means TravelCenters of America, Inc.
1.11 "Directors" means Directors of the Corporation.
1.12 "Entire Board" means the total number of Directors that the Corporation would have if there were no vacancies.
1.13 "General Corporation Law" means the General Corporation Law of the State of Delaware, as amended from time to time.
1.14 "Office of the Corporation" means the executive office of the Corporation, anything in Section 131 of the General Corporation Law to the contrary notwithstanding.
1.15 "President" means the President of the Corporation.
1.16 "Secretary" means the Secretary of the Corporation.
1.17 "Stockholders" means stockholders of the Corporation.
1.18 "Vice President" means a Vice President of the Corporation.
2

ARTICLE 2
STOCKHOLDERS
2.1 PLACE OF MEETINGS. Every meeting of stockholders shall be held at the office of the Corporation or at such other place within or without the State of Delaware as shall be specified or fixed in the notice of such meeting or in the waiver of notice thereof.
2.2 ANNUAL MEETING. A meeting of stockholders shall be held annually for the election of Directors and the transaction of other business at such hour and on such business day in April or as may be determined by the Board and designated in the notice of meeting.
2.3 DEFERRED MEETING FOR ELECTION OF DIRECTORS, ETC. If the annual meeting of stockholders for the election of Directors and the transaction of other business is not held within the month specified in Section 2.2 hereof, the Board shall call a meeting of stockholders for the election of Directors and the transaction of other business as soon thereafter as convenient.
2.4 OTHER SPECIAL MEETINGS. A special meeting of stockholders, unless otherwise prescribed by statute, may be called at any time by the Board, the Chairman of the Board, the Chief Executive Officer, or the Secretary. At any special meeting of stockholders only such business may be transacted as is related to the purpose or purposes of such meeting set forth in the notice thereof given pursuant to Section 2.6 hereof or in any waiver of notice thereof given pursuant to Section 2.7 hereof.
2.5 FIXING RECORD DATE. For the purpose of (a) determining the stockholders entitled (i) to notice of or to vote at any meeting of stockholders or any adjournment thereof, (ii) to express consent to corporate action in writing without a meeting or (iii) to
3

receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock; or (b) any other lawful action, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date was adopted by the Board and which record date shall (x) in the case of clause (a)(i) above, not be more than 60 nor less than 10 days before the date of such meeting, (y) in the case of clause (a)(ii) above, not be more than 10 days after the date upon which the resolution fixing the record date was adopted by the Board and (z) in the case of clause (a)(iii) or (b) above, not be more than 60 days prior to such action. If no such record date is fixed:
2.5.1 the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held;
2.5.2 the record date for determining stockholders entitled to express consent to corporate action in writing without a meeting, when no prior action by the Board is required under the General Corporation Law, shall be the first day on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded; and when prior action by the Board is required under the General Corporation Law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the
4

close of business on the date on which the Board adopts the resolution taking such prior action; and
2.5.3 the record date for determining stockholders for any purpose other than those specified in Sections 2.5.1 and 2.5.2 shall be at the close of business on the day on which the Board adopts the resolution relating thereto.
When a determination of stockholders entitled to notice of or to vote at any meeting of stockholders has been made as provided in this Section 2.5, such determination shall apply to any adjournment thereof unless the Board fixes a new record date for the adjourned meeting. Delivery made to the Corporation's registered office in accordance with Section 2.5.2 shall be by hand or by certified or registered mail, return receipt requested.
2.6 NOTICE OF MEETINGS OF STOCKHOLDERS. Except as otherwise provided in Sections 2.5 and 2.7 hereof, whenever under the provisions of any statute, the Certificate of Incorporation or these By-laws, stockholders are required or permitted to take any action at a meeting, written notice shall be given stating the place, date and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Unless otherwise provided by any statute, the Certificate of Incorporation or these By-laws, a copy of the notice of any meeting shall be given, personally or by mail, not less than ten nor more than sixty days before the date of the meeting, to each stockholder entitled to notice of or to vote at such meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail, with postage prepaid, directed to the stockholder at his or her address as it appears on the records of the Corporation. An affidavit of the Secretary or an Assistant Secretary or of
5

the transfer agent of the Corporation that the notice required by this
Section 2.6 has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. When a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken, and at the adjourned meeting any business may be transacted that might have been transacted at the meeting as originally called. If, however, the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.
2.7 WAIVERS OF NOTICE. Whenever the giving of any notice is required by statute, the Certificate of Incorporation or these By-laws, a waiver thereof, in writing, signed by the stockholder or stockholders entitled to said notice, whether before or after the event as to which such notice is required, shall be deemed equivalent to notice. Attendance by a stockholder at a meeting shall constitute a waiver of notice of such meeting except when the stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting (and so objects), to the transaction of any business on the ground that the meeting has not been lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in any written waiver of notice unless so required by statute, the Certificate of Incorporation or these By-laws.
2.8 LIST OF STOCKHOLDERS. The Secretary shall prepare and make, or cause to be prepared and made, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and
6

showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, the stockholder's agent, or attorney, at the stockholder's expense, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder (or agent or attorney of a stockholder) who is present. The Corporation shall maintain the stockholder list in written form or in another form capable of conversion into written form within a reasonable time. The stock ledger shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list of stockholders or the books of the Corporation, or to vote in person or by proxy at any meeting of stockholders.
2.9 QUORUM OF STOCKHOLDERS; ADJOURNMENT. Except as otherwise provided by any statute, the Certificate of Incorporation or these By-laws, the holders of a majority of all outstanding shares of stock entitled to vote at any meeting of stockholders, present in person or represented by proxy, shall constitute a quorum for the transaction of any business at such meeting; PROVIDED, HOWEVER, that in respect of any matter on which stockholders vote by class, a quorum shall exist as to such matter if and only if a majority of the outstanding shares of the class or classes of stock entitled to vote as a class thereon is present in person or represented by proxy. When a quorum is once present to organize a meeting of stockholders, it is not broken by the subsequent withdrawal of any stockholders. The holders of a majority of the shares of stock present in person or
7

represented by proxy at any meeting of stockholders, including an adjourned meeting, whether or not a quorum is present, may adjourn such meeting to another time and place. Shares of its own stock belonging to the Corporation or to another corporation, if a majority of the shares entitled to vote in the election of Directors of such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes; PROVIDED, HOWEVER, that the foregoing shall not limit the right of the Corporation to vote stock, including but not limited to its own stock, held by it in a fiduciary capacity.
2.10 VOTING; PROXIES. Unless otherwise provided in the Certificate of Incorporation, every stockholder of record shall be entitled at every meeting of stockholders to one vote for each share of capital stock standing in his or her name on the record of stockholders determined in accordance with Section 2.5 hereof. If the Certificate of Incorporation provides for more or less than one vote for any share on any matter, each reference in the By-laws or the General Corporation Law to a majority or other proportion of stock or votes with respect to stock shall refer to such majority or other proportion of the votes of such stock. The provisions of Sections 212 and 217 of the General Corporation Law shall apply in determining whether any shares of capital stock may be voted and the persons, if any, entitled to vote such shares; but the Corporation shall be protected in assuming that the persons in whose names shares of capital stock stand on the stock ledger of the Corporation are entitled to vote such shares. At any meeting of stockholders (at which a quorum was present to organize the meeting), all matters, except as otherwise provided by statute or by the Certificate of Incorporation or by these By-laws, shall be decided by a majority of the votes cast at such meeting by
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the holders of shares present in person or represented by proxy and entitled to vote thereon, whether or not a quorum is present when the vote is taken. All elections of Directors shall be by written ballot. In voting on any other question on which a vote by ballot is required by law or is demanded by any stockholder entitled to vote, the voting shall be by ballot. Each ballot shall be signed by the stockholder voting or the stockholder's proxy and shall state the number of shares voted. On all other questions, the voting may be VIVA VOCE. Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for such stockholder by proxy. The validity and enforceability of any proxy shall be determined in accordance with Section 212 of the General Corporation Law. A stockholder may revoke any proxy that is not irrevocable by attending the meeting and voting in person or by filing an instrument in writing revoking the proxy or by delivering a proxy in accordance with applicable law bearing a later date to the Secretary.
2.11 VOTING PROCEDURES AND INSPECTORS OF ELECTION AT MEETINGS OF STOCKHOLDERS. The Board, in advance of any meeting of stockholders, may appoint one or more inspectors to act at the meeting and make a written report thereof. The Board may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting, the person presiding at the meeting may appoint, and on the request of any stockholder entitled to vote thereat shall appoint, one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her
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ability. The inspectors shall (a) ascertain the number of shares outstanding and the voting power of each, (b) determine the shares represented at the meeting and the validity of proxies and ballots, (c) count all votes and ballots, (d) determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors, and (e) certify their determination of the number of shares represented at the meeting and their count of all votes and ballots. The inspectors may appoint or retain other persons or entities to assist the inspectors in the performance of their duties. Unless otherwise provided by the Board, the date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting shall be determined by the person presiding at the meeting and shall be announced at the meeting. No ballot, proxies or votes, or any revocation thereof or change thereto, shall be accepted by the inspectors after the closing of the polls unless the Court of Chancery of the State of Delaware upon application by a stockholder shall determine otherwise.
2.12 ORGANIZATION. At each meeting of stockholders, the Chairman, or in the absence of the Chairman the Chief Executive Officer, or in the absence of the Chief Executive Officer the President, or in the absence of the President a Vice President and in case more than one Vice President shall be present, then a Vice President designated by the Board (or in the absence of any such designation, the most senior Vice President, based on age, present), shall act as chairman of the meeting. The Secretary, or in his or her absence one of the Assistant Secretaries, shall act as secretary of the meeting. In case none of the officers above designated to act as chairman or secretary of the meeting, respectively, shall be present, a chairman or a secretary of the meeting, as the case may be, shall be chosen by a majority of the votes cast at such meeting by the holders of
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shares of capital stock present in person or represented by proxy and entitled to vote at the meeting.
2.13 ORDER OF BUSINESS. The order of business at all meetings of stockholders shall be as determined by the chairman of the meeting, but the order of business to be followed at any meeting at which a quorum is present may be changed by a majority of the votes cast at such meeting by the holders of shares of capital stock present in person or represented by proxy and entitled to vote at the meeting.
2.14 WRITTEN CONSENT OF STOCKHOLDERS WITHOUT A MEETING. Unless otherwise provided in the Certificate of Incorporation, any action required by the General Corporation Law to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered (by hand or by certified or registered mail, return receipt requested) to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Every written consent shall bear the date of signature of each stockholder who signs the consent and no written consent shall be effective to take the corporate action referred to therein unless, within 60 days of the earliest dated consent delivered in the manner required by this
Section 2.14, written consents signed by a sufficient number of holders to take action are delivered to the Corporation as aforesaid. Prompt notice of the taking of
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the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.
ARTICLE 3
DIRECTORS
3.1 GENERAL POWERS. Except as otherwise provided in the Certificate of Incorporation, the business and affairs of the Corporation shall be managed by or under the direction of the Board. The Board may adopt such rules and regulations, not inconsistent with the Certificate of Incorporation or these By-laws or applicable laws, as it may deem proper for the conduct of its meetings and the management of the Corporation. In addition to the powers expressly conferred by these By-laws, the Board may exercise all powers and perform all acts that are not required, by these By-laws or the Certificate of Incorporation or by statute, to be exercised and performed by the stockholders.
3.2 NUMBER; QUALIFICATION; TERM OF OFFICE. The number of Directors shall be fixed from time to time by action of the Board. Directors need not be stockholders and shall hold office until a successor is elected and qualified or until the Director's death, resignation or removal.
3.3 ELECTION. Directors shall be elected as provided in the Certificate of Incorporation.
3.4 NEWLY CREATED DIRECTORSHIPS AND VACANCIES. Vacancies on the Board that arise for any reason, including vacancies resulting from an increase in the number of Directors, may be filled by the affirmative vote of a majority of the entire Board,
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although less than quorum, or by a sole remaining Director, and the Director(s) so chosen shall hold office for a term expiring the next following annual meeting of Stockholders, or, in each case until their respective successors are duly elected and qualify, or until the respective Directors' earlier death, resignation or removal.
3.5 RESIGNATION. Any Director may resign at any time by written notice to the Corporation. Such resignation shall take effect at the time therein specified, and, unless otherwise specified in such resignation, the acceptance of such resignation shall not be necessary to make it effective.
3.6 REMOVAL. Any one or more (or all) of the Directors may be removed, at any time, by the stockholders having at least a majority in voting power eligible to elect Directors in accordance with the Certificate of Incorporation.
3.7 COMPENSATION. Each Director who is not an employee of the Corporation, in consideration of his or her service as such, shall be entitled to receive from the Corporation approximately $20,000 per annum plus approximately $1,500 for attendance in person (and $750 for attendance by telephone) at each Directors' meeting, together with reimbursement for the reasonable out-of-pocket expenses, if any, incurred by such Director in connection with the performance of his or her duties. Each Director who is not an employee of the Corporation who shall serve as a member of any committee of Directors in consideration of serving as such shall be entitled to such additional amount per annum or such fees for attendance at committee meetings, or both, as the Board may from time to time determine, together with reimbursement for the reasonable out-of-pocket expenses, if any, incurred by such Director in the performance of his or her duties. Nothing contained in this Section 3.7 shall preclude any Director from serving the
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Corporation or its subsidiaries in any other capacity and receiving proper compensation therefor.
3.8 TIMES AND PLACES OF MEETINGS. The Board may hold meetings, both regular and special, either within or without the State of Delaware. The times and places for holding meetings of the Board may be fixed from time to time by resolution of the Board or (unless contrary to a resolution of the Board) in the notice of the meeting.
3.9 ANNUAL MEETINGS. On the day when and at the place where the annual meeting of stockholders for the election of Directors is held, and as soon as practicable thereafter, the Board may hold its annual meeting, without notice of such meeting, for the purposes of organization, the election of officers and the transaction of other business. The annual meeting of the Board may be held at any other time and place specified in a notice given as provided in Section 3.11 hereof for special meetings of the Board or in a waiver of notice thereof.
3.10 REGULAR MEETINGS. Regular meetings of the Board may be held without notice at such times and at such places as shall from time to time be determined by the Board.
3.11 SPECIAL MEETINGS. Special meetings of the Board may be called by the Chairman, the Chief Executive Officer or the Secretary or by any two or more Directors then serving on at least two Business Days' notice to each Director given by one of the means specified in Section 3.14 hereof. Special meetings shall be called by the Chairman, Chief Executive Officer or Secretary in like manner and on like notice on the written request of any two or more of the Directors then serving.
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3.12 TELEPHONE MEETINGS. Any Director or member of any committee designated by the Board may participate, at his or her election, in any meeting of the Board or of such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this
Section 3.12 shall constitute presence in person at such meeting. Each regular or special meeting of the Board or any committee thereof shall have adequate conference telephone or similar communications equipment available to allow any Directors or committee members who choose to participate by telephone to do so in accordance with this Section 3.12.
3.13 ADJOURNED MEETINGS. A majority of the Directors present at any meeting of the Board, including an adjourned meeting, whether or not a quorum is present, may adjourn such meeting to another time and place. At least two Business Days' notice of any adjourned meeting of the Board shall be given to each Director whether or not present at the time of the adjournment shall be given by one of the means specified in Section 3.14 hereof. Any business may be transacted at an adjourned meeting that might have been transacted at the meeting as originally called.
3.14 NOTICE PROCEDURE. Subject to Sections 3.11 and 3.17 hereof, whenever, under the provisions of any statute, the Certificate of Incorporation or these By-laws, notice is required to be given to any Director, such notice shall be deemed given effectively if given in person or by telephone, by hand delivery, or by telegram, telex, telecopy or similar means addressed to such Director at such Director's address as it appears on the records of the Corporation.
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3.15 WAIVER OF NOTICE. Whenever the giving of any notice is required by statute, the Certificate of Incorporation or these By-laws, a waiver thereof, in writing, signed by the person or persons entitled to said notice, whether before or after the event as to which such notice is required, shall be deemed equivalent to notice. Attendance by a person at a meeting shall constitute a waiver of notice of such meeting except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business on the ground that the meeting has not been lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Directors or a committee of Directors need be specified in any written waiver of notice unless so required by statute, the Certificate of Incorporation or these By-laws.
3.16 ORGANIZATION. At each meeting of the Board, the Chairman, or in the absence of the Chairman the Chief Executive Officer, or in the absence of the Chief Executive Officer, the President, or in the absence of the President, a chairman chosen by a majority of the Directors present, shall preside. The Secretary shall act as secretary at each meeting of the Board. In case the Secretary shall be absent from any meeting of the Board, an Assistant Secretary shall perform the duties of secretary at such meeting; and in the absence from any such meeting of the Secretary and all Assistant Secretaries, the person presiding at the meeting may appoint any person to act as secretary of the meeting.
3.17 QUORUM OF DIRECTORS. The presence in person of a majority of the entire Board shall be necessary and sufficient to constitute a quorum for the transaction of business at any meeting of the Board, but a majority of a smaller number may adjourn any such meeting to a later date.
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3.18 ACTION BY MAJORITY VOTE. Except as otherwise expressly required by statute, the Certificate of Incorporation or the By-laws, the act of a majority of the Directors present at a meeting at which a quorum is present shall be the act of the Board.
3.19 ACTION WITHOUT MEETING. Unless otherwise restricted by the Certificate of Incorporation or these By-laws, any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting if all Directors or members of such committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board or committee.
ARTICLE 4
COMMITTEES OF THE BOARD
The Board may, by resolution passed by a vote of the entire Board, designate one or more committees, each committee to consist of one or more of the Directors of the Corporation. The Board may designate one or more Directors as alternate members of any committee to replace absent or disqualified members at any meeting of such committee. If a member of a committee shall be absent from any meeting, or disqualified from voting thereat, the remaining member or members present and not disqualified from voting, whether or not such member or members constitute a quorum, may, by a unanimous vote, appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in a resolution of the Board passed as aforesaid, shall have and may
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exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be impressed on all papers that may require it, but no such committee shall have the power or authority in reference to the following matters: (i) approving or adopting, or recommending to the stockholders. any action or matter expressly required by the GCL to be submitted to stockholders for approval or (ii) adopting, amending or repealing any by-law of the Corporation. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board. Unless otherwise specified in the resolution of the Board designating a committee, at all meetings of such committee a majority of the total number of members of the committee shall constitute a quorum for the transaction of business, and the vote of a majority of the members of the committee present at any meeting at which there is a quorum shall be the act of the committee. Each committee shall keep regular minutes of its meetings. Unless the Board otherwise provides, each committee designated by the Board may make, alter and repeal rules for the conduct of its business. In the absence of such rules each committee shall conduct its business in the same manner as the Board conducts its business pursuant to Article 3 of these By-laws.
ARTICLE 5
OFFICERS
5.1 POSITIONS. The officers of the Corporation shall be a Chairman, a Chief Executive Officer, a President, a Secretary, a Chief Financial Officer and such other officers as the Board may appoint, including one or more Vice Presidents and one or
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more Assistant Secretaries and Assistant Treasurers, who shall exercise such powers and perform such duties as shall be determined from time to time by the Board. The Board may designate one or more Vice Presidents as Executive Vice Presidents and may use descriptive words or phrases to designate the standing, seniority or areas of special competence of the Vice Presidents elected or appointed by it. Any number of offices may be held by the same person unless the Certificate of Incorporation or these By-laws otherwise provide.
5.2 APPOINTMENT. The officers of the Corporation shall be chosen by the Board annually or at such other time or times as the Board shall determine.
5.3 COMPENSATION. The compensation of all officers of the Corporation shall be fixed by the Board. No officer shall be prevented from receiving a salary or other compensation by reason of the fact that the officer is also a Director.
5.4 TERM OF OFFICE. Each officer of the Corporation shall hold office until such officer's successor is chosen and qualifies or until such officer's earlier death, resignation or removal. Any officer may resign at any time upon written notice to the Corporation. Such resignation shall take effect at the date of receipt of such notice or at such later time as is therein specified, and, unless otherwise specified, the acceptance of such resignation shall not be necessary to make it effective. The resignation of an officer shall be without prejudice to the contract rights of the Corporation, if any. Any officer elected or appointed by the Board may be removed at any time, with or without cause, by vote of a majority of the entire Board. Any vacancy occurring in any office of the Corporation shall be filled by the Board. The removal of an officer without cause shall
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be without prejudice to the officer's contract rights, if any. The election or appointment of an officer shall not of itself create contract rights.
5.5 FIDELITY BONDS. The Corporation may secure the fidelity of any or all of its officers or agents by bond or otherwise.
5.6 CHAIRMAN. The Chairman shall preside at all meetings of the Board and shall exercise such powers and perform such other duties as shall be determined from time to time by the Board.
5.7 CHIEF EXECUTIVE OFFICER. The Chief Executive Officer shall be the Chief Executive Officer of the Corporation and shall have general supervision over the business of the Corporation, subject, however, to the control of the Board and of any duly authorized committee of Directors. The Chief Executive Officer shall preside at all meetings of the stockholders and at all meetings of the Board at which the Chairman is not present. All officers shall be subject to the direction of the Chief Executive Officer. The Chief Executive Officer may sign and execute in the name of the Corporation deeds, mortgages, bonds, contracts and other instruments except in cases in which the signing and execution thereof shall be expressly delegated by the Board or by these By-laws to some other officer or agent of the Corporation or shall be required by statute otherwise to be signed or executed and, in general, the Chief Executive Officer shall perform all duties incident to the office of Chief Executive Officer of a corporation and such other duties as may from time to time be assigned to the Chief Executive Officer by the Board.
5.8 PRESIDENT. At the request of the Chief Executive Officer, or, in the Chief Executive Officer's absence, at the request of the Board, the President shall perform all of the duties of the Chief Executive Officer and, in so performing, shall have all the powers
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of, and be subject to all restrictions upon, the Chief Executive Officer. The President may sign and execute in the name of the Corporation deeds, mortgages, bonds, contracts or other instruments, except in cases in which the signing and execution thereof shall be expressly delegated by the Board or by these By-laws to some other officer or agent of the Corporation, or shall be required by statute otherwise to be signed or executed, and the President shall perform such other duties as from time to time may be assigned to the President by the Board or by the Chief Executive Officer.
5.9 VICE PRESIDENTS. At the request of the President, or in the President's absence, at the request of the Board, the Vice Presidents shall (in such order as may be designated by the Board or, in the absence of any such designation, in order of seniority based on age) perform all of the duties of the President and, in so performing, shall have all of the powers of, and be subject to all restrictions upon, the President. Any Vice President may sign and execute in the name of the Corporation deeds, mortgages, bonds, contracts or other instruments, except in cases in which the signing and execution thereof shall be expressly delegated by the Board or by these By-laws to some other officer or agent of the Corporation, or shall be required by statute otherwise to be signed or executed, and each Vice President shall perform such other duties as from time to time may be assigned to such Vice President by the Board or by the President.
5.10 SECRETARY. The Secretary shall attend all meetings of the Board and of the stockholders and shall record all the proceedings of the meetings of the Board and of the stockholders in a book to be kept for that purpose, and shall perform like duties for committees of the Board, when required. The Secretary shall give, or cause to be given, notice of all special meetings of the Board and of the stockholders and shall perform such
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other duties as may be prescribed by the Board or by the Chief Executive Officer, under whose supervision the Secretary shall be. The Secretary shall have custody of the corporate seal of the Corporation, and the Secretary, or an Assistant Secretary, shall have authority to impress the same on any instrument requiring it, and when so impressed the seal may be attested by the signature of the Secretary or by the signature of such Assistant Secretary. The Board may give general authority to any other officer to impress the seal of the Corporation and to attest the same by such officer's signature. The Secretary or an Assistant Secretary may also attest all instruments signed by the President or any Vice President. The Secretary shall have charge of all the books, records and papers of the Corporation relating to its organization and management, shall see that the reports, statements and other documents required by statute are properly kept and filed and, in general, shall perform all duties incident to the office of Secretary of a corporation and such other duties as may from time to time be assigned to the Secretary by the Board or by the Chief Executive Officer.
5.11 CHIEF FINANCIAL OFFICER. The Chief Financial Officer shall have charge and custody of, and be responsible for, all funds, securities and notes of the Corporation; receive and give receipts for moneys due and payable to the Corporation from any sources whatsoever; deposit all such moneys and valuable effects in the name and to the credit of the Corporation in such depositaries as may be designated by the Board; against proper vouchers, cause such funds to be disbursed by checks or drafts on the authorized depositaries of the Corporation signed in such manner as shall be determined by the Board and be responsible for the accuracy of the amounts of all moneys so disbursed; regularly enter or cause to be entered in books or other records maintained for the purpose
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full and adequate account of all moneys received or paid for the account of the Corporation; have the right to require from time to time reports or statements giving such information as the Chief Financial Officer may desire with respect to any and all financial transactions of the Corporation from the officers or agents transacting the same; render to the Chief Executive Officer or the Board, whenever the Chief Executive Officer or the Board shall require the Chief Financial Officer so to do, an account of the financial condition of the Corporation and of all financial transactions of the Corporation; exhibit at all reasonable times the records and books of account to any of the Directors upon application at the office of the Corporation where such records and books are kept; disburse the funds of the Corporation as ordered by the Board; and, in general, perform all duties incident to the office of Chief Financial Officer of a corporation and such other duties as may from time to time be assigned to the Chief Financial Officer by the Board or the Chief Executive Officer.
5.12 ASSISTANT SECRETARIES AND ASSISTANT TREASURERS. Assistant Secretaries and Assistant Treasurers shall perform such duties as shall be assigned to them by the Secretary or by the Chief Financial Officer, respectively, or by the Board or by the Chief Executive Officer.
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ARTICLE 6
CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.
6.1 EXECUTION OF CONTRACTS. The Board, except as otherwise provided in these By-laws, may prospectively or retroactively authorize any officer or officers, employee or employees or agent or agents, in the name and on behalf of the Corporation, to enter into any contract or execute and deliver any instrument, and any such authority may be general or confined to specific instances, or otherwise limited.
6.2 LOANS. The Board may prospectively or retroactively authorize the Chief Executive Officer or any other officer, employee or agent of the Corporation to effect loans and advances at any time for the Corporation from any bank, trust company or other institution, or from any firm, corporation or individual, and for such loans and advances the person so authorized may make, execute and deliver promissory notes, bonds or other certificates or evidences of indebtedness of the Corporation, and, when authorized by the Board so to do, may pledge and hypothecate or transfer any securities or other property of the Corporation as security for any such loans or advances. Such authority conferred by the Board may be general or confined to specific instances, or otherwise limited.
6.3 CHECKS, DRAFTS, ETC. All checks, drafts and other orders for the payment of money out of the funds of the Corporation and all evidences of indebtedness of the Corporation shall be signed on behalf of the Corporation in such manner as shall from time to time be determined by resolution of the Board.
6.4 DEPOSITS. The funds of the Corporation not otherwise employed shall be deposited from time to time to the order of the Corporation with such banks, trust companies, investment banking firms, financial institutions or other depositaries as the
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Board may select or as may be selected by an officer, employee or agent of the Corporation to whom such power to select may from time to time be delegated by the Board.
ARTICLE 7
STOCK AND DIVIDENDS
7.1 CERTIFICATES REPRESENTING SHARES. The shares of capital stock of the Corporation shall be represented by certificates in such form (consistent with the provisions of Section 158 of the General Corporation Law) as shall be approved by the Board. Such certificates shall be signed by the Chairman, the Chief Executive Officer or a Vice President and by the Secretary or an Assistant Secretary or the Chief Financial Officer or an Assistant Treasurer, and may be impressed with the seal of the Corporation or a facsimile thereof. The signatures of the officers upon a certificate may be facsimiles, if the certificate is countersigned by a transfer agent or registrar other than the Corporation itself or its employee. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon any certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, such certificate may, unless otherwise ordered by the Board, be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue.
7.2 TRANSFER OF SHARES. Transfers of shares of capital stock of the Corporation shall be made only on the books of the Corporation by the holder thereof or by the holder's duly authorized attorney appointed by a power of attorney duly executed and filed with the Secretary or a transfer agent of the Corporation, and on surrender of the
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certificate or certificates representing such shares of capital stock properly endorsed for transfer and upon payment of all necessary transfer taxes. Every certificate exchanged, returned or surrendered to the Corporation shall be marked "Cancelled," with the date of cancellation, by the Secretary or an Assistant Secretary or the transfer agent of the Corporation. A person in whose name shares of capital stock shall stand on the books of the Corporation shall be deemed the owner thereof to receive dividends, to vote as such owner and for all other purposes as respects the Corporation. No transfer of shares of capital stock shall be valid as against the Corporation, its stockholders and creditors for any purpose, except to render the transferee liable for the debts of the Corporation to the extent provided by law, until such transfer shall have been entered on the books of the Corporation by an entry showing from and to whom transferred.
7.3 TRANSFER AND REGISTRY AGENTS. The Corporation may from time to time maintain one or more transfer offices or agents and registry offices or agents at such place or places as may be determined from time to time by the Board.
7.4 LOST, DESTROYED, STOLEN AND MUTILATED CERTIFICATES. The holder of any shares of capital stock of the Corporation shall immediately notify the Corporation of any loss, destruction, theft or mutilation of the certificate representing such shares, and the Corporation may issue a new certificate to replace the certificate alleged to have been lost, destroyed, stolen or mutilated. The Board may, in its discretion, as a condition to the issue of any such new certificate, require the owner of the lost, destroyed, stolen or mutilated certificate, or his or her legal representatives, to make proof satisfactory to the Board of such loss, destruction, theft or mutilation and to advertise such fact in such manner as the Board may require, and to give the Corporation and its transfer agents and registrars, or such of them as the Board may require, a bond in such form, in such sums and with such surety or sureties as the Board may direct, to indemnify the Corporation and its transfer agents and
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registrars against any claim that may be made against any of them on account of the continued existence of any such certificate so alleged to have been lost, destroyed, stolen or mutilated and against any expense in connection with such claim.
7.5 RULES AND REGULATIONS. The Board may make such rules and regulations as it may deem expedient, not inconsistent with these By-laws or with the Certificate of Incorporation, concerning the issue, transfer and registration of certificates representing shares of its capital stock.
7.6 DIVIDENDS, SURPLUS, ETC. Subject to the provisions of the Certificate of Incorporation and of law, the Board:
1.10.1 may declare and pay dividends or make other distributions on the outstanding shares of capital stock in such amounts and at such time or times as it, in its discretion, shall deem advisable giving due consideration to the condition of the affairs of the Corporation;
1.10.2 may use and apply, in its discretion, any of the surplus of the Corporation in purchasing or acquiring any shares of capital stock of the Corporation, or purchase warrants therefor, in accordance with law, or any of its bonds, debentures, notes, scrip or other securities or evidences of indebtedness; and
1.10.3 may set aside from time to time out of such surplus or net profits such sum or sums as, in its discretion, it may think proper, as a reserve
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fund to meet contingencies, or for equalizing dividends or for the purpose of maintaining or increasing the property or business of the Corporation, or for any purpose it may think conducive to the best interests of the Corporation.
ARTICLE 8
INDEMNIFICATION
8.1 INDEMNITY UNDERTAKING. To the extent not prohibited by law, the Corporation shall indemnify any person who is or was made, or threatened to be made, a party to any threatened, pending or completed action, suit or proceeding (a "Proceeding"), whether civil, criminal, administrative or investigative, including, without limitation, an action by or in the right of the Corporation to procure a judgment in its favor, by reason of the fact that such person, or a person of whom such person is the legal representative, is or was a Director or officer of the Corporation, or, at the request of the Corporation, is or was serving as a director or officer of any other corporation or in a capacity with comparable authority or responsibilities for any partnership, joint venture, trust, employee benefit plan or other enterprise (an "Other Entity"), against judgments, fines, penalties, excise taxes, amounts paid in settlement and costs, charges and expenses (including attorneys' fees, disbursements and other charges). Persons who are not directors or officers of the Corporation (or otherwise entitled to indemnification pursuant to the preceding sentence) may be similarly indemnified in respect of service to the Corporation or to an Other Entity at the request of the Corporation to the extent the Board at any time specifies that such persons are entitled to the benefits of this Article 8.
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8.2 ADVANCEMENT OF EXPENSES. The Corporation shall, from time to time, reimburse or advance to any Director or officer or other person entitled to indemnification hereunder the funds necessary for payment of expenses, including attorneys' fees and disbursements, incurred in connection with any Proceeding, in advance of the final disposition of such Proceeding; PROVIDED, HOWEVER, that, if required by the General Corporation Law, such expenses incurred by or on behalf of any Director or officer or other person may be paid in advance of the final disposition of a Proceeding only upon receipt by the Corporation of an undertaking, by or on behalf of such Director or officer (or other person indemnified hereunder), to repay any such amount so advanced if it shall ultimately be determined by final judicial decision from which there is no further right of appeal that such Director, officer or other person is not entitled to be indemnified for such expenses.
8.3 RIGHTS NOT EXCLUSIVE. The rights to indemnification and reimbursement or advancement of expenses provided by, or granted pursuant to, this Article 8 shall not be deemed exclusive of any other rights to which a person seeking indemnification or reimbursement or advancement of expenses may have or hereafter be entitled under any statute, the Certificate of Incorporation, these By-laws, any agreement, any vote of stockholders or disinterested Directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office.
8.4 CONTINUATION OF BENEFITS. The rights to indemnification and reimbursement or advancement of expenses provided by, or granted pursuant to, this Article 8 shall continue as to a person who has ceased to be a Director or officer (or other person
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indemnified hereunder) and shall inure to the benefit of the executors, administrators, legatees and distributees of such person.
8.5 INSURANCE. The Corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of an Other Entity, against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person's status as such, whether or not the Corporation would have the power to indemnify such person against such liability under the provisions of this Article 8, the Certificate of Incorporation or under section 145 of the General Corporation Law or any other provision of law.
8.6 BINDING EFFECT. The provisions of this Article 8 shall be a contract between the Corporation, on the one hand, and each Director and officer who serves in such capacity at any time while this Article 8 is in effect and any other person entitled to indemnification hereunder, on the other hand, pursuant to which the Corporation and each such Director, officer or other person intend to be, and shall be legally bound. No repeal or modification of this Article 8 shall affect any rights or obligations with respect to any state of facts then or theretofore existing or thereafter arising or any proceeding theretofore or thereafter brought or threatened based in whole or in part upon any such state of facts.
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8.7 PROCEDURAL RIGHTS. The rights to indemnification and reimbursement or advancement of expenses provided by, or granted pursuant to, this Article 8 shall be enforceable by any person entitled to such indemnification or reimbursement or advancement of expenses in any court of competent jurisdiction. The burden of proving that such indemnification or reimbursement or advancement of expenses is not appropriate shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, its independent legal counsel and its stockholders) to have made a determination prior to the commencement of such action that such indemnification or reimbursement or advancement of expenses is proper in the circumstances nor an actual determination by the Corporation (including its Board of Directors, its independent legal counsel and its stockholders) that such person is not entitled to such indemnification or reimbursement or advancement of expenses shall constitute a defense to the action or create a presumption that such person is not so entitled. Such a person shall also be indemnified for any expenses incurred in connection with successfully establishing his or her right to such indemnification or reimbursement or advancement of expenses, in whole or in part, in any such proceeding.
8.8 SERVICE DEEMED AT CORPORATION'S REQUEST. Any Director or officer of the Corporation serving in any capacity (a) another corporation of which a majority of the shares entitled to vote in the election of its directors is held, directly or indirectly, by the Corporation or (b) any employee benefit plan of the Corporation or any corporation referred to in clause (a) shall be deemed to be doing so at the request of the Corporation.
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8.9 ELECTION OF APPLICABLE LAW. Any person entitled to be indemnified or to reimbursement or advancement of expenses as a matter of right pursuant to this Article 8 may elect to have the right to indemnification or reimbursement or advancement of expenses interpreted on the basis of the applicable law in effect at the time of the occurrence of the event or events giving rise to the applicable Proceeding, to the extent permitted by law, or on the basis of the applicable law in effect at the time such indemnification or reimbursement or advancement of expenses is sought. Such election shall be made, by a notice in writing to the Corporation, at the time indemnification or reimbursement or advancement of expenses is sought; PROVIDED, HOWEVER, that if no such notice is given, the right to indemnification or reimbursement or advancement of expenses shall be determined by the law in effect at the time indemnification or reimbursement or advancement of expenses is sought.
ARTICLE 9
BOOKS AND RECORDS
9.1 BOOKS AND RECORDS. There shall be kept at the principal office of the Corporation correct and complete records and books of account recording the financial transactions of the Corporation and minutes of the proceedings of the stockholders, the Board and any committee of the Board. The Corporation shall keep at its principal office, or at the office of the transfer agent or registrar of the Corporation, a record containing the names and addresses of all stockholders, the number and class of shares held by each and the dates when they respectively became the owners of record thereof.
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9.2 FORM OF RECORDS. Any records maintained by the Corporation in the regular course of its business, including its stock ledger, books of account, and minute books, may be kept on, or be in the form of, punch cards, magnetic tape, photographs, microphotographs, or any other information storage device, provided that the records so kept can be converted into clearly legible written form within a reasonable time. The Corporation shall so convert any records so kept upon the request of any person entitled to inspect the same.
9.3 INSPECTION OF BOOKS AND RECORDS. Except as otherwise provided by law, the Board shall determine from time to time whether, and, if allowed, when and under what conditions and regulations, the accounts, books, minutes and other records of the Corporation, or any of them, shall be open to the stockholders for inspection.
ARTICLE 10
SEAL
The corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization and the words "Corporate Seal, Delaware." The seal may be used by causing it or a facsimile thereof to be impressed or affixed or otherwise reproduced.
ARTICLE 11
FISCAL YEAR
The fiscal year of the Corporation shall be fixed, and may be changed, by resolution of the Board.
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ARTICLE 12
PROXIES AND CONSENTS
Unless otherwise directed by the Board, the Chairman, the President, any Vice President, the Secretary or the Chief Financial Officer, or any one of them, may execute and deliver on behalf of the Corporation proxies respecting any and all shares or other ownership interests of any Other Entity owned by the Corporation appointing such person or persons as the officer executing the same shall deem proper to represent and vote the shares or other ownership interests so owned at any and all meetings of holders of shares or other ownership interests, whether general or special, and/or to execute and deliver consents respecting such shares or other ownership interests; or any of the aforesaid officers may attend any meeting of the holders of shares or other ownership interests of such Other Entity and thereat vote or exercise any or all other powers of the Corporation as the holder of such shares or other ownership interests.
ARTICLE 13
AMENDMENTS
The Board of Directors may from time to time adopt, amend or repeal the By-laws; PROVIDED, HOWEVER, that any By-laws adopted or amended by the Board may be amended or repealed, and any By-laws may be adopted, by a vote of the Stockholders having at least a majority in voting power of the capital stock of the Corporation eligible to vote thereon under applicable law.
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EXHIBIT 3.5
AMENDED AND RESTATED BY-LAWS
of
NATIONAL AUTO/TRUCKSTOPS, INC.
(A Delaware Corporation)

ARTICLE 1
DEFINITIONS
As used in these By-laws, unless the context otherwise requires, the term:
1.1 "Assistant Secretary" means an Assistant Secretary of the Corporation.
1.2 "Assistant Treasurer" means an Assistant Treasurer of the Corporation.
1.3 "Board" means the Board of Directors of the Corporation.
1.4 "Business Day" means any day other than a Saturday, Sunday or other day on which banking institutions are authorized by law to close in the City of New York.
1.5 "By-laws" means the initial by-laws of the Corporation, as amended from time to time.
1.6 "Certificate of Incorporation" means the initial certificate of incorporation of the Corporation, as amended, supplemented or restated from time to time.
1.7 "Chairman" means the Chairman of the Board of Directors of the Corporation.
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1.8 "Chief Executive Officer" means the Chief Executive Officer of the Corporation.
1.9 "Chief Financial Officer" means the Chief Financial Officer of the Corporation.
1.10 "Corporation" means National Auto/Truckstops, Inc.
1.11 "Directors" means Directors of the Corporation.
1.12 "Entire Board" means the total number of Directors that the Corporation would have, if there were no vacancies.
1.13 "General Corporation Law" means the General Corporation Law of the State of Delaware, as amended from time to time.
1.14 "Office of the Corporation" means the executive office of the Corporation, anything in Section 131 of the General Corporation Law to the contrary notwithstanding.
1.15 "President" means the President of the Corporation.
1.16 "Secretary" means the Secretary of the Corporation.
1.17 "Stockholders" means stockholders of the Corporation.
1.18 "Vice President" means a Vice President of the Corporation.
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ARTICLE 2
STOCKHOLDERS
2.1 PLACE OF MEETINGS. Every meeting of stockholders shall be held at the office of the Corporation or at such other place within or without the State of Delaware as shall be specified or fixed in the notice of such meeting or in the waiver of notice thereof.
2.2 ANNUAL MEETING. A meeting of stockholders shall be held annually for the election of Directors and the transaction of other business at such hour and on such business day in April or as may be determined by the Board and designated in the notice of meeting.
2.3 DEFERRED MEETING FOR ELECTION OF DIRECTORS, ETC. If the annual meeting of stockholders for the election of Directors and the transaction of other business is not held within the month specified in Section 2.2 hereof, the Board shall call a meeting of stockholders for the election of Directors and the transaction of other business as soon thereafter as convenient.
2.4 OTHER SPECIAL MEETINGS. A special meeting of stockholders (other than a special meeting for the election of Directors), unless otherwise prescribed by statute, may be called at any time by the Board or by the Chief Executive Officer, by the President or by the Secretary. At any special meeting of stockholders only such business
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may be transacted as is related to the purpose or purposes of such meeting set forth in the notice thereof given pursuant to Section 2.6 hereof or in any waiver of notice thereof given pursuant to Section 2.7 hereof.
2.5 FIXING RECORD DATE. For the purpose of (a) determining the stockholders entitled (i) to notice of or to vote at any meeting of stockholders or any adjournment thereof, (ii) to express consent to corporate action in writing without a meeting or (iii) to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock; or (b) any other lawful action, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date was adopted by the Board and which record date shall (x) in the case of clause (a)(i) above, be not more than 60 nor less than 10 days before the date of such meeting, (y) in the case of clause (a)(ii) above, be not more than 10 days after the date upon which the resolution fixing the record date was adopted by the Board and (z) in the case of clause (a)(iii) or (b) above, be not more than 60 days prior to such action. If no such record date is fixed:
2.5.1 the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived,
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at the close of business on the day next preceding the day on which the meeting is held;
2.5.2 the record date for determining stockholders entitled to express consent to corporate action in writing without a meeting, when no prior action by the Board is required under the General Corporation Law, shall be the first day on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded; and when prior action by the Board is required under the General Corporation Law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the date on which the Board adopts the resolution taking such prior action; and
2.5.3 the record date for determining stockholders for any purpose other than those specified in Sections 2.5.1 and 2.5.2 shall be at the close of business on the day on which the Board adopts the resolution relating thereto.
When a determination of stockholders entitled to notice of or to vote at any meeting of stockholders has been made as provided in this Section 2.5, such determination shall
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apply to any adjournment thereof unless the Board fixes a new record date for the adjourned meeting. Delivery made to the Corporation's registered office in accordance with Section 2.5.2 shall be by hand or by certified or registered mail, return receipt requested.
2.6 NOTICE OF MEETINGS OF STOCKHOLDERS. Except as otherwise provided in Sections 2.5 and 2.7 hereof, whenever under the provisions of any statute, the Certificate of Incorporation or these By-laws, stockholders are required or permitted to take any action at a meeting, written notice shall be given stating the place, date and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Unless otherwise provided by any statute, the Certificate of Incorporation or these By-laws, a copy of the notice of any meeting shall be given, personally or by mail, not less than forty (in the case of any meeting for the election of directors) or thirty (in all other instances) nor more than sixty days before the date of the meeting, to each stockholder entitled to notice of or to vote at such meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail, with postage prepaid, directed to the stockholder at his or her address as it appears on the records of the Corporation. An affidavit of the Secretary or an Assistant Secretary or of the transfer agent of the Corporation that the notice required by this Section 2.6 has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein.
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When a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken, and at the adjourned meeting any business may be transacted that might have been transacted at the meeting as originally called. If, however, the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.
2.7 WAIVERS OF NOTICE. Whenever the giving of any notice is required by statute, the Certificate of Incorporation or these By-laws, a waiver thereof, in writing, signed by the stockholder or stockholders entitled to said notice, whether before or after the event as to which such notice is required, shall be deemed equivalent to notice. Attendance by a stockholder at a meeting shall constitute a waiver of notice of such meeting except when the stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business on the ground that the meeting has not been lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in any written waiver of notice unless so required by statute, the Certificate of Incorporation or these By-laws.
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2.8 LIST OF STOCKHOLDERS. The Secretary shall prepare and make, or cause to be prepared and made, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, the stockholder's agent, or attorney, at the stockholder's expense, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder (or agent or attorney of a stockholder) who is present. The Corporation shall maintain the stockholder list in written form or in another form capable of conversion into written form within a reasonable time. The stock ledger shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list of stockholders or the books of the Corporation, or to vote in person or by proxy at any meeting of stockholders.
2.9 QUORUM OF STOCKHOLDERS; ADJOURNMENT. Except as otherwise provided by any statute, the Certificate of Incorporation or these By-laws, the holders of a
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majority of all outstanding shares of stock entitled to vote at any meeting of stockholders, present in person or represented by proxy, shall constitute a quorum for the transaction of any business at such meeting. When a quorum is once present to organize a meeting of stockholders, it is not broken by the subsequent withdrawal of any stockholders. The holders of a majority of the shares of stock present in person or represented by proxy at any meeting of stockholders, including an adjourned meeting, whether or not a quorum is present, may adjourn such meeting to another time and place. Shares of its own stock belonging to the Corporation or to another corporation, if a majority of the shares entitled to vote in the election of Directors of such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes; PROVIDED, HOWEVER, that the foregoing shall not limit the right of the Corporation to vote stock, including but not limited to its own stock, held by it in a fiduciary capacity.
2.10 VOTING; PROXIES. Unless otherwise provided in the Certificate of Incorporation, every stockholder of record shall be entitled at every meeting of stockholders to one vote for each share of capital stock standing in his or her name on the record of stockholders determined in accordance with Section 2.5 hereof. If the Certificate of Incorporation provides for more or less than one vote for any share on any matter, each reference in the By-laws or the General Corporation Law to a majority or
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other proportion of stock or votes with respect to stock shall refer to such majority or other proportion of the votes of such stock. The provisions of Sections 212 and 217 of the General Corporation Law shall apply in determining whether any shares of capital stock may be voted and the persons, if any, entitled to vote such shares; but the Corporation shall be protected in assuming that the persons in whose names shares of capital stock stand on the stock ledger of the Corporation are entitled to vote such shares. Holders of redeemable shares of stock are not entitled to vote after the notice of redemption is mailed to such holders and a sum sufficient to redeem the stocks has been deposited with a bank, trust company, or other financial institution under an irrevocable obligation to pay the holders the redemption price on surrender of the shares of stock. At any meeting of stockholders (at which a quorum was present to organize the meeting), all matters, except as otherwise provided by statute or by the Certificate of Incorporation or by these By-laws, shall be decided by a majority of the votes cast at such meeting by the holders of shares present in person or represented by proxy and entitled to vote thereon, whether or not a quorum is present when the vote is taken. All elections of Directors shall be by written ballot. In voting on any other question on which a vote by ballot is required by law or is demanded by any stockholder entitled to vote, the voting shall be by ballot. Each ballot shall be signed by the stockholder voting or the stockholder's proxy and shall state the number of shares voted. On all other questions, the voting may be VIVA
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VOCE. Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for such stockholder by proxy.
The validity and enforceability of any proxy shall be determined in accordance with Section 212 of the General Corporation Law. A stockholder may revoke any proxy that is not irrevocable by attending the meeting and voting in person or by filing an instrument in writing revoking the proxy or by delivering a proxy in accordance with applicable law bearing a later date to the Secretary.
2.11 VOTING PROCEDURES AND INSPECTORS OF ELECTION AT MEETINGS OF STOCKHOLDERS. The Board, in advance of any meeting of stockholders, may appoint one or more inspectors to act at the meeting and make a written report thereof. The Board may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting, the person presiding at the meeting may appoint, and on the request of any stockholder entitled to vote thereat shall appoint, one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspectors shall (a) ascertain the number of shares outstanding and the voting power of each, (b) determine the shares represented at the meeting and the validity of
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proxies and ballots, (c) count all votes and ballots, (d) determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors, and (e) certify their determination of the number of shares represented at the meeting and their count of all votes and ballots. The inspectors may appoint or retain other persons or entities to assist the inspectors in the performance of their duties. Unless otherwise provided by the Board, the date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting shall be determined by the person presiding at the meeting and shall be announced at the meeting. No ballot, proxies or votes, or any revocation thereof or change thereto, shall be accepted by the inspectors after the closing of the polls unless the Court of Chancery of the State of Delaware upon application by a stockholder shall determine otherwise.
2.12 ORGANIZATION. At each meeting of stockholders, the Chairman, or in the absence of the Chairman the Chief Executive Officer, or in the absence of the Chief Executive Officer the President, or in the absence of the President a Vice President and in case more than one Vice President shall be present, that Vice President designated by the Board (or in the absence of any such designation, the most senior Vice President, based on age, present), shall act as chairman of the meeting. The Secretary, or in his or her absence one of the Assistant Secretaries, shall act as secretary of the meeting. In case none of the officers above designated to act as chairman or secretary of the meeting,
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respectively, shall be present, a chairman or a secretary of the meeting, as the case may be, shall be chosen by a majority of the votes cast at such meeting by the holders of shares of capital stock present in person or represented by proxy and entitled to vote at the meeting.
2.13 ORDER OF BUSINESS. The order of business at all meetings of stockholders shall be as determined by the chairman of the meeting, but the order of business to be followed at any meeting at which a quorum is present may be changed by a majority of the votes cast at such meeting by the holders of shares of capital stock present in person or represented by proxy and entitled to vote at the meeting.
2.14 WRITTEN CONSENT OF STOCKHOLDERS WITHOUT A MEETING. Unless otherwise provided in the Certificate of Incorporation, any action required by the General Corporation Law to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered (by hand or by certified or registered mail, return receipt requested) to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having
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custody of the book in which proceedings of meetings of stockholders are recorded. Every written consent shall bear the date of signature of each stockholder who signs the consent and no written consent shall be effective to take the corporate action referred to therein unless, within 60 days of the earliest dated consent delivered in the manner required by this Section 2.14, written consents signed by a sufficient number of holders to take action are delivered to the Corporation as aforesaid. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.
ARTICLE 3
DIRECTORS
3.1 GENERAL POWERS. Except as otherwise provided in the Certificate of Incorporation, the business and affairs of the Corporation shall be managed by or under the direction of the Board. The Board may adopt such rules and regulations, not inconsistent with the Certificate of Incorporation or these By-laws or applicable laws, as it may deem proper for the conduct of its meetings and the management of the Corporation. In addition to the powers expressly conferred by these By-laws, the Board may exercise all powers and perform all acts that are not required, by these By-laws or
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the Certificate of Incorporation or by statute, to be exercised and performed by the stockholders.
3.2 NUMBER; QUALIFICATION; TERM OF OFFICE. The Board shall consist of one or more members. The number of Directors shall be fixed from time to time by resolution adopted by a majority of the entire Board then in office, whether or not present at a meeting. Each Director shall hold office until his successor is elected and qualified, or until his earlier death, resignation or removal.
3.3 ELECTION. The persons qualified to be Directors pursuant to
Section 3.2 hereof shall, except as otherwise required by statute or by the Certificate of Incorporation, be elected by a plurality of the votes cast at a meeting of stockholders by the holders of shares entitled to vote in the election.
3.4 NEWLY CREATED DIRECTORSHIPS AND VACANCIES. Vacancies on the Board that arise for any reason may be filled by the affirmative vote of a majority of the entire Board, although less than a quorum, or by a sole remaining Director, and the Director(s) so chosen shall hold office for a term expiring the next following annual meeting of Stockholders, or, in each case until their respective successors are duly elected and qualify, or until the respective Directors' earlier death, resignation or removal.
3.5 RESIGNATION. Any Director may resign at any time by written notice to the Corporation. Such resignation shall take effect at the time therein specified,
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and, unless otherwise specified in such resignation, the acceptance of such resignation shall not be necessary to make it effective.
3.6 REMOVAL. Any or all of the Directors may be removed with or without cause by vote of the holders of a majority of the shares then entitled to vote at an election of Directors.
3.7 COMPENSATION. Each Director who is not an employee of the Corporation, in consideration of his or her service as such, shall be entitled to receive from the Corporation such amount per annum or such fees for attendance at Directors' meetings, or both, as the Board may from time to time determine, together with reimbursement for the reasonable out-of-pocket expenses, if any, incurred by such Director in connection with the performance of his or her duties. Each Director who is not an employee of the Corporation who shall serve as a member of any committee of Directors in consideration of serving as such shall be entitled to such additional amount per annum or such fees for attendance at committee meetings, or both, as the Board may from time to time determine, together with reimbursement for the reasonable out-of-pocket expenses, if any, incurred by such Director in the performance of his or her duties. Nothing contained in this Section 3.7 shall preclude any Director from serving the Corporation or its subsidiaries in any other capacity and receiving proper compensation therefor.
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3.8 TIMES AND PLACES OF MEETINGS. The Board may hold meetings, both regular and special, either within or without the State of Delaware. The times and places for holding meetings of the Board may be fixed from time to time by resolution of the Board or (unless contrary to a resolution of the Board) in the notice of the meeting.
3.9 ANNUAL MEETINGS. On the day when and at the place where the annual meeting of stockholders for the election of Directors is held, and as soon as practicable thereafter, the Board may hold its annual meeting, without notice of such meeting, for the purposes of organization, the election of officers and the transaction of other business. The annual meeting of the Board may be held at any other time and place specified in a notice given as provided in Section 3.11 hereof for special meetings of the Board or in a waiver of notice thereof.
3.10 REGULAR MEETINGS. Regular meetings of the Board may be held without notice at such times and at such places as shall from time to time be determined by the Board.
3.11 SPECIAL MEETINGS. Special meetings of the Board may be called by the Chairman, the Chief Executive Officer or the Secretary or by any two or more Directors then serving on at least two Business Days' notice to each Director given by one of the means specified in Section 3.14 hereof. Special meetings shall be called by the
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Chairman, Chief Executive Officer or Secretary in like manner and on like notice on the written request of any two or more of the Directors then serving.
3.12 TELEPHONE MEETINGS. Any Director or member of any committee designated by the Board may participate, at his or her election, in any meeting of the Board or of such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this
Section 3.12 shall constitute presence in person at such meeting. Each regular or special meeting of the Board or any committee thereof shall have adequate conference telephone or similar communications equipment available to allow any Directors or committee members who choose to participate by telephone to do so in accordance with this Section 3.12.
3.13 ADJOURNED MEETINGS. A majority of the Directors present at any meeting of the Board, including an adjourned meeting, whether or not a quorum is present, may adjourn such meeting to another time and place. At least two Business Days' notice of any adjourned meeting of the Board shall be given to each Director whether or not present at the time of the adjournment, shall be given by one of the means specified in Section 3.14 hereof. Any business may be transacted at an adjourned meeting that might have been transacted at the meeting as originally called.
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3.14 NOTICE PROCEDURE. Subject to Sections 3.11 and 3.17 hereof, whenever, under the provisions of any statute, the Certificate of Incorporation or these By-laws, notice is required to be given to any Director, such notice shall be deemed given effectively if given in person or by telephone, by hand delivery, or by telegram, telex, telecopy or similar means addressed to such Director at such Director's address as it appears on the records of the Corporation.
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3.15 WAIVER OF NOTICE. Whenever the giving of any notice is required by statute, the Certificate of Incorporation or these By-laws, a waiver thereof, in writing, signed by the person or persons entitled to said notice, whether before or after the event as to which such notice is required, shall be deemed equivalent to notice. Attendance by a person at a meeting shall constitute a waiver of notice of such meeting except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business on the ground that the meeting has not been lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Directors or a committee of Directors need be specified in any written waiver of notice unless so required by statute, the Certificate of Incorporation or these By-laws.
3.16 ORGANIZATION. At each meeting of the Board, the Chairman, or in the absence of the Chairman the Chief Executive Officer, or in the absence of the Chief Executive Officer, the President, or in the absence of the President, a chairman chosen by a majority of the Directors present, shall preside. The Secretary shall act as secretary at each meeting of the Board. In case the Secretary shall be absent from any meeting of the Board, an Assistant Secretary shall perform the duties of secretary at such meeting; and in the absence from any such meeting of the Secretary and all Assistant Secretaries, the person presiding at the meeting may appoint any person to act as secretary of the meeting.
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3.17 QUORUM OF DIRECTORS. The presence in person of a majority of the entire Board shall be necessary and sufficient to constitute a quorum for the transaction of business at any meeting of the Board, but a majority of a smaller number may adjourn any such meeting to a later date.
3.18 ACTION BY MAJORITY VOTE. Except as otherwise expressly required by statute, the Certificate of Incorporation or the By-laws, the act of a majority of the Directors present at a meeting at which a quorum is present shall be the act of the Board.
3.19 ACTION WITHOUT MEETING. Unless otherwise restricted by the Certificate of Incorporation or these By-laws, any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting if all Directors or members of such committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board or committee.
ARTICLE 4
COMMITTEES OF THE BOARD
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The Board may, by resolution passed by a vote of the entire Board, designate one or more committees, each committee to consist of one or more of the Directors of the Corporation. The Board may designate one or more Directors as alternate members of any committee to replace absent or disqualified members at any meeting of such committee. If a member of a committee shall be absent from any meeting, or disqualified from voting thereat, the remaining member or members present and not disqualified from voting, whether or not such member or members constitute a quorum, may, by a unanimous vote, appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in a resolution of the Board passed as aforesaid, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be impressed on all papers that may require it, but no such committee shall have the power or authority in reference to the following matters: (i) approving or adopting, or recommending to the stockholders, any action or matter expressly required by the GCL to be submitted to stockholders for approval or (ii) adopting, amending or repealing any By-law of the Corporation. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board. Unless otherwise specified in the resolution of the Board designating a committee, at all meetings of such
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committee a majority of the total number of members of the committee shall constitute a quorum for the transaction of business, and the vote of a majority of the members of the committee present at any meeting at which there is a quorum shall be the act of the committee. Each committee shall keep regular minutes of its meetings. Unless the Board otherwise provides, each committee designated by the Board may make, alter and repeal rules for the conduct of its business. In the absence of such rules each committee shall conduct its business in the same manner as the Board conducts its business pursuant to Article 3 of these By-laws.
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ARTICLE 5
OFFICERS
5.1 POSITIONS. The officers of the Corporation shall be a Chairman, a Chief Executive Officer, a President, a Secretary, a Chief Financial Officer and such other officers as the Board may appoint, including one or more Vice Presidents and one or more Assistant Secretaries and Assistant Treasurers, who shall exercise such powers and perform such duties as shall be determined from time to time by the Board. The Board may designate one or more Vice Presidents as Executive Vice Presidents and may use descriptive words or phrases to designate the standing, seniority or areas of special competence of the Vice Presidents elected or appointed by it. Any number of offices may be held by the same person unless the Certificate of Incorporation or these By-laws otherwise provide.
5.2 APPOINTMENT. The officers of the Corporation shall be chosen by the Board annually or at such other time or times as the Board shall determine.
5.3 COMPENSATION. The compensation of all officers of the Corporation shall be fixed by the Board. No officer shall be prevented from receiving a salary or other compensation by reason of the fact that the officer is also a Director.
5.4 TERM OF OFFICE. Each officer of the Corporation shall hold office until such officer's successor is chosen and qualifies or until such officer's earlier death,
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resignation or removal. Any officer may resign at any time upon written notice to the Corporation. Such resignation shall take effect at the date of receipt of such notice or at such later time as is therein specified, and, unless otherwise specified, the acceptance of such resignation shall not be necessary to make it effective. The resignation of an officer shall be without prejudice to the contract rights of the Corporation, if any. Any officer elected or appointed by the Board may be removed at any time, with or without cause, by vote of a majority of the entire Board. Any vacancy occurring in any office of the Corporation shall be filled by the Board. The removal of an officer without cause shall be without prejudice to the officer's contract rights, if any. The election or appointment of an officer shall not of itself create contract rights.
5.5 FIDELITY BONDS. The Corporation may secure the fidelity of any or all of its officers or agents by bond or otherwise.
5.6 CHAIRMAN. The Chairman shall preside at all meetings of the Board and shall exercise such powers and perform such other duties as shall be determined from time to time by the Board.
5.7 CHIEF EXECUTIVE OFFICER. The Chief Executive Officer shall be the Chief Executive Officer of the Corporation and shall have general supervision over the business of the Corporation, subject, however, to the control of the Board and of any duly authorized committee of Directors. The Chief Executive Officer shall preside at all
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meetings of the stockholders and at all meetings of the Board at which the Chairman is not present. All officers shall be subject to the direction of the Chief Executive Officer. The Chief Executive Officer may sign and execute in the name of the Corporation deeds, mortgages, bonds, contracts and other instruments except in cases in which the signing and execution thereof shall be expressly delegated by the Board or by these By-laws to some other officer or agent of the Corporation or shall be required by statute otherwise to be signed or executed and, in general, the Chief Executive Officer shall perform all duties incident to the office of Chief Executive Officer of a corporation and such other duties as may from time to time be assigned to the Chief Executive Officer by the Board.
5.8 PRESIDENT. At the request of the Chief Executive Officer, or, in the Chief Executive Officer's absence, at the request of the Board, the President shall perform all of the duties of the Chief Executive Officer and, in so performing, shall have all the powers of, and be subject to all restrictions upon, the Chief Executive Officer. The President may sign and execute in the name of the Corporation deeds, mortgages, bonds, contracts or other instruments, except in cases in which the signing and execution thereof shall be expressly delegated by the Board or by these By-laws to some other officer or agent of the Corporation, or shall be required by statute otherwise to be signed or executed, and the President shall perform such other duties as from time to time may be assigned to the President by the Board or by the Chief Executive Officer.
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5.9 VICE PRESIDENTS. At the request of the President, or in the President's absence, at the request of the Board, the Vice Presidents shall (in such order as may be designated by the Board or, in the absence of any such designation, in order of seniority based on age) perform all of the duties of the President and, in so performing, shall have all of the powers of, and be subject to all restrictions upon, the President. Any Vice President may sign and execute in the name of the Corporation deeds, mortgages, bonds, contracts or other instruments, except in cases in which the signing and execution thereof shall be expressly delegated by the Board or by these By-laws to some other officer or agent of the Corporation, or shall be required by statute otherwise to be signed or executed, and each Vice President shall perform such other duties as from time to time may be assigned to such Vice President by the Board or by the President.
5.10 SECRETARY. The Secretary shall attend all meetings of the Board and of the stockholders and shall record all the proceedings of the meetings of the Board and of the stockholders in a book to be kept for that purpose, and shall perform like duties for committees of the Board, when required. The Secretary shall give, or cause to be given, notice of all special meetings of the Board and of the stockholders and shall perform such other duties as may be prescribed by the Board or by the Chief Executive Officer, under whose supervision the Secretary shall be. The Secretary shall have custody of the corporate seal of the Corporation, and the Secretary, or an Assistant Secretary, shall have
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authority to impress the same on any instrument requiring it, and when so impressed the seal may be attested by the signature of the Secretary or by the signature of such Assistant Secretary. The Board may give general authority to any other officer to impress the seal of the Corporation and to attest the same by such officer's signature. The Secretary or an Assistant Secretary may also attest all instruments signed by the President or any Vice President. The Secretary shall have charge of all the books, records and papers of the Corporation relating to its organization and management, shall see that the reports, statements and other documents required by statute are properly kept and filed and, in general, shall perform all duties incident to the office of Secretary of a corporation and such other duties as may from time to time be assigned to the Secretary by the Board or by the Chief Executive Officer.
5.11 CHIEF FINANCIAL OFFICER. The Chief Financial Officer shall have charge and custody of, and be responsible for, all funds, securities and notes of the Corporation; receive and give receipts for moneys due and payable to the Corporation from any sources whatsoever; deposit all such moneys and valuable effects in the name and to the credit of the Corporation in such depositaries as may be designated by the Board; against proper vouchers, cause such funds to be disbursed by checks or drafts on the authorized depositaries of the Corporation signed in such manner as shall be
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determined by the Board and be responsible for the accuracy of the amounts of all moneys so disbursed; regularly enter or cause to be entered in books or other records maintained for the purpose full and adequate account of all moneys received or paid for the account of the Corporation; have the right to require from time to time reports or statements giving such information as the Chief Financial Officer may desire with respect to any and all financial transactions of the Corporation from the officers or agents transacting the same; render to the Chief Executive Officer or the Board, whenever the Chief Executive Officer or the Board shall require the Chief Financial Officer so to do, an account of the financial condition of the Corporation and of all financial transactions of the Corporation; exhibit at all reasonable times the records and books of account to any of the Directors upon application at the office of the Corporation where such records and books are kept; disburse the funds of the Corporation as ordered by the Board; and, in general, perform all duties incident to the office of Chief Financial Officer of a corporation and such other duties as may from time to time be assigned to the Chief Financial Officer by the Board or the Chief Executive Officer.
5.12 ASSISTANT SECRETARIES AND ASSISTANT TREASURERS. Assistant Secretaries and Assistant Treasurers shall perform such duties as shall be assigned to them by the Secretary or by the Chief Financial Officer, respectively, or by the Board or by the Chief Executive Officer.
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ARTICLE 6
CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.
6.1 EXECUTION OF CONTRACTS. The Board, except as otherwise provided in these By-laws, may prospectively or retroactively authorize any officer or officers, employee or employees or agent or agents, in the name and on behalf of the Corporation, to enter into any contract or execute and deliver any instrument, and any such authority may be general or confined to specific instances, or otherwise limited.
6.2 LOANS. The Board may prospectively or retroactively authorize the Chief Executive Officer or any other officer, employee or agent of the Corporation to effect loans and advances at any time for the Corporation from any bank, trust company or other institution, or from any firm, corporation or individual, and for such loans and advances the person so authorized may make, execute and deliver promissory notes, bonds or other certificates or evidences of indebtedness of the Corporation, and, when authorized by the Board so to do, may pledge and hypothecate or transfer any securities or other property of the Corporation as security for any such loans or advances. Such authority conferred by the Board may be general or confined to specific instances, or otherwise limited.
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6.3 CHECKS, DRAFTS, ETC. All checks, drafts and other orders for the payment of money out of the funds of the Corporation and all evidences of indebtedness of the Corporation shall be signed on behalf of the Corporation in such manner as shall from time to time be determined by resolution of the Board.
6.4 DEPOSITS. The funds of the Corporation not otherwise employed shall be deposited from time to time to the order of the Corporation with such banks, trust companies, investment banking firms, financial institutions or other depositaries as the Board may select or as may be selected by an officer, employee or agent of the Corporation to whom such power to select may from time to time be delegated by the Board.
ARTICLE 7
STOCK AND DIVIDENDS
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7.1 CERTIFICATES REPRESENTING SHARES. The shares of capital stock of the Corporation shall be represented by certificates in such form (consistent with the provisions of Section 158 of the General Corporation Law) as shall be approved by the Board. Such certificates shall be signed by the Chairman, the Chief Executive Officer or a Vice President and by the Secretary or an Assistant Secretary or the Chief Financial Officer or an Assistant Treasurer, and may be impressed with the seal of the Corporation or a facsimile thereof. The signatures of the officers upon a certificate may be facsimiles, if the certificate is countersigned by a transfer agent or registrar other than the Corporation itself or its employee. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon any certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, such certificate may, unless otherwise ordered by the Board, be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue.
7.2 TRANSFER OF SHARES. Transfers of shares of capital stock of the Corporation shall be made only on the books of the Corporation by the holder thereof or by the holder's duly authorized attorney appointed by a power of attorney duly executed and filed with the Secretary or a transfer agent of the Corporation, and on surrender of the certificate or certificates representing such shares of capital stock properly endorsed for
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transfer and upon payment of all necessary transfer taxes. Every certificate exchanged, returned or surrendered to the Corporation shall be marked "Cancelled," with the date of cancellation, by the Secretary or an Assistant Secretary or the transfer agent of the Corporation. A person in whose name shares of capital stock shall stand on the books of the Corporation shall be deemed the owner thereof to receive dividends, to vote as such owner and for all other purposes as respects the Corporation. No transfer of shares of capital stock shall be valid as against the Corporation, its stockholders and creditors for any purpose, except to render the transferee liable for the debts of the Corporation to the extent provided by law, until such transfer shall have been entered on the books of the Corporation by an entry showing from and to whom transferred.
7.3 TRANSFER AND REGISTRY AGENTS. The Corporation may from time to time maintain one or more transfer offices or agents and registry offices or agents at such place or places as may be determined from time to time by the Board.
7.4 LOST, DESTROYED, STOLEN AND MUTILATED CERTIFICATES. The holder of any shares of capital stock of the Corporation shall immediately notify the Corporation of any loss, destruction, theft or mutilation of the certificate representing such shares, and the Corporation may issue a new certificate to replace the certificate alleged to have been lost, destroyed, stolen or mutilated. The Board may, in its discretion, as a condition to the issue of any such new certificate, require the owner of the lost, destroyed, stolen or
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mutilated certificate, or his or her legal representatives, to make proof satisfactory to the Board of such loss, destruction, theft or mutilation and to advertise such fact in such manner as the Board may require, and to give the Corporation and its transfer agents and registrars, or such of them as the Board may require, a bond in such form, in such sums and with such surety or sureties as the Board may direct, to indemnify the Corporation and its transfer agents and registrars against any claim that may be made against any of them on account of the continued existence of any such certificate so alleged to have been lost, destroyed, stolen or mutilated and against any expense in connection with such claim.
7.5 RULES AND REGULATIONS. The Board may make such rules and regulations as it may deem expedient, not inconsistent with these By-laws or with the Certificate of Incorporation, concerning the issue, transfer and registration of certificates representing shares of its capital stock.
7.6 DIVIDENDS, SURPLUS, ETC. Subject to the provisions of the Certificate of Incorporation and of law, the Board:
7.6.1 may declare and pay dividends or make other distributions on the outstanding shares of capital stock in such amounts and at such time or times as it, in its discretion, shall deem advisable giving due consideration to the condition of the affairs of the Corporation;
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7.6.2 may use and apply, in its discretion, any of the surplus of the Corporation in purchasing or acquiring any shares of capital stock of the Corporation, or purchase warrants therefor, in accordance with law, or any of its bonds, debentures, notes, scrip or other securities or evidences of indebtedness; and
7.6.3 may set aside from time to time out of such surplus or net profits such sum or sums as, in its discretion, it may think proper, as a reserve fund to meet contingencies, or for equalizing dividends or for the purpose of maintaining or increasing the property or business of the Corporation, or for any purpose it may think conducive to the best interests of the Corporation.
ARTICLE 8
INDEMNIFICATION
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8.1 INDEMNITY UNDERTAKING. To the extent not prohibited by law, the Corporation shall indemnify any person who is or was made, or threatened to be made, a party to any threatened, pending or completed action, suit or proceeding (a "Proceeding"), whether civil, criminal, administrative or investigative, including, without limitation, an action by or in the right of the Corporation to procure a judgment in its favor, by reason of the fact that such person, or a person of whom such person is the legal representative, is or was a Director or officer of the Corporation, or, at the request of the Corporation, is or was serving as a director or officer of any other corporation or in a capacity with comparable authority or responsibilities for any partnership, joint venture, trust, employee benefit plan or other enterprise (an "Other Entity"), against judgments, fines, penalties, excise taxes, amounts paid in settlement and costs, charges and expenses (including attorneys' fees, disbursements and other charges). Persons who are not directors or officers of the Corporation (or otherwise entitled to indemnification pursuant to the preceding sentence) may be similarly indemnified in respect of service to the Corporation or to an Other Entity at the request of the Corporation to the extent the Board at any time specifies that such persons are entitled to the benefits of this Article 8.
8.2 ADVANCEMENT OF EXPENSES. The Corporation shall, from time to time, reimburse or advance to any Director or officer or other person entitled to indemnification hereunder the funds necessary for payment of expenses, including
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attorneys' fees and disbursements, incurred in connection with any Proceeding, in advance of the final disposition of such Proceeding; PROVIDED, HOWEVER, that, if required by the General Corporation Law, such expenses incurred by or on behalf of any Director or officer or other person may be paid in advance of the final disposition of a Proceeding only upon receipt by the Corporation of an undertaking, by or on behalf of such Director or officer (or other person indemnified hereunder), to repay any such amount so advanced if it shall ultimately be determined by final judicial decision from which there is no further right of appeal that such Director, officer or other person is not entitled to be indemnified for such expenses.
8.3 RIGHTS NOT EXCLUSIVE. The rights to indemnification and reimbursement or advancement of expenses provided by, or granted pursuant to, this Article 8 shall not be deemed exclusive of any other rights to which a person seeking indemnification or reimbursement or advancement of expenses may have or hereafter be entitled under any statute, the Certificate of Incorporation, these By-laws, any agreement, any vote of stockholders or disinterested Directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office.
8.4 CONTINUATION OF BENEFITS. The rights to indemnification and reimbursement or advancement of expenses provided by, or granted pursuant to, this Article 8 shall continue as to a person who has ceased to be a Director or officer (or other
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person indemnified hereunder) and shall inure to the benefit of the executors, administrators, legatees and distributees of such person.
8.5 INSURANCE. The Corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of an Other Entity, against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person's status as such, whether or not the Corporation would have the power to indemnify such person against such liability under the provisions of this Article 8, the Certificate of Incorporation or under section 145 of the General Corporation Law or any other provision of law.
8.6 BINDING EFFECT. The provisions of this Article 8 shall be a contract between the Corporation, on the one hand, and each Director and officer who serves in such capacity at any time while this Article 8 is in effect and any other person entitled to indemnification hereunder, on the other hand, pursuant to which the Corporation and each such Director, officer or other person intend to be, and shall be legally bound. No repeal or modification of this Article 8 shall affect any rights or obligations with respect to any state of facts then or theretofore existing or thereafter arising or any proceeding
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theretofore or thereafter brought or threatened based in whole or in part upon any such state of facts.
8.7 PROCEDURAL RIGHTS. The rights to indemnification and reimbursement or advancement of expenses provided by, or granted pursuant to, this Article 8 shall be enforceable by any person entitled to such indemnification or reimbursement or advancement of expenses in any court of competent jurisdiction. The burden of proving that such indemnification or reimbursement or advancement of expenses is not appropriate shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, its independent legal counsel and its stockholders) to have made a determination prior to the commencement of such action that such indemnification or reimbursement or advancement of expenses is proper in the circumstances nor an actual determination by the Corporation (including its Board of Directors, its independent legal counsel and its stockholders) that such person is not entitled to such indemnification or reimbursement or advancement of expenses shall constitute a defense to the action or create a presumption that such person is not so entitled. Such a person shall also be indemnified for any expenses incurred in connection with successfully establishing his or her right to such indemnification or reimbursement or advancement of expenses, in whole or in part, in any such proceeding.
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8.8 SERVICE DEEMED AT CORPORATION'S REQUEST. Any Director or officer of the Corporation serving in any capacity (a) another corporation of which a majority of the shares entitled to vote in the election of its directors is held, directly or indirectly, by the Corporation or (b) any employee benefit plan of the Corporation or any corporation referred to in clause (a) shall be deemed to be doing so at the request of the Corporation.
8.9 ELECTION OF APPLICABLE LAW. Any person entitled to be indemni-fied or to reimbursement or advancement of expenses as a matter of right pursuant to this Article 8 may elect to have the right to indemnification or reimbursement or advancement of expenses interpreted on the basis of the applicable law in effect at the time of the occurrence of the event or events giving rise to the applicable Proceeding, to the extent permitted by law, or on the basis of the applicable law in effect at the time such indemnification or reimbursement or advancement of expenses is sought. Such election shall be made, by a notice in writing to the Corporation, at the time indemnification or reimbursement or advancement of expenses is sought; PROVIDED, HOWEVER, that if no such notice is given, the right to indemnification or reimbursement or advancement of expenses shall be determined by the law in effect at the time indemnification or reimbursement or advancement of expenses is sought.
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ARTICLE 9
BOOKS AND RECORDS
9.1 BOOKS AND RECORDS. There shall be kept at the principal office of the Corporation correct and complete records and books of account recording the financial transactions of the Corporation and minutes of the proceedings of the stockholders, the Board and any committee of the Board. The Corporation shall keep at its principal office, or at the office of the transfer agent or registrar of the Corporation, a record containing the names and addresses of all stockholders, the number and class of shares held by each and the dates when they respectively became the owners of record thereof.
9.2 FORM OF RECORDS. Any records maintained by the Corporation in the regular course of its business, including its stock ledger, books of account, and minute books, may be kept on, or be in the form of, punch cards, magnetic tape, photographs, microphotographs, or any other information storage device, provided that the records so kept can be converted into clearly legible written form within a reasonable time. The Corporation shall so convert any records so kept upon the request of any person entitled to inspect the same.
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9.3 INSPECTION OF BOOKS AND RECORDS. Except as otherwise provided by law, the Board shall determine from time to time whether, and, if allowed, when and under what conditions and regulations, the accounts, books, minutes and other records of the Corporation, or any of them, shall be open to the stockholders for inspection.
ARTICLE 10
SEAL
The corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization and the words "Corporate Seal, Delaware." The seal may be used by causing it or a facsimile thereof to be impressed or affixed or otherwise reproduced.
ARTICLE 11
FISCAL YEAR
The fiscal year of the Corporation shall be fixed, and may be changed, by resolution of the Board.
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ARTICLE 12
PROXIES AND CONSENTS
Unless otherwise directed by the Board, the Chairman, the President, any Vice President, the Secretary or the Chief Financial Officer, or any one of them, may execute and deliver on behalf of the Corporation proxies respecting any and all shares or other ownership interests of any Other Entity owned by the Corporation appointing such person or persons as the officer executing the same shall deem proper to represent and vote the shares or other ownership interests so owned at any and all meetings of holders of shares or other ownership interests, whether general or special, and/or to execute and deliver consents respecting such shares or other ownership interests; or any of the aforesaid officers may attend any meeting of the holders of shares or other ownership interests of such Other Entity and thereat vote or exercise any or all other powers of the Corporation as the holder of such shares or other ownership interests.
ARTICLE 13
AMENDMENTS
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The Board of Directors may from time to time adopt, amend or repeal the By-laws; PROVIDED, HOWEVER, that any By-laws adopted or amended by the Board may be amended or repealed, and any By-laws may be adopted, by a vote of the Stockholders having at least a majority in voting power of the then issued and outstanding shares of capital stock of the Corporation.
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EXHIBIT 3.6
AMENDED AND RESTATED BY-LAWS
of
TA OPERATING CORPORATION
(A Delaware Corporation)

ARTICLE 1
DEFINITIONS
As used in these By-laws, unless the context otherwise requires, the term:
1.1 "Assistant Secretary" means an Assistant Secretary of the Corporation.
1.2 "Assistant Treasurer" means an Assistant Treasurer of the Corporation.
1.3 "Board" means the Board of Directors of the Corporation.
1.4 "Business Day" means any day other than Saturday, Sunday or other day on which banking institutions are authorized by law to close in the City of New York.
1.5 "By-laws" means the initial by-laws of the Corporation, as amended from time to time.
1.6 "Certificate of Incorporation" means the initial certificate of incorporation of the Corporation, as amended, supplemented or restated from time to time.
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1.7 "Chairman" means the Chairman of the Board of Directors of the Corporation.
1.8 "Chief Executive Officer" means the Chief Executive Officer of the Corporation.
1.9 "Chief Financial Officer" means the Chief Financial Officer of the Corporation.
1.10 "Corporation" means TA Operating Corporation.
1.11 "Directors" means directors of the Corporation.
1.12 "Entire Board" means all directors of the Corporation in office, whether or not present at a meeting of the Board, but disregarding vacancies.
1.13 "General Corporation Law" means the General Corporation Law of the State of Delaware, as amended from time to time.
1.14 "Office of the Corporation" means the executive office of the Corporation, anything in Section 131 of the General Corporation Law to the contrary notwithstanding.
1.15 "President" means the President of the Corporation.
1.16 "Secretary" means the Secretary of the Corporation.
1.17 "Stockholders" means stockholders of the Corporation.
1.18 "Vice President" means a Vice President of the Corporation.
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ARTICLE 2
STOCKHOLDERS
2.1 PLACE OF MEETINGS. Every meeting of stockholders shall be held at the office of the Corporation or at such other place within or without the State of Delaware as shall be specified or fixed in the notice of such meeting or in the waiver of notice thereof.
2.2 ANNUAL MEETING. A meeting of stockholders shall be held annually for the election of Directors and the transaction of other business at such hour and on such business day in April or as may be determined by the Board and designated in the notice of meeting.
2.3 DEFERRED MEETING FOR ELECTION OF DIRECTORS, ETC. If the annual meeting of stockholders for the election of Directors and the transaction of other business is not held within the month specified in Section 2.2 hereof, the Board shall call a meeting of stockholders for the election of Directors and the transaction of other business as soon thereafter as convenient.
2.4 OTHER SPECIAL MEETINGS. A special meeting of stockholders (other than a special meeting for the election of Directors), unless otherwise prescribed by statute, may be called at any time by the Board or the Chief Executive Officer, or by the President or by the Secretary. At any special meeting of stockholders only such business may be transacted as is related to the purpose or purposes of such meeting set forth in the
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notice thereof given pursuant to Section 2.6 hereof or in any waiver of notice thereof given pursuant to Section 2.7 hereof.
2.5 FIXING RECORD DATE. For the purpose of (a) determining the stockholders entitled (i) to notice of or to vote at any meeting of stockholders or any adjournment thereof, (ii) to express consent to corporate action in writing without a meeting or (iii) to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock; or (b) any other lawful action, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date was adopted by the Board and which record date shall not be (x) in the case of clause (a)(i) above, more than 60 nor less than 10 days before the date of such meeting, (y) in the case of clause (a)(ii) above, more than 10 days after the date upon which the resolution fixing the record date was adopted by the Board and (z) in the case of clause (a)(iii) or (b) above, more than 60 days prior to such action. If no such record date is fixed:
2.5.1 the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held;
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2.5.2 the record date for determining stockholders entitled to express consent to corporate action in writing without a meeting, when no prior action by the Board is required under the General Corporation Law, shall be the first day on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded; and when prior action by the Board is required under the General Corporation Law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the date on which the Board adopts the resolution taking such prior action; and
2.5.3 the record date for determining stockholders for any purpose other than those specified in Sections 2.5.1 and 2.5.2 shall be at the close of business on the day on which the Board adopts the resolution relating thereto.
When a determination of stockholders entitled to notice of or to vote at any meeting of stockholders has been made as provided in this Section 2.5, such determination shall apply to any adjournment thereof unless the Board fixes a new record date for the adjourned meeting. Delivery made to the Corporation's registered office in accordance with Section 2.5.2 shall be by hand or by certified or registered mail, return receipt requested.
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2.6 NOTICE OF MEETINGS OF STOCKHOLDERS. Except as otherwise provided in Sections 2.5 and 2.7 hereof, whenever under the provisions of any statute, the Certificate of Incorporation or these By-laws, stockholders are required or permitted to take any action at a meeting, written notice shall be given stating the place, date and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Unless otherwise provided by any statute, the Certificate of Incorporation or these By-laws, a copy of the notice of any meeting shall be given, personally or by mail, not less than ten nor more than sixty days before the date of the meeting, to each stockholder entitled to notice of or to vote at such meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail, with postage prepaid, directed to the stockholder at his or her address as it appears on the records of the Corporation. An affidavit of the Secretary or an Assistant Secretary or of the transfer agent of the Corporation that the notice required by this Section 2.6 has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. When a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken, and at the adjourned meeting any business may be transacted that might have been transacted at the meeting as originally called. If, however, the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.
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2.7 WAIVERS OF NOTICE. Whenever the giving of any notice is required by statute, the Certificate of Incorporation or these By-laws, a waiver thereof, in writing, signed by the stockholder or stockholders entitled to said notice, whether before or after the event as to which such notice is required, shall be deemed equivalent to notice. Attendance by a stockholder at a meeting shall constitute a waiver of notice of such meeting except when the stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business on the ground that the meeting has not been lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in any written waiver of notice unless so required by statute, the Certificate of Incorporation or these By-laws.
2.8 LIST OF STOCKHOLDERS. The Secretary shall prepare and make, or cause to be prepared and made, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, the stockholder's agent, or attorney, at the stockholder's expense, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the
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time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. The Corporation shall maintain the stockholder list in written form or in another form capable of conversion into written form within a reasonable time. Upon the willful neglect or refusal of the Directors to produce such a list at any meeting for the election of Directors, they shall be ineligible for election to any office at such meeting. The stock ledger shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list of stockholders or the books of the Corporation, or to vote in person or by proxy at any meeting of stockholders.
2.9 QUORUM OF STOCKHOLDERS; ADJOURNMENT. Except as otherwise provided by any statute, the Certificate of Incorporation or these By-laws, the holders of one-third of all outstanding shares of stock entitled to vote at any meeting of stockholders, present in person or represented by proxy, shall constitute a quorum for the transaction of any business at such meeting. When a quorum is once present to organize a meeting of stockholders, it is not broken by the subsequent withdrawal of any stockholders. The holders of a majority of the shares of stock present in person or represented by proxy at any meeting of stockholders, including an adjourned meeting, whether or not a quorum is present, may adjourn such meeting to another time and place. Shares of its own stock belonging to the Corporation or to another corporation, if a majority of the shares entitled to vote in the election of directors of such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes; PROVIDED, HOWEVER, that the foregoing shall not limit the right of the
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Corporation to vote stock, including but not limited to its own stock, held by it in a fiduciary capacity.
2.10 VOTING; PROXIES. Unless otherwise provided in the Certificate of Incorporation, every stockholder of record shall be entitled at every meeting of stockholders to one vote for each share of capital stock standing in his or her name on the record of stockholders determined in accordance with Section 2.5 hereof. If the Certificate of Incorporation provides for more or less than one vote for any share on any matter, each reference in the By-laws or the General Corporation Law to a majority or other proportion of stock shall refer to such majority or other proportion of the votes of such stock. The provisions of Sections 212 and 217 of the General Corporation Law shall apply in determining whether any shares of capital stock may be voted and the persons, if any, entitled to vote such shares; but the Corporation shall be protected in assuming that the persons in whose names shares of capital stock stand on the stock ledger of the Corporation are entitled to vote such shares. Holders of redeemable shares of stock are not entitled to vote after the notice of redemption is mailed to such holders and a sum sufficient to redeem the stocks has been deposited with a bank, trust company, or other financial institution under an irrevocable obligation to pay the holders the redemption price on surrender of the shares of stock. At any meeting of stockholders (at which a quorum was present to organize the meeting), all matters, except as otherwise provided by statute or by the Certificate of Incorporation or by these By-laws, shall be
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decided by a majority of the votes cast at such meeting by the holders of shares present in person or represented by proxy and entitled to vote thereon, whether or not a quorum is present when the vote is taken. All elections of Directors shall be by written ballot unless otherwise provided in the Certificate of Incorporation. In voting on any other question on which a vote by ballot is required by law or is demanded by any stockholder entitled to vote, the voting shall be by ballot. Each ballot shall be signed by the stockholder voting or the stockholder's proxy and shall state the number of shares voted. On all other questions, the voting may be VIVA VOCE. Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for such stockholder by proxy. The validity and enforceability of any proxy shall be determined in accordance with Section 212 of the General Corporation Law. A stockholder may revoke any proxy that is not irrevocable by attending the meeting and voting in person or by filing an instrument in writing revoking the proxy or by delivering a proxy in accordance with applicable law bearing a later date to the Secretary.
2.11 VOTING PROCEDURES AND INSPECTORS OF ELECTION AT MEETINGS OF STOCKHOLDERS. The Board, in advance of any meeting of stockholders, may appoint one or more inspectors to act at the meeting and make a written report thereof. The Board may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting, the person presiding at the meeting may appoint, and on the request of any stockholder entitled to vote thereat shall
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appoint, one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspectors shall (a) ascertain the number of shares outstanding and the voting power of each, (b) determine the shares represented at the meeting and the validity of proxies and ballots, (c) count all votes and ballots, (d) determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors, and (e) certify their determination of the number of shares represented at the meeting and their count of all votes and ballots. The inspectors may appoint or retain other persons or entities to assist the inspectors in the performance of their duties. Unless otherwise provided by the Board, the date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting shall be determined by the person presiding at the meeting and shall be announced at the meeting. No ballot, proxies or votes, or any revocation thereof or change thereto, shall be accepted by the inspectors after the closing of the polls unless the Court of Chancery of the State of Delaware upon application by a stockholder shall determine otherwise.
2.12 ORGANIZATION. At each meeting of stockholders, the Chairman, or in the absence of the Chairman, the Chief Executive Officer, or in the absence of the Chief Executive Officer, the President, or in the absence of the President a Vice President, and in case more than one Vice
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President shall be present, that Vice President designated by the Board (or in the absence of any such designation, the most senior Vice President, based on age, present), shall act as chairman of the meeting. The Secretary, or in his or her absence one of the Assistant Secretaries, shall act as secretary of the meeting. In case none of the officers above designated to act as chairman or secretary of the meeting, respectively, shall be present, a chairman or a secretary of the meeting, as the case may be, shall be chosen by a majority of the votes cast at such meeting by the holders of shares of capital stock present in person or represented by proxy and entitled to vote at the meeting.
2.13 ORDER OF BUSINESS. The order of business at all meetings of stockholders shall be as determined by the chairman of the meeting, but the order of business to be followed at any meeting at which a quorum is present may be changed by a majority of the votes cast at such meeting by the holders of shares of capital stock present in person or represented by proxy and entitled to vote at the meeting.
2.14 WRITTEN CONSENT OF STOCKHOLDERS WITHOUT A MEETING. Unless otherwise provided in the Certificate of Incorporation, any action required by the General Corporation Law to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered (by hand or by certified or registered mail, return receipt requested) to the Corporation by delivery to its registered office in the State of
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Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Every written consent shall bear the date of signature of each stockholder who signs the consent and no written consent shall be effective to take the corporate action referred to therein unless, within 60 days of the earliest dated consent delivered in the manner required by this Section 2.14, written consents signed by a sufficient number of holders to take action are delivered to the Corporation as aforesaid. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.
ARTICLE 3
DIRECTORS
3.1 GENERAL POWERS. Except as otherwise provided in the Certificate of Incorporation, the business and affairs of the Corporation shall be managed by or under the direction of the Board. The Board may adopt such rules and regulations, not inconsistent with the Certificate of Incorporation or these By-laws or applicable laws, as it may deem proper for the conduct of its meetings and the management of the Corporation. In addition to the powers expressly conferred by these By-laws, the Board may exercise all powers and perform all acts that are not required, by these By-laws or the Certificate of Incorporation or by statute, to be exercised and performed by the stockholders.
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3.2 NUMBER; QUALIFICATION; TERM OF OFFICE. The Board shall consist of one or more members. The number of Directors shall be fixed from time to time by resolution adopted by a majority of the entire Board then in office, whether or not present at a meeting. Each Director shall hold office until his successor is elected and qualified, or until his earlier death, resignation or removal.
3.3 ELECTION. Directors shall, except as otherwise required by statute or by the Certificate of Incorporation, be elected by a plurality of the votes cast at a meeting of stockholders by the holders of shares entitled to vote in the election.
3.4 NEWLY CREATED DIRECTORSHIPS AND VACANCIES. Unless otherwise provided in the Certificate of Incorporation, newly created Directorships resulting from an increase in the number of Directors and vacancies occurring in the Board for any other reason, including the removal of Directors without cause, may be filled by persons having the qualifications set forth in
Section 3.2 hereof by the affirmative votes of a majority of the entire Board, although less than a quorum, or by a sole remaining Director, or may be elected by a plurality of the votes cast by the holders of shares of capital stock entitled to vote in the election at a special meeting of stockholders called for that purpose. A Director elected to fill a vacancy shall be elected to hold office until a successor is elected and qualified, or until the Director's earlier death, resignation or removal.
3.5 RESIGNATION. Any Director may resign at any time by written notice to the Corporation. Such resignation shall take effect at the time therein specified,
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and, unless otherwise specified in such resignation, the acceptance of such resignation shall not be necessary to make it effective.
3.6 REMOVAL. Subject to the provisions of Section 141(k) of the General Corporation Law, any or all of the Directors may be removed with or without cause by vote of the holders of a majority of the shares then entitled to vote at an election of Directors.
3.7 COMPENSATION. Each Director who is not an employee of the Corporation, in consideration of his or her service as such, shall be entitled to receive from the Corporation such amount per annum or such fees for attendance at Directors' meetings, or both, as the Board may from time to time determine, together with reimbursement for the reasonable out-of-pocket expenses, if any, incurred by such Director in connection with the performance of his or her duties. Each Director who is not an employee of the Corporation who shall serve as a member of any committee of Directors in consideration of serving as such shall be entitled to such additional amount per annum or such fees for attendance at committee meetings, or both, as the Board may from time to time determine, together with reimbursement for the reasonable out-of-pocket expenses, if any, incurred by such Director in the performance of his or her duties. Nothing contained in this Section 3.7 shall preclude any Director from serving the Corporation or its subsidiaries in any other capacity and receiving proper compensation therefor.
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3.8 TIMES AND PLACES OF MEETINGS. The Board may hold meetings, both regular and special, either within or without the State of Delaware. The times and places for holding meetings of the Board may be fixed from time to time by resolution of the Board or (unless contrary to a resolution of the Board) in the notice of the meeting.
3.9 ANNUAL MEETINGS. On the day when and at the place where the annual meeting of stockholders for the election of Directors is held, and as soon as practicable thereafter, the Board may hold its annual meeting, without notice of such meeting, for the purposes of organization, the election of officers and the transaction of other business. The annual meeting of the Board may be held at any other time and place specified in a notice given as provided in Section 3.11 hereof for special meetings of the Board or in a waiver of notice thereof.
3.10 REGULAR MEETINGS. Regular meetings of the Board may be held without notice at such times and at such places as shall from time to time be determined by the Board.
3.11 SPECIAL MEETINGS. Special meetings of the Board may be called by the Chairman, the Chief Executive Officer or the Secretary or by any two or more Directors then serving on at least two Business Day's notice to each Director given by one of the means specified in Section 3.14 hereof other than by mail. Special meetings shall be called by the Chairman, Chief Executive Officer or Secretary in like manner and on like notice on the written request of any two or more of the Directors then serving.
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3.12 TELEPHONE MEETINGS. Directors or members of any committee designated by the Board may participate in a meeting of the Board or of such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this Section 3.12 shall constitute presence in person at such meeting. Each regular or special meeting of the Board or any committee thereof shall have adequate conference telephone or similar communications equipment available to allow any one of the directors or committee members who choose to participate by telephone to do so in accordance with this Section 3.12.
3.13 ADJOURNED MEETINGS. A majority of the Directors present at any meeting of the Board, including an adjourned meeting, whether or not a quorum is present, may adjourn such meeting to another time and place. At least one day's notice of any adjourned meeting of the Board shall be given to each Director whether or not present at the time of the adjournment, if such notice shall be given by one of the means specified in Section 3.14 hereof other than by mail, or at least three days' notice if by mail. Any business may be transacted at an adjourned meeting that might have been transacted at the meeting as originally called.
3.14 NOTICE PROCEDURE. Subject to Sections 3.11 and 3.17 hereof, whenever, under the provisions of any statute, the Certificate of Incorporation or these By-laws, notice is required to be given to any Director, such notice shall be deemed given effectively if given in person or by telephone, by hand delivery, or by telegram, telex,
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telecopy or similar means addressed to such Director at such Director's address as it appears on the records of the Corporation.
3.15 WAIVER OF NOTICE. Whenever the giving of any notice is required by statute, the Certificate of Incorporation or these By-laws, a waiver thereof, in writing, signed by the person or persons entitled to said notice, whether before or after the event as to which such notice is required, shall be deemed equivalent to notice. Attendance by a person at a meeting shall constitute a waiver of notice of such meeting except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business on the ground that the meeting has not been lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Directors or a committee of Directors need be specified in any written waiver of notice unless so required by statute, the Certificate of Incorporation or these By-laws.
3.16 ORGANIZATION. At each meeting of the Board, the Chairman, or in the absence of the Chairman the Chief Executive Officer, or in the absence of the Chief Executive Officer a chairman chosen by a majority of the Directors present, shall preside. The Secretary shall act as secretary at each meeting of the Board. In case the Secretary shall be absent from any meeting of the Board, an Assistant Secretary shall perform the duties of secretary at such meeting; and in the absence from any such meeting of the Secretary and all Assistant Secretaries, the person presiding at the meeting may appoint any person to act as secretary of the meeting.
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3.17 QUORUM OF DIRECTORS. The presence in person of a majority of the entire Board shall be necessary and sufficient to constitute a quorum for the transaction of business at any meeting of the Board, but a majority of a smaller number may adjourn any such meeting to a later date.
3.18 ACTION BY MAJORITY VOTE. Except as otherwise expressly required by statute, the Certificate of Incorporation or these By-laws, the act of a majority of the Directors present at a meeting at which a quorum is present shall be the act of the Board.
3.19 ACTION WITHOUT MEETING. Unless otherwise restricted by the Certificate of Incorporation or these By-laws, any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting if all Directors or members of such committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board or committee.
ARTICLE 4
COMMITTEES OF THE BOARD
The Board may, by resolution passed by a vote of the entire Board, designate one or more committees, each committee to consist of one or more of the Directors of the Corporation. The Board may designate one or more Directors as alternate members of any committee to replace absent or disqualified members at any meeting of such committee. If a member of a committee shall be absent from any meeting, or disqualified from voting thereat, the remaining member or members present
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and not disqualified from voting, whether or not such member or members constitute a quorum, may, by a unanimous vote, appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in a resolution of the Board passed as aforesaid, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be impressed on all papers that may require it, but no such committee shall have the power or authority in reference to the following matters: (i) approving or adopting, or recommending to the stockholders. any action or matter expressly required by the GCL to be submitted to stockholders for approval or (ii) adopting, amending or repealing any by-law of the Corporation. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board. Unless otherwise specified in the resolution of the Board designating a committee, at all meetings of such committee a majority of the total number of members of the committee shall constitute a quorum for the transaction of business, and the vote of a majority of the members of the committee present at any meeting at which there is a quorum shall be the act of the committee. Each committee shall keep regular minutes of its meetings. Unless the Board otherwise provides, each committee designated by the Board may make, alter and repeal rules for the conduct of its business. In the absence of such rules each committee shall conduct its business in the same manner as the Board conducts its business pursuant to Article 3 of these By-laws.
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ARTICLE 5
OFFICERS
5.1 POSITIONS. The officers of the Corporation shall be a Chairman, a Chief Executive Officer, a President, a Secretary, a Chief Financial Officer and such other officers as the Board may appoint, including one or more Vice Presidents and one or more Assistant Secretaries and Assistant Treasurers, who shall exercise such powers and perform such duties as shall be determined from time to time by the Board. The Board may designate one or more Vice Presidents as Executive Vice Presidents and may use descriptive words or phrases to designate the standing, seniority or areas of special competence of the Vice Presidents elected or appointed by it. Any number of offices may be held by the same person unless the Certificate of Incorporation or these By-laws otherwise provide.
5.2 APPOINTMENT. The officers of the Corporation shall be chosen by the Board annually or at such other time or times as the Board shall determine.
5.3 COMPENSATION. The compensation of all officers of the Corporation shall be fixed by the Board. No officer shall be prevented from receiving a salary or other compensation by reason of the fact that the officer is also a Director.
5.4 TERM OF OFFICE. Each officer of the Corporation shall hold office until such officer's successor is chosen and qualifies or until such officer's earlier death, resignation or removal. Any officer may resign at any time upon written notice to the Corporation. Such resignation shall take effect at the date of receipt of such notice or at
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such later time as is therein specified, and, unless otherwise specified, the acceptance of such resignation shall not be necessary to make it effective. The resignation of an officer shall be without prejudice to the contract rights of the Corporation, if any. Any officer elected or appointed by the Board may be removed at any time, with or without cause, by vote of a majority of the entire Board. Any vacancy occurring in any office of the Corporation shall be filled by the Board. The removal of an officer without cause shall be without prejudice to the officer's contract rights, if any. The election or appointment of an officer shall not of itself create contract rights.
5.5 FIDELITY BONDS. The Corporation may secure the fidelity of any or all of its officers or agents by bond or otherwise.
5.6 CHAIRMAN. The Chairman shall preside at all meetings of the Board and shall exercise such powers and perform such other duties as shall be determined from time to time by the Board.
5.7 CHIEF EXECUTIVE OFFICER. The Chief Executive Officer shall be the Chief Executive Officer of the Corporation and shall have general supervision over the business of the Corporation, subject, however, to the control of the Board and of any duly authorized committee of Directors. The Chief Executive Officer shall preside at all meetings of the stockholders and at all meetings of the Board at which the Chairman is not present. The Chief Executive Officer may sign and execute in the name of the Corporation deeds, mortgages, bonds, contracts and other instruments except in cases in which the signing and execution thereof shall be expressly delegated by the Board or by
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these By-laws to some other officer or agent of the Corporation or shall be required by statute otherwise to be signed or executed and, in general, the Chief Executive Officer shall perform all duties incident to the office of Chief Executive Officer of a corporation and such other duties as may from time to time be assigned to the Chief Executive Officer by the Board.
5.8 PRESIDENT. At the request of the Chief Executive Officer, or, in the Chief Executive Officer's absence, at the request of the Board, the President shall perform all of the duties of the Chief Executive Officer and, in so performing, shall have all the powers of, and be subject to all the restrictions upon, the Chief Executive Officer. The President may sign and execute in the name of the Corporation deeds, mortgages, bonds, contracts or other instruments, except in the cases in which the signing and execution thereof shall be expressly delegated by the Board or these By-laws to some other officer or agent of the Corporation, or shall be required by statute otherwise to be signed or executed, and the President shall perform such other duties as from time to time may be assigned to the President by the Board or the Chief Executive Officer.
5.9 VICE PRESIDENTS. At the request of the President, or, in the President's absence, at the request of the Board, the Vice Presidents shall (in such order as may be designated by the Board or, in the absence of any such designation, in order of seniority based on age) perform all of the duties of the President and, in so performing, shall have all the powers of, and be subject to all restrictions upon, the President. Any Vice President may sign and execute in the name of the Corporation deeds, mortgages,
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bonds, contracts or other instruments, except in cases in which the signing and execution thereof shall be expressly delegated by the Board or by these By-laws to some other officer or agent of the Corporation, or shall be required by statute otherwise to be signed or executed, and each Vice President shall perform such other duties as from time to time may be assigned to such Vice President by the Board or by the President.
5.10 SECRETARY. The Secretary shall attend all meetings of the Board and of the stockholders and shall record all the proceedings of the meetings of the Board and of the stockholders in a book to be kept for that purpose, and shall perform like duties for committees of the Board, when required. The Secretary shall give, or cause to be given, notice of all special meetings of the Board and of the stockholders and shall perform such other duties as may be prescribed by the Board or by the President, under whose supervision the Secretary shall be. The Secretary shall have custody of the corporate seal of the Corporation, and the Secretary, or an Assistant Secretary, shall have authority to impress the same on any instrument requiring it, and when so impressed the seal may be attested by the signature of the Secretary or by the signature of such Assistant Secretary. The Board may give general authority to any other officer to impress the seal of the Corporation and to attest the same by such officer's signature. The Secretary or an Assistant Secretary may also attest all instruments signed by the President or any Vice President. The Secretary shall have charge of all the books, records and papers of the Corporation relating to its organization and management, shall see that the reports, statements and other documents required by statute are properly kept and filed and, in
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general, shall perform all duties incident to the office of Secretary of a corporation and such other duties as may from time to time be assigned to the Secretary by the Board or by the Chief Executive Officer.
5.11 CHIEF FINANCIAL OFFICER. The Chief Financial Officer shall have charge and custody of, and be responsible for, all funds, securities and notes of the Corporation; receive and give receipts for moneys due and payable to the Corporation from any sources whatsoever; deposit all such moneys and valuable effects in the name and to the credit of the Corporation in such depositaries as may be designated by the Board; against proper vouchers, cause such funds to be disbursed by checks or drafts on the authorized depositaries of the Corporation signed in such manner as shall be determined by the Board and be responsible for the accuracy of the amounts of all moneys so disbursed; regularly enter or cause to be entered in books or other records maintained for the purpose full and adequate account of all moneys received or paid for the account of the Corporation; have the right to require from time to time reports or statements giving such information as the Chief Financial Officer may desire with respect to any and all financial transactions of the Corporation from the officers or agents transacting the same; render to the Chief Executive Officer or the Board, whenever the Chief Executive Officer or the Board shall require the Chief Financial Officer so to do, an account of the financial condition of the Corporation and of all financial transactions of the Corporation; exhibit at all reasonable times the records and books of account to any of the Directors upon application at the office of the Corporation where such records and books are kept;
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disburse the funds of the Corporation as ordered by the Board; and, in general, perform all duties incident to the office of Chief Financial Officer of a corporation and such other duties as may from time to time be assigned to the Chief Financial Officer by the Board or the Chief Executive Officer.
5.12 ASSISTANT SECRETARIES AND ASSISTANT TREASURERS. Assistant Secretaries and Assistant Treasurers shall perform such duties as shall be assigned to them by the Secretary or by the Chief Financial Officer, respectively, or by the Board or by the Chief Executive Officer.
ARTICLE 6
CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.
6.1 EXECUTION OF CONTRACTS. The Board, except as otherwise provided in these By-laws, may prospectively or retroactively authorize any officer or officers, employee or employees or agent or agents, in the name and on behalf of the Corporation, to enter into any contract or execute and deliver any instrument, and any such authority may be general or confined to specific instances, or otherwise limited.
6.2 LOANS. The Board may prospectively or retroactively authorize the Chief Executive Officer or any other officer, employee or agent of the Corporation to effect loans and advances at any time for the Corporation from any bank, trust company or other institution, or from any firm, corporation or individual, and for such loans and advances the person so authorized may make, execute and deliver promissory notes, bonds or other certificates or evidences of indebtedness of the Corporation, and, when
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authorized by the Board so to do, may pledge and hypothecate or transfer any securities or other property of the Corporation as security for any such loans or advances. Such authority conferred by the Board may be general or confined to specific instances, or otherwise limited.
6.3 CHECKS, DRAFTS, ETC. All checks, drafts and other orders for the payment of money out of the funds of the Corporation and all evidences of indebtedness of the Corporation shall be signed on behalf of the Corporation in such manner as shall from time to time be determined by resolution of the Board.
6.4 DEPOSITS. The funds of the Corporation not otherwise employed shall be deposited from time to time to the order of the Corporation with such banks, trust companies, investment banking firms, financial institutions or other depositaries as the Board may select or as may be selected by an officer, employee or agent of the Corporation to whom such power to select may from time to time be delegated by the Board.
ARTICLE 7
STOCK AND DIVIDENDS
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7.1 CERTIFICATES REPRESENTING SHARES. The shares of capital stock of the Corporation shall be represented by certificates in such form (consistent with the provisions of Section 158 of the General Corporation Law) as shall be approved by the Board. Such certificates shall be signed by the Chairman, the Chief Executive Officer, the President or a Vice President and by the Secretary or an Assistant Secretary or the Chief Financial Officer or an Assistant Treasurer, and may be impressed with the seal of the Corporation or a facsimile thereof. The signatures of the officers upon a certificate may be facsimiles, if the certificate is countersigned by a transfer agent or registrar other than the Corporation itself or its employee. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon any certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, such certificate may, unless otherwise ordered by the Board, be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue.
7.2 TRANSFER OF SHARES. Transfers of shares of capital stock of the Corporation shall be made only on the books of the Corporation by the holder thereof or by the holder's duly authorized attorney appointed by a power of attorney duly executed and filed with the Secretary or a transfer agent of the Corporation, and on surrender of the certificate or certificates representing such shares of capital stock properly endorsed for transfer and upon payment of all necessary transfer taxes. Every certificate exchanged, returned or surrendered to the Corporation shall be marked "Cancelled," with the date of
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cancellation, by the Secretary or an Assistant Secretary or the transfer agent of the Corporation. A person in whose name shares of capital stock shall stand on the books of the Corporation shall be deemed the owner thereof to receive dividends, to vote as such owner and for all other purposes as respects the Corporation. No transfer of shares of capital stock shall be valid as against the Corporation, its stockholders and creditors for any purpose, except to render the transferee liable for the debts of the Corporation to the extent provided by law, until such transfer shall have been entered on the books of the Corporation by an entry showing from and to whom transferred.
7.3 TRANSFER AND REGISTRY AGENTS. The Corporation may from time to time maintain one or more transfer offices or agents and registry offices or agents at such place or places as may be determined from time to time by the Board.
7.4 LOST, DESTROYED, STOLEN AND MUTILATED CERTIFICATES. The holder of any shares of capital stock of the Corporation shall immediately notify the Corporation of any loss, destruction, theft or mutilation of the certificate representing such shares, and the Corporation may issue a new certificate to replace the certificate alleged to have been lost, destroyed, stolen or mutilated. The Board may, in its discretion, as a condition to the issue of any such new certificate, require the owner of the lost, destroyed, stolen or mutilated certificate, or his or her legal representatives, to make proof satisfactory to the Board of such loss, destruction, theft or mutilation and to advertise such fact in such manner as the Board may require, and to give the Corporation and its transfer agents and registrars, or such of them as the Board may require, a bond in such form, in such sums
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and with such surety or sureties as the Board may direct, to indemnify the Corporation and its transfer agents and registrars against any claim that may be made against any of them on account of the continued existence of any such certificate so alleged to have been lost, destroyed, stolen or mutilated and against any expense in connection with such claim.
7.5 RULES AND REGULATIONS. The Board may make such rules and regulations as it may deem expedient, not inconsistent with these By-laws or with the Certificate of Incorporation, concerning the issue, transfer and registration of certificates representing shares of its capital stock.
7.6 RESTRICTION ON TRANSFER OF STOCK. A written restriction on the transfer or registration of transfer of capital stock of the Corporation, if permitted by Section 202 of the General Corporation Law and noted conspicuously on the certificate representing such capital stock, may be enforced against the holder of the restricted capital stock or any successor or transferee of the holder, including an executor, administrator, trustee, guardian or other fiduciary entrusted with like responsibility for the person or estate of the holder. Unless noted conspicuously on the certificate representing such capital stock, a restriction, even though permitted by Section 202 of the General Corporation Law, shall be ineffective except against a person with actual knowledge of the restriction. A restriction on the transfer or registration of transfer of capital stock of the Corporation may be imposed either by the Certificate of Incorporation or by an agreement among any number of stockholders or among such stockholders and the
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Corporation. No restriction so imposed shall be binding with respect to capital stock issued prior to the adoption of the restriction unless the holders of such capital stock are parties to an agreement or voted in favor of the restriction.
7.7 DIVIDENDS, SURPLUS, ETC. Subject to the provisions of the Certificate of Incorporation and of law, the Board:
7.7.1 may declare and pay dividends or make other distributions on the outstanding shares of capital stock in such amounts and at such time or times as it, in its discretion, shall deem advisable giving due consideration to the condition of the affairs of the Corporation;
7.7.2 may use and apply, in its discretion, any of the surplus of the Corporation in purchasing or acquiring any shares of capital stock of the Corporation, or purchase warrants therefor, in accordance with law, or any of its bonds, debentures, notes, scrip or other securities or evidences of indebtedness; and
7.7.3 may set aside from time to time out of such surplus or net profits such sum or sums as, in its discretion, it may think proper, as a reserve fund to meet contingencies, or for equalizing dividends or for the purpose of maintaining or increasing the property or business of the Corporation, or for any purpose it may think conducive to the best interests of the Corporation.
ARTICLE 8
INDEMNIFICATION
8.1 INDEMNITY UNDERTAKING. To the extent not prohibited by law, the Corporation shall indemnify any person who is or was made, or threatened to be made, a
31

party to any threatened, pending or completed action, suit or proceeding (a "Proceeding"), whether civil, criminal, administrative or investigative, including, without limitation, an action by or in the right of the Corporation to procure a judgment in its favor, by reason of the fact that such person, or a person of whom such person is the legal representative, is or was a Director or officer of the Corporation, or, at the request of the Corporation, is or was serving as a director or officer of any other corporation or in a capacity with comparable authority or responsibilities for any partnership, joint venture, trust, employee benefit plan or other enterprise (an "Other Entity"), against judgments, fines, penalties, excise taxes, amounts paid in settlement and costs, charges and expenses (including attorneys' fees, disbursements and other charges). Persons who are not directors or officers of the Corporation (or otherwise entitled to indemnification pursuant to the preceding sentence) may be similarly indemnified in respect of service to the Corporation or to an Other Entity at the request of the Corporation to the extent the Board at any time specifies that such persons are entitled to the benefits of this Article 8.
8.2 ADVANCEMENT OF EXPENSES. The Corporation shall, from time to time, reimburse or advance to any Director or officer or other person entitled to indemnification hereunder the funds necessary for payment of expenses, including attorneys' fees and disbursements, incurred in connection with any Proceeding, in advance of the final disposition of such Proceeding; PROVIDED, HOWEVER, that, if required by the General Corporation Law, such expenses incurred by or on behalf of any Director
32

or officer or other person may be paid in advance of the final disposition of a Proceeding only upon receipt by the Corporation of an undertaking, by or on behalf of such Director or officer (or other person indemnified hereunder), to repay any such amount so advanced if it shall ultimately be determined by final judicial decision from which there is no further right of appeal that such Director, officer or other person is not entitled to be indemnified for such expenses.
8.3 RIGHTS NOT EXCLUSIVE. The rights to indemnification and reimbursement or advancement of expenses provided by, or granted pursuant to, this Article 8 shall not be deemed exclusive of any other rights to which a person seeking indemnification or reimbursement or advancement of expenses may have or hereafter be entitled under any statute, the Certificate of Incorporation, these By-laws, any agreement, any vote of stockholders or disinterested Directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office.
8.4 CONTINUATION OF BENEFITS. The rights to indemnification and reimbursement or advancement of expenses provided by, or granted pursuant to, this Article 8 shall continue as to a person who has ceased to be a Director or officer (or other person indemnified hereunder) and shall inure to the benefit of the executors, administrators, legatees and distributees of such person.
8.5 INSURANCE. The Corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or
33

agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of an Other Entity, against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person's status as such, whether or not the Corporation would have the power to indemnify such person against such liability under the provisions of this Article 8, the Certificate of Incorporation or under section 145 of the General Corporation Law or any other provision of law.
8.6 BINDING EFFECT. The provisions of this Article 8 shall be a contract between the Corporation, on the one hand, and each Director and officer who serves in such capacity at any time while this Article 8 is in effect and any other person entitled to indemnification hereunder, on the other hand, pursuant to which the Corporation and each such Director, officer or other person intend to be, and shall be legally bound. No repeal or modification of this Article 8 shall affect any rights or obligations with respect to any state of facts then or theretofore existing or thereafter arising or any proceeding theretofore or thereafter brought or threatened based in whole or in part upon any such state of facts.
8.7 PROCEDURAL RIGHTS. The rights to indemnification and reimbursement or advancement of expenses provided by, or granted pursuant to, this Article 8 shall be enforceable by any person entitled to such indemnification or reimbursement or advancement of expenses in any court of competent jurisdiction. The burden of proving that such indemnification or reimbursement or advancement of expenses is not appropriate shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, its independent legal counsel and its stockholders) to have made a determination prior to the commencement of such action that such indemnification or reimbursement or advancement of
34

expenses is proper in the circumstances nor an actual determination by the Corporation (including its Board of Directors, its independent legal counsel and its stockholders) that such person is not entitled to such indemnification or reimbursement or advancement of expenses shall constitute a defense to the action or create a presumption that such person is not so entitled. Such a person shall also be indemnified for any expenses incurred in connection with successfully establishing his or her right to such indemnification or reimbursement or advancement of expenses, in whole or in part, in any such proceeding.
8.8 SERVICE DEEMED AT CORPORATION'S REQUEST. Any Director or officer of the Corporation serving in any capacity (a) another corporation of which a majority of the shares entitled to vote in the election of its directors is held, directly or indirectly, by the Corporation or (b) any employee benefit plan of the Corporation or any corporation referred to in clause (a) shall be deemed to be doing so at the request of the Corporation.
8.9 ELECTION OF APPLICABLE LAW. Any person entitled to be indemni-fied or to reimbursement or advancement of expenses as a matter of right pursuant to this Article 8 may elect to have the right to indemnification or reimbursement or advancement of expenses interpreted on the basis of the applicable law in effect at the time of the occurrence of the event or events giving rise to the applicable Proceeding, to the extent
35

permitted by law, or on the basis of the applicable law in effect at the time such indemnification or reimbursement or advancement of expenses is sought. Such election shall be made, by a notice in writing to the Corporation, at the time indemnification or reimbursement or advancement of expenses is sought; PROVIDED, HOWEVER, that if no such notice is given, the right to indemnification or reimbursement or advancement of expenses shall be determined by the law in effect at the time indemnification or reimbursement or advancement of expenses is sought.
ARTICLE 9
BOOKS AND RECORDS
9.1 BOOKS AND RECORDS. There shall be kept at the principal office of the Corporation correct and complete records and books of account recording the financial transactions of the Corporation and minutes of the proceedings of the stockholders, the Board and any committee of the Board. The Corporation shall keep at its principal office, or at the office of the transfer agent or registrar of the Corporation, a record containing the names and addresses of all stockholders, the number and class of shares held by each and the dates when they respectively became the owners of record thereof.
9.2 FORM OF RECORDS. Any records maintained by the Corporation in the regular course of its business, including its stock ledger, books of account, and minute books, may be kept on, or be in the form of, punch cards, magnetic tape, photographs, microphotographs, or any other information storage device, provided that the records so
36

kept can be converted into clearly legible written form within a reasonable time. The Corporation shall so convert any records so kept upon the request of any person entitled to inspect the same.
9.3 INSPECTION OF BOOKS AND RECORDS. Except as otherwise provided by law, the Board shall determine from time to time whether, and, if allowed, when and under what conditions and regulations, the accounts, books, minutes and other records of the Corporation, or any of them, shall be open to the stockholders for inspection.
ARTICLE 10
SEAL
The corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization and the words "Corporate Seal, Delaware." The seal may be used by causing it or a facsimile thereof to be impressed or affixed or otherwise reproduced.
ARTICLE 11
FISCAL YEAR
The fiscal year of the Corporation shall be fixed, and may be changed, by resolution of the Board.
ARTICLE 12
PROXIES AND CONSENTS
Unless otherwise directed by the Board, the Chairman, the Chief Executive Officer, the President, any Vice President, the Secretary or the Chief Financial
37

Officer, or any one of them, may execute and deliver on behalf of the Corporation proxies respecting any and all shares or other ownership interests of any Other Entity owned by the Corporation appointing such person or persons as the officer executing the same shall deem proper to represent and vote the shares or other ownership interests so owned at any and all meetings of holders of shares or other ownership interests, whether general or special, and/or to execute and deliver consents respecting such shares or other ownership interests; or any of the aforesaid officers may attend any meeting of the holders of shares or other ownership interests of such Other Entity and thereat vote or exercise any or all other powers of the Corporation as the holder of such shares or other ownership interests.
ARTICLE 13
EMERGENCY BY-LAWS
Unless the Certificate of Incorporation provides otherwise, the following provisions of this Article 13 shall be effective during an emergency, which is defined as when a quorum of the Corporation's Directors cannot be readily assembled because of some catastrophic event. During such emergency:
13.1 NOTICE TO BOARD MEMBERS. Any one member of the Board or any one of the following officers: Chairman, Chief Executive Officer, President, any Vice President, Secretary, or Chief Financial Officer, may call a meeting of the Board. Notice of such meeting need be given only to those Directors whom it is practicable to reach, and may be given in any practical manner, including by publication and radio. Such notice shall be given at least six hours prior to commencement of the meeting.
38

13.2 TEMPORARY DIRECTORS AND QUORUM. One or more officers of the Corporation present at the emergency Board meeting, as is necessary to achieve a quorum, shall be considered to be Directors for the meeting, and shall so serve in order of rank, and within the same rank, in order of seniority. In the event that less than a quorum of the Directors are present (including any officers who are to serve as Directors for the meeting), those Directors present (including the officers serving as Directors) shall constitute a quorum.
13.3 ACTIONS PERMITTED TO BE TAKEN. The Board as constituted in
Section 13.2, and after notice as set forth in Section 13.1 may:
(a) prescribe emergency powers to any officer of the Corporation;
(b) delegate to any officer or Director, any of the powers of the Board;
(c) designate lines of succession of officers and agents, in the event that any of them are unable to discharge their duties;
(d) relocate the principal place of business, or designate successive or simultaneous principal places of business; and
(e) take any other convenient, helpful or necessary action to carry on the business of the Corporation.
ARTICLE 14
ADOPTION, AMENDMENT AND REPEAL OF BY-LAWS
39

The Board may from time to time adopt, amend or repeal the By-laws; PROVIDED, HOWEVER, that any By-laws adopted or amended by the Board may be amended or repealed, and any By-laws may be adopted, by a vote of the Stockholders having at least a majority in voting power of the then issued and outstanding shares of capital stock of the Corporation.
40

EXHIBIT 4.5
SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of March 1, 1998 among TA TRAVEL, L.L.C. (the "New Subsidiary Guarantor"), a subsidiary of TA Operating Corporation which is a subsidiary of TravelCenters of America, Inc. (or its successor), a Delaware corporation (the "Company"), THE COMPANY, on behalf of itself and the Subsidiary Guarantors (the "Existing Subsidiary Guarantors") under the Indenture referred to below, and STATE STREET BANK AND TRUST COMPANY, as successor to FLEET NATIONAL BANK, a national banking association, as successor trustee under the indenture referred to below (the "Trustee").
W I T N E S S E T H :
WHEREAS the Company has heretofore executed and delivered to the Trustee an Indenture (the "Indenture"), dated as of March 27, 1997, providing for the issuance of an aggregate principal amount of $125,000,000 of 10-1/4% Senior Subordinated Notes due 2007 (the "Securities");
WHEREAS Section 4.11 of the Indenture provides that under certain circumstances the Company is required to cause the New Subsidiary Guarantor to execute and deliver to the Trustee a supplemental indenture pursuant to which the New Subsidiary Guarantor shall unconditionally guarantee all of the Company's obligations under the Securities pursuant to a Subsidiary Guaranty on the terms and conditions set forth herein; and
WHEREAS pursuant to Section 9.01 of the Indenture, the Trustee, the Company and Existing Subsidiary Guarantors are authorized to execute and deliver this Supplemental Indenture;
NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the New Subsidiary Guarantor, the Company, the Existing Subsidiary Guarantors and the Trustee mutually covenant and agree for the equal and ratable benefit of the holders of the Securities as follows:
1

1. DEFINITIONS. (a) Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.
(b) For all purposes of this Supplement, except as otherwise herein expressly provided or unless the context otherwise requires: (i) the terms and expressions used herein shall have the same meanings as corresponding terms and expressions used in the Indenture; and (ii) the words "herein," "hereof" and "hereby" and other words of similar import used in this Supplement refer to this Supplement as a whole and not to any particular section hereof.
2. AGREEMENT TO GUARANTEE. The New Subsidiary Guarantor hereby agrees, jointly and severally with all other Subsidiary Guarantors, to Guarantee the Company's obligations under the Securities on the term and subject to the conditions set forth in Article 11 of the Indenture and to be bound by all other applicable provisions of the Indenture.
3. RATIFICATION OF INDENTURE; SUPPLEMENTAL INDENTURES PART OF INDENTURE. Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Indenture shall form a part of the Indenture for all purposes, and every holder of Securities heretofore or hereafter authenticated and delivered shall be bound hereby.
4. GOVERNING LAW. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
5. TRUSTEE MAKES NO REPRESENTATION. The Trustee makes no representation as to the validity or sufficiency of this Supplemental Indenture.
6. COUNTERPARTS. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.
7. EFFECT OF HEADINGS. The Section headings herein are for convenience only and shall not effect the construction thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first above written.
TA TRAVEL, L.L.C.

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

2

Title: Sr. VP and CFO
TRAVELCENTERS OF AMERICA, INC. on behalf
 of itself and the Existing Subsidiary
Guarantors,

by   /s/ James W. George
     --------------------------
     Name: James W. George
     Title: Sr. VP and CFO	

STATE STREET BANK AND TRUST COMPANY, as
 successor to FLEET NATIONAL BANK as
successor Trustee,

by  /s/ Susan C. Merker
    ---------------------------
    Name: Susan C. Merker
    Title: Assistant Vice President	

3

EXHIBIT 10.9
WAIVER NO. 1 AND AGREEMENT dated as of March 1, 1998 (this "Agreement"), to the Credit Agreement dated as of March 21, 1997 (the "Credit Agreement"), among TravelCenters of America, Inc., a Delaware corporation (the "Borrower"), the financial institutions from time to time party thereto (the "Lenders") and The Chase Manhattan Bank, a New York banking corporation, as agent (in such capacity, the "Agent") for the Lenders, as swingline lender (in such capacity, the "Swingline Lender") and as fronting bank (in such capacity, the "Fronting Bank").
A. The Borrower has requested that the Lenders waive compliance by the Borrower with certain provisions of the Credit Agreement to the extent necessary to permit the formation by the Borrower of an indirect wholly owned subsidiary that will engage solely in the business of acquiring, operating and maintaining an airplane.
B. The Required Lenders are willing to enter into this Agreement on the terms and subject to the conditions set forth herein.
C. Capitalized terms used but not defined herein shall have the meanings assigned to them in the Credit Agreement.
Accordingly, in consideration of the mutual agreements herein contained and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. WAIVER. The Lenders hereby waive compliance by the Borrower and the Guarantors with (a) the provisions of Section 7.12 of the Credit Agreement to the extent, but only to the extent, necessary to permit TA Operating Corporation, a Delaware corporation ("TA"), to form and maintain as a subsidiary TA Travel L.L.C., a Delaware limited liability company ("TA Travel"), and (b) the provisions of Section 7.04 of the Credit Agreement to the extent, but only to the extent, necessary to permit the Borrower and the Guarantors to make investments (whether by means of capital contributions or intercompany loans) in TA Travel from time to time in an aggregate amount not to exceed $10,000,000 in the aggregate at any time outstanding, which investments are to be used by TA Travel solely for the purchase, operation and maintenance of an airplane (or any airplane purchased in replacement thereof) owned by TA Travel (collectively, the "Airplane"). In connection with the operation of the Airplane, (a) TA Travel has leased the Airplane to TA and (b) TA Travel and/or TA may from time to time enter into operating agreements (any such agreement, an "Operating Agreement") with airplane charter companies (any such charter company, a "Charter Company") pursuant to which TA Travel and TA will permit the Charter Company to operate the Airplane for the benefit of the (i) Borrower and its subsidiaries or (ii) other persons.
1

SECTION 2. AGREEMENT. (a) TA Travel agrees with the Lenders, the Agent, the Swingline Lender and the Fronting Bank as follows:
(i) TA Travel shall, at all times during the term of the Credit Agreement, engage solely in the business of acquiring, operating and maintaining the Airplane, leasing the Airplane to TA and entering into Operating Agreements with respect to the operation of the Airplane from time to time;
(ii) by its signature below, TA Travel shall be deemed to be a Guarantor for purposes of the Credit Agreement and TA Travel hereby agrees to be bound by all the terms and provisions of, and to perform all the obligations under, the Credit Agreement applicable to a Guarantor thereunder (it being understood that, for purposes of the foregoing, any reference in the Credit Agreement to a "Guarantor" shall be deemed to be a reference to TA Travel); PROVIDED, HOWEVER, that, notwithstanding anything to the contrary in the Credit Agreement, TA Travel will not (A) incur, create, assume or permit to exist any Indebtedness in respect of Capital Lease Obligations or (B) permit to exist any loans or advances by Borrower to TA Travel or any investment by Borrower in TA Travel except as expressly permitted by Section 1(b) hereof;
(iii) by its signature below, TA Travel agrees to become a party to the Guarantee Agreement attached hereto as Exhibit A (the "TA Travel Guarantee Agreement"), it being understood that each reference to the "Guarantee Agreement" in the Credit Agreement shall be deemed to include the TA Travel Guarantee Agreement;
(iv) by its signature below, TA Travel agrees to become a party to the Security Agreement attached hereto as Exhibit B (the "TA Travel Security Agreement"), it being understood that each reference to the "Security Agreement" in the Credit Agreement shall be deemed to include the TA Travel Security Agreement;
(v) TA Travel represents and warrants to each of the Lenders, the Agent, the Swingline Lender and the Fronting Bank that, after giving effect to this Agreement, all representations and warranties contained in the Credit Agreement, the TA Travel Guarantee Agreement and the TA Travel Security Agreement that relate to TA Travel are true and correct in all material respects 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; and
(vi) on or before April 30, 1998, in the case of the original Airplane, and within thirty days of the purchase thereof, in the case of any replacement Airplane, TA Travel shall grant to the Collateral Agent a valid and perfected first priority security interest in the Airplane, pursuant to documentation in form and substance satisfactory to the Collateral Agent; and
(b) the Borrower agrees with the Lenders, the Agent, the Swingline Lender and the Fronting Bank as follows:
(i) the Borrower shall cause TA Travel to engage, at all times during the term of the Credit Agreement, solely in the business of acquiring, operating and maintaining the Airplane, leasing the Airplane to TA and entering into Operating Agreements with respect to the operation of the Airplane from time to time;
2

(ii) the Borrower will cause TA Travel to comply with its other obligations pursuant to Section 2(a) hereof, including but not limited to its obligations under the covenants in Article VI and Article VII of the Credit Agreement;
(iii) the Borrower will not, and will not cause or permit either Guarantor to, make any investments in TA Travel; PROVIDED, HOWEVER, the Borrower or either Guarantor shall be permitted to make investments (whether by means of capital contributions or intercompany loans) in TA Travel in an aggregate amount not to exceed $10,000,000 in the aggregate at any time outstanding, to the extent that such investments are used by TA Travel solely for the purchase, operation and maintenance of the Airplane; and
(iv) the representations and warranties made by TA Travel in
Section 2(a)(v) hereof are true and correct in all material respects on and as of the date hereof.
SECTION 3. REPRESENTATIONS AND WARRANTIES. To induce the other parties hereto to enter into this Agreement, the Borrower represents and warrants to each of the Lenders, the Agent, the Swingline Lender and the Fronting Bank that
(a) after giving effect to this Agreement, the representations and warranties set forth in Article IV of the Credit Agreement are true and correct in all material respects on and as of the date hereof with the same effect as though made on and as of the date hereof, except to the extent such representations and warranties expressly relate to an earlier date, and (b) after giving effect to this Agreement, no Default or Event of Default has occurred and is continuing.
SECTION 4. CONDITIONS TO EFFECTIVENESS. The waiver set forth in Section 1 shall become effective as of the date first above written on the date that the Agent shall have received (a) counterparts of this Agreement that, when taken together, bear the signatures of the Borrower and the Required Lenders, (b) the TA Travel Guarantee Agreement shall have been duly executed by TA Travel, the Collateral Agent and the other parties thereto, and shall be in full force and effect, (c) the TA Travel Security Agreement shall have been duly executed by TA Travel and the Collateral Agent and the other parties thereto, and shall be in full force and effect, (d) a duly executed waiver and amendment to the Tranche A Exchange Note Purchase Agreements in form and substance satisfactory to the Agent and (e) a supplemental indenture, an officer's certificate and a letter of counsel each in form and substance satisfactory to the Agent establishing and confirming that TA Travel is a Subsidiary Guarantor, as such term is defined in the Subordinated Note Indenture, of the Borrower and that the investments in TA Travel permitted hereby are permitted pursuant to Section 4.04 of the Subordinated Note Indenture.
SECTION 5. EFFECT OF AGREEMENT. Except as expressly set forth herein, this Agreement shall not by implication or otherwise limit, impair, constitute a waiver of, or otherwise affect the rights and remedies of the Lenders, the Agent, the Collateral Agent, the Swingline Lender, the Fronting Bank or the Borrower under the Credit Agreement or any Security Document, and shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any Security Document, all of which are ratified and affirmed in all respects and shall continue in full force and effect. Nothing herein shall be deemed to entitle the Borrower to a consent to, or a waiver, amendment, modification or other change of, any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any Security Document in similar or different circumstances. This Agreement shall apply and be effective only with respect to the provisions of the Credit Agreement specifically referred to herein. Any default under this Agreement shall constitute an Event of Default under the Credit Agreement.
3

SECTION 6. COUNTERPARTS. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument. Delivery of any executed counterpart of a signature page of this Agreement by facsimile transmission shall be as effective as delivery of a manually executed counterpart hereof.
SECTION 7. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 8. HEADINGS. The headings of this Agreement are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.
SECTION 9. EXPENSES. The Company agrees to reimburse the Administrative Agent for its reasonable out-of-pocket expenses in connection with this Agreement, including the reasonable fees, charges and disbursements of Cravath, Swaine & Moore, counsel for the Agent.
4

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their duly authorized officers, all as of the date and year first above written.
TRAVELCENTERS OF AMERICA, INC.,

by  /s/ James W. George
    ---------------------------
    Name:  James W. George
    Title:  Sr. VP and CFO	

TA TRAVEL L.L.C.,

by  /s/ James W. George
    ---------------------------
    Name:  James W. George
    Title:  Sr. VP and CFO	

TA OPERATING CORPORATION,

by  /s/ James W. George
    ---------------------------
    Name:  James W. George
    Title:  Sr. VP and CFO	

NATIONAL AUTO/TRUCKSTOPS, INC.,

by  /s/ James W. George
    ---------------------------
    Name:  James W. George
    Title:  Sr. VP and CFO	

5

THE CHASE MANHATTAN BANK,
 individually and as Agent, Swingline Lender and
Fronting Bank,

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

6

CREDIT AGRICOLE INDOSUEZ,

by  /s/ Katherine L. Abbott
    ----------------------------
    Name: Katherine L. Abbott
    Title: First Vice President

by  /s/ Todd Voss
    ----------------------------
    Name: Todd Voss
    Title: First Vice President	

7

CRESCENT/MACH I PARTNERS, L.P.,
by TCW ASSET MANAGEMENT COMPANY,
 its Investment Manger,
by

Name:
Title:
8

KEYPORT LIFE INSURANCE COMPANY,
by Stein Roe & Farnham Inc., as agent

/s/ Richard Hegwood
------------------------------
Name: Richard Hegwood
Title: Senior Vice President	

9

KZH -SOLEIL CORPORATION,
by

Name:
Title:
10

KZH HOLDING CORPORATION III,
by

Name:
Title:
11

KZH -CRESCENT CORPORATION,
by

Name:
Title:
12

THE LONG-TERM CREDIT BANK OF JAPAN, LIMITED,
 New York Branch,

by /s/ Shuichi Tajima
   ---------------------------
Name: Shuichi Tajima
Title: Deputy General Manager	

13

MANUFACTURERS AND TRADERS TRUST COMPANY,

by /s/ C. Gregory Vogelsang
   ---------------------------
   Name: C. Gregory Vogelsang
   Title: Assistant Vice President	

14

NATIONAL CITY BANK,

by /s/ Stanley J. Gregorin, Jr.
   ---------------------------
   Name: Stanley J. Gregorin, Jr.
   Title: Vice President	

15

PAMCO CAYMAN LTD.,
by Protective Asset Management Company as
Collateral Manager

/s/ Mark K. Okuda
--------------------------
Name: Mark K. Okuda
Title Executive Vice President	

16

PILGRIM AMERICA PRIME RATE TRUST,

by /s/ Thomas C. Hunt
   --------------------------
   Name: Thomas C. Hunt
   Title: Assistant Portfolio Manager	

17

MERRIL LYNCH PRIME RATE PORTFOLIO,
by

Name:
Title:
18

SENIOR FLOATING RATE FUND, INC.,
by

Name:
Title:
19

SENIOR DEBT PORTFOLIO,
by Boston Management and Research, as Investment
Advisor

/s/ Scott H. Page
-------------------------
Name: Scott H. Page
Title: Vice President	

20

SOCIETE GENERALE,

by /s/ Joseph A. Philbin
   -------------------------
   Name: Joseph A. Philbin
   Title: Vice President	

21

VAN KAMPEN AMERICAN CAPITAL PRIME
RATE INCOME TRUST,

by /s/ Jeffrey W. Maillet
   -------------------------
   Name: Jeffrey W. Maillet
   Title: Sr. Vice President and Director	

22

VAN KAMPEN CLO I, LIMITED,
by Van Kampen American Capital
Management, Inc., as Collateral
Manager

by /s/ Jeffrey W. Maillet
   ------------------------
   Name:  Jeffrey W. Maillet
   Title:  Senior Vice President and Director	

23

EXHIBIT 10.11

TRAVELCENTERS OF AMERICA, INC.

AMENDMENT AND WAIVER AGREEMENT
Dated as of March 1, 1998
amending the
Senior Secured Note Exchange Agreement
dated as of March 21, 1997

8.94% Series I Senior Secured Notes due 2002 Series II Senior Secured Notes due 2005

TRAVELCENTERS OF AMERICA, INC.
AMENDMENT AND WAIVER AGREEMENT
New York, New York
as of March 1, 1998
To the several Noteholders whose
names appear in the Acceptance
Form at the end hereof
Ladies and Gentlemen:
The undersigned, TRAVELCENTERS OF AMERICA, INC., a Delaware corporation (the "COMPANY"), hereby agrees with you (the "NOTEHOLDER") as follows:
SECTION 1. SENIOR SECURED NOTE EXCHANGE AGREEMENT; PROPOSED WAIVERS AND AMENDMENTS. Pursuant to the Senior Secured Note Exchange Agreement dated as of March 21, 1997 (the "NOTE EXCHANGE AGREEMENT") entered into by the Company with each of you, the Company issued and sold $35,500,000 aggregate principal amount of its 8.94% Series I Senior Secured Notes due 2002 and $50,000,000 aggregate principal amount of its Series II Senior Secured Notes due 2005 (the "NOTES"), all of which remain outstanding on the date hereof. Unless the context otherwise requires, capitalized terms used herein without definition have the respective meanings ascribed thereto in the Note Exchange Agreement.
The Company requests approval by the Noteholders of the formation of a newly formed direct wholly-owned subsidiary of TA Operating Corporation ("TA") in a transaction that is briefly described in a letter to you dated March 12, 1998 from the Company (the "AMENDMENT REQUEST LETTER") attached hereto as EXHIBIT A. Because the transaction described in the Amendment Request Letter will result in a breach of Sections 7.4, 7.8 and 7.12 of the Note Exchange Agreement, the Company is requesting the waiver and amendment described below.
SECTION 2. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants to you that (a) after giving effect to this Agreement, the representations and warranties set forth in Section 4 of the Note Exchange Agreement are true and correct in all material respects on and as of the date hereof with the same effect as though made on and as of the date hereof, except to the extent such representations and warranties expressly relate to an earlier date, and (b) after giving effect to this Agreement, no Default or Event of Default has occurred and is continuing.

The Company has not, directly or indirectly, paid or caused to be paid any consideration (as supplemental or additional interest, a fee or otherwise) to any Noteholder in order to induce such holder to enter into this Agreement or take any other action in connection with the transactions contemplated hereby, nor has the Company agreed to make such payment.
SECTION 3. WAIVER OF SECTIONS 7.4 AND 7.12. By acceptance of this Agreement, you agree to waive compliance by the Company and the Guarantors with (a) the provisions of Section 7.4 of the Note Exchange Agreement to the extent, but only to the extent, necessary to permit the Company and the Guarantors to make investments (whether by means of capital contributions or intercompany loans) in TA Travel, L.L.C., a Delaware limited liability company ("TA TRAVEL") from time to time in an aggregate amount not to exceed $10,000,000 at any time outstanding, which investments are to be used by TA Travel solely for the purchase, operation and maintenance of an airplane (or any airplane purchased in replacement thereof) owned by TA Travel, and (b) the provisions of Section 7.12 of the Note Exchange Agreement to the extent, but only to the extent necessary to permit TA to form and maintain as a subsidiary, TA Travel.
SECTION 4. AMENDMENTS TO THE NOTE EXCHANGE AGREEMENT. The Note Exchange Agreement is amended pursuant to Section 13 thereof:
A. by adding the following new paragraph to the end of Section 1.5 of the Note Exchange Agreement:
"Pursuant to the Waiver and Amendment Agreement by the Noteholders dated as of March 1, 1998 (the "WAIVER AND AMENDMENT AGREEMENT"), the Notes will be unconditionally guaranteed by TA Travel, L.L.C. ("TA TRAVEL"), a Delaware limited liability company and wholly-owned subsidiary of TA, pursuant to a guarantee agreement, substantially in the form of Exhibit B-1 hereto between the Guarantors and the Collateral Agent. TA Travel will execute a waiver to the Credit Agreement and a security agreement, substantially in the form of Exhibit D-1 hereto between the Company, the Guarantors, TAFSI and the Collateral Agent. For purposes of this Agreement, all references to a "Guarantor" or the "Guarantors" shall include TA Travel if the context so warrants and any reference to the "Guarantee Agreement" and the "Security Agreement" shall be deemed to reference the guarantee agreement and security agreement executed by TA Travel."
B. by deleting clause (i) of paragraph (b) to Section 7.8 of the Note Exchange Agreement in its entirety and by substituting in lieu thereof the following:
2

"(i) engage at any time in any activities other than the business currently conducted by it and business activities reasonably incidental thereto (including the operation of restaurants) on Truckstop premises (other than the business relating to the acquisition, operation and maintenance of an airplane (or airplane purchased in replacement thereof) conducted by TA Travel as set forth in Section 3 of the Waiver and Amendment Agreement), or"
C. by adding the following paragraph to the end of Part A of Schedule I to the Pledge Agreement attached as Exhibit E thereto as follows:
"4. The membership interest of TA Operating Corporation, a Delaware corporation, in TA Travel L.L.C., a Delaware limited liability company ("TA Travel")."
SECTION 5. EFFECTIVENESS OF THIS WAIVER AGREEMENT. This Agreement will become effective when counterparts of this Agreement shall have been executed and delivered by the Company and the Required Holders.
SECTION 6. EXPENSES. Without limiting the generality of Section 16.1 of the Note Exchange Agreement, the Company agrees to pay the reasonable fees and disbursements and other charges of Willkie Farr & Gallagher, your special counsel, for their services rendered in connection with the transactions contemplated hereby and with respect to this Agreement and any other document delivered pursuant to this Agreement and reimburse you for your out-of-pocket expenses in connection with the foregoing.
SECTION 7. RATIFICATION. Except as modified hereby, the Note Exchange Agreement is in all respects ratified and confirmed and the provisions thereof shall remain in full force and effect.
SECTION 8. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
SECTION 9. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.
3

If you are in agreement with the foregoing, please sign the form of acceptance in the space below provided, whereupon this Agreement shall become a binding agreement between you and the Company, subject to becoming effective as hereinabove provided.
TRAVELCENTERS OF AMERICA, INC.
By JAMES W. GEORGE
 Senior Vice President and
Chief Financial Officer
ACCEPTED AND AGREED:
NOTEHOLDERS:
THE TRAVELERS INDEMNITY COMPANY
By ROBERT M. MILLS
Investment Officer
Principal amount of Notes held: $12,000,000 (Series I)
THE TRAVELERS INSURANCE COMPANY
By ROBERT M. MILLS
Investment Officer
Principal amount of Notes held: $10,000,000 (Series I)
THE TRAVELERS LIFE AND ANNUITY COMPANY
By ROBERT M. MILLS
Investment Officer
Principal amount of Notes held: $5,000,000 (Series I)
OHIO NATIONAL LIFE ASSURANCE CORPORATION
By MICHAEL A. BOEDEKER
Authorized Representative
Principal amount of Notes held: $5,000,000 (Series I)
THE OHIO NATIONAL LIFE INSURANCE COMPANY
By MICHAEL A. BOEDEKER
4

Vice President, Fixed Income Securities
Principal amount of Notes held: $3,500,000 (Series I)
MELLON BANK, N.A., SOLELY IN ITS CAPACITY AS TRUSTEE FOR BELL ATLANTIC MASTER TRUST (AS DIRECTED BY JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY), AND NOT IN ITS
INDIVIDUAL CAPACITY
By BERNADETTE RIST
Authorized Signatory
Principal amount of Notes held: $2,000,000 (Series II)
BARNETT & CO.
By RICHARD McCORMICK
Assistant Treasurer
Principal amount of Notes held: $10,000,000 (Series II)
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
By MARLENE J. DeLEON
Investment Officer
Principal amount of Notes held: $11,000,000 (Series II)
COMMONWEALTH OF PENNSYLVANIA STATE EMPLOYEES'
RETIREMENT SYSTEM
By JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY,
AS INVESTMENT ADVISOR
By STEPHEN A. MACLEAN
Senior Investment Officer
Principal amount of Notes held: $2,000,000 (Series II)
KEYPORT LIFE INSURANCE COMPANY
By STEIN ROE & FARNHAM INCORPORATED,
AS AGENT
By RICHARD A. HEGWOOD
5

Vice President
Principal amount of Notes held: $25,000,000 (Series II)
6

EXHIBIT 10.14
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of January 1, 1997, and executed this ____ day of __________ 1997, by and between TA Operating Corporation, a Delaware corporation (the "Company"), and Edwin P. Kuhn (the "Employee").
In consideration of the parties' desire to assure the Company of the services of the Employee, and the mutual covenants herein contained, the parties agree as follows:
1. EMPLOYMENT, ACCEPTANCE AND TERM. The Company hereby agrees to employ the Employee, and the Employee agrees to serve the Company, for a period of four (4) years commencing on the date hereof (the "Effective Date") and ending on December 31, 2000 or such earlier date on which employment is otherwise terminated in accordance with the terms of this Agreement (the "Term"). The Employee acknowledges that the Company shall have no obligation to extend the Term or to enter into a new employment agreement upon the expiration of the Term. Unless otherwise agreed between the parties in writing, any continuation of the Executive's employment beyond the expiration of the Term shall constitute an employment at will and shall not extend the terms of this Agreement.
2. DUTIES AND AUTHORITY.

2.1 The Employee will serve as an officer of the Company, in accordance with the Certificate of Incorporation and By-Laws of the Company and subject to the direction of, and in accordance with the authority delegated to the Employee by, the Board of Directors of the Company.
2.2 The Employee shall devote 100% of his full working time and energies to the business and affairs of the Company and, in connection therewith, shall perform such duties, functions and responsibilities as are commensurate with and appropriate to the position of an officer of the Company. Throughout the Term, the Employee will use his best efforts, skills and abilities to promote the interests of the Company and its Affiliates. For purposes of this Agreement, the term "Affiliates" shall mean, collectively, TravelCenters of America, Inc., a Delaware corporation ("Holdings"), National Auto/Truckstops, Inc., a Delaware corporation ("National"), TA Franchise Systems Inc., a Delaware Corporation ("TAFSI"), and all subsidiaries and affiliates of the Company, Holdings, National and TAFSI.
3. COMPENSATION.
3.1 As compensation for all services to be rendered pursuant to this Agreement, the Company shall pay the Employee during the Term a base salary at the rate of Three Hundred Twenty Five Thousand Dollars ($325,000) per annum (the "Base Salary"), payable currently in equal biweekly installments or otherwise in accordance with the payroll policies of the Company as from time to time in effect, LESS such deductions as shall be required to be withheld by applicable law and regulations.

3.2 For each fiscal year of the Company during the Term (a "Fiscal Year"), commencing with the Fiscal Year ending December 31, 1997, the Company shall pay to the Employee an annual bonus (the "Annual Bonus"). The amount of each Annual Bonus shall be determined by the Compensation Committee of the Board of Directors of the Company (the "Compensation Committee"), based fifty percent (50%) upon Company performance (EBITDA goals) and fifty percent (50%) upon the Employee's individual performance (MBO targets), and shall range from zero (0) to fifty percent (50%) of the Base Salary (the "Maximum Bonus"); PROVIDED, HOWEVER, that the Annual Bonus payable with respect to the 1997 Fiscal Year shall not be less than fifty percent (50%) of the Maximum Bonus (the "1997 Guaranteed Bonus"), and that the Annual Bonus payable with respect to the 1998 Fiscal Year shall not be less than twenty-five percent (25%) of the Maximum Bonus (the "1998 Guaranteed Bonus"); and, PROVIDED FURTHER, that there shall be no guaranteed bonus due to the Employee under this Agreement after the 1998 Fiscal Year.

4. ADDITIONAL BENEFITS.
4.1 BENEFIT PLANS. The Employee shall be entitled during the Term, if and to the extent eligible, to participate in all employee benefit plans of the Company which the Company provides to its executive employees generally, including, without limitation, a health and medical insurance plan, basic life insurance, supplemental life insurance, basic disability benefit plan, supplemental disability benefit plan, relocation, retirement or pension plan or similar benefit plans of the Company, whether now in existence or hereafter adopted; PROVIDED, HOWEVER, that the Company shall not be obligated to adopt, maintain or contribute to any such benefit plans which, in its sole discretion, the Company believes would be imprudently expensive or otherwise inappropriate.
4.2 DIRECTOR'S AND OFFICER'S INSURANCE. Holdings has purchased and will use reasonable efforts to maintain, at the Company's expense, Director's and Officer's liability insurance in a reasonable amount covering all insurable acts of the Employee pursuant to this Agreement provided that Employee's coverage will not be less extensive than that provided by Company to any other director or officer of the Company.
4.3 FRINGE BENEFITS. The Employee shall be entitled during the Term to the following additional benefits: (i) a company-owned automobile of a make and model approved by the Compensation Committee as appropriate for an officer of the position of the Employee; (ii) company-owned club membership (or to the extent the club does not permit company membership, reimbursement for individual membership) up to an aggregate maximum amount over the term of this agreement of $40,000 for initiation

fees, dues and fixed expenses only, paid by the Company and/or the Employee;
(iii) paid vacation days in accordance with standard Company policy for similarly situated officers; and (iv) participation in a nonqualified unfunded elective salary deferral plan adopted or to be adopted by the Compensation Committee having such terms as the Compensation Committee determines in its sole discretion are appropriate for the purpose of providing certain benefits in excess of the benefits otherwise available under the Company's employee benefit plan established pursuant to Code sections 401(a) and 401(k) of the Internal Revenue Code of 1986, as amended (the "Code") which nonqualified plan provides or is expected to provide tax-deferred savings opportunities through elective salary deferrals in excess of certain of the limits set forth in Subchapter D of Chapter I of Subtitle A of the Code.
5. TERMINATION OF EMPLOYMENT. The Employee's employment with the Company shall terminate upon the death of the Employee, and the Company shall have the right, by delivery of written notice to the Employee, to terminate the Employee's employment as a result of the Employee's Permanent Disability (as such term is defined in Section 5.1 hereof), for Cause or for any other reason, the consequences of any such termination being as specified in this
Section 5:
5.1 DEATH; DISABILITY. If the Employee's employment with the Company is terminated by reason of the Employee's death or Permanent Disability, the Company's obligations under this Agreement shall be satisfied by providing the benefits set forth in the Company's life insurance or disability benefit plan or plans, as the case may be. The Employee shall not be entitled to any other payments or compensation

under this Agreement except for (i) Base Salary accrued and unpaid to the date of death or disability, (ii) any vested benefits as of the date of death or termination for disability under stock options granted to the Employee pursuant to the terms of the National Auto/Truckstops Holdings Corporation 1993 Stock Incentive Plan and the TravelCenters of America, Inc. 1997 Stock Incentive Plan (collectively, the "Stock Incentive Plans"), (iii) an amount equal to the product of (x) the Annual Bonus, if any, determined by the Compensation Committee for the year in which the termination occurs (or if the termination occurs in Fiscal Year 1997 or Fiscal Year 1998, the 1997 Guaranteed Bonus or the 1998 Guaranteed Bonus, respectively, if larger, in lieu of any Annual Bonus for such year), MULTIPLIED BY (y) the fraction, the numerator of which equals the number of days the Employee was employed by the Company during the Fiscal Year in which such termination occurs and the denominator of which is 365, and (iv) if the Employee and/or his spouse and dependents properly elect continued medical coverage ("COBRA") in accordance with Code section 4980B, the Company will pay the entire cost of the premiums for such continued medical coverage for the maximum required period of coverage under Code section 4980B(f). "Permanent Disability," as used in this Section 5.1, shall mean the physical or mental inability of the Employee to perform, consistent with past practice, such Employee's duties as specified in Section 2.1 hereof for at least 12 consecutive months.
5.2 RESIGNATION. If the Employee's employment with the Company is terminated by reason of the Employee's resignation (other than for "Good Reason" as defined in Section 5.5), all obligations of the Company, including, without

limitation, the obligation to pay salary or other amounts payable under this Agreement to or for the benefit of the Employee, shall terminate upon the effective date of such resignation, and the Employee shall not be entitled to any compensation under this Agreement except for Base Salary accrued and unpaid through, and vested benefits under stock options granted to the Employee pursuant to the Stock Incentive Plans as of, the effective date of such resignation.
5.3 COMPANY'S RIGHT TO TERMINATE FOR CAUSE. If the Employee shall be discharged for "Cause" (as defined below), all obligations of the Company, including, without limitation, the obligation to pay salary or other amounts payable under this Agreement to or for the benefit of the Employee, shall terminate upon the effective date of such discharge, and the Employee shall not be entitled to any compensation under this Agreement except for Base Salary accrued and unpaid through, and vested benefits under stock options granted to the Employee pursuant to the Stock Incentive Plans as of, the effective date of such discharge. As used in this Agreement, "Cause" shall mean a discharge in one or more of the following events:
(i) the Employee's misappropriation of money or other assets or property, breach of fiduciary duty, tortious conduct or other act of dishonesty with respect to the Company or any Affiliate; the Employee's conviction of, or plea of guilty or NOLO CONTENDERE to, any act of fraud, embezzlement, tortious conduct or any crime for an offense that constitutes a felony; or the Employee's indictment for any crime involving dishonesty or moral turpitude;

(ii) the Employee's continuing, repeated willful failure or refusal to follow written directions of the Board of Directors of the Company which failure or refusal continues following the Employee's receipt of written notice from the Board for Directors advising him of the acts or omissions that constitute the failure to perform his duties as an officer of the Company, if such failure continues after the Employee shall have had a reasonable opportunity to correct the act or omissions so complained of;
(iii) a written determination by a licensed physician that the Employee is a chronic alcoholic or addicted to narcotics; or
(iv) the Employee's breach of any covenant set forth in Section 6 hereof.
5.4 TERMINATION FOR ANY OTHER REASON OR RESIGNATION FOR GOOD REASON. If (a) the Employee is discharged by the Company for any reason (other than for "Cause" (as defined in Section 5.3 hereof) or by reason of the Employee's death or "Permanent Disability" (as defined in Section 5.1 hereof)) or (b) the Employee's employment with the Company is terminated by reason of the Employee's resignation for "Good Reason" (as defined in Section 5.5 hereof), then all obligations of the Employee and the Company hereunder shall cease, except that the Employee shall be entitled to the following from the Company:
(i) the Base Salary as set forth in Section 3.1 hereof payable on the same dates and in the same amounts as if the Employee continued to serve as an officer of the Company until the later of (A) December 31, 2000, or (B) twelve (12)

months after the date of such discharge or resignation; PROVIDED, HOWEVER, that if the Employee engages in any activity from which the Employee derives or is contractually (including, without limitation, pursuant to an employment agreement) entitled to compensation other than in connection with a "competitive activity" (as such term is defined in
Section 6.1.1 hereof), then the Company's obligations under this clause
(i) shall be limited solely to the excess of (x) the amount the Employee would have been due had the Employee remained in the employ of the Company through the later of the dates set forth in clauses (A) and (B) above in this clause (i), over (y) the total compensation the Employee receives, derives or is contractually (including, without limitation, pursuant to an employment agreement) entitled to as a result of engaging in such activity for services performed, PROVIDED, that there shall be no offset against the amount of the Base Salary the Employee would have been due had the Employee remained in the employ of the Company for the first twelve (12) months after the date of such discharge or resignation, which amount shall be payable on such dates and in such manner as if the Employee had continued to serve as an officer of the Company;
(ii) (a) if such discharge or resignation occurs on or prior to December 31, 1997, the 1997 Guaranteed Bonus MULTIPLIED BY a fraction, the numerator of which equals the number of days the Employee was employed by the Company during the 1997 Fiscal Year and the denominator of which is 365, in lieu of any Annual Bonus which may be due to the Employee pursuant to Section 3.2; (b) if such discharge or resignation occurs on or prior to December 31, 1998, the 1998 Guaranteed Bonus MULTIPLIED BY a fraction, the numerator of which equals the number of days the Employee

was employed by the Company during the 1998 Fiscal Year and the denominator of which is 365, in lieu of any Annual Bonus which may be due to the Employee pursuant to Section 3.2; PROVIDED, HOWEVER, that if the amount of the Annual Bonus determined by the Compensation Committee for the Employee for the Fiscal Year in which the discharge or resignation occurs, prorated as set forth below in this clause (ii), exceeds the amount of the Guaranteed Bonus for the Employee for such year, prorated as set forth above in this clause (ii), then, solely for such Fiscal Year in which the Employee was so discharged or so resigned, in lieu of any Annual Bonus or any Guaranteed Bonus which may be due to the Employee pursuant to this clause (ii) or Section 3.2 hereof, an amount equal to the product of (x) the Annual Bonus so determined by the Compensation Committee for the Employee for such Fiscal Year MULTIPLIED BY (y) a fraction, the numerator of which equals the number of days the Employee was employed by the Company during the Fiscal Year in which the Employee was so discharged or so resigned and the denominator of which is 365; and (c) if such discharge or resignation occurs after December 31, 1998, then no Guaranteed Bonus or Annual Bonus shall be due to the Employee under this Agreement;
(iii) benefits under stock options granted to the Employee pursuant to the Stock Incentive Plans vested as of the date of such discharge or resignation; and
(iv) if the Employee (and/or his spouse and/or dependents) properly elect continued COBRA medical coverage, the Company and the Employee (and/or his spouse and/or dependents) each shall pay their same portions of the premiums

for such medical coverage as if the Employee had remained in the employ of the Company until the later of (A) the maximum required period of coverage under Code Section 4980B(f), or (B) December 31, 2000;
PROVIDED, HOWEVER, that, in each case in clauses (i) through (iv) above in this Section 5.4, if at any time during which the Company is obligated to make payments thereunder the Employee engages in a "competitive activity" (as such term is defined in Section 6.1.1 hereof), then, as of the date the Employee commences engaging in such competitive activity, all of the Company's obligations to pay compensation or other amounts payable under this Agreement to or for the benefit of the Employee shall terminate except for
(i) Base Salary then accrued and unpaid, (ii) any vested stock options granted to the Employee under the Stock Incentive Plans, and (iii) the Company's obligation to pay its portion of the COBRA premiums described in clause (iv) of this Section 5.4 for the first twelve (12) months of such COBRA coverage provided that valid COBRA elections are and remain in effect.
5.5 RESIGNATION FOR GOOD REASON. As used in this Agreement, "Good Reason" shall mean a resignation by the Employee as a result of one or both of the following events:
(i) a material reduction in the Employee's aggregate compensation, duties or title with respect to the Company or any of its Affiliates (other than nonsubstantive, titular or nominal changes); or

(ii) a material breach of this Agreement by the Company or any of its Affiliates unless such breach is substantially cured within a reasonable period of time after written notice advising the Company of the acts or omissions constituting such breach is actually received by the Company in accordance with Section 9.1 hereof.
5.6 EMPLOYEE BENEFIT PLANS. In addition to such payments and benefits as may be provided to the Employee upon his termination of employment as set forth herein, the Employee (or his estate, legal representative or employee benefit plan beneficiary, as the case may be), shall be entitled to receive such other benefits as are expressly so provided under the terms of any employee benefit plan or other contractual arrangement maintained by the Company, as determined by the Compensation Committee; provided, however, that the Compensation Committee may reduce benefits hereunder or, if permissible, under any such other plan or arrangement to the extent it determines in good faith that such benefits are clearly duplicative and unintended (e.g., severance, company car).
6. COVENANTS OF THE EMPLOYEE.
6.1 COVENANTS AGAINST COMPETITION. The Employee acknowledges that
(a) the Company and its Affiliates are engaged in the business of operating a truckstop network (the "Network"), with facilities that provide motor fuel pumping along with one or more of the following services: truck care and repair services, a fast food restaurant, a full-service restaurant, a convenience store, showers, laundry facilities, telephones, recreation rooms, truck weighing scales and other compatible

business services approved by the Company (together with any other activities in which the Company may be engaged during the Term and in which the Employee materially participates, the "Business"); (b) the Employee is one of the limited number of persons who developed the Business; (c) the Business is conducted nationally; (d) the Employee's work for the Business has given him, and will continue to give him, trade secrets of, and confidential information concerning, the Business; and (e) the agreements and covenants contained in this Section 6.1 are essential to protect the Business and the goodwill associated with it. Accordingly, the Employee covenants and agrees as follows:
6.1.1 NON-COMPETE. From the date hereof through the later of (A) December 31, 2000 and (B) the last date through which the Employee is entitled to receive any payment or benefit hereunder, the Employee shall not, in the United States of America, directly or indirectly, (x) engage in a business for his own account that competes with the Business, (y) enter the employ of or render any services to a person that competes with the Business, or (z) have an interest in any person that competes with the Business, whether such interest is direct or indirect, and including any interest as a partner, shareholder, trustee, consultant, officer or similarly situated person (the foregoing activities specified in foregoing clauses (x), (y) and
(z) being deemed engaging in a "competitive activity"); PROVIDED, HOWEVER, that in any case, the Employee may own, solely as an investment, securities of any person that are publicly traded if the Employee (a) is not a controlling person and (b) does not, directly or indirectly, own 5% or more of any class of securities of such person. After the date which is the later of (A)

and (B) in the preceding sentence, the Employee shall be free to engage in any lawful business activities, including activities directly competitive with the Business.
6.1.2 CONFIDENTIAL INFORMATION. The Employee agrees that, neither during the Term nor at any time thereafter shall he (i) disclose to any person not employed by the Company, or not engaged to render services to the Company or (ii) use for the benefit of himself or others, any confidential information of the Company, any of the Company's Affiliates or of the Business obtained by him, including, without limitation, "know-how," trade secrets, details of customers', suppliers', manufacturers' or distributors' contracts with the Company or any of the Company's Affiliates, pricing policies, financial data, operational methods, marketing and sales information, marketing plans or strategies, product development techniques or plans, plans to enter into any contract with any person or any strategies relating thereto, technical processes, designs and design projects, and other proprietary information of the Company, the Company's Affiliates or of the Business or the business of any of the Company's Affiliates; PROVIDED, HOWEVER, that this provision shall not preclude the Employee from (a) making any disclosure required by law or court order or (b) using or disclosing information (i) known generally to the public (other than information known generally to the public as a result of a violation of this Section 6.1 by the Employee), (ii) acquired by the Employee outside of his affiliation with the Company or any of the Company's Affiliates, or (iii) of a general nature (that is, not related specifically to the Business) that ordinarily would be learned, developed or obtained by individuals similarly active and/or employed in similar capacities by other companies in the same Business as the Company or any of the

Company's Affiliates. The Employee agrees that all confidential information of the Company or any of the Company's Affiliates shall remain the Company's or the Company's Affiliates', as the case may be, property and shall be delivered to the Company or to the Company's Affiliates, as the case may be, promptly upon the termination of the Employee's employment with the Company or at any other time on request. The covenant contained in this Section 6.1.2 shall survive, as provided herein, the termination of Employee's employment with the Company for any reason.
6.1.3 NONSOLICITATION BY RESTRICTED PERSONS. From the date hereof and through the later of (A) December 31, 2001 and (B) the last date through which the Employee is entitled to receive any payment or benefit hereunder, the Employee shall not, directly or indirectly, (a) solicit any employee to leave the employment of the Company or the employment of any of the Company's Affiliates or (b) hire any employee who has left the employ of the Company or the employ of any of the Company's Affiliates within six (6) months after termination of such employee's employment with the Company or such employee's employment with any of the Company's Affiliates, as the case may be (unless such employee was discharged by the Company without Cause and excepting clerical and similar employees). The covenant contained in this
Section 6.1.3 shall survive, as provided herein, the termination of the Employee's employment with the Company for any reason.
7. RIGHTS AND REMEDIES UPON BREACH OF COVENANTS. If the Employee breaches, or threatens to commit a breach of, any of the provisions of
Section 6 hereof (the "Restrictive Covenants"), the Company shall have the following rights and remedies,

each of which rights and remedies shall be independent of the others and severally enforceable, and all of which rights and remedies shall be in addition to, and not in lieu of, any other rights and remedies available to the Company at law or in equity:
7.1 SPECIFIC PERFORMANCE. The right and remedy to have the Restrictive Covenants specifically enforced by any court having equity jurisdiction, it being acknowledged and agreed that any such breach or threatened breach will cause irreparable injury to the Company and that money damages will not provide an adequate remedy to the Company.
7.2 SEVERABILITY OF COVENANTS. The Employee acknowledges and agrees that the Restrictive Covenants are reasonable and valid in geographical and temporal scope and in all other respects. If any court determines that any of the Restrictive Covenants, or any part thereof, is invalid or unenforceable, the remainder of the Restrictive Covenants shall not thereby be affected and shall be given full effect to the greatest extent possible, without regard to the invalid portions.
7.3 BLUE-PENCILLING. If any court construes any of the Restrictive Covenants, or any part thereof, to be unenforceable because of the duration of such provision or the area covered thereby, such court shall have the power to reduce the duration or area of such provision and, in its reduced form, such provision shall be enforceable and shall be enforced to the greatest extent possible.
7.4 ENFORCEABILITY IN JURISDICTIONS. The parties intend to and hereby do limit jurisdiction to enforce the Restrictive Covenants upon the courts of the

jurisdiction of the Employee's last principal place of business under this Agreement and the sites of the alleged breach of the Restrictive Covenants.
8. REPRESENTATIONS OF EMPLOYEE. The Employee hereby represents and warrants to the Company (a) that there are no restrictions, agreements or understandings whatsoever to which the Employee is a party which would prevent or make unlawful the execution or performance of this Agreement or his employment hereunder and (b) that the execution of this Agreement and the Employee's employment hereunder shall not constitute a breach of any contract, agreement or understanding to which he is a party or by which he is bound.
9. OTHER PROVISIONS.
9.1 NOTICES. Any notice or other communication required or which may be given hereunder shall be in writing and shall be delivered personally, sent by facsimile transmission or overnight courier or sent by registered or certified mail, return receipt requested, postage prepaid, and shall be deemed given when so delivered personally or sent by facsimile transmission or overnight courier, or if mailed, four days after the date of mailing, as follows:
(i) if to the Company, to it at:
TA Operating Corporation, d/b/a Truckstops of America, Inc.
24601 Center Ridge Road, Suite 300 Westlake, Ohio 44145-5634 Attention: General Counsel Telecopy No.: (216) 808-3301

and a copy to:
TravelCenters of America, Inc. 24601 Center Ridge Road, Suite 300 Westlake, Ohio 44145-5634 Attention: General Counsel Telecopy No: (216) 808-3301
and a copy to:
The Clipper Group, L.P.
650 Madison Avenue, 9th Floor
New York, New York 10022
Attention: Rolf H. Towe
Telecopy No.: (212) 940-6055
or at such other address as such person may hereafter designate to the Employee by notice as provided herein; and
(ii) if to the Employee, to him at the address set forth below or at such other address as the Employee may hereafter designate to each of the persons listed in clause (i) above by notice as provided herein.
Either party may give any notice or other communication hereunder using any other means (including ordinary mail or electronic mail), but no such notice or other communication shall be deemed to have been duly given unless and until it actually is received by the individual for whom it is intended. Either party may change the address to which notices and other communications hereunder are to be delivered by giving the other party notice in the manner herein set forth.
9.2 ENTIRE AGREEMENT. This Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes all

prior agreements, written or oral, with respect thereto, including, without limitation, the employment agreement by and between the Company and the Employee dated as of December 10, 1993. The Employee acknowledges that, as of the date this Agreement is executed, he has received all amounts accrued or due under any prior agreements, and that he is not entitled to receive additional amounts pursuant to any such agreements.
9.3 WAIVERS AND AMENDMENTS. This Agreement may be amended, modified, superseded, canceled, renewed or extended, and the terms and conditions hereof may be waived, only by a written instrument signed by the parties or, in the case of a waiver, by the party waiving compliance. No delay on the part of any party in exercising any right, power or a privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any party of any right, power or privilege hereunder, nor any single or partial exercise of any right, power or privilege hereunder, preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder. The rights and remedies herein provided are cumulative and are not exclusive of any rights or remedies which any party may otherwise have at law or in equity.
9.4 GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of Ohio applicable to agreements made and to be performed entirely within such State.
9.5 ASSIGNMENT. This Agreement, and the Employee's rights and obligations hereunder, may not be assigned by the Employee. The Company may assign this Agreement and its rights, together with its obligations, hereunder to any entity that controls the Company, is controlled by the Company or is under common control

with the Company or in connection with any sale, transfer or other disposition of all or substantially all of its assets or business, whether by merger, consolidation or otherwise.
9.6 COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.
9.7 HEADINGS. The headings in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.
9.8 SHAREHOLDER APPROVAL. The Employee's right to receive any payment or benefit hereunder in connection with his termination of employment or otherwise which may be characterized as a "parachute payment" (within the meaning of Code section 280G), or deemed to constitute a payment made in connection with or contingent upon a change of control of the Company for purposes of Code section 280G is contingent upon and subject to the written approval of holders of record of stock of the Company representing more than seventy-five percent (75%) of the voting power of all outstanding stock of the Company on the date this Agreement is adopted (determined without regard to any stock actually or constructively owned by the Employee and by certain other persons as determined by the Company). Such shareholder approval is being obtained concurrently herewith.

IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of the date first above written.
TA OPERATING CORPORATION
By:

Name:
Title:

Edwin P. Kuhn

NOTE: FOR ADDITIONAL SIGNATURE PAGES SEE DS1: 343502

EXHIBIT 10.15
SCHEDULE OF OMITTED EXECUTIVE EMPLOYMENT AGREEMENTS
The following documents have been omitted as Exhibits to the Registration Statement because they are on substantially identical terms as Exhibit 10.22 in all material respects other than with respect to the amounts payable to the executives under the agreements.

                                                          Annual
                  Agreement                            Compensation
------------------------------------------           ----------------
1. Executive Employment Agreement, dated
     as of January 1, 1997, by and between
     TA and Edwin P. Kuhn                              $  325,000

2.  Executive Employment Agreement, dated
     as of January 1, 1997, by and between
     TA and James W. George                            $  210,000

3.  Executive Employment Agreement, dated
     as of January 1, 1997, by and between
     TA and Michael H. Hinderliter                     $  210,000

4.  Executive Employment Agreement, dated
     as of January 1, 1997, by and between
     TA and Timothy L. Doane                           $  210,000	

EXHIBIT 10.17
TRAVELCENTERS OF AMERICA, INC.
1997 STOCK INCENTIVE PLAN
NONQUALIFIED STOCK OPTION AGREEMENT
NONQUALIFIED STOCK OPTION AGREEMENT, dated as of January 1, 1997, between TravelCenters of America, Inc., a Delaware corporation (the "Company"), and ___________ (the "Optionee"), an officer, employee or director of the Company or one of its Affiliates.
The Compensation Committee (the "Committee") of the Company's Board of Directors (the "Board"), as administrator of the TravelCenters of America, Inc. 1997 Stock Incentive Plan (the "Plan"), has determined that the purposes of the Plan will be furthered by awarding to the Optionee options under the Plan. Capitalized terms defined in the Plan and not otherwise defined herein shall have the meaning given such terms in the Plan.
The Optionee may have previously received options to acquire common stock of the Company pursuant to the National Auto/Truckstops Holdings Corporation 1993 Stock Incentive Plan. Such options are currently exercisable to the extent vested as of December 31, 1996, but shall not become further vested or exercisable.
In consideration of the foregoing and of the mutual undertakings set forth in this Nonqualified Stock Option Agreement ("Agreement"), the Company and the Optionee agree as follows:
SECTION 1. GRANT OF OPTION.
1.1. The Company hereby grants to the Optionee options to purchase the number of shares of common stock, par value $.01 per share, of the Company ("Common Stock"), at the times, in the amounts and at the purchase prices set forth on Exhibit A hereto (collectively, the "Options").
1.2. Each Option granted hereby is intended to be a nonqualified stock option subject to the provisions of section 83 of the Internal Revenue Code of 1986, as amended (the "Code"), and is not intended to qualify for special tax treatment as a statutory stock option subject to the provisions of section 422 of the Code.
SECTION 2. VESTING AND EXERCISABILITY; CHANGE OF CONTROL; IPO.

2.1. No portion of any Option shall be vested or exercisable prior to December 31, 1997, except in the event of a "Change of Control" or "IPO", as described in Section 2.5 hereof, or subsequent to December 31, 2006.
2.2. Each Option shall vest and become exercisable, in whole or in part, in accordance with Exhibit B attached hereto, with respect to the shares of Common Stock subject thereto if and only if, and to the extent that, the applicable performance targets established by the Committee with respect to such Option are determined by the Committee to be satisfied. If the applicable performance targets are not satisfied, then such Option shall not vest or become exercisable and shall be forfeited, subject to the following sentence. To the extent that an Option shall not vest or become exercisable, in whole or in part, solely because the applicable performance targets have not been satisfied, then the shares of Common Stock covered by such Option shall again become available for awards to be granted to the Optionee on or before December 31, 2000, for options to purchase shares of Common Stock at an option exercise price at or greater than the then Fair Market Value of Common Stock on the respective date of grant, as determined by the Committee, as evidenced by a written agreement executed by the Company and the Optionee, and on such other terms and conditions as determined by the Committee in its sole discretion, subject to the terms of the Plan.
2.3. The Options may be exercised at any time and from time to time in whole or in part for the shares of Common Stock subject thereto, within the limitations on exercisability set forth above.
2.4. Unless terminated earlier, the unexercised portion of the Options shall automatically and without notice terminate and become null and void on December 31, 2006.
2.5. If a "Change of Control" or initial public offering ("IPO") (as such terms are defined in Plan Section 3.11(e)) is effective prior to January 1, 2001, and the Optionee is an "Eligible Grantee" (as such term is defined in Plan Section 3.11(c)), then effective upon the consummation of the Change of Control or IPO (a) each outstanding Option granted with respect to the calendar year in which the Change of Control or IPO is effective (including any Option which was granted with respect to a prior calendar year and which did not then vest and become exercisable, which was regranted with respect to the calendar year in which such Change of Control or IPO is effective) shall immediately become fully vested and exercisable, and (b) each Option to be granted with respect to each calendar year thereafter shall immediately be granted and become fully vested and exercisable. The option exercise price for each such option described in clause (b) of the preceding sentence shall be the option exercise price for the most recent option granted under the Plan in the event of a Change of Control, or the price per share at which shares of Common Stock are offered in the IPO in the event of an IPO. There shall be no acceleration of the grant or vesting of any Option if a Change of Control or IPO becomes

effective after December 31, 2000. A Change of Control or IPO shall not cause any Option granted with respect to any calendar year prior to the calendar year in which the Change of Control or IPO becomes effective to become further vested or exercisable.
SECTION 3. METHOD OF EXERCISE. Each Option or any part thereof may be exercised in accordance with Section 2 of this Agreement by giving written notice of exercise to the Company, on a form to be provided by the Committee for that purpose, and by specifying the number of whole shares of Common Stock with respect to which the Option is being exercised, together with full payment of the purchase price for the number of shares purchased. Payment of the purchase price shall be made by certified or official bank check payable to the Company (or the equivalent thereof acceptable to the Committee), or by cashless exercise in accordance with Plan Section 2.6(c) provided that only shares of Common Stock held by the Optionee for at least six months prior to the date of exercise may be used for such purpose. As soon as practicable after it receives payment of the purchase price, subject to the provisions of Plan Section 3.2, the Company shall deliver to the Optionee a certificate or certificates for the shares of Common Stock so purchased, which shares shall bear a restrictive legend in accordance with Section 6 of this Agreement (or as otherwise determined by the Committee). The shares of Common Stock so delivered automatically shall become subject to the terms and conditions of the Supplemental Institutional and Management Stockholders' Agreement, dated as of April __, 1997 (the "Supplemental Stockholders' Agreement") by and among the Company, the Optionee and the other parties thereto, as it may be amended, copies of which are on file in the office of the Company and will be furnished to the Optionee.
SECTION 4. TERMINATION OF EMPLOYMENT OR SERVICE.
4.1. IN GENERAL. The non-vested portion of any Option shall terminate and expire upon the Optionee's termination of employment or service; the vested portion shall expire when it may no longer be exercised pursuant to the provisions of the Plan and this Agreement (including this Section 4). The "vested portion" of any Option shall mean the portion thereof which is vested (whether or not then exercisable) immediately prior to the Optionee's termination of employment for any reason.
4.2. IMPROPER ACTIVITY; QUIT.
(a) IMPROPER ACTIVITY. If the Optionee's employment is terminated for cause, whether or not he is a party to a written employment contract, the vested and exercisable portion of each Option granted hereunder may be exercised until the earlier of (a) 30 days after his employment terminates or
(b) the date on which the Option otherwise terminates or expires in accordance with the applicable provisions of the Plan and this Agreement. For purposes of this Section 4, an Optionee's employment shall be deemed to be terminated for "cause" if he is discharged for "cause" or any like term as defined in a written employment contract with the Optionee, if any.

(b) QUIT. If the Optionee quits employment, whether or not he is a party to a written employment contract, each Option granted hereby shall terminate and expire as of the close of business on the day the Optionee's employment terminates.
4.3. REGULAR TERMINATION; PERMANENT DISABILITY. If the Optionee's employment terminates for reasons other than as provided in Section 4.2 or 4.4 of this Agreement, including for "Permanent Disability," the vested and exercisable portion of each Option granted hereunder may be exercised until the earlier of (a) 60 days after his employment terminates or (b) the date on which the Option otherwise terminates or expires in accordance with the applicable provisions of the Plan and this Agreement.
4.4. DEATH. In the event that the Optionee's employment terminates by reason of death, or if the Optionee's employment shall terminate as described in Section 4.3 of this Agreement and he dies within the 60-day period described therein and while some portion of any Option is vested and/or exercisable, the portion, if any, of any such Options which were vested and exercisable immediately prior to the Optionee's death shall be exercisable by the person to whom the Options have passed under the Optionee's will (or, if applicable, pursuant to the laws of descent and distribution) until the earlier of (a) one year after the Optionee's death or (b) the date on which the Options otherwise terminate or expire in accordance with the applicable provisions of the Plan and this Agreement (disregarding Section 4.3 of this Agreement).
4.5. PAYMENT. For purposes of any post-employment exercisability of each Option in accordance with this Section 4, payment of the purchase price in accordance with Section 3 of this Agreement shall be satisfied if made in accordance with Plan Section 2.6(b)(i) or (c).
SECTION 5. CALL AND PUT OPTIONS; LOOK BACK RIGHT.
5.1. CALL AND PUT OPTIONS. The shares of Common Stock issued upon exercise of all or any portion of an Option shall be subject to a call right by the Company, the other "Management Stockholders" and the "Investors" (as such terms are defined in Plan Section 2.8) and shall be subject to a put right by the Optionee (and his estate, legal representative and "Permitted Transferees" (as such term is defined in Plan Section 3.3)) following the Optionee=s termination of employment, all in accordance with the provisions of Plan Section 2.8. Notwithstanding the preceding sentence and the provisions of Plan Section 2.8, no Option shall be subject to any call right or put right if, and to the extent, that any such right would cause the Company, a Management Stockholder, an Investor, or the Optionee (or his estate, legal representative or Permitted Transferee) to incur any liability under Rule 16b-3 of the Act.

5.2. LOOK BACK RIGHT. The shares of Common Stock issued upon exercise of all or any portion of an Option shall be entitled to participate in the look back right following the Optionee's termination of employment in accordance with the provisions of Plan Section 3.11(d).
SECTION 6. NON-TRANSFERABILITY.
6.1. No right granted to the Optionee under the Plan or this Agreement shall be assignable or transferable (whether by operation of law or otherwise and whether voluntarily or involuntarily), other than by will or by the laws of descent and distribution. During the lifetime of the Optionee, all rights granted to the Optionee under the Plan or under this Agreement shall be exercisable only by the Optionee, and shall not be exercisable prior to December 31, 1997, except in the event of a "Change of Control" or "IPO", as described in Section 2.5 hereof. Shares of Common Stock acquired upon exercise of any portion of an option granted to an Optionee under the Plan shall not be transferable to any person other than (i) to the Optionee's parent, spouse, ex-spouse or child (or any trust for the benefit of any such person) or (ii) pursuant to the laws of descent and distribution. Such shares shall remain subject to the call option as set forth in Plan Section 2.8(a) and the put option as set forth in Plan Section 2.8(b) upon the Optionee's termination. Each transferee shall agree in writing to be bound by all of the provisions of the Plan and this Agreement, and no such transferee shall be permitted to make any transfer other than in accordance with the terms of the Plan or this Agreement. Any sale, assignment, mortgage, pledge, encumbrance or other transfer in violation of this Section 6 shall be null and void and of no force and effect.
6.2. The certificate or certificates of shares of Common Stock issued pursuant to the terms of this Agreement shall bear a legend in substantially the following form:
"The securities represented by this certificate are subject to the terms and conditions (including forfeiture and restrictions against transfer) contained in a Nonqualified Stock Option Agreement entered into between the registered holder hereof and TravelCenters of America, Inc. Copies of such Nonqualified Stock Option Agreement are on file in the Office of the Secretary of TravelCenters of America, Inc. The securities represented by this certificate are further subject to a Supplemental Institutional and Management Stockholders' Agreement dated as of April __, 1997 among the issuer of such securities (the "Company") and certain of the Company's stockholders. A copy of such Supplemental Institutional and Management Stockholders' Agreement will be furnished without charge by the Company to the holder hereof upon written request. By acceptance of this certificate, each holder hereof agrees to be bound by the provisions of such agreements."

SECTION 7. RIGHT OF DISCHARGE RESERVED.
Nothing in the Plan or this Agreement shall confer upon the Optionee the right to continue in the employment or service of the Company or any of its Affiliates or affect any right that the Company or such Affiliate may have to terminate the employment or service of the Optionee.
SECTION 8. NO STOCKHOLDER RIGHTS.
Neither the Optionee nor any person succeeding to the Optionee's rights hereunder shall have any rights as a stockholder with respect to any shares subject to an Option until the date of the issuance of a stock certificate or certificates to him for such shares. Except for adjustments made pursuant to Plan Section 3.5 (as described in Section 9 of this Agreement), no adjustment shall be made for dividends, distributions or other rights (whether ordinary or extraordinary, and whether in cash, securities or other property) for which the record date is prior to the date such stock certificate is issued.
SECTION 9. PLAN PROVISIONS TO PREVAIL.
This Agreement shall be subject to all of the terms and provisions of the Plan, which are incorporated hereby and made a part hereof, including, without limitation, the provisions of Plan Section 3.2 (generally relating to consents required by securities and other laws), Plan Section 3.4 (generally relating to tax withholding obligations), Plan Section 3.5 (generally relating to adjustments to the number of shares of Common Stock subject to the Option and the option exercise price, upon certain changes in capitalization, provided that the Committee shall be required to make an appropriate adjustment in the circumstances described in Plan Section 3.5) and Plan Section 3.11 (generally relating to the effects of certain reorganizations and other extraordinary transactions, provided that in such an event payment of the purchase price in accordance with Section 3 of this Agreement shall be satisfied if made in accordance with Plan Section 2.6(b)(i) or (c)). In the event there is any inconsistency between any of the provisions of the Agreement and the Plan, the provisions of the Plan shall govern.

SECTION 10. OPTIONEE'S ACKNOWLEDGMENTS.
By entering into this Agreement the Optionee agrees and acknowledges that
(a) he has received and read a copy of the Plan, including Plan Section
3.8(c) (generally relating to waivers of continued exercise or vesting of awards, damages and severance entitlements related to non-continuation of awards), and accepts this Option upon all of the terms thereof, (b) he agrees to be bound by the provisions of the Supplemental Stockholders' Agreement described in Section 3 of this Agreement and to execute such documents with respect thereto as the Committee may require, and (c) that none of the Board, the Committee, the Affiliates (including their respective parents and subsidiaries) and their respective shareholders, officers, directors, employees, agents and counsel shall be liable for any action or determination with respect to the Plan or any award thereunder or this Agreement.
SECTION 11. SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and inure to the benefit of the parties hereto and the successors and assigns of the Company and, to the extent set forth in Plan Section 3.3 and Section 6 of this Agreement, the heirs and personal representatives of the Optionee.
SECTION 12. GOVERNING LAW.
THIS AGREEMENT IS DEEMED ADOPTED, MADE AND DELIVERED IN NEW YORK AND SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
SECTION 13. NOTICES.
Any notice or other communication required or which may be given hereunder shall be given in writing and shall be delivered personally, sent by facsimile transmission or overnight courier or sent by registered or certified mail, return receipt requested, postage prepaid, and shall be deemed given when so delivered personally or sent by facsimile transmission or overnight courier, or if mailed, four days after the mailing, as follows, to:
TravelCenters of America, Inc. 24601 Center Ridge Road, Suite 300 Westlake, Ohio 44145-5634 Attention: General Counsel Telecopy No.: (216) 808-3301

and a copy to:
The Clipper Group, L.P.
650 Madison Avenue, 9th Floor
New York, New York 10022
Attention: Rolf H. Towe
Telecopy No.: (212) 940-6055
or at such other address as the Company may hereafter designate to the Optionee by notice as provided herein. All notices to be given to the Optionee hereunder shall be addressed to the Optionee at the address set forth below or at such other address as the Optionee may hereafter designate to the Company by notice as provided herein. Either party may give any notice or other communication hereunder using any other means (including ordinary mail or electronic mail), but no such notice or other communication shall be deemed to have been duly given unless and until it actually is received by the individual for whom it is intended. Either party may change the address to which notices and other communications hereunder are to be delivered by giving the other party notice in the manner herein set forth.
SECTION 14. CANCELLATION AND SUBSTITUTION OF OPTION.
The Committee may cancel any Option granted under the Plan and issue a new award in substitution therefor upon such terms as the Committee may in its sole discretion determine (provided that the substituted award shall satisfy all applicable Plan requirements as of the date such new award is made) without the Optionee's consent, where the substituted award confers upon the Optionee, until exercised, substantially the same net economic benefit inherent in the replaced Option, taking into account any post-exercise puts and calls, etc., and with the Optionee's consent if otherwise.
SECTION 15. SECTION HEADINGS.
The section headings contained herein are for the purposes of convenience only and are not intended to define or limit the contents of said sections.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above written.
TravelCenters of America, Inc.
By:

Name:
Title:

ATTEST:

(Optionee)

(Address)

EXHIBIT A
The Optionee shall receive options to purchase shares of Common Stock as determined by the Committee. Subject to Section 2.5 of this Agreement, such options are granted as of January 1, 1997 (the "1997 Option"), January 1, 1998 (the "1998 Option"), January 1, 1999 (the "1999 Option") and January 1, 2000 (the "2000 Option"), each at the then Fair Market Value of Company Stock on the respective date of grant, as determined by the Committee, as follows:

         Grant Date                              Number of Shares
         ----------                              ----------------
January 1, 1997 (1997 Option)
                                                      ------
January 1, 1998 (1998 Option)
                                                      ------
January 1, 1999 (1999 Option)
                                                      ------
January 1, 2000 (2000 Option)
                                                      ------	

By:
Name:
Title:

Signed:

EXHIBIT B

 Highest Percent                          Percent of Shares Becoming
 of Performance                    Vested and Exercisable if Percent of
  Targets Met                              Performance Targets Met*
----------------                           ------------------------
  100% or more                                      100%

      99%                                            80%

      98%                                            64%

      97%                                            48%

      96%                                            32%

      95%                                            20%

 less than 95%                                        0	

* Each Option shall vest and become exercisable on the December 31 in the year of grant in accordance with the above schedule (and to the extent the applicable performance targets have not been met then such Option shall not vest or become exercisable and shall be forfeited); provided, however, that the percent of shares becoming vested and exercisable (a) will be proportionately adjusted on a straight line basis if actual performance falls between the percentages listed on the above schedule, and (b) in all events, the Committee, in its sole discretion, may reduce (but not increase) the percent of performance targets to be met and may increase (but not reduce) the percent of shares becoming vested and exercisable if performance targets are met.

EXHIBIT 10.18
MANAGEMENT SUBSCRIPTION AGREEMENT
MANAGEMENT SUBSCRIPTION AGREEMENT, dated as of November____, 1997, between TravelCenters of America, Inc., a Delaware corporation (the "Company"), and ________________ (the "Purchaser").
WHEREAS, the Purchaser is an employee of either the Company or one of its subsidiaries;
WHEREAS, the Purchaser wishes to subscribe for and purchase, and the Company desires to issue and sell to the Purchaser, certain authorized but unissued shares of common stock, par value $.01 per share, of the Company (the "Common Stock") on the terms and subject to the conditions set forth herein;
WHEREAS, the Purchaser is concurrently herewith becoming party to a Stockholders' Agreement, dated as of March 6, 1997, among the Company and certain of its stockholders (the "Stockholders' Agreement"), which provides certain restrictions on the transfer of the Common Stock;
WHEREAS, the Purchaser agrees to enter into an Institutional and Management Stockholder's Agreement and a Supplemental Institutional and Management Stockholder's Agreement, substantially in the forms attached hereto as Exhibits A and B, respectively, or in a form or forms mutually agreeable to the Purchaser and the Company, which agreements also provide certain restrictions on the transfer of Common Stock; and
WHEREAS, the Purchaser and the Company wish to provide for certain additional arrangements with respect to the Purchaser's right to hold and dispose of the shares of Common Stock acquired by the Purchaser hereunder.

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Accordingly, the Purchaser and the Company hereby agree as follows:
1. PURCHASE AND SALE OF SHARES. Subject to the terms set forth in this Agreement, and in reliance upon the representations, warranties and agreements of the Purchaser or the Beneficiary, as the case may be, contained herein, the Company hereby issues and sells to the Purchaser, and the Purchaser hereby subscribes for, the shares of Common Stock set forth opposite his name on Schedule A hereto (the "Shares"), at a price of ____ per share, for the aggregate purchase price set forth in Schedule A hereto (the "Purchase Price").
2. CLOSING OF THE PURCHASE AND SALE; PAYMENT FOR SHARES. The closing of the transactions contemplated hereby shall take place at the offices of the Company, at such other time, date and place as the Company and the Purchaser shall mutually agree (the "Closing"). At the Closing, the Company shall deliver to the Purchaser a duly executed certificate representing the Shares, and the Purchaser shall pay the Purchase Price to the Company either (i) in cash or (ii) in a combination of cash and a note payable to the Company (the "Note"), in the respective amounts set forth in Schedule A.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and warrants to the Purchaser that:
(a) The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, and has the requisite corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder.

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(b) The execution, delivery and performance of this Agreement, and the execution, issuance, sale and delivery of the Shares have been duly authorized by all necessary corporate action on the part of the Company. The Shares, when issued, shall be validly issued, and, upon payment to the Company by the Purchaser of the full Purchase Price (including payment of any Notes delivered as a portion thereof), shall be fully paid and nonassessable.
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER OR THE BENEFICIARY. The Purchaser or, if the Purchaser is other than an individual, the Beneficiary, represents and warrants to the Company, that:
(a) he is acquiring the Shares for his own account and not with a view to distributing or reselling the Shares in any transaction that would be in violation of any federal or state securities laws;
(b) he (i) is familiar with the business of the Company, (ii) has had an opportunity to discuss with representatives of the Company the condition of and prospects for the continued operation of the Company and such other matters as he deemed appropriate in considering whether to invest in the Shares and (iii) has been provided access to all available information about the Company requested by him;
(c) he understands that the Shares have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or registered or qualified under the securities laws of any state, and that he may not sell or otherwise transfer the Shares unless the Shares are subsequently registered under the Securities Act

4
and registered or qualified under applicable state securities laws, or unless an exemption is available that permits the sale or transfer without such registration or qualification;
(d) he understands that each certificate representing the Shares shall contain the following legend:
THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, ASSIGNED, OR OTHERWISE TRANSFERRED OR DISPOSED OF EXCEPT IN COMPLIANCE WITH SUCH ACT AND THE APPLICABLE RULES AND REGULATIONS THEREUNDER.
(e) if a Note is delivered to the Company as part of the Purchase Price, he understands that each certificate representing the Shares shall bear a legend satisfying the requirements of Section 156 of the General Corporation Law of the State of Delaware as to partly paid shares;
(f) he has made his own investigation whether or not to invest in the Shares and that he has sufficient business and financial experience so as to enable him to evaluate the merits and risks associated with the purchase of the Shares;
(g) he is able to bear the economic risk of a total loss of his investment in the Company and he has adequate means of providing for his current needs and foreseeable personal contingencies and has no need for his investment in the Shares to be liquid; and

5
(h) he understands that the purchase of the Shares involves various risks, including, among others, that it is unlikely that any market will exist for any resale of the Shares and that the Shares are subject to the provisions of the Stockholders' Agreement and also will be subject to the terms and conditions of loan or credit agreements and related security documents entered into by the Company.
5. REPRESENTATIONS OF THE BENEFICIARY. If the Purchaser is other than an individual, the Beneficiary represents that he has authority to instruct the Purchaser to enter into this Management Subscription Agreement.
6. RESTRICTIONS ON DISPOSITION OF THE SHARES. The Purchaser agrees that as a condition of his subscription for the Shares he will become party to the Stockholders' Agreement and acknowledges that the Stockholders' Agreement contains certain provisions restricting the transfer or assignment of the Shares. In addition, the Purchaser agrees to enter into an Institutional and Management Stockholder's Agreement and a Supplemental Institutional and Management Stockholder's Agreement, substantially in the forms attached hereto as Exhibits A and B respectively, or in a form or forms mutually agreeable to the Purchaser and the Company, which agreements also provide certain restrictions on the transfer of the Common Stock.
7. CALL AND PUT OPTIONS. The Company and the Purchaser agree that call and put options shall be available with respect to Shares as set forth in Sections 2.8 and 3.11(d) of the TravelCenters of America, Inc. 1997 Stock Incentive Plan (the "Plan"),

6
which sections shall be applied and interpreted consistently with other sections of the Plan. Such options shall be exercised at a Call Purchase Price or Put Purchase Price, as the case may be, as provided in Exhibit A and Exhibit B to the Plan.
8. STOCKHOLDERS' AGREEMENT CONTROLS. If any provision of this Agreement conflicts with or is contrary to any provision of the Stockholders' Agreement, such provision of the Stockholders' Agreement shall control.
9. MISCELLANEOUS.
(a) RULES OF CONSTRUCTION. In this Agreement, unless the context otherwise requires, words in the singular number or in the plural number shall each include the singular number and the plural number, words of the masculine gender shall include the feminine and the neuter, and, when the sense so indicates, words of the neuter shall refer to any gender.
(b) FURTHER ASSURANCES. Each party hereto shall do and perform or cause to be done and performed all further acts and shall execute and deliver all other agreements, certificates, instruments and documents as any other party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
(c) GOVERNING LAW. This Agreement and the rights and obligations of the parties hereto shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, without giving effect to the conflicts of laws principles thereof.

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(d) SPECIFIC PERFORMANCE. The parties hereto acknowledge that there will be no adequate remedy at law for a violation of any of the provisions of this Agreement and that, in addition to any other remedies that may be available, all of the provisions of this Agreement shall be specifically enforceable in accordance with their respective terms.
(e) INVALIDITY OF PROVISION. The invalidity or unenforceability of any provision of this Agreement in any jurisdiction shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of this Agreement, including that provision, in any other jurisdiction.
(f) NOTICE. All notices and other communications hereunder shall be in writing and, unless otherwise provided herein, shall be deemed to have been given when received by the party to whom such notice is to be given at its address set forth below, or such other address for the party as shall be specified by notice given pursuant hereto:
If to the Company, to:
TravelCenters of America, Inc.
24601 Center Ridge Road
Suite 300
Westlake, OH 44145-5634
Attention: Corporate Secretary
Fax: 440-808-3301

8
with a copy to:
Paul, Weiss, Rifkind, Wharton &
Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Attention: Carl L. Reisner, Esq.
Fax: 212-757-3900
If to the Purchaser, to the address set forth in
Schedule A hereto.
(g) BINDING EFFECT. This Agreement shall inure to the benefit of and shall be binding upon the parties hereto and their respective heirs, legal representatives, successors and assigns.
(h) AMENDMENT AND MODIFICATION. This Agreement may be amended, modified or supplemented only by written agreement of the party against whom enforcement of such amendment, modification or supplement is sought.
(i) HEADINGS; EXECUTION IN COUNTERPARTS. The headings and captions contained herein are for convenience only and shall not control or affect the meaning or construction of any provision hereof. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument.
(j) NO RIGHTS TO EMPLOYMENT. Nothing in this Agreement shall constitute an offer of employment to [name of employee] or be construed to require the Company or any of its affiliates to continue [name of employee] in the employ of the Company or any of its affiliates for any stated period of time.

9
(k) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement, and supersedes all prior agreements and understandings, oral and written, between the parties hereto with respect to the subject matter hereof.

10
IN WITNESS WHEREOF, the Purchaser and the Company have executed this Agreement as of the date first above written.
TRAVELCENTERS OF AMERICA, INC.
By:

Name:

Title:

SCHEDULE A

Shares of                                                Aggregate
Common                  Cash            Note             Purchase
Stock Issued           Amount           Amount             Price
------------           ------           ------           ---------	

Address of the Purchaser:

EXHIBIT 10.19
SCHEDULE OF OMITTED MANAGEMENT SUBSCRIPTION
The following documents have been omitted as Exhibits to the Registration Statement because they are on substantially identical terms as Exhibit 10.18 in all material respects other than with respect to the numbers and purchase prices of shares purchased by each of the executives under the agreements.

                 Agreement                           # of Shares
--------------------------------------------         ------------
1.  Management Subscription Agreements
     between the Company and Edwin P. Kuhn             15,452

2.  Management Subscription Agreements
     between the Company and Edwin P. Kuhn             11,590

3.  Management Subscription Agreements
     between the Company and Edwin P. Kuhn             11,590

4.  Management Subscription Agreements
     between the Company and Edwin P. Kuhn             7,727	

EXHIBIT 21
SUBSIDIARIES OF THE COMPANY

                                            State of
               Subsidiary                 Incorporation      Doing Business As
--------------------------------------  -----------------   -------------------
TA Operating Corporation                    Delaware        Travel Centers of America
National Auto/Truckstops, Inc.              Delaware                 -
TA Franchise Systems, Inc.                  Delaware                 -
TA Travel, L.L.C. (a)                       Delaware                 -	

(a) Wholly-owned by TA Operating Corporation.
1

ARTICLE 5	
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.	
MULTIPLIER: 1,000	

		
PERIOD TYPE	YEAR	
FISCAL YEAR END	DEC 31 1997	
PERIOD START	JAN 01 1997	
PERIOD END	DEC 31 1997	
CASH	71,756	
SECURITIES	0	
RECEIVABLES	71,140	
ALLOWANCES	2,707	
INVENTORY	33,718	
CURRENT ASSETS	187,903	
PP&E	286,472	
DEPRECIATION	0	
TOTAL ASSETS	507,792	
CURRENT LIABILITIES	101,800	
BONDS	289,625	
PREFERRED MANDATORY	61,404	
PREFERRED	38	
COMMON	14	
OTHER SE	45,447	
TOTAL LIABILITY AND EQUITY	507,792	
SALES	1,002,480	
TOTAL REVENUES	1,039,328	
CGS	773,084	
TOTAL COSTS	773,084	
OTHER EXPENSES	243,899	
LOSS PROVISION	1,688	
INTEREST EXPENSE	22,898	
INCOME PRETAX	(553)	
INCOME TAX	(344)	
INCOME CONTINUING	(209)	
DISCONTINUED	0	
EXTRAORDINARY	(5,554)	
CHANGES	0	
NET INCOME	(5,763)	
EPS PRIMARY	(13.00)	
EPS DILUTED	(13.00)	

ARTICLE 5	
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.	
RESTATED:	
MULTIPLIER: 1,000	

		
PERIOD TYPE	9 MOS	6 MOS	3 MOS	YEAR	
FISCAL YEAR END	DEC 31 1997	DEC 31 1997	DEC 31 1997	DEC 31 1996	
PERIOD START	JAN 01 1997	JAN 01 1997	JAN 01 1997	JAN 01 1996	
PERIOD END	SEP 30 1997	JUN 30 1997	MAR 31 1997	DEC 31 1996	
CASH	76,816	79,492	74,910	23,779	
SECURITIES	0	0	0	0	
RECEIVABLES	69,085	60,924	60,142	57,873	
ALLOWANCES	4,405	4,310	3,851	3,502	
INVENTORY	32,491	33,710	29,821	29,082	
CURRENT ASSETS	186,638	180,230	175,794	121,639	
PP&E	264,523	265,698	267,618	269,366	
DEPRECIATION	0	0	0	0	
TOTAL ASSETS	487,912	483,674	479,831	425,889	
CURRENT LIABILITIES	72,942	71,397	62,480	97,873	
BONDS	289,750	289,875	290,000	193,185	
PREFERRED MANDATORY	59,463	57,522	55,704	53,885	
PREFERRED	38	38	38	38	
COMMON	14	14	14	14	
OTHER SE	52,644	50,362	56,805	65,528	
TOTAL LIABILITY AND EQUITY	487,912	483,674	479,831	425,889	
SALES	755,747	512,042	255,393	650,203	
TOTAL REVENUES	780,302	529,990	265,113	696,258	
CGS	585,226	404,689	205,878	568,694	
TOTAL COSTS	585,226	404,689	205,878	568,694	
OTHER EXPENSES	174,937	119,076	54,304	103,446	
LOSS PROVISION	1,404	606	376	2,545	
INTEREST EXPENSE	16,954	10,967	5,105	15,236	
INCOME PRETAX	3,185	(4,742)	(174)	8,882	
INCOME TAX	1,231	(1,838)	(68)	3,349	
INCOME CONTINUING	1,954	(2,904)	(106)	5,533	
DISCONTINUED	0	0	0	0	
EXTRAORDINARY	(5,554)	(5,554)	(5,554)	0	
CHANGES	0	0	0	0	
NET INCOME	(3,600)	(8,458)	(5,660)	5,533	
EPS PRIMARY	(8.23)	(10.29)	(0.50)	(0.81)	
EPS DILUTED	(8.23)	(10.29)	(0.50)	(0.81)	

EXHIBIT 99.1
INFORMATION REQUIRED BY PART III OF FORM 10-K
DIRECTORS AND OFFICERS OF THE REGISTRANT
The executive officers and members of the Board of Directors of the Company and their ages, are as follows:

NAME                        AGE                    POSITION
----                        ---                    --------
Edwin P. Kuhn . . . . . .    55        President, Chief Executive Officer and
                                        Director

James W. George . . . . .    46        Senior Vice President, Chief Financial
                                        Officer and Secretary

Timothy L. Doane  . . . .    40        Senior Vice President

Michael H. Hinderliter. .    48        Senior Vice President

Steven C. Lee . . . . . .    34        Vice President, General Counsel and
                                        Assistant Secretary

Walter E. Smith, Jr . . .    57        Director

Margaret M. Eisen . . . .    44        Director

Robert B. Calhoun, Jr . .    55        Chairman of the Board of Directors and
                                        Director

Eugene P. Lynch . . . . .    36        Director

Louis J. Mischianti . . .    38        Director

Rolf H. Towe. . . . . . .    59        Director

Harrison T. Bubb. . . . .    58        Director	

Officers of the Company 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 President, Chief Executive Officer and Director of the Company and its subsidiaries in January 1997. Mr. Kuhn has served as President and Chief Executive Officer of TA since the closing of the TA Acquisition in December 1993. Mr. Kuhn served as the General Manager (the most senior position and effective President) of TA under BP's ownership from April 1992 to December 1993. Prior to joining TA, Mr. Kuhn spent 25 years with 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.
James W. George was named Senior Vice President, Chief Financial Officer and Secretary of the Company and its subsidiaries in January 1997. Mr. George has served as a Vice President and Chief Financial Officer of TA since the closing of the TA Acquisition in December 1993. From August 1990 to December 1993, Mr. George served as the Controller (the most senior financial position) of TA under BP's ownership. Prior to joining TA, Mr. George spent ten years with Sohio and BP in a series of accounting and finance positions.
Timothy L. Doane was named Senior Vice President, Market Development of the Company and its subsidiaries in January 1997. Mr. Doane has served as a Vice President, Market Development of TA since 1995.
1

Prior to joining TA, 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.
Michael H. Hinderliter was named Senior Vice President, Marketing of the Company and its subsidiaries in January 1997. Mr. Hinderliter has served as a Vice President, Marketing of TA since the closing of the TA Acquisition 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, Sohio and BP ownership in a series of positions which included serving as a Fleet Sales Manager, Division Manager and location General Manager.
Steven C. Lee was named Vice President and General Counsel of the Company and its 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.
Walter E. Smith, Jr. has been a Director of the Company since July 1995. Mr. Smith has operated travel centers under franchises from National or TA since 1993. Mr. Smith is a director of Citrus Financial Services, Inc., a bank holding company in Vero Beach, FL, and the chief executive officer of four separate private corporations which operate TA travel centers.
Margaret M. Eisen has been a Director of the Company since April 1997. Ms. Eisen has served as Managing Director, North American Equities since June 1995 at General Motors Investment Management Corporation ("GMIMC"), the investment advisor to First Plaza Group Trust ("First Plaza"). From March 1993 to June 1995 and from March 1992 to March 1993, Ms. Eisen served as Director, Worldwide Pension Investments and as Director, Equity Portfolio Strategy, respectively, at Du Pont Pension Fund Investment, E. I. Du Pont de Nemours and Company.
Robert B. Calhoun, Jr. has been a Director of the Company since April 1993 and was elected Chairman of the Board of Directors in September 1996. Mr. Calhoun has been President of Clipper Asset Management Corporation, which is the sole general partner of Clipper, as well as certain of its affiliates and related entities, since 1991. Mr. Calhoun also serves as director of Avondale Mills, Inc., Hvide Marine Incorporated, Interstate Bakeries Corporation and several private companies.
Eugene P. Lynch has been a Director of the Company since April 1993. Mr. Lynch has been employed by Clipper or its affiliates and related entities since 1991 and has served as a Managing Director since 1993. Mr. Lynch also serves as a director of AVTEAM, Inc., Owosso Corporation and several private companies.
Louis J. Mischianti has been a Director of the Company since October 1992. Mr. Mischianti has been employed by Olympus Advisory Partners, Inc., an affiliate of Olympus Private Placement Fund, L.P. ("Olympus"), since May 1994. Mr. Mischianti was employed by Clipper or its affiliates from 1991 to April 1994. Mr. Mischianti serves as a director of several private companies.
Rolf H. Towe has been a Director of the Company since July 1996. Mr. Towe has served as a Senior Managing Director of Clipper and its affiliates since 1991. Mr. Towe also serves as a director of American Heritage Life Insurance Company, Sterling Chemicals Holdings, Inc. and several private companies.
Harrison T. Bubb was elected as a Director of the Company on March 25, 1998. Mr. Bubb spent over 35 years with Sohio and BP in various positions, including Vice President - Strategic Development, Director - Retail Europe, Vice President - Marketing (USA) and General Manager - Retail Sales.
2

EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE. The following table sets forth the compensation awarded to, earned by or paid to the Chief Executive Officer and each of the four other most highly compensated executive officers of the Company as of December 31, 1997 (the "Named Executive Officers") for services rendered to the Company and its subsidiaries for 1997, 1996 and 1995.
SUMMARY COMPENSATION TABLE

                                                                                                 Long-Term
                                                                        Annual Compensation     Compensation
                                                                      ----------------------    ------------
                                                                                                 Securities       All Other
                                                                                                 Underlying        Compen-
              Name and Principal Position                   Year     Salary($)    Bonus($)(1)    Options(#)       sation($)(2)
              ---------------------------                   ----     ---------    -----------   ------------     -------------
Edwin P. Kuhn . . . . . . . . . . . . . . . . . . . .       1997      325,000      162,500           -               4,243
     President, Chief Executive Officer and Director(3)     1996      230,000       92,000           -               4,204
                                                            1995      220,000       88,000           -               2,165

James W. George . . . . . . . . . . . . . . . . . . .       1997      210,000      105,000           -               4,241
     Senior Vice President, Chief Financial Officer and     1996      144,000       57,600           -                 360
     Secretary (4)                                          1995      136,500       54,600           -                 348

Michael H. Hinderliter  . . . . . . . . . . . . . . .       1997      210,000      105,000           -               4,953
     Senior Vice President (4)                              1996      144,000       57,600           -                 360
                                                            1995      136,500       54,600           -                 348

Timothy L. Doane  . . . . . . . . . . . . . . . . . .       1997      210,000      105,000           -                 529
     Senior Vice President (4)(5)                           1996      138,000       55,200           -                 348
                                                            1995       86,666       34,666           -                 216

C. William Osborne  . . . . . . . . . . . . . . . . .       1997       22,038            -           -                   -
     President, Chief Executive Officer and Director(6)     1996      264,452       26,445           -               1,235
                                                            1995      257,500       20,214           -               1,152	

(1) Represents bonus for services rendered in the indicated year.
(2) Represents life insurance premiums paid by the Company. Mr. Kuhn's amount includes $3,424 in 1997, $3,628 in 1996, and $1,613 in 1995, reflecting his use of a Company automobile. Messrs. George's, and Hinderliter's amounts include $3,712, and $4,424, respectively, for their use of Company automobiles in 1997.
(3) Elected as Chief Executive Officer and President of the Company and as a director, effective January 21, 1997.
(4) Elected as Senior Vice President of the Company, effective January 21, 1997.
(5) Mr. Doane has been employed by the Company since May 1995.
(6) In 1997, Mr. Osborne received severance and consulting payments of $176,300.
Mr. Steven C. Lee began employment with the Company in December 1997, and was elected as Vice President, General Counsel and Assistant Secretary effective December 17, 1997.
3

OPTION GRANTS.
The following table sets forth certain information regarding stock options granted in 1997 pursuant to the Company's 1997 Stock Incentive Plan (the "1997 Stock Plan") to the executive officers named in the Summary Compensation Table. One-hundred percent of the options listed below have vested based on 1997 earnings. Vested options may be exercised at any time after December 31 of the year of grant and will remain exercisable through December 31, 2006, at which time they will terminate.
OPTION GRANTS IN LAST FISCAL YEAR

                                                                                                           POTENTIAL
                                                                                                      REALIZABLE VALUE AT
                                                                                                        ASSUMED ANNUAL
                                                                                                        RATES OF STOCK
                                                                                                             PRICE
                                                                                                       APPRECIATION FOR
                                                       INDIVIDUAL GRANTS                                  OPTION TERM
                              ----------------------------------------------------------------       --------------------
                              NUMBER OF      PERCENT OF
                              SECURITIES   TOTAL OPTIONS
                              UNDERLYING     GRANTED TO
                               OPTIONS      EMPLOYEES IN   EXERCISE PRICE OF
           NAME                GRANTED      FISCAL YEAR        OPTIONS           EXPIRATION DATE        5%          10%
          ------             -----------   -------------   -----------------    -----------------    -------      -------
Edwin P. Kuhn                  31,000          19.9%           $20.00           December 31, 2006    156,296      237,563
James W. George                18,000          11.6%           $20.00           December 31, 2006     90,753      137,940
Michael H. Hinderliter         18,000          11.6%           $20.00           December 31, 2006     90,753      137,940
Timothy L. Doane               18,000          11.6%           $20.00           December 31, 2006     90,753      137,940	

Vested options may be exercised at any time after December 31, 1997. Options may also, at the discretion of the Company, vest and/or become exercisable at earlier dates than otherwise provided in the event of certain changes in control or Reorganization Events (as defined in the 1997 Stock Plan). Vested options are exercisable for limited periods following termination of employment of a named executive officer; non-vested options terminate upon termination of employment. Securities obtained as a result of the exercise of options may not be transferred except to certain family members and, upon termination of employment or death, are subject to call and put rights that, generally, give the Company the right, but not the obligation, for a specified time period to purchase such securities from the named executives at a formula price and give the named executives the right, but not the obligation, for a specified time period to sell such securities to the Company at a second formula price. Pursuant to either of the foregoing formulas, a purchase price per share is derived by subtracting consolidated indebtedness (as defined in the 1997 Stock Plan) from a specified multiple of EBITDA (as defined in the 1997 Stock Plan) and dividing the result by the sum of the number of issued and outstanding shares of capital stock of the Company plus the number of shares of capital stock of the Company subject to certain warrants.
1993 STOCK PLAN. Stock options to purchase shares of the Company's Common Stock, par value $0.01 per share ("Common Stock") have been granted to the Named Executive Officers prior to 1996 pursuant to the Company=s 1993 Stock Incentive Plan (the "1993 Stock Plan") as Series I, Series II and Series III options, as follows: Mr. Kuhn, 15,860, 16,721 and 17,799 options; both of Messrs. George and Hinderliter, 9,818, 10,364 and 11,018 options; Mr. Doane, 7,364, 7,773, and 8,263 options; and Mr. Osborne, 25,175, 26,573 and 28,252 options, respectively. The option exercise price for each Series I, Series II and Series III option is as follows: $10.00 per share, $17.49 per share and $22.50 per share, respectively. Fifty percent of each of the Series I, II and III options have vested with respect to Mr. Osborne; however, all of such options have been canceled. See "--Termination, Consulting and Release Agreement with C. William Osborne." Seventy-five percent of each series of options have vested with respect to Messrs. Kuhn, George and Hinderliter and 67% of each series of options have vested with respect to Mr. Doane. Options are currently exercisable to the extent vested as of December 31, 1996 and remain exercisable for limited periods following termination of employment of the Named Executive Officer. All such unvested options have been canceled in connection with the adoption of the 1997 Stock Plan. Common Stock
4

acquired upon the exercise of options may not be transferred except to certain family members and are subject to call and put options upon termination of employment. The call and put option pricing formula under the 1993 Stock Plan and option agreements has been modified to the formula under the 1997 Stock Plan. It is also expected that if a change of control occurs within six months after termination of employment for "good reason," death, "disability" or termination other than for "cause" (as defined), an adjustment will be made to the amount paid upon exercise of any call options or put options (but, in the case of put options, only to the extent the proceeds received by the former employee upon exercise of the put option are used to repay indebtedness to the Company) so that the former employee will be able to receive any amounts in excess of the call or put price payable in the change of control transaction. See "Certain Transactions--Stockholders' Agreements--Supplemental Institutional and Management Stockholders' Agreement."
The following table sets forth information concerning the value of unexercised options as of December 31, 1997 held by the Named Executive Officers.
AGGREGRATED OPTION EXERCISES IN LAST FISCAL YEAR AND
LAST FISCAL YEAR-END OPTION VALUES TABLE

                                          SHARES                        NUMBER OF SECURITIES             VALUE OF UNEXERCISED
                                         ACQUIRED       VALUE            UNDERLYING OPTIONS              IN-THE-MONEY OPTIONS
                                        ON EXERCISE    REALIZED         AT 1997 YEAR-END (#)             AT 1997 YEAR-END ($)
                 NAME                     (#)(1)        ($)(1)      EXERCISABLE/UNEXERCISABLE(2)   EXERCISABLE/UNEXERCISABLE(2)(3)
                 ----                   -----------    --------     ----------------------------   -------------------------------
                                             -            -                 69,539 / -                    345,382 / -
Edwin P. Kuhn . . . . . . . . . . . .

James W. George . . . . . . . . . . .        -            -                 41,359 / -                    209,586 / -

Michael H. Hinderliter  . . . . . . .        -            -                 41,359 / -                    209,586 / -

Timothy L. Doane  . . . . . . . . . .        -            -                 34,058 / -                    160,442 / -

C. William Osborne  . . . . . . . . .        -            -                      - / -(4)                       _ / -(4)	

(1) No options were exercised by any Named Executive Officer in 1997.
(2) The portion of all options granted pursuant to the 1993 Stock Plan which were unexercisable as of December 31, 1996 were canceled in connection with the adoption of the 1997 Stock Plan.
(3) Based on a stock price of $23.25 per share.
(4) All options of Mr. Osborne, 50% vested at December 31, 1996, have been canceled.
COMPENSATION OF DIRECTORS
In September 1996, the Company's Board of Directors unanimously agreed to waive all Board of Directors retainers and meeting fees. Beginning in 1997, each non-employee director will be granted, subject to being disclaimed by such directors, 1,250 stock options each year pursuant to the 1997 Stock Plan, although there is no assurance such an arrangement will continue in the future. Members of the Company's Board of Directors also receive reasonable out-of-pocket expenses in connection with travel to and attendance at meetings.
EMPLOYMENT AGREEMENTS AND STOCKHOLDERS' AGREEMENTS WITH EDWIN P. KUHN, JAMES W.
GEORGE, MICHAEL H. HINDERLITER AND TIMOTHY L. DOANE
The Company has entered into an employment agreement, a stockholder's agreement and a Supplemental Institutional and Management Stockholders' Agreement with each of Edwin P. Kuhn, James W. George, Michael H. Hinderliter and Timothy L. Doane (the "Executives"). The principal terms and conditions of the Executives' employment agreements are as follows:
5

The Executives shall be employed by the Company from January 1, 1997 through December 31, 2000 (unless terminated earlier). The employment agreements provide for annual base salaries, subject to approved increases, of $325,000 for Mr. Kuhn and $210,000 for Messrs. George, Hinderliter and Doane, respectively; annual bonuses of up to 50% of annual base salary, minimum 25% of base salary for 1997 and 12.5% of base salary for 1998 (the "Guaranteed Bonuses"); participation in Company employee benefit plans; and certain fringe benefits.
If an Executive's employment is terminated prior to December 31, 2000:
(i) by his resignation (other than for "good reason" (this term and each subsequent term in quotation marks referenced in this paragraph as defined in the employment agreements) or for "cause", he shall be entitled to only his accrued and unpaid base salary and any vested benefits under the Company's 1993 and 1997 Stock Plans; (ii) by reason of death or "permanent disability", then in addition to the foregoing, any annual or guaranteed bonus (whichever is greater), pro-rated, and Company-paid continued medical coverage; and
(iii) by his resignation for good reason or by the Company for any other reason, base salary until December 31, 2000 (or if later, for one year) subject to offset, his guaranteed bonus, if any (or, if greater, any annual bonus, pro-rated), any vested benefits under the Company's 1993 and 1997 Stock Plans and subsidized medical coverage; provided that if the Executive engages in a "competitive activity," he shall instead only be entitled to his accrued and unpaid base salary, any vested benefits under the Company's 1993 and 1997 Stock Plans and subsidized medical coverage. If any payments and the value of benefits are "contingent on a change of control" within the meaning of section 280G of the Internal Revenue Code of 1986, as amended (which could include, for example and without limitation, the accelerated vesting of stock options upon a change of control), then the Company may be denied an income tax deduction for all or a portion of such payments, and the recipient thereof may be subject to a 20% excise tax in addition to income tax otherwise imposed. The Executives' employment agreements also include non-competition and non-solicitation covenants and confidentiality agreements.
For a description of the stockholder's agreements and Supplemental Institutional and Management Stockholders' agreement to be entered into by the Executives, see "Certain Relationships and Related Transactions--Stockholders' Agreements."
TERMINATION, CONSULTING AND RELEASE AGREEMENT WITH C. WILLIAM OSBORNE
The Company has entered into a Termination, Consulting and Release Agreement with C. William Osborne, former President and Chief Executive Officer of the Company on the principal terms and conditions described below as of January 17, 1997 (the "Termination Agreement").
Mr. Osborne resigned from all positions and directorships with the Company and its affiliates and was entitled to continued base salary through January 31, 1997, 1996 fiscal year bonus (10% of annual base salary), any vested benefits under the Company's retirement or group health plans and reimbursement for up to six months of outplacement services.
Mr. Osborne was retained as a consultant from February 1, 1997 (the "Initial Payment Date") through January 31, 1998 (the "Final Payment Date"), in consideration for payment on February 28, 1997 of $176,300, continued medical coverage for up to one year, and severance of $88,150 on the Final Payment Date.
Certain stock options held by Mr. Osborne under the Company's 1993 Stock Plan were canceled without consideration. The Series I options were canceled for the right to receive (i) on or about the Initial Payment Date, (x) the product of $13.00 and the number of shares of Common Stock into which the Series I options held by Mr. Osborne could be converted minus (y) the option exercise price and (ii) on the Final Payment Date, the product of $2.69 and such number of shares. Shares of Common Stock held by Mr. Osborne or by his transferees were purchased by the Company for (i) an amount payable on or about the Initial Payment Date equal to the product of $10.00 and such number of shares and (ii) an amount payable on the Final Payment Date equal to the product of $5.69 and such number of shares.
6

The outplacement service reimbursements and all deferred payments were conditioned upon Mr. Osborne's service as a consultant not being terminated for "cause" (as defined in the Termination Agreement). Mr. Osborne also executed a general release of claims and covenants regarding confidentiality, non-solicitation of employees or clients and non-disparagement.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As of April 1997, the members of the Executive Compensation Committee of the Board of Directors were Robert B. Calhoun, Jr., Louis J. Mischianti and Rolf H. Towe. Hugh D. Schmieder, Bruce D. Dorbeck, Walter M. Cain and Louis J. Mischianti served as members of the Executive Compensation Committee of the Board of Directors during fiscal year 1996 and through April 1997. Messrs. Schmieder, Dorbeck and Cain are former Directors of the Company, each of whom resigned in April 1997. Mr. Schmieder was an Operator of three travel centers and is a Franchisee-Owner with respect to one travel center. Mr. Dorbeck was an Operator of one travel center and a lessee (but not a franchisee) of an additional travel center. During fiscal year 1996, Mr. Cain was employed by GMIMC, the investment advisor to First Plaza, but resigned as of April 1997. Messrs. Calhoun and Towe are employed by Clipper and/or its affiliates and Mr. Mischianti is employed by an affiliate of Olympus.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Prior to March 6, 1997 the Company had two classes of common stock. However, pursuant to the amendment and restatement of the Company's Certificate of Incorporation effected on March 6, 1997, the Company currently has only one class of common stock.
The Company has one class of Common Stock outstanding and four classes of convertible preferred stock outstanding: Series I and Series II Convertible Preferred Stock, par value $0.01 per share ("Series I Preferred" and "Series II Preferred," respectively), and Series I and Series II Senior Convertible Participating Preferred Stock, par value $0.01 per share ("Series I Senior" and "Series II Senior," respectively).
At the option of the holder thereof, Series I Preferred and Series I Senior may be converted to Common Stock at any time on a one for one basis. Series II Preferred and Series II Senior also may be converted to Common Stock on a one for one basis; however, the total number of shares that may be converted at any one time is limited to a percentage determined by reference to a formula reflecting the number of outstanding shares of Common Stock at the time of conversion. Pursuant to this formula, as of December 31, 1997, Clipper/Merchant I, L.P. ("Clipper/Merchant"), which holds of record all outstanding shares of Series II Preferred and Series II Senior, could have elected to convert a combined total of 211,170 shares of Series II Preferred and Series II Senior (out of a total of 2,171,718 shares) to an equal number of shares of Common Stock.
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The following table sets forth the number of shares of capital stock of the Company beneficially owned, as of February 15, 1998, by each person known by the Company to beneficially own more than 5% of any class of capital stock of the Company (other than directors and officers, see "Directors and Officers").

                                                                 AMOUNT AND                                       PERCENT OF
                                                                 NATURE OF                                          STATED
NAME OF BENEFICIAL OWNER                                        OWNERSHIP(1)               CLASS OF STOCK          CLASS(1)
------------------------                                        ------------               --------------         ----------
United States Trust Company of New York . . . . . . . . .          417,500(2)               Common                   65.9%
     770 Broadway
     New York, NY 10003

Clipper Capital Associates, L.P.(3) . . . . . . . . . . .        4,661,702                  Common(4)                 88.0
     650 Madison Avenue                                          2,594,876                  Series I Preferred(5)    100.0
     New York, NY 10022                                          1,237,374                  Series II Preferred(5)   100.0
                                                                 1,855,656                  Series I Senior(5)        69.2
                                                                   934,344                  Series II Senior(5)      100.0

UBS Capital LLC . . . . . . . . . . . . . . . . . . . . .          478,680                  Common(6)                 45.2
     299 Park Avenue                                               425,000                  Series I Senior           15.9
     New York, NY 10171

First Plaza Group Trust . . . . . . . . . . . . . . . . .        3,945,391                  Common(7)                 86.2
     c/o Mellon Bank, N.A.                                       2,044,750                  Series I Preferred(8)     78.8
     One Mellon Bank Center                                      1,800,000                  Series I Senior(8)        67.1
     Pittsburgh, PA 15258

Olympus Private Placement Fund, L.P.  . . . . . . . . . .          494,039                  Common(9)                 43.8
     Metro Center                                                  277,500                  Series I Preferred(10)    10.7
     One Station Place                                             200,000                  Series I Senior            7.5
     Stamford, CT 06902

The Travelers Indemnity Company . . . . . . . . . . . . .          200,000                  Common(11)                24.0
     One Tower Square                                              200,000                  Series I Senior            7.5
     Hartford, CT 06183

Barclays U.S.A., Inc. . . . . . . . . . . . . . . . . . .          222,866                  Common(12)                26.9
     600 Fifth Avenue                                              185,000                  Series I Preferred(13)     7.1
     New York, NY 10020

Merchant Truckstops, L.P.(14) . . . . . . . . . . . . . .          211,170                  Common(15)                25.0
     11 Madison Avenue                                           1,225,000                  Series II Preferred       99.0
     New York, NY 10010	

(1) With respect to Common Stock, reflects beneficial ownership of Common Stock, assuming the conversion into Common Stock by the listed stockholder of any preferred stock and the exercise by the listed stockholder of any warrants to purchase Common Stock owned by such stockholder to the extent currently convertible or exercisable within 60 days after February 15, 1998.
(2) United States Trust Company of New York holds these shares in its capacity as Voting Trustee under the Voting Trust Agreement. See "Certain Relationships and Related Transactions."
(3) Clipper Capital Associates, L.P. ("CCA") directly owns 62,298 shares of Series I Preferred and 37,474 shares of Series I Senior and is the general partner of four limited partnerships that are the record owners of the remainder of these shares: (i) National Partners I, L.P. ("National I"),
(ii) National Partners II, L.P. ("National II"), (iii) National Partners III, ("National III") and (iv) Clipper/Merchant. CCA thus may be said to beneficially own all such shares owned by these four limited partnerships. Clipper Capital Associates, Inc. ("CCI") is the general partner of CCA, and the sole stockholder of CCI is Robert B. Calhoun, Jr., a director of the Company. By virtue of such relationship, CCI and Mr. Calhoun may be deemed to beneficially own these shares. CCI and Mr. Calhoun disclaim beneficial ownership of all such shares except to the extent of any pecuniary interest they may have therein. See footnote 3 to the following security ownership table.
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(4) Includes shares of Common Stock that could be issued upon conversion of all outstanding shares of preferred stock of the Company held of record by the following: (i) CCA: 62,298 shares of Series I Preferred and 37,474 shares of Series I Senior, (ii) National I: 2,065,405 shares of Series I Preferred and 1,818,182 shares of Series I Senior, (iii) National II: 186,869 shares of Series I Preferred, (iv) National III: 280,304 shares of Series I Preferred and (v) Clipper Merchant: 1,237,374 shares of Series II Preferred and 934,344 shares of Series II Senior. As of February 15, 1998, a combined total of only 211,170 shares of the two Series II classes held by Clipper/Merchant were convertible, as described above. For further discussion of National I, National II, National III and Clipper/Merchant see footnotes 8, 10, 13 and 14 below.
(5) See footnote 4 above.
(6) Includes 53,680 shares of Common Stock held of record and 425,000 shares of Common Stock that could be issued upon conversion of Series I Senior.
(7) Includes 100,641 shares of Common Stock that could be issued upon exercise of warrants, 2,044,750 shares of Common Stock that could be issued upon conversion of Series I Preferred and 1,800,000 shares of Common Stock that could be issued upon conversion of Series I Senior. For further discussion of First Plaza's share ownership, see footnote 8 below.
(8) First Plaza, as limited partner of National I and under National I's partnership agreement, may be deemed to beneficially own 2,044,750 shares of Series I Preferred and 1,800,000 shares of Series I Senior held of record by National I.
(9) Includes 16,539 shares of Common Stock that could be issued upon exercise of warrants, 277,500 shares of Common Stock that could be issued upon conversion of Series I Preferred and 200,000 shares of Common Stock that could be issued upon conversion of Series I Senior. For further discussion of Olympus' share ownership, see footnote 10 below.
(10) Olympus, as limited partner of National III and under National III's partnership agreement, may be deemed to beneficially own 277,500 shares of Series I Preferred held of record by National III. Olympus disclaims beneficial ownership of all such shares, except to the extent of any pecuniary interest it may have therein.
(11) Includes 200,000 shares of Common Stock that could be issued upon conversion of Series I Senior.
(12) Includes 26,840 shares of Common Stock held by an affiliate, 11,026 shares of Common Stock that could be issued upon exercise of warrants held by an affiliate, and 185,000 shares of Common Stock that could be issued upon conversion of Series I Preferred. For further discussion of Barclays' share ownership, see footnote 13 below.
(13) Barclays, as limited partner of National II and under National II's partnership agreement, may be deemed to beneficially own 185,000 shares of Series I Preferred held of record by National II. Barclays disclaims beneficial ownership of all such shares, except to the extent of any pecuniary interest it may have therein.
(14) Merchant Truckstops, L.P. ("Merchant"), as the limited partner of Clipper/Merchant and under Clipper/Merchant's partnership agreement, may be deemed to beneficially own 1,225,000 shares of Series II Preferred held of record by Clipper/Merchant. Merchant is a limited partnership of which Merchant Truckstops, Inc. ("Merchant Inc.") is the general partner, and Merchant Inc. is an indirect wholly-owned subsidiary of Credit Suisse Group ("CS"). By virtue of such relationship, Merchant Truckstops and CS may be deemed to beneficially own these shares. Merchant, Merchant Inc. and CS disclaim beneficial ownership of all such shares, except to the extent of any pecuniary interest they may have therein.
(15) Includes 211,170 shares of Common Stock that could be issued upon conversion of shares of Series II Preferred that were eligible for conversion as of February 15, 1997, as described above.
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DIRECTORS AND OFFICERS
The following table sets forth the number of shares of capital stock of the Company beneficially owned, as of February 15, 1998, by each of the Company's executive officers and directors, and all executive officers and directors of the Company as a group.

                                                    AMOUNT AND                                               PERCENT OF
                                                    NATURE OF                                                  STATED
NAME                                                OWNERSHIP(1)                   CLASS OF STOCK              CLASS(1)
----                                                ------------                   --------------            ----------
Edwin P. Kuhn . . . . . . . . . . . . . . . . . . .    84,991                  Common                           12.1%

James W. George . . . . . . . . . . . . . . . . . .    52,949                  Common                            7.8

Michael H. Hinderliter  . . . . . . . . . . . . . .    52,949                  Common                            7.8

Timothy L. Doane  . . . . . . . . . . . . . . . . .    41,785                  Common                            6.3

Walter E. Smith, Jr.(2) . . . . . . . . . . . . . .    50,000                  Common                            7.9

Margaret M. Eisen . . . . . . . . . . . . . . . . .         -                  -                                   -

Robert B. Calhoun, Jr.  . . . . . . . . . . . . . . 4,661,702                  Common(3)                        88.0
                                                    2,594,876                  Series I Preferred(3)           100.0
                                                    1,237,374                  Series II Preferred(3)          100.0
                                                    1,855,656                  Series I Senior(3)               69.2
                                                      934,344                  Series II Senior(3)             100.0

Eugene P. Lynch . . . . . . . . . . . . . . . . . .         -                  -                                   -

Louis J. Mischianti . . . . . . . . . . . . . . . .         -                  -                                   -

Rolf H. Towe  . . . . . . . . . . . . . . . . . . .         -                  -                                   -

Harrison T. Bubb  . . . . . . . . . . . . . . . . .         -                  -                                   -

(All directors and officers as a group (12
   persons))(2) . . . . . . . . . . . . . . . . . . 4,944,376                  Common                           90.2
                                                    2,594,876                  Series I Preferred              100.0
                                                    1,237,374                  Series II Preferred             100.0
                                                    1,855,656                  Series I Senior                  69.2
                                                      934,344                  Series II Senior                100.0

C. William Osborne(4) . . . . . . . . . . . . . . .         -                  -                                   -	

(1) In the case of Common Stock, reflects beneficial ownership of Common Stock, assuming the exercise by the listed stockholder of options to purchase Common Stock owned by such stockholder to the extent currently exercisable within 60 days after February 15, 1998.
(2) Walter E. Smith, Jr., a Director of the Company, owns 50,000 shares of Common Stock which are held pursuant to the Voting Trust Agreement. See footnote 2 to the previous table and "Certain Relationships and Related Transactions."
(3) CCA, National I, National II, National III and Clipper/Merchant are the record owners of these shares. Mr. Calhoun is the sole stockholder of CCI, which is the general partner of CCA. CCA is the general partner of each of National I, National II, National III and Clipper/Merchant. By virtue of such relationships, Mr. Calhoun may be deemed to beneficially own all of such shares. Mr. Calhoun disclaims beneficial ownership of such shares, except to the extent of any pecuniary interest he may have therein. See footnotes 3, 4, and 5 to the previous security ownership table.
(4) Mr. Osborne resigned from all of his positions with the Company effective January 21, 1997. All shares of Common Stock beneficially owned by Mr. Osborne were repurchased on February 28, 1997, pursuant to the terms of the Termination Agreement between the Company and Mr. Osborne.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
VOTING TRUST AGREEMENT
Voting and transfer of the shares of Common Stock beneficially owned by Operators and Franchisee-Owners ("Certificate Holders") are governed by a voting trust agreement dated as of April 14, 1993, as amended as of March 6, 1997, among the Certificate Holders, United States Trust Company of New York as the voting trustee (the "Voting Trustee") and the Company (the "Voting Trust Agreement"). The Operators' and
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Franchisee-Owners' beneficial ownership interest in such shares is evidenced by voting trust certificates (the "Voting Trust Certificates"). In connection with any matter that may be put to a vote of the Company's stockholders, the Voting Trustee will vote all of the shares subject to the Voting Trust Agreement in the manner determined by a vote by the Certificate Holders. Transfers of the Voting Trust Certificates or beneficial interests in shares of Common Stock represented thereby are only permitted in accordance with applicable securities laws and are also subject to certain restrictions. Certain provisions of the Voting Trust Agreement may only be amended by a vote of Certificate Holders holding a majority of the Voting Trust Certificates and a vote of the holders of a majority of the shares of Series I Preferred Stock (and the holders of Common Stock issued upon conversion of Series I Preferred Stock) together with the consent of the Company. The Voting Trust Agreement will terminate on the earlier of (i) April 14, 2003, unless Certificate Holders beneficially owning 65% of the shares subject to the Voting Trust Agreement elect to continue the Voting Trust or (ii) upon the consent of the Company and the vote of the holders of Voting Trust Certificates who beneficially own more than 75% of the shares subject to the Voting Trust Agreement.
STOCKHOLDERS' AGREEMENTS
GLOBAL STOCKHOLDERS' AGREEMENT. The Voting Trustee, Certificate Holders, certain members of the Investor Group (members of such group referred to individually as an "Investor") holding preferred stock, certain members of management (the "Management Stockholders") and the Company are parties to a stockholders' agreement, dated as of April 14, 1993, as amended as of March 6, 1997 (the "Global Stockholders' Agreement"). Pursuant to the Global Stockholders' Agreement, the Management Stockholders have agreed not to sell any shares of Common Stock except for certain family transfers, transfers pursuant to the laws of descent and distribution, and certain other exceptions. The Global Stockholders' Agreement provides that, in the event of any sale (whether by merger or sale of the stock) of the Company effected on the same terms for each holder of capital stock of the Company, a stockholder party to the Global Stockholders' Agreement has no right to dissent and be paid the appraised value of his or her shares and, in the event of a stock sale, is required to sell his or her shares to any purchaser in such sale. The Global Stockholders' Agreement will terminate on the earlier of April 14, 2003 or the consummation of a registered public offering of the Company's stock.
SUPPLEMENTAL STOCKHOLDERS' AGREEMENT. The Company and certain Investors are parties to a supplemental stockholders' agreement, dated as of December 10, 1993, which the parties thereto expect to amend (the "Supplemental Stockholders' Agreement"). The Supplemental Stockholders' Agreement sets forth analogous provisions for the transfer of preferred stock as the Global Stockholders' Agreement sets forth for transfer of shares held by Management Stockholders.
INSTITUTIONAL AND MANAGEMENT STOCKHOLDERS' AGREEMENT. The Company and the Investor Group are parties to a preferred and common stockholders' agreement, dated as of December 10, 1993 (the "Institutional and Management Stockholders' Agreement") to establish in part the composition of the Company's Board of Directors and to provide for certain participation rights related to the sale of stock by major stockholders. This agreement is expected to be amended and restated to add Management Stockholders as parties and provide for certain other changes.
The parties to the Institutional and Management Stockholders' Agreement are required to vote their shares to elect to the Board of Directors two nominees of Clipper Capital Associates, L.P. ("CCA"), an affiliate of Clipper, one nominee of National Partners III, L.P. ("National III"), two nominees of National Partners, L.P. ("National I") and one nominee jointly chosen by National I and CCA. After the liquidation of National I, First Plaza will assume National I's rights and after the liquidation of National III, Olympus will assume National III's rights, with respect to nominating directors under the agreement. Under certain conditions, the rights of certain parties to nominate directors may increase or decrease. The right to nominate a director ceases when any party (together with its affiliates) sells any shares governed by the agreement unless such shares have been registered under the Securities Act or sold pursuant to Rule 144 under the Securities Act. The portion of the Institutional and Management Stockholders' Agreement pertaining to the Board of Directors terminates on December 10, 2003 unless extended. In
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the event that the Company becomes publicly held, the Institutional and Management Stockholders' Agreement will terminate except for that portion of the agreement pertaining to nomination of directors.
The Institutional and Management Stockholders' Agreement provides for the right of such stockholders to participate in certain sales of stock of the Company by other parties. In addition, the agreement requires Management Stockholders to participate in any sale of the Company.
Any transferee of a party to the Institutional and Management Stockholders' Agreement must become party to that agreement according to its terms.
SUPPLEMENTAL INSTITUTIONAL AND MANAGEMENT STOCKHOLDERS' AGREEMENT. The Company expects to enter into a Supplemental Institutional and Management Stockholders' Agreement with the Investor Group and the Management Stockholders, the principal terms and conditions of which are expected to be as follows: shares of Common Stock held by Management Stockholders will be subject to call and put options upon termination of employment of Management Stockholders; the call and put option pricing formulae under the 1993 Stock Plan and option agreements have been modified; if a change of control occurs within six months after termination of the employment of a Management Stockholder for "good reason," death, "disability" or termination other than for "cause" (as defined), an adjustment will be made to the amount paid upon exercise of any call options or put options (but, in the case of put options, only to the extent the proceeds received by the Management Stockholder upon exercise of the put option are used to repay indebtedness to the Company) so that the Management Stockholders will be able to receive any amounts in excess of the call or put price payable in the change of control transaction; and the option exercise price of vested and exercisable Series III options granted under the 1993 Stock Plan was reduced from $28.56 per share to $22.50 per share.
CERTAIN INDEBTEDNESS FORMERLY HELD BY STOCKHOLDERS AND RELATED TRANSACTIONS
On the day the Refinancing transactions were finalized (the "Closing Date"), immediately prior to the consummation of the Refinancing, First Plaza, Olympus and Barclays Bank PLC (together with its affiliates, "Barclays") owned $19.6 million, $3.2 million and $2.1 million in principal amount, respectively, of National's Old Subordinated Notes and each owned, individually (directly or through affiliates), more than 5% of at least one class of the Company's capital stock. In connection with the issuance of National's Old Subordinated Notes, the Company issued a total of 128,206 warrants exercisable at $0.01 per warrant for an equal number of shares of Common Stock. First Plaza, Olympus and Barclays received 100,641, 16,539 and 11,026 warrants, respectively. Immediately prior to the Closing Date, Clipper/Merban, L.P. ("Clipper/Merban"), an affiliate of Clipper, Union Bank of Switzerland (together with its affiliates, "UBS") and Barclays held $6.0 million, $6.0 million and $3.0 million in principal amount, respectively, of TA's Old Subordinated Notes and each owned, individually (directly or through affiliates), more than 5% of at least one class of the Company's capital stock. In connection with the issuance of TA's Old Subordinated Notes, the Company issued a total of 80,520 shares of Common Stock, with 53,680 such shares issued to UBS and 26,840 such shares issued to Barclays. In lieu of receiving shares of Common Stock in connection with the issuance of the Old Subordinated Notes to it, Clipper/Merban received a right to a contingent payment upon early redemption of the TA Old Subordinated Notes held by it in the amount necessary to cause the yield on its Old Subordinated Notes to aggregate 14%. As part of the Refinancing, all outstanding indebtedness under the Old Subordinated Notes was repaid in full, Clipper/Merban received a payment equal to approximately $480,000 pursuant to its contingent payment right described above and the warrants and Common Stock referred to above remain outstanding. In April 1993, the Company entered into an agreement (the "First Clipper Agreement") and related indemnity for financial advisory services to be provided, on an exclusive basis, by Clipper and Clipper Capital Partners, L.P. (together, the "Clipper Entities") to the Company and National. In December 1993, the First Clipper Agreement was restated and amended in connection with the TA Acquisition and TA Holdings and TA entered into an agreement (the "Second Clipper Agreement" and, together with the First Clipper Agreement, the "Clipper Agreements") and related indemnity for financial advisory services to be provided, on an exclusive basis, by the Clipper Entities to TA Holdings and TA. In consideration for services provided pursuant to such agreements, the Company, National, TA Holdings and TA agreed to compensate the Clipper
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Entities at rates established by the Clipper Entities consistent with those rates customarily charged by nationally recognized investment firms. The terms of the Clipper Agreements continue until such time as Clipper and its affiliates no longer own, in the aggregate, 5% or more of the equity securities of the Company. To date, no fees have been paid or have become payable to the Clipper Entities pursuant to the Clipper Agreements or the related indemnity other than fees paid to Clipper at the time of the National Acquisition and the time of the TA Acquisition. Clipper has also been reimbursed from time to time by the Company for out of pocket expenses, including legal fees. Upon the closing of the Transactions, the Company reimbursed Clipper for approximately $137,000 in connection with Clipper's payment for certain consulting services rendered to the Company and the reimbursement of out of pocket expenses incurred in connection therewith by Charles L. Dunlap, a former Director of the Company. Margaret M. Eisen, who is employed by GMIMC, the investment advisor to First Plaza, and Louis J. Mischianti, who is employed by an affiliate of Olympus, are Directors of the Company. Robert B. Calhoun, Jr., Rolf H. Towe and Eugene P. Lynch, each of whom are Directors of the Company, are employed by Clipper or its affiliates.
On the Closing Date, immediately prior to the consummation of the Refinancing, the Travelers Insurance Company (together with its affiliates, "Travelers") owned, in the aggregate, $7.0 million and $20.0 million in principal amount of TA's and National's Old Senior Notes, respectively, and owned, in the aggregate, more than 5% of at least one class of the Company's capital stock. The Old Senior Notes held by Travelers were exchanged by the Company for Senior Notes as part of the Refinancing. See Item 1-"The Combination Plan, Capital Program and the Refinancing."
TRANSACTIONS WITH OPERATOR STOCKHOLDERS AND DIRECTOR
As of December 31, 1997, Operators controlling 22 travel centers owned an aggregate of 298,750 shares of the Company's Common Stock, which represents approximately 4.8% of the issued and outstanding Common Stock giving effect to the conversion of preferred stock and the exercise of warrants. The Company's transactions with these Operators are at prices and on terms that are the same as similar transactions with non-stockholder Operators. Such Operator stockholders have entered into the Voting Trust Agreement with the Company and the Voting Trustee.
Walter E. Smith, Jr., a Director of the Company, is an Operator of four travel centers.
TRANSACTIONS WITH OFFICERS
As of December 31, 1997, the Company had issued to Edwin P. Kuhn, James W. George, Timothy L. Doane and Michael H. Hinderliter, 15,452, 11,590, 7,727, and 11,590, shares of Common Stock (the "Management Shares"), respectively, pursuant to certain management subscription agreements (together, the "Management Subscription Agreement"). Each Management Subscription Agreement provides for a purchase price of the Management Shares of between $10 and $15 per share. As described below, the Company financed a portion of the purchase price of the Management Shares.
The Management Subscription Agreement gives the Company the right, but not the obligation, for 60 days following the employee's cessation of employment with the Company, for any reason whatsoever, to repurchase the Management Shares at a formula price and gives the employee the right, but not the obligation, for an additional 60 days to sell the Management Shares to the Company at a second formula price. Pursuant to either of the foregoing formulas, the purchase price per share is equal to the product of (a) a specified multiple of EBITDA (as defined in the Management Subscription Agreement) of the Company for the most recent four consecutive full fiscal quarters less the aggregate amount of consolidated indebtedness of the Company and (b) a fraction, the numerator of which is equal to the number of Management Shares being repurchased by the Company and the denominator of which equals the number of fully diluted shares of capital stock of the Company. The credit facilities, the Senior Notes and the Indenture limits the Company's ability to repurchase the Management Shares.
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In connection with the purchase of the Management Shares, each of the members of senior management who entered into the Management Subscription Agreement also received financing from the Company with respect to no more than one half of the purchase price of such manager's stock purchases. In connection with such financing, each such manager executed a note in favor of the Company (each, a "Management Note") and a pledge agreement (each a "Management Pledge Agreement"). The Management Notes for the Named Executives total $251,110 in principal amount, and are payable by the following Named Executives in the indicated principal amount as follows: Edwin P. Kuhn, $77,260; James W. George, $57,950; Timothy L. Doane, $57,950 and Michael H. Hinderliter, $57,950. With respect to the Management Notes, interest accrues at an annual rate of 4.76% for Messrs. Kuhn, George and Hinderliter and 6.01% for Mr. Doane, 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 (i) the date of cessation of employment of such employee, (ii) the date such employee is no longer the owner of the particular Management Shares and (iii) the tenth anniversary of the Management Note.
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