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1、COMPENSATION TRADE CONTRACTContract No.： _Date of Signing： _Place of Signing： _The two Parties：Party A： _Address： _Tel：_Fax： _E-mail： _Party B： _Address： _Tel：_Fax： _E-mail：_WITNESSETHWhereas Party B has machines and equipment, which are now used in Party Bs manufacturing of _, and is willing to sel
2、l to Party A the machines and equipment； andWhereas Party B agrees to buy the products, _, made by Party A using the machines and equipment Party B supplies, in compensation for the price of the machines and equipment, andWhereas Party A agrees to purchase from Party B the machines and equipment, an
3、dWhereas Party A agrees to sell to Party B the products, _, in compensation of the price of Party Bs machines and equipment； Now therefore, in consideration of the premises and covenants described hereinafter, Party A and Party B agree a follows：ARTICLE 1 TRANSACTIONSA） Party B agrees to provide Par
4、ty A with _ machines to be used in production, their auxiliary machinery, accessories and spare parts and a variety of measuring and testing instruments required in the process of production. The details of the models, names, specifications,quantity, prices, packing, delivery , etc. thereof shall be
5、 specified in an additional equipment-import agreement to be concluded by and between both parties which shall serve as an component part hereof.B） The total value of the machines, auxiliary equipment, etc. supplied by part B shall be paid off by Party A with part of the manufactures made therewith
6、and/or other goods, or with（designate name）products made in （Name of the plant）if both parties agree. The specific name（s）, quantity, price, delivery, etc. of the goods granted as the make-up payment shall be decided in an additional compensation goods-supply agreement made by the parties which shal
7、l serve as a component part hereof. The equipment-import agreement and compensation-goods-supply agreement aforesaid may be merged as one called sales agreement on compensation trade（See appendix）.ARTICLE 2 PAYMENTBoth parties agree to open letters of credit in favor of each other, i.e. Party A will
8、 open, at regular intervals, long term letters of credit in favor of Party B to pay by installments the total cost of the machines and auxiliary equipment provided by Party B； whereas Party B will open sight letters of credit in favor of Party A to pay the products to be delivered by Party A. Party
9、A shall pay for the total cost of the machines and auxiliary equipment with the money remitted by Party B as reimbursement for the products to be delivered by Party A. In case the sum to be paid by Party B fails to cover the value of the long-term letters of credit opened by Party A, the difference
10、shall be made up by Party B by paying that much to Party A in advance, before the long-term letters of credit are due, to enable Party A to reimburse on time the long-term letters of credit it opens. The payment of the long-term letters of credit opened by Party A is based on Party Bs opening a sigh
11、t letter of credit under the provisions and on its paying the advance required herein. Thus, Party B warrants, guarantees and covenants that it will open the letters of credit and pay the advance as provided herein.ARTICLE 3 REIMBURSEMENTParty A shall reimburse Party B for all the machines and auxil
12、iary equipment supplied by Party B by delivering goods to Party B on a monthly basis and the reimbursement will last for_ year（s） and _months（s）. The reimbursement shall start approximately _month（s） after the first delivery of the machines and, in principle, the money to be reimbursed per month sha
13、ll be _percent of the total amount due for the machines. With a _month（s） notice to Party B, Party A may reimburse Party B in advance.Within the reimbursement period, Party B shall, under the provisions of the additional sales agreement aforesaid, open, sight, irrevocable, divisible and assignable l
14、etters of credit, covering the full amount, in favor of Party A.ARTICLE 4 STANDARD MONEY AND PRICE STANDARDThe standard money for this transaction is （Name of currency）. All the machinery, auxiliary equipment and measuring and testing instruments , etc. provided by Party B shall be valued with （Name
15、 of currency）, while the goods provided by Party A to Party B as reimbursement shall be valued with the basis price （Name of currency） of the same goods exported by Party A at the time when this agreement is entered into, and the total price （Name of currency） shall be changed into that of （Name o f currency） in accordance with the exchange rate then. ARTICLE 5 INT
