Loan Contract

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

Borrower: (Party B): Goldenway Nanjing Garment Co., Ltd.

Whereas Party B applies to Party A for, and Party A agrees to provide, the loan stated below and in order to clarify the rights and liabilities of the two parties, and to protect the legal rights and interests of both of them, Party A and Party B have duly concluded the Contract for common observance, according to governing laws and regulations, and through negotiation and agreement.

Article 1  Amount of the Loan

RMB39,600,000.00, said Thirty-nine Million and Six Hundred Thousand RMB Yuan.

Article 2  Usage of the Loan

working capital.

Article 3  Term of the Loan

Commencing on August 19, 2008 and ending on February 18, 2009.

The actual term of the loan is subject to the one stipulated in the note which is a constituent part of the Contract, and is equally binding.

Article 4  Loan Interest, Default Interest and their Accrual and Settlement

4-1 Loan Interest

The interest rate is monthly, and is calculated according to the method described in Category 1 listed below:

(Category 1) A fixed rate of 6.0225‰ remaining unchanged within the Term of the Loan

(Category 2) A floating rate adjusted upward or downward from the benchmark interest rate (i.e. the loan interest rate of the same class published and put into force by People’s Bank of China) by  ／   % to ／ ‰; in case of a PBC benchmark interest rate adjusted during the Term of the Loan, this floating rate is to be adjusted from this benchmark by the upward or downward margin agreed in this item, on next month’s corresponding day of the publishing date. And this floating rate is subject to any other regulations stipulated by People’s Bank of China.

4-2 Default Interests

(1) In case of Party B’s failure in using the loan in compliance with the Contract, a default interest is set by adding 100% to the loan interest of the Contract.

(2) In case of the loan exceeding the term of loan of the Contract, a default interests is set by adding 50% to the loan of interest of the Contract.

(3) In case of exceeding the term of loan or failure in using the loan in compliance with the Contract, the interests are to be settled on default interest rates, from the date of exceeding or the date of the said failure, until both the principal and interests are repaid. For any interest not paid on time, a compound interest is set by a default interest rate.

4-3 Accrual of Interests

The interest of the loan is calculated from the date when the loan is provided. Under the Contract the interest of the loan is calculated daily by a daily rate = the monthly rate/30. In case Party B fails to pay the interest on time, a compound interest rate is set from the next day of this failure.

4-4 Settlement of Interests

(1) For the loan with a fixed interest rate, the interest is calculated with the rate agreed upon. For the loan with a floating interest rate, an interest is calculated within each floating term with a rate set within the term; while multiple times of floatation were there for one calculation, one interest is calculated within each floating term, and all the interests calculated are added to a summation.

(2) The interest of the loan under the Contract is settled in a quarterly manner, and the settling date is set on the 20th day of the last month of the quarter.

Article 5  Guarantee of the Loan

5-1 For the principal and interests (including compound interest and default interest, and same in the following text) of the loan under the Contract, and any penalties, damages, and relevant expenses (including but not limited to legal cost, arbitration fee, property preservation charge, travel expense, execution fee, notarial fee, attorney fee, eligibility fee, auctioneers fee, etc., and same in the following text) for Party A to realize its creditor’s rights, one or more types of following guaranties are provided by the guarantor below:

(1) Jiangsu Ever-Glory International Enterprises Group Co., Ltd., acting as a guarantor, provides a guaranty with joint liability guarantee, and concludes and signs a guaranty contract with Party A.

(2) (Void) acting as a mortgagor, provides an underlying security with properties legally owned by or at the disposal of itself, and concludes and signs a relevant mortgage contract with Party A.

(3) (Void) acting as pledgor, provides a pledge of rights with rights legally owned by or at the disposal of itself, and concludes and signs a relevant contract of pledge of right.

5-2 In case of any changes in the guaranty or pledge under the Contract to the disadvantage of the creditor’s rights of Party A, Party B shall provide a guaranty or pledge recognized by Party A as required.

Article 6  Provision and Expense of the Loan

6-1 Only when the following prerequisites are met simultaneously has Party A the liability to provide the loan:

(1) The Contract becomes effective;

(2) Party B has completed the relevant formalities in approval, registration, document delivery and others for the loan under the Contract in accordance with the governing laws and regulations;

(3) When the Contract is attached with a guaranty, the guaranty contract, agreement or other guaranty means in conformity with Party A’s requirements, has taken effect;

(4) Other pre-conditions set by both parties. (Void)

6-2 Party B’s Expending Plan of the Loan

(Void)

Article 7  Repayment of the Loan

7-1 Unless agreed by Party A in writing, any repayment made by Party B under the Contract, shall adhere to the principle of paying interest first and principal after.

7-2 Party B shall pay due interest to Party A by the settling date. The first repaying day falls on the first settling date after the loan was provided. Upon the last time of repayment, all remaining interests shall be paid with the principal.

7-3 Party B shall repay the principal according to a plan of Type 1 below:

(Type 1) Repayment of principal at once when due;

(Type 2) Repaying by installments, according to the plan below:

(Void)

7-4 Party B shall deposit enough fund in an account opened by Party A before each repaying date agreed upon under the Contract, to let it be transferred for the repaying, or have a fund transferred from some other account for the repaying before the repaying date.

7-5 In case of Party B fails to come to time as stipulated in the above item, Party A is entitled to deduct its receivables directly from any settlement account opened by Party B at the side of Party A (including but not limited to current account, savings account, national debt account, etc.), and Party B bears by itself any interest, handling charge, loss from exchange rate fluctuation, etc. caused by the deduction.

Article 8  Repayment of the Principal in Advance

8-1 If wishing to repay the principal in advance, Party B needs to apply in writing with Party A five days beforehand, and is able to repay the principal partly or wholly only if Party A agrees. When the principal is repaid by Party B in advance, the interests shall be calculated in the light of amount of the principal repaid, number of days when the loan is used, and the loan interest rate set by Article 4 of the Contract, and the interests shall be settled at once with the repayment of the principal.

8-2 In the case of repayment of the principal in advance, Party B shall pay Party A a compensation, the amount of the compensation = amount of repaid principal × number of days in advance × __ %.