-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GVHWnn0TG0yp5cFfzRizw1QISs8g+6Eb9tkT3PvEp5GrzimaCgvraXPNkib7+hop 2cgLgHqbCR7mnl+loh2dWw== 0000895345-05-000443.txt : 20050412 0000895345-05-000443.hdr.sgml : 20050412 20050412082906 ACCESSION NUMBER: 0000895345-05-000443 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20050412 DATE AS OF CHANGE: 20050412 GROUP MEMBERS: 1995 DAVID REIS FAMILY TRUST GROUP MEMBERS: 1995 DONNA REIS FAMILY TRUST GROUP MEMBERS: AARON REIS SPRAY TRUST GROUP MEMBERS: ALEXANDER REIS SPRAY TRUST GROUP MEMBERS: ANNA REIS SPRAY TRUST GROUP MEMBERS: APPALOOSA INVESTMENT LIMITED PARTNERSHIP I GROUP MEMBERS: APPALOOSA MANAGEMENT L.P. GROUP MEMBERS: APPALOOSA PARTNERS INC. GROUP MEMBERS: ARNOLD M. WHITMAN GROUP MEMBERS: BAYLOR ENTERPRISES LLC GROUP MEMBERS: DAVID A. TEPPER GROUP MEMBERS: DAVID HOKIN GROUP MEMBERS: DAVID REIS GROUP MEMBERS: DAVID REIS FAMILY TRUST GROUP MEMBERS: FRANKLIN MUTUAL ADVISERS, LLC GROUP MEMBERS: NORTHBROOK NBV, LLC GROUP MEMBERS: PALOMINO FUND LTD. GROUP MEMBERS: ROB RUBIN GROUP MEMBERS: ROBERT HARTMAN SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: BEVERLY ENTERPRISES INC CENTRAL INDEX KEY: 0001040441 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SKILLED NURSING CARE FACILITIES [8051] IRS NUMBER: 621691861 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-52627 FILM NUMBER: 05745177 BUSINESS ADDRESS: STREET 1: ONE THOUSAND BEVERLY WAY CITY: FORT SMITH STATE: AR ZIP: 72919 BUSINESS PHONE: 5014526712 MAIL ADDRESS: STREET 1: ONE THOUSAND BEVERLY WAY CITY: FORT SMITH STATE: AR ZIP: 72919 FORMER COMPANY: FORMER CONFORMED NAME: NEW BEVERLY HOLDINGS INC DATE OF NAME CHANGE: 19970604 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: APPALOOSA MANAGEMENT LP CENTRAL INDEX KEY: 0001006438 IRS NUMBER: 223220835 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 26 MAIN ST STREET 2: 1ST FLOOR CITY: CHATHAM STATE: NJ ZIP: 07928 BUSINESS PHONE: 9737017000 MAIL ADDRESS: STREET 1: 26 MAIN ST STREET 2: 1ST FLOOR CITY: CHATAM STATE: NJ ZIP: 07928 SC 13D/A 1 pr13da6.txt SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Schedule 13D/A (Amendment No. 6) Under the Securities Exchange Act of 1934 Beverly Enterprises, Inc. ----------------------------------------- (Name of Issuer) Common Stock, $0.10 par value per share ------------------------------------------ (Title of class of securities) 087851309 ----------------------------------------- (CUSIP Number) Kenneth Maiman, Esq. Bradley Takahashi, Esq. Appaloosa Management L.P. Franklin Mutual Advisers, LLC 26 Main Street, First Floor 51 John F. Kennedy Parkway Chatham, NJ 07928 Short Hills, NJ 07078 (973) 701-7000 (973) 912-2000 Arnold M. Whitman Richard Marks, Esq. Formation Capital, LLC Northbrook NBV, LLC 1035 Powers Place 500 Skokie Blvd, Ste. 310 Alpharetta, GA 30004 Northbrook, IL 60062 (770) 754-9660 (847) 559-1002 Robert C. Schwenkel, Esq. Fried, Frank, Harris, Shriver & Jacobson LLP One New York Plaza New York, NY 10004-1980 (212) 859-8000 (Persons Authorized to Receive Notices and Communications) April 11, 2005 ----------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of ss.ss.240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. [ ] CUSIP NO. 087851309 13D PAGE 2 OF 44 PAGES NAME OF REPORTING PERSON SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 Appaloosa Investment Limited Partnership I CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| 2 (b) |_| 3 SEC USE ONLY SOURCE OF FUNDS 4 OO CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) 5 N/A CITIZENSHIP OR PLACE OF ORGANIZATION 6 Delaware NUMBER OF 7 SOLE VOTING POWER SHARES -0- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 1,873,122 EACH 9 SOLE DISPOSITIVE POWER REPORTING -0- PERSON 10 SHARED DISPOSITIVE POWER WITH 1,873,122 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 1,873,122 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES N/A 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.7% TYPE OF REPORTING PERSON 14 PN CUSIP NO. 087851309 13D PAGE 3 OF 44 PAGES NAME OF REPORTING PERSON SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 Palomino Fund Ltd. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| 2 (b) |_| 3 SEC USE ONLY SOURCE OF FUNDS 4 OO CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) 5 N/A CITIZENSHIP OR PLACE OF ORGANIZATION 6 British Virgin Islands NUMBER OF 7 SOLE VOTING POWER SHARES -0- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 1,641,178 EACH 9 SOLE DISPOSITIVE POWER REPORTING -0- PERSON 10 SHARED DISPOSITIVE POWER WITH 1,641,178 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 1,641,178 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES N/A 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.5% TYPE OF REPORTING PERSON 14 CO CUSIP NO. 087851309 13D PAGE 4 OF 44 PAGES NAME OF REPORTING PERSON SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 Appaloosa Management L.P. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| 2 (b) |_| 3 SEC USE ONLY SOURCE OF FUNDS 4 OO CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) 5 N/A CITIZENSHIP OR PLACE OF ORGANIZATION 6 Delaware NUMBER OF 7 SOLE VOTING POWER SHARES -0- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 3,514,300 EACH 9 SOLE DISPOSITIVE POWER REPORTING -0- PERSON 10 SHARED DISPOSITIVE POWER WITH 3,514,300 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 3,514,300 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES N/A 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 3.2% TYPE OF REPORTING PERSON 14 PN;IA CUSIP NO. 087851309 13D PAGE 5 OF 44 PAGES NAME OF REPORTING PERSON SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 Appaloosa Partners Inc. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| 2 (b) |_| 3 SEC USE ONLY SOURCE OF FUNDS 4 OO CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) 5 N/A CITIZENSHIP OR PLACE OF ORGANIZATION 6 Delaware NUMBER OF 7 SOLE VOTING POWER SHARES -0- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 3,514,300 EACH 9 SOLE DISPOSITIVE POWER REPORTING -0- PERSON 10 SHARED DISPOSITIVE POWER WITH 3,514,300 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 3,514,300 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES N/A 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 3.2% TYPE OF REPORTING PERSON 14 CO CUSIP NO. 087851309 13D PAGE 6 OF 44 PAGES NAME OF REPORTING PERSON SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 David A. Tepper CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| 2 (b) |_| 3 SEC USE ONLY SOURCE OF FUNDS 4 OO CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) 5 N/A CITIZENSHIP OR PLACE OF ORGANIZATION 6 USA NUMBER OF 7 SOLE VOTING POWER SHARES -0- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 3,514,300 EACH 9 SOLE DISPOSITIVE POWER REPORTING -0- PERSON 10 SHARED DISPOSITIVE POWER WITH 3,514,300 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 3,514,300 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES N/A 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 3.2% TYPE OF REPORTING PERSON 14 IN;HC CUSIP NO. 087851309 13D PAGE 7 OF 44 PAGES NAME OF REPORTING PERSON SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 Franklin Mutual Advisers, LLC CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| 2 (b) |_| 3 SEC USE ONLY SOURCE OF FUNDS 4 OO CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) 5 N/A CITIZENSHIP OR PLACE OF ORGANIZATION 6 Delaware NUMBER OF 7 SOLE VOTING POWER SHARES 3,508,900 BENEFICIALLY 8 SHARED VOTING POWER OWNED BY -0- EACH 9 SOLE DISPOSITIVE POWER REPORTING 3,508,900 PERSON 10 SHARED DISPOSITIVE POWER WITH -0- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 3,508,900 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES N/A 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 3.2% TYPE OF REPORTING PERSON 14 IA CUSIP NO. 087851309 13D PAGE 8 OF 44 PAGES NAME OF REPORTING PERSON SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 Northbrook NBV, LLC CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| 2 (b) |_| 3 SEC USE ONLY SOURCE OF FUNDS 4 WC CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) 5 N/A CITIZENSHIP OR PLACE OF ORGANIZATION 6 Delaware NUMBER OF 7 SOLE VOTING POWER SHARES -0- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 1,487,200 EACH 9 SOLE DISPOSITIVE POWER REPORTING -0- PERSON 10 SHARED DISPOSITIVE POWER WITH 1,487,200 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 1,487,200 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES N/A 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.4% TYPE OF REPORTING PERSON 14 OO CUSIP NO. 087851309 13D PAGE 9 OF 44 PAGES NAME OF REPORTING PERSON SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 David Hokin CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| 2 (b) |_| 3 SEC USE ONLY SOURCE OF FUNDS 4 OO CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) 5 N/A CITIZENSHIP OR PLACE OF ORGANIZATION 6 USA NUMBER OF 7 SOLE VOTING POWER SHARES -0- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 1,487,200 EACH 9 SOLE DISPOSITIVE POWER REPORTING -0- PERSON 10 SHARED DISPOSITIVE POWER WITH 1,487,200 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 1,487,200 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES N/A 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.4% TYPE OF REPORTING PERSON 14 IN;HC CUSIP NO. 087851309 13D PAGE 10 OF 44 PAGES NAME OF REPORTING PERSON SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 Rob Rubin CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| 2 (b) |_| 3 SEC USE ONLY SOURCE OF FUNDS 4 OO CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) 5 N/A CITIZENSHIP OR PLACE OF ORGANIZATION 6 USA NUMBER OF 7 SOLE VOTING POWER SHARES -0- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 1,487,200 EACH 9 SOLE DISPOSITIVE POWER REPORTING -0- PERSON 10 SHARED DISPOSITIVE POWER WITH 1,487,200 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 1,487,200 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES N/A 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.4% TYPE OF REPORTING PERSON 14 IN CUSIP NO. 087851309 13D PAGE 11 OF 44 PAGES NAME OF REPORTING PERSON SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 Robert Hartman CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| 2 (b) |_| 3 SEC USE ONLY SOURCE OF FUNDS 4 OO CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) 5 N/A CITIZENSHIP OR PLACE OF ORGANIZATION 6 USA NUMBER OF 7 SOLE VOTING POWER SHARES -0- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 1,487,200 EACH 9 SOLE DISPOSITIVE POWER REPORTING -0- PERSON 10 SHARED DISPOSITIVE POWER WITH 1,487,200 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 1,487,200 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES N/A 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.4% TYPE OF REPORTING PERSON 14 IN CUSIP NO. 087851309 13D PAGE 12 OF 44 PAGES NAME OF REPORTING PERSON SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 1995 David Reis Family Trust CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| 2 (b) |_| 3 SEC USE ONLY SOURCE OF FUNDS 4 OO CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) 5 N/A CITIZENSHIP OR PLACE OF ORGANIZATION 6 Connecticut NUMBER OF 7 SOLE VOTING POWER SHARES -0- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 10,000 EACH 9 SOLE DISPOSITIVE POWER REPORTING -0- PERSON 10 SHARED DISPOSITIVE POWER WITH 10,000 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 10,000 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES N/A 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Less than 1.0% TYPE OF REPORTING PERSON 14 OO CUSIP NO. 087851309 13D PAGE 13 OF 44 PAGES NAME OF REPORTING PERSON SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 1995 Donna Reis Family Trust CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| 2 (b) |_| 3 SEC USE ONLY SOURCE OF FUNDS 4 OO CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) 5 N/A CITIZENSHIP OR PLACE OF ORGANIZATION 6 Connecticut NUMBER OF 7 SOLE VOTING POWER SHARES -0- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 25,000 EACH 9 SOLE DISPOSITIVE POWER REPORTING -0- PERSON 10 SHARED DISPOSITIVE POWER WITH 25,000 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 25,000 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES N/A 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Less than 1.0% TYPE OF REPORTING PERSON 14 OO CUSIP NO. 087851309 13D PAGE 14 OF 44 PAGES NAME OF REPORTING PERSON SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 Aaron Reis Spray Trust CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| 2 (b) |_| 3 SEC USE ONLY SOURCE OF FUNDS 4 OO CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) 5 N/A CITIZENSHIP OR PLACE OF ORGANIZATION 6 Connecticut NUMBER OF 7 SOLE VOTING POWER SHARES -0- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 20,000 EACH 9 SOLE DISPOSITIVE POWER REPORTING -0- PERSON 10 SHARED DISPOSITIVE POWER WITH 20,000 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 20,000 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES N/A 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Less than 1.0% TYPE OF REPORTING PERSON 14 OO CUSIP NO. 087851309 13D PAGE 15 OF 44 PAGES NAME OF REPORTING PERSON SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 Anna Reis Spray Trust CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| 2 (b) |_| 3 SEC USE ONLY SOURCE OF FUNDS 4 OO CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) 5 N/A CITIZENSHIP OR PLACE OF ORGANIZATION 6 Connecticut NUMBER OF 7 SOLE VOTING POWER SHARES -0- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 22,500 EACH 9 SOLE DISPOSITIVE POWER REPORTING -0- PERSON 10 SHARED DISPOSITIVE POWER WITH 22,500 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 22,500 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES N/A 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Less than 1.0% TYPE OF REPORTING PERSON 14 OO CUSIP NO. 087851309 13D PAGE 16 OF 44 PAGES NAME OF REPORTING PERSON SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 Alexander Reis Spray Trust CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| 2 (b) |_| 3 SEC USE ONLY SOURCE OF FUNDS 4 OO CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) 5 N/A CITIZENSHIP OR PLACE OF ORGANIZATION 6 Connecticut NUMBER OF 7 SOLE VOTING POWER SHARES -0- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 22,500 EACH 9 SOLE DISPOSITIVE POWER REPORTING -0- PERSON 10 SHARED DISPOSITIVE POWER WITH 22,500 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 22,500 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES N/A 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Less than 1.0% TYPE OF REPORTING PERSON 14 OO CUSIP NO. 087851309 13D PAGE 17 OF 44 PAGES NAME OF REPORTING PERSON SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 David Reis Family Trust CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| 2 (b) |_| 3 SEC USE ONLY SOURCE OF FUNDS 4 OO CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) 5 N/A CITIZENSHIP OR PLACE OF ORGANIZATION 6 Connecticut NUMBER OF 7 SOLE VOTING POWER SHARES -0- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 25,000 EACH 9 SOLE DISPOSITIVE POWER REPORTING -0- PERSON 10 SHARED DISPOSITIVE POWER WITH 25,000 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 25,000 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES N/A 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Less than 1.0% TYPE OF REPORTING PERSON 14 OO CUSIP NO. 087851309 13D PAGE 18 OF 44 PAGES NAME OF REPORTING PERSON SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 David Reis CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| 2 (b) |_| 3 SEC USE ONLY SOURCE OF FUNDS 4 PF CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) 5 N/A CITIZENSHIP OR PLACE OF ORGANIZATION 6 United States NUMBER OF 7 SOLE VOTING POWER SHARES 75,000 BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 125,000 EACH 9 SOLE DISPOSITIVE POWER REPORTING 75,000 PERSON 10 SHARED DISPOSITIVE POWER WITH 125,000 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 200,000 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES N/A 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Less than 1.0% TYPE OF REPORTING PERSON 14 IN CUSIP NO. 087851309 13D PAGE 19 OF 44 PAGES NAME OF REPORTING PERSON SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 Baylor Enterprises LLC CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| 2 (b) |_| 3 SEC USE ONLY SOURCE OF FUNDS 4 AF CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) 5 N/A CITIZENSHIP OR PLACE OF ORGANIZATION 6 Georgia NUMBER OF 7 SOLE VOTING POWER SHARES -0- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 21,900 EACH 9 SOLE DISPOSITIVE POWER REPORTING -0- PERSON 10 SHARED DISPOSITIVE POWER WITH 21,900 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 21,900 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES N/A 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Less than 1.0% TYPE OF REPORTING PERSON 14 OO CUSIP NO. 087851309 13D PAGE 20 OF 44 PAGES NAME OF REPORTING PERSON SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 Arnold M. Whitman CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X| 2 (b) |_| 3 SEC USE ONLY SOURCE OF FUNDS 4 PF CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) 5 N/A CITIZENSHIP OR PLACE OF ORGANIZATION 6 USA NUMBER OF 7 SOLE VOTING POWER SHARES 4,700 BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 21,900 EACH 9 SOLE DISPOSITIVE POWER REPORTING 4,700 PERSON 10 SHARED DISPOSITIVE POWER WITH 21,900 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON 26,600 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES N/A 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Less than 1% TYPE OF REPORTING PERSON 14 IN;HC This Amendment No. 6 amends the Schedule 13D originally filed on January 24, 2005, as amended by Amendment No. 1 filed on January 25, 2005, by Amendment No. 2 filed on January 27, 2005, by Amendment No. 3 filed on February 4, 2005, by Amendment No. 4 filed on February 22, 2005 and by Amendment No. 5 filed on March 14, 2005 (as amended, the "Statement"), by (i) Appaloosa Investment Limited Partnership I, (ii) Palomino Fund Ltd., (iii) Appaloosa Management L.P., (iv) Appaloosa Partners, Inc., (v) David A. Tepper, (vi) Franklin Mutual Advisers, LLC, (vii) Northbrook NBV, LLC, (viii) David Hokin, (ix) Rob Rubin, (x) Robert Hartman, (xi) 1995 David Reis Family Trust, (xii) 1995 Donna Reis Family Trust, (xiii) Aaron Reis Spray Trust, (xiv) Anna Reis Spray Trust, (xv) Alexander Reis Spray Trust, (xvi) David Reis Family Trust, (xvii) David Reis, (xviii) Baylor Enterprises LLC and (xix) Arnold Whitman, relating to the common stock, $0.10 par value per share, of Beverly Enterprises, Inc. Unless otherwise indicated, all capitalized terms used herein shall have the meanings given to them in the Statement, and unless amended hereby, all information previously filed remains in effect. ITEM 4. PURPOSE OF TRANSACTION Item No. 4 is hereby supplemented by the following: On March 22, 2005, the Company issued a press release disclosing that its Board of Directors had voted to conduct a sale of the Company or similar transaction through an auction process. On April 11, 2005, Appaloosa, Formation, Franklin Mutual and Northbrook (the "Consortium Parties") entered into a confidentiality agreement with the Company (the "Confidentiality Agreement"), and the Consortium Parties and Mr. Whitman entered into a settlement agreement (the "Settlement Agreement") with the Company. Pursuant to the terms of the Confidentiality Agreement and the Settlement Agreement, the Consortium Parties and Mr. Whitman have agreed, among other things, to withdraw their nominees for election to the Company's 2005 Annual Meeting of Stockholders and the Consortium Parties will be included in the Company's auction process on an equitable basis relative to other potential buyers. In connection with the auction process now being undertaken by the Company, the Filing Persons intend to evaluate the Company's financial condition, business, operations and prospects and may from time to time, and without further amendment to this Schedule 13D, submit to the Company indications of interest or proposals with respect to an acquisition of the Company or its assets or subsidiaries. There is no assurance that any of the Filing Persons will submit any such indications of interest or proposals or that any of the Filing Persons will reach an agreement with the Company with respect to a sale of the Company or its assets or subsidiaries. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER Item No. 6 is hereby supplemented by the following: On April 11, 2005, the Consortium Parties entered into the Confidentiality Agreement with the Company, and the Consortium Parties and Mr. Whitman entered into the Settlement Agreement with the Company. Confidentiality Agreement. ------------------------- Confidentiality. Pursuant to the Confidentiality Agreement, the Company is prepared to make available to the Consortium Parties, their representatives and certain other third parties confidential information concerning the Company ("Evaluation Material"), and each Consortium Party agreed to keep such information confidential and use such information, subject to certain exceptions, solely for the purpose of evaluating a possible transaction with the Company (a "Possible Transaction") and/or the operation of all or a portion of the Company after the consummation of a Possible Transaction. Access to Information and Employees. The Company agreed to ensure that access to Evaluation Material and the Company's officers and employees given to a Consortium Party, during the time that such Consortium Party is an Active Bidder, is no less favorable than the access to such material and such persons given to any other party evaluating a Possible Transaction. In addition, the Company agreed that it would provide each Consortium Party that is an Active Bidder with an opportunity to submit proposals to the Company at such time as any other party is given such an opportunity, and that the Company would not permit any of its officers or employees to conduct discussions with any party evaluating a Possible Transaction regarding the role of such officers or employees with the Company or such party in connection with a Possible Transaction unless, simultaneously with such permission, the Company permits each Consortium Party that is an Active Bidder and the Company's officers and employees to conduct such discussions. For purposes of the Confidentiality Agreement, a Consortium Party is considered an "Active Bidder" so long as it has not notified the Company or publicly disclosed that it is no longer considering a Possible Transaction. However, a Consortium Party will cease to be an Active Bidder if a majority of the Company's independent directors determine in good faith that the then most recent written proposal for a Possible Transaction made by a Consortium Party to the Company is sufficiently and materially less favorable to the stockholders of the Company than the least favorable proposal for a Possible Transaction most recently submitted by a bidder (other than a Consortium Party) with whom the Company intends to continue discussions regarding a Possible Transaction so as to warrant a cessation of discussions of a Possible Transaction with such Consortium Party. Nothing contained in the Confidentiality Agreement shall prevent the Company from selecting a bidder with whom to negotiate and enter into definitive documents relating to a potential transaction. Non-Solicit. Each Consortium Party agreed that, for a period of two years, neither it nor any of its officers, directors, employees, managing members or general partners would, subject to certain exceptions, solicit to employ any of the Company's officers or employees who are employed by the Company as of the date of the Agreement or who are hired thereafter and (i) with whom the Consortium Party had contact during the evaluation of a Possible Transaction or (ii) who were specifically identified to the Consortium Party by the Company during the Consortium Party's evaluation of a Possible Transaction. In addition, subject to certain exceptions, until the earlier of (i) the execution of a definitive agreement regarding a Possible Transaction or (ii) two years from the date of the Agreement, each Consortium Party agreed not to initiate or maintain any contact (except for contacts in the ordinary course of business) with any officer, director or employee of the Company regarding the Company's business, operations, prospects or finances. Standstill. Each Consortium Party agreed that, until August 20, 2005, unless specifically invited in writing by the Company, neither it nor any of its representatives would, subject to certain exceptions, (i) effect or seek, offer or propose to effect (a) any acquisition of any securities or rights or options to acquire any securities, or any assets, indebtedness or businesses of the Company or any of its subsidiaries, (b) any tender or exchange offer, merger or other business combination involving the Company, any of the subsidiaries or assets of the Company, (c) any recapitalization, restructuring or other extraordinary transaction with respect to the Company or any of its subsidiaries, (d) any solicitation of proxies to vote any voting securities of the Company; (ii) form or participate in a group (as defined in the Securities Exchange Act of 1934, as amended) with respect to the Company; (iii) act to seek representation on or to control the management, Board of Directors or policies of the Company or to obtain representation on the Company's Board of Directors; (iv) take any action that would or would reasonably be expected to result in the Company being obligated to make a public announcement regarding any of the types of matters set forth in (i) above; or (v) enter into discussions or arrangements with any third party regarding the foregoing. Most Favored Nations. The Company agreed that it would not provide any Evaluation Material to any third party relating to a Possible Transaction unless that party enters into a confidentiality agreement with the Company. If any such agreement with a third party contains any provision relating to the subject matter covered by the Confidentiality Agreement's non-solicitation or standstill provisions that is less favorable to the Company, or more favorable to the third party, than the comparable provision contained in the Confidentiality Agreement (or omits any such provision contained in the Confidentiality Agreement that restricts the Consortium Parties), the comparable provision of the Confidentiality Agreement will be amended or deleted, as applicable, at the option of the Consortium Parties, so that such provision is substantially similar to the provision contained in such third party agreement or is no longer in effect, as applicable. The description of the Confidentiality Agreement is qualified in its entirety by reference to the Confidentiality Agreement filed as Exhibit N attached hereto and incorporated herein by reference. Settlement Agreement -------------------- Termination of Proxy Contest. Pursuant to the Settlement Agreement, each Consortium Party and Mr. Whitman agreed that, promptly after the execution and delivery of the Agreement, it will take all actions necessary to discontinue the solicitation of proxies in connection with the Company's 2005 annual meeting of stockholders, and Mr. Whitman agreed not to nominate any individuals for election as directors at such annual meeting. In addition, the Company agreed to reimburse the Consortium Parties for up to $600,000 of out-of-pocket fees and expenses incurred by them and Mr. Whitman in connection with such solicitation. Rights Plan. Pursuant to the Settlement Agreement, the Company agreed that promptly, and in any event within five business days, after the execution of the Settlement Agreement, it will cause its Rights Agreement, dated as of January 26, 2005, to be amended substantially as set forth on Exhibit A to the Settlement Agreement, and that, prior to October 21, 2005, it would not adopt any amendment to the Rights Agreement inconsistent with the provisions in such amendment. The Company has disclosed that it has already amended its Rights Agreement as contemplated by the Settlement Agreement. The Company also agreed that it would take all actions contemplated by the resolutions it adopted on March 21, 2005 and March 25, 2005 relating to the convening of a special meeting of the Company's shareholders on October 21, 2005. The description of the Settlement Agreement is qualified in its entirety by reference to the Settlement Agreement filed as Exhibit O attached hereto and incorporated herein by reference. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS A. Joint Filing Agreement dated January 24, 2005.* B. Executive Officers of Franklin Mutual.* C. Transactions in Beverly Enterprises Shares Since November 18, 2004.**** D. Letter dated December 22, 2004 from Formation to the Company.* E. Letter dated January 5, 2005 from the Company to Formation.* F. Letter dated January 19, 2005 from Formation to the Company.* G. Term Sheet dated December 14, 2004.* H. Agreement among Stockholders dated January 24, 2005.+ I. Letter dated January 27, 2005 from Fried, Frank, Harris, Shriver & Jacobson LLP to Douglas J. Babb, Executive Vice President, Chief Administrative and Legal Officer of the Company.** J. Press Release issued on February 3, 2005 (including Letter dated February 3, 2005 from Mr. Whitman to Mr. Floyd).*** K. Notice of Business and Proposals to be Brought before the 2005 Annual Meeting of Stockholders.*** L. List of Participants in Solicitation of Company Stockholders.*** M. Complaint, filed by Formation and Arnold M. Whitman***** N. Confidentiality Agreement, dated as of April 11, 2005, between the Consortium Parties and the Company.****** O. Settlement Agreement, dated as of April 11, 2005, between the Consortium Parties and the Company.****** - -------------------------------- *Filed on January 24, 2005 +Filed with Amendment No. 1 on January 25, 2005 **Filed with Amendment No. 2 on January 27, 2005 ***Filed with Amendment No. 3 on February 4, 2005 ****Filed with Amendment No. 4 on February 22, 2005 *****Filed with Amendment No. 5 on March 14, 2005 ******Filed herewith SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, the Reporting Person certifies that the information set forth in this statement is true, complete and correct. Dated: April 11, 2005 APPALOOSA INVESTMENT LIMITED PARTNERSHIP I By: Appaloosa Management L.P., its General Partner By: Appaloosa Partners Inc., its General Partner By: /s/ David A. Tepper ------------------------- Name: David A. Tepper Title: President SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, the Reporting Person certifies that the information set forth in this statement is true, complete and correct. Dated: April 11, 2005 PALOMINO FUND LTD. By: Appaloosa Management L.P., its Investment Adviser By: Appaloosa Partners Inc., its General Partner By: /s/ David A. Tepper ------------------------- Name: David A. Tepper Title: President SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, the Reporting Person certifies that the information set forth in this statement is true, complete and correct. Dated: April 11, 2005 APPALOOSA MANAGEMENT L.P. By: Appaloosa Partners Inc., its General Partner By: /s/ David A. Tepper ------------------------- Name: David A. Tepper Title: President SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, the Reporting Person certifies that the information set forth in this statement is true, complete and correct. Dated: April 11, 2005 APPALOOSA PARTNERS INC. By: /s/ David A. Tepper ------------------------- Name: David A. Tepper Title: President SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, the Reporting Person certifies that the information set forth in this statement is true, complete and correct. Dated: April 11, 2005 /s/ David A. Tepper ------------------------------- DAVID A. TEPPER SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, the Reporting Person certifies that the information set forth in this statement is true, complete and correct. Dated: April 11, 2005 FRANKLIN MUTUAL ADVISERS, LLC By: /s/ David J. Winters ------------------------ Name: David J. Winters Title: President, Chief Executive Officer and Chief Investment Officer SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, the Reporting Person certifies that the information set forth in this statement is true, complete and correct. Dated: April 11, 2005 NORTHBROOK NBV, LLC By: /s/ Rob Rubin ------------------------ Name: Rob Rubin Title: Manager SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, the Reporting Person certifies that the information set forth in this statement is true, complete and correct. Dated: April 11, 2005 /a/ David Hokin ------------------------------- DAVID HOKIN SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, the Reporting Person certifies that the information set forth in this statement is true, complete and correct. Dated: April 11, 2005 /s/ Rob Rubin ------------------------------- ROB RUBIN SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, the Reporting Person certifies that the information set forth in this statement is true, complete and correct. Dated: April 11, 2005 /s/ Robert Hartman ------------------------------- ROBERT HARTMAN SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, the Reporting Person certifies that the information set forth in this statement is true, complete and correct. Dated: April 11, 2005 1995 DAVID REIS FAMILY TRUST By: /s/ David Reis ------------------------------- Name: David Reis Title: Trustee SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, the Reporting Person certifies that the information set forth in this statement is true, complete and correct. Dated: April 11, 2005 1995 DONNA REIS FAMILY TRUST By: /s/ David Reis ------------------------------- Name: David Reis Title: Trustee SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, the Reporting Person certifies that the information set forth in this statement is true, complete and correct. Dated: April 11, 2005 AARON REIS SPRAY TRUST By: /s/ David Reis ------------------------------- Name: David Reis Title: Trustee SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, the Reporting Person certifies that the information set forth in this statement is true, complete and correct. Dated: April 11, 2005 ANNA REIS SPRAY TRUST By: /s/ David Reis ------------------------------- Name: David Reis Title: Trustee SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, the Reporting Person certifies that the information set forth in this statement is true, complete and correct. Dated: April 11, 2005 ALEXANDER REIS SPRAY TRUST By: /s/ David Reis ------------------------------- Name: David Reis Title: Trustee SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, the Reporting Person certifies that the information set forth in this statement is true, complete and correct. Dated: April 11, 2005 DAVID REIS FAMILY TRUST By: /s/ David Reis ------------------------------- Name: David Reis Title: Trustee SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, the Reporting Person certifies that the information set forth in this statement is true, complete and correct. Dated: April 11, 2005 /s/ David Reis ------------------------------- DAVID REIS SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, the Reporting Person certifies that the information set forth in this statement is true, complete and correct. Dated: April 11, 2005 BAYLOR ENTERPRISES LLC By: /s/ Arnold M. Whitman --------------------------- Name: Arnold M. Whitman Title: Managing Member SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, the Reporting Person certifies that the information set forth in this statement is true, complete and correct. Dated: April 11, 2005 /s/ Arnold M. Whitman ------------------------------- ARNOLD M. WHITMAN EXHIBIT INDEX EXHIBIT NAME A. Joint Filing Agreement dated January 24, 2005.* B. Executive Officers of Franklin Mutual.* C. Transactions in Beverly Enterprises Shares Since November 18, 2004.**** D. Letter dated December 22, 2004 from Formation to the Company.* E. Letter dated January 5, 2005 from the Company to Formation.* F. Letter dated January 19, 2005 from Formation to the Company.* G. Term Sheet dated December 14, 2004.* H. Agreement among Stockholders dated January 24, 2005.+ I. Letter dated January 27, 2005 from Fried, Frank, Harris, Shriver & Jacobson LLP to the Company.** J. Press Release issued on February 3, 2005 (including Letter dated February 3, 2005 from Mr. Whitman to Mr. Floyd).*** K. Notice of Business and Proposals to be Brought before the 2005 Annual Meeting of Stockholders.*** L. List of Participants in Solicitation of Company Stockholders.*** M. Complaint, filed by Formation and Arnold M. Whitman***** N. Confidentiality Agreement, dated as of April 11, 2005, between the Consortium Parties and the Company.****** O. Settlement Agreement, dated as of April 11, 2005, between the Consortium Parties and the Company.****** - -------------------------------- * Filed on January 24, 2005 + Filed with Amendment No. 1 on January 25, 2005 ** Filed with Amendment No. 2 on January 27, 2005 *** Filed with Amendment No. 3 on February 4, 2005 **** Filed with Amendment No. 4 on February 22, 2005 ***** Filed with Amendment No. 5 on March 14, 2005 ****** Filed herewith EX-99.N 2 exh99n.txt CONFIDENTIALITY AGREEMENT Exhibit 99.N EXECUTION COPY BEVERLY ENTERPRISES, INC. ONE THOUSAND BEVERLY WAY FORT SMITH, ARKANSAS 72919 April 11, 2005 Appaloosa Management L.P. 26 Main Street, First Floor Chatham, NJ 07928 Attention: Kenneth Maiman, Esq. Formation Capital LLC 1035 Powers Place Alpharetta, GA 30004 Attention: Arnold M. Whitman Franklin Mutual Advisers, LLC 51 John F. Kennedy Parkway Short Hills, NJ 07078 Attention: Bradley Takahashi, Esq. Northbrook NBV, LLC 500 Skokie Blvd., Ste. 310 Northbrook, IL 60062 Attention: Richard Marks, Esq. Re: Confidentiality Agreement ------------------------- Ladies and Gentlemen: In connection with the consideration by you (collectively, the "Consortium Members" and each, individually, a "Consortium Member") of a possible acquisition (a "Possible Transaction") of Beverly Enterprises, Inc. ("BEI") and/or some or all of its subsidiaries, affiliates, divisions or assets (BEI, together with its subsidiaries, affiliates and divisions, the "Company"), the Company is prepared to make available to the Consortium Members, the Joined Post-Transaction Parties (as hereinafter defined) and their Representatives (as hereinafter defined) certain information concerning the business, financial condition, operations, assets and liabilities of the Company. As a condition to such information being furnished to the Consortium Members, the Joined Post-Transaction Parties and their Representatives, each Consortium Member and Joined Post-Transaction Party agrees that it will, and will cause its Representatives to, treat the Evaluation Material (as hereinafter defined) in accordance with the provisions of this letter agreement and take or abstain from taking certain other actions as set forth herein. The term "Representatives" shall mean, in the case of the Company, its directors, officers, employees, agents, controlled affiliates (as such term is defined under the Securities Exchange Act of 1934, as amended (the "1934 Act")) and advisors (including, without limitation, attorneys, accountants, consultants, bankers and financial advisors); and in the case of each Consortium Member, Joined Post-Transaction Party (as hereinafter defined) or Prospective Post-Transaction Party (as hereinafter defined), its controlled affiliates and its and its controlled affiliates' respective members, directors, officers, employees, agents, partners, advisors and prospective advisors (including, without limitation, attorneys, accountants, consultants, bankers and financial advisors), prospective sources of financing for a Possible Transaction and the respective members, directors, officers, employees, agents, affiliates, partners and advisors of such prospective financing sources (including, without limitation, their respective attorneys, accountants, consultants, bankers and financial advisors). "Prospective Post-Transaction Parties" means (x) the persons set forth in the Notice of Prospective Post-Transaction Parties delivered to BEI as of the date hereof on behalf of the Consortium Members and (y) any prospective operators or purchasers of assets or businesses of the Company after, or in connection with, the consummation of a Possible Transaction approved as a Prospective Post-Transaction Party by BEI, such approval not to be unreasonably withheld or delayed (taking into account, among other things, the impact of approving any additional Prospective Post-Transaction Party on the Company's ongoing sales process and ability to maximize stockholder value, the interest of the Company in maintaining a level playing field auction and the identity of the proposed Prospective Post-Transaction Party); provided, that, in connection with a request for approval of a proposed Prospective Post-Transaction Party, the Consortium Members shall provide the Company with such information regarding any proposed Prospective Post-Transaction Party and the possible role of any such proposed Post-Transaction Party in a Possible Transaction (or following any Possible Transaction) as the Company shall reasonably request. "Joined Post-Transaction Party" means any Prospective Post-Transaction Party that executes and delivers to the Company an agreement to be bound by the provisions of this letter agreement applicable to Joined Post-Transaction Parties. Each Consortium Member represents and warrants that it has not, as of the date hereof, directly or indirectly through any Representative, entered into any exclusivity or other agreement. arrangement or understanding with any person or entity (other than the other Consortium members) that would restrict the ability of such other person or entity to engage in discussions or negotiations, or enter into any agreement, arrangement or understanding, with any other person or entity regarding or relating to a Possible Transaction. 1. Evaluation Material. The term "Evaluation Material" shall mean all information relating, directly or indirectly, to the Company or the business, products, markets, condition (financial or other), operations, assets, liabilities, results of operations, cash flows or prospects of the Company (whether prepared by the Company, its advisors or otherwise) which is delivered, disclosed or furnished by or on behalf of the Company to a Consortium Member, a Joined Post-Transaction Party or any of their respective Representatives (either directly or through a Consortium Member, Joined Post-Transaction Party or any of their respective Representatives), on or after the date hereof, regardless of the manner in which it is delivered, disclosed or furnished, or which the Consortium Member, the Joined Post-Transaction Party or any of their respective Representatives otherwise learn or obtain, through observation or through analysis of such information, data or knowledge, and shall also be deemed to include all notes, analyses, compilations, studies, forecasts, interpretations or other documents prepared by the Consortium Member, the Joined Post-Transaction Party or any of their respective Representatives that contain, reflect or are based upon, in whole or in part, the information delivered, disclosed or furnished to the Consortium Member, the Joined Post-Transaction Party or any of their respective Representatives pursuant hereto. Notwithstanding any other provision hereof, the term Evaluation Material shall not include information which (i) is or becomes generally available to the public other than as a result of a disclosure by a Consortium Member, a Joined Post-Transaction Party or any of their respective Representatives in breach of this Agreement, (ii) was within the possession of a Consortium Member, a Joined Post-Transaction Party or any of their respective Representatives or developed by a Consortium Member, a Joined Post-Transaction Party or any of their respective Representatives prior to it being furnished to any Consortium Member or Joined Post-Transaction Party by or on behalf of the Company pursuant hereto; provided, that no Consortium Member or Joined Post-Transaction Party, as applicable, had a reasonable basis (after reasonable inquiry) for concluding that the source of such information was bound by a confidentiality agreement with, or other contractual, legal or fiduciary obligation of confidentiality to, the Company with respect to such information or (iii) becomes available to a Consortium Member, a Joined Post-Transaction Party or any of their respective Representatives on a non-confidential basis from a source other than the Company or any of its Representatives, provided, that the Consortium Member or the Joined Post-Transaction Party does not know or have reason to believe (after reasonable inquiry) that the source is bound by a confidentiality agreement with, or other contractual, legal or fiduciary obligation of confidentiality to, the Company with respect to such information. 2. Use and Disclosure of Evaluation Material. (a) Each Consortium Member and Joined Post-Transaction Party recognizes and acknowledges the competitive value and confidential nature of the Evaluation Material and the damage that could result to the Company if any information contained therein is disclosed to a third party in violation of this Agreement. Each Consortium Member and each Joined Post-Transaction Party hereby agrees that it and its Representatives shall use the Evaluation Material solely for the purpose of evaluating a Possible Transaction and/or the operation of all or a portion of the Company after the consummation of a Possible Transaction and for no other purpose, that the Evaluation Material will be kept confidential by the Consortium Member or Joined Post-Transaction Party, as applicable, and their respective Representatives and that the Consortium Member, the Joined Post-Transaction Party and their respective Representatives will not disclose any of the Evaluation Material in any manner whatsoever; provided, however, that (i) a Consortium Member, the Joined Post-Transaction Party, as applicable, or any of their respective Representatives may make any disclosure of the Evaluation Material to which the Company gives its prior written consent and (ii) any of the Evaluation Material may be disclosed to a Consortium Member, a Joined Post-Transaction Party or to any Representatives of any Consortium Member or Joined Post-Transaction Party who needs to know such information for the purpose of evaluating a Possible Transaction or the operation of all or a portion of the Company after the consummation of a Possible Transaction and who is provided with a copy of this letter agreement. Each Consortium Member and Joined Post-Transaction Party shall maintain a list of those of its Representatives to whom Evaluation Material has been disclosed (which list shall be presented to the Company upon request). In any event, each Consortium Member and each Joined Post-Transaction Party agrees to undertake reasonable precautions to safeguard and protect the confidentiality of the Evaluation Material, to accept responsibility for any breach of this letter agreement by it or any of its Representatives, and, at its sole expense, to take all reasonable measures to restrain itself and its Representatives from prohibited or unauthorized disclosure or uses of the Evaluation Material. (b) The Company shall ensure that the access to Evaluation Material, other due diligence information and officers and employees of the Company given to a Consortium Member, its related Joined Post-Transaction Parties and their respective Representatives, during such time as the Consortium Member is an Active Bidder (as hereinafter defined), in connection with their due diligence of the Company is no less favorable, in accordance with such procedures, if any, applicable to all other bidders, than the access to Evaluation Material, other due diligence information and officers and employees of the Company given to any other party evaluating a Possible Transaction. The Company agrees that, during such time as a Consortium Member is an Active Bidder (as hereinafter defined), it shall notify the Consortium Member and provide the Consortium Member with an opportunity and permission to submit proposals to the Company, its Representatives and/or its Board of Directors at such time as any other party is given an opportunity or permitted by the Company or any of its Representatives to submit a proposal for a Possible Transaction to the Company, its Representatives and/or its Board of Directors, as applicable (and subject to such procedures, if any, imposed upon all other parties). The Company shall not permit or authorize any officers or employees of the Company to conduct discussions with any party evaluating a Possible Transaction regarding the role of such officers or employees with the Company or such party in connection with, or after the consummation of, a Possible Transaction, unless, simultaneously with such permission or authorization, the Company notifies the Consortium Members who are Active Bidders (as hereinafter defined) of such permission or authorization and permits or authorizes such Consortium Members and the officers or employees of the Company to conduct such discussions. A Consortium Member shall be considered an "Active Bidder", so long as it has not notified the Company or publicly disclosed that it is no longer considering a Possible Transaction; provided, however, that a Consortium Member shall cease to be an Active Bidder in the event that a majority of the Company's independent directors determine in good faith (based on the advice of the Company's financial advisors and outside legal counsel) that the then most recent written proposal for a Possible Transaction made (after the date hereof) by a Consortium Member to the Company is sufficiently and materially less favorable to the stockholders of the Company than the least favorable proposal for a Possible Transaction most recently submitted by a Continuing Bidder (as hereinafter defined) as to warrant a cessation of discussions of a Possible Transaction with such Consortium Member; provided further, that nothing contained herein shall be deemed to prevent the Company from selecting a Continuing Bidder (as hereinafter defined), who, in the judgment of the Board, has made the most favorable proposal, with whom to negotiate and enter into definitive documents relating to a Possible Transaction, and upon such selection, such Consortium Member shall cease to be an Active Bidder. "Continuing Bidder" means any bidder (other than any Consortium Member) with which the Company intends to continue discussions regarding a Possible Transaction. (c) In addition, each Consortium Member and Joined Post-Transaction Party agrees that, without the prior written consent of the Company, it and its Representatives acting on its behalf will not disclose to any other person (other than to other Consortium Members, Prospective Post-Transaction Parties or to their respective Representatives) the fact that the Consortium Members, the Joined Post-Transaction Parties and their respective Representatives have received Evaluation Material or that Evaluation Material has been made available to the Consortium Members, the Joined Post-Transaction Parties and their respective Representatives, that investigations, discussions or negotiations are taking place concerning a Possible Transaction or any of the terms, conditions or other facts with respect to any Possible Transaction, including the status thereof and the identity of the parties thereto (collectively, the "Discussion Information"); provided, that nothing contained in this letter agreement shall prohibit any Consortium Member, Joined Post-Transaction Party or any of their respective Representatives from making (or require the Consortium Member, Joined Post-Transaction Party or any of their respective Representatives to seek or obtain the consent of the Company to make) (a) such public disclosure of Discussion Information as may be determined to be necessary under the disclosure obligations of the 1934 Act, based on the advice of Fried, Frank, Harris, Shriver & Jacobson LLP or another law firm that is nationally recognized for its knowledge of the disclosure obligations imposed by the 1934 Act ("Outside Counsel"), for the applicable Consortium Member, Joined Post-Transaction Party or Representative not to be in violation of or default under any applicable law or regulation or (b) any public disclosure of Discussion Information after August 20, 2005 (or the earlier termination of the restrictions contained in paragraph 7 below); provided, that a Consortium Member or Joined Post-Transaction Party may provide Discussion Information (but not Evaluation Material) to a Prospective Post-Transaction Party (or its Representatives) only if such Prospective Post-Transaction Party (or such Representatives) is provided with a copy of this letter agreement and agrees to maintain the confidentiality of the Discussion Information. Each Consortium Member and each Joined Post-Transaction Party accepts responsibility for any breach of this letter agreement by any Prospective Post-Transaction Party or any of such Prospective Post-Transaction Party's Representatives and, at its sole expense, shall take all commercially reasonable measures to restrain the Prospective Post-Transaction Parties and their Representatives from prohibited and unauthorized disclosure or uses of the Discussion Information. Notwithstanding the foregoing, "Discussion Information" shall not include, and the restrictions set forth above applicable to Discussion Information shall not apply to, information which is or becomes generally available to the public other than as a result of disclosure by a Consortium Member, a Joined Post-Transaction Party, a Prospective Post-Transaction Party or any of their Representatives in breach of this Agreement. Without limiting the generality of the foregoing, each Consortium Member and Joined Post-Transaction Party further agrees that, without the prior written consent of the Company, it and its affiliates will not, other than as publicly disclosed prior to the date hereof, directly or indirectly, enter into any agreement, arrangement or understanding, or any discussions which might lead to any such agreement, arrangement or understanding, with any person (other than the Company) regarding a Possible Transaction; provided, that nothing contained in this letter agreement shall restrict any Consortium Member from entering into any such agreement, arrangement, understanding or discussions with any other Consortium Member or Prospective Post-Transaction Party or any Representative of any Consortium Member or Prospective Post-Transaction Party; provided further, that no Evaluation Material shall be provided to any Prospective Post-Transaction Party or its Representatives until such time as it becomes a Joined Post-Transaction Party. The Company agrees and acknowledges that the Consortium Members and the Joined Post-Transaction Parties may publicly disclose their execution and delivery of this letter agreement, the Settlement Agreement, dated as of the date hereof (the "Settlement Agreement"), and the terms hereof and thereof and may file a copy of this letter agreement and the Settlement Agreement as Exhibits to an amendment to their Schedule 13D (any such amendment, a "Schedule 13D Amendment"). Until the earlier of (x) August 20, 2005 and (y) the date on which the restrictions in Section 7 of this letter agreement terminate, the Consortium Members shall, prior to filing any Schedule 13D Amendment with the Securities and Exchange Commission (the "SEC"), (a) furnish, via e-mail, to counsel to BEI a draft of the Schedule 13D Amendment as far in advance of the intended filing as is practicable (provided that the Schedule 13D Amendment shall not be filed for at least 6 hours after the draft is e-mailed to Charles Nathan and John Sorkin, counsel to BEI, if e-mailed before 6 PM New York City time, and if such draft is e-mailed to counsel to BEI after 6 PM New York City time, the Schedule 13D Amendment shall not be filed prior to 11 AM New York City time on the next business day); (b) prior to or promptly after sending any such e-mail place a telephone call to BEI's counsel notifying counsel of such e-mail; and (c) consider in good faith any comments from BEI regarding the disclosures set forth in the draft of the Schedule 13D Amendment. (d) In the event that a Consortium Member, a Joined Post-Transaction Party or any of their respective Representatives is requested or required (by oral questions, interrogatories, requests for information or documents in legal proceedings, subpoena, civil investigative demand or other similar legal process) to disclose any of the Evaluation Material or Discussion Information in a manner otherwise prohibited hereby, such Consortium Member or Joined Post-Transaction Party shall, to the extent reasonably practicable, provide the Company with prompt notice of any such request or requirement so that the Company may in its sole discretion seek a protective order or other appropriate remedy and/or waive compliance with the provisions of this letter agreement. If, in the absence of a protective order or other remedy or the receipt of a waiver by the Company, a Consortium Member, a Joined Post-Transaction Party or any of their respective Representatives nonetheless determines, based on the advice of Outside Counsel, that the Consortium Member, the Joined Post-Transaction Party or the Representatives is legally compelled to disclose Evaluation Material or Discussion Information in a manner otherwise prohibited hereby, the Consortium Member, the Joined Post-Transaction Party or the Representative may, without liability hereunder, disclose only that portion of the Evaluation Material or Discussion Information which such counsel advises the Consortium Member, the Joined Transaction Party or the Representative is legally required to be disclosed, provided, that the Consortium Member or the Joined Post-Transaction Party shall, upon the Company's request and expense, use its reasonable best efforts to preserve the confidentiality of such Evaluation Material or Discussion Information, including, without limitation, by cooperating with the Company to obtain an appropriate protective order or other reliable assurance that confidential treatment will be accorded such Evaluation Material or Discussion Information; and provided further, that to the extent reasonably practicable, the Consortium Member, the Joined Post-Transaction Party or their respective Representative shall as promptly as practicable notify the Company of (i) its determination to make such disclosure and (ii) the nature, scope and contents of such disclosure. 3. Return and Destruction of Evaluation Material. In the event that a Consortium Member decides not to proceed with a Possible Transaction or a Joined Post-Transaction Party decides not to proceed with the evaluation of all or a portion of the Company, it will promptly inform the Company of that decision. In that case, or, subject to Section 2(b) above, upon notice from the Company delivered to a Consortium Member or a Joined Post-Transaction Party requesting that the Consortium Member or the Joined Post-Transaction Party destroy or return Evaluation Material (a "Destroy or Return Request"), the applicable Consortium Member or Joined Post-Transaction Party will, at its election, either destroy or cause to be destroyed or promptly deliver or cause to be delivered, at its expense, to the Company all Evaluation Material (and any copies thereof) in the possession of the Consortium Member, the Joined Post-Transaction Party or any of their Representatives (except to the extent that such Representatives are also Representatives of a Consortium Member or Joined Post-Transaction Party who still wishes to proceed with a Possible Transaction or with the evaluation of all or a portion of the Company or are also Representatives of a Consortium Member or Joined Post-Transaction Party that has not been requested by the Company to destroy or deliver Evaluation Material); provided, that each Consortium Member, each Joined Post-Transaction Party and any of their respective Representatives may retain Evaluation Material to the extent retention of such material is necessary based on the advice of Outside Counsel to demonstrate compliance by the Consortium Member, the Joined Post-Transaction Party or their Representatives with any legal or fiduciary obligation and only if such Evaluation Material is kept by Outside Counsel in a separate file that remains inaccessible to each Consortium Member, each Joined Post-Transaction Party and their respective Representatives except as, and only to the extent, required, based on the advice of Outside Counsel, to comply with (or demonstrate compliance with) applicable law or regulation. With respect to Evaluation Material held electronically, the Consortium Members, the Joined Post-Transaction Parties and their respective Representatives shall only be required by this section to remove Evaluation Material from hard disks or back-up tapes to the extent the same are readily accessible. In the event a Consortium Member decides not to proceed with a Possible Transaction or the Company makes a Destroy or Return Request to any Consortium Member, the applicable Consortium Member or Joined Post-Transaction Party shall provide the Company with prompt written confirmation of its compliance with this section. Notwithstanding the return or destruction of the Evaluation Material, each Consortium Member, each Joined Post-Transaction Party and their respective Representatives shall continue to be bound by its obligations of confidentiality and other obligations and agreements hereunder in accordance with the terms hereof. 4. No Representations or Warranties. Each Consortium Member and Joined Post-Transaction Party understands, acknowledges and agrees that neither the Company nor any of its Representatives makes any representation or warranty, express or implied, as to the accuracy or completeness of the Evaluation Material. Each Consortium Member and Joined Post-Transaction Party agrees that neither the Company nor any of its Representatives shall have any liability to the Consortium Members, the Joined Post-Transaction Parties or to any of their respective Representatives relating to or resulting from the use of the Evaluation Material or any errors therein or omissions therefrom. Only those representations or warranties which are made in a final definitive agreement regarding any transactions contemplated hereby, when, as and if executed and delivered, or in this letter agreement, and subject to such limitations and restrictions as may be specified therein or herein, will have any legal effect. 5. No Solicitation. In consideration of the Evaluation Material being furnished hereunder, each Consortium Member and Joined Post-Transaction Party hereby agrees that, for a period of two years from the date hereof, neither it nor any of its officers, directors, employees, managing members or general partners shall, or shall authorize any person to act on its behalf to, without the prior written consent of the Company, directly or indirectly, solicit to employ any of the officers or employees of the Company who are employed by the Company as of the date hereof or who are hired after the date hereof and (i) with whom the Consortium Member or the Joined Post-Transaction Party had contact during its evaluation of a Possible Transaction or its evaluation of the Company in connection therewith, or (ii) who were specifically identified to the Consortium Member or the Joined Post-Transaction Party by the Company or any of its Representatives during the Consortium Member's or Joined Post-Transaction Party's evaluation of a Possible Transaction or the Company in connection therewith; provided, however, that nothing in this Section 5 shall limit the ability of a Consortium Member, a Joined Post-Transaction Party or any of their respective employees to, or require a Consortium Member, a Joined Post-Transaction Party or any of their respective employees to obtain the consent of the Company to, (1) engage, or authorize any other person to engage, in general solicitations for employees, or (2) solicit, or authorize any other person to solicit, for employment any officer or employee of the Company after such officer or employee is no longer employed by the Company, provided such Consortium Member, Joined Post-Transaction Party or employee of the Consortium Member or Joined Post-Transaction Party did not encourage such officer or employee to terminate his or her employment with the Company. Until the earlier of (i) the execution by the Consortium Members of a definitive agreement regarding a Possible Transaction with the Company or (ii) two years from the date hereof, each Consortium Member and Joined Post-Transaction Party agrees not to initiate or maintain, directly or indirectly through any of its Representatives or otherwise, any contact (except for those contacts made in the ordinary course of business) with any officer, director or employee of the Company in connection with a Proposed Transaction regarding the Company's business, operations, prospects or finances, except with the express permission of the Company or its Representatives. The foregoing shall not prevent a Consortium Member, a Joined Post-Transaction Party or any of their respective Representatives, after August 20, 2005 (or the earlier termination of the restrictions contained in Section 7), from contacting any directors or "named executive officers" of the Company in connection with any of the actions described in clauses (a) through (d) of Section 7, or from contacting any officer, director or employee of the Company solely in his or her capacity as a stockholder of the Company. 6. Material Non-Public Information. Each Consortium Member and Joined Post-Transaction Party acknowledges and agrees that it is aware (and that its Representatives are aware or, upon receipt of any Evaluation Information or Discussion Information, will be advised) that (i) the Evaluation Material being furnished to the Consortium Member, the Joined Post-Transaction Party or their respective Representatives may contain material, non-public information regarding the Company and (ii) the United States securities laws generally prohibit any persons who have material, nonpublic information concerning the matters which are the subject of this letter agreement from purchasing or selling securities of a company which may be a party to a transaction of the type contemplated by this letter agreement or from communicating such information to any person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities in reliance upon such information. 7. Standstill. Each Consortium Member and Joined Post-Transaction Party agrees that, from the date hereof through August 20, 2005, unless specifically invited in writing by the Company, neither it nor any of its Representatives will, in any manner, directly or indirectly: (a) effect or seek, offer or propose (whether publicly or otherwise) to effect, or announce any intention to effect or cause or participate in or in any way assist, facilitate or encourage any other person to effect or seek, offer or propose (whether publicly or otherwise) to effect or participate in, (i) any acquisition of any securities (or beneficial ownership thereof), or rights or options to acquire any securities (or beneficial ownership thereof), or any assets, indebtedness or businesses of the Company or any of its subsidiaries, (ii) any tender or exchange offer, merger or other business combination involving the Company, any of the subsidiaries or assets of the Company or the subsidiaries constituting a significant portion of the consolidated assets of the Company and its subsidiaries, (iii) any recapitalization, restructuring, liquidation, dissolution or other extraordinary transaction with respect to the Company or any of its subsidiaries, or (iv) any "solicitation" of "proxies" (as such terms are used in the proxy rules of the SEC) or consents to vote any voting securities of the Company; (b) form, join or in any way participate in a "group" (as defined under the 1934 Act) with respect to the Company or otherwise act in concert with any person in respect of any securities of the Company; (c) otherwise act, alone or in concert with others, to seek representation on or to control the management, Board of Directors or policies of the Company or to obtain representation on the Board of Directors of the Company; (d) take any action which would or would reasonably be expected to result in the Company being obligated to make a public announcement regarding any of the types of matters set forth in (a) above; or (e) enter into any discussions or arrangements with any third party with respect to any of the foregoing. Each Consortium Member also agrees during such period not to request that the Company or any of its Representatives, directly or indirectly, amend or waive any provision of this Section 7 (including this sentence). 8. Most Favored Nations. The Company shall not provide any Evaluation Material to any third party relating to a Possible Transaction unless such party enters into a confidentiality agreement with the Company. In the event that any such agreement with a third party at any time contains (including as a result of an amendment, waiver or consent entered into or granted by the Company) any provision relating to the subject matter covered by Sections 5 or 7 of this letter agreement (a "Covered Provision") that is less favorable to the Company, or more favorable to the third party, than the comparable provision contained in this letter agreement or omits any provision contained in Sections 5 or 7 of this letter agreement that restricts the Consortium Members, the Joined Post-Transaction Parties or their respective Representatives, the Company shall notify the Consortium Members of that provision of such agreement or the omission thereof, as applicable (but not any other terms of such agreement or the identity of the relevant third party), as soon as reasonably practicable after execution of such agreement (or the execution or granting of an amendment, waiver or consent), in which case the comparable provision of this letter agreement as it applies to the Consortium Members, the Joined Post-Transaction Parties and their respective Representatives shall be amended or deleted, as applicable (or a waiver or consent granted by the Company), at the option of the Consortium Members, so that such provision of this letter agreement is substantially similar to the Covered Provision less favorable to the Company or more favorable to the third party contained in such third party agreement (after giving effect any amendment, waiver or consent entered into or granted by the Company in connection with that third party agreement) or is no longer in effect, as applicable. As of the date hereof, the Company has not entered into a confidentiality agreement with a third party relating to a Possible Transaction with a Covered Provision less favorable to the Company, or more favorable to the third party, than the comparable provisions contained in this letter agreement or that omits any Covered Provision. 9. No Agreement. The Company, each Consortium Member and each Joined Post-Transaction Party understands and agrees that, except as set forth in this letter agreement, no contract or agreement providing for any Possible Transaction shall be deemed to exist between them unless and until a final definitive agreement has been executed and delivered. Each of the Company and each Consortium Member and Joined Post-Transaction Party also agrees that unless and until a final definitive agreement regarding a Possible Transaction has been executed and delivered, neither the Company, any Consortium Member nor any Joined Post-Transaction Party will be under any legal obligation of any kind whatsoever with respect to such a Possible Transaction by virtue of this letter agreement except for the matters specifically agreed to herein. Each Consortium Member and Joined Post-Transaction Party further acknowledges and agrees that, subject in each case to its commitments under the provisions of Section 2(b) of this letter agreement, the Company reserves the right, in its sole discretion, to reject any and all proposals made by a Consortium Member or Joined Post-Transaction Party or any of their Representatives with regard to a Possible Transaction, to determine not to engage in discussions or negotiations and to terminate discussions and negotiations with Consortium Members and Joined Post-Transaction Parties at any time, and to conduct, directly or through any of its Representatives, any process for any transaction involving the Company or any of its subsidiaries, if and as they in their sole discretion shall determine (including, without limitation, negotiating with any other interested parties and entering into a definitive agreement without prior notice to you or any other person). 10. No Waiver of Rights. It is understood and agreed that no failure or delay by any party hereto in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder. 11. Remedies. It is understood and agreed that money damages would not be a sufficient remedy for any breach of this letter agreement by any party hereto and that each party hereto shall be entitled to equitable relief, including, without limitation, injunction and specific performance, as a remedy for any such breach any other party. Such remedies shall not be deemed to be the exclusive remedies for a breach by a party of this letter agreement but shall be in addition to all other remedies available at law or equity to the other parties hereto. Each of the parties hereto further agrees not to raise as a defense or objection to the request or granting of such relief that any breach of this letter agreement is or would be compensable by an award of money damages, and each party hereto agrees to waive any requirements for the securing or posting of any bond in connection with such remedy. In the event of litigation to enforce the terms of this letter agreement, if a court of competent jurisdiction determines in a final non-appealable order that one of the parties has prevailed in such litigation, then the non-prevailing party shall reimburse the prevailing party for the reasonable out-of-pocket costs incurred in such litigation. 12. Governing Law. This letter agreement is for the benefit of the parties hereto, and shall be governed by and construed in accordance with the laws of the State of Delaware applicable to agreements made and to be performed entirely within the State of Delaware, without regard to the conflict of law provisions thereof. Each party hereto hereby irrevocably and unconditionally consent to submit to the exclusive jurisdiction of the Chancery Court of the State of Delaware for any actions, suits or proceedings arising out of or relating to this letter agreement and the transactions contemplated hereby (and each party hereto agrees not to commence any action, suit or proceeding relating thereto except in such courts, and further agree that service of any process, summons, notice or document by U.S. registered mail to its address set forth above shall be effective service of process for any action, suit or proceeding brought against you in any such court). Each party hereto hereby irrevocably and unconditionally waive any objection which it may now or hereafter have to the laying of venue of any action, suit or proceeding arising out of this letter agreement or the transactions contemplated hereby in the Chancery Court of the State of Delaware, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum. 13. Entire Agreement. This letter agreement and the Settlement Agreement, dated as of the date hereof, between the Consortium Members, the Joined Post-Transaction Parties and the Company, contain the entire agreement between the Consortium Members, the Joined Post-Transaction Parties and the Company regarding their subject matter and supersede all prior agreements, understandings, arrangements and discussions between the Consortium Members and the Company regarding such subject matter. 14. No Modification. No provision in this letter agreement can be waived, modified or amended except by written consent of the Consortium Members and the Company, which consent shall specifically refer to the provision to be waived, modified or amended and shall explicitly make such waiver, modification or amendment. 15. Counterparts. This letter agreement may be signed by facsimile and in one or more counterparts, each of which shall be deemed an original but all of which shall be deemed to constitute a single instrument. 16. Severability. If any provision of this letter agreement is found to violate any statute, regulation, rule, order or decree of any governmental authority, court, agency or exchange, such invalidity shall not be deemed to affect any other provision hereof or the validity of the remainder of this letter agreement, and such invalid provision shall be deemed deleted herefrom to the minimum extent necessary to cure such violation. 17. Inquiries. All inquiries for information about the Company and its subsidiaries and communications with the Company shall be made through Barry Blake of Lehman Brothers Inc. or Cory Rapkin of J.P. Morgan Securities Inc. Subject in each case to the provisions of Section 2(b) of this letter agreement, until August 20, 2005 or the earlier termination of the restrictions contained in Section 7, no Consortium Member or Joined Post-Transaction Party shall, or shall authorize any of its Representatives to act on its behalf to, contact any third party with whom the Company or any of its subsidiaries has a business or other relationship (including without limitation any director, officer, employee, customer, supplier, stockholder or creditor of the Company or any of its subsidiaries but expressly excluding other Consortium Members, Joined Post-Transaction Parties and any of their respective Representatives) in connection with a Possible Transaction without the Company's prior written consent. 18. Successors. This letter agreement shall inure to the benefit of, and be enforceable by, BEI and each of the Consortium Members and Joined Post-Transaction Parties and their respective successors and assigns. 19. No Third Party Beneficiaries. The parties hereto each agree and acknowledge that nothing herein expressed or implied is intended to confer upon or give any rights or remedies to person not party to this agreement under or by reason of this letter agreement. 20. No License. Nothing herein shall be deemed to grant a license, whether directly or by implication, estoppel or otherwise, to any Evaluation Material disclosed pursuant to this letter agreement. 21. Term. Except as otherwise provided herein, this letter agreement shall terminate on the second anniversary of the date hereof. 22. Action by Consortium Members and Joined Post-Transaction Parties. Notwithstanding anything herein to the contrary, the Consortium Members may at any time form, join in or participate in a "group" (as defined under the 1934 Act) composed of the Consortium Members and their affiliates who agree to comply with the terms hereof, any Joined Post-Transaction Party, their respective Representatives or any other person listed as of the date hereof as a reporting person on the Consortium Members' Schedule 13D. 23. Additional Permitted Activities. Notwithstanding anything herein to the contrary, nothing in this agreement will prohibit (A) the purchase by any Consortium Member of any publicly traded non-convertible, non-exchangeable debt securities of the Company so long as the Consortium Member would not, after such purchase, beneficially own more than 2% of the class of debt securities being purchased and so long as (i) the individual or individuals making the decision with respect to such purchase are not in possession, at the time of such purchase, of Evaluation Material or Discussion Information, (ii) the Consortium Member has established a "Chinese Wall" between individuals purchasing such debt securities and other employees or agents of the Consortium Member and (iii) such purchases (1) are conducted in accordance with such "Chinese Wall" policies and procedures and applicable law and (2) will not result in any legal, regulatory or other requirement that the Consortium Member, the Joined Post-Transaction Party or their respective Representatives disclose any Evaluation Material or Discussion Information; (B) any sale or other disposition of any securities of the Company so long as such sale would not require the disclosure by the seller of Evaluation Material or Discussion Information the disclosure of which would otherwise (absent this Clause (B)) be prohibited by the terms of this letter agreement (without taking into account the proviso in the first sentence of Section 2(c)); (C) the engagement by any Consortium Member in discussions with, or the entering into agreements by any Consortium Member with, any other Consortium Member, Joined Post-Transaction Party or any of their respective Representatives with respect to a Possible Transaction or the operations or assets of the Company after the consummation of a Possible Transaction, (D) the participation by any Consortium Member in discussions with other Consortium Members, Joined Post-Transaction Parties or any of their respective Representatives with respect to the possibility of taking of any of the actions described in clauses (a) through (d) of Section 7 after August 20, 2005 (or the earlier termination of the restrictions contained in Section 7) or (E) the making of a proposal to the Company, its Representatives and/or its Board of Directors by a Consortium Member which at the time is an Active Bidder at such time as any other party is given an opportunity or permitted by the Company or any of its Representatives to submit a proposal for a Proposed Transaction to the Company, its Representatives and/or its Board of Directors, as applicable (subject to such procedures, if any, applicable to all other parties). 24. Trading by Representatives. Notwithstanding anything herein to the contrary, it is understood that the Representatives of any Consortium Member, Joined Post-Transaction Party or Prospective Post-Transaction Party may, from time to time, effect transactions for such Representatives' own account or for the account of such Representatives' customers, and hold positions in securities of the Company in the ordinary course of business and dispose of any securities they currently hold or may hereafter acquire so long as (i) such Representatives have established reasonable policies and procedures to restrict the flow of material, non-public information from individuals working on behalf of any Consortium Member, Joined Post-Transaction Party or Prospective Post-Transaction Party with respect to the Possible Transaction and those individuals involved in making investment decisions with respect to securities of the Company and/or effectuating trades of securities and (ii) such purchases, sales or dealings (a) are made in accordance with such policies and procedures and in accordance with applicable law and (b) will not result in any legal, regulatory or other requirement that any Consortium Member, Joined Post-Transaction Party or Prospective Post-Transaction Party or its Representatives disclose any Evaluation Material or Discussion Information. Please confirm your agreement with the foregoing by having a duly authorized officer of your organization sign and return one copy of this letter to the undersigned, whereupon this letter agreement shall become a binding agreement among you and the Company. Very truly yours, BEVERLY ENTERPRISES, INC. By: /s/ Douglas J. Babb --------------------------- Name: Douglas J. Babb Title: Executive Vice President and Chief Administrator and Legal Officer and Secretary CONFIRMED AND AGREED as of the date written above: APPALOOSA MANAGEMENT L.P. By: /s/ Kenneth Maiman ----------------------------- Name: Kenneth Maiman Title: Principal FORMATION CAPITAL LLC By: /s/ Arnold M. Whitman ----------------------------- Name: Arnold M. Whitman Title: Chief Executive Officer and Co-Chairman FRANKLIN MUTUAL ADVISERS, LLC By: /s/ Bradley Takahashi ----------------------------- Name: Bradley Takahashi Title: Vice President NORTHBROOK NBV, LLC By: /s/ Robert Hartman ----------------------------- Name: Robert Hartman Title: Manager EX-99.O 3 exh99o.txt SETTLEMENT AGREEMENT Exhibit 99.O EXECUTION COPY SETTLEMENT AGREEMENT -------------------- SETTLEMENT AGREEMENT, dated this 11th day of April, 2005 (the "Agreement"), between Beverly Enterprises, Inc., a Delaware corporation (the "Company"), Arnold M. Whitman ("Mr. Whitman"), Appaloosa Management L.P., Formation Capital LLC, Franklin Mutual Advisers, LLC and Northbrook NBV, LLC (collectively, the "Consortium Members" and each, individually, a "Consortium Member"). Terms used and not otherwise defined herein shall have the meaning attributed to such terms in the Confidentiality Agreement (as defined below). RECITALS WHEREAS, the Company has scheduled its 2005 Annual Meeting of Stockholders (the "2005 Annual Meeting") for April 21, 2005; WHEREAS, Mr. Whitman filed with the Securities and Exchange Commission (the "SEC") a definitive proxy statement on March 14, 2005, for the election at the 2005 Annual Meeting of a slate of nominees to the Company's Board of Directors (the "Board") and certain other proposals; WHEREAS, the Company, Mr. Whitman and the Consortium Members have determined that the interests of the Company and its stockholders would best be served (i) by the Consortium Members not engaging in a solicitation of proxies for the purpose of electing Mr. Whitman's nominees to the Board at the 2005 Annual Meeting, (ii) by Mr. Whitman not nominating any individuals for election as directors at the 2005 Annual Meeting and (iii) by the parties' entering into the arrangements set forth herein; and WHEREAS, the Company and the Consortium Members have signed, in conjunction with this Agreement, a confidentiality agreement, dated April 11, 2005 (the "Confidentiality Agreement"), in contemplation of a Possible Transaction (as defined in the Confidentiality Agreement). AGREEMENT NOW THEREFORE, and in consideration of the foregoing premises and the mutual covenants, representations and warranties contained herein, the Company, Mr. Whitman and the Consortium Members agree as follows: 1. Company Agreement to Amend Rights Plan. -------------------------------------- The Company agrees that, promptly, but in any event within five (5) business days, after the execution and delivery of this Agreement, it will cause its Rights Agreement, dated as of January 26, 2005 (as amended, the "Rights Agreement"), to be amended substantially as set forth on Exhibit A. Within two (2) business days after such amendment becomes effective, the Company shall file a copy of such amendment with the Securities and Exchange Commission (the "SEC") as an amendment to the Registration Statements on Form 8-A previously filed by the Company with respect to the Rights Agreement. Prior to October 21, 2005, the Company shall not adopt any amendment to the Rights Agreement (or adopt any replacement rights plan) containing provisions inconsistent with, or that would have the effect of repealing, the provisions in the amendment set forth on Exhibit A. The Company represents and warrants that its Board has duly and validly adopted the resolutions dated March 21, 2005, filed as Exhibit 99.1 to the Current Report on Form 8-K filed by the Company with the SEC on March 23, 2005 (the "March 21, 2005 Resolutions"), and the resolutions effective as of March 25, 2005, filed as Exhibit 99.1 to the Current Report on Form 8-K filed by the Company with the SEC on April 7, 2005 (the "March 25, 2005 Resolutions" and, together with the March 21, 2005 Resolutions, the "Board Resolutions"). The Company agrees that it will fully comply with the provisions of, and take all actions contemplated by, the Board Resolutions, including taking all actions necessary to convene the Special Meeting (as defined in the Board Resolutions) as contemplated by the Board Resolutions if the requisite notifications are received as contemplated thereby. The Company represents and warrants that each of the directors of the Company shall resign as a director of the Company effective immediately prior to the tabulation of the votes for new directors at the Special Meeting, if held; provided that, in the event of any dispute with respect to the results of the election, the then current directors shall remain in office until the final tabulation has been completed and all disputes resolved. Except as set forth herein, the Company shall not at any time on or prior to the Special Meeting adopt, amend, modify or revoke the Board Resolutions or any bylaw of the Company or take any other action so as to alter in any way any of the voting requirements or provisions applicable to the Special Meeting Demands (as defined in the March 25, 2005 Resolutions), the Special Meeting Notice (as defined in the March 21, 2005 Resolutions) or the Special Meeting. The Company and its Board hereby agree and acknowledge that it shall not be necessary for any stockholder of the Company to comply with the advance notice bylaws of the Company (including the provisions contained Article II, Sections 15 and 16 of the Company's Bylaws) in order to nominate candidates for election at the Special Meeting, compliance with such Bylaws having been duly and validly waived by the Company and its Board. The Board shall not expand its size to be greater than eight (8) at any time prior to October 22, 2005. 2. Request for Section 220 Information. ----------------------------------- The Company shall provide to Mr. Whitman or the Consortium Members, as promptly as reasonably practicable after the receipt by the Company from any of them of a request therefor, copies of all of the records and other information in the possession of the Company or its Representatives (as defined in the Confidentiality Agreement) contemplated by Section 220 of the Delaware General Corporation Law in the same manner and to the same extent similar information was provided in connection with the 2005 Annual Meeting. 3. Termination of the Proxy Contest. -------------------------------- Mr. Whitman and each Consortium Member agree that, promptly after the execution and delivery of this Agreement, it will take all actions necessary to discontinue the solicitation of proxies in connection with the 2005 Annual Meeting (the "Annual Meeting Proxy Solicitation"). Mr. Whitman further agrees not to nominate any individuals for election as directors at the 2005 Annual Meeting. Within five (5) business days following receipt of the documentation thereof, the Company shall reimburse the Consortium Members for all out-of-pocket fees and expenses incurred by them and Mr. Whitman in connection with the Annual Meeting Proxy Solicitation and the negotiation and execution of this Agreement and all related activities, provided that such reimbursement shall not exceed $600,000, in the aggregate. 4. Postponement of the Special Meeting. ----------------------------------- In the event that Mr. Whitman or any of the Consortium Members (i) files a preliminary proxy statement in respect of the election of directors at the Special Meeting no later than September 9, 2005, (ii) provides to the Secretary of the Company by September 9, 2005, a Nomination Notice (as defined in the March 25 Resolutions) signed by or on behalf of the beneficial owners of not less than 5% of the issued and outstanding shares of Company common stock and (iii) thereafter uses its reasonable best efforts to cause such proxy statement to become definitive but is unable to cause the proxy statement to become definitive by September 26, 2005, the Company and its Board of Directors shall take all action necessary to postpone the date of the Special Meeting to a date reasonably requested by any of the Consortium Members; provided that the Company need not hold the Special Meeting unless the Secretary of the Company receives a Special Meeting Notice or one or more Special Meeting Demands from beneficial owners of at least 20% of the Company's issued and outstanding common stock; provided further, that, in any event, the Company need not postpone the date of the Special Meeting to a date that is more than (i) thirty (30) days after the date Mr. Whitman or any Consortium Member files with the SEC a definitive proxy statement with respect to the Special Meeting or (ii) 90 days following the filing by Mr. Whitman or the Consortium Members of the first preliminary proxy statement with respect to the Special Meeting. It is understood and agreed that the Company shall not be required to postpone the Special Meeting on more than one occasion. 5. Public Statements. ----------------- The parties shall consult with each other before issuing any press release or making any public statement with respect to this Agreement, the Confidentiality Agreement and the negotiations related hereto or thereto and, subject to the provisions of Section 2(c) of the Confidentiality Agreement, shall not issue any such press release or make any such public statement without the prior consent of the other party, which shall not be unreasonably withheld or delayed, except as may be required by applicable law or any listing agreement with any national securities exchange. The provisions contained in this Section 5 shall terminate upon the earlier of (x) the delivery to the Company of Special Meeting Demands, a Special Meeting Notice or a Nomination Notice or (y) the filing with the SEC of a preliminary proxy statement by the Company, Mr. Whitman or any of the Consortium Members with respect to the solicitation of Special Meeting Demands or the Special Meeting; provided, that in no event shall the provisions of this paragraph terminate before August 21, 2005. 6. No Waiver of Rights. ------------------- It is understood and agreed that no failure or delay by any party hereto in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder. 7. Remedies. -------- It is understood and agreed that money damages would not be a sufficient remedy for any breach of this Agreement by any party hereto and that each party hereto shall be entitled to equitable relief, including, without limitation, injunction and specific performance, as a remedy for any such breach any other party. Such remedies shall not be deemed to be the exclusive remedies for a breach by a party of this Agreement but shall be in addition to all other remedies available at law or equity to the other parties hereto. Each of the parties hereto further agrees not to raise as a defense or objection to the request or granting of such relief that any breach of this Agreement is or would be compensable by an award of money damages, and each party hereto agrees to waive any requirements for the securing or posting of any bond or other security in connection with such remedy. 8. Governing Law. ------------- This Agreement is for the benefit of the parties hereto, and shall be governed by and construed in accordance with the laws of the State of Delaware applicable to agreements made and to be performed entirely within the State of Delaware, without regard to the conflict of law provisions thereof. Each party hereto hereby irrevocably and unconditionally consents to submit to the exclusive jurisdiction of the Chancery Court of the State of Delaware for any actions, suits or proceedings arising out of or relating to this Agreement and the transactions contemplated hereby (and each party hereto agrees not to commence any action, suit or proceeding relating thereto except in such courts, and further agrees that service of any process, summons, notice or document by U.S. registered mail to its address set forth above shall be effective service of process for any action, suit or proceeding brought against you in any such court). Each party hereto hereby irrevocably and unconditionally waives any objection which it may now or hereafter have to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby in the Chancery Court of the State of Delaware, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum. 9. Entire Agreement. ---------------- This Agreement and the Confidentiality Agreement contain the entire agreement between Mr. Whitman, the Consortium Members and the Company regarding their subject matter and supersede all prior agreements, understandings, arrangements and discussions between the Consortium Members and the Company regarding such subject matter. 10. No Modification. --------------- No provision in this Agreement can be waived, modified or amended except by written consent of Mr. Whitman, the Consortium Members and the Company, which consent shall specifically refer to the provision to be waived, modified or amended and shall explicitly make such waiver, modification or amendment. 11. Counterparts. ------------ This Agreement may be signed by facsimile and in one or more counterparts, each of which shall be deemed an original but all of which shall be deemed to constitute a single instrument. 12. Severability. ------------ If any provision of this Agreement is found to violate any statute, regulation, rule, order or decree of any governmental authority, court, agency or exchange, such invalidity shall not be deemed to affect any other provision hereof or the validity of the remainder of this Agreement, and such invalid provision shall be deemed deleted herefrom to the minimum extent necessary to cure such violation. 13. Successors. ---------- This Agreement shall inure to the benefit of, and be enforceable by, the Company and each of Mr. Whitman and the Consortium Members and their respective successors and assigns. 14. No Third Party Beneficiaries. ---------------------------- The parties hereto each agree and acknowledge that nothing herein expressed or implied is intended to confer upon or give any rights or remedies to persons not party to this Agreement under or by reason of this Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the date first set forth above. By: /s/ Douglas J. Babb --------------------------- Name: Douglas J. Babb Title: Executive Vice President and Chief Administrator and Legal Officer and Secretary CONFIRMED AND AGREED as of the date written above: APPALOOSA MANAGEMENT L.P. By: /s/ Kenneth Maiman ----------------------------- Name: Kenneth Maiman Title: Principal FORMATION CAPITAL LLC By: /s/ Arnold M. Whitman ----------------------------- Name: Arnold M. Whitman Title: Chief Executive Officer and Co-Chairman FRANKLIN MUTUAL ADVISERS, LLC By: /s/ Bradley Takahashi ----------------------------- Name: Bradley Takahashi Title: Vice President NORTHBROOK NBV, LLC By: /s/ Robert Hartman ----------------------------- Name: Robert Hartman Title: Manager ARNOLD M. WHITMAN /s/ Arnold M. Whitman - -------------------------------- Exhibit A --------- Amendment No. 1 to Rights Agreement -----END PRIVACY-ENHANCED MESSAGE-----