Guaranty Contract

Creditor (Party A): International Business Department, Bank of Nanjing Co., Ltd.

Surety (Party B): Jiangsu Ever-Glory International Group Corporation

In order to ensure the performance of the Contract of Maximum Amount of Credit numbered A04110108073100053, which was concluded between Party A and Goldenway Nanjing Garment Co., Ltd. (hereinafter called the Debtor), and all specific business contracts, agreements, and applications under this contract (hereinafter called the Principal Contract), Party B is willing to provide the Debtor with a guaranty of joint and several liability of maximum amount. In order to clarify their liabilities and keep to their credibility, Party A and Party B have entered into the Contract for common observance and joint performance, according to governing laws, regulations and rules, and through negotiation and agreement.

Article 1  Representations and Warranties of Party B

Party B has the right as principal of a surety, and is capable to provide with a guaranty of suertyship, in accordance with the Laws of People’s Republic of China.

Party B is fully capable to undertake the Guaranty liability, and such liability may not be alleviated or exempted due to any instruction received, financial situation changes, or any agreement reached with any body.

Party B has a full knowledge of the usage of the debt of the debtor under the Principal Contract, and Party B provides the debtor a guaranty absolutely out of his own will while all of his declaration of intention under the Contract is true.

If being a natural person, Party B confirms and assures that before providing the guaranty under the Contract, he has made proper arrangement on the bare necessities of life for himself and his family dependents; Party A requires that Party B’s assumption of the Guaranty liability shall not have any impact on the normal lives of Party B and his family members.

Article 2  The Principal Credit

2-1 The Principal Credit secured under the Contract is the full value of the Principal Credit, namely RMB74,000,000.00, said seventy-four million RMB Yuan, formed by a specific granting of credit (including but not limited to a on-or-off balance sheet business such as a loan, a commitment of loan, an acceptance, a discount, a bond buy-back, a business financing, a factor, a letter of credit, a letter of guarantee, an overdraft, an inter-bank lending, a guaranty, etc.) conducted by Party A for the Debtor from July 31, 2008 to July 31, 2010, on the basis of the Principal Contract.

2-2 Party B provides a guaranty of maximum amount for the above-mentioned Principal Credit, irrespective of the times and the amount of each time, or whether the expiry date of the time limit for the debtor to perform his obligation overtop the foregoing time limit.

Article 3  Manner of Guaranty

Party B provides joint and several guaranty for the Principle Credit. Where the debtor either wholly or partly defaults when the time limit for his performance of the obligation of a single debt expires, Party A has the right to directly demand Party B to perform his obligation of Guaranty.

Article 4  The Scope of the Guaranty

The scope of the guaranty of maximum amount provided by Party B includes the Principal Credit and the interest thereof (including compound interest and default interest), default fine, compensation for damage and expenses for enforcing the Credit (including but not limited to legal cost, arbitration fee, property preservation charge, travel expense, notarial fee, execution fee, attorney fee, eligibility fee, auctioneers fee, etc., and same in the following text).

Party B confirms and accepts out of his will, that when the Debtor fails to perform his liability as stipulated in the Principal Contract, Party A has the right to directly demand Party B to undertake his guaranty liability within the scope of his guaranty, whether or not the Credit of Party A under the Principal Contract is benefited with other guaranty (including but not limited to a guaranty with real rights).

Article 5  Term of the Guaranty

The term of the Guaranty is the period of two years from the expiry date of the performance term of the liability caused by each time’s usage by the Debtor of the line of credit under the Principal Contract.

Where an extension agreement was reached between Party A and the Debtor of the performance term of each debt under the Principal Contract, the term of the Guaranty is the period of two years from the expiry date of the performance term of a certain debt reappointed by the extension agreement; where Party A withdraws its creditor’s rights ahead of time according to laws, regulations, rules or stipulations in the Principal Contract, the term of the Guaranty is the period of two years from the advanced expiry date of the Principal Liability.

Article 6  Conclusion and Alteration of the Principal Contract Guaranteed

Particulars related to specific amount, term, interest, usage, etc. of the Principal Credit, shall be stipulated by Party A and the Debtor in the Principal Contract.

Party B confirms that, except for the increase of line of credit and the extension of term of guaranty, the conclusion of the Principal Contract or the alteration of the Principal Contract through agreement by Party A and the Debtor, are deemed as being agreed in advance by Party B, and need not to be notified to Party B, while the Guaranty liability on the part of Party B shall not be alleviated.

Where Party A and the Debtor alter the interest rates in the light of stipulations of the Principal Contract, such alteration shall also be deemed as being agreed in advance by Party B, and needs not to be notified to Party B, while Party B is still obliged to undertake the Guaranty liability.

Article 7  Independent Effectiveness of the Contract

The effectiveness of the Contract is independent of the Principal Contract, complete or incomplete invalidity of the Principal Contract or its likely revocation has no impact on the Contract’s effectiveness. Where it is confirmed that the Principal Contract was invalid or that it was revoked, Party B undertakes further Guaranty of joint and several liability for the Debtor’s debts coming into being because he surrendered properties or compensated losses.

Party B’s Guaranty liability under the Contract shall not change to any extent because of merger, separation, changes of shareholdings, the lapse of capacity of civil acts, disappearance, death or the declaration of disappearance or death of the Debtor, or any other causes.

Article 8  Advanced Liability Enforcement of Guaranty

Where Party A declares an advanced expiration of the liability under the Principal Contract according to laws, regulations, rules etc. o