compensation and benefits_COMPENSATION TRADE CONTRACT

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　　contract no.： ____________
　　date of signing： _________
　　place of signing： ________
　　the two parties：
　　party a： _______________________________
　　address： _______________________________
　　tel：_________________fax： _____________
　　e-mail： ________________________________
　　party b： _______________________________
　　address： _______________________________
　　tel：_________________fax： _____________
　　e-mail：_________________________________
　　witnesseth
　　whereas party b has machines and equipment, which are now used in party b""s manufacturing of _______, and is willing to sell to party a the machines and equipment； and
　　whereas 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, and
　　whereas party a agrees to purchase from party b the machines and equipment, and
　　whereas party a agrees to sell to party b the products, _______, in compensation of the price of party b""s machines and equipment； now therefore, in consideration of the premises and covenants described hereinafter, party a and party b agree a follows：
　　article 1 transactions
　　a） party b agrees to provide party 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 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 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 shall 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 payment
　　both parties agree to open letters of credit in favor of each other, i.e. party a will 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 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 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 b""s opening a sight 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.1/4