HARBORSIDE HEALTHCARE CORP
SENIOR OFFICER STOCK OPTION AGREEMENT
<DOCUMENT>
<TYPE>EX-10.37
<SEQUENCE>2
<FILENAME>seniorstockoption.txt
<DESCRIPTION>SENIOR OFFICER STOCK OPTION AGREEMENT
<TEXT>
                             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); provided, further, that in the case of
                   consummation of a business combination that would otherwise
                   constitute an Approved Sale except that Investcorp receives
                   securities of a corporation that represent more than 20% of
                   the outstanding shares of the subject company, the Optionee
                   shall be entitled to the vesting described herein if the
                   Optionee's employment with the Company is terminated by the
                   Company other than for Cause or by the Executive for Good
                   Reason, in either case within one year following consummation
                   of such business combination, or prior to consummation of
                   such business combination if it is reasonably demonstrated by
                   the Optionee that such termination or Good Reason (1) was at
                   the request of the merger partner in the business combination
                   or (2) otherwise arose in connection with or anticipation of
                   the business combination.

                   "Cause," when used in connection with the termination of
                   employment of the Optionee, has the meaning set forth in the
                   employment agreement between the Company and the Optionee, or
                   if there is no such employment agreement, means (a)
                   conviction of the Optionee for a felony, or the entry by the
                   Optionee of a plea of guilty or nolo contendere to a felony,
                   (b) the commission of an act of fraud involving dishonesty
                   for personal gain which is injurious to the Company, (c) the
                   willful and continued refusal by the Optionee to
                   substantially perform his duties with the Company (other than
                   any such refusal resulting from his incapacity due to mental
                   illness or physical illness or injury), after a demand for
                   substantial performance is delivered to the Optionee by the
                   Company's Board of Directors, where such demand identifies
                   the manner in which the Company's Board of Directors believes
                   that the Optionee has refused to substantially perform his
                   duties and the passage of a reasonable period of time as
                   specified by the Board for the Optionee to comply with such
                   demand or (d) the willful engaging by the Optionee in gross
                   misconduct injurious to the Company or its Subsidiaries.

                   "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(e).

                   "Good Reason" means, unless the Optionee shall have consented
                   in writing thereto, any of the following:

                   (a) except as specifically provided in the Optionee's
                   employment agreement, if any, the assignment to the Optionee
                   of duties, or the assignment of the Optionee to a position,
                   constituting a material diminution in the Optionee's role,
                   responsibilities or authority compared with his role,
                   responsibilities or authority on the Effective Date;

                   (b) a reduction by the Company in the Optionee's base salary
                   as in effect on the Effective Date as the same may be
                   increased from time to time or a reduction of the potential
                   annual bonus expressed as a percent of base salary (subject
                   to attainment of goals, Board discretion and other conditions
                   of the applicable bonus program) from the levels in effect on
                   the Effective Date as the same may be increased from time to
                   time;

                   (c) a demand by the Company to the Optionee to relocate to
                   any place that exceeds a fifty (50) mile radius beyond the
                   location at which the Optionee performed his duties on the
                   Effective Date; or

                   (d) any material breach of this Agreement or any breach of
                   the employment agreement between the Optionee and the
                   Company, if any, on the part of the Company.

                   In the event that any change in the Optionee's duties,
                   position, role, responsibilities or authority is implemented
                   or proposed to be implemented by the Company during the term
                   of this Agreement, then: (i) unless the Optionee provides
                   written notice to the Company and Chief Executive Officer of
                   the Company within thirty (30) days of being notified of such
                   change or proposed change that the Optionee asserts that such
                   change constitutes a "material diminution," such change shall
                   be deemed not to be such a "material diminution" and
                   thereafter the Optionee's duties, position, role,
                   responsibilities and authority shall be as so changed; and
                   (ii) in the event that the Optionee provides such notice in a
                   timely manner and, within thirty (30) days thereafter, the
                   Company, in its sole discretion, rescinds or alters such
                   change, then the original change shall be disregarded (except
                   to the extent so altered). The thirty-day period for the
                   Optionee to notify the Company of his assertion that any
                   change or proposed change is a "material diminution"
                   hereunder shall commence only upon receipt by the Optionee of
                   written notice of such change or proposed change from the
                   Company.

                  "HBRS" is defined in Section 9(b).

                   "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.

                  "Put Date" is defined in Section 9(b).

                   "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).

                   "Retirement" 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 Optionee's
                   retirement from employment with the Company in accordance
                   with the Company's normal retirement policy generally
                   applicable to its salaried employees.

                   "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.

                   (a) 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.

                   (b) Notwithstanding Section 3(a), (i) if the Optionee's
                   employment is terminated by the Company without Cause or the
                   Optionee resigns with Good Reason, the Option shall become
                   exercisable with respect to the number the Option Shares
                   equal to (A) the total number of Option Shares that would
                   have vested at the end of the year in which such termination
                   occurs multiplied by (B) a fraction, the numerator of which
                   equal the number of days which have elapsed in such year
                   (through the Termination Date) and the denominator of which
                   is 365; and (ii) upon the occurrence of an Approved Sale, the
                   schedule set forth in Section 3(a) shall not apply and the
                   Optionee's right to exercise the Option shall vest to the
                   extent of one-hundred percent (100%) of the number of Option
                   Shares, provided that the Optionee remains continuously
                   employed by the Company through consummation of such Approved
                   Sale.

                   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, if (i) at any time prior to an Approved Sale
                   the Optionee resigns without Good Reason, the exercisable
                   portion of any option shall expire thirty (30) days following
                   the Termination Date, or (ii) the Optionee is terminated for
                   Cause from employment by the Company, the exercisable portion
                   of any Option shall expire on the Termination Date, or (iii)
                   the Optionee resigns with Good Reason or is terminated
                   without Cause from employment with the Company, the
                   exercisable portion of any Option shall expire one-hundred
                   eighty (180) days following the Termination Date, or (iv) the
                   Optionee dies or is terminated due to disability, the
                   exercisable portion of any Option shall expire one-year
                   following the Termination Date, or (v) the Optionee is
                   terminated other than for Cause from employment by the
                   Company and the Company exercises the repurchase right
                   pursuant to Section 9 hereof, or the Optionee or his or her
                   representative exercises the put right pursuant to Section 9
                   hereof, the exercisable portion of any Option shall expire on
                   the business day immediately preceding the Repurchase Date,
                   the Put Date, or the date on which the Company acquires any
                   Option Shares pursuant to Section 9(d) hereof, as the case
                   may be.

                   (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 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) If the Optionee's employment by the Company is terminated
                   prior to an Approved Sale (i) by the Company without Cause or
                   by the Optionee for any reason or (ii) due to the Optionee's
                   Retirement, death or Disability, the Optionee or his or her
                   representative, during the 120 days following the Termination
                   Date, shall have a one-time right to require HBRS Limited, a
                   Cayman Islands corporation ("HBRS") to purchase all, but not
                   less than all, of the Option Shares, unless, by the thirtieth
                   (30) day after HBRS and the Company have received notice of
                   the Optionee's election to exercise his put right to HBRS,
                   the Company has notified the Optionee and HBRS of its
                   election, exercisable at the discretion of the Company, to
                   purchase the Option Shares on the same terms as such Option
                   Shares were offered to HBRS, in which case such Option Shares
                   will be acquired by the Company. The purchase price shall be
                   at Fair Market Value, unless the employment of the Optionee
                   is terminated by the Company for Cause, in which case the
                   purchase price will be the lower of Fair Market Value or the
                   Exercise Price. The purchase price shall be paid in cash on
                   the thirtieth (30th) day after HBRS and the Company have
                   received notice of the Optionee's election to exercise his
                   put right (the "Put Date"), provided that HBRS or the
                   Company, as the case may be, need not pay the purchase price
                   until such later time that the Optionee presents to the
                   Company the Endorsed Certificate.

                   (c) 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
                   and the Put 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.

                   (d) 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, and the Optionee may elect to put
                   said shares to HBRS (subject to the right of the Company to
                   purchase the Option Shares pursuant to Section 9(a)) by
                   notice to such effect during the 120 day period following the
                   Termination Date.

                   (e) The Fair Market Value of Option Shares to be purchased by
                   the Company or HBRS, as the case may be, 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 (without
                   reduction for minority interest or lack of liquidity of the
                   Option Shares or similar discount) and determined in a manner
                   consistent with the manner in which the purchase price paid
                   by the Investors pursuant to the Recapitalization Agreement
                   was determined. If such determination of the Fair Market
                   Value is challenged by the Optionee, a mutually acceptable
                   investment banker or appraiser shall establish the Fair
                   Market Value as of the date of valuation referenced by the
                   Board of Directors or a subsequent determination. The
                   investment banker's or appraiser's determination shall be
                   conclusive and binding on the Company and the Optionee. Upon
                   request by the Optionee the Company shall make available to
                   the Optionee a description of the methodology employed by the
                   investment banker or appraiser in making the determination of
                   Fair Market Value, which description shall include, to the
                   extent relevant, a listing of companies used in comparing
                   market and transaction valuations, the range of multiples
                   applied, and the terminal valuation, discount factor and
                   multiples used in any discounted cash flow analysis. The
                   Company shall bear all costs incurred in connection with the
                   services of such investment banker or appraiser unless (i)
                   the Fair Market Value established by such investment banker
                   or appraiser is less than or equal to 120% but more than 110%
                   of the determination challenged by the Optionee, in which
                   case the Optionee shall promptly pay or reimburse the Company
                   fifty percent (50%) for such costs, or (ii) the Fair Market
                   Value established by such investment banker or appraiser is
                   equal to or less than 110% of the determination challenged by
                   the Optionee, in which case the Optionee shall promptly pay
                   or reimburse the Company for one hundred percent (100%) of
                   such costs. If the Optionee and the Company cannot agree upon
                   an investment banker or appraiser, they shall each choose an
                   investment banker or appraiser and the two shall choose a
                   third investment banker or appraiser who shall establish the
                   Fair Market Value.

                   (f) 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 HBRS to:

                           HBRS Limited
                           P.O. Box 1111, West Wind Building
                           Grand Cayman, Cayman Islands B.W.I.

                  With a copy to:

                           Investcorp Management Services Limited
                           c/o Investcorp Bank E.C.
                           P.O. Box 5430
                           Manama, Bahrain
                           Attention:  H. Richard Lukens, III

                  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:

Accepted and agreed to for purposes of Section 9(b) only:

HBRS LIMITED



By:  ___________________________
Name:
Title:



</TEXT>
</DOCUMENT>
