Domingo 21 de Abril 2019

Five Star Quality Care, Inc. Announces Correspondence with Thomas Brothers

NEWTON, Mass.–(BUSINESS WIRE)–Five Star Quality Care, Inc. (Nasdaq: FVE) today announced that Five
Star and Senior Housing Properties Trust (Nasdaq: SNH) responded
separately to letters that William Thomas sent dated October 17, 2016 to
the Independent Directors of Five Star and to the Board of Trustees of
SNH.

Copies of the correspondence referenced in this press release have been
filed earlier today with the Securities and Exchange Commission on a
Current Report on Form 8-K and are attached hereto. Five Star’s Form 8-K
can also be found on the Securities and Exchange Commission’s website (www.sec.gov).

Five Star Quality Care, Inc. is a senior living and healthcare services
company that owns, leases and manages senior living communities,
including primarily private pay independent and assisted living
communities located throughout the U.S. Five Star is headquartered in
Newton, Massachusetts.

IMPORTANT NOTICE

This press release does not constitute an offer to sell or purchase, or
the solicitation of tenders with respect to, Five Star shares. William
Thomas and affiliated parties, or the Thomas Brothers, have not yet
commenced the proposed tender offer described in certain of the
attachments to this press release. If the Thomas Brothers commence a
tender offer for Five Star shares by filing with the Securities and
Exchange Commission a tender offer statement on Schedule TO as required
by Securities and Exchange Commission rules, Five Star will file a
solicitation/recommendation statement on Schedule 14D-9 with the
Securities and Exchange Commission. Five Star stockholders are
encouraged to read any tender offer statement of the Thomas Brothers and
any related solicitation/recommendation statement on Schedule 14D-9 of
Five Star, if and when they become available, because they will contain
important information about the tender offer. Five Star stockholders may
obtain any such tender offer statement and solicitation/recommendation
statement, and any other documents filed in connection therewith, if and
when filed, at the Securities and Exchange Commission’s website (www.sec.gov)
or by requesting them from Five Star. Five Star stockholders are urged
to read any such materials, if and when they become available, carefully
before making any decision with respect to the proposed tender offer by
the Thomas Brothers, if commenced.

Letter from Five Star’s Independent Directors
to William F. Thomas:

October 27, 2016

Mr. William F. Thomas
1516 South Boston Avenue, Suite 301
Tulsa,
Oklahoma 74119

Dear Mr. Thomas:

Your letter of October 17 requesting waivers of the restrictions in Five
Star’s Bylaws and Charter has been considered by the Board of Five Star,
including separate consideration by the Five Star Independent Directors,
and I have been asked to send you this response.

The 5% limitation on ownership of Five Star shares included in Five
Star’s Bylaws is intended to protect the value of certain tax
attributes, including significant tax credit and loss carryforwards. As
you know, Five Star has previously granted a conditional waiver of this
restriction to ABP Acquisition LLC and certain related parties (ABP).
Without jeopardizing those tax attributes, Five Star cannot grant an
additional waiver for the amount of shares you have requested, at the
earliest, until ABP’s right to acquire up to 18 million Five Star shares
expires on March 31, 2017.

An equally important issue is raised by your request for waiver of the
Charter restriction on ownership above 9.8%. Five Star was formerly a
100% owned subsidiary of Senior Housing Properties Trust, or SNH. Since
the time of its spin off from SNH in 2001, Five Star’s Charter has
restricted ownership of its shares to 9.8% without SNH’s approval.
Moreover, Five Star currently operates 246 senior living communities
(approximately 28,444 residence units) under long term leases and
management agreements with SNH. SNH has retained the right to terminate
these contracts in the event any individual or group acquires more than
9.8% of Five Star shares without SNH’s prior approval. Five Star’s
ability to preserve its relationship and the benefit of its contracts
with SNH is critical to its evaluation of your request.

If you remain interested in increasing your ownership of Five Star
shares after the waiver of the Bylaw restriction granted to ABP has
expired, the Independent Directors will consider the waivers and
approvals you have requested under its Bylaws and Charter and under the
applicable provisions of the Maryland Business Combination Statutes at
that time. Please note that any such waivers and approvals, if granted,
will be conditioned upon your obtaining SNH’s approval of the Charter
restriction waiver, among other matters. The Independent Directors also
ask that any further requests you make state which of the several
covenants and restrictions that they required of ABP in the consent
agreement you and your group are willing to accept, particularly whether
you are prepared to agree to the 10 year lock up and standstill
provisions.

Very truly yours,

/s/Katherine E. Potter
Katherine E.
Potter
Senior Vice President, General Counsel and Assistant
Secretary

Letter from William F. Thomas to Five Star’s
Independent Directors:

WILLIAM F. THOMAS

1516 South Boston Avenue, Suite 301
Tulsa, Oklahoma 74119

October 17, 2016

Five Star Quality Care, Inc. 400 Centre Street
Newton,
Massachusetts 02458
Attn: Independent Directors

Dear Mmes. Fraiche and Gilmore and Mr. Gans,

William F. Thomas, together with Robert D. Thomas, Gemini Properties and
certain other affiliated entities (collectively, the “Acquisition Group”
or “we”), may be deemed to beneficially own an aggregate of 3,364,737
shares of Common Stock of Five Star Quality Care, Inc. (the “Company”),
representing approximately 6.8% of the outstanding shares.

We have closely monitored the recent events at the Company relating to
the $3.00 per share tender offer launched by ABP Acquisition LLC, a
wholly owned subsidiary of ABP Trust, an entity owned by Barry M.
Portnoy and Adam D. Portnoy (together, the “Portnoy Tender Offer”) for
up to 10,000,000 shares of the Company’s common stock. We are encouraged
by the precedent set by the Company’s independent Board members in
waiving certain ownership restrictions and granting certain approvals in
order to clear the way for the Portnoy Tender Offer. On October 13,
2016, we announced our intention to conduct a tender offer, through an
affiliated entity, to acquire up to 10,000,000 shares of FVE’s common
stock at a price of $3.45 per share in cash (the “Tender Offer”).

In preparation for the Tender Offer, we have reviewed the Company’s
restrictions on transfers pursuant to the following items:

  • Article VI of the Articles of Amendment and Restatement (the
    “Charter”), which prohibits stockholders from acquiring 9.8% (in value
    or number of shares, whichever is more restrictive) of the outstanding
    Common Stock of the Company (the “Charter Restriction”) and requires
    the consent of the Board of Directors of the Company (the “Board”) and
    the Board of Trustees of Senior Housing Properties Trust (“SNH”);
  • Article IX of the Amended and Restated Bylaws (the “Bylaws”), which
    prohibits stockholders from becoming a 5% stockholder pursuant to
    Treasury Regulation Section 1.382-2T(g) (the “Bylaw Restriction”); and
  • Sections 3-601, 3-602, 3-603, 3-604 and 3-605 (the “Business
    Combination Statutes”) under the Maryland General Corporation Law
    (“MGCL”), which apply to any “Interested stockholder” as defined in
    Section 3-601(j) of the MGCL.

In light of the Company’s various restrictions on transfers, and the
Company’s recent waiver of certain ownership restrictions and grant of
certain approvals to clear the way for the Portnoy Tender Offer, we are
hereby requesting that the independent Board members similarly: (i)
waive the Charter Restriction, pursuant to which the Company would grant
to the Acquisition Group (including any affiliated acquisition entity or
person) an exception to the Ownership Limit (as defined in the Charter)
and deem the Acquisition Group (including any affiliated acquisition
entity or person) to be an Excepted Holder (as defined in the Charter),
pursuant to Section 6.2.7 of the Charter; (ii) waive the Bylaw
Restriction, pursuant to which the Company would grant the Acquisition
Group (including any affiliated acquisition entity or person) an
exception to a Transfer of Corporation Securities for any 5-percent
Stockholder (as defined in the Bylaws), pursuant to Section 9.3(b) of
the Bylaws; and (iii) as applicable, for purposes of the Business
Combination Statutes under the MGCL, approve the acquisition by the
Acquisition Group (including any affiliated acquisition entity or
person), in aggregate, up to 10,000,000 shares of Common Stock.

The Acquisition Group’s interests are truly aligned with the interests
of all shareholders in providing fair value for any shareholders who may
be seeking liquidity for their investment, on the one hand, while
continuing to seek to take steps to improve the Company’s corporate
governance and strategic direction to drive shareholder value creation
for long-term holders, on the other hand. We expect the Company’s
independent directors and SNH to work with us in good faith to take
whatever steps may be necessary for the Acquisition Group to be granted
similar exceptions and approvals that may be required for us to complete
our offer. With respect to the Charter Restriction requiring SNH to have
consented in writing to the exception, we have also requested from SNH
for such consent in writing.

Nothing in this letter shall be interpreted to preclude the Acquisition
Group from making further requests for exemptions under the Charter,
Bylaws or MGCL and to the extent any future covenants are provided to
the Company in respect to such exemption request, such covenants shall
be in the form of an amended and restated exemption request letter,
which if approved by the Company, shall supersede in full those provided
in this letter.

We are available to answer any reasonable and appropriate requests for
additional information the Board and its advisors may have in order to
assist in making their determination on the exemption requested herein.
As time is of the essence in this matter, we request that you respond to
us promptly, and, in any event, no later than 12pm EST on October 21,
2016. We reserve all rights under applicable law.

Sincerely,

/s/ William F. Thomas

William F. Thomas

Letter from SNH’s Board to William F. Thomas:

October 27, 2016

Mr. William F. Thomas
1516 South Boston Avenue, Suite 301
Tulsa,
OK 74119

Dear Mr. Thomas:

Your letter of October 17th (a copy of which is attached) was considered
by the Board of Senior Housing Properties Trust, or SNH, including
separate consideration by the SNH Independent Trustees. They have asked
that I communicate this response.

It is the Board’s view at this time that the waivers and consents you
have requested of SNH in your letter should be acted on only if the Five
Star Board of Directors has determined to grant you the waivers and
consents required under Five Star’s charter and bylaws and under
provisions of Maryland law. The SNH Board has been informed that Five
Star has declined to grant your request for such waivers and consents.
Therefore, the SNH Board has determined to take no action with respect
to the waivers and consents you have requested from SNH.

Further, you should understand that, even if Five Star were to grant you
such waivers and consents, any action by SNH with respect to the waivers
and consents you have requested from SNH will require separate
consideration by SNH in its sole discretion of, among other things, the
impact that the granting of such waivers and consents may have on SNH’s
REIT status, on the continuity and stability of SNH’s business
relationship with Five Star, and on Five Star’s operations. Moreover,
SNH may condition its consideration of such waivers and consents on your
agreeing to such covenants and conditions as SNH may determine in its
sole discretion.

Very truly yours,

/s/Jennifer B. Clark
Jennifer B. Clark
Secretary

JBC:ccb
Enclosure

cc: Five Star Quality Care, Inc. Board of Directors

Letter from William F. Thomas to SNH’s Board:

WILLIAM F. THOMAS

1516 South Boston Avenue, Suite 301
Tulsa, Oklahoma 74119

October 17, 2016

Senior Housing Properties Trust
Two Newton Place, 255 Washington
Street, Suite 300
Newton, Massachusetts 02458-1634

Attn: Senior Housing Properties Trust Board of Trustees

Dear Messrs. Harrington, Portnoy, Portnoy and Somers and Ms. Jones:

William F. Thomas, together with Robert D. Thomas, Gemini Properties and
certain other affiliated entities (collectively, the “Acquisition Group”
or “we”), may be deemed to beneficially own an aggregate of 3,364,737
shares of Common Stock of Five Star Quality Care, Inc. (the “Company”),
representing approximately 6.8% of the outstanding shares.

We have closely monitored the recent events at the Company relating to
the $3.00 per share tender offer launched by ABP Acquisition LLC, a
wholly owned subsidiary of ABP Trust, an entity owned by Barry M.
Portnoy and Adam D. Portnoy (together, the “Portnoy Tender Offer”), for
up to 10,000,000 shares of the Company’s common stock. We are encouraged
by the precedent set by the Board of Trustees of Senior Housing
Properties Trust (“SNH”) and the Company’s independent Board members in
waiving certain ownership restrictions and granting certain approvals in
order to clear the way for the Portnoy Tender Offer. On October 13,
2016, we announced our intention to conduct a tender offer, through an
affiliated entity, to acquire up to 10,000,000 shares of FVE’s common
stock at a price of $3.45 per share in cash (the “Tender Offer”).

In preparation for the Tender Offer, we have reviewed the Company’s
restrictions on transfer pursuant to Article VI of the Articles of
Amendment and Restatement (the “Charter”), which prohibits stockholders
from acquiring 9.8% (in value or number of shares, whichever is more
restrictive) of the outstanding Common Stock of the Company (the
“Charter Restriction”) and requires the consent of the Board of
Directors of the Company (the “Board”) and SNH.

In light of the Company’s Charter Restriction, and the Company’s and
SNH’s recent waiver of certain ownership restrictions and grant of
certain approvals to clear the way for the Portnoy Tender Offer, we are
hereby requesting that SNH similarly consent to any Company waiver of
the Charter Restriction, pursuant to which the Company would grant to
the Acquisition Group (including any affiliated acquisition entity or
person) an exception to the Ownership Limit (as defined in the Charter)
and deem the Acquisition Group (including any affiliated acquisition
entity or person) to be an Excepted Holder (as defined in the Charter).

As such, in connection with the Tender Offer, we are requesting that SNH
grant the following:

  • the written consent of SNH to the Board’s grant of the exceptions to
    the Charter Restriction; and
  • a written waiver of SNH of any default or event of default under any
    lease, management or other agreement between or among the Company and
    SNH, or any of their subsidiaries, arising or resulting from the grant
    of such exceptions or the acquisition by us (including any affiliated
    acquisition entity or person), in aggregate, of up to 10,000,000
    shares of Common Stock, such consent and waiver to be in a form
    satisfactory to the Board.

The Acquisition Group’s interests are truly aligned with the interests
of all shareholders of the Company in providing fair value for any
shareholders who may be seeking liquidity for their investment, on the
one hand, while continuing to seek to take steps to improve the
Company’s corporate governance and strategic direction to drive
shareholder value creation for long-term holders, on the other hand. We
expect the Company’s independent directors and SNH to work with us in
good faith to take whatever steps may be necessary for the Acquisition
Group to be granted similar exceptions and approvals that may be
required for us to complete our offer.

Nothing in this letter shall be interpreted to preclude the Acquisition
Group from making further requests for exemptions under the Charter, the
Amended and Restated Bylaws or Maryland General Corporation Law and to
the extent any future covenants are provided to the Company or SNH in
respect to such exemption request, such covenants shall be in the form
of an amended and restated exemption request letter, which if approved
by the Company and SNH, shall supersede in full those provided in this
letter.

We are available to answer any reasonable and appropriate requests for
additional information SNH and its advisors may have in order to assist
in making their determination on the exemption requested herein. As time
is of the essence in this matter, we request that you respond to us
promptly, and, in any event, no later than 12pm EST on October 21, 2016.
We reserve all rights under applicable law.

Sincerely,
/s/ William F. Thomas

William F. Thomas

Contacts

Five Star Quality Care, Inc.
Brad Shepherd, 617-796-8245
Director,
Investor Relations