Document:

STOCK OPTION AGREEMENT
                                 PURSUANT TO THE
                        HARBORSIDE HEALTHCARE CORPORATION
                              STOCK INCENTIVE PLAN

         THIS STOCK OPTION AGREEMENT (this "Agreement") is made as of November
19, 2001 (the "Effective Date"), between Harborside Healthcare Corporation, a
Delaware corporation (the "Company"), and _______________ (the "Optionee" or the
"Executive").

                                 R E C I T A L S

     A.   The Company has adopted the Harborside Healthcare Corporation Stock
          Incentive Plan (the "Plan"), a copy of which has been delivered to
          Optionee.

     B.   The Company desires to grant the Optionee the opportunity to acquire a
          proprietary interest in the Company to encourage the Optionee's
          contribution to the success and progress of the Company.

     C.   In accordance with the Plan, the Committee (as defined in the Plan)
          has as of the Effective Date granted to the Optionee a non-qualified
          option to purchase shares of Class C Stock, $0.01 par value, of the
          Company (the "Class C Stock") subject to the terms and conditions of
          the Plan and this Agreement.

                                   AGREEMENTS

         1.       Definitions.  Capitalized terms used herein shall have the
                  following meanings:

                  "Act" is defined in Section 10(a).

                  "Agreement" means this Stock Option Agreement.

                   "Approved Sale" means the transfer or sale by Investcorp Bank
                   E.C., any affiliate thereof or any Person with whom
                   Investcorp Bank E.C. or any affiliate thereof has an
                   administrative relationship with respect to the outstanding
                   capital stock of the Company (collectively, "Investcorp"), in
                   the aggregate, in one or a series of related transactions, of
                   fifty percent (50%) or more of the outstanding capital stock
                   of the Company held by Investcorp immediately prior to such
                   transactions (excluding any transfers among such entities) in
                   exchange for cash, cash equivalents, securities that are
                   listed for trading on a national securities exchange or
                   quoted on the NASDAQ National Market System, or a combination
                   thereof; provided, however, that any such transaction or
                   series of related transactions which results in Investcorp
                   holding securities representing more than twenty percent
                   (20%) of the outstanding shares of the subject company shall
                   not be an Approved Sale unless fifty percent (50%) or more of
                   the consideration paid in such transaction(s) consists of
                   cash or cash equivalents, or unless, within six months
                   following consummation of such transaction(s), Investcorp
                   transfers or sells, in one of a series of related
                   transactions, fifty percent (50%) or more of the securities
                   of the subject company received by Investcorp in such
                   transaction(s).

                   "Certificate of Incorporation" means the Restated Certificate
                   of Incorporation of the Company setting forth the rights,
                   preferences and privileges of and restrictions on the Class C
                   Stock.

                  "Class C Stock" is defined in recital C.

                  "Company" is defined in the preamble.

                   "Disability" has the meaning set forth in the employment
                   agreement between the Company and the Optionee, or if there
                   is no such employment agreement, means the failure by the
                   Optionee to render full-time employment services to the
                   Company for an aggregate of ninety (90) business days in any
                   continuous period of six (6) months on account of physical or
                   mental disability.

                  "Effective Date" is defined in the preamble.

                  "Endorsed Certificate" is defined in Section 9(a).

                  "Executive" is defined in the preamble.

                  "Exercise Price" is defined in Section 2.

                  "Fair Market Value" means the value of a Share, as of the
                    Termination Date or other date of determination, calculated
                    pursuant to Section 9(d).

                   "Initial Public Offering" means the sale of any of the common
                   stock of the Company pursuant to a registration statement
                   that has been declared effective under the Act, if as a
                   result of such sale (i) the issuer becomes a reporting
                   company under Section 12(b) or 12(g) of the Securities
                   Exchange Act of 1934, as amended, and (ii) such stock is
                   traded on the New York Stock Exchange or the American Stock
                   Exchange, or is quoted on the NASDAQ National Market System
                   or is traded or quoted on any other national stock exchange
                   or national securities system.

                   "Investors" means those entities set forth on Schedule 1 of
                   the Recapitalization Agreement.

                  "Option" is defined in Section 2.

                  "Option Shares" is defined in Section 2.

                  "Optionee" is defined in the preamble.

                  "Plan" is defined in recital A.

                  "Recapitalization Agreement" means the Recapitalization
                    Agreement dated as of April 15, 1998, by and between the
                    Company and the Investors.

                  "Repurchase" is defined in Section 9(a).
                   "Subsidiary" means any joint venture, corporation,
                   partnership or other entity as to which the Company, whether
                   directly or indirectly, has more than 50% of the (i) voting
                   rights or (ii) rights to capital or profits.

                   "Termination Date" means the date on which the Optionee
                   ceases to be employed by the Company for any reason.

     2.   Grant of Option. The Company grants to the Optionee the right and
          option (the "Option") to purchase, on the terms and conditions
          hereinafter set forth, all or any part of the number of shares of
          Class C Stock set forth below the Optionee's signature below (the
          "Option Shares"), at the purchase price of $1.25 per share (the
          "Exercise Price"), on the terms and conditions set forth herein.

     3.   Exercisability.
          --------------
               The Optionee's right to exercise the Option shall vest to the
          extent of one-fourth (1/4) of the number of Option Shares on December
          31, 2001, one-fourth (1/4) of the number of Option Shares on December
          31, 2002, one-fourth (1/4) of the number of Option Shares on December
          31, 2003, and one-fourth (1/4) of the number of Option Shares on
          December 31, 2004, provided, that the Optionee shall have been in
          continuous employment by the Company from the Effective Date to, and
          including, each such date. No option may be exercised for fractional
          shares of Class C Stock.

      4.       Expiration.
                  ----------
     (a)  Subject to Sections 4(b) and 6(a), any nonexercised Option shall
          expire upon the thirtieth (30th) day following the seventh (7th)
          anniversary of the Effective Date (the "Expiration Date"), provided,
          however, that if it would result in the expiration of the Option prior
          to the Expiration Date, (i) if the Optionee dies or is terminated due
          to disability, the exercisable portion of any Option shall expire
          one-year following the Termination Date, or (ii) in the event the
          Company exercises the repurchase right pursuant to Section 9 hereof,
          the exercisable portion of any Option shall expire on the business day
          immediately preceding the Repurchase Date.
     (b)  The unexercisable portion of the Option shall expire on the
          Termination Date.

     5.   Nontransferability. Subject to Section 9 hereof, the Option shall
          not be transferable by the Optionee except to (a) his or her spouse,
          child, estate, personal representative, heir or successor (b) a trust
          for the benefit of the Optionee or his or her spouse, child or heir,
          or (c) a partnership, the partners of which consist solely of the
          Optionee and/or his or her spouse, child, heir, and/or successor
          (each, a "permitted transferee") and the Option is exercisable, during
          the Optionee's lifetime, only by him or her or his or her spouse or
          child, or, in the event of the Optionee's Disability, his or her
          guardian or legal representative. More particularly (but without
          limiting the generality of the foregoing), the Option may not be
          assigned, transferred (except as aforesaid), pledged or hypothecated
          in any way (whether by operation of law or otherwise), and shall not
          be subject to execution, attachment or similar process. Any
          assignment, transfer, pledge, hypothecation or other disposition of
          the Option contrary to the provisions hereof, and the levy of any
          attachment or similar process upon the Option that would otherwise
          effect a change in the ownership of the Option, shall terminate the
          Option; provided, however, that in the case of the involuntary levy of
          any attachment or similar involuntary process upon the Option, the
          Optionee shall have thirty (30) days after notice thereof to cure such
          levy or process before the Option terminates. This Agreement shall be
          binding on and enforceable against any person who is a permitted
          transferee of the Option pursuant to the first sentence of this
          Section.

    6.       Effect of Approved Sale; Adjustments.
             ------------------------------------

     (a)  In the event of an Approved Sale, the unexercised portion of the
          Option shall terminate upon such Approved Sale, provided that, unless
          the agreement or plan of merger effecting such Approved Sale provides
          that the Optionee shall receive upon such Approved Sale, with respect
          to the entire exercisable but unexercised portion of the Option, the
          same consideration that the holders of the Class C Stock shall be
          entitled to receive upon such Approved Sale (less the Exercise Price
          attributable to such exercisable but unexercised portion and any taxes
          withheld pursuant to Section 16 hereof), the Optionee shall be given
          at least thirty (30) days' prior notice of the proposed Approved Sale
          and shall be entitled to exercise such exercisable but unexercised
          portion of the Option at any time during such thirty (30) day period
          up to and until the close of business on the day immediately preceding
          the date of consummation of such Approved Sale and, upon exercise of
          the Option, the Option Shares shall be treated in the same manner as
          the shares of any other holder of Class C Stock.

     (b)  Subject to Section 6(a), if the shares of the Class C Stock, or to the
          extent it affects the economic rights of the holders of the Class C
          Stock, shares of Class A stock, Class B stock or Class D stock of the
          Company, are changed into or exchanged for a different number or kind
          of shares or securities, as the result of any one or more
          reorganizations, recapitalizations, mergers, acquisitions, stock
          splits, reverse stock splits, stock dividends or similar events, an
          appropriate adjustment shall be made in the number and kind of shares
          or other securities subject to the Option, and the price for each
          share or other unit of any securities subject to this Agreement, in
          accordance with Section 13 of the Plan. No fractional interests shall
          be issued on account of any such adjustment unless the Committee
          specifically determines to the contrary; provided, however, that in
          lieu of fractional interests, the Optionee, upon the exercise of the
          Option in whole or part, shall receive cash in an amount equal to the
          amount by which the fair market value of such fractional interests
          exceeds the Exercise Price attributable to such fractional interests.

     7.   Exercise of the Option. Prior to the expiration thereof, the Optionee
          may exercise the exercisable portion of the Option from time to time
          in whole or in part. Upon electing to exercise the Option, the
          Optionee shall deliver to the Secretary of the Company a written and
          signed notice of such election setting forth the number of Option
          Shares the Optionee has elected to purchase, together with cash or a
          cashier's or certified bank check to the order of the Company for the
          full Exercise Price of such Option Shares and any amount required
          pursuant to Section 17 hereof. Alternatively, if the Company is not at
          the time prohibited from purchasing or acquiring shares of its capital
          stock, the Exercise Price may be paid in whole or in part by delivery
          of shares of the Class C Stock owned by the Optionee provided that
          Optionee has owned such shares for at least six (6) months. The value
          of any such shares delivered or withheld as payment of the Exercise
          Price shall be such shares' fair market value as determined by the
          Committee. The Committee may, in its discretion, permit payment of the
          Exercise Price in such other form or in such other manner as may be
          permissible under the Plan and under any applicable law.

     8.   Restrictions on Transfers of Shares Issuable Upon Exercise. Subject to
          Section 9 hereof, prior to the earlier of (A) 180 days following an
          Initial Public Offering or (B) an Approved Sale, the Option Shares
          shall not be transferable or transferred, assigned, pledged or
          hypothecated in any way (whether by operation of law or otherwise)
          except that the Optionee may transfer the Option Shares (i) to a
          permitted transferee, as defined in Section 5 of this Agreement, or
          (ii) as provided for in the Certificate of Incorporation. This
          Agreement shall be binding on and enforceable against any person who
          is a permitted transferee of the Option Shares except a person who
          acquires the Option Shares pursuant to (y) Section 4 of Article IV of
          the Certificate of Incorporation or (z) as part of the Initial Public
          Offering. The stock certificates issued to evidence Option Shares upon
          exercise of the Option hereunder shall bear a legend referring to this
          Agreement and the restrictions contained herein.

     9.       Repurchase of Option Shares.
              ---------------------------

     (a)  In the event that the Optionee ceases to be employed by the Company
          for any reason prior to an Approved Sale, the Company, during the
          sixty (60) days following the Termination Date (the "Repurchase
          Period"), shall have a one-time right to purchase all, but not less
          than all, of the Option Shares. The purchase price for each Option
          Share shall equal Fair Market Value, or, if the Optionee is terminated
          for cause, the lower of Fair Market Value or the Exercise Price. If
          the Company elects to purchase the Option Shares, it shall notify the
          Optionee at or before the end of the Repurchase Period of such
          election and the purchase price shall be paid in cash at a time set by
          the Company (the "Repurchase Date") within thirty (30) days after the
          end of the Repurchase Period, provided that the Optionee has presented
          to the Company a stock certificate evidencing the Option Shares duly
          endorsed for transfer (the "Endorsed Certificate"). If the Optionee
          fails to deliver the Endorsed Certificate, the Option Shares
          represented thereby shall be deemed to have been purchased upon (i)
          the payment by the Company of the purchase price to the Optionee or
          his or her permitted transferee or (ii) notice to the Optionee or such
          permitted transferee that the Company is holding the purchase price
          for the account of the Optionee or such permitted transferee, and upon
          such payment or notice the Optionee and such permitted transferee will
          have no further rights in or to such Option Shares. If the Company
          does not purchase the Option Shares, the restrictions on transfer
          thereof contained in Sections 5 and 8 of this Agreement shall
          terminate and be of no further force and effect.

     (b)  In the event that (i) on the Termination Date, Optionee owns Option
          Shares that have not been owned by the Optionee for a period of at
          least six (6) months, and/or (ii) following the Termination Date, the
          Optionee exercises any then outstanding vested Option pursuant to this
          Agreement, with respect to all such Option Shares, the Repurchase
          Period will not commence on the Termination Date but rather will
          commence on the first date on which all such Option Shares have been
          owned by Optionee for six (6) months.

     (c)  In the event that, following the Termination Date, the Optionee
          exercises an Option in accordance with Section 4(a) hereof, by notice
          to the Optionee delivered during the Repurchase Period, the Company
          may elect to purchase any Option Shares so acquired by notice to such
          effect during the 120 day period following the Termination Date.

     (d)  The Fair Market Value of Option Shares to be purchased by the Company
          hereunder shall be determined in good faith by the Company's Board of
          Directors. The Fair Market Value shall be based on an assumed sale of
          100% of the outstanding capital stock of the Company.

     (e)  The Optionee shall not be considered to have ceased to be employed by
          the Company for purposes of this Agreement if he or she continues to
          be employed by the Company or a Subsidiary, or by a company of which
          the Company is a Subsidiary.

    10.      Compliance with Legal Requirements.
             ----------------------------------

     (a)  No Option Shares shall be issued or transferred pursuant to this
          Agreement unless and until all legal requirements applicable to such
          issuance or transfer have, in the opinion of counsel to the Company,
          been satisfied. Such requirements may include, but are not limited to,
          registering or qualifying such Shares under any state or federal law,
          satisfying any applicable law relating to the transfer of unregistered
          securities or demonstrating the availability of an exemption from
          applicable laws, placing a legend on the Shares to the effect that
          they were issued in reliance upon an exemption from registration under
          the Securities Act of 1933, as amended (the "Act"), and may not be
          transferred other than in reliance upon Rule 144 or Rule 701
          promulgated under the Act, if available, or upon another exemption
          from the Act, or obtaining the consent or approval of any governmental
          regulatory body.

     (b)  The Optionee understands that the Company intends for the offering and
          sale of Option Shares to be effected in reliance upon Rule 701 or
          another available exemption from registration under the Act and
          intends to file a Form 701 as appropriate, and that the Company is
          under no obligation to register for resale the Option Shares issued
          upon exercise of the Option, subject to the Certificate of
          Incorporation. In connection with any such issuance or transfer, the
          person acquiring the Option Shares shall, if requested by the Company,
          provide information and assurances satisfactory to counsel to the
          Company with respect to such matters as the Company reasonably may
          deem desirable to assure compliance with all applicable legal
          requirements.

    11.    Subject to Certificate of Incorporation.
           ---------------------------------------   The Optionee
           acknowledges that the Option Shares are subject to the terms of the
           Certificate of Incorporation.

     12.  No Interest in Shares Subject to Option. Neither the Optionee
          (individually or as a member of a group) nor any beneficiary or other
          person claiming under or through the Optionee shall have any right,
          title, interest, or privilege in or to any shares of stock allocated
          or reserved for the purpose of the Plan or subject to this Agreement
          except as to such Option Shares, if any, as shall have been issued to
          such person upon exercise of an Option or any part thereof.

     13.  Plan Controls. The Option hereby granted is subject to, and the
          Company and the Optionee agree to be bound by, all of the terms and
          conditions of the Plan as the same may be amended from time to time in
          accordance with the terms thereof, but no such amendment shall be
          effective as to the Option without the Optionee's consent insofar as
          it may adversely affect the Optionee's rights under this Agreement.

     14.  Not an Employment Contract. Nothing in the Plan, in this Agreement or
          any other instrument executed pursuant thereto shall confer upon the
          Optionee any right to continue in the employ of the Company or any
          Subsidiary or shall affect the right of the Company or any Subsidiary
          to terminate the employment of the Optionee with or without cause.

     15.  Governing Law.
          -------------
          All terms of and rights under this
          Agreement shall be governed by and construed in accordance with the
          internal laws of the State of New York, without giving effect to
          principles of conflicts of law.

     16.  Taxes. The Committee may, in its discretion, make such provisions and
          take such steps as it may deem necessary or appropriate for the
          withholding of all federal, state, local and other taxes required by
          law to be withheld with respect to the issuance or exercise of the
          Option including, but not limited to, deducting the amount of any such
          withholding taxes from any other amount then or thereafter payable to
          the Optionee, requiring the Optionee to pay to the Company the amount
          required to be withheld or to execute such documents as the Committee
          deems necessary or desirable to enable it to satisfy its withholding
          obligations, or any other means provided in the Plan; provided further
          that the Optionee may satisfy all aforesaid withholding tax
          obligations by directing the Company to withhold that number of Option
          Shares with an aggregate Fair Market Value equal to the amount of all
          federal, state, local and other taxes required to be withheld, or
          delivering to the Company such number of previously held shares.

     18.  Notices. All notices, requests, demands and other communications
          pursuant to this Agreement shall be in writing and shall be deemed to
          have been duly given if personally delivered, telexed or telecopied
          to, or, if mailed, when received by, the other party at the following
          addresses (or at such other address as shall be given in writing by
          either party to the other):

                  If to the Company to:

                           Harborside Healthcare
                           One Beacon Street
                           Boston, Massachusetts  02108
                           Attention:  Chief Financial Officer

                  With a copy to:

                           Gibson, Dunn & Crutcher LLP
                           200 Park Avenue, 47th Floor
                           New York, New York 10166-0193
                           Facsimile: (212) 351-4035
                           Attention:  E. Michael Greaney, Esq.

                           If to the Optionee to the address set forth below
                           the Optionee's signature below.

     19.  Amendments and Waivers.
          ----------------------
          This Agreement may be amended, and any provision hereof may be waived,
          only by a writing signed by the party to be charged.

     20.  Entire Agreement. This Agreement, together with the Plan, sets forth
          the entire agreement and understanding between the parties as to the
          subject matter hereof and supersedes all prior oral and written and
          all contemporaneous oral discussions, agreements and understandings of
          any kind or nature.

     21.  Separability. In the event that any provision of this Agreement is
          declared to be illegal, invalid or otherwise unenforceable by a court
          of competent jurisdiction, such provision shall be reformed, if
          possible, to the extent necessary to render it legal, valid and
          enforceable, or otherwise deleted, and the remainder of this Agreement
          shall not be affected except to the extent necessary to reform or
          delete such illegal, invalid or unenforceable provision.

     22.  Headings. The headings preceding the text of the sections hereof are
          inserted solely for convenience of reference, and shall not constitute
          a part of this Agreement, nor shall they affect its meaning,
          construction or effect.

     23.  Counterparts. This Agreement may be executed in two counterparts, each
          of which shall be deemed an original, but which together shall
          constitute one and the same instrument.

     24.  Further Assurances. Each party shall cooperate and take such action as
          may be reasonably requested by another party in order to carry out the
          provisions and purposes of this Agreement.
     25.  Remedies. In the event of a breach by any party to this Agreement of
          its obligations under this Agreement, any party injured by such
          breach, in addition to being entitled to exercise all rights granted
          by law, including recovery of damages, shall be entitled to specific
          performance of its rights under this Agreement. The parties agree that
          the provisions of this Agreement shall be specifically enforceable, it
          being agreed by the parties that the remedy at law, including monetary
          damages, for breach of any such provision will be inadequate
          compensation for any loss and that any defense in any action for
          specific performance that a remedy at law would be adequate is hereby
          waived.

     26.  Binding Effect. This Agreement shall inure to the benefit of and be
          binding upon the parties hereto and their respective permitted
          successors and assigns.

     27.  Shareholder Approval. Section 3(b)(ii) of this Agreement shall not be
          effective unless shareholder approval meeting the requirements of
          Section 280G(b)(5) of the Internal Revenue Code of 1986, as amended,
          and the regulations promulgated thereunder is obtained.

  IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date. HARBORSIDE HEALTHCARE CORPORATION

                                 By:      ___________________________________
                                 Name:    ___________________________________
                                 Title:   ___________________________________

                                    OPTIONEE

                                    ------------------------------------------
                                 Name:

                                 Address:  _________________________________

                                  ------------------------------------------

                                  ------------------------------------------

                                                     Number of Option Shares:March 28, 2002

Curt Phillips
Chief Financial Officer
Automotive Finance Corporation
310 East 96th Street
Suite 300
Indianapolis, IN  46240

RE:  Ugly Duckling  Corporation  Master Loan and Security  Agreement dated as of
     August 24, 2001

Dear Sir:

With this letter we are  requesting a waiver under  Article VIII Section 8.0 (o)
No Defaults for December 2001 and January 2002.

As previously  discussed  with you, we hit  termination  charge-off  triggers on
three of our  securitized  trusts in December  and one  termination  delinquency
trigger on a trust in January 2002. These trigger  breaches  constitute an event
of default under the Insurance  Agreements in each of these trusts.  Each of the
trusts  were  only in  breach  of the  termination  trigger  test for the  month
indicated  and have  since been under  these  levels.  MBIA,  our  insurer,  has
indicated they will retain but not exercise  their rights under the  termination
events to, among other things,  transition  servicing and retain all future cash
flows  from  the  trusts  to  pay  off  the  A  bondholder,  assuming  continued
improvement in the performance of the trusts.

To  further  validate  MBIA's  intent,  we are  scheduled  to  close  our  first
securitization  of 2002 on April 2nd with  MBIA  acting  as the  insurer  on the
transaction.

Thank  you for  your  time  and  consideration.  I have  provided  an area on an
attached page for your signature authorizing the waiver. Please call me with any
further questions at 602-852-6635.

Sincerely,

Bob Fulton
Treasurer
Ugly Duckling Corporation

<PAGE>

The undersigned hereby waive as requested above:

Automotive Finance Corporation

By:      _________________________
Name:    _________________________
Title:   _________________________

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