EXHIBIT 10.1

DRAW PROMISSORY NOTE

FOR VALUE RECEIVED, the undersigned, promises to pay to Capital Senior Living Properties, Inc., a Texas corporation, the sum draw down up to Ten Million and No/100 Dollars ($10,000,000.00), the principal due five (5) years from the date of the first draw down and interest due quarterly at the rate of twelve percent (12%) per annum, both principal and interest payable at office at 14160 Dallas Parkway, Suite 300, Dallas, Texas 75240.

The accrued interest on this note is payable quarterly after the first draw down.

All past due principal and interest shall bear interest from maturity at the rate of sixteen percent (16%) per annum.

This note may be prepaid without penalty.

Failure to pay any installment of principal and interest, or any other part thereof, when due shall, at the election of the holder and without notice, mature the whole note and it shall at once become due and payable.

It is hereby specifically agreed that if this note is placed in the hands of an attorney for collection, or if collected by suit or through the Probate Court or any other legal proceedings, the undersigned agrees to pay reasonable attorneys' fees.

All makers, endorsers, sureties and guarantors hereby waive presentment for payment of this note, notice of nonpayment, protest, notice of protest, diligence, or any notice of, or defense on account of, any extension, extensions, renewal, renewals, or change in any manner of or in this note, or in any of its terms, provisions or covenants, or of any delay, indulgence or other act of any holder of the aforesaid note.

TRIAD SENIOR LIVING V, L.P.,
a Texas limited partnership

By: Triad Partners V. L.L.C.
Its General Partner

BY:    /s/ Blake N. Fail
       ----------------------------
TITLE: President of General Partner

EXHIBIT 10.2

FIRST AMENDMENT TO AMENDED AND RESTATED
EMPLOYMENT AGREEMENT OF JAMES A. STROUD

This first amendment (the "First Amendment") to the Amended and Restated Employment Agreement of James A. Stroud (the "Employment Agreement") is entered into effective as of March 22, 1999, by and between Capital Senior Living Corporation (the "Company") and James A. Stroud ("Stroud").

WHEREAS, the Company and Stroud entered into the Employment Agreement dated October 8, 1997, whereby the Company employed Stroud in the capacity of Chief Operating Officer, Co-Chairman of the Board and a member of the Executive Committee of the Board, and

WHEREAS, the Board of Directors of the Company on March 22, 1999, amended the By-Laws and added the new office of Chairman of the Company and elected Stroud to that office, and

WHEREAS, the Company and Stroud desire to amend the Employment Agreement to reflect Stroud's election to the office of Chairman of the Company,

NOW, THEREFORE, in consideration of the foregoing, the mutual promises of the parties hereto and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. The Employment Agreement shall be amended so that the phrase or any portion of the phrase "Chief Operating Officer, Co-Chairman of the Board and a member of the Executive Committee of the Board" shall be deleted and shall be replaced with the phrase "Co- Chairman and a member of the Executive Committee of the Board, Chairman of the Company, Chief Operating Officer and Secretary."

2. Except as expressly provided herein, all of the terms and provisions of the Employment Agreement shall remain in full force and effect and unchanged. All capitalized terms used herein which are not otherwise defined herein shall have the meaning ascribed to such terms in the Employment Agreement.

IN WITNESS WHEREOF, this First Amendment has been duly executed on the 6th day of April, 1999.

COMPANY:
CAPITAL SENIOR LIVING CORPORATION

By:      /s/ David R. Brickman
         ----------------------------------
         David R. Brickman,
         Vice President and General Counsel

STROUD:

By:      /s/ James A. Stroud
         ----------------------------------
         James A. Stroud

EXHIBIT 10.3
SECOND AMENDMENT TO AMENDED AND RESTATED
EMPLOYMENT AGREEMENT OF JAMES A. STROUD

This second amendment (the "Second Amendment") to the Amended and Restated Employment Agreement of James A. Stroud is entered into effective as of May 31, 1999, by and between Capital Senior Living Corporation (the "Company") and James A. Stroud ("Employee").

WHEREAS, the Company and Employee entered into the Amended and Restated Employment Agreement dated October 8, 1997, as amended on March 22, 1999 (the "Employment Agreement"), and

WHEREAS, the Company and Employee desire to amend the Employment Agreement.

NOW, THEREFORE, in consideration of the foregoing, the mutual promises of the parties hereto and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. The first and second sentence of Paragraph 4, shall be deleted and the following shall be added:

CSL shall pay to Employee a base salary at an annual rate of not less than Two Hundred and Fifty Thousand ($250,000.00) per annum, paid in approximately equal installments no less frequently than semi-monthly. An annual bonus of thirty-three and one-third percent (33-1/3%) of Employee's base salary shall be paid in quarterly installments, subject to increase by the Compensation Committee and subject to meeting performance standards that the Company's reported quarterly earnings per share is not less than the First Call consensus earnings per share for that quarter. The Compensation Committee will use its reasonable discretion to determine the amount of the quarterly bonus to be paid if the reported quarterly earnings per share are lower than the First Call consensus earnings per share.

2. The last sentence of Paragraph 5 shall be deleted and the following added: "The number of shares and approximate vesting schedule of such options shall be at least as favorable to Employee as those contained in options granted to any other officer of the Company and its subsidiaries.

3. The phrase "annual minimum bonus" in Paragraph 6(C), "minimum annual bonus" in Paragraph 7(A)(i), and "minimum base bonus" in Paragraph 7(B)(i) shall be deleted and the following shall be added: "annual bonus paid during the term of this Agreement in the past twelve (12) months."

4. In Paragraph 7(D)(i), the last word ", and" shall be deleted and be replaced with a period. In addition, Paragraph 7(D)i(B) shall be amended to form a new paragraph as follows:

a) The parenthetical "(i)(B)" shall be deleted and the new parenthetical "(ii)" shall be added at the beginning of the paragraph.

b) The parenthetical "(D)(i)(B)" shall be deleted and the new parenthetical "(D)(ii)" shall be added in the last sentence of the paragraph.

c) The last sentence starting with "The Company shall..." shall be deleted.

The remaining parentheticals "(ii) through (v)" shall be deleted and the new parentheticals "(iii) through (vi)" shall be added. In new paragraph 7(D)(iii), the parenthetical "7(D)i(B)" shall be deleted and the new parenthetical "7(D)(ii)" shall be added.

In new Paragraph 7(D)(vi), the phrase ", family partnership or other family entity" shall be added after the word "trust".

5. The phrase "Paragraphs 7, 8, 9, and 10" in the second sentence of Paragraph 14 shall be deleted and the following shall be added, "Paragraphs 7, 8, 9, 10, and 17".

6. A new paragraph 17 shall be added:

17. INDEMNIFICATION BY COMPANY. The Company shall and hereby does indemnify Employee to the extent and in accordance with the terms of Attachment I to this Agreement.

7. Except as expressly provided herein, all of the terms and provisions of the Employment Agreement shall remain in full force and effect and unchanged. All capitalized terms used herein which are not otherwise defined herein shall have the meaning ascribed to such terms in the Employment Agreement.

IN WITNESS WHEREOF, this Second Amendment has been duly executed on the 28th day of May, 1999.

COMPANY:
CAPITAL SENIOR LIVING CORPORATION

By:  /s/ David R. Brickman
     -------------------------------

EMPLOYEE:

By:  /s/ James A. Stroud
     -------------------------------
         James A. Stroud

ATTACHMENT I
INDEMNITY

1. CAPITAL SENIOR LIVING CORPORATION (the "Corporation") will indemnify JAMES A. STROUD ("Indemnitee") in accordance with the following terms.

2. DEFINITIONS. As used in this Indemnity:

(a) The term "Proceeding" shall include any threatened, pending or completed investigation, claim, action, suit or proceeding, whether of a civil, criminal, administrative or investigative nature (including without limitation any action, suit or proceeding by or in the right of the Corporation or Other Entity to procure a judgment in its favor), in which Indemnitee may be or may have been or may be threatened to be made or to become involved in any manner (including without limitation as a party or a witness) by reason of the fact that Indemnitee has advised the Corporation (as an officer, director or consultant of the Corporation) with respect to any matter, is alleged to have advised Other Entities with respect to any matter in which the Corporation was involved or related or by reason of anything actually or allegedly done or not done by Indemnitee in any of such capacities, and whether such advice, action or inaction occurred in the past or occurs after the date hereof. It is expressly agreed that "Proceeding" shall include any claim, action, suit or proceeding arising out of or related to the Corporation's business relationships with and proposed mergers with ILM Senior Living, Inc. and ILM II Senior Living, Inc., in connection with which the Corporation's Board of Directors in considering this Agreement has determined Indemnitee's actions and advice were in good faith and in the best interests of the Corporation. It is also expressly agreed that "Proceeding" shall include any claim, action, suit or proceeding arising out of allegations that Indemnitee's affiliates have engaged in transactions with the Corporation in which Indemnitee had a financial or conflicting interest.

(b) The term "Expenses" includes, without limitation, reasonable attorneys' fees and disbursements and all other reasonable costs, expenses and obligations actually and reasonably incurred by Indemnitee in connection with (i) investigating, defending, being a witness in or otherwise participating in, or preparing to defend, be a witness in or participate in, any Proceeding, or (ii) establishing a right to indemnification under Paragraph 6 of this Indemnity, but shall not include the amount of any judgments, fines or penalties entered or assessed against Indemnitee or any amounts paid or payable in settlement by Indemnitee.

(c) The term "Other Entity" includes, without limitation, any subsidiary or affiliate of the Corporation and any entity with which Indemnitee has served or is serving as an officer or director or otherwise in the general interest of the Corporation's business. It is expressly agreed that Indemnitee's (i) service with Capital Realty Group Senior Housing, Inc., a Texas corporation, and with its subsidiaries and partnerships in which it is a general partner, (ii) service with Capital Senior Living Communities, LP, and its general partner, Retirement Living Communities, L.P. and (iii) service with Tri-Point Communities, L.P. were all undertaken by the Indemnitee for the benefit of the Corporation, and all such entities and their affiliates are hereby agreed to be Other Entities within the meaning of this definition.

3. SCOPE OF INDEMNIFICATION. Subject to Paragraph 7 of this Indemnity, the Corporation shall indemnify Indemnitee in accordance with the provisions of this Paragraph 3 if Indemnitee is or was or is threatened to be made or to become involved in any manner, including without limitation as a party or witness, in any Proceeding (including a Proceeding by or in the right of the Corporation or Other Entity to procure a judgment in its favor) against any and all Expenses and any and all judgments, fines and penalties entered or assessed against Indemnitee, and any and all amounts reasonably paid or payable in settlement by Indemnitee, in connection with such Proceeding, but only if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the Corporation's best interests and without gross negligence. THIS INDEMNITY EXPRESSLY INDEMNIFIES INDEMNITEE AGAINST HIS OWN NEGLIGENCE. The termination of any Proceeding by judgment, order of court, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption for purposes of any provision of this Indemnity that Indemnitee did not act in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the Corporation's best interests, or with gross negligence.

4. INDEMNIFICATION OF EXPENSES OF SUCCESSFUL PARTY; NO ADVERSE PRESUMPTION. Notwithstanding any other provisions of this Indemnity, to the extent that Indemnitee has been successful on the merits or otherwise, in defense of any Proceeding or in defense of any claim, issue or matter therein, including the dismissal of an action without prejudice, Indemnitee shall be indemnified against all Expenses incurred in connection therewith.

5. ADVANCES OF EXPENSES. The Expenses incurred by Indemnitee pursuant to Paragraph 3 in any Proceeding shall be paid by the Corporation in advance, promptly upon the written request of the Indemnitee, if Indemnitee shall undertake to repay such amount to the extent that it is ultimately determined that Indemnitee is not entitled to indemnification. No security for the performance of any such undertaking shall be required and any such undertaking shall be accepted by the Corporation without regard to the financial capacity of Indemnitee to perform his obligations thereunder.

6. RIGHT OF INDEMNITEE TO INDEMNIFICATION UPON APPLICATION: PROCEDURE UPON APPLICATION. Without limiting the obligation of the Corporation to promptly make payments in respect of Expenses in accordance with Paragraph 5, any indemnification under Paragraph 3 shall be made no later than 45 days after receipt by the Corporation of the written request of Indemnitee, unless a determination is made within said 45-day period by
(1) the Board of Directors of the Corporation by a majority vote of a quorum consisting of Directors who are not and were not parties to the relevant Proceeding, or (2) independent legal counsel in a written opinion (which counsel shall be appointed if such a quorum is not obtainable) that the Indemnitee has not met the relevant standards for indemnification set forth in Paragraph 3.

The right to indemnification or advances as provided by this Indemnity shall be enforceable by Indemnitee in any court of competent jurisdiction. The burden of proving that indemnification is not appropriate shall be on the Corporation. Indemnitee's Expenses reasonably incurred in connection with successfully establishing his or her right to indemnification, in whole or in part, in any such proceeding shall also be indemnified by the Corporation.

7. INDEMNIFICATION HEREUNDER NOT EXCLUSIVE; CONSTRUCTION. The indemnification provided by this Indemnity shall not be deemed exclusive of any other rights to which Indemnitee may be entitled under the General Corporation Law of the State of Delaware, the Amended and Restated Certificate of Incorporation and/or Bylaws of the Corporation, any other indemnity, any vote of stockholders or disinterested Directors, or otherwise, either as to action in his official capacity on, prior or after the date hereof or as to action in any other capacity. The corporation hereby agrees and acknowledges that it will continue to honor its indemnification obligations to Indemnitee set forth in its Amended and Restated Certificate of Incorporation and/or Bylaws with respect to any existing or future lawsuit against the Corporation and any other actions pursuant to which Indemnitee would be entitled to indemnification.

8. PARTIAL INDEMNIFICATION. In the event that Indemnitee is entitled under any provision of this Indemnity to indemnification by the Corporation for a portion but less than the entire amount of any Expenses, judgments, fines, penalties and/or amounts paid or payable in settlement, the Corporation shall fully indemnify Indemnitee in accordance with the applicable provisions of this Indemnity for such portion of such Expenses, judgments, fines, penalties and/or amounts paid in settlement.

9. SUBROGATION. In the event that the Corporation provides any indemnification or makes any payment to Indemnitee in respect of any matter in respect of which indemnification or the advancement of expenses is provided for herein, the Corporation shall be subrogated to the extent of such indemnification or other payment to all of the related rights of recovery of Indemnitee against other persons or entities. Indemnitee shall execute all papers reasonably required and shall do everything that may be reasonably necessary to secure such rights and enable the Corporation effectively to bring suit to enforce such rights (with all of Indemnitee's reasonable costs and expenses, including attorneys' fees and disbursements, to be reimbursed by or, at the option of Indemnitee, advanced by the Corporation).

10. NO DUPLICATION OF PAYMENTS. The Corporation shall not be obligated under this Indemnity to provide any indemnification or make any payment to which Indemnitee is otherwise entitled hereunder to the extent, but only to the extent, that such indemnification or payment hereunder would be duplicative of any amount actually received by Indemnitee pursuant to any insurance policy, the General Corporation Law of the State of Delaware, the Amended and Restated Certificate of Incorporation and/or the Bylaws of the Corporation or otherwise. With respect to the Corporation's indemnity obligations concerning Other Entities, the Corporation shall have no obligation hereunder until and unless Indemnitee has first sought all available insurance coverage benefitting such Other Entities and indemnity available from such Other Entities and such insurance coverage and indemnity has been exhausted or has been denied.

11. SAVING CLAUSE. If any provision of this Indemnity or the application of any provision hereof to any circumstance is held illegal, invalid or otherwise unenforceable, the remainder of this Indemnity and the application of such provision to any other circumstance shall not be affected, and the provision so held to be illegal, invalid or otherwise unenforceable shall be reformed to the extent (but only to the extent) necessary to make it legal, valid and enforceable.

12. NOTICE. Indemnitee shall give to the Corporation notice in writing as soon as practicable of any claim made against him or her for which indemnification will or could be sought under this Indemnity, provided, however, that any failure to give such notice to the Corporation will relieve the Corporation from its obligations hereunder only if, and to the extent that, such failure results in the forfeiture of substantial rights and defenses. Notice to the Corporation shall be directed to the Corporation (to the attention of the Chief Executive Officer, with a copy to the General Counsel) at its principal executive office or such other address as the Corporation shall designate in writing to Indemnitee. Notice shall be deemed received when hand delivered or dispatched by electronic facsimile transmission (with receipt thereof orally confirmed), or three calendar days after having been mailed by United States registered or certified mail, return receipt requested, postage prepaid, or one business day after having been sent for next-day delivery by a nationally recognized overnight courier. In addition, Indemnitee shall give the Corporation such information and cooperation as it may reasonably require and shall be within Indemnitee's power. The Corporation shall give prompt notice to Indemnitee of any potential claims against Indemnitee of which the Corporation becomes aware.

13. APPLICABLE LAW. This Indemnity shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to the principles of conflicts of law thereof.

14. SUCCESSORS. This Indemnity shall be binding upon the Corporation and its successors, including without limitation any person acquiring directly or indirectly all or substantially all of the business or assets of the Corporation whether by purchase, merger, consolidation, reorganization or otherwise (and such successor will thereafter be deemed the "Corporation" for purposes of this Indemnity), but will not otherwise be assignable, transferable or delegable by the Corporation. The Corporation shall require any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business or assets of the Corporation, to assume and agree in writing to perform this Indemnity, expressly for the benefit of Indemnitee, in the same manner and to the same extent the Corporation would be required to perform if no such succession had taken place.

Dated:  May 28, 1999                         CAPITAL SENIOR LIVING
                                             CORPORATION

                                             By:     /s/ David R. Brickman
                                                     ---------------------
                                             Title: Vice President

EXHIBIT 10.4
EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into on the 26th day of May, 1999, by and between Capital Senior Living Corporation, a Delaware corporation ("CSL" or "the Company"), and Lawrence A. Cohen, an individual residing in the State of New York ("Employee"). The term of this Agreement shall be deemed to have commenced as of June 1, 1999 ("Employment Commencement Date").

1. APPOINTMENT, TITLE AND DUTIES. CSL hereby employs Employee to serve in the positions as assigned to him by its Board of Directors, which currently shall be as its Chief Executive Officer and as the Vice Chairman of its Board of Directors and a member of the Executive Committee of the Board. In such capacity, Employee shall report to the Chairman of the Company of CSL and shall have such powers, duties and responsibilities as are customarily assigned to the Chief Executive Officer and Vice Chairman. In addition Employee shall have such other duties and responsibilities as may reasonably be assigned to him by the Board of Directors, including serving with the consent or at the request of CSL on the board of directors of affiliated corporations.

2. TERM OF AGREEMENT. The initial term of this Agreement shall be for a three (3) year period ending on May 31, 2002, however, the term of this Agreement shall automatically be extended for a one (1) year term on a consecutive basis. The term of this Agreement may be extended by the mutual written consent of the Employee and Company. This Agreement shall terminate upon the earlier of: (i) the date of the voluntary resignation of Employee,
(ii) the date of Employee's death or determination of Employee's disability (as defined in Paragraph 6 below), (iii) the date of notice by CSL to Employee that this Agreement is being terminated by CSL whether "for cause" (as defined in Paragraph 6 below) or without cause, (iv) upon the date a notice of intent to resign for "good reason" (as defined in Paragraph 6 below) is delivered to the Company by Employee, or (v) expiration of the term.

3. ACCEPTANCE OF POSITION. Employee hereby accepts the positions assigned by the Board of Directors, and agrees that during the term of this Agreement he will faithfully perform his duties and will devote substantially all of his business time to the business and affairs of CSL and will not engage, for his own account or for the account of any other person or entity, in any other business or enterprise except with the express written approval of the Board of Directors of CSL. Employee may, at his sole discretion, (i) serve as a director on the boards of directors of other entities, businesses and enterprises he currently serves on, and (ii) make personal, passive investments. Employee agrees to perform his duties faithfully, diligently and to the best of his ability, to use his best efforts to advance the best interests of the Company at all times, and to abide by all moral, ethical and lawful policies, guidelines, procedures, instructions and orders given to him by the Company from time to time; PROVIDED, HOWEVER, that in no event shall Employee be required to move from the New York City, New York area. The Company will provide an office either in New York City or the immediate area. Employee shall spend a reasonable amount of time in Dallas to conduct the affairs of the Company.

4. SALARY AND BENEFITS. During the term of this Agreement:

A) CSL shall pay to Employee a base salary at an annual rate of not less than $300,000 per annum, paid in approximately equal installments no less frequently than semi-monthly. An annual bonus of thirty-three and one-third percent (33-1/3%) of Employee's base salary shall be paid in quarterly installments, subject to meeting performance standards that the Company's reported quarterly earnings per share is not less than the First Call consensus earnings per share for that quarter, and subject to increase by the Compensation Committee. The Compensation Committee will use its reasonable discretion to determine the amount of the quarterly bonus to be paid if the reported quarterly earnings per share are lower than the First Call consensus earnings per share. The Company shall deduct from Employee's compensation and bonus all applicable local, state, Federal or foreign taxes, including, but not limited to, income tax, withholding tax, social security tax and pension contributions (if any).

B) Employee shall participate in all health, retirement, Company-paid insurance, sick leave, disability, expense reimbursement and other benefit programs, if any, which CSL makes available, in its sole discretion, to its senior executives; however, nothing herein shall be construed to obligate the Company to establish or maintain any employee benefit program. The Company may purchase and maintain in force a death and disability insurance policy in an amount at all times equal to not less than an amount equal to Employee's annual base salary multiplied by three (3). The Company shall be the beneficiary of said policy and shall use said policy for the purposes described in Paragraph 7(A)(i), below. Reimbursement of Employee's reasonable and necessary business expenses incurred in the pursuit of the business of the Company or any of its affiliates shall be made to Employee upon his presentation to the Company of itemized bills, vouchers or accountings prepared in conformance with applicable regulations of the Internal Revenue Service and the policies and guidelines of the Company.

C) Employee shall be entitled to reasonable vacation time in an amount of four (4) weeks per year pursuant to the Company's Corporate Policies and Procedures Manual.

5. STOCK OPTIONS. If the Company adopts a stock option plan or other incentive compensation plan, Employee shall receive options to purchase Company Common Stock. The number of shares of Common Stock of the Company covered by options to be granted to Employee and the exercise price of the options shall be determined by the Compensation Committee, if it exists, and in the absence of a Compensation Committee, by the Board of Directors. The number of shares and approximate vesting schedule of such options shall be at least as favorable to Employee as those contained in options granted to any other officer of the Company and its subsidiaries.

6. CERTAIN TERMS DEFINED. For purposes of this Agreement:

A) Employee shall be deemed to be disabled if a physical or mental condition shall occur and persist which, in the written opinion of two
(2) licensed physicians, has rendered Employee unable to perform the duties of Chief Executive Officer, Vice Chairman and member of the Board of Directors of CSL for a period of ninety (90) calendar days or more, and which condition, in the opinion of such physicians, is likely to continue for an indefinite period of time, rendering Employee unable to return to his duties for CSL. One (1) of the two (2) physicians shall be selected in good faith by the Board of Directors of CSL, and the other of the two (2) physicians

shall be selected in good faith by Employee. In the event that the two (2) physicians selected do not agree as to whether Employee is disabled, as described above, then said two (2) physicians shall mutually agree upon a third (3rd) physician whose written opinion as to Employee's condition shall be conclusive upon CSL and Employee for purposes of this Agreement.

B) A termination of Employee's employment by CSL shall be deemed to be "for cause" if it is based upon (i) a final, nonappealable conviction of Employee for commission of a felony involving moral turpitude,
(ii) Employee's willful gross misconduct that causes material economic harm to the Company or that brings substantial discredit to the Company's reputation, or (iii) Employee's material failure or refusal to perform his duties in accordance with this Agreement, if Employee has failed to cure such failure or refusal to perform within thirty (30) days after the Company notifies Employee in writing of such failure or refusal to perform.

C) A resignation by Employee shall not be deemed to be voluntary, and shall be deemed to be a resignation for "good reason" if it is based upon (i) a material diminution in Employee's duties which is not part of an overall diminution for all executive officers of the Company, or (ii) a material breach by CSL of the Company's obligations to Employee under this Agreement or under the Company's Stock Option Plan, if adopted.

D) A Fundamental Change shall be defined as any of the following: (A) a merger, consolidation, statutory share exchange or sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company that requires the consent or vote of the holders of the Company's Common Stock, other than a consolidation, merger or share exchange of the Company in which the holders of the Company's Common Stock immediately prior to such transaction have the same proportionate ownership of Common Stock of the surviving corporation immediately after such transaction; (B) the stockholders of the Company approve any plan or proposal for the liquidation or dissolution of the Company; (C) the cessation of control (by virtue of their not constituting a majority of directors) of the Board of Directors of the Company by the individuals (the "Continuing Directors") who (x) at the date of this Agreement were directors or (y) become directors after the date of this Agreement and whose election or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds of the directors then in office who were directors at the date of this Agreement or whose election or nomination for election was previously so approved; (D) the acquisition of beneficial ownership (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934) of an aggregate of 20% or more of the voting power of the Company's outstanding voting securities by any person or group (as such term is used in Rule 13d-5 under the Securities Exchange Act of 1934) who beneficially owned less than 15% of the voting power of the Company's outstanding voting securities on the date of this Agreement, or the acquisition of beneficial ownership of an additional 5% of the voting power of the Company's outstanding voting securities by any person or group who beneficially owned at least 15% of the voting power of the Company's outstanding voting securities on the date of this Agreement; provided, however, that notwithstanding the foregoing, an acquisition shall not constitute a Fundamental Change hereunder if the acquiror is (x) a trustee or other fiduciary holding securities under an employee benefit plan of the Company and acting in such capacity, (y) a wholly-owned subsidiary of the Company or a corporation owned, directly or indirectly, by the stockholders of the Company in the same proportions as their ownership of voting securities of the Company or (z) any other person whose acquisition of shares of voting securities is approved in

advance by a majority of the Continuing Directors; or (E) in a Title 11 bankruptcy proceeding, the appointment of a trustee or the conversion of a case involving the Company to a case under Chapter 7.

7. CERTAIN BENEFITS AND OBLIGATIONS UPON TERMINATION.

A) In the event that Employee's employment terminates (i) because of death or disability, (ii) because CSL has terminated Employee other than "for cause," as described above, or (iii) because Employee has voluntarily resigned for "good reason," as described above, then,

i) CSL shall pay Employee in accordance with its Corporate Policies and Procedures Manual his base salary plus his annual bonus paid during the term of this Agreement in the past twelve (12) months for the balance of the term of this Agreement (not including any future extensions), but not less than two (2) years (base salary plus annual bonus paid during the term of this Agreement in the past twelve (12) months for three (3) years if termination due to a Fundamental Change) from the date of the notice of termination, and Employee shall retain all his Company stock options that are vested; provided, however, the benefits described in this Paragraph 7(A)(i) shall terminate at such time as Employee materially breaches the provisions of Paragraphs 7(D), 8, or 9 hereof.

ii) All accrued but unpaid or unused vacation, sick pay and expense reimbursement shall be calculated in accordance with CSL's Corporate Policies and Procedures Manual and shall be promptly paid to Employee upon such termination.

B) In the event that Employee's employment terminates for any other cause other than those set forth in Paragraph 7(A), which can include but not be limited to voluntary resignation without good reason, termination by CSL "for cause," expiration of the term of the Agreement, etc., then,

i) CSL shall promptly pay Employee his base salary and pro-rated annual bonus up to and through the date of termi- nation;

ii) All accrued but unpaid or unused vacation, sick pay and expense reimbursement shall be calculated in accordance with CSL's Corporate Policies and Procedures Manual and shall be promptly paid to Employee upon such termination.

C) In the event that Employee's employment terminates by reason of his death, all benefits provided in this Paragraph 7 shall be paid to Employee's estate or as his executor or personal representative shall direct, but payment may be deferred until Employee's executor or personal representative has been appointed and qualified pursuant to the law in effect in Employee's jurisdiction of residence at the time of his death;

D) Following the termination for any reason of Employee's employment, Employee shall not for himself or any third party, directly or indirectly (i) divert or attempt to divert from the Company or its affiliated companies any business of any kind in which it is or has been engaged, including, without limitation, the solicitation of, interference with, or entering into any

contract with any of its past or then existing customers, and (ii) employ, solicit for employment, or recommend for employment any person employed by the Company or its affiliated companies during the period of such person's employment and for a period of two (2) years thereafter.

8. CONFIDENTIALITY. Employee hereby acknowledges his understanding that as a result of his employment by CSL, he will have access to, and possession of, valuable and important confidential or proprietary data, documents and information concerning CSL, its operations and its future plans. Employee hereby agrees that he will not, either during the term of his employment with CSL, or at any time after the term of his employment with CSL, divulge or communicate to any person or entity, or direct any employee or agent of CSL or of his to divulge or communicate to any person or entity, or use to the detriment of CSL or for the benefit of any other person or entity, or make or remove any copies of, such confidential information or proprietary data or information, whether or not marked or otherwise identified as confidential or secret. Upon any termination of this Agreement for any reason whatsoever, Employee shall surrender to CSL any and all materials, including but not limited to drawings, manuals, reports, documents, lists, photographs, maps, surveys, plans, specifications, accountings and any and all other materials relating to the Company or any of its business, including all copies thereof, that Employee has in his possession, whether or not such material was created or compiled by Employee, but excluding, however, personal memorabilia belonging to Employee and notes taken by him as a member of the Board of Directors. With the exception of such excluded items, materials, etc., Employee acknowledges that all such material is solely the property of CSL, and that Employee has no right, title or interest in or to such materials. Notwithstanding anything to the contrary set forth in this Paragraph 8, the Provisions of this Paragraph 8 shall not apply to information which: (i) is or becomes generally available to the public other than as a result of disclosure by Employee, or (ii) is already known to Employee as of the date of this Agreement from sources other than CSL, or (iii) is required to be disclosed by law or by regulatory or judicial process.

9. NON-COMPETITION. Employee hereby agrees that during the term of his employment with the Company and for a period of one (1) year after any termination for any reason whatsoever of this Agreement, he will not and will cause his Affiliates not to, directly or indirectly, acquire, develop or operate senior living facilities anywhere in the United States, other than through the Company and its subsidiaries except as otherwise requested by the Company. CSL hereby acknowledges and agrees that Employee's ownership of a class of securities listed on a stock exchange or traded on the over-the-counter market that represents five percent (5%) or less of the number of shares of such class of securities then issued and outstanding shall not constitute a violation of this Paragraph 9.

10. WORK PRODUCT. The Employee agrees that all innovations, improvements, developments, methods, designs, analyses, reports and all similar or related information which relates to the Company's or any of its subsidiaries' or affiliates' actual or anticipated business, or existing or future products or services and which are conceived, developed or made by the Employee while employed by the Company ("Work Product") belong to the Company or such subsidiary or affiliate. The Employee will promptly disclose such Work Product to the Board and perform all actions reasonably requested by the Board (whether during or after the employment period) to establish and to confirm such ownership (including, without limitation, assignments, consents, powers of attorney and other instruments).

11. LEGAL ACTION. In the event that any action or proceeding is brought to enforce the terms and provisions of this Agreement, the prevailing party shall be entitled to recover reasonable attorneys' fees and costs. In the event of a breach or threatened breach by Employee of the provisions of Paragraph 7(D), 8, 9, or 10, Employee and the Company agree that the Company, shall, in addition to any other available remedies, be entitled to an injunction restraining Employee from violating the terms of the applicable Paragraph and that said injunction is appropriate and proper relief for such violation.

12. NOTICES. All notices and other communications provided to either party hereto under this Agreement shall be in writing and delivered by hand delivery, overnight courier service or certified mail, return receipt requested, to the party being notified at said party's address set forth adjacent to said party's signature on this Agreement, or at such other address as may be designated by a party in a notice to the other party given in accordance with this Agreement. Notices given by hand delivery or overnight courier service shall be deemed received on the date of delivery shown on the courier's delivery receipt or log. Notices given by certified mail shall be deemed received three (3) days after deposit in the U.S. Mail.

13. CONSTRUCTION. In construing this Agreement, if any portion of this Agreement shall be found to be invalid or unenforceable, the remaining terms and provisions of this Agreement shall be given effect to the maximum extent permitted without considering the void, invalid or unenforceable provision. In construing this Agreement, the singular shall include the plural, the masculine shall include the feminine and neuter genders, as appropriate, and no meaning or effect shall be given to the captions of the paragraphs in this Agreement, which are inserted for convenience of reference only.

14. CHOICE OF LAW; SURVIVAL. This Agreement shall be governed and construed in accordance with the internal laws of the State of Texas without resort to choice of law principles. The provisions of Paragraphs 7, 8, 9, 10 and 17 shall survive the termination of this Agreement for any reason whatsoever.

15. INTEGRATION; AMENDMENTS. This is an integrated Agreement. This Agreement constitutes and is intended as a final expression and a complete and exclusive statement of the understanding and agreement of the parties hereto with respect to the subject matter of this Agreement. All negotiations, discussions and writings between the parties hereto relating to the subject matter of this Agreement are merged into this Agreement, and there are no rights conferred, nor promises, agreements, conditions, undertakings, warranties or representations, oral or written, expressed or implied, between the undersigned parties as to such matters other than as specifically set forth herein. No amendment or modification of or addendum to, this Agreement shall be valid unless the same shall be in writing and signed by the parties hereto. No waiver of any of the provisions of this Agreement shall be valid unless in writing and signed by the party against whom it is sought to be enforced.

16. BINDING EFFECT. This Agreement is binding upon and shall inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors and assigns; PROVIDED, HOWEVER, that Employee shall not be entitled to assign his interest in this Agreement (except for an assignment by operation of law to his estate), or any portion hereof, or any rights hereunder, to any

party. Any attempted assignment by Employee in violation of this Paragraph 16 shall be null, void, ab initio and of no effect of any kind or nature whatsoever.

17. REGISTRATION RIGHT.

A) If the Company at any time proposes to register any of its securities under the Securities Act for sale to the public, whether for its own account or for the account of other security holders or both (except with respect to registration statements on Forms S-4 or S-8 or another form not available for registering the Registrable Securities for sale to the public), each such time it will give written notice to Employee of its intention so to do. Upon the written request of Employee, received by the Company within 30 days after the giving of any such notice by the Company, the Company will cause the Registrable Securities as to which registration shall have been so requested to be included in the securities to be covered by the registration statement proposed to be filed by the Company, all to the extent requisite to permit the sale or other disposition by Employee (in accordance with its written request) of such Registrable Securities so registered; provided, however, that if the managing underwriter of the Company's offering delivers in good faith a written opinion to Employee that either because of (A) the kind of securities which the Employee or the Company intends to include in the offering or (B) the size of the offering which Employee or the Company intend to make, the success of the offering or the market for the Company's common stock would be materially and adversely affected by the inclusion of the Registrable Securities requested to be included (I) in the event that the size of the offering is the basis for the managing underwriter's opinion, the amount of the securities to be offered for the account of the Employee and each other person registering securities of the Company pursuant to similar incidental registration rights shall be reduced pro rata to the extent necessary to reduce the total amount of securities to be included in such offering to the amount reasonably recommended by such managing underwriter; and (II) in the event that the combination of securities to be offered is the basis of such managing underwriter's opinion, 1) the Registrable Securities and other securities to be included in such offering shall be reduced as described in clause (I) above or, 2) if the actions described in clause (I) would, in the reasonable judgment of the managing underwriter, be insufficient to substantially eliminate the material and adverse effect that inclusion of the Registrable Securities requested to be included would have on such offering, such Registrable Securities will be excluded from such offering. Notwithstanding the foregoing provisions, the Company may withdraw any registration statement referred to in this Paragraph 17(A) without thereby incurring any liability to Employee. The Company shall not be required to register shares of Registrable Securities of Employee after the Company has filed two (2) registration statements which included Registrable Securities and such registration statements have become effective, remained effective for the period of distribution, and the transaction described therein were closed.

B) If and whenever the Company is required by Paragraph 17(A) to effect a piggy back registration, the Company shall as expeditiously as possible:

i) prepare and file with the Securities and Exchange Commission ("Commission") a registration statement (which, in the case of an underwritten public offering shall be on Form S-1, Form S-2, Form S-3, any successor forms thereto, or other form of general applicability satisfactory to the managing underwriter selected as therein provided) with respect to such securities and use its best efforts to cause such registration statement to become and remain

effective for the period of the distribution contemplated thereby ( as determined hereinafter ); provided, however that the Company may postpone the filing, effectiveness, supplementing or amending of the registration statement for up to 90 days if, in the good faith opinion of the Company's Board of Directors, the registration or sale of Registrable Securities would adversely affect a material financing, acquisition, disposition of assets or stock, merger or other comparable transaction or would require the Company to make public disclosure of information the public disclosure of which would have a material adverse effect upon the Company. During any time that the Company defers amending or supplementing the registration statement, the holders of Registrable Securities shall discontinue disposing of Registrable Securities;

ii) subject to the proviso in subparagraph (i), prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective for the period of distribution and comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by such registration statement in accordance with the intended method of disposition set forth in such registration statement for such period;

iii) furnish to Employee and to each underwriter such number of copies of the registration statement and the prospectus included therein (including each preliminary prospectus) as such persons reasonably may request in order to facilitate the public sale or other disposition of the Registrable Securities covered by such registration statement;

iv) use its best efforts to register or qualify the Registrable Securities covered by such registration statement under the securities or "blue sky" laws of such jurisdictions as the Employee or, in the case of an underwritten public offering, the managing underwriter reasonably shall request, provided however, that the Company shall not for any such purpose be required to qualify generally to transact business as a foreign corporation in any jurisdiction where it is not so qualified or to consent to general service of process in any such jurisdiction;

v) use its best efforts to list or qualify for quotation the Registrable Securities covered by such registration statement with any securities exchange or inter-dealer quotation system on which the common stock of the Company is then listed or quoted;

vi) notify Employee at any time when a prospectus relating to Registrable Securities is required to be delivered under the Securities Act or the happening of any event as a result of which the prospectus included in such registration statement contains an untrue statement of a material fact or omits any fact necessary to make the statements therein not misleading, and, at the request of Employee, the Company will prepare a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein not misleading, provided that the 180-day period described below will be tolled from the time a prospectus contains such a statement or omission until a prospectus correcting such statement or omission has been delivered to the Employee and may be delivered to the purchasers of such Registrable Securities in compliance with the Securities Act;

vii) notify the Employee immediately, and confirm the notice in writing,

(1) when the registration statement becomes effective, (2) of the issuance by the Commission of any stop order or of the initiation, or the threatening, of any proceedings for that purpose, (3) of the receipt by the Company of any notification with respect to the suspension of qualification of the Registrable Securities for sale in any jurisdiction or of the initiation, or the threatening, of any proceedings for that purpose, and
(4) of the receipt of any comments, or requests for additional information, from the Commission or any state regulatory authority. If the Commission or any state regulatory authority shall enter such a stop order or order suspending qualification at any time, the Company will promptly use its best reasonable efforts to obtain the lifting of such order; and

viii) otherwise use its best efforts to comply with -all applicable rules and regulations of the Commission, and make available to its security holders as soon as reasonably practicable, but not later than 15 months after the effective date of the registration statement, a statement covering a period of at least 12 months beginning after the effective date of the registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act.

For purposes hereof, the period of distribution of Registrable Securities in a firm commitment underwritten public offering shall be deemed to extend until each underwriter has completed the distribution of all securities purchased by it, and the period of distribution of Registrable Securities in any other registration shall be deemed to extend until the earlier of the sale of all Registrable Securities covered thereby or 180 days after the effective date thereof.

In connection with each registration hereunder, Employee will furnish to the Company in writing such information with respect to it as a stockholder as reasonably shall be necessary in order to assure compliance with federal and applicable state securities laws.

In connection with each registration pursuant to Paragraph 17 hereof covering an underwritten public offering, the Company and Employee agree to use their best efforts to select a managing underwriter (and any co-managers) and to enter into a written agreement with the managing underwriter selected in the manner herein provided in such form and containing such provisions as are customary in the securities business for such an arrangement between such underwriter and companies of the Company's size and investment stature.

C) All expenses incurred by the Company in complying with Paragraph 17 hereof, including, without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel and independent public accountants for the Company, fees and expenses (including counsel fees) incurred in connection with complying with state securities or "blue sky" laws, fees of the National Association of Securities Dealers, Inc., transfer taxes, fees of transfer agents and registrars, costs of insurance, and fees and disbursements of one counsel for the Employee but excluding any Selling Expenses, are called "Registration Expenses." All underwriting discounts and selling commissions applicable to the sale of Registrable Securities are called "Selling Expenses."

i) The Company shall pay all Registration Expenses attributable to the shares of Registrable Securities included in the registration in connection with each registration statement under Paragraph 17 hereof.

ii) All Selling Expenses in connection with each such registration statement applicable to Registrable Securities sold by Employee shall be borne by the Employee.

D) Subject to applicable law, the Company will indemnify each underwriter, the Employee and each person controlling any of them, against all claims, losses, damages and liabilities, including legal and other expenses reasonably incurred, arising out of any untrue statement of a material fact contained in the registration statement, or any omission to state a material fact required to be stated in the registration statement or necessary to make the statements not misleading, or arising out of any violation by the Company of the Securities Act, any state securities or "blue-sky" laws or any applicable rule or regulation. This indemnification will not apply to any claims, losses, damages or liabilities to the extent that they may have been caused by an untrue statement or omission based upon information furnished in writing to the Company by such underwriter, the Employee or controlling person, respectively, expressly for use in the registration statement. With respect to such untrue statement or omission in the information furnished in writing to the Company by the Employee, the Employee will indemnify the underwriters, the Company, its directors and officers, and each person controlling any of them against any losses, claims, damages, expenses or liabilities to which any of them may become subject as a result of such untrue statement or omission.

E) The registration rights of the Employee under this Agreement may be transferred to any trust, family partnership or other family entity formed by Employee to hold shares of common stock and to any member of the family of the Employee.

F) In the event of any merger, consolidation or share exchange pursuant to which the Company is not the surviving or resulting corporation, the Company's obligations under this Paragraph 17 shall be assumed by such surviving or resulting corporation.

18. CANCELLATION OF PRIOR EMPLOYMENT AGREEMENT. Employee and Company hereby agree that the Employment Agreement, dated November 1, 1996, between Employee and Company shall be, upon execution and delivery of this Agreement, canceled and of no further force and effect.

IN WITNESS WHEREOF, the parties have executed this Agreement on the date set forth above to be effective as of the date specified in the preamble of this Agreement.

CAPITAL SENIOR LIVING CORPORATION,
a Delaware corporation

Address:
14160 Dallas Parkway, #300

Dallas, TX  75240                           By:  /s/ James A. Stroud
                                                 -----------------------------
                                                 James A. Stroud, Chairman

EMPLOYEE

Address:
41 Willow Road

Woodsburgh, NY  11598                       /s/ Lawrence A. Cohen
                                            ----------------------------------
                                            Lawrence A. Cohen