Document:

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                                                                   EXHIBIT 10.93

                              MANAGEMENT AGREEMENT

                          dated as of December 28, 2001

                                     between

                              BRE/AMBERLEIGH INC.,

                                  as the Owner

                                       and

                           CAPITAL SENIOR LIVING, INC.

                                 as the Manager

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                                TABLE OF CONTENTS

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                                       ARTICLE I

                                  GENERAL PROVISIONS

Section 1.01.        Employment as Exclusive Leasing Agent and the Manager...................1
Section 1.02.        The Manager's Duties Generally..........................................1
Section 1.03.        Term of Agreement.......................................................3
Section 1.04.        Compensation............................................................3
Section 1.05.        Termination.............................................................3
Section 1.06.        Insurance...............................................................6
Section 1.07.        Plans and Specifications................................................11
Section 1.08.        Ethical Standards.......................................................11
Section 1.09.        Cooperation and Consultation with Third Parties.........................11
Section 1.10.        Indemnities.............................................................11
Section 1.12.        Real Estate Tax Assessments.............................................12
Section 1.13.        Policies and Procedures Manual..........................................12

                                      ARTICLE II

                                       LEASING

Section 2.01.        The Manager's Duties Generally As Leasing Agent.........................12
Section 2.02.        Negotiation and Execution of Leases.....................................12
Section 2.03.        Liaison with Tenants....................................................12
Section 2.04.        Marketing of Rental Space...............................................12
Section 2.05.        Advertising.............................................................13

                                     ARTICLE III

                                ADMINISTRATIVE SUPPORT

Section 3.01.        Personnel...............................................................13
Section 3.02.        Contracts...............................................................14
Section 3.03.        Status Reports..........................................................15
Section 3.04.        Records.................................................................15
Section 3.05.        Obligations Under Tenant Leases.........................................15
Section 3.06.        Tenant Compliance.......................................................16
Section 3.07.        Licensing...............................................................16
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                                    ARTICLE IV

                             MAINTENANCE AND OPERATIONS

Section 4.01.        Engineering Management Services........................................16
Section 4.02.        Preventative Maintenance...............................................17
Section 4.03.        Personnel Training.....................................................17
Section 4.04.        Development............................................................17
Section 4.05.        Maintenance............................................................17
Section 4.06.        Supervision of Contracts...............................................17
Section 4.07.        Service Requests.......................................................18
Section 4.08.        Emergencies............................................................18
Section 4.09.        Regulatory Requirements................................................18
Section 4.10.        Security...............................................................19

                                      ARTICLE V

                                FINANCIAL MANAGEMENT

Section 5.01.        Bank Account...........................................................19
Section 5.02.        Collections and Deposits...............................................19
Section 5.03.        Disbursements..........................................................20
Section 5.04.        Examinations and Audits of Accounts....................................20
Section 5.05.        Books and Records......................................................20
Section 5.06.        Budget.................................................................21
Section 5.07.        Obligations for Expenses...............................................22

                                      ARTICLE VI

                                     MISCELLANEOUS

Section 6.01.        No Partnership or Joint Venture........................................22
Section 6.02.        Notices................................................................22
Section 6.03.        Applicable Law.........................................................23
Section 6.04.        Successors and Assigns.................................................23
Section 6.05.        Confidentiality........................................................23
Section 6.07.        Entire Agreement.......................................................25
Section 6.08.        Captions, Gender, Number...............................................25
Section 6.09.        Severability...........................................................25
Section 6.10.        Days...................................................................25
Section 6.11.        Subordination..........................................................25
Section 6.12.        Counterparts...........................................................26
Section 6.13.        Waiver of Jury Trial...................................................26
Section 6.14.        CONSENT TO JURISDICTION................................................26
Section 6.15.        Arbitration............................................................26
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EXHIBIT A TO MANAGEMENT AGREEMENT             Description of Property
EXHIBIT B TO MANAGEMENT AGREEMENT             Fees and Compensation of the
                                                 Manager
EXHIBIT C TO MANAGEMENT AGREEMENT             Budget
EXHIBIT D TO MANAGEMENT AGREEMENT             D-1 Form of Monthly Status Report
                                              D-2 Form of Annual Fiscal Year
                                                 Status Report
                                              D-3 Form of Annual Calendar Year
                                                 Status Report
EXHIBIT E TO MANAGEMENT AGREEMENT             Form of Rent Roll
EXHIBIT F TO MANAGEMENT AGREEMENT             List of Non-Property Staff

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                              MANAGEMENT AGREEMENT

         THIS AGREEMENT, dated as of December 28, 2001, by and between
BRE/Amberleigh Inc., a Delaware corporation (the "Owner") and CAPITAL SENIOR
LIVING, INC., a Texas corporation (the "Manager"), recites and provides:

                                    RECITALS

         WHEREAS, the Owner owns the real estate and related personal property
described on Exhibit A hereto (the "Property").

         WHEREAS, the Property is operated as an independent living facility;

         WHEREAS, the Manager has experience and expertise in the management of
independent living facilities; and

         WHEREAS, the Owner wishes the Manager to manage the Property, and the
Manager desires to do so, pursuant to the terms and conditions set forth in this
Agreement.

                                    AGREEMENT

         NOW, THEREFORE, for and in consideration of the mutual covenants set
forth herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Owner and the Manager agree as
follows.

                                   ARTICLE I

                               GENERAL PROVISIONS

         Section 1.01. Employment as Exclusive Leasing Agent and the Manager.
The Owner hereby employs the Manager as its exclusive agent for leasing,
operating and managing the Property. The Manager accepts such employment and
agency and, subject to the terms and conditions hereof and such express
restrictions or limitations on its authority and, to the extent not inconsistent
with the terms and conditions hereof, such written instructions as may from time
to time be given by the Owner, agrees to perform the duties and obligations
described herein. In its performance of its duties under this Agreement, the
Manager shall be an independent contractor rather than an employee of the Owner.

         Section 1.02. The Manager's Duties Generally.

                  (a) The Manager shall assist the Owner in the leasing,
management, operation, supervision, control and administration of the Property
and, by its execution hereof, the Manager accepts the relationship of trust and
confidence established between itself and the Owner. In accepting its employment
hereunder, the Manager shall (i) perform its responsibilities hereunder with the
same or a greater degree of diligence, competence and care exercised by leading
real estate brokers, agents and managers of facilities of the same or similar
type as the Property in the general areas in which the Property is located and
(ii) act with due care in its management of the Owner's funds and property and
avoid conflicts of interest or self dealing that would be

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detrimental to the interests of the Owner. In addition to the obligations
expressly provided for in this Agreement, the Manager shall do such other things
on behalf of the Owner that are consistent with this Agreement, necessary or
appropriate, in the judgment of the Owner, and communicated to the Manager, for
the proper and profitable operation of the Property.

                  (b) Without limiting the restrictions placed upon the Manager
pursuant to Subsection (a), the Manager hereby agrees that:

                        (i) during the Term of this Agreement neither the
Manager nor any person controlling, controlled by or under common control with
the Manager (an "Affiliate") shall develop, finance, operate, manage or acquire
any direct or indirect interest in any assisted living, independent living, or
congregate care facility (as the case may be) located within five miles of the
Property (a "Competing Facility") without the prior written consent of the
Owner, provided, however, that in the event that the Manager enters into a
transaction involving a Portfolio Transaction (as defined below), the Manager
may own, operate or manage, as applicable, any Competing Facility, connected
with a Portfolio Transaction and located within such radius, if (A) the Manager
does not relocate any Property Staff involved in the marketing of the Property
to such Competing Facility or otherwise employ marketing materials or trade
secrets specifically developed for use in the Property; and (B) the Manager does
not reposition the Competing Facility to compete directly with the Property. For
purposes of this Subsection, "Portfolio Transaction" shall mean a single
transaction in which the Manager acquires the ownership of, leasehold interest
in, or is contracted to manage, at least five operating assisted living or
independent living facilities.

                        (ii) during the Term of this Agreement and for a period
of one year thereafter, neither the Manager nor any Affiliate will, in
connection with any independent living facility or assisted living facility (as
the case may be) in which it directly or indirectly owns an interest or which it
manages, solicit any of the tenants of the Property or interfere, either
directly or indirectly, in any manner, with any relationship between the tenants
of the Property and their landlord(s).

                        (iii) for a period of one year after the expiration of
this Agreement, neither the Manager nor any Affiliate will solicit any of the
Property Staff (as defined in Section 3.01) or interfere, either directly or
indirectly, in any manner, with their employment by the Owner, another lessee or
owner of the Property, or the successor to the Manager, as applicable.

                  (c) If any provision of this Section is deemed invalid by a
court of competent jurisdiction, the covenants contained herein shall be
applicable and enforceable for such lesser period of time and for such lesser
activity included within such limitations, as such court may then or thereafter
determine to be reasonable and proper under the circumstances.

                  (d) In the event that any provision hereof is deemed to be
unenforceable, the remainder of this Section shall not be affected thereby and
each provision hereof shall be valid and enforced to the fullest extent
permitted by law.

                  (e) The Manager hereby acknowledges that the damages the Owner
would sustain in the event of any violation of the provisions of this Section
are difficult or impossible to

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ascertain. Accordingly, the Manager hereby agrees that the Owner shall be
entitled, in addition to any other remedy or damages available to it in the
event of any such violation, to injunctive relief to restrain such violation by
the Manager and any person or entity acting for or with the Manager

         Section 1.03. Term of Agreement. The initial term of this Agreement
(the "Initial Term") shall commence on the date of this Agreement and unless
otherwise set forth in this Agreement, shall continue through the fifth
anniversary of the date of this Agreement, and shall thereafter be automatically
renewed for successive one-year extensions except as otherwise set forth in this
Agreement and the limited liability company agreement of BRE/CSL L.L.C. (the
"Venture L.L.C. Agreement").

         Section 1.04. Compensation. As compensation for the Manager's
performance of its obligations hereunder, the Owner agrees to pay to the Manager
the fees for the Property as set forth on Exhibit B attached hereto.

         Section 1.05. Termination. (a) Termination for Cause. The Owner may
elect to terminate this Agreement immediately upon the occurrence of a Default
by notifying the Manager in writing that this Agreement has been terminated (a
"Notice of Default"). For purposes of this Agreement, "Default" shall mean:

                        (i) The Manager's gross negligence or willful misconduct
in the performance of its duties under this Agreement;

                        (ii) The revocation of any license or permit necessary
for the performance by the Manager of its duties hereunder or for the operation
of the Property as independent living facilities, or the Manager's failure to
keep any such license or permit in force for any reason whatsoever which license
or permit is not reinstated before a material adverse impact or effect on the
operation of the Property or, if earlier, the expiration of 60 days after the
Manager is initially notified of such revocation or failure by applicable
authorities or the Owner;

                        (iii) A non-voluntary reduction in licensed bed capacity
or a governmental or regulatory restriction on admission and/or retention of
residents resulting from acts or omissions of the Manager;

                        (iv) The violation by the Manager in any material
respect of any provision of this Agreement, provided, however, that no default
shall be deemed to have occurred if the Manager cures such violation within 30
days after the Owner's written notice to the Manager of such violation with
respect to a non-monetary default and within 5 days with respect to a monetary
default;

                        (v) The violation by the Manager of any provision of any
Management Agreement or lease, between the Manager or any affiliate of the
Manager and the Owner or any affiliate of the Owner, which violation entitles
the Owner or such affiliate of Owner to terminate such Management Agreement or
lease;

                        (vi) The default of Capital Senior Living Properties,
Inc., as a member of BRE/CSL L.L.C., under any material provision of the Venture
L.L.C Agreement;

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                        (vii) The entry by a court of competent jurisdiction of
a decree or order for relief in respect of the Manager or Capital Senior Living
Corporation (the "Parent"), in an involuntary case or proceeding under any
bankruptcy, insolvency or similar law, or appointing a receiver, liquidator,
trustee or similar official of the Manager or the Parent of all or any
substantial part of the property of any of them, or ordering the reorganization
of the Manager or the Parent, the winding up of the Manager or the Parent of its
affairs or liquidation of its property, and such decree or order shall continue
unstayed and in effect for a period of 30 days;

                        (viii) The consent or acquiescence by the Manager or the
Parent to the entry of any decree or order described in Subsection 1.05(a)(vii)
hereof, the commencement by the Manager or the Parent of a voluntary case or
proceeding under any bankruptcy, insolvency or similar law, the making by the
Manager or the Parent of any general assignment for the benefit of creditors, or
the Manager's or the Parent's failure or admission in writing of its inability
to pay its debts as they become due;

                        (ix) Any material adverse change in the financial
condition of Manager which adversely affects Manager's ability to perform its
duties under this Agreement; or

                        (x) A transfer of any voting stock in the Manager which
would cause the current owners of Manager to own less than 51% of all ownership
interests in Manager.

         The Manager or the Parent shall notify the Owner in writing of the
occurrence of any of the events specified in Sections 1.05(a)(i)-(x) above
promptly after it first learns of such event.

                  (b) Termination Without Cause. The Owner may terminate this
Agreement upon (i) the sale to an unaffiliated third party of the Property, or
(ii) the transfer to an unaffiliated third party of all of (x) the Venture's
ownership interest in Owner or (y) the Blackstone Member's (as defined in the
Venture L.L.C. Agreement) ownership interests in the Venture (as defined in the
Venture L.L.C. Agreement).

                  (c) Action on Termination. For purposes of this Section,
"Effective Date" shall mean the date upon which (i) a Notice of Default is
delivered by the Owner or (ii) an event described in Section 1.05(b) occurs.

                        (i) Within ten business days following the Effective
Date, the Manager shall provide the Owner with the following items to facilitate
the transfer of leasing and management responsibilities to the Owner or its
designee in a comprehensive and professional manner:

                            (A) A schedule of termination activities including
notices to vendors, contractors and banks and meetings with the successor entity
responsible for the leasing and management of the Property;

                            (B) An itemized statement of the amounts due
hereunder from the Owner to the Manager;

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                        (C) An itemized statement of the amounts due suppliers
of services and goods which have been ordered by the Manager in the name of the
Owner;

                        (D) An itemized statement of all accounts receivable due
the Owner from any source; and

                        (E) A list of all records, reports, financial
statements, files and similar materials in the Manager's possession related to
the Property.

                        (ii) On the Effective Date, the Manager shall:

                            (A) Deliver to the Owner all funds collected and
held for the account of the Owner including, without limitation, passbook
accounts, negotiable and investment instruments, demand deposits and petty cash,
whether any of the foregoing is received before or after the termination hereof;

                            (B) Deliver to the Owner all property and documents
and all records, reports, files and similar materials relating to the Property;

                            (C) Assign to the Owner, or its designee, all
contracts not otherwise in the name of the Owner relating to the operation or
leasing of the Property and assign, to the extent transferable, to the Owner, or
its designee, all applicable licenses and permits necessary to operate the
Property as an independent living facility;

                            (D) Deliver to the Owner a complete list of all
contracts, agreements and obligations entered into or incurred by the Manager on
behalf of the Owner during the Term hereof; and

                            (E) Furnish such other information and take such
other actions as the Owner shall reasonably require to transfer the Manager's
leasing and management responsibilities to the Owner or its designee.

                        (iii) Within 25 days after the Effective Date, the
Manager shall deliver to the Owner a full accounting, including a statement
showing all payments collected by it and all moneys held by it, for the period
following the last date covered by the last accounting furnished to the Owner.

                        (iv) The Manager's obligation to deliver to the Owner or
its designee the items described in this Section 1.05(c) shall be a continuing
obligation with respect to any of those items that may be in or come into the
Manager's possession or control on or after the effective date of termination of
this Agreement.

                        (v) The Manager shall cooperate fully with the Owner or
its designee in the transfer of, or in obtaining, all applicable licenses and
permits necessary to operate the Property as an independent living facility and
of management, leasing and licensing operational responsibilities to the Owner
or such designee.

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                        (vi) Manager shall provide a current list of all
Property Staff together with access to payroll, personnel and employment records
and assist Owner in reasonably transitioning those employees of Manager at the
Property which Owner so selects or Owner's designee selects.

                  (d) Casualty or Condemnation. Notwithstanding the foregoing or
anything to the contrary contained in this Agreement, either the Manager or the
Owner may elect to terminate this Agreement immediately if the Property is
subject to a Casualty or Condemnation Event (as defined herein) by giving
written notice of termination to the other party. For purposes hereof, a
"Casualty or Condemnation Event" shall mean damage to a Property by fire, smoke,
lightning, wind storm, explosion, riot, vandalism, malicious mischief, theft and
such other casualty hazards and risks to the extent that the Property cannot, in
the Manager's or Owner's (as the case may be) reasonable judgment, be
economically operated as the type of facility it was prior to such casualty and
(i) such casualty occurred within 24 months of the end of the Term, or (ii) such
casualty is an event for which insurance coverage is not required under Section
1.06 and a condemnation or taking by eminent domain which is either (i) 50% or
more of the Property (measured by any of gross area, rentable square footage or
number of rental units) or (ii) such portion or portions of the Property so that
the portion remaining cannot, in the Manager's or Owner's (as the case may be)
reasonable judgment, be economically operated as the type of facility it was
prior to the taking.

                  (e) Termination by the Manager. The Manager may terminate this
Agreement by written termination notice to the Owner in the event that the
Manager fails to receive reimbursement of reimbursable expenses or any
compensation due the Manager pursuant to the terms of this Agreement, and such
failure continues for a period of 30 days after the Manager's written notice of
such failure to the Owner.

                  (f) Effect of Termination. No termination of this Agreement
shall affect any obligation owing by either party hereto to the other which
accrued prior to the Effective Date of the Notice of Termination.

         Section 1.06. Insurance.

                  (a) The Owner's Insurance Coverage. The Manager will obtain at
the Owner's sole cost and expense the following coverage for the Owner with
respect to the Property. The Owner retains the right to procure all such
insurance for itself should it see fit rather than having the Manager procure
such insurance on behalf of the Owner. If the Owner is procuring insurance for
itself, and elects again to have the Manager procure insurance on behalf of the
Owner, it shall give the Manager sufficient notice to procure all required
insurance.

                        (i) Building Insurance. The Manager shall obtain a
building and contents insurance policy with comprehensive all risk coverage with
respect to the buildings and personal property components of the Property
(including, without limitation, any such personal property components owned by
the Manager) and which shall not exclude the following: fire, lighting, extended
coverage, theft, flood, earthquake (where available), vandalism, sprinkler
leakage, water damage, collapse and debris removal.

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         The amount of such insurance shall not be less than the full
replacement cost except where sublimits are appropriate (and a replacement cost
endorsement shall be provided for these purposes permitting payment of the loss
without a requirement to rebuild) as determined by an insurance appraisal or
such other valuation with provisions for the use of indexes at interim dates to
increase the value for inflation.

         The policy shall contain an endorsement called an "Agreed Amount
Endorsement" which shall waive any and all coinsurance provisions under the
policy as it applies to the coverage.

                        (ii) Business Interruption and Loss of Rent Insurance.
The Manager shall obtain a business interruption and loss of rent insurance
policy with coverage against all of the risks referred to in Subsection (a)(i)
above. The insurance shall be in an amount equal to not less than 100% of the
annual rent roll schedules of the Property covering all tenants and shall be
endorsed to cover unoccupied and unleased space at pro forma rents and shall
include gross budgeted revenues for all other activities. The policy shall
contain an Agreed Amount Endorsement waiving all coinsurance provisions.

                        (iii) Comprehensive General Liability Insurance. This
policy shall include coverage for claims arising from bodily injury, personal
injury, and property damage occurring upon, in, or about the Property. The
coverage shall be on an occurrence basis, and the minimum limits shall be not
less than $1,000,000. Coverage for liquor law liability shall also be included
if required by law.

         The policy should cover the following hazards: premises and operation
incidental malpractice; comprehensive owned and non-owned auto liability
insurance and coverage for hired vehicles on an "if any" basis.

                        (iv) Umbrella Liability Coverage. A policy shall be
obtained, providing coverage in an amount equal to at least $10,000,000 in
excess of the coverage to be maintained pursuant to Subsection (iii) of this
Section 1.06(a).

                        (v) Additional Insurance. The Owner shall have the right
to require the Manager to obtain and maintain, if requested in writing and at
the Owner's sole cost and expense, such other insurance as the Owner may from
time to time deem reasonably necessary, and which insurance is normal and
customary for other operations of improved property similar to the Property.

                        (vi) Priority of Coverage. The Owner's insurance will be
primary as to any insurance carried by the Manager, and any such coverage of the
Manager will be excess insurance to the extent that the Manager is acting within
the scope of its duties under this Agreement.

                  (b) The Manager's Operational Insurance Coverage. Throughout
the Term, the Manager shall procure and maintain, at the Owner's sole cost and
expense, the insurance coverage set forth in this Section 1.06(b). The Owner
retains the right to procure all such insurance for itself or the Manager, as
appropriate, should it see fit rather than having the Manager procure such
insurance.

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                        (i) Worker's Compensation and Unemployment Compensation.
Workers' compensation and unemployment compensation with respect to the Property
Staff in full compliance with all applicable state and federal laws and
regulations;

                        (ii) Employer's Liability Insurance. Employer's
liability insurance in an amount not less than $100,000 for each accident,
$500,000 for each disease policy limit and $100,000 for diseases for each
employee covering all Property Staff;

                        (iii) Comprehensive Automobile Liability Insurance.
Comprehensive automobile liability insurance coverage with respect to those
motor vehicles owned by the Owner which are used by the Property Staff in
connection with the Property which has limits for bodily injury of not less than
$250,000 per person and $500,000 per accident and property damage of $100,000
per accident. The comprehensive automobile liability policy shall include
blanket non-owned coverage;

                        (iv) Employee Dishonesty Insurance. Employee dishonesty
insurance with respect to the Property Staff and any agents against employee
dishonesty in an amount not less than the greater of (A) $1,500,000 or (B) an
amount equal to the average monthly receipts from the Property;

                        (v) Professional Liability Insurance. Professional
liability insurance in an amount equal to at least $1,000,000 with respect to
bodily injury, property damage or personal injury arising out of professional
acts, errors or omissions;

                        (vi) Fiduciary Liability Insurance. In the event that
the Manager makes any employee benefit plan available to the Property Staff,
fiduciary liability insurance in an amount equal to at least $1,000,000 with
respect to claims alleging breach of fiduciary obligations under the Employment
Retirement Income Security Act of 1974 and any acts, errors or omissions
committed in connection with the administration of any employee benefit plans
for the Property Staff;

                        (vii) Employment Practices Insurance. Employment
practices insurance in an amount equal to at least $1,000,000 with respect to
lawsuits brought by employees alleging wrongful discharge, discrimination,
harassment or other employment related exposure with respect to the Property
Staff; and

                        (viii) Umbrella Liability Coverage. A policy shall be
obtained, providing coverage in an amount equal to at least $10,000,000 in
excess of the coverage to be maintained pursuant to Subsections (i) through
(vii) of this Section 1.06(b).

                        (ix) Other Insurance. Such other insurance as may be
carried at similar properties as the Owner may from time to time reasonably deem
necessary in connection with or for the performance of the Manager's duties
hereunder.

                  (c) The Manager's Insurance Coverage. Throughout the Term, the
Manager shall procure and maintain, at the Manager's sole cost and expense, the
following insurance coverage:

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                        (i) Comprehensive General Liability Insurance.
Comprehensive general liability insurance which includes coverage for all
Non-Property Staff (as defined in Section 3.01(b)) and if the Manager is found
to be acting outside the scope of his duties under this Agreement, with minimum
limits of at least $1,000,000 per occurrence for bodily injury, personal injury
and property damage;

                        (ii) Worker's Compensation and Unemployment
Compensation. Workers' compensation and unemployment compensation with respect
to the Non-Property Staff in full compliance with all applicable state and
federal laws and regulations;

                        (iii) Employer's Liability Insurance. Employer's
liability insurance in an amount not less than $100,000 for each accident,
$500,000 for each disease policy and $100,000 for diseases for each employee
covering all Non-Property Staff performing any work relating to the Property;

                        (iv) Comprehensive Automobile Liability Insurance.
Comprehensive automobile liability insurance coverage with respect to those
motor vehicles owned by the Manager which are used by Non-Property Staff in
connection with the Property which has limits for bodily injury of not less than
$250,000 per person and $500,000 per accident and property damage of $100,000
per accident. The comprehensive automobile liability policy shall include
blanket non-owned coverage;

                        (v) Umbrella Liability Insurance. An "umbrella"
liability coverage providing coverage in an amount equal to at least $10,000,000
in excess of the coverage to be maintained pursuant to Subsections (i), (iii)
and (iv) above;

                        (vi) Employee Dishonesty Insurance. Employee dishonesty
insurance with respect to the Non-Property Staff and any agents, officers and
employees of the Manager against dishonesty by any of such persons in an amount
not less than the greater of (A) $1,500,000 or (B) an amount equal to the
average monthly receipts from the Property;

                        (vii) Fiduciary Liability Insurance. Fiduciary liability
insurance in an amount equal to at least $1,000,000 with respect to claims
alleging breach of fiduciary obligations under the Employment Retirement Income
Security Act of 1974 and any acts, errors or omissions committed in connection
with the administration of any employee benefit plans made available to the
Non-Property Staff;

                        (viii) Employment Practices Insurance. Employment
practices insurance in an amount equal to at least $1,000,000 with respect to
lawsuits brought by employees alleging wrongful discharge, discrimination,
harassment or other employment related exposure with respect to Non-Property
Staff; and

                        (ix) Other Insurance. Such other insurance as may be
carried at similar properties as the Owner may from time to time reasonably deem
necessary in connection with or for the performance of the Manager's duties
hereunder.

                  (d) Payment of Insurance. The insurance required by Subsection
(a) and (b) of this Section, whether obtained by the Manager on behalf of the
Owner or by the Owner directly,

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shall be an operating expense of the applicable Property and paid from such
Property's revenues or reserves or by the Owner, as directed by the Owner. The
insurance coverage required pursuant to Subsection (c) shall be paid for by the
Manager from its own funds.

                  (e) Policy Requirements. The policies described in Subsections
(a) through (c) above shall be in form and substance reasonably satisfactory to
the Owner and with insurance companies that are reasonably acceptable to the
Owner, reputable and properly licensed in each State in which they propose to
effect coverage. The Manager shall furnish the Owner with certificates of
insurance or certified copies of each of the insurance polices required to be
obtained and maintained by the Manager pursuant to the terms of this Agreement.
The insurance policies required pursuant to Subsection (a) shall be in the name
of the Owner with the Manager named as an additional insured party. The
insurance policies required pursuant to Subsections (b) and (c) shall be in the
name of the Manager with the Owner named as an additional insured party. Each
insurance policy required by this Section shall provide that such policies shall
not be canceled or otherwise modified without 30 days' prior written notice to
the Owner. At least 5 days prior to the extension of any such policy the Manager
shall furnish the Owner with evidence that the insurance policies required
hereunder have been renewed. The Manager shall in all cases obtain the Owner's
prior written approval before obtaining, renewing, canceling or modifying the
coverages under any insurance policies required hereunder. The Manager shall
make periodic reports and recommendations to the Owner regarding the adequacy of
the then current insurance policies and provide the Owner with adequate warning
of any potential lapses in coverage of which the Manager becomes aware.

                  (f) Waiver of Subrogation. The Owner and the Manager hereby
waive and release any and all claims either may have or acquire against the
other by way of subrogation or otherwise, for any loss or damage occasioned by
the negligence of either of them or their respective agents, employees,
contractors, licensees or invitees, which results in any loss or damage to
person or property and which is fully insured against by either the Owner or the
Manager in accordance with the terms of this Agreement. Each party agrees to
obtain from its respective insurance carriers waiver of subrogation endorsements
to all such insurance policies maintained hereunder (excluding workmen's
compensation or employer's liability insurance) providing that each insurance
carrier waives its right of subrogation against the other party in the event of
any loss or damage which is fully insured against pursuant to the provisions of
this Agreement. In the event that such endorsements cannot be obtained and the
mutual waiver contained herein would invalidate any such insurance policy, then
the provisions of this Subsection (f) shall be inapplicable to such insurance
policy.

                  (g) Compliance With Insurance Requirements. The Manager shall
use its best efforts to assure that the Property is not used for any purpose
which may void or impair, or increase the premium payable under, any policy of
insurance held by the Owner pursuant to the terms of this Section 1.06, or which
may render any loss under any such policy uncollectible.

                  (h) Insurance Claims. The Manager shall promptly report to
Gary M. Sumers, on behalf of the Owner, c/o The Blackstone Group, 345 Park
Avenue, New York, New York 10154, facsimile (212) 583-5726, and the insurance
agent, broker or adjustor designated by the Owner, all material damages,
accidents or claims relating to the ownership, maintenance or operation of the
Property and shall cooperate with such agent, broker or adjustor in connection
with its

                                       10
<PAGE>

investigation thereof and its reporting to the appropriate insurance carrier.
The Manager shall not compromise or settle any claims against insurance carriers
without the prior written approval of the Owner.

         Section 1.07. Plans and Specifications. Upon request by the Owner and
if reasonably available to the Manager, the Manager shall promptly furnish the
Owner with a set of plans and specifications for the Property and, with the aid
of these documents and its own inspections the Manager shall remain
knowledgeable with respect to the organization, location, character, plan and
operation of the lighting, plumbing, heating, air conditioning and all other
mechanical systems and equipment of the Property.

         Section 1.08. Ethical Standards. In any transaction with vendors,
contractors or others who provide services or goods for the Owner or the
Property, the Manager shall act at all times in the best interests of the Owner
and shall credit to the Owner all discounts, commissions, rebates, finders fees
and similar amounts obtainable as a result of such transactions. The Manager
shall not enter into any agreement to provide goods or services for the Property
with any party, partnership, corporation or other entity related to or
affiliated with the Manager without the prior written approval of the Owner.

         Section 1.09. Cooperation and Consultation with Third Parties. The
Owner may appoint and employ auditors, attorneys, appraisers and other persons
for the purpose of rendering advice about or for conducting research and inquiry
with respect to the leasing, management, operation and valuation of the Property
and, in any such case, the Manager shall cooperate fully with such persons and,
within the authority invested in such persons, communicate all information
requested and advise and consult with them in good faith.

         Section 1.10. Indemnities.

                  (a) Manager Indemnity

                           Subject to the provisions of Section 1.06 hereof, the
                  Manager shall indemnify and hold the Owner, its officers,
                  directors and employees harmless from and against all losses,
                  costs, expenses, claims, damages, deficiencies, actions,
                  suits, proceedings, demands, assessments, orders, judgments,
                  writs, decrees, debts, obligations and liabilities (including
                  reasonable attorney's and accounting fees) ("Losses") of any
                  nature and of any kind whatsoever which may be made against or
                  incurred by any of them resulting from or arising out of or in
                  any way connected with any of the following unless such Losses
                  are directly caused by the Owner: acts of Manager which (i)
                  constitute a breach of the provisions of this Agreement, (ii)
                  are otherwise outside the scope of Manager's employment and
                  (iii) result from Manager's own negligence or misconduct.

                  (b) Owner Indemnity

                           Subject to the provisions of Section 1.06 hereof, the
                  Owner shall indemnify and hold the Manager, its officers,
                  directors and employees harmless from and against all Losses
                  arising out of or in connection with the management, operation
                  and leasing of the Property, except for acts of Manager which
                  (i)

                                       11
<PAGE>

                  constitute a breach of the provisions of this Agreement, (ii)
                  are otherwise outside the scope of its employment or (iii)
                  result from Manager's own negligence or misconduct.

         Section 1.12. Real Estate Tax Assessments. If during the Term, the
Owner shall elect to protest any real or personal property tax assessment in
connection with Property, the Manager shall cooperate with the Owner and its tax
advisors in connection therewith. The Manager will have no responsibility for
the institution of any legal proceedings in connection with tax assessments.

         Section 1.13. Policies and Procedures Manual. Upon request by the
Owner, the Manager shall promptly provide the Owner a policies and procedures
manual for the Property (the "Manual") for review and approval by the Owner.
Following the approval by the Owner of the Manual, the Manager shall utilize the
Manual in connection with the leasing, management or operation of the Property
and shall submit any proposed modifications to the Manual to the Owner in
writing. Following the Owner's review and approval of such modifications, the
Manager shall utilize the modified Manual.

                                   ARTICLE II

                                     LEASING

         Section 2.01. The Manager's Duties Generally As Leasing Agent. The
Manager shall use its best efforts to lease and keep leased all leasable space
in the Property to such tenants as it may deem compatible with the character and
location of the Property. The Manager shall use its best efforts to develop and
maintain the character and reputation of the Property while maintaining the
highest possible net income. The Manager shall be familiar with all tenant
leases for the Property, particularly with regard to the services, charges and
procedures applicable to the various tenants.

         Section 2.02. Negotiation and Execution of Leases. The Manager shall
respond to all inquiries concerning tenant leases and shall conduct all
negotiations in connection with their execution, renewal, extension,
modification, amendment or termination. All leases entered into after the date
hereof shall be in such form as may be approved by the Owner, and the Manager
shall furnish the Owner executed originals of such leases upon request.

         Section 2.03. Liaison with Tenants. The Manager shall schedule and
coordinate tenant moves, maintain personal contact with tenants and serve as
liaison with the Owner in order to minimize misunderstandings and receive and
resolve tenant complaints in a timely and courteous manner.

         Section 2.04. Marketing of Rental Space. The Manager shall develop a
comprehensive, professional program for marketing the Property (a "Marketing
Plan") and, following the approval of the Marketing Plan by the Owner, implement
and monitor the effectiveness of such Marketing Plan.

                                       12
<PAGE>

         Section 2.05. Advertising. The Manager, at the Owner's expense and in
accordance with the Budget (as that term is defined in Section 5.06 below) and
the Marketing Plan, shall advertise, to such extent and in such media as the
Manager deems advisable, the availability of units in the Property; provided,
however that the Manager shall pay all costs associated with advertisements that
do not relate specifically and exclusively to the availability of rental space
in, or the operational needs of, the Property, unless otherwise approved in
writing by the Owner.

                                  ARTICLE III

                             ADMINISTRATIVE SUPPORT

         Section 3.01. Personnel.

                  (a) Property Staff. Based upon job standards, wage rates and
the applicable Plan of Operation (as defined in Subsection (c), below) but
subject to the Budget, the Manager shall recruit, hire, train, supervise and
discharge all on-site management, administrative, maintenance, cleaning and
other personnel, including, without limitation, the Property director or
administrator (collectively, the "Property Staff") necessary to properly manage,
administer, repair, maintain and otherwise operate the Property. The Property
Staff may be full-time, part-time, temporary or contract personnel. The Property
Staff shall be employees of the Manager and not the Owner, provided, however,
that the costs of such Property Staff shall be paid from the Owner's funds. All
costs of hiring, equipping and providing the services of Property Staff,
including but not limited to, compensation, health insurance, employer liability
insurance, payroll taxes, bonding, workers compensation insurance, benefits and
vacations shall be an expense of Owner. The Manager shall pay wages and required
payroll taxes and all costs and expenses of such Property Staff from the Owner's
funds and shall make provision at the Owner's expenses for employee group
benefits as agreed upon by the Owner. The Manager will abide by all local, state
and federal laws, regulations and guidelines in administering the payroll. The
Manager will cause to be prepared and filed all forms, reports and returns as
required by law in connection with unemployment insurance, workers' compensation
insurance, withholding tax, social security and other similar taxes now in
effect. In addition the Manager shall take such actions as may be necessary to
comply with the provisions of wage, hour, health, safety, income tax, social
security, unemployment compensation, workman's compensation and similar laws,
regulations and requirements relating to the Property Staff. The Manager shall,
at the request of the Owner, promptly provide the Owner with the then-current
list of Property Staff.

                  (b) The Manager's Personnel. The Manager shall maintain
sufficient personnel to fulfill its obligations hereunder. Prior to the
commencement of its duties hereunder, the Manager shall provide the Owner with a
listing of the personnel which it intends to employ in connection with the
obligations to be performed by the Manager hereunder (the "Non-Property Staff"),
together with a job description for each member of the Non-Property Staff. The
Owner and the Manager shall mutually agree upon the personnel required by the
Manager to fulfill its obligations hereunder. The Manager shall, upon the
request of the Owner, provide the Owner with a list of the then-current
Non-Property Staff. The Owner shall have no authority to provide directions to
the Managers employees or to terminate such employees employment by the Manager.
Nothing in this section is intended or shall be construed to make any person
employed by the Manager an employee of the Owner, to influence the hiring
decisions of the Manager or to

                                       13

<PAGE>

alter the relationship between the Owner and the Manager of independent
contractor. The Manager acknowledges that in entering into this Agreement the
Owner is relying upon the experience and capabilities of the employees of the
Manager. Accordingly, the Manager agrees to maintain each of positions listed on
Exhibit F to this Agreement (the "Positions") and shall not eliminate or change
any of the Positions without the prior written consent of the Owner. The initial
occupants of each of the Positions are listed on Exhibit F and the Manager
agrees to keep each of the Positions permanently occupied during the Term by
personnel with experience and capabilities similar or superior to the
individuals listed on Exhibit F (the "Personnel"), with any vacancies in any
such Positions occurring during such Term to be filled on a timely basis. The
Manager shall notify the Owner of any change in the Personnel and shall supply
the Owner with information which is reasonably sufficient to demonstrate the
caliber and experience of any replacement Personnel.

                  (c) Plan of Operation. Upon request by the Owner and if plans
of operation for the Property are required by law, the Manager shall promptly
provide to the Owner the current plan of operation for the Property (the "Plan
of Operation"). The Plan of Operation shall (i) describe each of the services to
be supplied to tenants at the Property and (ii) list all Property Staff that
will be required at the Property in order to provide such services to the
tenants, to provide management and administrative services for such Property
(other than such administrative services as are to be provided by the Manager
hereunder) or to maintain the Property. The Plan of Operation must be approved
by the Owner in writing. The Owner and the Manager shall review the Plan of
Operation for the Property not less than annually and shall amend the Plan of
Operation from time to time as appropriate.

                  (d) Job Descriptions. Upon the request of the Owner, the
Manager shall provide to the Owner job descriptions for all Property Staff
positions in the Plan of Operation. The Manager shall furnish the job
descriptions, along with job performance standards, to the Owner to delineate
clearly between the Manager's exclusive responsibilities which are to be
performed by the Non-Property Staff, and those responsibilities that are
delegated by the Manager to the Property Staff.

         Section 3.02. Contracts.

                  (a) Renewal and Execution. The Manager shall be familiar with
the provisions of, and provide to the Owner copies of, all material contracts
affecting the leasing, management or operation of the Property. At least 60 days
prior to the scheduled termination of any of these contracts, the Manager shall
recommend to the Owner whether such contracts should be renewed, modified or
canceled, and renew, modify or cancel such contracts as the Owner may direct.
Where new contracts are necessary, the Manager shall recommend to the Owner for
its approval contracts from responsive and responsible contractors for work to
be performed according to written specifications developed by the Manager in
consultation with the Owner. The Manager shall assure that all contractors are
properly insured (and bonded, if appropriate) for the duration of their
contracts. Except for emergencies and those cases where the Owner authorizes
otherwise due to the size or nature of the contract, all contracts and
procurements shall be let by competitive bidding procedures. The Manager, its
employees and the Property Staff shall disclose to the Owner the extent of any
financial interest that it or they may have in any firm or person providing
goods or services to the Owner pursuant to any such contracts. The

                                       14
<PAGE>

Manager shall exploit fully all commonality of contracting and purchasing so as
to accrue to the Owner all possible benefits deriving from a unified procurement
policy.

                  (b) Supervision and Enforcement. The Manager shall supervise
and oversee the activities of all contractors, review the quality of their
workmanship, enforce contractors' warranties and approve all work and materials
prior to payment therefor.

         Section 3.03. Status Reports.

                  (a) Monthly Status Reports. The Manager shall prepare and
deliver to the Owner within the prescribed time period set forth on Exhibit D-1
a written Monthly Status Report in the form attached hereto as Exhibit D-l.

                  (b) Annual Fiscal Year Status Reports. The Manager shall
submit to the Owner within 30 days following the end of each fiscal year, a
report in the form of Exhibit D-2 attached hereto.

                  (c) Annual Calendar Year Status Reports. The Manager shall
submit to the Owner within 15 days following the end of each calendar year, a
report in the form of Exhibit D-3 attached hereto.

                  (d) Healthcare Reports. The Manager shall submit to the Owner
all healthcare surveys, responsive plans of correction, notices from
governmental regulatory authorities, administrative orders, and notices of
change of law/regulation impacting the operation and provision of services at
the Property.

                  (e) Other. The Manager shall prepare and deliver to the Owner
such other reports and/or statements in such form as may reasonably be requested
by the Owner from time to time, which reports shall be delivered within 30 days
after request thereof (or as soon thereafter as is practicable).

         Section 3.04. Records. The Manager shall maintain and keep complete,
accurate and up-to-date all books and records of the Owner relating to the
Property including, without limitation, all accounting and financial records,
rent rolls, memoranda, correspondence, notices and all other such records as may
be appropriate or customary in connection with the leasing and operation of the
Property and the transaction of business with third parties including, without
limitation, suppliers, employees, labor unions and governmental or municipal
authorities. All of these records shall be kept and maintained available for
inspection at any and all reasonable times during normal business hours by any
person authorized in writing by the Owner, but not by others.

         Section 3.05. Obligations Under Tenant Leases. The Manager shall comply
with all requirements respecting the operation or maintenance of the Property
imposed upon the Owner as "landlord" under any lease for the Property. The
Manager's duties hereunder shall include, without limitation, the selection and
supervision of all contractors or others providing required tenant services or
performing tenant repair or capital improvement work at the Property.

                                       15
<PAGE>

         Section 3.06. Tenant Compliance. The Manager shall monitor the
performance of all tenants and use its best efforts to secure the full
compliance by tenants with the terms and provisions of their leases. The Manager
shall inform all tenants of such rules, regulations and notices as may be
promulgated by the Owner or the Manager. The Manager, at the expense of and
using attorneys approved by the Owner, may institute legal proceeding in its own
name or in the name of the Owner to collect rent, security deposits and other
tenant charges, to oust or dispossess tenants or others occupying the Property
and otherwise to enforce the rights of the Owner with respect thereto. The
Manager shall secure the prior written approval of the Owner before instituting
legal proceedings or compromising or settling any such claim or proceeding. The
Manager shall give the Owner prompt written notice of all matters involving
actual or threatened litigation.

         Section 3.07. Licensing. The Manager shall be responsible for obtaining
all licenses, permits or other authorizations (the "Permits") necessary to
operate the Property as an independent living facility in the name of the Owner
or such other name as the Owner may designate. All amounts payable to state or
local governmental authorities with respect to the Permits for a Property, and
all legal fees incurred in connection with obtaining such Permits with the prior
written permission of the Owner, shall be paid by the Owner. Upon request, the
Manager shall provide such assistance as may be necessary in order to obtain
Permits for such other affiliate of the Owner with respect to the Property,
whether such Permits are required by applicable law or are being requested at
the option of the Owner or the applicable affiliate.

                                   ARTICLE IV

                           MAINTENANCE AND OPERATIONS

         Section 4.01. Engineering Management Services.

                  (a) Benchmark Study. Upon request by the Owner, the Manager
shall promptly prepare and deliver to the Owner a report containing corrective
and deferred maintenance work or capital improvements required to be performed
at the Property.

                  (b) Quarterly Inspections. The Manager shall conduct physical
inspections of the Property at least quarterly unless the Owner reasonably
determines that a more frequent inspection is necessary. Specific problems shall
be investigated on an "as-needed" basis. The Manager shall submit to the Owner a
written report containing findings, conclusions and recommendations of actions
to be taken to correct deficiencies noted during the inspections. This quarterly
inspection and report shall address deficiencies found in, among other areas,
the building foundations, exterior, roof, flashings, concrete work, sidewalks,
retaining walls, parking areas, gutter and downspout systems, mechanical
equipment and utility distribution systems.

                  (c) Engineering On-Site Inspections. At the request of the
Owner, and at the Owner's expense, the Manager shall employ or retain a
licensed, experienced mechanical engineer or engineering firm to conduct
engineering on-site inspections of the Property. During these inspections, the
engineering firm shall: (i) inspect all mechanical equipment for corrective
maintenance and other action that should be completed by the Property Staff or
outside contractors; (ii) review preventive maintenance records, logs and other
related records to

                                       16
<PAGE>

evaluate work completed; (iii) review energy practices; (iv) consult with the
Property Staff on the findings with regard to the foregoing items; and (v)
submit to the Owner a written, itemized report with respect to the foregoing
immediately following the inspection.

         Section 4.02. Preventative Maintenance. Upon request by the Owner, the
Manager shall promptly provide to the Owner the current preventative maintenance
program for the Property. The Manager shall review or develop, as applicable, a
program designed to keep the Property and all installed mechanical and
electrical systems in proper condition. Following the Owner's review and
approval of any such program for the Property, the Manager shall maintain such
program on a regular basis and such program shall reflect the useful lives of
the various components and items of equipment comprising the Property. The
Manager shall establish and monitor a seasonal maintenance program for the
heating and cooling systems in the Property to assure that they are in good
working order and conserve utility consumption

         Section 4.03. Personnel Training. Upon the request of the Owner, the
Manager shall outline in writing the training needs of the Property Staff,
create a training manual for the Property, and establish a training program
based on such training manual that will teach, maintain and improve the
technical proficiency of each member in his or her assigned job.

         Section 4.04. Development. If Manager believes that a Property should
be expanded or improved, Manager shall recommend such action to Owner. If Owner
decides to proceed with the expansion or improvement of a Property, Owner shall
give Manager a right of first offer to act as development consultant.

         Section 4.05. Maintenance. The Manager shall be responsible, at the
Owner's expense, for maintaining the Property according to standards at least
comparable to similar properties in the general areas in which they are located.
The Manager's maintenance responsibilities shall include, without limitation,
interior cleaning of common areas, exterior window cleaning, painting,
decorating, grounds care and landscaping, plumbing, electrical repair,
carpentry, plastering and such other normal maintenance and repair work as may
be necessary. The areas and items to be maintained shall include, without
limitation, roofing, mechanical and other equipment, building exterior surfaces
(including windows), parking areas, sidewalks, gutters, walkways, hallways,
stairwells, storage rooms, the management office and all other related areas
including fencing, signs and lighting. The Property Staff shall, at least
weekly, conduct walk through inspections of these areas to assure that they are
receiving adequate and appropriate care. The Manager shall supervise the work of
the Property Staff to assure that it is performed in accordance with the Owner's
standards.

         Section 4.06. Supervision of Contracts. The Manager shall arrange for,
coordinate, supervise and enforce the conditions of all contracts necessary or
advisable for the proper operation of the Property including, without
limitation, contracts for the maintenance and repair work described in Section
4.05 above and for water, sewer, electricity, telephone, vermin extermination,
trash removal, landscaping, heating fuels, air conditioner contractual
maintenance, and snow and ice removal. All such contracts (excluding contracts
which provide for payment to vendors directly by residents) shall be at the
Owner's expense. Such contracts entered into during the Term shall provide for
cancellation by the Owner without penalty upon 30 days written notice and shall
not terminate upon the termination of this Agreement, unless the

                                       17
<PAGE>

Owner has agreed otherwise in writing. Any such contracts in the Manager's
possession at the commencement of the Term which do not allow for such 30-day
cancellation will be identified by the Manager and reported to the Owner within
30 days of the commencement of operations. Further, the Manager shall place
orders for such equipment, tools, appliances, materials, and supplies as are
required to adequately maintain and operate the Property. Such equipment, tools,
appliances, supplies and materials shall be used only for operating, maintaining
and repairing the Property, unless the cost thereof is prorated on a basis
satisfactory to the Owner.

         Section 4.07. Service Requests. The Manager shall maintain
business-like relations with tenants of the Property and receive, record and
take appropriate action with respect to any service requests that may be made.
Complaints of a serious nature shall, after investigation, be reported to the
Owner in a timely manner, together with appropriate recommendations. The Manager
shall make reasonable efforts to obtain full compliance by tenants for all items
of maintenance for which they are individually responsible. Scheduled outages of
water, electricity or other services shall be reported to the Owner and to all
tenants, individually, as promptly, fully and courteously as possible and in a
manner and at a time which are customary under the circumstances or as may
otherwise be required by applicable law. Unscheduled material outages shall be
reported to the Owner and the tenants as soon after occurring as is reasonably
possible.

         Section 4.08. Emergencies.

                  (a) Services. Upon request by the Owner, the Manager shall
promptly provide to the Owner details of the current 24-hour, seven day-a-week
maintenance emergency system and any system designed to be responsive to
emergencies (the "Emergency System") for the Property for the Owner's review and
approval. An emergency is defined as any condition of, in or acting on a
Property which if not responded to could injure or damage or impose a threat of
injury or damage to property or persons. The definition of an emergency
includes, without limitation, fire, flood, insufficient heat during winter
weather, lack of hot water and utility shut offs. Following the review of the
Emergency System for the Property submitted by the Manager, the Manager shall
insure that all appropriate Property Staff and Non-Property Staff are familiar
with the applicable Emergency System and shall undertake periodic reviews to
insure that such Emergency System is being complied with.

                  (b) Readiness. In addition to such programs as may be required
by applicable state or local law, rules or regulations, the Manager shall
establish, with the approval of the Owner, a comprehensive program ensuring that
emergencies are dealt with by the Property Staff and outside agencies in a
manner in the best interests of the Owner and the Property and in compliance
with applicable law. This responsibility shall include notification and testing
procedures as may be necessary.

         Section 4.09. Regulatory Requirements. The Manager shall take such
action as may be necessary to (a) obtain and maintain all licenses, permits and
approvals necessary for the operation and maintenance of the Property and (b)
comply in all material respects with all laws, ordinances, orders and
requirements affecting the Property or services provided at the Property; (or
the Owner or the Manager in connection therewith) imposed by any governmental or
quasi-governmental authority having jurisdiction, including but not limited to
building codes, anti-discrimination laws, zoning, assisted living, healthcare,
independent living, and licensing

                                       18
<PAGE>

requirements affecting the Property. The Manager shall give the Owner prompt
written notice of any violation or claimed violation of any such requirement.

         Section 4.10. Security. The Manager shall consult with the Owner to
plan, arrange and supervise a comprehensive security program for the Property.
This program shall include, without limitation, that adequate communications
equipment is operable and available to the Property Staff and all Property Staff
are fully aware of their security responsibilities. Detailed security, fire and
safety procedures shall be developed and distributed to the Owner, all tenants
and the Property Staff. The Manager shall maintain effective liaison with local
fire and police organizations and keep detailed logs covering all security
incidents. The Manager shall promptly inform the Owner of all security incidents
and other material matters prejudicial to the security and safety of the
Property.

                                   ARTICLE V

                              FINANCIAL MANAGEMENT

         Section 5.01. Bank Account. The Manager shall open and maintain, for
the Property, in a local bank selected by the Owner, a checking account (the
"Checking Account") for moneys to be paid or received by the Manager in
connection with its duties hereunder. The Checking Account shall be in the name
determined by the Owner and the Owner shall pay all costs (if any) charged by
the bank for maintaining the account including monthly service fees and the cost
of blank checks; provided, however, that the Manager shall pay all costs charged
by the bank on account of the Manager's errors or negligence in maintaining the
Checking Account including, without limitation, the maintenance of any necessary
cash reserve therein provided that sufficient funds are made available by Owner.
The Manager shall not deposit any of its funds to the Checking Account or
otherwise commingle its funds with the Owner's funds. The Manager shall have
authority to endorse checks payable to the Owner and deposit funds paid or
payable to the Owner into the Checking Account.

         Section 5.02. Collections and Deposits. The Manager shall collect and
deposit in the Checking Account all rents, security deposits, late charges,
insurance and condemnation proceeds, fees, refunds and other monies due from any
source which are payable to the Owner in connection with the leasing and
operation of the related Property; provided, however, that the Manager shall
deposit security deposits in bank accounts selected by and owned by the Owner
and shall otherwise handle security deposits in accordance with applicable law.
All amounts deposited to the Checking Account shall be swept by the Manager from
the Checking Account on a regular basis into an Operating Expense Account
(herein so called) for the Property. Each Operating Expense Account shall be in
an FDIC insured bank approved by the Owner and shall be owned by the Owner. The
style of the Operating Expense Account shall be in the name of the Property with
designated representatives from the Owner and the Manager being the only parties
authorized to draw from said account. If required by Owner's lender and if
permitted by applicable laws and regulations, all payments made by tenants of
the Property shall be paid directly into a lockbox controlled by Owner's lender
or Owner and payments for Operating Expenses and debt service shall be made
pursuant to an agreement between Owner and Owner's lender.

                                       19
<PAGE>

         Section 5.03. Disbursements. On the 15th day of each calendar month or,
if such day is not a business day, the immediately succeeding business day, the
Manager shall deliver to the Owner a check representing all amounts in the
Operating Expense Account (after allowing for outstanding checks written and
deposits made pursuant to this Agreement which had not yet cleared such
Operating Expense Account) in excess of the sum of (i) the amounts to be
expended or disbursed by the Manager with respect to the Property during such
calendar month as set forth in the Budget; (ii) amounts expended in any prior
month in excess of the amount specified in the Budget with respect to which the
Manager has not yet been reimbursed and which have been approved in writing by
the Owner; and (iii) a cushion equal to 5% of the aggregate amount to be
expended in accordance with the Budget in the immediately succeeding month or
such other amount as may be designated by the Owner. If there is a deficit in
the amount required in the preceding sentence relating to payroll costs,
benefits and other payroll-related expenses, Owner shall fund such deficit from
Owner's own funds. The Manager shall pay out of the Operating Expense Account
for the Property all operating expenses of the Property in accordance with the
Budget for such Property, as permitted by this Agreement or as otherwise
approved in writing by the Owner. The Manager shall hold, remit or expend the
funds in the Checking Account and Operating Expense Account according to the
Budget or the directions of the Owner. The funds in the Checking Account and
Operating Expense Account shall not be co-mingled with funds from any other
projects or facilities managed or operated by the Manager and the Manager shall
compile detailed records concerning all transactions relating to the Checking
Account and Operating Expense Account and shall promptly deliver to the Owner
copies of all statements or other correspondence received by the Manager with
respect to such Checking Account and Operating Expense Account. Except in
emergencies, the Manager shall not incur any obligation in excess of $2,000
which is not specifically included in the Budget, and neither shall the Manager
incur any substantial overrun of any budgeted item without the Owner's prior
written approval. Where an emergency relating to a Property precludes the
Manager's obtaining the prior written consent of the Owner, the Manager shall
make reasonable expenditures as necessary to abate the emergency and shall use
its best efforts to contact the Owner by telephone or otherwise as soon as
possible. The Manager shall also notify the Owner in writing of any such
emergency expenditures within 24 hours thereafter. Except as specifically
authorized by the Owner, the Manager will not incur any obligation (whether or
not in the Budget) which will exceed $10,000 or mature more than one year after
its creation. At least two but no more than three persons (including Property
Staff) shall be responsible for handling cash in order to maintain adequate
financial control procedures.

         Section 5.04. Examinations and Audits of Accounts. The Checking
Account, the Operating Expense Account and any other accounts maintained by the
Manager in the name of or for the benefit of the Owner may be examined by the
Owner or its designated representatives during normal business hours. The Owner
shall have the right to cause an audit of such accounts at any time at its
expense and the Manager shall make its facilities available for, and cooperate
in, any such audit. In addition, the Manager shall promptly supply to the
Owner's accountants, without charge therefor, all records or documents
respecting the Property that such accountant may request in connection with
audits of the Owner's accounts and preparation of necessary tax returns.

         Section 5.05. Books and Records. The Manager shall maintain, in a
manner consistent with generally accepted accounting principles, a system of
books and records that fully and

                                       20
<PAGE>

accurately detail all financial transactions with respect to the leasing and
operation of the Property. Such books and records shall be (a) the property of
the Owner, (b) maintained at the Manager's office at the Property or at the
Manager's corporate office, (c) available to the Owner upon reasonable request
and (d) delivered to the Owner upon the termination of this Agreement. Manager
shall provide to the Owner, during the term of this Agreement, appropriate
on-site accounting systems and software, which shall include complete
accounting, bookkeeping and record keeping services for the Property,
specifically including, but not limited to, resident billings, accounts payable,
accounts receivable, general ledger and inventory records and maintain
demographic information on the residents. The cost allocation between the Owner
and the Manager for the accounting systems shall continue as presently conducted
and as set forth in the Budget. Notwithstanding anything contained herein, there
shall be no allocation of costs to the Owner for corporate-level accounting of
the Manager. Acquisition of software for Property based operations, software
maintenance and update charges will be budgeted expenses of the Property.
Payroll processing may be delegated to a third party, the cost of which will be
the responsibility of the Property. The Owner agrees at its expense to maintain
the computer terminal at the Property compatible with the mainframe computer
currently in use by the Manager and to transmit data to the Manager via
telephone lines.

         Section 5.06. Budget.

                  (a) Annual Operating and Capital Budget. The Budget shall
serve as the major control under which the Manager shall operate the Property
and there shall be no substantial deviations therefrom, excluding deviations for
such expenses as utilities, fuel, insurance and other expenses not within the
control of the Manager, except as may be approved in writing by the Owner. No
expenses may be incurred and no commitments may be made by the Manager in the
name of the Owner in connection with the maintenance and operation of the
Property in excess of the amounts allocated to the various classifications of
expense in the Budget for Property, except as otherwise provided herein.

                  (b) Budget Preparation. The Manager shall prepare for the
Owner's written approval operating and capital budgets for the Property
addressing each of the items listed on Exhibit C attached hereto (with the
Owner-approved budget in effect from time to time being herein called the
"Budget"). The Manager shall submit to the Owner, at least 45 days prior to the
end of the Owner's fiscal year, a proposed budget for the next ensuing fiscal
year. The proposed budget submitted by the Manager shall include an analysis of
repair and maintenance needs, operating expenses and any capital improvements
anticipated for that period. Reserve fund requirements, adjusted for
inflationary factors, shall also be included on an updated cost basis in the
proposed budget. Reasonable supporting schedules shall be submitted with the
proposed budget. The proposed budget will reflect a "three year cycles" and will
be based on actual income and expenses for the past completed year and projected
income and expenses for the current year and for the future year for which the
Budget is being prepared. Increases or decreases in actual or estimated amounts
for income and expense items shall also be shown as percentage increases or
decreases. The proposed budget also shall contain a forecast of cash flow for
each month of the budget period, an assessment of personnel needs for operating
the Property, a forecast of rental rates, an analysis of leases then in effect,
and such other supplemental information as may be reasonably required by the
Owner. Following the review

                                       21
<PAGE>

and approval of a budget by the Owner, the Manager shall implement such budget
and perform in accordance therewith.

         Section 5.07. Obligations for Expenses. Except as otherwise set forth
herein, all obligations and expenses incurred by the Manager in accordance with
this Agreement shall be deemed to be obligations and expenses of the Owner, the
parties acknowledging that the Manager may engage, at the Owner's expense,
independent contractors and service providers as permitted under this Agreement,
as may be usual and customary in the circumstances in connection with the
performance of the Manager's duties hereunder. The salaries and benefits of the
Non-Property Staff of the Manager and all other general overhead costs and
expenses of Manger shall be paid by the Manager from its own funds. For
avoidance of doubt, the flat amount for allocated overhead expenses of the
Manager (or its Affiliates) currently being paid by the owners or the lessees of
the Property shall not be payable, directly or indirectly by the Owner. The
Manager shall be reimbursed for any costs and expenses (other than those
described in the immediately preceding sentence) related to a Property and which
are contained in the current Budget. The Manager shall also be reimbursed for
travel expenses related to the Property in an amount equal to up to $3,000/year
(to be adjusted annually in accordance with the Consumer Price Index).

                                   ARTICLE VI

                                  MISCELLANEOUS

         Section 6.01. No Partnership or Joint Venture. This Agreement is a
management agreement only and does not grant to the Manager any ownership right
or interest in the Property or any other property of the Owner pertaining
thereto. This Agreement is not intended to and does not constitute a partnership
or joint venture of any kind between the Owner and the Manager with respect to
the operation of the Property or any other matter.

         Section 6.02. Notices. Any notice that is provided for in this
Agreement shall be in writing, shall be given either manually or by mail,
overnight courier, hand delivery or facsimile or cable, and shall be deemed
sufficiently given if and when received by the party to be notified at its
address or facsimile set forth below or if and when mailed by registered or
certified mail, postage prepaid, addressed to such party at such address (any
single notice given pursuant to this Section 6.02 to the address designated
below for the Manager shall be deemed as notice so given to both the Manager).
Any party and any representative designated below may, by notice to the others,
change its address for receiving such notices. Refusal to accept such notice or
inability to deliver such notice on account of a change in address not given the
other addressees shall be deemed receipt of notice.

                                       22
<PAGE>

If to the Owner or any affiliate:

                            BRE/Amberleigh Inc.
                            c/o The Blackstone Group
                            345 Park Avenue
                            New York, New York  10154
                            Attn:  Stavros Galiotos
                            Facsimile:  (212) 583-5730
     With a copy to:

                            Simpson Thacher & Bartlett
                            425 Lexington Avenue
                            New York, New York  10017
                            Attn:  Scott M. Kobak, Esq.
                            Facsimile:  (212) 455-2502
     If to the Manager:

                            Capital Senior Living Inc.
                            14160 Dallas Parkway
                            Suite 300
                            Dallas, Texas 75240
                            Attn:  Keith Johannessen and David Brickman
                            Facsimile:  (972) 770-5666

         Section 6.03. Applicable Law. This Agreement shall be executed,
construed and performed in accordance with the laws of the State of New York.

         Section 6.04. Successors and Assigns. This Agreement shall bind and
inure to the benefit of the parties hereto and their respective successors and
assigns; provided, however, that the Manager shall not assign its rights or
delegate its duties hereunder to any party by operation of law, or otherwise,
and no shares of stock in the Manager shall be transferred, without the prior
written consent of the Owner, which consent may be withheld in the Owner's sole
discretion. Notwithstanding the foregoing, subject to requirements of law and
regulatory approvals, the Manager may, without the Owner's consent, enter into a
merger transaction with Manager or an affiliate or Manager or assign its rights
and delegate its duties hereunder to an affiliate of Manager, provided, however,
that no such merger or assignment shall relieve the Manager from any of its
obligations under this Agreement. Any attempted assignment or delegation by the
Manager other than as permitted hereby shall be void and of no force or effect.
The Owner shall be entitled, at any time during the Term and in its sole
discretion, to assign its rights and benefits under this Agreement so long as
such assignee assumes the Owner's obligations hereunder and agrees to be bound
by the terms and conditions hereof or succeeds the Owner as the owner of the
Property.

         Section 6.05. Confidentiality. (a) Confidential Information;
Representatives. For purposes of this Section:

                                       23
<PAGE>

                        (i) The term "Owner Confidential Information" shall be
deemed to include all information concerning the Property and the Owner (whether
prepared by the Owner, its Representatives or otherwise and irrespective of the
form of communication) which is furnished to the Manager or Representative (as
defined below) of the Manager (collectively, the "Management Group") now or in
the future by the Owner or by its Representatives, together with all notes,
analyses, compilations, studies, interpretations or other documents prepared by
any member of the Management Group which contain, reflect or are based upon, in
whole or in part, the information furnished to any member of the Management
Group pursuant hereto. The term "Owner Confidential Information" shall also
include the Required Information (as defined below), but does not include the
Proprietary Information (as defined below), information which is or becomes
generally available to the public other than as a result of a disclosure in
violation of this Agreement by any member of the Management Group.

                        (ii) The term "Required Information" shall be deemed to
include all information required to own and operate the Property as it is
currently being operated and as it is required to be operated in accordance with
this Agreement.

                        (iii) The term "Proprietary Information" shall be deemed
to include all materials developed by Manager and of a proprietary nature. The
term "Proprietary Information" does not include information which is or becomes
generally available to the public other than as a result of a disclosure in
violation of this Agreement by the Owner and its Representatives (the "Owner
Group").

                        (iv) The term "Representatives" shall mean,
collectively, and as applicable, a person's directors, officers, employees,
affiliates (as such term is defined under the Securities Exchange Act of 1934,
as amended), agents or advisors (including, without limitation, attorneys,
accountants, consultants, bankers and financial advisors).

                  (b) Use of Proprietary Information. The Owner hereby agrees
that the Owner Group shall use the Proprietary Information solely for the
purpose of owning and operating the Property or otherwise performing or
assisting the Manager in the performance of its obligations under this
Agreement, that the Proprietary Information will be kept confidential and that
no member of the Owner Group will use the Proprietary Information for any other
purpose or disclose any of the Proprietary Information in any manner whatsoever;
provided, however, that the Owner may make any disclosure of the Proprietary
Information to the extent that the Manager gives its prior written consent.

                  (c) Use of Owner Confidential Information. The Manager hereby
agrees that each member of the Management Group shall use the Owner Confidential
Information solely for the purpose of managing the Property or otherwise
performing or assisting the Manager in the performance of its obligations under
this Agreement, that the Owner Confidential Information will be kept
confidential and that no member of the Management Group will use the Owner
Confidential Information for any other purpose or disclose any of the Owner
Confidential Information in any manner whatsoever; provided, however, that the
Manager may make any disclosure of the Owner Confidential Information to the
extent that the Owner gives its prior written consent. It is understood and
agreed that the Manager shall inform each member of the Management Group of the
confidential nature of the Owner Confidential Information prior to

                                       24
<PAGE>

delivery thereof to such person, and of the obligation to not contact or
communicate with the persons described above, and that by receiving such
materials, such member of the Management Group will be deemed to have agreed to
be bound by this Agreement. In any event, the Manager shall be responsible for
any breach of this Agreement by the Manager or by any member of the Management
Group, unless such Management Group member has signed a separate Confidentiality
Agreement with the Owner, and the Manager agrees, at the Manager's sole expense,
to take all reasonable measures (including but not limited to court proceedings)
to restrain any member of the Management Group from prohibited or unauthorized
contacts or disclosure or use of the Owner Confidential Information.
Notwithstanding any other provision of this Agreement, the foregoing restriction
shall continue in full force and effect throughout the Term and following the
termination of this Agreement.

                  (d) Remedies. The Manager and the Owner agree that either
party shall be entitled to equitable relief, including injunction and specific
performance, in the event of any breach of the provisions of this Section and
that the Manager and the Owner shall not oppose the granting of such relief.

         Section 6.07. Entire Agreement. This Agreement contains the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersedes all prior and contemporaneous negotiations, understandings and
agreements, written or oral, between the parties. This Agreement shall not be
amended or modified, and no waiver of any provision hereof shall be effective,
unless set forth in a written instrument authorized and executed with the same
formality as this Agreement.

         Section 6.08. Captions, Gender, Number. The captions hereof are for
convenience of reference only and shall neither limit nor enlarge the provisions
hereof. All personal pronouns used herein, whether used in the masculine,
feminine or neuter gender, shall include all other genders. The singular shall
include the plural and vice versa unless the context requires otherwise.

         Section 6.09. Severability. If any provision hereof, or the application
thereof to any person or circumstance, shall to any extent be invalid or
unenforceable, the remainder of the provisions hereof, or the application of
such provision to other persons or circumstances, shall not be affected thereby,
and each provision hereof shall be valid and enforceable to the fullest extent
permitted by law.

         Section 6.10. Days. If any action is required to be performed, or if
any notice, consent or other communication is to be given, on a day that is a
Saturday or Sunday or a legal holiday in the jurisdiction in which the action is
required to be performed or in which is located the intended recipient of such
notice, consent or other communication, such performance shall be deemed to be
required, and such notice, consent or other communication shall be deemed to be
given, on the first business day following such Saturday, Sunday or legal
holiday. Unless otherwise specified herein, all references herein to a "day" or
"days" shall refer to calendar days and not business days.

         Section 6.11. Subordination. This Agreement and all rights of Manager
shall be subject and subordinate to any mortgage or deed of trust encumbering
the Property. Such subordination

                                       25
<PAGE>

include the absolute right of the holder of such mortgage or deed of trust to
terminate this Agreement, without premium or penalty, upon a default by Owner
under the loan secured by such mortgage or deed of trust. The foregoing
subordination shall be self-operative, provided that upon request of a lender or
Owner, Manager shall execute such subordination agreements to confirm such
subordination and rights of termination. Notwithstanding the foregoing, Manager
shall not be required to perform under this Agreement unless it receives the
compensation due to Manager hereunder.

         Section 6.12. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.

         Section 6.13. Waiver of Jury Trial. The Owner and the Manager waive
trial by jury in any action, proceeding or counterclaim brought by any of them
against the other on all matters arising out of this agreement.

         Section 6.14. CONSENT TO JURISDICTION. THE MANAGER HEREBY IRREVOCABLY
SUBMITS AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION AND VENUE OF ANY STATE OR
FEDERAL COURT HAVING JURISDICTION OVER NEW YORK COUNTY, NEW YORK OR ANY COUNTY
IN WHICH A PROPERTY IS LOCATED FOR ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND
ANY MATTER ARISING FROM OR RELATED TO THIS AGREEMENT. THE MANAGER HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF ANY SUCH ACTION OR PROCEEDING.

THE MANAGER AGREES NOT TO INSTITUTE ANY LEGAL ACTION OR PROCEEDING AGAINST THE
OWNER OR ANY DIRECTOR, OFFICER, EMPLOYEE, AGENT OR PROPERTY OF THE OWNER,
CONCERNING ANY MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT IN ANY COURT
OTHER THAN A STATE OR FEDERAL COURT HAVING JURISDICTION OVER NEW YORK COUNTY,
NEW YORK

THE MANAGER AND THE OWNER HEREBY CONSENT TO SERVICE OF PROCESS BY THE OWNER IN
ANY MANNER AND IN ANY JURISDICTION PERMITTED BY LAW. NOTHING HEREIN SHALL AFFECT
OR IMPAIR THE MANAGERS'S AND THE OWNER'S RIGHT TO SERVE LEGAL PROCESS IN ANY
MANNER PERMITTED BY LAW.

         Section 6.15. Arbitration. In the event of any dispute, claim or
controversy of any kind between the parties, concerning this Agreement or the
termination of this Agreement, the matter shall be submitted to arbitration in
accordance with rules of the American Association. The parties jointly shall
agree on an arbitrator. If the parties are unable to agree, in good faith within
a reasonable time, on the selection of an arbitrator, either party may request
appointment of an arbitrator chosen by the American Arbitration Association who
shall be the selected arbitrator. Such arbitrator shall be limited in his
decision to a choice between the final position as requested by each party. Said
arbitration shall be held or such other place as is mutually agreeable. The

                                       26
<PAGE>

arbitration decision shall be final and binding on both parties unless the
arbitration is fraudulent or so grossly erroneous as to necessarily imply bad
faith. Costs of arbitration are to be shared by both parties equally, provided
that the arbitrator may choose to award the costs of arbitration against the
loss party if the arbitrator determined that the final position urged by the
losing party was not reasonable.

                                       27
<PAGE>

                  WITNESS the following signatures.

                                              OWNER:

                                              BRE/AMBERLEIGH INC.

                                              By:
                                                 -------------------------------
                                                 Name: Stavros Galiotos
                                                 Title: Managing Director and
                                                        Vice President

                                              MANAGER:

                                              CAPITAL SENIOR LIVING, INC.

                                              By:
                                                 -------------------------------
                                                 Name:
                                                      -----------------------
                                                 Title:
                                                      -----------------------

                                       28

<PAGE>

                                    EXHIBIT A
                             TO MANAGEMENT AGREEMENT

                             Description of Property

271-unit full service retirement community (including 271 independent living
units and related community amenities) located at 2330 Maple Road,
Williamsville, NY 14211.

<PAGE>

                                    EXHIBIT B

                        FEES AND COMPENSATION OF MANAGER

         The Owner shall pay the Manager a fee in the amount of 5% of the
monthly Gross Operating Revenue recognized during each month of the Term with
respect to the Property ("Base Management Fee"). The Base Management Fee shall
be payable monthly in arrears on the fifteenth day of each month or, if such day
is not a business day, the immediately succeeding business day (a "Payment
Date"). For purposes hereof, "Gross Operating Revenues" shall mean and refer,
for any period for which such Gross Operating Revenues are being determined, the
total gross revenues of the Property from operations received during such
period, including all receipts from (i) rent of units at the Property, (ii) rent
or business interruption insurance, (iii) revenue of the Property for or on
account of any and all goods provided and services rendered or activities during
such period, (iv) deposits in the event of forfeiture thereof to the Property
and (v) other revenues and receipts realized by the Property from operations and
customarily included in Gross Operating Revenue. Gross Operating Revenue shall
not include (i) security deposits received from residents and, if applicable,
interest accrued thereon for the benefit of the residents until such deposits or
interest are applied for rental payments; (ii) proceeds from the sale or
dispositions of all or any part of the Property; (iii) insurance proceeds
received by the Owner as a result of any insured loss (except proceeds from rent
loss insurance) and proceeds from any condemnation action; (iv) capital
contributions made by any member of the Owner; (v) loans by the Owner; (vi)
proceeds from capital, financing, and any other transactions not in the ordinary
course of operation of the Property; (vii) any advance rentals paid (until such
time as they are earned); (viii) revenues related to services provided to
residents by third parties or subject to reimbursement to third parties by
Owner; (ix) revenues which are challenged, subject to defense or involve a
bankruptcy filing or paid under protest; and (x) revenues attributable to
Medicare or Medicaid payment (to the extent subject to potential future set-off
or recoupment).

<PAGE>

                                    EXHIBIT C

                             TO MANAGEMENT AGREEMENT

                                     Budget

<PAGE>

                                    EXHIBIT D

                             TO MANAGEMENT AGREEMENT

                        D-1 FORM OF MONTHLY STATUS REPORT

The monthly status report will be provided within 20 days after the end of each
month and will include the following reports:

Reports for the Property:

(a)      Accrual basis operating statement (Income and Expense Statement)
         showing figures for the current month, year-to-date and comparison with
         budget

(b)      Balance sheet

(c)      General ledger

Summary reports for the Property:

1.       Occupancy percentage history report including occupancy for the
         Property. Report will compare current period to previous period, to the
         same period one year ago and to the occupancy levels at transfer of
         management.

2.       Accrual basis operating statement totaling operation of the Property
         (Income and Expense Statement) showing figures for the current month,
         year-to-date and comparison with budget

3.       Balance sheet totaling the Property

4.       Capital expenditure status report for the Property, including a
         breakdown of capital improvements in process and those completed during
         the month by type of asset and amount

5.       Narrative report recommending corrective actions and other capital
         items to be approved for the following month as well as any upcoming
         significant expenditures

An additional monthly status report will be provided within 20 days after the
end of the month and will include the following reports for the Property:

1.       Narrative explanations of significant variations from budget

2.       Rent roll

3.       Detailed occupancy/leasing report with summary information about
         move-ins and move-outs

4.       Report of accidents and other mishaps

<PAGE>

5.      Summary of staff turnover

6.       General information regarding Property operations (legislation,
         governmental decisions, tax rulings, insurance, financial and other
         practices) which come to the Manager's attention in the normal course
         of business

7.       Accounts payable

8.       Cash receipts and cash disbursements journals

9.       Copy of journal entries (as may be requested by the Owner from time to
         time)

10.      Copy of bank statement(s)

11.      Bank reconciliation(s)

12.      Detailed Management Fee invoices and corporate expense distribution
         report

                  D-2 FORM OF ANNUAL FISCAL YEAR STATUS REPORT

The Manager will submit reports as required to assist independent auditing firm
with annual audit including preparation of audited work paper packages

                 D-3 FORM OF ANNUAL CALENDAR YEAR STATUS REPORT

Within 15 days after the end of the calendar year, the Manager will submit
operating statements for the Property for preparation of Forms 1099 and
calendar-year tax returns

<PAGE>

                                    EXHIBIT E

                             TO MANAGEMENT AGREEMENT

                                Form of Rent Roll
                             (included in Form E-1)

<PAGE>

                                    EXHIBIT F

                             TO MANAGEMENT AGREEMENT

                           List of Non-Property Staff

Keith Johannessen - head of operations - responsible for overseeing all
                    operational functions

Rob Goodpaster - marketing director - overall responsibility for all marketing
                 functions

Bob Hollister - controller - handles accounting and financial functions<PAGE>
                                                                   EXHIBIT 10.94

                          THIRD MODIFICATION AGREEMENT

         This THIRD MODIFICATION AGREEMENT (this "Agreement") dated as of the
30th day of March, 2001 by and between CAPITAL SENIOR LIVING PROPERTIES, INC., a
Texas corporation (hereinafter called"Borrower"), and BANK ONE, NA (successor by
merger to Bank One, Texas, N.A.), as Agent (hereinafter called "Agent") for the
Lenders under the Loan Agreement (as hereinafter defined);

                                   WITNESSETH:

         WHEREAS, Borrower, Agent and the Lenders (as such term is defined
therein) entered into that certain 1999 Amended and Restated Loan Agreement
dated April 8, 1999, as modified by Modification Agreement dated March 28, 2000
and Second Modification Agreement dated August 15, 2000 (as the same may be
modified, amended, restated or supplemented from time to time, the "Loan
Agreement");

         WHEREAS, Borrower has requested and Lender has agreed to make certain
revisions to the Loan Agreement as more particularly set forth below;

         NOW, THEREFORE, for and in consideration of the mutual covenants
contained herein and for other valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

         1. Capitalized terms not otherwise defined herein shall have the
meaning assigned to such terms in the Loan Agreement.

         2. Section 5.15(f) of the Loan Agreement is deleted and the following
is substituted in lieu thereof:

                  (f) CSLC shall continuously maintain Liquid Assets of at least
         $4,000,000, to be measured quarterly.

         3. Borrower acknowledges that the Property failed to comply with the
minimum Cash Flow Coverage of .65 to 1 as of December 31, 2000 (the "12/31/00
Default"). Agent has waived the 12/31/00 Default. Borrower agrees as follows:

                  (1) On or before March 30, 2001, Borrower will calculate and
         present to Agent the estimated March 31, 2000 Cash Flow Coverage of the
         Property based on actual results for January and February 2001 and
         estimated results for March 2001. If such calculations indicate that
         the Property will not maintain the required Cash Flow Coverage of .75
         to 1 as of March 31, 2001, Borrower will deposit with Agent funds in an
         amount which, if applied to reduce the outstanding principal balance of
         the Loan,

                                       1
<PAGE>

         would cause the Property to maintain a minimum Cash Flow Coverage of
         .75 to 1 as of March 31, 2001 (the "Initial Deposit") and will execute
         and deliver a Pledge Agreement in favor of Agent in connection
         therewith in substantially the form attached hereto as Exhibit A.

                  (2) Once information is available to completely and accurately
         calculate Cash Flow Coverage as of March 31, 2001, Borrower will
         deposit with Agent additional funds, if any, which when added to the
         Initial Deposit, if applied to reduce the outstanding principal balance
         of the Loan, would cause the Property to maintain a minimum Cash Flow
         Coverage of .75 to 1 as of March 31, 2001. Such additional funds (the
         "Additional Funds") shall be added to the "Account" and form part of
         the "Collateral" (as such terms are used in the Pledge Agreement). If
         an Initial Deposit was not required under (1) above (but would be
         required under this subsection (2)) and, as a result, a Pledge
         Agreement was not previously executed, Borrower will timely execute and
         deliver a Pledge Agreement and related UCC financing statement together
         with its required deposit of the Additional Funds.

                  (3) Agent's waiver of all rights and remedies available to it
         with respect to the 12/31/00 Default is without prejudice to its rights
         to exercise its available rights and remedies in the event of any other
         Event of Default (whether concerning Cash Flow Coverage or otherwise).

         Agent agrees as follows:

                  (1) In the event the Property fails to comply with the
         required Cash Flow Coverage of .75 to 1 as of March 31, 2001 (a
         "3/31/01 Default"), but Borrower timely complies with (1) and (2)
         above, Agent agrees to waive all rights and remedies available to it
         with respect to a 3/31/01 Default without prejudice to its rights to
         exercise its available rights and remedies in the event of any other
         Event of Default (whether concerning Cash Flow Coverage or otherwise).

                  (2) Agent will return all amounts deposited under this Section
         3 to Borrower at such time as the Property has complied with the
         minimum Cash Flow Coverage requirements of the Loan Agreement for two
         (2) consecutive quarters.

         4. Borrower hereby represents and warrants that (a) Borrower is duly
organized and legally existing under the laws of the State of Texas; (b) the
execution and delivery of, and performance under this Agreement are within
Borrower's power and authority without the joinder or consent of any other party
and have been duly authorized by all requisite corporate action and are not in
contravention of law or the powers of Borrower's organizational documents; (c)
this Agreement constitutes the legal, valid and binding obligations of Borrower
enforceable in accordance with its terms, subject to laws regarding creditor's
rights and general principles of

                                       2
<PAGE>

equity; and (d) the execution and delivery of this Agreement by Borrower do not
contravene, result in a breach of or constitute a default under any deed of
trust, loan agreement, indenture or other contract, agreement or undertaking to
which Borrower is a party or by which Borrower or any of its properties may be
bound (nor would such execution and delivery constitute such a default with the
passage of time or the giving of notice or both) and do not violate or
contravene any law, order, decree, rule or regulation to which Borrower is
subject.

         5. Borrower, upon request from Agent, agrees to execute such other and
further documents as may be reasonably necessary or appropriate to consummate
the transactions contemplated herein or to perfect the liens and security
interests intended to secure the payment of the Obligations.

         6. Except as provided herein, the terms and provisions of the Loan
Documents shall remain unchanged and shall remain in full force and effect. Any
modification herein of the Loan Documents, shall in no way affect the security
of the Loan Documents for the payment of the Obligations. The Loan Documents as
modified and amended hereby are hereby ratified and confirmed in all respects.
All references to the Loan Agreement in the Loan Documents shall hereafter refer
to the Loan Agreement as modified by this Agreement.

         7. Borrower hereby acknowledges that the liens, security interests and
assignments created and evidenced by the Loan Documents are valid and subsisting
and further acknowledges and agrees that there are no offsets, claims or
defenses to the Obligations or any Loan Documents.

         8. Upon execution of this Agreement, Borrower shall deliver to Lenders
and Agent in form and substance satisfactory to Agent, an opinion of counsel to
Borrower and CSLC stating that this Agreement and the Pledge Agreement are valid
and binding upon Borrower and CSLC, as applicable, and enforceable in accordance
with their terms, subject to laws regarding creditor's rights and general
principles of equity.

         9. Contemporaneously with the execution and delivery hereof, Borrower
shall pay, or cause to be paid, all reasonable costs and expenses incident to
the preparation hereof and the consummation of the transactions specified
herein, including, without limitation, fees and expenses of legal counsel to
Agent and the Lenders.

         10. Borrower hereby releases, remises, acquits and forever discharges
Lenders and Agent, together with their employees, agents, representatives,
consultants, attorneys, fiduciaries, servants, officers, directors, partners,
predecessors, successors and assigns, subsidiary corporations, parent
corporations, and related corporate divisions (all of the foregoing hereinafter
called the "Released Parties"), from any and all actions and causes of action,
judgments, executions, suits, debts, claims, demands, liabilities, obligations,
damages and expenses of any and every character, known or unknown, direct and/or
indirect, at law or in equity, of whatsoever kind or nature, whether heretofore
or hereafter accruing, for or because of any matter or things done, omitted or
suffered to be done by any of the Released Parties prior to and including the

                                       3
<PAGE>

date hereof, and in any way directly or indirectly arising out of or in any way
connected to this Agreement, the Loan Agreement or any other Loan Document, or
any of the transactions associated therewith, including specifically but not
limited to claims of usury.

         11. This Agreement may be executed in any number of counterparts with
the same effect as if all parties hereto had signed the same document. All such
counterparts shall be construed together and shall constitute one instrument,
but in making proof hereof it shall only be necessary to produce one such
counterpart.

         12. If any covenant, condition, or provision herein contained is held
to be invalid by final judgment of any court of competent jurisdiction, the
invalidity of such covenant, condition, or provision shall not in any way affect
any other covenant, condition or provision herein contained.

         13. It is expressly agreed by the parties hereto that time is of the
essence with respect to this Agreement.

         14. The parties acknowledge and confirm that each of their respective
attorneys have participated jointly in the review and revision of this Agreement
and that it has not been written solely by counsel for one party. The parties
hereto therefore stipulate and agree that the rule of construction to the effect
that any ambiguities are to or may be resolved against the drafting party shall
not be employed in the interpretation of this Agreement to favor either party
against the other.

         15. This Agreement and the rights and duties of the parties hereunder
shall be governed for all purposes by the law of the State of Texas and the law
of the United States applicable to transactions within said State.

         16. The terms and provisions hereof shall be binding upon and inure to
the benefit of the parties hereto, their successors and assigns.

         17. Borrower and Agent hereby take notice of and agree to the
following:

                  A. PURSUANT TO SUBSECTION 26.02(b) OF THE TEXAS BUSINESS AND
         COMMERCE CODE, A LOAN AGREEMENT IN WHICH THE AMOUNT INVOLVED THEREIN
         EXCEEDS $50,000 IN VALUE IS NOT ENFORCEABLE UNLESS THE AGREEMENT IS IN
         WRITING AND SIGNED BY THE PARTY TO BE BOUND OR BY THAT PARTY'S
         AUTHORIZED REPRESENTATIVE.

                  B. PURSUANT TO SUBSECTION 26.02(c) OF THE TEXAS BUSINESS AND
         COMMERCE CODE, THE RIGHTS AND OBLIGATIONS OF THE PARTIES TO THE LOAN
         DOCUMENTS SHALL BE DETERMINED SOLELY FROM THE LOAN DOCUMENTS, AND ANY
         PRIOR ORAL AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED
         INTO THE LOAN DOCUMENTS.

                                       4
<PAGE>

                  C. THE LOAN AGREEMENT, THIS AGREEMENT AND THE OTHER LOAN
         DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES THERETO AND
         MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
         SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES THERETO. THERE ARE NO
         UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

         IN WITNESS WHEREOF, this Agreement is executed on the respective dates
of acknowledgment, to be effective as of the date first above written.

                                CAPITAL SENIOR LIVING PROPERTIES, INC.,
                                a Texas corporation

                                By:
                                   -------------------------------------------
                                      Name: David R. Brickman
                                      Title:  Vice President

                                BANK ONE, NA, as Agent
                                (Main Office Chicago)

                                By:
                                    ------------------------------------------
                                      Name: Jeffrey A. Etter
                                      Title:  First Vice President

                                       5
<PAGE>

THE STATE OF TEXAS      )
                        )
COUNTY OF DALLAS        )

         This instrument was acknowledged before me on March ____, 2001, by
David R. Brickman, Vice President of Capital Senior Living Properties, Inc., a
Texas corporation, on behalf of said corporation.

                                   --------------------------------------------
                                   Notary Public, State of Texas

                                   --------------------------------------------
                                             (printed name)

My Commission Expires:

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

THE STATE OF TEXAS      )
                        )
COUNTY OF DALLAS        )

         This instrument was acknowledged before me on March ____, 2001, by
Jeffrey A. Etter, First Vice President of Bank One, NA, a national association,
on behalf of said association, as Agent.

                                   --------------------------------------------
                                   Notary Public, State of Texas

                                   --------------------------------------------
                                             (printed name)

My Commission Expires:

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

                                       6
<PAGE>

                              CONSENT OF GUARANTOR

         For a valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, CAPITAL LIVING SENIOR CORPORATION, the Guarantor (herein so
called) under that certain Unlimited Guaranty (herein so called) dated March 28,
2000 hereby consents to and acknowledges the above modification and the Pledge
Agreement and hereby declares to and agrees with Lender that all of the
obligations of the Guarantor under the Unlimited Guaranty are and shall be
unaffected by said transactions and that the Unlimited Guaranty is hereby
ratified and confirmed in all respects.

         Executed on the date of acknowledgment, to be effective as of March 30,
2001.

                                   CAPITAL SENIOR LIVING CORPORATION, a
                                   Delaware corporation

                                   By:
                                      ----------------------------------------
                                   Name:
                                        --------------------------------------
                                   Title:
                                         -------------------------------------

THE STATE OF TEXAS      )
                        )
COUNTY OF DALLAS        )

         This instrument was acknowledged before me on March ____, 2001, by
_______________________, _______________ of Capital Senior Living Corporation, a
Delaware corporation, on behalf of said corporation.

                                   --------------------------------------------
                                   Notary Public, State of Texas

                                   --------------------------------------------
                                             (printed name)

My Commission Expires:

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

                                       7
<PAGE>

                                    EXHIBIT A

                                PLEDGE AGREEMENT

         THIS PLEDGE AGREEMENT (this "Agreement") made as of the ____ day of
____________, 2001, by CAPITAL SENIOR LIVING PROPERTIES, INC. ("Pledgor"), in
favor of BANK ONE, NA (successor by merger to Bank One, Texas, N.A.), a national
banking association, in its capacity as Agent under the Loan Agreement
(hereinafter called "Bank"), with its main office in Chicago, Illinois. The
parties hereto agree as follows:

                                   WITNESSETH:

         1. Pledgor, Bank and the Lenders named therein are parties to that
certain 1999 Amended and Restated Loan Agreement dated as of April 8, 1999, as
modified by Modification Agreement dated March 28, 2000, Second Modification
Agreement dated August 15, 2000 and Third Modification Agreement (herein so
called) dated March 30, 2001 (as from time to time amended, supplemented or
restated, the "Loan Agreement").

         2. Capitalized terms not otherwise defined herein have the meaning
assigned such terms in the Loan Agreement.

         3. Pursuant to the Loan Agreement, the Bank has agreed to the waiver of
a certain Event of Default.

         4. It is a condition precedent to Bank's waiver that, among other
things, Pledgor shall have executed and delivered to Bank this Agreement
granting to Bank a security interest in the Collateral as defined herein.

         NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Pledgor hereby agrees with Bank as follows:

                                    ARTICLE I

                           Definitions and References

         Section 1.1. General Definitions. As used herein, the terms
"Agreement", "Loan Agreement", "Pledgor", and "Bank" shall have the meanings
indicated above, and the following terms shall have the following meanings:

                                       1
<PAGE>

         (a) "Collateral" means all property of whatever type, in which Bank at
any time has a security interest pursuant to Section 2.1.

         (b) "Obligations" means all present and future indebtedness,
obligations and liabilities of whatever type which are or shall be secured
pursuant to Section 2.2.

         1.2 Capitalized terms not defined herein shall have the meanings
ascribed to them in the Loan Agreement.

         1.3. Unless the context otherwise requires or unless otherwise provided
herein, references in this Agreement to a particular agreement, instrument or
document (including, but not limited to, references in Section 2.1) also refer
to and include all renewals, extensions, amendments, modifications, supplements
or restatements of any such agreement, instrument or document, provided that
nothing contained in this Section shall be construed to authorize any Person to
execute or enter into any such renewal, extension, amendment, modification,
supplement or restatement.

         1.4. All references in this Agreement to Exhibits, Articles, Sections,
subsections, and other subdivisions refer to the Exhibits, Articles, Sections,
subsections and other subdivisions of this Agreement unless expressly provided
otherwise. Titles appearing at the beginning of any subdivision are for
convenience only and do not constitute any part of any such subdivision and
shall be disregarded in construing the language contained in this Agreement. The
words "this Agreement", "herein", "hereof", "hereby", "hereunder" and words of
similar import refer to this Agreement as a whole and not to any particular
subdivision unless expressly so limited. The phrases "this Section" and "this
subsection" and similar phrases refer only to the Sections or subsections hereof
in which the phrase occurs. The word "or" is not exclusive. Pronouns in
masculine, feminine and neuter gender shall be construed to include any other
gender, and words in the singular form shall be construed to include the plural
and vice versa unless the context otherwise requires.

                                   ARTICLE II

                              Pledge and Assignment

         2.1. In order to secure the payment of the secured indebtedness
hereinafter referred to and to secure the performance of the secured
indebtedness and the performance of each and every covenant, agreement and
undertaking of the Pledgor made herein and in the other Loan Documents, Pledgor
hereby irrevocably pledges, assigns and grants to Bank a lien on and security
interest in the following account (the "Account"):

<Table>
<Caption>
         Name of Depository                             Identifying Number
             Institution         Type of Account            of Account
         ------------------      ---------------        ------------------

<S>                             <C>                     <C>
           Bank One, NA            Money Market                 #
</Table>

                                       2
<PAGE>

together with any and all instruments, documents, agreements and other writings
evidencing such account, all sums now or at any time hereafter on deposit
therein, all sums now due or to become due with respect to such account and any
and all renewals, replacements and proceeds thereof.

The foregoing shall be covered by this Agreement, whether Pledgor's ownership or
other rights therein are presently held or hereafter acquired and howsoever
Pledgor's interests therein may arise or appear (whether by ownership, security
interest, claim or otherwise).

                                  ARTICLE III.

                               Obligations Secured

         3.1. This Agreement is made to secure and enforce the payment and
performance of the following obligations, indebtedness and liabilities:

                  (a) Loan Agreement Indebtedness. The payment by Pledgor as and
         when due and payable of all amounts from time to time owing by Pledgor
         under or in respect of the Loan Documents.

                  (b) Renewals. All renewals, extensions, amendments,
         modifications, supplements, or restatements of or substitutions for any
         of the foregoing.

                  (c) Performance. The due performance and observance by Pledgor
         of all of its other obligations from time to time existing under or in
         respect of any of the Loan Documents.

         As used herein, the term "secured indebtedness" refers to all present
and future indebtedness, obligations, and liabilities of whatever type which are
described above in this section, including any interest which accrues after the
commencement of any case, proceeding, or other action relating to the
bankruptcy, insolvency, or reorganization of Pledgor.

                                   ARTICLE IV.

                          Representations and Covenants

         To induce Bank to accept this Agreement, Pledgor represents as follows:

                                       3
<PAGE>

         4.1. Pledgor has good and marketable title to the Collateral free and
clear of all claims, mortgages, security interests, pledges, liens and other
encumbrances of every nature whatsoever except the security interest evidenced
by this Agreement and has good right and authority to grant a security interest
in the Collateral. There are no financing statements covering the Collateral or
its proceeds on file in any public office except those in favor of Bank.

         4.2. If the validity or priority of this Agreement or of any rights,
titles, liens or interests created or evidenced hereby with respect to the
Collateral or any part thereof shall be endangered or questioned or shall be
attacked directly or indirectly or if any legal proceedings are instituted
against Pledgor with respect thereto, Pledgor will give prompt written notice
thereof to Bank and at Pledgor's own cost and expense will diligently endeavor
to cure any defect that may be developed or claimed, and will take all necessary
and proper steps for the defense of such legal proceedings, including but not
limited to the employment of counsel, the prosecution or defense of litigation
and the release or discharge of all adverse claims, and Bank is hereby
authorized and empowered to take such additional steps as in its judgment and
discretion may be necessary or proper for the defense of any such legal
proceedings or the protection of the validity or priority of this Agreement, and
the rights, titles, liens and interest created or evidenced hereby, including
but not limited to the employment of counsel, the prosecution or defense of
litigation, the compromise or discharge of any adverse claims made with respect
to the Collateral, the removal of prior liens or security interests, and all
expenses so incurred of every kind and character shall be a demand obligation
owing by Pledgor and shall bear interest each day, from the date of such
expenditure until paid, at a rate per annum equal to the Late Payment Rate. All
such amounts owing to Bank shall be a part of the secured indebtedness and
secured by this Agreement and by the other Loan Documents, and Bank shall be
subrogated to all rights of the person, corporation or body politic receiving
such payment.

         4.3. Pledgor shall not, without the prior written consent of Bank,
create, place or permit to be created or placed, or through any act or failure
to act, acquiesce in the placing of, or allow to remain, any security interest,
encumbrance or charge, against or covering the Collateral or any part thereof
(other than the security interest created by this Agreement) and should any of
the foregoing become attached hereafter in any manner to any part of the
Collateral without the prior written consent of Bank, Pledgor will cause the
same to be promptly discharged and released. Pledgor shall not, without the
prior written consent of Bank, execute or deliver any check, instrument or other
document relating to, or otherwise make or attempt to make any withdrawal from
or charge against the Account.

                                       4
<PAGE>

         4.4. Pledgor agrees that, if Pledgor fails to perform any act or to
take any action which hereunder Pledgor is required to perform or take or to pay
any money which hereunder Pledgor is required to pay, Bank, in Pledgor's name or
its own name, may, but shall not be obligated to, perform or cause to be
performed such act or take such action or pay such money, and any expenses so
incurred by Bank and any money so paid by Bank shall be a demand obligation
owing by Pledgor to Bank, and Bank upon making such payment, shall be subrogated
to all of the rights of the Person receiving such payment. Each amount due and
owing by Pledgor to Bank pursuant to this Agreement shall bear interest each day
from the date of expenditure or payment, or other occurrence which gives rise to
such amount being owed to Bank, until paid at a rate per annum equal to the Late
Payment Rate. All such amounts, together with interest thereon, shall be a part
of the secured indebtedness and shall be secured by this Agreement and by the
other Loan Documents.

                                   ARTICLE V.

                          Remedies in Event of Default

         5.1. Authorization. Pledgor hereby authorizes Bank in the place and
stead of the Pledgor and in the name of the Pledgor or otherwise, from time to
time in Bank's discretion upon the occurrence and during the continuance of an
Event of Default, to take any action and to execute any instrument which Bank
may deem necessary or advisable to accomplish the purposes of this Agreement
including, without limitation: (i) to ask, demand, collect, sue for, recover,
compound, receive and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Collateral; (ii) to receive, indorse and
collect any drafts or other instruments, documents and chattel paper in
connection with clause (i) above; and (iii) to file any claims or take any
action or institute any proceedings which Bank may deem necessary or desirable
for the collection of any of the Collateral or otherwise to enforce the rights
of Bank with respect to any of the Collateral. Upon the occurrence of any Event
of Default, Bank shall be entitled to immediately receive or withdraw and offset
any or all funds in the Account against the secured indebtedness.

         5.2. All remedies herein expressly provided for are cumulative of any
and all other remedies existing at law or in equity and are cumulative of any
and all other remedies provided for in any other Loan Document, and Bank shall,
in addition to the remedies herein provided, be entitled to avail itself of all
such other remedies as may now or hereafter exist at law or in equity for the
collection of the secured indebtedness and the enforcement of the covenants
herein and the foreclosure of the security interests evidenced hereby, and the
resort to any remedy provided for hereunder or under any such other Loan
Document or provided for by law shall not prevent the concurrent or subsequent
employment of any other appropriate remedy or remedies. Upon an Event of
Default, Bank may resort to any security given by this Agreement or to any other
security now existing or hereafter given to secure the payment of the secured
indebtedness, in whole or in part, and in such portions and in such order as may
seem best to Bank in its sole and

                                       5
<PAGE>

uncontrolled discretion, and any such action shall not be considered as a waiver
of any of the rights, benefits, liens or security interests evidenced by this
Agreement.

         5.3. The powers conferred on Bank hereunder are solely to protect its
interest in the Collateral and shall not impose any duty upon it to exercise any
such powers. Except for the safe custody of any Collateral in its possession and
the accounting for moneys actually received by it hereunder, Bank shall have no
duty (i) as to any Collateral, (ii) as to the taking of any necessary steps to
preserve rights against prior parties or any other rights pertaining to any
Collateral, or (iii) as to the taking of any action to collect or realize upon
the Collateral.

                                       6
<PAGE>

                                   ARTICLE VI.

                            Indemnities and Expenses

         6.1. Indemnity and Expenses. In addition to, but not in qualification
or limitation of, any similar obligations under other Loan Documents:

         (a) PLEDGOR WILL INDEMNIFY BANK FROM AND AGAINST ANY AND ALL CLAIMS,
LOSSES AND LIABILITIES GROWING OUT OF OR RESULTING FROM THIS AGREEMENT
(INCLUDING ENFORCEMENT OF THIS AGREEMENT), WHETHER OR NOT SUCH CLAIMS, LOSSES
AND LIABILITIES ARE IN ANY WAY OR TO ANY EXTENT OWED, IN WHOLE OR PART, UNDER
ANY CLAIM OR THEORY OF STRICT LIABILITY, OR ARE CAUSED BY OR ARISING OUT OF SUCH
INDEMNIFIED PARTY'S OWN NEGLIGENCE, EXCEPT TO THE EXTENT SUCH CLAIMS, LOSSES OR
LIABILITIES ARE PROXIMATELY CAUSED BY BANK'S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.

         (b) Pledgor will upon demand pay to Bank the amount of any and all
costs and expenses, including the reasonable fees and disbursements of Bank's
counsel and of any experts and agents, which Bank may incur in connection with
(i) the transactions which give rise to this Agreement, (ii) the preparation of
this Agreement and the perfection and preservation of this security interest
created under this Agreement, (iii) the administration of this Agreement; (iv)
the custody, preservation, use or operation of, or the sale of, collection from,
or other realization upon, any Collateral; (v) the exercise or enforcement of
any of the rights of Bank hereunder; or (vi) the failure by Pledgor to perform
or observe any of the provisions hereof, except expenses resulting from Bank's
gross negligence or willful misconduct.

                                  ARTICLE VII.

                                  Miscellaneous

         7.1. Except as otherwise provided in the Third Modification Agreement,
when all of the indebtedness secured by this Agreement has been paid in full,
the Loan Agreement has been terminated, and all obligations and liabilities of
the Pledgor hereunder shall have been performed and discharged, the pledge,
assignment and liens evidenced hereby or provided for herein shall terminate and
shall be released at the expense of Pledgor and the Collateral then held as such
by Bank shall become free and clear of the same.

         7.2. Bank may at any time and from time to time in writing waive
compliance by Pledgor with any covenant herein made by Pledgor to the extent and
in the manner specified in such writing, or consent to Pledgor's doing any act
which hereunder Pledgor is prohibited from doing, or to Pledgor's failing to do
any act which hereunder Pledgor is required to do, to the extent and in the
manner specified in such writing, or release any part of the Collateral or any

                                       7
<PAGE>

interest therein from this Agreement, or release any party liable, either
directly or indirectly, for the secured indebtedness or for any covenant herein
or in any other Loan Document, without impairing or releasing the liability of
any other party. No such act shall in any way impair the rights of Bank
hereunder except to the extent specifically agreed to by Bank in such writing.

         7.3. The security rights of Bank hereunder shall not be impaired by any
indulgence, moratorium or release granted by Bank including, but not limited to,
any renewal, extension or modification which Bank may grant with respect to any
secured indebtedness, or any surrender, compromise, release, renewal, extension,
exchange or substitution which Bank may grant in respect of the Collateral, or
any part thereof or any interest therein, or any release or indulgence granted
to any endorser, guarantor or surety of any secured indebtedness.

         7.4. Bank may waive any default without waiving any other prior or
subsequent default. Bank may remedy any default without waiving the default
remedied. Neither failure by Bank to exercise, nor delay by Bank in exercising,
any right, power or remedy upon any default shall be construed as a waiver of
such default or as a waiver of the right to exercise any such right, power or
remedy at a later date. No single or partial exercise by Bank of any right,
power or remedy hereunder shall exhaust the same or shall preclude any other or
further exercise thereof, and every such right, power or remedy hereunder may be
exercised at any time and from time to time. No modification or waiver of any
provision hereof nor consent to any departure by Pledgor therefrom shall in any
event be effective unless the same shall be in writing and signed by Bank and
then such waiver or consent shall be effective only in the specific instances,
for the purpose for which given and to the extent therein specified and if given
with the necessary approval of Bank as required in the Loan Agreement. No notice
to or demand on Pledgor in any case shall of itself entitle Pledgor to any other
or further notice of demand in similar or other circumstances. Acceptance by
Bank of any payment in an amount less than the amount then due on any secured
indebtedness shall be deemed an acceptance on account only and shall not in any
way excuse the existence of a default hereunder.

         7.5. If any part of the secured indebtedness cannot be lawfully secured
by this Agreement or if any part of the Collateral cannot be lawfully subject to
the security interest hereof to the full extent of such indebtedness, then all
payments made shall be applied on said indebtedness first in discharge of that
portion thereof which is unsecured by this Agreement.

         7.6. Pledgor and Bank intend to contract in strict compliance with
applicable usury law from time to time in effect, and the provisions of the Loan
Agreement limiting the interest for which Pledgor is obligated are expressly
incorporated herein by reference. Notwithstanding anything to the contrary
herein this Agreement shall never be construed as a contract obligating Pledgor
to pay interest in excess of the maximum amount of interest permitted by
applicable law from time to time in effect, and Pledgor shall have no liability
hereunder to pay interest in excess of such maximum interest.

                                       8
<PAGE>

         7.7. Any notice, request, demand or other communication required or
permitted hereunder shall be given as provided in the Loan Agreement.

         7.8. To the extent permitted under the Loan Agreement, Bank may assign
this Agreement so that the assignee shall be entitled to the rights and remedies
of Bank hereunder and in the event of such assignment, Pledgor will assert no
claims or defenses they may have against the assignee except those granted in
this Agreement.

         7.9. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

         THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

         7.10. A determination that any provision of this Agreement is
unenforceable or invalid shall not affect the enforceability or validity of any
other provision, and any determination that the application of any provision of
this Agreement to any Person or circumstance is illegal or unenforceable shall
not affect the enforceability or validity of such provision as it may apply to
any other Persons or circumstances.

         7.11. Within this Agreement, words of any gender shall be held and
construed to include any other gender, and words in the singular number shall be
held and construed to include the plural, unless the context otherwise requires.

         7.12. Pledgor will cause this Agreement and all amendments and
supplements thereto and substitutions therefor and all financing statements and
continuation statements relating thereto to be recorded, filed, re-recorded and
refiled in such manner and in such places as Bank shall reasonably request.

         7.13. The terms, provisions, covenants and conditions hereof shall be
binding upon Pledgor, and the successors and assigns of Pledgor, and shall inure
to the benefit of Bank and its successors and assigns. All references in this
Agreement to Pledgor and Bank shall be deemed to include all such successors and
assigns.

         7.14. This Agreement shall be governed by and construed in accordance
with the laws of the State of Texas applicable to contracts made and to be
performed entirely within such state, except as required by mandatory provisions
of law and except to the extent that the perfection and the effect of perfection
or non-perfection of the security interest created hereunder, in respect of any
particular collateral, are governed by the laws of a jurisdiction other than the
State of Texas.

                                       9
<PAGE>

         IN WITNESS WHEREOF, this Agreement is executed and delivered as of the
date first written above.

                                       CAPITAL SENIOR LIVING PROPERTIES, INC.

                                       By:
                                          -------------------------------------
                                       Name:
                                            -----------------------------------
                                       Title:
                                             ----------------------------------

                                       Address:

                                       14160 Dallas Parkway
                                       Suite 300
                                       Dallas, TX  75240

                                       10

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