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Wednesday, 15 May 1968

We refer to previous correspondence and are pleased to submit the following offer:

1.   We are prepared to extend to the Commonwealth of Australia a cash credit not exceeding 16,800,000 Deutsche Marks (Sixteen Million Eight Hundred Thousand Deutsche Marks), subject to our General Business Conditions ruling from time to time and further subject to the following terms and conditions.

2.   The credit will be used solely for financing the purchase by Trans-Australia Airlines of four Fokker Friendship Aircraft from N.V. Koninklijke Nederlandsche Vliegtuigenfabriek Fokker, Amsterdam.

3.   Drawings against the credit may be made no later than 31 December 1968 and in amounts of not less than 1,000,000 Deutsche Marks. The Treasury will give us at least one week's notice of any drawing.

4.   From the date of acceptance of this offer until the credit is fully drawn, but in any case not beyond 31 December 1968, a commitment fee of i per cent per annum will be payable quarterly in advance on the undrawn part of the credit of 16,800,000 Deutsche Marks. Such commitment fee will be calculated pro rata and any excess will be credited against the interest payable.

5.   Interest at the rate of 6} per cent per annum will be chaTged on the amounts outstanding under the credit from the date of drawing up to and including 31 December 1970. From 1 January 1971 until the expiration of the credit the amounts outstanding under the credit will bear interest at a rate 3} per cent per annum above the official discount rate of the Deutsche Bundesbank prevailing from time to time (this rate being currently 3 per cent per annum) but in any event not less than 61/2 per cent per annum or more than 71/2 per cent per annum. Interest will be payable retrospectively at the end of each calendar half year.

6.   For the purpose of computing interest and commitment fee a year will be deemed to contain 360 days and a month 30 days.

7.   All amounts outstanding under the credit will be debited to a special account in the name of the Commonwealth of Australia with our Zentrale/Geldstelle, Frankfurt/ Main.

8.   The amounts outstanding under the credit will be repaid as follows:

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