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"Operating Expenses" — (a) any and all expenses and expenditures of whatever kind or nature incurred by SMG in promoting, operating, maintaining and managing the Facility, provided that the same have been budgeted, are otherwise contemplated by this Agreement (e.g. an increase over budgeted Operating Expenses due to an increase in event activity) or such ex- pense is otherwise approved in writing by the County, including, but not limited to: employee compensation and related expenses (e.g., base salaries, bonuses, severance and car allowances), employee benefits and related costs (e.g., relocation and other related expenses pursuant to SMG's relocation policy (a copy of which is included in the Facility Policy Manual), parking and other fringe benefits), supplies, material and parts costs, costs of any interns and independent contractors, advertising, marketing and public relations costs and commissions, janitorial and cleaning expenses, data processing costs, dues, subscriptions and membership costs, the costs of procuring, administering and maintaining the insurance referred to in Section 8 below (including, without limitation, the amount of any premium or deductible under any such policy), amounts expended to procure and maintain permits and licenses, charges, taxes, excises, penalties (except where incurred due to SMG's or its employees', agents', licensees', concessionaires', promo- ters', performers' or contractors' negligent or intentional acts or omissions) and fees, profession- al fees, printing and stationery costs, Event Expenses, postage and freight costs, equipment rental costs, computer equipment leases and line charges, repairs and maintenance costs (e.g., elevators and HVAC), security expenses, utility and telephone charges, travel and entertainment expenses in accordance with SMG's policies (a copy of which is included in the Facility Policy Manual), the cost of employee uniforms, safety and medical expenses, exterminator and waste disposal costs, costs relating to the maintenance of signage inventory and systems, the cost of annual in- dependent audits of the Facility, the cost of compliance with laws and regulations, costs incurred under agreements, commitments, licenses and contracts executed by SMG as provided in Section 2.3(c) hereof, and the fixed management fees payable to SMG pursuant to Section 4.1 below, all as determined in accordance with generally accepted accounting principles and recognized on a full accrual basis; provided that Operating Expenses shall not include expenses or expenditures in connection with Capital Improvements and Capital Equipment purchases or the incentive fee payable pursuant to Section 4.2 below and any expenses relating to SMG personnel based in SMG's corporate headquarters in Philadelphia, Pennsylvania or its regional field locations (in- cluding the costs of travel by such corporate or regional personnel in connection with SMG's management of the Facility). (b) Solely for purposes of calculating Net Operating Loss/Profit and SMG's in- centive fee hereunder, Operating Expenses shall exclude all interest, income tax, depreciation and amortization expenses. "Operating Revenues" — any and all revenues of every kind or nature derived from owning, operating, managing or promoting the Facility, including, but not limited to: li- cense, lease and concession fees and rentals, revenues from merchandise sales, advertising and sponsorship sales and renewals, event sponsorship revenues, equipment rentals, utility revenues, box office revenues, ticket surcharges (if any), ticket service fees, parking revenues, food service and concession revenues (however, if such revenues are collected in the first instance by and re- tained by the concessionaire, only the amount of such revenues paid by the concessionaire to the Facility shall be included as Operating Revenues), commissions or other revenues from decora- pdfconvert. 9450 .1.cabarrus_agreement_2015.doc Attachment number 1 F -1 Page 83