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• I • • _ 2 _ 2. EQUITY INTEREST The COUNTY shall retain full title to the land. Each entity will acquire an equity interest in the structure and improvements only, and that interest will be proportionate to the entity's total contribution to the principal debt service payment. An entity may withdraw from the agreement before full retirement of the debt only if another participating entity or entities agree(s) to buy out the withdrawing entity's share. Should an entity wish to withdraw after the full retirement of the debt, there will be no buy out provision. 3. COST SHARING The cost sharing ratios for the COUNTY and the CITIES will be based on the percentage of live animals handled at the Santa Rita Animal Shelter for each participating entity, as indicated in Attachment A, for the first 12 months of this agreement. The COUNTY intends to issue municipal securities with which to finance the cost of constructing the PROJECT, including all cost of issuance fees and charges related to the PROJECT. The cost sharing allocation (debt service amount) will be adjusted annually based on the percentage of live animals handled for the previous calendar year. The cost sharing ratio will determine the payment of debt service for the PROJECT on an annual basis. Each entity's annual share of debt service shall clearly identify the portion attributable to interest and the share attributable to principal for the purpose of calculating equity interest held by each entity. The COUNTY shall notify each CITY of its percentage of live animals handled for the previous calendar year by March 1 of the following year. 4. PAYMENT The COUNTY shall bill the CITIES for their share of the debt service payment semi-annually,60 days prior to the date on which the total debt service payment is to be made. CTT1trS shall pay COUNTY within 30 days of date of billing. This provision shall not preclude CITIES from exercising the option of prepaying the entire annual debt service in one lump sum for any given year within the first quarter of the fiscal year. 5. CONSTRUCTION COSTS Construction costs include all costs and expenses incurred in connection with the shelter construction, including without limitation, the following: a. Payment due to contractors' and subcontractors' for work and services performed including change-order work and payment in settlement or satisfaction of claims and/or judgments.