amine its terms. The Canadian Government will be consulted regarding any change which may be made in the contents of the contract prior to its signature by a prospective contractor. Such a procedure will be in keeping with the 1941 Agreement, which provides in the preamble that its terms shall be fulfilled in a "spirit of good neighborliness" and further anticipates, in other parts of its provisions, that there shall be constant cooperation between authorities of the two countries in exercising the terms of the Agreement.

In this regard, Article XXI of the 1941 Agreement provides a statement of procedure to be followed in the event that the United States should desire to abandon any portion of the base area and notes that the area abandoned would revert to the lessor (now the Government of Canada). While the United States has no present plans looking toward abandonment of any portion of the 99-year leased areas, the United States Government proposes that the Canadian Government permit the contractor of the housing project to continue his operation of the project for the full 20-year period granted to the contractor by the terms of the contract, in the event that the United States Government should abandon the area prior to the expiration of the twenty years.

During the total period of twenty years the contractor will be given the privilege of renting to tenants other than United States forces and their civilian components, only in the event that there are insufficient numbers of United States personnel to occupy the development, a condition which is not now contemplated, and provided that the Canadian Government is informed, for its approval, of other than United States personnel to be housed in the project.

With general regard to the proposed project, it is understood that the Canadian Government will not undertake to supply utilities and fire protection for the development in the event the United States should abandon the leased area. In the latter contingency, however, the Canadian Government would have the right to specify, on a priority basis, the tenants who might occupy the project.

The Ambassador proposes that this Note and the Secretary's reply thereto shall, as from the date of the reply, constitute an agreement between the two Governments.

Enclosure:

Contract, as stated.

THE EMBASSY OF THE UNITED STATES OF AMERICA,

Ottawa, April 18, 1956.

PEPPERRELL AFB, NEWFOUNDLAND

DEFERRED PAYMENT FAMILY HOUSING PROGRAM
CONSTRUCTION, OPERATION, MAINTENANCE & MANAGEMENT

X. Terms of Periodic Payments to Construction Agent 6-7-8 [9]
XI. Defaults and Delays

8 [11]

DEFERRED PAYMENT FAMILY HOUSING PROGRAM

CONSTRUCTION, OPERATION, MAINTENANCE AND MANAGEMENT

CONTRACT

This agreement entered into this

day of 1955 by the United States of America (hereinafter referred to as the "GOVERNMENT"), represented by the Contracting Officer executing this instrument and (hereinafter referred to as the "CONSTRUCTION AGENT"), the said Construction Agent for the purpose of this agreement electing as domicile

66 Stat. 606.

5 U.S.C. 171z.

WITNESSETH

WHEREAS, the Government pursuant to the Leased Bases Agreement of 1941-1948 maintains and operates a military installation at St. Johns, Newfoundland, known as Pepperrell Air Force Base, at or in the vicinity of which there exists an acute shortage of housing for families of personnel assigned to duty at or near such military installation, and

WHEREAS, provision of such housing, as an integral part of Pepperrell Air Force Base, is essential for its continued maintenance and operation, and

WHEREAS, the Government is authorized to finance the construction and operation of such housing by guarantee, indemnity or other participation,

NOW THEREFORE, under the authority contained in the Act of 14 July 1952 (Public Law 534, 82d Congress), and in consideration of the premises, it is mutually agreed as follows:

ARTICLE I. Project Site

The Government hereby makes available the lands necessary, within the confines of Pepperrell Air Force Base, to construct, operate, maintain and manage the subject housing project for a period of twenty (20) years to permit the Construction Agent to comply with the terms of this agreement. This period shall commence on the completion date as set forth in Article II of this agreement. The land available for utilization for this project by the Construction Agent on Pepperrell Air Force Base is as set forth in Annex "A", appended hereto.[']

The leasehold interest in such lands and improvements thereto will remain in the Government subject to this agreement and the provisions of the Leased Bases Agreement of 1941 and Supplements thereto by which Pepperrell Air Force Base is leased to the United States Government for a period of 99 years from the 17th day of June 1941 to the 16th day of June 2040 by the Government of the United Kingdom, the Government of Canada having succeeded the Government of the United Kingdom as Lessor.

! Not printed.

ARTICLE II. Construction of Project

1. The Construction Agent agrees to construct the housing project for the Government, comprised of 500 units referred to herein, in accordance with the appended plans and specifications (Annex "B"). There shall be no change made in the plans and specifications without prior consent, in writing, of the Contracting officer. Construction shall be commenced within sixty (60) days of receipt of a Government letter of acceptability. The entire 500 units shall be fully livable, operational and complete in every detail as set forth in the plans and specifications within

( calendar months from the date of the

execution and delivery of the executed copy of this agreement to the Construction Agent. In the event of any delay occasioned by the construction of Government facilities, an extension of completion date as determined by the contracting officer will be allowed the Construction Agent.

2. The Government will provide project site improvement and construction as delineated in detail on appended plans and specification under "Annex C".

3. Title to all construction material passes to the United States upon delivery to water carriers for shipment to Newfoundland.

ARTICLE III. Management

1. The Construction Agent covenants and agrees to operate, maintain and manage the project for a period of twenty (20) years following completion of the project in accordance with the provisions of Article II, and to lease all units of the project to such U. S. military and U. S. national civilian employees of the Government as are designated by an authorized representative of the Government, (hereinafter referred to as designated U. S. personnel). Such designation of military personnel to occupy units in the project shall not, however, be considered an assignment to government quarters under the provisions of 37 U.S.C. 252(a).

2. a. In the event an authorized representative of the government shall authorize, in writing, the Construction Agent to rent units in the project to personnel other than U. S. military and U. S. national civilian employees of the Government (hereinafter referred to as undesignated personnel) during the initial ten (10) years following completion of this project, the Construction Agent shall make every effort to lease such units as they become vacant at rents no lower than those charged to designated U. S. personnel unless lower rents are authorized by the Government, plus an amount equal to any deferred taxes levied on the units pursuant to Article VIII(2). Undesignated personnel permitted to occupy units in the project will be subject to airbase rules and regulations set forth by the base commander of Pepperrell Air Force Base. Rental of quarters to undesignated personnel will be subject to the approval of an authorized representative of the Canadian Government for the duration of this agreement. The Canadian Department of National Defense shall have the right of first refusal on the rental of any units to undesignated personnel.

b. The Construction Agent shall notify the Government's authorized representative of all vacancies or notices of intention to vacate the rented units. If the Government's authorized representative fails to designated a new tenant within fifteen (15) days of receipt of such notification by the agent, such agent is authorized to lease the vacant unit to any reputable undesignated tenant, subject to the approval of the authorized representative of the Canadian Government.

C. The Construction Agent shall not be required to permit a prospective tenant to occupy a unit until a lease has been executed, the form of which will be approved by the authorized representative of the Government.

d. Use and occupation of the premises shall be subject to such rules and regulations as the authorized representative of the Government may from time to time reasonably prescribe for military requirements, for safety and security purposes, consistent with the use of the premises for housing.

3. The rights of the Construction Agent may be made subject to a mortgage, lien or other encumbrance, without affecting the rights of the Government set forth in this Article III.

ARTICLE IV. Rents for Facilities

1.

From the date of the first occupancy to the end of the initial ten (10) year period as hereinafter set forth in Article X, the rents to be collected from the designated tenants by the Construction Agent in accordance with the terms of this agreement shall be as follows:

All rentals scheduled above shall be the total amount to be charged the tenant for all unit space with all utilities furnished, such as unit space, heat, hot and cold running water, electricity for lighting, cooking, laundry and the use of normal household appliances.

2. The rents set forth in paragraph 1 hereof, may be modified to accommodate variable rental conditions at the request of the Government's authorized representative at any time during the initial ten (10) year period. The total amount of the rents to be collected from theproject as a whole during the initial ten (10) year period shall not, however, be decreased by reason of such modification.

a. The rents to be collected from tenants designated by the Government during the period of ten (10) years following the initial ten (10) year period shall be at lower rentals mutually agreed upon annually by the Government and the Construction Agent.

b. Rent shall be paid monthly in advance by each tenant to the Construction Agent and in no event later than the tenth of each month.