5.A1 Operations & Management Agreement

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d) Prepare and submit by October 31, 2010 to Owner a final written report on the conclusions and recommendations coming out of the above process. 7.4 Capital Improvements. In conjunction with the preparation and submittal of the Annual Operating Budget, or as otherwise requested by Owner, Manager shall prepare annual capital improvement plans and cost estimates for Owner's review and approval. Funding for all capital improvements shall be Owner's responsibility. No capital improvement project shall be undertaken by Manager without Owner's written approval in advance. 7.5 Personnel and Employment Matters. In accordance with the approved Annual Business Plan and Annual Operating Budget, Manager shall hire, in its own name, supervise and discharge any personnel necessary to be employed in order to properly fulfill Manager's obligations hereunder in accordance with the approved Annual Business Plan and Annual Operating Budget. Owner acknowledges and agrees that Manager may, at Manager's option, employ Golf Course personnel directly or through a professional employment services subcontractor or employee leasing company. Employees of the Manager and/or professional employment services subcontractor or employee leasing company are referred to as employees of the Manager in this Agreement. All salaries, wages and other employment-related costs of personnel employed by Manager hereunder at the Golf Course, including, if applicable, but not limited to: fringe benefits, social security taxes, worker's compensation insurance, and costs associated with employee recruitment, relocation, or separation, shall be deemed an operating expense of the Golf Course and therefore payable from the Operating Accounts. All such salaries, wages and employment-related costs, including but not necessarily limited to those set forth immediately above, shall be the responsibility of Owner and shall be paid by Manager from the Operating Accounts. In the event that funds in the Operating Accounts are not sufficient to cover employment costs, it shall be Owner's responsibility to provide sufficient funds in accordance with the provisions herein. 7.6 Payroll Funding. It shall be Manager's responsibility to insure that sufficient funds are transferred from the Operating Account to the Payroll Account designated by Manager or by Manager's professional services subcontractor or employee leasing company. ("Payroll Account") to fund all payroll and all other employment- related costs at least five (5) business days prior to each payday. Advance funding for payroll obligations shall be accomplished via an electronic transfer of funds from the Operating Account to the Payroll Account. In the event that funds on deposit in the Payroll Account are insufficient to fund an upcoming payroll, Manager shall notify Owner and Owner shall be responsible for immediately depositing additional funds directly into the Payroll account. In the event that Owner fails to deposit the additional funds needed to fund an upcoming payroll, despite having received due notice from Manager, it shall be an event of default by Owner under the terms of this Agreement. -16-