THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

Beverly Enterprises, Inc. (Retired) (BEV.X)

3/15/2005 Proxy Information

Mr. Freimark, the Chief Financial and Information Officer, was indebted to his former employer. As part of his employment agreement with BEI, BEI loaned Mr. Freimark $194,092.47 on December 31, 2001 (prior to the enactment of the Sarbanes-Oxley Act of 2002) which was used to pay off the loan from his former employer. Such amount is the maximum principal amount of the loan. The interest rate varies based upon the federal short-term rate as published by the IRS. The outstanding balance of the note plus accrued interest as of March 7, 2005 was approximately $48,765.28.

4/9/2004 Proxy Information

Mr. Freimark, the Chief Financial and Information Officer, was indebted to his former employer. As part of his employment agreement with Beverly, Beverly loaned Mr. Freimark $194,092.47 on December 31, 2001 (prior to the enactment of the Sarbanes-Oxley Act of 2002) which was used to pay off the loan from his former employer. Such amount is the maximum principal amount of the loan. The interest rate varies based upon the federal short-term rate as published by the IRS. The outstanding balance of the note plus accrued interest as of March 31, 2004 was $97,458.68.

4/10/2003 Proxy Information

Beryl F. Anthony, who served as a Director until May 24, 2002, provided government relations consulting and legal advice to Beverly in 2002. Beverly paid Mr. Anthony $160,000 for these services in 2002.

Harris Diamond, who served as a Director until March 6, 2002, is Chief Executive Officer of FRB/ Weber Shandwick Worldwide. During 2002, Beverly engaged FRB/ Weber Shandwick Worldwide to provide it with public relations consulting services. The fees paid to FRB/ Weber Shandwick Worldwide for 2002 were $176,903.

Since 2001, Beverly has engaged Rhino Internet Solutions to develop corporate, business unit and facility-specific web sites for Beverly. The Rhino Internet Solutions account manager for this relationship is Rebecca Seymann, daughter-in-law of Dr. Marilyn Seymann, a director. Beverly paid Rhino Internet Solutions $182,018 in 2002.

During 2002, Beverly engaged Silver Summit Group to provide it with consulting services relating to research and development of new business opportunities and sales and marketing strategies. The fees paid to Silver Summit Group for 2002 were $176,742. Mr. Hal Price, an executive officer, is a principal of Silver Summit Group, however, he is no longer active in that business.

Mr. Freimark, the Chief Financial and Information Officer, was indebted to his former employer. As part of his employment agreement with Beverly, Beverly loaned Mr. Freimark $194,092.47, which was used to pay off the loan from his former employer. Such amount is the maximum principal amount of the loan. The interest rate varies based upon the federal short-term rate as published by the Internal Revenue Service. One-quarter of the principal and interest is being forgiven annually for so long as Mr. Freimark remains employed by Beverly, such that the loan will be forgiven entirely at the end of Mr. FriemarkÕs fourth year of employment. The amounts forgiven are being grossed-up for taxes. The principal amount outstanding as of March 31, 2003 was $140,173.58