ARTICLE 12.
REIMBURSABLE EXPENSES.

Section 12.1 Definition of Reimbursable Expenses. For purposes of calculating Net Operating Expenses, "Reimbursable Expenses" means, for each year during the term of the Stadium Lease, subject to the exclusions set forth in Section 12.2 below, all costs of operating, maintaining and repairing the Stadium and all costs attributable to NFL Events and Non-NFL Events of operating parking lots and structures under the control of the Stadium Authority and for Public Safety Costs, all in accordance with the approved Stadium Operation and Maintenance Plan, Annual Stadium Operating Budget and Public Safety Plan, including, without limitation, the following:

1. Day-to-day expenses of operating and maintaining the Stadium, including, without limitation, costs of cleaning, sweeping, repairs, painting, removing garbage and landscaping;
2. Charges for heat, water, sewer, gas, electricity and other utilities used or consumed in the Stadium;
3. Expenses of operating the Stadium for NFL Events and Non-NFL Events, including, without limitation, security and field preparation;
4. Expenses of operating parking under the control of the Stadium Authority for NFL Events and Non-NFL Events;
5. Amounts the Stadium Authority pays the City for Public Safety Costs, including a charge for capital expenditures, subject to and in accordance with the Public Safety Agreement;
6. The charge to the Stadium Capital Expenditure Reserve described in Section 14.1(a) below, in the amount of $1.5 million in the second year of operation of the Stadium, and escalating 3% per year each year thereafter, plus any additional amount agreed by 49ers Stadium Company , and any Second Team Capital Reserve Deposit pursuant to Section 14.1(c) below;
7. Insurance expenses for liability, casualty and other insurance;
8. Possessory interest taxes assessed on account of the possessory interest held by 49ers Stadium Company, the Team or any Second Team, which will be paid by the Stadium Authority (but which, by virtue of being included in Reimbursable Expenses, will be subject to reimbursement by 49ers Stadium Company);
9. The portion of the Ground Rent payable to the City under the ground lease of the Stadium site consisting of the Fixed Ground Rent and the Performance-Based Rent. The SA Excess Revenue Payment is not a Stadium Operating Expense; and
10. Amounts paid to the Stadium management company pursuant to its management agreement.

Section 12.2 Excluded Expenses. The following costs and expenses will not be included in Reimbursable Expenses:

1. Capital expenditures; provided, however, that charges for capital expenditures will be included in Reimbursable Expenses as provided in subsections 12.1(e) and (f) above;
2. Debt service on financing secured by NFL Ticket Surcharges and/or Naming Rights Revenues;
3. Stadium Authority Discretionary Expenses, including costs and expenses attributable to Civic Events; and
4. Distributions of Excess Revenues pursuant to Article 15 below.