Document:

Exhibit 10.103

                                                               [Sedgwick Plaza]

                           LOAN MODIFICATION AGREEMENT

         THIS LOAN MODIFICATION  AGREEMENT (this  "Agreement") is made effective
as of this 15th day of October,  2002,  by and among  CAPITAL  SENIOR  LIVING A,
INC.,  a  Delaware  corporation  (the  "Borrower"),   GMAC  COMMERCIAL  MORTGAGE
CORPORATION,  a California corporation (the "Lender"), and CAPITAL SENIOR LIVING
CORPORATION, a Delaware corporation (the "Guarantor").

                                R E C I T A L S:

         A. On June 13, 2002, Lender made a refinancing loan to Borrower, in the
original principal amount of $5,560,000.00  (the "Loan"),  pursuant to the terms
and  provisions of that certain Loan  Agreement  dated as of August 15, 2000, by
and between  Borrower and Lender  (together with all amendments and  supplements
thereto, the "Loan Agreement"), and secured in part by that certain Mortgage and
Security Agreement executed by Borrower and Lender,  dated as of August 15, 2000
(together with all amendments and supplements thereto, the "Mortgage"), creating
a first lien on the real  property  described  in Exhibit A attached  hereto and
made a part hereof.

         B. The Loan is  evidenced by an Amended and  Restated  Promissory  Note
dated  as  of  June  13,  2002,  in  the  original   stated   principal   amount
$5,560,000.00,  executed  by Borrower  and  payable to the order of Lender,  its
successors  and assigns  (the  "Note").  The Loan is  guaranteed  by  Guarantor,
pursuant to that certain Exceptions to Non-Recourse  Guaranty Agreement dated as
of August 15, 2000 given for the benefit of Lender,  its  successors and assigns
(the "Guaranty").  The Note, the Loan Agreement,  the Mortgage, the Guaranty and
any and all other documents,  certificates,  instruments and agreements executed
in connection with the Loan or to otherwise evidence or secure the Loan prior to
the date hereof are referred to herein as the "Original Loan Documents."

         C. Borrower has requested that Lender agree, and Lender has agreed,  to
modify certain covenants in the Original Loan Documents,  and to amend the Note,
the Loan Agreement,  the Mortgage and each of the other Original Loan Documents,
as Lender deems  necessary  (the Original Loan  Documents,  as so amended and/or
modified,  together  with any other  documents  executed  by  Borrower,  Lender,
Guarantor  or any other person in  connection  with the Loan,  are  collectively
referred to herein as the "Loan Documents").

                                   AGREEMENT:

         NOW, THEREFORE,  for and in consideration of the foregoing recitals, to
induce Lender to modify  certain of the covenants in the Original Loan Documents
and for other good and valuable  consideration,  the receipt and  sufficiency of
which are hereby acknowledged, Borrower, Lender, and Guarantor agree as follows:

<PAGE>

         1. Recitals.  The foregoing  Recitals are hereby ratified and confirmed
and made a part hereof.

         2. Definitions.  All capitalized terms used in this Agreement,  and not
otherwise  defined  herein,  shall have the meanings  given to such terms in the
Loan Agreement.

         3. Amendments to Definitions.  The Loan Agreement and each of the other
Original Documents are amended as follows:

         A. The term "Cross-Collateralization Agreement" as it is defined in and
appears from time to time in the Original Loan  Documents,  is hereby amended to
mean  that   certain   Cross-Collateralization,   Cross-Default   and   Mortgage
Modification Agreement between Borrower and Lender dated as of October 15, 2002.

         B. The term "Guaranty Agreement",  as it is defined in and appears from
time to time in the  Original  Loan  Documents,  is hereby  amended to mean that
certain Payment and Performance Guaranty Agreement dated as of October 15, 2002,
by and between Lender and Guarantor.

         C. The term "Loan Agreement", as it is defined in and appears from time
to time in the Original Loan  Documents,  is hereby amended to mean that certain
Loan Agreement dated as of August 15, 2000, by and between  Borrower and Lender,
as amended by that certain Loan Document  Modification  Agreement dated June 13,
2002 by and between Borrower and Lender and further amended by that certain Loan
Modification  Agreement  dated as of October 15,  2002,  by and among  Borrower,
Lender and Guarantor.

         D. The term  "EBITDA  Covenant"  has the meaning  given to such term in
Section 4(g) of the Guaranty Agreement.

         E. The term "Minimum Liquidity  Covenant" has the meaning given to such
term in Section 4(f) of the Guaranty.

         F. The term  "Mortgage",  as it is defined in and appears  from time to
time in the  Original  Loan  Documents,  is hereby  amended to mean that certain
Mortgage  and  Security  Agreement  dated as of August  15,  2000,  executed  by
Borrower and Lender and covering the  Mortgaged  Property and securing the Loan,
as amended by the Cross-Collateralization Agreement.

         G. The term  "Related  Loans" means the Loan and the  additional  loans
made by Lender to Borrower and its affiliate Capital Senior Living ILM-B,  Inc.,
a Delaware corporation,  listed and described on Exhibit "B" attached hereto and
made a part hereof.

         4. Loan  Agreement.  In  addition  to the  revisions  made  pursuant to
Section 3 of this Agreement, the Loan Agreement is hereby amended as follows:

         A.  Interest  Rate  Protection.  Section 2.3 of the Loan  Agreement  is
amended and restated in its entirety as follows:

                                       2
<PAGE>

                                    On or before the Closing Date,  the Borrower
                           shall  enter in an  interest  rate cap  agreement  (a
                           "Cap")  with  Lender  or  a  Cap   provider  (a  "Cap
                           Provider")  reasonably approved by Lender, to protect
                           against  fluctuations in interest rates,  pursuant to
                           which  Lender or such Cap  Provider,  as the case may
                           be,  agrees to make  certain  payments  to or for the
                           benefit  of  Borrower  if the Note Rate  exceeds  the
                           Strike Rate. The Cap shall not terminate earlier than
                           the date which is the third (3rd)  anniversary of the
                           Closing Date. The Cap shall be secured and documented
                           on terms and conditions  approved by Lender and shall
                           be with a  counter-party  (who is  obligated  to make
                           payments  in  accordance   with  the  Cap  Agreement)
                           acceptable to Lender.  The Cap shall be evidenced and
                           governed by documents in form and content  reasonably
                           acceptable to Lender.

         B.  Debt  Service  Coverage  Requirements.  Section  4.14  of the  Loan
Agreement is hereby deleted in its entirety.

         C.  Occupancy.  Section 4.15 of the Loan Agreement is hereby deleted in
its entirety.

         D. Dividends,  Distributions and Redemptions.  Section 5.13 of the Loan
Agreement is hereby  deleted in its entirety  and the  following is  substituted
therefor:

                                    If the Debt Service  Coverage  Ratio,  after
                           deduction of the greater of Actual Management Fees or
                           Assumed  Management  Fees, at the end of any calendar
                           quarter,  is less than 1.10 to 1.0,  until such ratio
                           is again  1.10 to 1.0,  or an Event  of  Default  has
                           occurred,   declare  or  pay  any  dividends  to  its
                           shareholders,  members or partners, as applicable, or
                           purchase,  redeem,  retire,  or otherwise acquire for
                           value,  any  ownership  interests  in Borrower now or
                           hereafter  outstanding,  return  any  capital  to its
                           shareholders,  members or partners, as applicable, or
                           make any distribution of assets to its  shareholders,
                           members, or partners, as applicable.

         E.  Events of  Default.  Section  7.1 of the Loan  Agreement  is hereby
amended to add the following subsections immediately after Section 7.1(x):

                           (y) The  failure  of  Guarantor  to  comply  with the
                  Minimum Liquidity Covenant or the EBITDA Covenant as set forth
                  in the Guaranty; or

                           (z) The failure of  Guarantor  to comply with Section
                  4(h) of the Guaranty.

         F.  Non-Recourse  to  Borrower.  Section 8.1 of the Loan  Agreement  is
hereby deleted in its entirety.

         G. Section 8.8 Notices,  etc. of the Loan  Agreement is hereby  amended
and restated in its entirety as follows:

                                       3
<PAGE>

                  "8.8 Notices, etc. Any notice or other communication  required
                  or permitted  to be given by this  Agreement or the other Loan
                  Documents or by  applicable  law shall be in writing and shall
                  be deemed received (a) on the date delivered or first refused,
                  if sent by hand  delivery (to the person or  department if one
                  is specified below) with receipt acknowledged by the recipient
                  thereof,  (b)  five  (5)  Business  Days  following  the  date
                  deposited  in the U.S.  mail,  certified or  registered,  with
                  return  receipt  requested,   or  (c)  one  (1)  Business  Day
                  following  the date  deposited  with Federal  Express or other
                  national  overnight  carrier,  and in each case  addressed  as
                  follows:

                  If to Borrower:

                           Capital Senior Living A, Inc.
                           14160 Dallas Parkway, Suite 300
                           Dallas, Texas  75240
                           Attention:  David R. Brickman, Esq.

                           with a copy to:

                           Winston W. Walp II, Esquire
                           Jenkens & Gilchrist, P.C.
                           1445 Ross Avenue, Suite 3200
                           Dallas, TX  75202

                  If to Lender:

                           GMAC Commercial Mortgage Corporation
                           200 Witmer Road
                           Horsham, PA  19044-0809
                           Attn:  Servicing Account Manager

                  with a copy to:

                           Kelly M. Wrenn, Esquire
                           Ballard Spahr Andrews & Ingersoll, LLP
                           601 13th Street, NW Suite, 1000 South
                           Washington, DC  20005-3807

                  Either party may change its address to another  single address
                  by  notice  given as herein  provided,  except  any  change of
                  address  notice  must be  actually  received  in  order  to be
                  effective."

         H. Exhibit "B". Exhibit "B" to the Loan Agreement is hereby amended and
restated in its entirety as more fully  described  on Exhibit B attached  hereto
and incorporated herein.

                                       4
<PAGE>

         5. Modification  Fee. In connection with this Agreement,  Borrower will
pay to Lender a  modification  fee in an amount equal to  three-quarters  of one
percent (3/4%) of the unpaid principal  balance of the Loan calculated as of the
date of this Amendment  ("Modification  Fee."). Lender acknowledges receipt of a
portion of the  Modification  Fee in the amount of $6,950.00 and Borrower agrees
to pay the remaining  balance of the  Modification Fee ($33,250.04) to Lender on
or prior to December 31, 2002.

         6. Miscellaneous

         A. The foregoing amendments shall be effective as of the date hereof.

         B. The  amendments  to the Loan  Agreement  set  forth  herein  are not
intended to, and shall not constitute, a novation.

         C. Except as expressly modified herein, the terms and provisions of the
Original Loan Documents (excluding the Note, Loan Agreement,  the Mortgage,  and
the Guaranty) shall remain unchanged, unmodified and in full force and effect as
of the date hereof.

         D.  The  Loan   Documents  may  not  be  further   modified,   amended,
supplemented or substituted except by an instrument in writing signed by each of
the parties thereto.

         E. Borrower  reaffirms,  incorporates  by reference  herein and makes a
part hereof,  each and every  representation  and  warranty  made by Borrower in
Article III of the Loan Agreement as if such representations and warranties were
made initially on the date hereof.

         F.  Borrower  hereby  represents as of the date hereof that no Event of
Default or event which, with the giving of notice or the lapse of time, or both,
would constitute an Event of Default, has occurred and is continuing.

         G. There has been no occurrence of any material  adverse  change in the
financial condition of Borrower or in the financial condition of Guarantor since
June 30, 2002, and no other condition  exists which, in Lender's  determination,
constitutes  a material  impairment  of such  Borrower's  ability to operate the
Facility  or of  Borrower's  ability to perform its  obligations  under the Loan
Documents  or of  Guarantor's  ability  to  perform  its  obligations  under the
Guaranty Agreement.

         H.  The  parties  hereto  agree  that  the  validity,   interpretation,
enforcement  and effect of this Agreement shall be governed by, and construed in
accordance with, the laws of the State of Texas.

         I. This Agreement may be executed in any number of  counterparts,  each
of  which,  when  executed  and  delivered,  shall  be  an  original,  but  such
counterparts shall together constitute one and the same instrument.

         J. This Agreement  shall bind, and the rights granted by this Agreement
shall  inure to the  benefit  of,  the  respective  successors  and  assigns  of
Borrower, Lender, and Guarantor.

                                       5
<PAGE>

         IN WITNESS WHEREOF,  Borrower,  Lender,  and Guarantor have caused this
Agreement to be executed by their respective duly authorized  representatives as
of the date first set forth above.

WITNESS:                                      BORROWER:

                                              Capital Senior Living A, Inc.,
                                              a Delaware corporation

_____________________________________         By:_________________________(Seal)
_____________________________________            Paul T. Lee, Vice President,
Print Name                                       Finance

                                       6
<PAGE>

WITNESS:                                       LENDER:

                                               GMAC Commercial Mortgage
                                               Corporation, a California
                                               corporation

_____________________________________          By:________________________(Seal)
_____________________________________             Lisa M. Lautner
Print Name                                        Senior Vice President

                                       7

<PAGE>

WITNESS:                                        GUARANTOR:

                                                Capital Senior Living
                                                Corporation, a Delaware
                                                corporation

_____________________________________           By:______________________(Seal)
_____________________________________              James A. Stroud
Print Name                                         Chairman of the Company

                                       8
<PAGE>

                                    EXHIBIT A

                         [LEGAL DESCRIPTION OF PROPERTY]

                                      A-1
<PAGE>

                                    EXHIBIT B

                          DESCRIPTION OF RELATED LOANS
<TABLE>
<CAPTION>

----------------------------------- ----------------------------------- ------------------------------------ ---------------------
    Facility Name and Location                   Address                     Number and Type of Units            Loan Amount
----------------------------------- ----------------------------------- ------------------------------------ ---------------------
<S> <C>                             <C>                                 <C>                                  <C>

1.  Town Centre                     7250 Arthur Boulevard               33 assisted living units             $13,307,270.00
    Merrillville, Lake              Merrillville, Indiana 46410         153 independent living units
    County, Indiana                                                     64 skilled nursing beds
----------------------------------- ----------------------------------- ------------------------------------ ---------------------

2.  Canton Regency                  4515 22nd Street                    34 assisted living units             $14,680,000.00
    Canton, Stark                   Canton, Ohio  44708                 146 independent living units
    County, Ohio                                                        50 skill nursing beds
----------------------------------- ----------------------------------- ------------------------------------ ---------------------

</TABLE>

                                      B-1

<PAGE>
                                                                [Sedgwick Plaza]

             FIRST AMENDMENT TO AMENDED AND RESTATED PROMISSORY NOTE

         THIS FIRST  AMENDMENT  TO AMENDED AND  RESTATED  PROMISSORY  NOTE (this
"Amendment")  is made  effective as of October 15, 2002, by and between  CAPITAL
SENIOR LIVING A, INC., a Delaware corporation ("Borrower"), having an address at
14160  Dallas  Parkway,  Suite  300,  Dallas,  Texas  75240 and GMAC  COMMERCIAL
MORTGAGE CORPORATION, a California corporation ("Lender"),  having an address at
200 Witmer Road, Horsham, Pennsylvania 19044.

                                    RECITALS:

         A. On July 13, 2002, Lender made a refinancing loan to Borrower, in the
original stated  principal  amount of  $5,560,000.00  (the "Loan").  The Loan is
evidenced by an Amended and Restated  Promissory Note dated as of June 13, 2002,
in the original stated principal amount of  $5,560,000.00,  given by Borrower in
favor of Lender (as further  amended,  extended,  supplemented or modified,  the
"Note").  The Loan is further  evidenced by a Loan Agreement  dated as of August
15,  2000,  by  and  between  Borrower  and  Lender  (as  modified,   the  "Loan
Agreement").

         B. The Note is secured by that certain Mortgage and Security  Agreement
dated as of August 15, 2000 between  Borrower and Lender,  and recorded with the
Register  of Deeds  Office of Sedgwick  County,  Kansas  (the  "Mortgage").  The
Mortgage encumbers the property located in Sedgwick County, Kansas and described
in Exhibit "A"  attached  hereto and made a part hereof by this  reference  (the
"Property").

         C.  Repayment  of the  Loan is  guaranteed  by  Capital  Senior  Living
Corporation,  a Delaware corporation ("Guarantor") pursuant to, and as set forth
in, that certain  Payment and  Performance  Guaranty  Agreement dated as of even
date herewith given by Guarantor for the benefit of Lender ("Guaranty").

         D. Borrower has requested that Lender modify  certain  covenants in the
Loan Agreement.

         E. Lender has agreed to modify the Loan Agreement, subject to the terms
and  conditions  of (i) this  Amendment,  (ii) that  certain  Loan  Modification
Agreement by and between  Lender and Borrower of even date herewith  ("Amendment
to   Loan   Agreement"),    (iii)   the   Guaranty   and   (iv)   that   certain
Cross-Collateralization,   Cross-Default  and  Mortgage  Modification  Agreement
("Mortgage Modification Agreement").  Borrower and Lender are entering into this
Amendment to amend the Note to reflect  certain terms and conditions of Lender's
agreement to modify the Loan Agreement.

<PAGE>

                                   AGREEMENT:

         NOW, THEREFORE,  for and in consideration of the foregoing, in reliance
thereon  and for other  good and  valuable  consideration,  Borrower  and Lender
hereby agree, and hereby agree to amend the Note, as follows:

         1. The foregoing  Recitals are hereby ratified and confirmed and made a
part hereof.

         2. All  capitalized  terms used herein shall have the meanings given to
such  terms in the Note,  unless  they are  otherwise  specifically  amended  or
defined herein.

         3. The outstanding  principal balance of the Note as of the date hereof
is  $5,360,005.90  which together with interest  accruing thereon from and after
the date  hereof and all  interest  accrued on the Note prior to the date hereof
and  remaining   unpaid  is   hereinafter   collectively   referred  to  as  the
"Indebtedness."

         4.  Borrower  represents,  warrants  and  agrees  that,  as of the date
hereof, it has no defenses, offsets or counterclaims to the Indebtedness.

         5. Section 1.1 Initial Rate and Payment Dates is hereby  deleted in its
entirety and the following shall be inserted in lieu thereof:

                  Interest  shall  accrue  on  the  outstanding  balance  of the
                  principal amount outstanding hereunder from and after June 13,
                  2002 at the rate of  4.2438%  per annum  until the first  Rate
                  Adjustment  Date (as defined  below).  On each successive Rate
                  Adjustment  Date,  the  rate of  interest  at  which  interest
                  accrues shall be adjusted to the then applicable Note Rate (as
                  defined in Section 1.4). Interest shall be paid in arrears and
                  shall be  computed  on the basis of a 360-day  year and actual
                  number of days elapsed for any whole or partial month in which
                  interest on the Loan is being  calculated and shall be charged
                  on the principal balance  outstanding from time to time. In no
                  event shall Holder compute the interest in a manner that would
                  cause Holder to contract for, charge or receive  interest that
                  would  exceed the  Maximum  Lawful Rate (as defined in Section
                  1.9) or the Maximum Lawful Amount (as defined in Section 1.9).

         6.  Section  1.4 Note Rate is hereby  deleted in its  entirety  and the
following shall be inserted in lieu thereof:

                  The "Note Rate" shall mean (i) the average of London Interbank
                  Offered  Rates  ("LIBOR")  for a term of one month  determined
                  solely by Holder as of each Rate  Adjustment  Date (but in the
                  event one month  LIBOR is less than three  percent  (3.0%) per
                  annum  then,  for  purposes of  calculating  the Note Rate one
                  month LIBOR shall be deemed  three  percent  (3.0%)) plus (ii)
                  two  hundred  forty (240)  basis  points per annum.  One month

                                       2
<PAGE>

                  LIBOR shall be  determined in the  following  manner:  on each
                  Rate Adjustment  Date,  Holder will obtain the one month LIBOR
                  (in  U.S.  Dollar  deposits)  from the  appropriate  Bloomberg
                  display page  available as of the close of business  announced
                  on the last  business day of the month  immediately  preceding
                  the  Rate  Adjustment  Date;  in the  event  Bloomberg  ceases
                  publication  or ceases to publish the one month LIBOR,  Holder
                  shall select a  comparable  publication  to determine  the one
                  month LIBOR and provide  prompt  notice  thereof to  Borrower;
                  LIBOR may or may not be the lowest  rate based upon the market
                  for U.S.  Dollar deposits in the London  Interbank  Eurodollar
                  Market at which  Holder  prices loans on the date on which the
                  Note Rate is determined by Holder as set forth above.

         7. Section 2 Principal and Interest  Payments is hereby  deleted in its
entirety and the following should be inserted in lieu thereof:

                  Commencing on October 1, 2000, and continuing on the first day
                  of each calendar  month  thereafter  through and including the
                  Maturity Date (defined  below),  monthly payments of principal
                  and interest  shall adjust monthly and be made in such amount,
                  taking  into  account  the then  effective  Note  Rate,  as is
                  sufficient to fully amortize the unpaid  principal  balance of
                  the Note on the date  that is  twenty-five  (25)  years  after
                  September 1, 2000.

         8. The last  sentence of Section 4 Maturity  Date is hereby  deleted in
its entirety and the following sentence shall be inserted in lieu thereof:

                  Notwithstanding anything contained herein, if repayment of the
                  Loan  in  connection   with  the  Maturity  Date  (and  not  a
                  prepayment under Section 5 hereof) is funded from the proceeds
                  of any refinancing of the Loan, Borrower shall pay to Lender a
                  repayment  premium  equal to one and  one-half  of one percent
                  (1.5%) of the  original  principal  balance of the Note unless
                  (a)  Lender  elects  not to  refinance  the  Loan or (b)  such
                  repayment   of  the  Loan  is  funded  from  the  proceeds  of
                  refinancing  of the Loan  pursuant to which Lender  receives a
                  contractually agreed upon sum for the arrangement thereof.

         9. The last  sentence  of  Section  5.3  Prepayment  in Full is  hereby
deleted in its entirety  and the  following  sentence  shall be inserted in lieu
thereof:

                  Prepayment  of the Loan in full shall be subject to payment by
                  Borrower to Lender of a  prepayment  premium  equal to one and
                  one-half  of one  percent  (1.5%)  of the  original  principal
                  balance of this Note.  Such premium  shall be waived by Lender
                  if (a) Lender  elects not to refinance  the Loan,  or (b) such

                                       3
<PAGE>

                  prepayment  of  the  Loan  is  funded  from  the  proceeds  of
                  refinancing  of the Loan  pursuant to which Lender  receives a
                  contractually agreed upon sum for the arrangement thereof.

         10. Section 12.19  Nonrecourse is hereby deleted in its entirety and is
of no further force and effect.

         11. As a condition to Lender's consent to certain  modifications of the
Loan Agreement and other matters set forth in this Amendment:

         (a) Borrower will execute and deliver this Amendment,  the Amendment to
Loan  Agreement,  the Guaranty and the Mortgage  Modification  Agreement and any
other document required by Lender relating thereto;

         (b) Borrower will pay all of the out-of-pocket fees, costs and expenses
incurred by Lender in connection herewith  (including,  without limitation,  the
commercially reasonable fees, costs and expenses of the attorneys for Lender);

         (c) In connection with this Amendment, the Amendment to Loan Agreement,
the Guaranty  and the  Mortgage  Modification  Agreement,  Borrower  will pay to
Lender, as provided in the Amendment to Loan Agreement, a modification fee in an
amount  equal to three  quarters of one percent  (3/4%) of the unpaid  principal
balance of the Indebtedness (calculated as of the date of this Amendment); and

         (d)  Borrower  will  furnish  Lender  such   authorization   and  other
instruments  and documents  relating to this  Amendment as Lender may reasonably
require.

         12.  The  execution  and  delivery  of  this   Amendment  will  neither
extinguish  the  Indebtedness  or the Note,  nor impair the lien of the Mortgage
securing the  obligations  of Borrower  pursuant to the Note, as amended by this
Amendment, and no part of the same will be disturbed,  discharged,  cancelled or
impaired by the execution of this Amendment or the execution and delivery of any
further instruments  evidencing or securing the Indebtedness.  This Amendment is
not intended to, and shall not constitute, a novation of the Note.

         13. Except as expressly provided herein, all other terms and provisions
of the Note  remain  unchanged,  unmodified  and in full force and effect on the
date hereof.

         14. The Note may not be further  modified or supplemented  except by an
instrument in writing signed by the parties hereto.

         15.  The  parties  hereto  agree  that  the  validity,  interpretation,
enforcement  and effect of this Amendment shall be governed by, and construed in
accordance with, the laws of the State of Texas.

         16. BORROWER AND LENDER HEREBY  IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION,  PROCEEDING  OR  COUNTERCLAIM  ARISING OUT OF OR RELATING TO
THIS AMENDMENT OR THE OBLIGATIONS SECURED HEREBY.

                                       4
<PAGE>

         17. This Amendment may be executed in any number of counterparts,  each
of  which,  when  executed  and  delivered,  shall  be  an  original,  but  such
counterparts shall together constitute one and the same instrument.

         18. This Amendment shall bind Borrower,  Lender,  and their  respective
successors and assigns,  and the rights granted by this Amendment shall inure to
the benefit of Borrower and Lender and their respective successors and assigns.

         IN WITNESS  WHEREOF,  Borrower and Lender have caused this Amendment to
be executed by their respective duly authorized  representatives  as of the date
first written above.

WITNESS:                                      BORROWER:
                                              Capital Senior Living A, Inc.,
                                              a Delaware corporation

________________________________              By:_________________________(Seal)
                                                 Paul T. Lee, Vice President,
                                                 Finance

                                       5
<PAGE>

WITNESS:                                   LENDER:

                                           GMAC Commercial Mortgage Corporation,
                                           a California corporation

___________________________                By:____________________________(Seal)
                                               Lisa M. Lautner
                                               Senior Vice President

                                       6
<PAGE>

                                   EXHIBIT "A"

                              PROPERTY DESCRIPTION

                                      A-1

<PAGE>
                                                                (Sedgwick Plaza)

                   PAYMENT AND PERFORMANCE GUARANTY AGREEMENT

         THIS PAYMENT AND PERFORMANCE  GUARANTY  AGREEMENT (this  "Guaranty") is
made  effective as of the 15th day of October  2002,  by CAPITAL  SENIOR  LIVING
CORPORATION, a Delaware corporation  ("Guarantor"),  between and for the benefit
of GMAC COMMERCIAL MORTGAGE CORPORATION, a California corporation (including its
successors, transferees and assigns, "Lender").

                                    RECITALS:

         A. Capital Senior Living A, Inc., a Delaware corporation  ("Borrower"),
has borrowed the sum of FIVE  MILLION  FIVE  HUNDRED  SIXTY  THOUSAND and 00/100
Dollars  ($5,560,000.00)  (the  "Loan") from  Lender,  evidenced  by  Borrower's
Amended and Restated Promissory Note dated as of June 13, 2002 (as amended,  the
"Note") and that certain Loan Agreement by and between Lender and Borrower dated
August 15, 2000 (as amended, the "Loan Agreement"),  and secured by, among other
things, a Mortgage and Security Agreement dated August 15, 2000 (as amended, the
"Mortgage")  granting a first lien on a senior living facility known as Sedgwick
Plaza,  which is located in the City of Wichita,  County of  Sedgwick,  State of
Kansas (the "Facility").

         B. The Note, the Loan Agreement,  the Mortgage and the other documents,
certificates, instruments and agreements executed by Borrower in connection with
the  Loan or to  otherwise  evidence  or  secure  the  Loan,  and all  renewals,
supplements,  or amendments thereto or a part thereof, are collectively referred
to as the "Loan Documents".

         C. As a  condition  of  modifying  the Loan,  Guarantor  has  agreed to
guaranty,  absolutely and  unconditionally,  payment of the Guaranty Obligations
(as  defined  below),  subject  to the  terms and  conditions  set forth in this
Guaranty.

                                   AGREEMENT:

         NOW THEREFORE,  in  consideration  of the above and as an inducement to
Lender to modify the Loan evidenced by the Note and the Loan  Agreement,  and as
security for the payment of the Loan and all interest  from time to time accrued
and unpaid thereon, and all expenses,  fees, charges and other amounts from time
to time due and owing to Lender  under the Note,  and the other Loan  Documents,
and for the performance of all covenants,  agreements and other obligations from
time to time  owing to,  or for the  benefit  of,  Lender  pursuant  to the Loan
Documents  (collectively  referred  to  herein as the  "Guaranty  Obligations"),
Guarantor,  intending to be legally bound, hereby covenants,  agrees, represents
and warrants as follows:

         1. Guaranty. Guarantor hereby absolutely and unconditionally guarantees
to the Lender the full,  regular and  punctual  payment and  performance  of the
Guaranty  Obligations  within fourteen (14) days of the Lender's  written demand
therefor.   Without   limiting  the  generality  of  the  foregoing,   "Guaranty

<PAGE>

Obligations"  is used  herein in its most  comprehensive  sense to  include  all
debts, obligations and indebtedness described in the Loan Documents, whether now
or hereafter made,  incurred or created,  voluntary or  involuntary,  due (after
expiration of any  applicable  notice and cure period),  absolute or contingent,
liquidated  or  unliquidated,  determined  or  undetermined,  and  regardless of
whether  there is any  recourse  with  respect to any  portion of such  Guaranty
Obligations  as against  Borrower  or any  partner  of  Borrower.  In  addition,
Guarantor  guarantees  the full payment of, and agrees to reimburse  Lender for,
all costs of collection incurred by Lender in enforcing the Guaranty Obligations
and pursuing any remedies set forth in the Loan  Documents  and/or the Guaranty,
including,  without  limitation,  court  costs and  reasonable  attorneys'  fees
(including, but not limited to, fees in any bankruptcy or appellate proceeding).

         2. Payments.  All payments to be made by Guarantor to Lender  hereunder
shall be made in lawful money of the United  States of America,  in  immediately
available  funds,  at 200 Witmer  Road,  P.O.  Box 1015,  Horsham,  Pennsylvania
19044-8015, or such other location designated by Lender in writing, and shall be
accompanied by a notice from Guarantor stating that such payments are made under
this Guaranty.  All payments  available to Lender for  application in payment or
reduction  of the Guaranty  Obligations  may be applied by Lender in such manner
and in such amount,  and at such time or times and in such order and priority as
Lender  may see fit and to the  payment  or  reduction  of such  portion  of the
Guaranty Obligations as Lender may elect.

         3.  Subsequent  Acts by Lender.  Lender may, in its sole discretion and
without notice to Guarantor,  take any action which might  otherwise be deemed a
legal or equitable  release or discharge of  Guarantor's  obligations  hereunder
without either  impairing or affecting the liability of Guarantor for payment of
the Guaranty  Obligations,  which actions might include,  by way of illustration
and not limitation:

         (a) at any  time  or  from  time  to  time,  the  time  for  Borrower's
performance  of or compliance  with any  provision of the Loan  Documents may be
extended or such performance or compliance may be waived by Lender;

         (b) the acceptance of partial payment of the Guaranty Obligations;

         (c) any of the acts permitted in the Loan Documents may be performed;

         (d) the Loan  Documents may from time to time be amended and/or renewed
by  Borrower  and Lender for the  purpose  of adding any  provisions  thereto or
changing in any manner the rights of Lender or of Borrower thereunder;

         (e) the maturity date of the Note may be changed or renewed in whole or
in part;

         (f) the maturity of the Note may be accelerated in accordance  with the
terms of the Loan Documents or any future agreement  between Borrower and Lender
or the holder of such Note;

                                       2
<PAGE>

         (g)  any  collateral  security  for  all or any  part  of the  Guaranty
Obligations may be exchanged, released, compromised,  consolidated,  surrendered
or otherwise dealt with, and Lender's  interest  therein may be released and may
or may not be perfected;

         (h) the settlement,  release,  compounding,  compromise,  cancellation,
rearrangement or consolidation of any of the Guaranty Obligations;

         (i) the  collection  of or other  liquidation  of any claims Lender may
have in respect to the Guaranty Obligations;

         (j) the granting of indulgences,  forbearance,  compromises, extensions
or adjustments in respect to any covenant or agreement under the Loan Documents;
and/or

         (k) the release from  liability of any Guarantor  and/or any additional
parties who may  guarantee  payment of the Guaranty  Obligations  or any portion
thereof.

         4. Certain Rights, Subordination, Etc.

         (a) Lender may pursue its rights and remedies  under this  Guaranty and
shall be entitled to payment hereunder notwithstanding any other guaranty of all
or any part of the Guaranty Obligations, and notwithstanding any action taken by
Lender to enforce any of its rights or remedies  under such other  guaranty,  or
any payment received  thereunder (but in no event shall Lender collect more than
the aggregate amount of the Guaranty Obligations).

         (b) Any  obligation  or  debt  of  Borrower  now or  hereafter  held by
Guarantor is hereby subordinated to the Guaranty Obligations and Guarantor shall
not enforce or collect any such indebtedness from Borrower.  Nevertheless,  upon
request  by  Lender,   Guarantor   shall  collect,   enforce  and  receive  such
indebtedness of Borrower to Guarantor. Any sums collected at Lender's request or
collected in  contravention of the prohibition set forth herein shall be held by
Guarantor  as trustee  for Lender and shall be paid over to Lender on account of
the  Guaranty  Obligations;  provided,  however,  that such  payments  shall not
impair,  reduce or affect in any manner the  liability  of  Guarantor  under the
other provisions of this Guaranty.

         (c) Guarantor agrees that if any event of default exists under the Loan
Documents  ("Event of Default") and is continuing,  (i) such Guarantor shall not
accept  payment from any other  guarantor of any Guaranty  Obligations by way of
contribution  or similar  rights on account of any  payment  made  hereunder  by
Guarantor to Lender, all of which rights are hereby  subordinated to Guarantor's
obligations  hereunder  to Lender,  (ii)  Guarantor  will not take any action to
exercise  or enforce  any rights to such  contribution,  and (iii) if  Guarantor
should  receive  payment,  satisfaction  or  security  for any  indebtedness  of
Borrower to Lender,  the same shall be delivered to Lender in the form received,
endorsed or signed as may be  appropriate  for  application  on account of or as
security for the  indebtedness  of Borrower to Lender and,  until so  delivered,
shall be held in trust for Lender as security for the  indebtedness  of Borrower
to Lender under the Loan Documents.

         (d) If an Event of Default by Borrower has occurred with respect to the
Guaranty  Obligations,  (it being  understood  that the  defined  term  Event of
Default includes any applicable notice and cure provisions), Guarantor agrees to

                                       3
<PAGE>

pay or perform on demand  (either  oral or written)  the  Guaranty  Obligations.
Lender shall not be under a duty to protect,  secure or insure or be required to
liquidate any security or lien provided by the Mortgage or other such collateral
held by Lender prior to making such demand.

         (e)  Notwithstanding  any payment or payments  made by Guarantor  under
this Guaranty,  Guarantor expressly,  irrevocably and unconditionally waives and
releases any and all "claims" (as that term is defined in the Bankruptcy  Reform
Act of 1978, as amended,  11 U.S.C.  Sections 101 et seq.,  and the  regulations
adopted and promulgated pursuant thereto (collectively,  the "Bankruptcy Code"))
it may now or hereafter have against Borrower, and shall not be entitled to, and
hereby  expressly  waives,  any and all  rights of  subrogation,  reimbursement,
indemnity,  exoneration and contribution  against Borrower,  which Guarantor may
now or hereafter have against  Borrower without regard to whether any such right
or claim arises expressly;  provided,  that such waiver and release shall not be
effective  as to any such claim or  entitlement  or such  subrogation  and other
rights  that  accrue  after  the  indefeasible  payment,  performance  or  other
satisfaction in full of the Guaranty Obligations.

         (f) Guarantor  covenants and agrees that until the Loan is paid in full
and/or the Guaranty  Obligations have been satisfied,  Guarantor's assets on the
last  day of  each  fiscal  quarter  of  Guarantor  will  include  Cash  or Cash
Equivalents in an amount not less than Four Million  Dollars  ($4,000,000)  (the
"Minimum Liquidity  Covenant").  Compliance with such Minimum Liquidity Covenant
will be reviewed by Lender,  on a quarterly  basis,  based on Lender's review of
the financial  information  of Guarantor  provided to Lender in accordance  with
Section 6 below. For purposes of this subsection (f) "Cash or Cash Equivalents,"
means

                  (i)  unencumbered  lawful  currency  of the  United  States of
         America;

                  (ii) unencumbered  direct  obligations of the United States of
         America or any agency or instrumentality  thereof or obligations backed
         by the full faith and credit of the United  States of America  maturing
         in three (3) months or less from the date of acquisition; and

                  (iii)   unencumbered   (a)  money  market  funds,  (b)  demand
         deposits,  or (c) time  deposits or  certificates  of deposit  maturing
         within three (3) months, and such funds and deposits may be situated in
         United Texas Bank and/or Bank One N.A.

         (g) Guarantor  covenants and agrees that until the Loan is paid in full
and/or the Guaranty  Obligations have been satisfied,  Guarantor's cash flow, on
the last day of each fiscal quarter of Guarantor  based on the preceding  twelve
(12) months,  as measured by earnings before interest,  taxes,  depreciation and
amortization ("EBITDA"),  shall be in an amount not less than Twelve Million and
00/100 Dollars  ($12,000,000.00)  (the "EBITDA Covenant").  Compliance with such
EBITDA  Covenant  will be  reviewed  by Lender on a  quarterly  basis,  based on
Lender's review of the financial  information  provided to Lender which shall be
certified by a financial officer of Borrower.

         (h) Guarantor  covenants and agrees that until the Loan is paid in full
and/or  the  Guaranty  Obligations  have  been  satisfied,  Transfers  of any of
Guarantor's legal or beneficial interest in BRE/CLS Portfolio L.L.C., a Delaware
limited liability company, shall not be permitted without Lender's prior written

                                       4
<PAGE>

consent  which may be withheld by Lender in its sole  discretion.  For  purposes
hereof,  "Transfer"  shall  mean the  conveyance,  assignment,  sale,  transfer,
mortgaging,   collateral   assignment,    encumbrance,   pledging,   alienation,
hypothecation,  granting of a security  interest  in,  granting of options  with
respect to, or other  dispositions  of (directly or  indirectly,  voluntarily or
involuntarily,  by  operation  of law  or  otherwise,  and  whether  or not  for
consideration  or of record of all or any portion of  Guarantor's  legal  and/or
beneficial  interest in BRE/CSL  Portfolio  L.L.C., a Delaware limited liability
company.

         5. Representations and Warranties. Guarantor represents and warrants to
Lender that:

         (a) Existence,  Power and Qualification.  Guarantor is a duly organized
and validly existing Delaware  corporation,  has the power to own its properties
and to carry on its business as is now being conducted, and is duly qualified to
do business and is in good standing in every jurisdiction in which the character
of the properties  owned by it or in which the transaction of its business makes
its qualification necessary.

         (b)  Power  and  Authority.  Guarantor  has full  corporate  power  and
authority to incur the Guaranty  Obligations  provided for herein,  all of which
have been authorized by all proper and necessary action.

         (c)  Financial  Position.  The  financial  statements  of the Guarantor
heretofore furnished to Lender are complete and correct in all material respects
and fairly  present  the  financial  position  of the  Guarantor  as of the date
thereof.  Since the date of said financial statements there has been no material
adverse change in the financial position or operations, or the business taken as
a whole,  of Guarantor from that set forth therein which have not been disclosed
to Lender.

         (d)  Litigation.  There  are no legal or  arbitral  proceedings  or any
proceedings by or before any governmental or regulatory  authority or agency now
pending or, to the best of Guarantor's  knowledge,  threatened against Guarantor
(which have not been  disclosed  to Lender) in which an adverse  decision  could
materially and adversely affect the financial position of Guarantor.

         (e) No  Breach.  The  execution  and  delivery  of this  Guaranty,  the
consummation of the  transactions  herein  contemplated  and compliance with the
terms and provisions hereof will not (i) conflict with or result in a breach of,
or require any consent (not heretofore  obtained at the time this representation
is made) under, any applicable law, administrative  proceeding or regulation, or
any order, writ, injunction or decree of any court or governmental  authority or
agency, or any agreement or instrument to which Guarantor is a party or by which
Guarantor is bound or to which  Guarantor is subject,  (ii) constitute a default
under  any such  agreement  or  instrument  or  under  Guarantor's  articles  of
incorporation,  or any other agreement or instrument binding upon Guarantor,  or
(iii) result in the creation or  imposition of any lien upon any of the revenues
or  assets  of  Guarantor  pursuant  to the  terms  of  any  such  agreement  or
instrument.

         (f) Approvals. To the best of Guarantor's knowledge, no authorizations,
approvals,  or  consents of (other than those  heretofore  obtained  and in full
force and  effect),  and no  filings or  registrations  with  (other  than those

                                       5
<PAGE>

heretofore  obtained  and  in  full  force  and  effect),  any  governmental  or
regulatory  authority or agency are  necessary  for the  execution,  delivery or
performance by Guarantor of this Guaranty or for the validity or  enforceability
thereof.

         (g) Taxes, etc. Guarantor has filed all United States federal and state
tax returns and all other tax returns that are required to be filed by Guarantor
and has  paid  all  taxes  due  pursuant  to such  returns  or  pursuant  to any
assessment received by Guarantor, except such taxes, the payment of which is not
yet due, or which if due, is not yet  delinquent  or is being  contested in good
faith or which has not been finally determined.

         (h) Benefit. The making of the Loan by Lender to Borrower will directly
benefit Guarantor.

         6. Financial  Covenants and Other Information.  Guarantor shall provide
to Lender, at its address set forth in Section 8.8 of the Loan Agreement, and at
GMAC  Commercial  Mortgage   Corporation,   2000  Woodcrest  Place,  Suite  305,
Birmingham, Alabama 35209, the financial statements and reporting information on
a  continuing  basis  during  the  term of the  Loan as  referenced  in the Loan
Agreement.

         7.  Guaranty  is  a  Continuing  Obligation.  The  obligations  of  the
Guarantor  under this Guaranty shall be continuing,  absolute,  irrevocable  and
unconditional under all circumstances, and shall remain in full force and effect
or be reinstated, until all of the Guaranty Obligations shall have been paid and
performed  in  full,  irrespective  of  the  bankruptcy,   insolvency,   merger,
reorganization,  termination,  discontinuation or dissolution of the Borrower or
any  assignment  for the benefit of creditors  by the  Borrower.  The  Guarantor
acknowledges  and agrees that Guarantor's  obligations  hereunder shall apply to
and continue with respect to any of the  obligations  of the Borrower  under the
Loan Documents which are subsequently  recovered from the Lender for the reasons
set  forth  below.  In the event  that any  payment  by or on the  behalf of the
Borrower to Lender is held to  constitute a preference,  fraudulent  transfer or
other voidable  payment under any  bankruptcy,  insolvency or similar law, or if
for any other  reason the Lender is required  to refund such  payment or pay the
amount thereof to any other party, including, without limitation, as a result of
the  appointment of a receiver,  intervenor,  or  conservator  of, or trustee or
similar officer for, the Borrower or of any substantial  part of its property or
otherwise,  such  payment by the Borrower or any other party to the Lender shall
not constitute a release of the Guarantor from any liability hereunder, and this
Guaranty shall continue to be effective or shall be reinstated  (notwithstanding
any prior  release,  surrender or discharge by the Lender of this Guaranty or of
the  Guarantor),  as the case may be, with respect to, and this  Guaranty  shall
apply to, any and all amounts so refunded by the Lender or paid by the Lender to
another party (which amounts shall constitute part of the Guaranty Obligations),
and any interest paid by the Lender and any attorneys'  fees, costs and expenses
paid or incurred  by the Lender in  connection  with any such  event.  It is the
intent of the Guarantor and the Lender that the  obligations  and liabilities of
the  Guarantor  hereunder  are  absolute  and  unconditional  under  any and all
circumstances and that until the Guaranty Obligations are fully and finally paid
and performed,  and not subject to refund or  disgorgement,  the obligations and
liabilities of the Guarantor  hereunder shall not be discharged or released,  in
whole or in part, by any act or occurrence that might, but for the provisions of
this  Guaranty,  be  deemed a legal  or  equitable  discharge  or  release  of a
guarantor. The Lender shall be entitled to continue to hold this Guaranty in its

                                       6
<PAGE>

possession  for a period of one year from the later of (a) the date the Guaranty
Obligations  are paid and  performed in full,  or (b) if not paid in  accordance
with the Guaranty  Obligations,  the  expiration or termination of the Loan, and
for so long  thereafter  as may be  necessary to enforce any  obligation  of the
Guarantor  hereunder  and/or to  exercise  any  right or  remedy  of the  Lender
hereunder.

         8. Limitation of Liability. [Intentionally Deleted].

         9. Waiver and Release of Subrogation and Participation. Guarantor shall
have no right of subrogation in or under the Guaranty Obligations, and no rights
of  reimbursement,  indemnity  or  contribution  from the  Borrower or any other
rights  by  law,  equity,  statute  or  contract  that  would  give  rise  to  a
creditor-debtor relationship between Guarantor and the Borrower. Guarantor shall
have no  right  to  participate  in any way in any of the  collateral  which  is
conveyed  under the Loan  Documents as security  for the  Guaranty  Obligations.
Guarantor  hereby  explicitly  waives and  releases  any of the  above-described
rights of subrogation,  reimbursement,  indemnity, contribution,  participation,
and any  right to  require  the  marshalling  of  Borrower's  assets  under  any
circumstances.

         10. Continuing Validity.  Guarantor further agrees that the validity of
this  Guaranty and the  obligations  of Guarantor  hereunder  shall in no way be
terminated, affected or impaired (a) by reason of the assertion by Lender of any
rights or remedies  which it may have under or with  respect to either the Note,
the  Mortgage,  or the  other  Loan  Documents,  against  any  person  obligated
thereunder or against the owner of the premises covered by the Mortgage,  (b) by
reason of any  failure to file or record any of such  instruments  or to take or
perfect  any  security  intended to be  provided  thereby,  (c) by reason of the
commencement  of a case  under the  Bankruptcy  Code by or  against  any  person
obligated under the Note, the Mortgage or the other Loan Documents, or the death
of  any  Guarantor,  or (d)  by  reason  of any  payment  made  on the  Guaranty
Obligations  or any other  indebtedness  arising under the Note, the Mortgage or
the other Loan  Documents,  whether  made by Borrower or  Guarantor or any other
person,  which  is  required  to be  refunded  pursuant  to  any  bankruptcy  or
insolvency  law;  it being  understood  that no  payment  so  refunded  shall be
considered as a payment of any portion of the Guaranty Obligations, nor shall it
have the effect of reducing the liability of Guarantor hereunder.  It is further
understood, that if Borrower shall have taken advantage of, or be subject to the
protection of, any provision in the  Bankruptcy  Code, the effect of which is to
prevent or delay  Lender  from  taking any  remedial  action  against  Borrower,
including  the  exercise  of any  option  Lender  has to  declare  the  Guaranty
Obligations  due and payable on the  happening  of any default or event by which
under the terms of the Note,  the  Mortgage  or the other  Loan  Documents,  the
Guaranty  Obligations  shall  become due and  payable,  Lender  may,  as against
Guarantor,  nevertheless,  declare the Guaranty  Obligations due and payable and
enforce any or all of its rights and  remedies  against  Guarantor  provided for
herein.

         11.  Notice.  All notices given under this Guaranty shall be in writing
and shall be deemed  received  upon hand delivery or upon five (5) Business Days
(as defined in the Loan Agreement) after mailed,  by certified U.S. mail, return
receipt  requested,  first class  postage  prepaid,  to the other party,  at its
address set forth below or at such other  address as such party may designate by
notice to the other party:

                                       7
<PAGE>

         (a) If to Guarantor:

                           Capital Senior Living Corporation
                           14160 Dallas Parkway, Suite 300B
                           Dallas, Texas  75240
                           Attention:  David R. Brickman, Esquire

                           with a copy to:

                           Winston W. Walp, II, Esquire
                           Jenkens and Gilchrist, P.C.
                           1445 Ross Avenue, Suite 3200
                           Dallas, Texas 75202

         (b) If to Lender:

                           GMAC Commercial Mortgage Corporation
                           200 Witmer Road
                           P.O. Box 1015
                           Horsham, Pennsylvania 19044-8015
                           Attention:  Servicing Department

                           with a copy to:

                           Ballard Spahr Andrews & Ingersoll, LLP
                           601 13th Street, NW, Suite 1000 South
                           Washington, DC  20005-3807
                           Attention: Kelly M. Wrenn, Esq.

         12. No Waiver by Lender;  Remedies. No failure on the part of Lender or
the  holder  of the Note to  exercise,  and no delay in  exercising,  any  right
hereunder or thereunder shall operate as a waiver thereof;  nor shall any single
or partial  exercise of any right hereunder or thereunder  preclude any other or
further  exercise  thereof or the exercise of any other right.  Guarantor hereby
agrees  that all rights and  remedies  that Lender is afforded by reason of this
Guaranty   are  separate  and   cumulative   and  may  be  pursued   separately,
successively,  or concurrently, as Lender deems advisable. In addition, all such
rights and  remedies  are  non-exclusive  and shall in no way limit or prejudice
Lender's  ability to pursue any other legal or equitable rights or remedies that
may be  available.  Failure  of Lender  to insist  upon  strict  performance  or
observance of any of the terms,  provisions and covenants  hereof or to exercise
any right herein contained shall not be construed as a waiver or  relinquishment
of the right to demand strict  performance at another time. Receipt by Lender of
any payment or  performance  on the Guaranty  Obligations  shall not be deemed a
waiver of the breach of any  provision  hereof or of any of the Loan  Documents.
Without  limiting the generality of the foregoing,  Guarantor agrees that in any
action by Lender by reason of the Guaranty Obligations, Lender, at its election,
may proceed (a) against Guarantor together with Borrower,  (b) against Guarantor
and  Borrower,  individually,  or (c)  against  Guarantor  only  without  having
commenced any action against, or having obtained any judgment against, Borrower.

                                       8
<PAGE>

         13. Certain Waivers by Guarantor.  AS A FURTHER INDUCEMENT TO LENDER TO
MAKE THE LOAN AND IN  CONSIDERATION  THEREOF,  GUARANTOR  FURTHER  COVENANTS AND
AGREES THAT SERVICE OF ANY SUMMONS AND  COMPLAINT  OR OTHER  PROCESS IN ANY SUCH
ACTION OR PROCEEDING  MAY BE MADE BY  REGISTERED  OR CERTIFIED  MAIL DIRECTED TO
GUARANTOR AT GUARANTOR'S ADDRESS HEREINABOVE SET FORTH, GUARANTOR HEREBY WAIVING
PERSONAL SERVICE THEREOF. GUARANTOR HEREBY WAIVES THE PLEADING OF ANY STATUTE OF
LIMITATIONS AS A DEFENSE TO THE OBLIGATIONS  HEREUNDER.  GUARANTOR HEREBY WAIVES
NOTICE OF THE ACCEPTANCE HEREOF, PRESENTMENT, PROTEST, NOTICE OF PROTEST, OR ANY
AND ALL  NOTICE OF  NON-PAYMENT,  NON-PERFORMANCE  OR  NON-OBSERVANCE,  OR OTHER
PROOF, OR NOTICE OR DEMAND.

         THE GUARANTOR FURTHER WAIVES AND AGREES NOT TO ASSERT: (A) ANY RIGHT TO
REQUIRE  LENDER TO PROCEED  AGAINST  BORROWER  OR TO PROCEED  AGAINST  ANY OTHER
GUARANTOR,  OR TO PROCEED  AGAINST  OR EXHAUST  ANY  SECURITY  FOR THE  GUARANTY
OBLIGATIONS, OR TO PURSUE ANY OTHER REMEDY AVAILABLE TO LENDER, OR TO PURSUE ANY
REMEDY IN ANY  PARTICULAR  ORDER OR MANNER,  (B) THE  BENEFIT OF ANY  STATUTE OF
LIMITATIONS AFFECTING GUARANTOR'S LIABILITY HEREUNDER OR THE ENFORCEMENT HEREOF,
(C)  NOTICE  OF THE  EXISTENCE,  CREATION  OR  INCURRING  OF  NEW OR  ADDITIONAL
INDEBTEDNESS OF BORROWER TO LENDER, (D) THE BENEFITS OF ANY STATUTORY  PROVISION
LIMITING  THE  LIABILITY OF A SURETY,  (E) ANY DEFENSE  ARISING BY REASON OF ANY
DISABILITY OR OTHER  DEFENSE OF BORROWER OR BY REASON OF THE CESSATION  FROM ANY
CAUSE  WHATSOEVER  (OTHER THAN PAYMENT IN FULL) OF THE LIABILITY OF BORROWER FOR
THE GUARANTY  OBLIGATIONS,  (F) THE BENEFITS OF ANY STATUTORY PROVISION LIMITING
THE RIGHT OF LENDER TO RECOVER A DEFICIENCY  JUDGMENT,  OR TO OTHERWISE  PROCEED
AGAINST ANY PERSON OR ENTITY OBLIGATED FOR PAYMENT OF THE GUARANTY  OBLIGATIONS,
AFTER  ANY  FORECLOSURE  OR  TRUSTEE'S  SALE OF ANY  SECURITY  FOR THE  GUARANTY
OBLIGATIONS,  AND (G) ANY OTHER DEFENSE OR  CIRCUMSTANCE  WHICH MIGHT  OTHERWISE
CONSTITUTE A LEGAL OR EQUITABLE  DISCHARGE OF GUARANTOR'S  LIABILITY  HEREUNDER,
ARISING FROM OR OUT OF THE LOAN, THE LOAN DOCUMENTS AND/OR THE FACILITY.

         14.  Waiver  of  Automatic  Stay.  GUARANTOR  HEREBY  AGREES  THAT,  IN
CONSIDERATION  OF LENDER'S  AGREEMENT TO MODIFY THE LOAN AND IN RECOGNITION THAT
THE FOLLOWING  COVENANT IS A MATERIAL  INDUCEMENT FOR LENDER TO MODIFY THE LOAN,
IN THE  EVENT  THAT  GUARANTOR  SHALL  (A)  FILE  WITH ANY  BANKRUPTCY  COURT OF
COMPETENT  JURISDICTION  OR BE THE SUBJECT OF ANY PETITION  UNDER ANY SECTION OR
CHAPTER OF TITLE 11 OF THE UNITED STATES CODE, AS AMENDED  ("BANKRUPTCY  CODE"),
OR SIMILAR  LAW OR STATUTE,  (B) BE THE  SUBJECT OF ANY ORDER FOR RELIEF  ISSUED
UNDER THE BANKRUPTCY CODE OR SIMILAR LAW OR STATUTE,  (C) FILE OR BE THE SUBJECT

                                       9
<PAGE>

OF  ANY  PETITION   SEEKING  ANY   REORGANIZATION,   ARRANGEMENT,   COMPOSITION,
READJUSTMENT,  LIQUIDATION,  DISSOLUTION, OR SIMILAR RELIEF UNDER ANY PRESENT OR
FUTURE FEDERAL OR STATE ACT OR LAW RELATING TO BANKRUPTCY,  INSOLVENCY, OR OTHER
RELIEF  FOR  DEBTORS,  (D) HAVE  SOUGHT OR  CONSENTED  TO OR  ACQUIESCED  IN THE
APPOINTMENT OF ANY TRUSTEE, RECEIVER,  CONSERVATOR, OR LIQUIDATOR, OR (E) BE THE
SUBJECT  OF AN ORDER,  JUDGMENT  OR  DECREE  ENTERED  BY ANY COURT OF  COMPETENT
JURISDICTION   APPROVING   A   PETITION   FILED   AGAINST   GUARANTOR   FOR  ANY
REORGANIZATION,    ARRANGEMENT,    COMPOSITION,    READJUSTMENT,    LIQUIDATION,
DISSOLUTION,  OR SIMILAR RELIEF UNDER ANY PRESENT OR FUTURE FEDERAL OR STATE ACT
OR LAW RELATING TO BANKRUPTCY,  INSOLVENCY OR RELIEF FOR DEBTORS,  THEN, SUBJECT
TO COURT  APPROVAL,  LENDER SHALL  THEREUPON BE ENTITLED,  AND GUARANTOR  HEREBY
IRREVOCABLY CONSENTS TO, AND WILL NOT CONTEST, AND AGREES TO STIPULATE TO RELIEF
FROM,  ANY  AUTOMATIC  STAY OR OTHER  INJUNCTION  IMPOSED BY SECTION  362 OF THE
BANKRUPTCY  CODE,  OR SIMILAR  LAW OR STATUTE  (INCLUDING,  WITHOUT  LIMITATION,
RELIEF FROM ANY  EXCLUSIVE  PERIOD SET FORTH IN SECTION  1121 OF THE  BANKRUPTCY
CODE) OR  OTHERWISE,  ON OR AGAINST  THE  EXERCISE  OF THE  RIGHTS AND  REMEDIES
OTHERWISE  AVAILABLE  TO LENDER AS  PROVIDED IN THIS  AGREEMENT  AND/OR THE LOAN
DOCUMENTS,  AND AS OTHERWISE  PROVIDED BY LAW, AND GUARANTOR HEREBY  IRREVOCABLY
WAIVES GUARANTOR'S RIGHTS TO OBJECT TO SUCH RELIEF.

         15.  Guaranty  of  Payment.  This is a guaranty  of payment  and not of
collection and upon any default of Borrower  under the Note,  the Mortgage,  the
Loan Agreement or the other Loan Documents,  Lender may, at its option,  subject
to applicable  Borrower notice and cure provisions proceed directly and at once,
against  Guarantor  to collect  and  recover  the full  amount of the  liability
hereunder or any portion  thereof,  without  proceeding  against Borrower or any
other  person,  or  foreclosing  upon,  selling,  or  otherwise  disposing of or
collecting or applying  against any of the Facility or other  collateral for the
Loan.

         (a) Joint and Several Liability. [Intentionally Deleted].

         (b) Assignment. Lender may assign this Guaranty or any rights or powers
hereunder,  in  whole or in part,  in  connection  with the sale of the Note and
assignment  of the Mortgage.  Lender shall notify  Guarantor of any such sale of
the Note.  The duties and  obligations  of  Guarantor  may not be  delegated  or
transferred by Guarantor  without the prior written  consent of Lender which may
be withheld in its absolute discretion. Each reference herein to Lender shall be
deemed to include its successors  and assigns,  to whose favor the provisions of
this Guaranty  shall also inure.  Each  reference  herein to Guarantor  shall be
deemed to include the heirs, executors,  administrators,  legal representatives,
successors  and  assigns  of  Guarantor,  all of  whom  shall  be  bound  by the
provisions of this Guaranty.

         16. Waiver of Trial by Jury;  Service of Process.  GUARANTOR AND LENDER
HEREBY WAIVE TRIAL BY JURY IN ANY ACTION OR  PROCEEDING  TO WHICH THE  GUARANTOR
AND THE LENDER MAY BE PARTIES ARISING OUT OF, IN CONNECTION  WITH, OR IN ANY WAY

                                       10
<PAGE>

PERTAINING  TO, THIS  AGREEMENT  AND/OR ANY OF THE OTHER LOAN  DOCUMENTS.  IT IS
AGREED AND UNDERSTOOD THAT THIS WAIVER  CONSTITUTES A WAIVER OF TRIAL BY JURY OF
ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS,  INCLUDING CLAIMS
AGAINST PARTIES WHO ARE NOT PARTIES TO THIS AGREEMENT. THIS WAIVER IS KNOWINGLY,
WILLINGLY  AND  VOLUNTARILY  MADE BY THE  GUARANTOR,  AND THE  GUARANTOR  HEREBY
REPRESENTS  THAT NO  REPRESENTATIONS  OF FACT OR  OPINION  HAVE BEEN MADE BY ANY
INDIVIDUAL  TO INDUCE  THIS  WAIVER OF TRIAL BY JURY OR TO IN ANY WAY  MODIFY OR
NULLIFY ITS EFFECT. THE GUARANTOR FURTHER REPRESENTS AND WARRANTS THAT GUARANTOR
HAS BEEN  REPRESENTED IN THE SIGNING OF THIS AGREEMENT AND IN THE MAKING OF THIS
WAIVER  BY  INDEPENDENT  LEGAL  COUNSEL,  OR  HAS  HAD  THE  OPPORTUNITY  TO  BE
REPRESENTED  BY INDEPENDENT  LEGAL COUNSEL  SELECTED BY GUARANTOR OF GUARANTOR'S
OWN FREE WILL, AND THAT GUARANTOR HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER
WITH COUNSEL.  GUARANTOR AGREES TO PAY ALL COURT COSTS AND REASONABLE ATTORNEY'S
FEES  INCURRED BY LENDER IN  CONNECTION  WITH  ENFORCING  ANY  PROVISION OF THIS
AGREEMENT.  NOTWITHSTANDING  THE  FOREGOING,  LENDER  AGREES  TO USE  REASONABLE
EFFORTS TO PROVIDE  GUARANTOR WITH NOTICE OF THE FILING OF ANY LAWSUIT BY LENDER
AGAINST GUARANTOR.

         17. Power and Authority.  Guarantor (and its representative,  executing
below,  if any) has full corporate  power,  authority and legal right to execute
this Guaranty and to perform all its obligations under this Guaranty.

         18.  Complete  Agreement;  Modification;  Waiver.  All  understandings,
representations and agreements  heretofore had with respect to this Guaranty are
merged into this Guaranty  which are  incorporated  herein which alone fully and
completely  expresses the  agreement of Guarantor and Lender.  In no event shall
any  modification  or waiver of the  provisions  of this  Guaranty be  effective
unless in writing  executed  by Lender.  Any waiver  granted by Lender  shall be
applicable only in the specific instance for which it is given.

         19. Governing Law. THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS AND APPLICABLE FEDERAL LAW.

         20.  Counterparts;  Construction.  This Guaranty may be executed in any
number of  counterparts,  all of which when taken together shall  constitute one
and the same instrument. Words of any gender used in this Guaranty shall be held
and  construed to include the other gender,  and words in the singular  shall be
held and construed to include the plural,  and words in the plural shall be held
and  construed  to include the  singular,  unless  this  Guaranty or the context
otherwise requires.

         21. Review by Guarantor.  GUARANTOR HAS RECEIVED COPIES OF, AND HAS HAD
THE  OPPORTUNITY  TO  REVIEW,  ALL OF THE  LOAN  DOCUMENTS  REFERRED  TO IN THIS

                                       11
<PAGE>

GUARANTY.  GUARANTOR HAS DISCUSSED THIS GUARANTY WITH GUARANTOR'S LEGAL COUNSEL,
AND  GUARANTOR  UNDERSTANDS  THE NATURE  AND EXTENT AND THE LEGAL AND  PRACTICAL
CONSEQUENCES OF GUARANTOR'S LIABILITY UNDER THIS GUARANTY.

         22. No Oral Agreement.  To the extent allowed by law,  Guarantor agrees
to be bound by the terms of the following notice:

         NOTICE:           THIS GUARANTY AND THE OTHER LOAN DOCUMENTS CONSTITUTE
                           A  WRITTEN   AGREEMENT  WHICH  REPRESENTS  THE  FINAL
                           AGREEMENT   BETWEEN   THE  PARTIES  AND  MAY  NOT  BE
                           CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
                           ORAL AGREEMENTS OF THE PARTIES.

                           THERE ARE NO UNWRITTEN  ORAL  AGREEMENTS  BETWEEN THE
                           PARTIES RELATING TO THE LOAN.

         23.   Termination  of  Pre-Existing   Guaranty.   This  Guaranty  shall
supercede,  in all respects,  that certain Exceptions to Non-Recourse  Guaranty,
with respect to the Loan, dated as of August 15, 2000, executed by Guarantor for
the benefit of Lender, which shall be deemed, as of the date hereof,  terminated
and of no further force and effect.

                                       12
<PAGE>

         IN  WITNESS  WHEREOF,  this  Guaranty  has been  duly  executed  by the
undersigned as of the day and year first written above.

WITNESS:                                      GUARANTOR:
                                              Capital Senior Living Corporation,
                                              a Delaware corporation

______________________________________        By:_________________________(Seal)
______________________________________           James A. Stroud
Print Name                                       Chairman of the Company

CITY OF WASHINGTON                  )
                                    )        ss:
DISTRICT OF COLUMBIA                )

         On this _____ day of October, 2002, before me, the undersigned officer,
personally  appeared  James A. Stroud,  who, I am satisfied,  is the  individual
named in the foregoing  instrument as Chairman of the Company of Capital  Senior
Living Corporation, a Delaware corporation, the Guarantor, and, did on behalf of
Capital Senior Living Corporation,  a Delaware  corporation  acknowledge that he
signed,  sealed and delivered the foregoing  instrument as his/her voluntary act
and deed as Chairman of the Company of Capital Senior Living,  on behalf of said
corporation, as Guarantor, for the purposes therein contained.

                                                ________________________________
                                                Notary Public

                                                                          [SEAL]

My Commission expires:

___________________________

                                       13
<PAGE>

WITNESS:                                  LENDER:

                                          GMAC Commercial Mortgage Corporation,
                                          a California corporation

______________________________________    By:_____________________________(Seal)
                                             Lisa M. Lautner
                                             Senior Vice President

CITY OF WASHINGTON                  )
                                    )        ss:
DISTRICT OF COLUMBIA                )

         I, a Notary Public in and for the said County, in the State aforesaid ,
DO HEREBY CERTIFY that Lisa M. Lautner  personally  known to me to be the Senior
Vice  President  of  GMAC   Commercial   Mortgage   Corporation,   a  California
corporation,  and  personally  known to me to be the same  person  whose name is
subscribed to the foregoing  instrument,  appeared before me this day in person,
and  acknowledged  that as such Senior Vice President,  she signed and delivered
the  said  instrument  as the  free  and  voluntary  act and  deed of said  GMAC
Commercial Mortgage Corporation, for the uses and purposes therein set forth.

         Given under my hand and official seal, this day of October, 2002.

                                               ________________________________
                                               Notary Public

My commission expires: _______________

                                       14Exhibit 10.104

                 AMENDED AND RESTATED ACCOUNT CONTROL AGREEMENT

         THIS AMENDED AND RESTATED ACCOUNT CONTROL AGREEMENT (this  "Agreement")
is made  effective as of October 15,  2002,  by and among BANK ONE, NA ("Bank"),
GMAC COMMERCIAL MORTGAGE  CORPORATION,  a California  corporation (together with
its  successors  and assigns,  "Lender"),  and CAPITAL  SENIOR LIVING A, INC., a
Delaware corporation ("Borrower").

                                    RECITALS:

         A.  Borrower,  by its  Amended  and  Restated  Promissory  Note  in the
original principal amount of $5,560,000.00 dated June 13, 2002, given to Lender,
as amended by that certain  First  Amendment to Amended and Restated  Promissory
Note  dated  as of  October  15,  2002,  by  and  between  Borrower  and  Lender
(collectively,  the  "Note"),  is  indebted  to Lender in the  principal  sum of
$5,389,815.22  as of the date  hereof in lawful  money of the  United  States of
America,  with interest thereon as set forth in the Note (such  indebtedness and
interest being referred to as the "Loan"). The Loan is further evidenced by that
certain  Loan  Agreement  dated  August 15,  2000,  by and between  Borrower and
Lender,  as amended by that  certain  Loan  Modification  Agreement  dated as of
October 15, 2002,  by and between  Borrower,  Lender and Capital  Senior  Living
Corporation, a Delaware corporation (collectively, the "Loan Agreement").

         B. The Loan is secured by, among other  things,  that certain  Mortgage
and Security Agreement dated August 15, 2000, by and between Borrower and Lender
and recorded with the Register of Deeds of Sedgwick  County,  Kansas in Official
Records Film 2087,  Page 1243, as re-recorded in Film 2096,  Page 0075 and again
re-recorded   in  Film   2112,   Page  1270,   as   amended   by  that   certain
Cross-Collateralization, Cross-Default and Mortgage Modification Agreement dated
as of October 15, 2002, by and between  Borrower and Lender  (collectively,  the
"Security Instrument"), which grants to Lender, among other things, a first lien
on certain real property more  particularly  described therein (the "Property"),
located  in  Wichita,  Sedgwick  County,  Kansas,  upon which  Borrower  and its
affiliate operate a senior housing facility (the "Facility").

         C. As  additional  security for  repayment of the Loan, by that certain
Account  Control  Agreement  dated as of June 13,  2002,  by and  among  Lender,
Borrower and Bank (the "Original Agreement"),  Lender required that Borrower (1)
provide  certain  Cash  Collateral  (described  below)  into a  Deposit  Account
(described  below)  separately  established  by  Lender  with  the Bank for such
purpose,  (2) grant to Lender a lien on and  security  interest  in the  Deposit
Account into which Borrower deposits such Cash Collateral,  and (3) provide that
such  Deposit  Account  will  be  maintained  for  the  benefit  of  Lender  and
administered in accordance with the terms of this Agreement.

         D.  Borrower has  requested  that Lender  modify  certain  terms of the
Original Agreement,  and Lender as agreed to such modifications,  subject to the
terms and conditions contained in this Agreement.

<PAGE>

         E. The  Borrower,  the Bank  and the  Lender  are  entering  into  this
Agreement  to amend and restate the  Original  Agreement  and to provide for the
control of the  Deposit  Account  referred  to above and to perfect  the pledge,
assignment, security interest and lien of the Lender in such Deposit Account and
all cash (including the Cash  Collateral),  securities or other financial assets
at any time on  deposit  to,  carried  or held in or for the  benefit  of,  such
Deposit Account.

                                   AGREEMENT:

         NOW,  THEREFORE,  in  consideration  of the mutual  promises  contained
herein  and  for  other  good  and  valuable  consideration,   the  receipt  and
sufficiency of which are hereby acknowledged,  and intending to be legally bound
hereby,  the parties hereto agree that the Original  Agreement is hereby amended
and restated as follows:

         1. Defined Terms.

         (a) As used herein, the following capitalized terms have the respective
meanings set forth below:

                  (i)      "Actual  Management  Fees" has the  meaning  given to
                           that term in the Loan Agreement.

                  (ii)     "Business  Day" means any day other than a  Saturday,
                           Sunday  or any day on which  commercial  banks in the
                           Commonwealth  of  Pennsylvania  or in the state where
                           the  Deposit  Account is located  are  authorized  or
                           required to close.

                  (iii)    "Cash   Collateral"   means  the   principal  sum  of
                           $3,389,815.22 provided by or on behalf of Borrower on
                           or prior to the date hereof,  as such  principal  sum
                           may be reduced pursuant to the provisions of Sections
                           5(a) and 5(b) hereof.

                  (iv)     "Debt Service Coverage Ratio" means the "Debt Service
                           Coverage  Ratio," as that term is defined in the Loan
                           Agreement,  for  the  Loan  and  all  Related  Loans,
                           calculated based on (A) the preceding three (3) month
                           period,  (B)  Actual  Management  Fees,  and  (C) the
                           required debt service on the Loan, the Related Loans,
                           and all other debts and  obligations  of Borrower and
                           its affiliate  Capital  Senior Living ILM-B,  Inc., a
                           Delaware corporation.

                  (v)      "Deposit  Account"  has  the  meaning  set  forth  in
                           Section 2(a) hereof.

                  (vi)     "Event of Default"  means any Event of Default  under
                           the Loan  Documents,  as such term is  defined in the
                           Loan Documents.

                  (vii)    "Facility"  has the meaning set forth in the Recitals
                           hereto.

                  (viii)   "Loan"  has the  meaning  set  forth in the  Recitals
                           hereto.

                                       2A

                  (ix)     "Loan  Agreement"  has the  meaning  set forth in the
                           Recitals hereto.

                  (x)      "Loan  Documents"  has the  meaning  set forth in the
                           Security Instrument.

                  (xi)     "Note"  has the  meaning  set  forth in the  Recitals
                           hereto.

                  (xii)    "Payment  Due  Date"  means  the first day of July 1,
                           2002,  and the first  day of each and every  calendar
                           month thereafter until the Loan is paid in full.

                  (xiii)   "Property"  has the meaning set forth in the Recitals
                           hereto.

                  (xiv)    "Related Loans" has the meaning given to that term in
                           the Loan Agreement.

                  (xv)     "Security  Instrument"  has the  meaning set forth in
                           the Recitals hereto.

         (b) All terms used but not otherwise  defined in this  Agreement  shall
have the same defined  meanings as set forth in the Loan  Agreement,  unless the
context otherwise requires.

         2. Deposit Account.

         (a)  Borrower  has caused Bank to  establish  and maintain a depository
account,  at its branch  located in Dallas,  Texas for the benefit of Lender and
Borrower  as set forth  herein,  that  bears  account  number  636253023  and is
designated  "Capital  Senior  Living A, Inc. for the benefit of GMAC  Commercial
Mortgage Corporation, as lender" (such account, all funds at any time on deposit
therein and any proceeds, replacements or substitutions of such account or funds
therein,  are referred to herein as the "Deposit Account").  The Deposit Account
will be  maintained  for the purpose of  disbursing  sums on deposit  therein in
accordance  with this  Agreement.  The  parties  hereto  agree that the  Deposit
Account is a "deposit  account"  within the  meaning of Article 9 of the Uniform
Commercial Code of the State of Texas (the "State").

         (b) Bank and Borrower  hereby  represent and warrant to Lender that (i)
the Deposit Account has been  established as recited above,  and (ii) except for
the claims and interest of Lender and Borrower in the Deposit  Account  (subject
to any  claim in favor of Bank  permitted  under  Section  3  hereof),  Bank and
Borrower do not know of any claim to or interest in the Deposit Account.

         (c) Borrower  acknowledges  and agrees that neither Borrower (except to
the extent  contemplated by Sections 4, 5 and 6) nor any other party claiming on
behalf  of, or  through,  Borrower,  shall have any  right,  title or  interest,
whether  express or implied,  to  withdraw  or make use of any amounts  from the
Deposit Account.

                                       3A

<PAGE>

         (d) Borrower and Lender agree all sums in the Deposit  Account shall be
held by Bank in an interest bearing account, if allowed by law, and any interest
earned on such sums shall be added to the then  existing  balance of the Deposit
Account  and  shall be  disbursed  in  accordance  with the  provisions  of this
Agreement.  Lender and Bank shall not be  responsible  for any losses  resulting
from  investment of sums in the Deposit  Account or from  obtaining any specific
level or percentage of earnings on such investment. Borrower shall pay all costs
and  expenses  of Bank  in the  establishment  and  maintenance  of the  Deposit
Account.

         (e) Prior to the date of this  Agreement,  Borrower has  deposited  the
amount of the Cash Collateral into the Deposit Account.

         3. Bank Obligations with respect to Deposit Account.

         (a) Bank  agrees to  establish  and  maintain  the  Deposit  Account as
contemplated  by this Agreement and agrees not to commingle the amounts held in,
or designated for deposit in, the Deposit Account with any other amounts held on
behalf  of  Lender,  Borrower  or any  other  party.  Bank and  Borrower  hereby
acknowledge the security  interests granted to Lender by Borrower in the Deposit
Account  and all  cash,  securities  and other  financial  assets at any time on
deposit to, carried or held in or for the benefit of, the Deposit Account.  Bank
acknowledges  that all amounts  held in the Deposit  Account are for the benefit
and account of Lender and agrees not to make disbursements from or debits to the
Deposit Account other than in accordance  with this  Agreement.  Bank waives any
rights to offset any claim it may have  against  the funds  held in the  Deposit
Account.

         (b) The parties agree that items deposited in the Deposit Account shall
be deemed to bear the valid and legally binding  endorsement of the payee and to
comply  with  all  of  Bank's   requirements   for  the   supplying  of  missing
endorsements,  now or hereafter in effect.  As between Borrower and Lender,  any
deposit  made by or on behalf of  Borrower  into the  Deposit  Account  shall be
deemed  deposited  into the  Deposit  Account  when the funds in respect of such
deposit shall become collected funds.

         (c) Bank hereby  subordinates  all  security  interests,  encumbrances,
claims and, rights of setoff it may have, now or in the future,  in, under on or
against the Deposit  Account or any funds in the Deposit Account to the security
interest,  encumbrances,  claims  and  rights of  set-off,  if any,  in favor of
Lender.

         4. Right to Withdraw from Deposit Account; Control of Account.

         (a) Except as set forth in Sections  4(b),  5(a),  5(b),  6(b) and 6(c)
below,  Borrower shall have no right to withdraw funds from the Deposit  Account
and no checks shall be issued or processed with respect to the Deposit Account.

         (b)  Upon  the  occurrence  and  continuance  of an  Agreement  Default
(described  below),  Lender will have sole  dominion  and control of the Deposit
Account  including,  without  limitation,  the right to withdraw  funds from the
Deposit Account and then apply such funds to the Loan. Bank hereby is authorized
to honor all transfer or withdrawal  requests from the Deposit Account  directed
by Borrower with Lender's written authorization until such time as Bank receives
written notice from Lender that an Agreement  Default has occurred and has had a

                                       4A
<PAGE>

reasonable opportunity to act upon such notice. Upon receipt of such notice from
Lender,  Bank will comply with all  instructions  originated by Lender regarding
the  Deposit  Account  and any moneys on deposit  therein  without  any  further
consent of Borrower or Bank.

         5. Partial Release of Cash Collateral.

         (a) At such time,  either on or after December 31, 2002,  that the Debt
Service  Coverage  Ratio is greater  than or equal to 1.15 to 1.0,  the required
Cash Collateral will be reduced to the principal sum of $2,694,907.61.

         (b) At such  time,  either  on or after  June 30,  2003,  that the Debt
Service  Coverage  Ratio is greater  than or equal to 1.25 to 1.0,  the required
Cash Collateral will be reduced to the principal sum of $2,000,000.00.

         6. Termination of Agreement.

         (a) Borrower may not terminate  this  Agreement for any reason  without
Lender's prior written consent. Bank, acting alone, may terminate this Agreement
and close the Deposit  Account at any time and for any reason by written  notice
delivered  to  Borrower  and Lender not less than  thirty (30) days prior to the
effective  termination date. Lender,  acting alone, may terminate this Agreement
at any time by  written  notice  delivered  to  Borrower  and  Bank.  If Bank so
terminates this Agreement or if Lender so terminates this Agreement but requires
that a Deposit Account with a different depository be established,  Lender shall
select a new depository to replace Bank, and thereupon Lender and Borrower shall
enter into a new deposit  account  arrangement  with such depository in form and
substance  substantially  similar to this Agreement.  Bank hereby agrees that it
shall promptly take all reasonable  action  necessary to facilitate the transfer
of any funds held in the Deposit Account to the replacement  depository selected
by Lender.  Except as specifically  provided in this Section 6, Bank agrees that
Bank shall not close the Deposit Account during the term of this Agreement.

         (b) Unless  terminated in accordance  with Section 6(a), this Agreement
shall  terminate  upon  repayment  in full of the  Loan  and  the  balance  then
remaining in the Deposit Account, if any, shall be disbursed to Borrower.

         (c) Upon  termination of this  Agreement by Lender  pursuant to Section
6(a) where  Lender does not require the  re-establishment  of a Deposit  Account
with  another  depository  or upon  termination  of this  Agreement  pursuant to
Section 6(b), the funds  remaining in the Deposit  Account shall be disbursed to
Borrower after deducting all  outstanding  charges or fees due to Bank or Lender
in connection with this Agreement.

         7. Fees and  Expenses.  Bank  agrees to look  solely  to  Borrower  for
payment of its fees in connection  with its  maintenance of the Deposit  Account
and services  hereunder,  and Borrower agrees to pay such fees to Bank on demand
therefor;  provided,  however,  that the fees which Bank may charge to  Borrower
shall  not  exceed  the  fees and  charges  customarily  charged  by Bank to its
customers  with respect to the customary and standard  maintenance  of a Deposit
Account.  Borrower  acknowledges  and agrees that it solely shall be, and at all
times  remains,  liable to Bank and Lender for all  normal and  customary  fees,
charges,  costs and  expenses  in  connection  with the  Deposit  Account,  this
Agreement  and  the  enforcement   hereof,   including  without  limitation  the

                                       5A
<PAGE>

commercially  reasonable  fees and expenses of outside legal counsel to Bank and
Lender as needed to enforce performance of this Agreement. In the event Borrower
fails or refuses to timely pay Bank's fees,  charges,  costs and expenses as set
forth herein,  Bank may debit any of Borrower's  other accounts at Bank for such
amounts.

         8. Funds in Deposit Account as Security for the Loan; Grant of Security
Interest.  As security  for full payment of the Loan and timely  performance  of
Borrower's  obligations  under  the  Note,  the  Security  Instrument,  the Loan
Documents, and this Agreement, Borrower hereby pledges, transfers and assigns to
Lender,  and  grants  to Lender a  continuing  security  interest  in and to the
Deposit Account, all moneys deposited therein from time to time, and all profits
and proceeds thereof. Borrower agrees to execute, acknowledge,  deliver, file or
do,  at its  sole  cost and  expense,  all  other  acts,  assignments,  notices,
agreements or other  instruments  as Lender may  reasonably  require in order to
perfect the foregoing security  interest,  pledge and assignment or otherwise to
fully  effectuate  the rights  granted to Lender by this Section and  authorizes
Lender to file financing statements in connection therewith. This Agreement also
constitutes  a  "security  agreement"  within  the  meaning  of Article 9 of the
Uniform Commercial Code as adopted by the State of Texas.

         9. Default.

         (a)  Borrower's  failure to timely and fully  perform  its  obligations
under this Agreement after written notice thereof provided by Lender to Borrower
and  thereafter  expiration of a thirty (30) day cure period shall  constitute a
default  under this  Agreement  ("Agreement  Default")  and the  occurrence  and
continuance  of an Event of  Default  under  and as  defined  in the  Note,  the
Security  Instrument or any of the Loan Documents shall  constitute an automatic
Agreement Default.

         (b) Upon the occurrence and continuance of an Agreement Default, Lender
will have sole  dominion  and  control of the  Deposit  Account and the right to
withdraw  and apply  funds  from the  Deposit  Account to payment of any and all
debts,  liabilities  and  obligations  of Borrower  to Lender  pursuant to or in
connection with the Note, the Security  Instrument,  the Loan Documents and this
Agreement, in such order, proportion and priority as Lender may determine in its
sole  discretion.  Lender's  right to  withdraw  and apply  funds in the Deposit
Account shall be in addition to all other rights and remedies provided to Lender
under this Agreement, the Note, the Security Instrument,  and the Loan Documents
and at law or in equity.

         (c) In addition to all rights and  remedies  available to Lender by law
or in equity or pursuant to the terms of the Note,  the Security  Instrument  or
the Loan Documents, Lender may convert the maintenance and administration of the
Deposit  Account  into  a  "hard  lockbox   account"  upon  the  occurrence  and
continuance  of an  Agreement  Default  in  accordance  with  Section 10 of this
Agreement.

         10. Conversion into Hard Lockbox.

         (a) If  Lender  converts  the  Deposit  Account  into a  "hard  lockbox
account," pursuant to Section 9(c) above, Lender, on each Payment Due Date, will
direct Bank to transfer  funds from the Deposit  Account,  and Bank shall comply

                                       6A
<PAGE>

with such  instructions to the extent of collected funds available  therein,  to
the following parties and in the following amounts and order of priority:

                  (i)      to  Lender,  the  amounts  required  to be  deposited
                           pursuant to the Security Instrument in escrow for the
                           payment of  insurance  premiums and Taxes (as defined
                           in the Mortgage);

                  (ii)     to Lender,  the amount of principal  and interest due
                           under the Note; and

                  (iii)    to  Lender,  the  amounts  required  to be  deposited
                           pursuant  to  the  Loan  Agreement  or  to  the  Loan
                           Documents  or any other  reserves  provided for under
                           the Loan Agreement or the other Loan Documents.

Notwithstanding the foregoing,  Borrower acknowledges that the order of priority
for payments from the Deposit  Account is recited  herein as a convenience  only
and does not control over any  conflicting  requirements  set forth in the Note,
the Security Instrument or any of the Loan Documents which Lender will follow in
applying such funds.

         (b) Transfers to Lender contemplated by Section 10(a) are to be made by
wire transfer or other electronic transfer of immediately available funds to the
following account of Lender ("Lender Account"):

First Union Bank--Philadelphia
ABA # 031-201-467
Collection and Clearing Account-2100012537715
Reference: GMACCM - #011024215 and Sedgwick Plaza
Attention:  Customer Service.

Lender  reserves  the right to change the Lender  Account from time to time upon
written  notice from Lender to Borrower and Bank,  and thereupon all payments to
Lender shall be remitted to the new Lender Account.

         (c)  Nothing   herein  shall   obligate   Bank  to  make  any  transfer
contemplated  herein  unless  sufficient  collected  funds remain in the Deposit
Account  for  such  transfer,  nor  shall  Bank be  obligated  to  independently
determine the amount of any transfer. Bank shall have no liability to any person
or party as a result of  acting  on  Lender's  instructions  with  regard to any
transfer of funds from the Deposit Account,  or for failure to timely act in the
event Lender fails to provide such instructions in a form reasonably  acceptable
to Bank.

         11. Certain Matters Affecting the Bank.

         (a) Bank may rely and shall be protected in acting or  refraining  from
acting upon any written notice  (including,  but not limited to,  electronically
confirmed  facsimiles  of such notice)  believed by it to be genuine and to have
been signed or presented by the proper party or parties,  and Bank shall have no

                                       7A
<PAGE>

obligation  to review or confirm that actions  taken  pursuant to such notice in
accordance with this Agreement comply with any other agreement or document.

         (b) The duties and  obligations of the Bank shall be determined  solely
by the express provisions of this Agreement,  and, except as expressly set forth
herein,  Bank will not be charged with  knowledge of any provisions of the Note,
the Security  Instrument or any of the other Loan  Documents.  Bank shall not be
liable  except  for  the  performance  of  its  duties  and  obligations  as are
specifically  set  forth  in  this  Agreement,   and  no  implied  covenants  or
obligations shall be read into this Agreement against the Bank.

         (c) Bank shall not be liable for any  claims,  suits,  actions,  costs,
damages,   liabilities,   or  expense,  or  for  any  interruption  of  services
("Liabilities")  in connection with the subject matter of this Agreement,  other
than  Liabilities  caused by the gross  negligence  or  willful  or  intentional
misconduct  of the  Bank  or any of its  affiliates  or any  director,  officer,
employee  or agent of any of them.  In no event  will the Bank be liable for any
lost profits or for any incidental,  special,  consequential or punitive damages
whether or not the Bank knew of the  possibility  or likelihood of such damages.
Bank's substantial  compliance with its standard procedures for provision of the
services  required  under  this  Agreement  shall be  deemed to  constitute  the
exercise of ordinary  care.  Lender and Borrower  hereby agree to indemnify  and
hold  harmless  the  Bank  and  its  affiliates,  and the  directors,  officers,
employees,  and agents of any of them,  and the  successors  and  assigns of the
Bank,  from  and  against  any  and all  Liabilities  asserted  against  them in
connection with this Agreement,  other than those Liabilities  caused by (i) the
gross  negligence  or  willful  or  intentional  misconduct  of the Bank or such
indemnified party or (ii) material breach of this Agreement by the Bank.

         (d)  If  Borrower   becomes  subject  to  a  voluntary  or  involuntary
proceeding under the United States  Bankruptcy Code, or if the Bank is otherwise
served  with  legal  process  which Bank in good faith  believes  affects  funds
deposited in the Deposit  Account,  Bank shall have the right to place a hold on
funds  deposited  in the  Deposit  Account  until such time as Bank  receives an
appropriate  court order or other assurances  satisfactory to Bank  establishing
that the  funds may  continue  to be  disbursed  according  to the  instructions
contained in this Agreement.

         (e) If at any time Bank, in good faith, is in doubt as to the action it
should take under this Agreement,  Bank shall have the right (i) to place a hold
on funds in the Deposit  Account until such time as Bank receives an appropriate
court order or other  assurances  satisfactory  to Bank as to the disposition of
funds in the Deposit Account,  or (ii) to commence,  at Borrower's  expense,  an
interpleader action in any United States District Court in the State and to take
no further action except in accordance with joint  instructions  from Lender and
Borrower or in accordance with the final order of the court in such action.

         (f) Bank  agrees  that it will  provide to Lender,  at the  address set
forth below,  a monthly  statement with respect to the Deposit  Account  setting
forth, among other items, the current balance of funds in the Deposit Account.

         12.  Payments  Set Aside.  To the extent  amounts  are paid into or are
distributed  from the Deposit Account to the Lender in accordance with the terms
of this Agreement or the Lender enforces its security  interests,  or the Lender
exercises its rights of setoff,  and such payment or payments or the proceeds of

                                       8A
<PAGE>

such  enforcement  or setoff or any part thereof are  subsequently  invalidated,
declared to be fraudulent or preferential,  set aside, recovered from, disgorged
by or are required to be refunded,  repaid or otherwise restored to or on behalf
of the  Borrower,  a trustee,  receiver or any other  person or entity under any
law,  regulation or order,  including any bankruptcy  law, state or federal law,
common law or equitable cause, then to the extent of any such  restoration,  the
obligation or part thereof originally  intended to be satisfied shall be revived
and  continued  in full force and effect as if such payment had not been made or
such enforcement or setoff had not occurred.

         13. Miscellaneous.

         (a) Notices.  All notices and other communications under this Agreement
are to be in writing and addressed to each party as set forth below.  Default or
demand  notices shall be deemed to have been duly given upon the earlier of: (i)
actual receipt; (ii) one (1) Business Day after having been timely deposited for
overnight delivery,  fee prepaid,  with any reputable overnight courier service,
with a reliable  tracking  system;  or (iii) five (5) Business Days after having
been deposited in any post office or mail depository regularly maintained by the
U.S. Postal Service and sent by certified mail, postage prepaid,  return receipt
requested,  and in the case of clause  (ii) and (iii)  irrespective  of  whether
delivery is  accepted.  A new address for notice may be  established  by written
notice to the  other;  provided,  however,  that no change  of  address  will be
effective until written notice thereof actually is received by the party to whom
such address change is sent. Notice to outside counsel or parties other than the
named Borrower and Lender, now or hereafter designated by a party as entitled to
notice,  are for convenience  only and are not required for notice to a party to
be  effective  in  accordance  with  this  Section.  Notice to  outside  counsel
designated by a party entitled to receive notice is for convenience  only and is
not  required  for notice to a party to be  effective  in  accordance  with this
Section.

         Address for Lender:                GMAC Commercial Mortgage Corporation
                                            8333 Douglas Avenue
                                            Suite 1460
                                            Dallas, Texas  75225
                                            Attn.: Lisa M. Lautner

         Address for Bank:                  Bank One, NA
                                            1700 Pacific Avenue, 21st Floor
                                            TX1-2810
                                            Dallas, Texas  75201
                                            Attn.:   Jeff  A.  Etter,
                                                     Commercial  Real
                                                     Estate

         Address for Borrower:              Capital Senior Living A, Inc.
                                            14160 Dallas Parkway, Suite 300
                                            Dallas, Texas  75240
                                            Attn.: David R. Brickman, Esquire,
                                            Vice President and General Counsel

                                       9A
<PAGE>

         (b)  Entire  Agreement;  Modification.  This  Agreement  sets forth the
entire  agreement  between the parties hereto with respect to the subject matter
hereof and  supersedes  and  replaces  all prior  discussions,  representations,
communications and agreements (oral and written) by and among the parties hereto
with respect  thereto.  This Agreement shall not be modified,  supplemented,  or
terminated,  or any  provision  hereof  waived,  except by a written  instrument
signed by the party against whom enforcement thereof is sought, and then only to
the extent expressly set forth in such writing.

         (c) Binding  Effect.  This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their  respective  successors and assigns,
whether by voluntary action of the parties or by operation of law.

         (d) Unenforceable Provisions.  Any provision of this Agreement which is
determined  by a  governmental  body or court of  competent  jurisdiction  to be
invalid,  unenforceable  or illegal shall be  ineffective  only to the extent of
such holding and shall not affect the  validity,  enforceability  or legality of
any other provision,  nor shall such determination  apply in any circumstance or
to any party not controlled by such determination.

         (e) Construction of Certain Terms. Defined terms used in this Agreement
may be used  interchangeably  in singular or plural form, and pronouns cover all
genders. Section headings shall not be used in interpretation of this Agreement;
"herein,"  "hereof" and  "hereunder"  and other words of similar import refer to
this Agreement as a whole and not to any particular section,  paragraph or other
subdivision;  "section"  refers to the entire  section and not to any particular
subsection,  paragraph or other subdivision; and "Agreement" means this original
agreement   and  all  written   modifications,   supplements,   extensions,   or
restatements hereof.  Reference to days for performance shall mean calendar days
unless Business Days are expressly indicated.

         (f) Duplicate Originals;  Counterparts.  This Agreement may be executed
in any number of  duplicate  originals,  and each  duplicate  original  shall be
deemed to be an original.  This Agreement (and each duplicate original) also may
be  executed  in any number of  counterparts,  each of which  shall be deemed an
original and all of which together shall  constitute a fully executed  agreement
even though all signatures do not appear on the same document.

         (g) Governing  Law. This Agreement  shall be  interpreted  and enforced
according  to the laws of the  State  of Texas  (without  giving  effect  to its
conflicts  of  law  rules),  except  with  respect  to  issues  relating  to the
operations  of the Deposit  Account or any other account to which funds from the
Deposit Account are transferred,  which issues shall be interpreted and enforced
according  to the laws of the state  where the  Deposit  Account  or such  other
account are located.

         (h) WAIVER OF JURY  TRIAL.  EACH OF THE LENDER,  BORROWER  AND THE BANK
IRREVOCABLY  WAIVES  ANY AND ALL  RIGHT  IT MAY  HAVE TO A TRIAL  BY JURY IN ANY
ACTION,  PROCEEDING  OR CLAIM OF ANY  NATURE  RELATING  TO THIS  AGREEMENT,  ANY
DOCUMENTS  EXECUTED  IN  CONNECTION  WITH  THIS  AGREEMENT  OR  ANY  TRANSACTION

                                      10A
<PAGE>

CONTEMPLATED  IN ANY OF SUCH  DOCUMENTS.  THE  LENDER,  BORROWER  AND  THE  BANK
ACKNOWLEDGE THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY.

         (i) Applicable  Bank  Agreements.  The provisions of Bank's  Commercial
Account or Treasury  Management  Agreement and  applicable  service terms ("Bank
Agreements") governing the operations of the Deposit Account are incorporated to
the extent not inconsistent  with the terms and provisions  hereof. In the event
of a conflict  among the  provisions of this Agreement and the provisions of the
Bank Agreements, the provisions of this Agreement shall govern and control.

                  [REMINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      11A
<PAGE>

         IN WITNESS WHEREOF,  the parties hereto have executed this Agreement as
of the date first above written.

WITNESS:                                   BORROWER:

                                           Capital Senior Living A, Inc.,
                                           a Delaware corporation

______________________________________     By:/s/ Paul T. Lee            (Seal)
                                              ---------------------------------
______________________________________        Paul T. Lee, Vice President,
Print Name                                    Finance

                                      12A
<PAGE>

WITNESS:                                   BANK:

                                           Bank One, NA

______________________________________     By: /s/ Jeffrey A. Etter
                                              ---------------------------------
______________________________________     Name:Jeffrey A. Etter
Print Name                                      -------------------------------
                                           Title: First Vice President
                                                 ------------------------------

WITNESS:                                   LENDER:

                                           GMAC Commercial Mortgage Corporation,
                                           a California corporation

______________________________________     By: /s/ Lisa M. Lautner       (Seal)
                                              ---------------------------------
______________________________________        Lisa M. Lautner
Print Name                                    Senior Vice President

                                      13A

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