Exhibit 10.11.1

MANAGEMENT AGREEMENT

     This Agreement by and between The Covenant Group, Inc., hereinafter
referred to as “Manager”, a Texas. corporation having its principal place of
business in Ft. Worth, Texas, and TEALRIDGE MANOR CORPORATION, hereinafter
referred to as “Owner”, having its principal place of business in Oklahoma City,
Oklahoma.

     WHEREAS, Owner is building a certain Retirement Facility, hereinafter
referred to as “Facility, “ at Oklahoma City, Oklahoma and;

     WHEREAS, Owner desires to employ Manager, by this Agreement, to provide
management services to operate the Facility;

     NOW; THEREFORE, in consideration of their mutual covenants herein
contained, Owner hereby employs Manager to perform the duties and to provide the
services hereinafter described and Manager does hereby accept such employment on
the terms and condition hereinafter set forth.

SECTION ONE

     1.1 Control. Owner shall be the owner and holder of all leases, licenses,
permits, occupancy agreements, and contracts in connection with the Facility.
Owner shall at all times exercise control over the assets and the affairs of the
Facility, and Manager shall perform the duties herein required to be performed
by it as Independent Contractor of Owner and with the polities and directives
from time to time adopted by Owner. Owner shall, at all times, be responsible
for the direction of the Facility and for general supervision over activities of
Manager.

     1.2 Financial Requirements. Manager will present to Owner for its approval
annual fiscal year Operating Budgets, Capital Budgets, and Cash Budgets
necessary for the operation of the Facility. Upon receiving approval of the
proposed budgets and capital program, Manager will carry out the Operating and
Capital Programs of the Facility as proposed and approved, to the extent that
funds are made available by Owner. Manager will not enter into any contracts in
excess of $500 without prior written consent of Owner.

     1.3 Reports. Manager shall furnish Owner with a monthly report detailing
the performance of the Facility during the preceding month. The report shall
contain, among other things, statistics regarding occupancy, expenses incurred,
revenues, a profit and loss statement and similar matters along with supporting
documentation. Additionally, narrative explanation will be provided as an
addendum to said report as Manager deems reasonably necessary or as requested by
Owner to make the report informative. Monthly reports shall be furnished to
Owner no later than the close of business on the 15th day of the calendar month
next following the month for which the report is being made. Owner shall at all
times be entitled to audit all books and records pertaining to the facility.

 

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     1.4 Ownership of Books and Records. Ownership of all books and records
shall be the property of the Facility and Owner. Upon termination of this
agreement, all records, books, computer software, files, and other similar items
shall remain or be delivered to the Facility for the benefit of Owner.

     1.5 General Management. Subject to the foregoing, Manager is hereby given
general authority to supervise and manage the day-to-day operation of the
Facility and to perform the specific duties hereinafter set out.

SECTION TWO

Management Services

     Management Services to be provided shall include the following specific
activities which shall be performed by Manager within the guidelines established
by Owner.

     2.1 Inventory. Preparation of specifications of quality and quantity of
supplies necessary for the continuity of operation.

     2.2 Operating Qualification. Assistance in obtaining and/or maintaining
appropriate Licenses and Permits for the operation of the Facility.

     2.3 Maintenance or Qualification. Assistance in qualifying the Facility to
receive maximum benefits from Federal, State, anal Local agencies, when and if
available.

     2.4 Personnel. Supervision of all personnel.

     2.5 Accounting Reports. Institute adequate procedures and forms for
furnishing to Owner monthly operating statements.

     2.6 Tax Statements. Obtaining and verifying for Owner all tax statements in
connection with the Facility.

     2.7 Standard of Services. Monitor the quality of services provided by the
Facility on a continuing basis and make every effort to maintain the highest
level of service possible within budget limitations.

     2.8 Prices. Recommend participating in or contracting for goods or services
which can reduce expenses of the operation.

     2.9 Vendors. Make available to the Facility such supply and equipment
Purchasing Contracts that are or may become available which could reduce
expenses of operation. Manager shall, subject to limitations in Paragraph 1.2
hereof, enter into such contracts on behalf of and in Owner’s name.

     2.10 Business Systems. Develop, implement, and supervise business office
systems, including accounting, bookkeeping, payroll and the timely payment of
appropriate taxes on behalf of Owner.

 

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     2.11 Market Plan. Develop and implement a marketing plan based on existing
and/or projected marketing needs of the Facility. Owner shall have prior
approval of the annual budget for said marketing activities.

     2.12 Staffing and Operational Systems. Monitor and Supervise staffing
levels, materials handling, equipment utilization, scheduling systems, and
inventory controls throughout the Facility and on a quarterly basis report on
the effectiveness of such activities.

     2.13 Insurance. Manager shall review the Facility’s insurance needs and
make recommendations with respect thereto to Owner. With prior written approval
of Owner, Manager shall enter into Insuranq’e Contracts on behalf of Owner.

     2.14 Government Regulation. Manager shall, within financial limits, use its
best efforts to cause all things to be done in and about the Facility necessary
to comply with the requirements of all applicable statutes, ordinances, laws,
rules, regulations or order of any governmental or regulatory body having
jurisdiction in the premises, respecting the use of the Facility, maintenance,
or operation thereof, including state, federal, or local regulation.

     2.15 Deposit and Disbursement of Funds. All income or other monies received
from the operation of the Facility together with all accounts and all other
assets or property generated, created or which shall accrue from the operation
of the Facility shall belong to Owner and shall be its property absolutely.
Payment of all operating costs, wages, salaries, expenses, and fees incurred or
sustained in the operation of the Facility is solely the obligation of Owner.
Owner shall designate the depository to be used by Manager in connection with
the operation of the Facility. All monies received from the property shall be
deposited in a control account accessible only by owner. A separate account also
belonging to Owner but accessible by Manager shall be used to pay operating
expenses. In all events, appropriate accounting safeguards to ensure the
integrity of the accounts will be instituted by Owner and complied with by
Manager.

     2.16 Collection of Accounts. Manager shall supervise and direct the
collection of all accounts due Owner and shall take all reasonable steps
necessary to minimize the amount of bad debts.

     2.17 Legal Actions. Manager shall, with prior written approval Owner,
institute in the name and at the expense of Owner, any and all legal actions or
proceedings necessary to collect charges, rent or other sums due the Facility or
to evict or dispossess Tenants or other persons unlawfully in possession under
any Lease, Rental Agreement, License, or Concessionaire.

     2.18 Rates. Manager and Owner recognize the importance of maintaining rates
which enable the Facility to pay its obligations while minimizing cost to
Tenants. From time to time, Manager will recommend to Owner, for approval, rate
structures which take into account the financial obligations of the Facility and
the level or rates at other comparable Facilities nearby.

     2.19 Employment of Personnel. Manager shall interview, hire, train, pay
supervise, and discharge the personnel necessary to be employed in order to
property maintain and operate the Facility, including, without limitation, and
Administrator or Supervisory Personnel who shall reside at the Facility. Such
personnel shall in every instance be deemed employees of Manager

 

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and not of Owner, and Owner shall have no right to supervise or direct such
employees. All reasonable salaries, wages, and other compensation of personnel
employed by Manager hereunder, including so-called fringe benefits, medical and
health insurance, pension plans, social security, taxes, workmen’s compensation,
insurance, and the like, shall be deemed to be reimbursable expenses of Manager
pursuant to Paragraph 2.14. In this connection, Manager shall provide Owner with
schedules listing all employees utilized at Facility including their number,
titles, salary, fringe benefits, and evidence of bonding or coverage under
Manager’s crime insurance policy.

     Nothing contained in this Agreement shall be deemed or construed to create
a partnership or joint venture between Owner and Manager or to cause Manager to
be responsible in any way for the debts or obligations or Owner of any other
party (but nothing contained herein shall affect Manager’s responsibility to
transmit payments for the account of Owner as provided herein), it being the
intent on of the parties that the only relationship hereunder is that of,
Manager and Owner, and Manager will not represent to anyone that its
relationship to owner is other than that set forth herein.

     2.20 Shortfall or Excess Revenue. Any shortfall in the operations of the
Facility shall be funded to Manager by Owner on or before the 15th of each month
following the month such shortfall occurs.

     2.21 Manager shall indemnify and hold harmless Owner for loss, damage,
liability, costs, or expenses (including reasonable attorney’s fees) arising
from the performance or non-performance of contractual and customary
responsibilities undertaken as Manager of Facility. If Manager is expressly
directed by Owner to perform or not perform some duty or action that Manager
would have otherwise taken, Manager may request that Owner provide certain
indemnities or other assurances that Manager will be relieved of any liability
in said performance or non-performance of such duty or action.

SECTION THREE

     3.1 Management Fee. Owner shall pay Manager a management fee hereunder an
amount equal to $2,000 per month. After occupancy averages ninety-five (95%) for
three (3) months at rental rates approved by Owner and is subsequently
maintained at such rates, the fee would then escalate to $4,000 per month. Such
fee shall be paid each month, payable on or before the tenth day of each month’
for the preceding month.

     3.2 Inadvertent Non-Performance. Manager shall not be deemed to in
violation of this Agreement if it is prevented from performing any of its
obligations hereunder for any reason beyond its control, including without
limitation, acts of God, fire, the elements, flood, strikes, limitations of
Facility’s financial resources or statutory regulations or rules of the Federal,
State, or Local government or any Agency thereof.

     3.3 Manager shall be compensated at the rate of $2,000 per month for its
monitoring and implementing the leasing program of the Facility.

 

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SECTION FOUR

Miscellaneous

     4.1 Term.

  (a)   The primary term of this Agreement shall, be for a period of three
(3) years commencing on the date the contract is executed.     (b)   The term of
this Agreement shall automatically         .be extended for successive
additional terms of three (3) years unless either party hereto elects to
terminate as is hereinafter provided, or gives written notice of termination at
least thirty (30) days prior to the end of each term.     (c)   This Agreement
may, be terminated for any reason at any time by Owner or Manager upon thirty
(30) days prior written notice.

     4.2 Notices. Any notice or other communications by either party to the
other shall be in writing and shall be given and deemed to have been given, if
either delivered personally or mailed postage prepaid, registered or certified
mail addressed as follows:

         
 
  To Owner:   Tealridge Manor Corporation
 
      P.O. Box 11000
 
      Oklahoma City, Oklahoma 73136-1100
 
       
 
  To Manager:   Gary D. Staats, President
 
      The Covenant Group, Inc.
 
      5208. Airport Freeway, Suite 130
 
      Fort Worth, Texas 76117

     4.3 Modification and Changes. This Agreement can not be modified except by
other Agreement in writing and duly executed by both parties.

     4.4 Manager as Independent Contractor. It is expressly agreed by both
parties hereto chat Manager is at all times hereunder -acting and performing as
an Independent contractor and that no act commission or omission of either party
hereto shall be construed to make or render the other party, its agent, joint
venturer, or associate, except to the extent specified herein.

     4.5 Authority of Manager. Manager represents to Owner that Manager is fully
qualified and licensed under applicable law to manage real estate and perform
all obligations under this agreement.

     4.6 Construction. In the event one or more of the contained in this
Agreement shall be invalid, illegal, or unenforceable in any respect under
applicable law, the validity, legality, and enforceability of the remaining
provisions hereof shall not in any way be impaired thereby.

     4.7 Heading. The headings contained herein are for only and are not
intended to define, limit, or describe the scope or intent of any provision of
the Agreement.

 

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     4.8 Governing Law. This Agreement shall be deemed to have been made and
shall be construed and interpreted in accordance with the laws of the State of
Oklahoma.

     4.9 Successors and Assigns. This Agreement may not be assigned by Manager
without the expressed written consent of Owner.

     This Agreement shall be binding upon and shall inure to the benefit of the
respective heirs, successors, and assigns (where permitted) of the parties
hereto.

     IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the 1st day of September, 1991.

            “OWNER”

TEALRIDGE MANOR CORPORATION
      BY: /s/ Kevin E. Jacobs         Kevin E. Jacobs, Vice President           
  “MANAGER”

THE COVENANT GROUP, INC.
      BY: /s/ Gary D. Staats         Gary D. Staats, President