SIXTH SEVENTH AMENDMENT TO

DISPOSITION AND DEVELOPMENT AGREEMENT

between

City of Vancouver

and

Vandevco Limited, a Washington corporation

for the Redevelopment of

Two City Blocks

bordered by Washington Street, Columbia Street, 6th Street, and 8th Street

Execution Date: ______, 20152016

SIXTH SEVENTH AMENDMENT TO
DISPOSITION AND DEVELOPMENT AGREEMENT

This Sixth Seventh Amendment to Disposition and Development Agreement (the "SixthAmendment") is entered into on ______, 20152016, between Vandevco Limited, a Washington corporation ("Developer"), and the City of Vancouver, a State of Washington municipality ("City"). Developer and City previously entered into that certain Disposition and Development Agreement dated as of June 21, 1999 (the "Original Agreement"), as amended by the First Amendment to Disposition and Development Agreement dated as of June 5, 2000 (the "First Amendment"), as further amended by the Second Amendment to Disposition and Development Agreement dated as of April 3, 2006 (the "Second Amendment"), as further amended by the Third Amendment to Disposition and Development Agreement dated as of May 1, 2006 (the "Third Amendment"),as further amended by the Fourth Amendment to the Disposition and Development Agreement dated as of July 10, 2006(the "Fourth Amendment"), and as further amended by the Fifth Amendment to Disposition and Development Agreement dated as of March 15, 2010, (the “Fifth Amendment”), and as further amended by the Sixth Amendment to the Disposition and Development Agreement dated as of January 26, 2015 (hereinafter collectively referred to as the "Agreement"). Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Agreement.

Section 1. PURPOSE

1.1Purpose

The purpose of this Sixth Seventh Amendment is to amend certain provisions of the Agreement pursuant to and in accordance with Section10.26 thereof. The parties acknowledge that these amendments are consistent with and further the goals in the Redevelopment Plan.

Section 2. amENDMENTS

2.1Description of Project and Phases

Section 4 of the Original Agreement as amended is superseded and replaced with the following language:

“Unit 1D of Phase Two of the project shall consist of a tower containing no less than six full floors with no fewer than 110 residential units and no less than 2,200 square feet of retail on the ground floor. Permitted uses on upper (first floor and above) floors shall include residential, retail, common areas, or hospitality, or any combination thereof. Unit 1D shall be designed and constructed to be substantially consistent with the architectural elevations attached to this agreement as “Exhibit A.”

2.22.1Developer Guaranty and Extension Fee

Section 1.6.C2.1 of the Original Agreement Sixth Amendment to the Disposition and Development Agreementas amended is superseded and replaced with by the following language:

“Developer anticipates that construction of Unit 1D of Phase Two will be commenced on or before September 30, 2015 June 30, 2016,and commits that said building construction will commence no later than December 31, 2015October 31, 2016 and be substantially completed no later thanMarch 1October 31, 2017.”

To provide assurance to the City that said deadlines will be met, Developer agrees to place funds in an escrow account to be controlled by the City that are sufficient to cover estimated permit fees, impact fees and system development charges (SDC’s) pertaining to the Fourth Tower construction (estimated at $430,000) no later than June 30, 2016, and City agrees to release funds to Developer when said fees are due, and upon written request by Developer, for purposes of paying required fees and charges. If any city fees have been paid by Developer by June 30, 2016, these are to be deducted from the amount that is to be placed in the escrow account. Any funds remaining in the account as of October 31, 2017 shall be retained by the City of Vancouver.

Developer agrees to pay an extension fee to the City in the amount of $25,000.00 upon approval of Amendment #7 by City Council.

2.3.Use of Parking Spaces in Vancouvercenter Garage

City agrees to enter into a license agreement with Vandevco for up to 114 parking spaces, to be reserved for the tenants of Unit 1D and paid for by Developer on a monthly basis at such rates as are in effect from time to time.

Developer may license parking spaces for the mixed use multifamily building to be constructed as Phase 2 building 1 D and may over time license up to and including a total of 114 spaces at once, or in phases through subsequent license agreements. Developer shall pay monthly for all parking spaces licensed. Developer shall be responsible for sublicensing parking spaces to tenants of the building and shall use a parking decal different from the City. Rates to the developer for licensed, unreserved parking spaces shall initially be $67.00 per space on levels 1 and 2 and $84.00 per secure parking space on level 3. Rates for signed, reserved spaces shall initially be $84.000 per space on levels 1 and 2, and $99.00 per space on level 3.

2.4 2.2 Schedule.

Section 2.4 of the Sixth Amendment to the Disposition and Development Agreement is amended by the following language:

In order to ensure the project commences construction no later than December 31, 2015 October 31, 2016, the parties have agreed to a schedule that includes target dates for submission of a complete land use permit application,issuance of the city land use decision, submission of a complete building permit application, issuance of a city building permit, and commencement of construction. This schedule is set forth in Exhibit B to this Sixth Seventh Amendment.

2.52.3Construction Staging

Section 2.5 of the Sixth Amendment to the Disposition and Development Agreement is amended by the following language:

City agrees to lease the south half of Block 10 to the Developer for a fenced construction staging for Unit 1D subject to negotiation of a separate lease agreement. Any and all improvements installed by Vancouver’s Downtown Association are shall be avoided to the extent possible. Where such improvements cannot be avoided to accommodate the staging area, Developer agrees to provide written notice to the Vancouver’s Downtown Association no less than thirty (30) days prior to such removal and, at its sole expense, replace any and all improvements to pre-staging conditions immediately following completion of Unit 1D or cancellation of the lease, whichever comes first.

Developer will execute a lease of the south half of Block 10 for construction staging no later than July 31, 2016. Such lease shall extend to March 1, 2017 (original construction completion date) after which, at the City’s sole discretion, the area may be leased to Developer on a month-to-month basis at a rate to be determined by the City. The lease may be canceled by either party with a minimum of 60 days’ written notice.

2.6 2.4 Penalty Non Performance

Section 3.2 of the Fifth Sixth Amendment to the Disposition and Development Agreement is hereby revised to provide that notwithstanding anything else contained in the Disposition and Development Agreement and its five six amendments to the contrary, the parties acknowledge and agree that the Developer will pay to the City the sum of $800,000$3,000 per day if construction of Unit 1D is not commenced by December 31, 2015 for any day after October 31, 2017 for which construction is not substantially complete, as defined in this Amendment to the Disposition and Development Agreementor substantially completed by March 1, 2017. Additionally, in the event that Unit 1D does not proceed to construction by October 31, 2017, Developer agrees to install landscaping within the footprint of Unit 1D to mitigate for visual impacts to the surrounding area until such time as the building construction commences. Such landscaping, to be approved by the City, shall include a minimum of eight (8) deciduous trees no less than 1 ½” diameter in size.

2.5Term. If the terms of this Seventh Amendment to the Disposition are not satisfied by December 31, 2017, the entire Disposition and Development Agreement and all of its seven amendments shall expire.

2.7 Parking limitations

Notwithstanding anything contained in the Disposition and Development Agreement and its five amendments, all restrictions on reserved parking spaces as a percentage of the total parking spaces in the Parking Garage are hereby eliminated and of no further force and effect.

Additionally, Section 5.5 Paragraph Four of the Disposition and Development Agreement shall be amended as follows:

“City shall designate six (6) different types of general parking privileges in the Parking Garages. The categories for such parking privileges shall be as follows: (i) Timed Parking (short term) privileges available to the general public on a non-reserved, first come, first served basis in the Open Parking Area; (ii) Twelve (12) hour per day privileges available to the general public on a non-reserved basis in either the Open Parking Area or the Enhanced Security Parking Area conditioned upon the purchase of a month to month permit on a first come, first served basis; (iii) Twenty-four (24) hour per day privileges available to the general public on a non-reserved basis in the Open Parking Area conditioned upon the purchase of a month to month permit on a first come, first served basis; (iv) Twenty-four (24) hour per day privileges available to the general public on a non-reserved basis in the Enhanced Security Parking Areas conditioned upon the purchase of a month to month permit on a first come, first served basis; (v) Twenty-four (24) hour per day privileges on a reserved basis in the Enhanced Security Parking Areas conditioned upon the purchase of a month to month permit; and (vi) After hours privileges available to the general public on a non-reserved basis in the Open Parking Area upon purchase of an after- hours receipt online or from a parking pay station on a first come, first served basis.”

2.82.6Notices

Section 10.1 of the Original Agreement as amended is superseded and replaced with the following language:

“Formal notices, demands and communications between City and Developer shall be sufficiently given if and shall not be deemed given unless dispatched by certified mail, postage prepaid, return receipt requested, or delivered personally, to the principal offices of City and Developer as follows:

“All notices, requests, demands, consents, approvals, declarations and other communications required by this Agreement shall be in writing, shall be in English and shall be deemed delivered: (a) if given by facsimile or electronic transmission when transmitted and the appropriate telephonic or electronic confirmation received (b) if given by first-class air mail (certified and return-receipt requested), when delivered, or (c) if given by an internationally recognized overnight courier, when received or personally delivered, in each case, with all charges prepaid and addressed as follows, or to such other address as any party shall specify in a notice delivered to all other parties in accordance with this Section 10.1:

(i)if to City:

City Manager

City of Vancouver

PO Box 1995

Vancouver, WA 98668-1995

with a copy to: (which alone shall not constitute notice)

Ctiy City Attorney

City of Vancouver

PO Box 1995

Vancouver, WA 98668-1995

(ii)if to Developer:

Vandevco Limited

c/o Nawzad Othman

700 Washington Street, Suite 401

Vancouver, WA 98660

with a copy to: (which alone shall not constitute notice)

Stephen W. Horenstein

Horenstein Law Group, PLLC

500 Broadway, Ste. 120

Vancouver, WA 98660

(iii)and to:

Kenton R. Barnes

Kenton R. Barnes, P.C

PO Box 14248

Portland, OR 97293

Section 3. miscellaneous

3.1Severability

If any term, provision, covenant or condition of this Sixth Seventh Amendment is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions of this Sixth Seventh Amendment shall continue to be in full force and effect unless the rights and obligations of the parties have been materially altered or abridged by such invalidation, voiding or unenforceability.

3.2Counterparts

This Sixth Seventh Amendment may be executed in counterparts, which when taken together shall constitute an original of this Sixth Seventh Amendment.

3.3No Existing Default

Each party acknowledges and agrees that, as of the effective date of this Sixth Amendment, the other party is not in default of any of the terms and conditions of the Agreement, as amended.

3.43.3Definitions

“Substantially complete” for the purposes of this Agreement shall mean that (1) the architect for the Project Phase Improvements in question has issued its “Certificate of Substantial Completion” AIA Document G704, stating that the portion of the work under the construction contract is substantially complete in substantial accordance with the Construction Documents for the Project Phase Improvements in question; (2) City of Vancouver has issued a temporary certificate of occupancy for the Project Phase Improvements such that the owner thereof is permitted to and could, physically occupy the Project Phase Improvements for the purposes for which they were designed; (3) the general contractor working on the Project Phase Improvements has issued its “Certificate of Substantial Completion” together with its Affidavit of Payment of Debts and Claims, AIA Forms 706 and 706A together with partial waivers and releases of lien for work performed prior to the date of its “Certificate of Substantial Completion” in form reasonably satisfactory to City and Developer, from such materialmen, laborers, contractors and subcontractors as City and Developer may require; and (4) Developer has accepted the Project Phase Improvements in question as complete, subject to completion of normal punchlist items.

Capitalized terms used herein without definition shall have the respective meanings ascribed thereto in the Original Agreement.

3.53.4Agreement to Remain in Effect

The Agreement shall remain in full force and effect except to the extent modified and amended by the terms of this Sixth Seventh Amendment.

DATED this ______day of ______, 20152016.

CITY OF VANCOUVER, a municipal corporation / VANDEVCO LIMITED, a Washington corporation
By:______
______, Eric Holmes, City Manager / By:
Nawzad Othman
Its:
Attest:
By: ______
______, City Clerk
Approved as to form:
______, Brent Boger, Assistant City Attorney

State of Washington)

) ss.

County of Clark)

I certify that I know or have satisfactory evidence that ______is the person who appeared before me, and said person acknowledged that he signed this instrument, on oath stated that he was authorized to execute the instrument and acknowledged it as the City Manager of City of Vancouver to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument.

Dated: ______, 20152016.

Notary Public for Washington

Name of Notary

My appointment expires:

State of Oregon

County of______

This instrument was acknowledged before me on ______, 20152016, by Nawzad Othman as of Vandevco Limited, a Washington corporation.

Notary Public for the State of Oregon

My appointment expires: ______

EXHIBIT A

PRELIMINARY ARCHITECTURAL ELEVATIONS

EXHIBIT B

PERMITTING AND CONSTRUCTION TIMING

Owner intends to commence construction of Phase 1D in by the end of the third second quarter of 20152016, but commits to a construction start date of no later than December 31 August 31, 20152016. In order to ensure the project is on track to meet this commitment, the following target dates are established:

  1. Owner submits a complete Type I Post Decision Review application: April 1March 31, 20152016
  1. City issues Post Decision Review decision: June 1April 28, 2015
  1. Owner submits a complete Building Permit application:August 1May 15, 2015
  1. City issues Building Permit for Unit 1D:November 1June 15, 2015

SIXTH SEVENTH AMENDMENT TO

DISPOSITION AND DEVELOPMENT AGREEMENT - 1