EXHIBIT
10.3

    


    Guaranty
Contract

     

    No.
Ec1 1101 087051 02254

    


    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.



    
      
         


      

      
        1

        
          

        

      

      
         


      

    


    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.


    
      
         


      

      
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    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. or stipulations in the
Principal Contract, Party A has the right to immediately demand Party B to
perform the liability of the guaranty.

    


    Article
9  Rights and Obligations of Party B

    


    9-1 Party
B has the obligation to supervise the guarantee’s performance of all the
obligations under the Principal Contract.

    


    9-2 Party
B shall actively cooperate with Party A and consciously subject itself to Party
A’s inspection and supervision over its business operation and financial
activities, and provide Party A every month, as required by Party A,
documentation and information concerning its financing and accounting status and
its production and operation situations, including but not limited to the
provision within 10 working days in the first month of every quarter of the
Balance Sheet, Income Sheet (Statement of Income and Expenditure for any public
institution), and the provision at the end of each year of a Statement of Cash
Flow, etc., and a timely provision of financial statement audited by any
auditing body recognized by Party A, and at the same time ensure the facticity,
legality, integrality, validity of the documentations provided.

    


    9-3 Where
the liability under the Principal Contract is in a foreign currency, Party B
shall undertake the Guaranty liability in the currency agreed in the Principal
Contract. If Party B does it in any other exchangeable currency or RMB, it shall
secure the agreement of Party A, and perform the Guaranty liability by
converting such currency into the one agreed in the Principal Contract at the
foreign exchange rate quoted at Bank of Nanjing Co., Ltd. on the day when the
Guaranty liability is performed.

    


    9-4 Party
B shall fulfill the following obligation of notifications:

    
      
        	
                (1)

              	
                Party
      B shall notify Party A in writing within 3 days of the occurring of
      following events or of the founding of possibility of such occurrence on
      the side of Party B:

              


      

    


    
      
         


      

      
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               1)

            	
              Party
      B meets with grave financial losses, which affects or possibly affects its
      repaying ability;

            


    

    
      	
               2)

            	
              Party
      B involves or will involve in major lawsuits, arbitrations or other legal
      disputes;

            


    

    
      
        	
                 3)

              	
                Any
      change in Party B’s name, legal representative (responsible officer),
      address, telephone numbers,
etc.;

              


      

    

    
      	
               4)

            	
              Other
      events occurred on the side of Party B, which affect or may affect its
      repaying ability.

            


    

    
      
        	
                (2)

              	
                Party
      B shall notify Party A in writing 30 days before the occurring or a
      possible occurrence of following events on the side of Party
      B:

              


      

    

    
      	
               1)

            	
              Separation,
      transformation, merger, termination, joint-venture,
  etc.;

            


    

    
      	
               2)

            	
              Changes
      in the business scope or of the registered capital of Party
    B;

            


    

    
      	
               3)

            	
              Changes
      in the top-five investors or
shareholders.

            


    

    In case
of any occurrence of the above-mentioned events, which impacts or possibly
impacts Party B in terms of its undertaking guaranty liability, Party B shall,
as required by Party A, further provide other guaranty recognized by Party
A.

    


    9-5 In
case of being a natural person, Party B shall notify Party A in writing within 3
days after the occurrence or a possible occurrence of the following events, in
addition to observing all the stipulations under the Contract:

    
      
        	
                (1)

              	
                Major
      casualty occurred to Party B himself or his family or its income has
      changed greatly, in which case the economic conditions worsens and impact
      or possibly impact his capability of
guaranty;

              


      

    

    
      	
              (2)

            	
              Party
      B changed his occupation;

            


    

    
      	
              (3)

            	
              Party
      B meets with such events as unemployment, divorce, or serious
      diseases;

            


    

    
      
        	
                (4)

              	
                Party
      B meets with other events, which have caused Party B to lose or possibly
      lose his capability of guaranty, or have impacted his undertaking guaranty
      liability.

              


      

    

    In case
of any occurrence of the above-mentioned events, which impacts or possibly
impacts Party B in terms of its undertaking guaranty liability, Party B shall,
as required by Party A, further provide other guaranty recognized by Party
A.

    


    9-6 Party
B shall not refuse to fulfill the obligations under the Contract on the excuse
of any dispute with a third party.

    


    9-7 Party
B enjoys the rights and takes the responsibilities in accordance with the laws,
regulations, rules, etc. and the terms and conditions of the
Contract.

    


    Article
10  Rights and Obligations of Party A

    


    10-1
Party A has the right to directly demand Party B to undertake the guaranty
liability under the Contract for the unsatisfied Credit of Party A.

    


    10-2
Party A has the right to supervise the status of fund, properties, economy, etc.
of Party B, and the right to demand Party B to present related documentation as
it is.



    
      
         


      

      
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    10-3 In
terms of all the receivables from Party B within the scope of the guaranty,
Party A has the right 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.

    


    10-4 Upon
performance by Party B of his guaranty liability, Party A may provide Party B,
as required by Party B, relevant evidence of such performance.

    


    10-5
Party A enjoys the rights and takes the responsibilities in accordance with the
laws, regulations, rules, etc. and the terms and conditions of the
Contract.

    


    Article
11  Default Liability

    


    In case
of Party B’s violation of any laws, regulations, rules, etc. or any stipulations
of the Contract, Party A has the right to demand Party B to rectify its
violation within a definite time, to further provide relevant guaranty, or
whatever.

    


    Article
12  Applicable Laws and Settlement of Disputes

    


    12-1 The
Contract is concluded in accordance to the Laws of the People’s Republic of
China, which are applicable to the Contract.

    


    12-2
Where any dispute occurs in the course of the execution of the Contract, both
parties shall settle them through negotiations. In case no settlement is
reached, they shall choose Type 1 from the following settling
manners:

    (Type 1)
Bring a lawsuit to the local people’s court at the locality of Party
A.

    (Type 2)
Apply to
the          Arbitration
Commission for arbitration (the locality is    ) with the
arbitration rules active and effective at the time the application is made. The
arbitration decision is final and binding on both parties.

    In the
course of lawsuit or arbitration, terms and conditions under the Contract, which
are not involved in the dispute, shall still be performed or
fulfilled.

    


    Article
13  Effectiveness, Alteration and Termination of the
Contract

    


    13-1
Where Party B is a legal person or any organization, the Contract shall enter
into effect on the day when signed by or sealed with the name stamp of the legal
representative, principle, or accredited representative of Party A and sealed
with the Corporate Seal or Special Contract Seal of Party A, and signed by or
sealed with the name stamp of the legal representative or accredited
representative of Party B and sealed with the Corporate Seal or Special Contract
Seal of Party B; where Party B is a natural person, the Contract shall enter
into effect on the day when signed by or sealed with the name stamp of the legal
representative, principle, or accredited representative of Party A and sealed
with the Corporate Seal or Special Contract Seal of Party A, and signed by Party
B or his accredited representative.


    
      
         


      

      
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    13-2
After the Contract enters into effect, neither Party A nor Party B shall
arbitrarily alter or terminate it unless further stipulated by the Contract; in
the case of needy alteration or determination, a written agreement should be
reached by both parties through negotiation. All terms and conditions of the
Contract remain effective before such written agreement is reached.

    


    Article
14  Other Stipulations

    


    14-1
Party B has fully acknowledged the risk of exchange rate fluctuation, and if the
Principal Contract adopts floating interest rate, Party B undertakes, out of his
will, the guaranty liability increased because of such fluctuation.

    


    14-2 All
attachment to the Contract, and all legal documents related to the exercise of
the Contract are the component part of the Contract, and have equal legal force
as the Contract.

    


    Article
15  Supplementary Provisions

    


    15-1 The
Contract is made in two copies, one is held by Party B, and one is held by Party
A, and each copy has the equal legal force.

    


    15-2 Any
matters not covered by the Contract shall be handled in compliance with relevant
national laws, regulations and rules.

    


    Article
16  Declaration Provisions

    


    16-1 In
signing and exercising the Contract, both parties have been given the approval
of such authorities as competent decision-maker or supervision department, and
obtained the necessary, sufficient and legal authorization.

    


    16-2 In
signing the Contract, parties expressed their true intentions, the signatures
and seals were genuine, the signing representatives are authorized, and the
Contract has legally binding on both parties.

    


    16-3
Party B has the right to own its whole property, and all the documentation it
produced to Party A is true, legal and effective, and contains no mistake or
omission of facts disagreeing with the truth.

    


    16-4
Party B has read all the content of the Contract. On request by Party B, Party A
has made explanation on the terms and conditions of the Contract. Party B has
got a full knowledge and understanding of the significations and legal
consequences of the stipulations of the Contract.

    


    16-5
Party A is a legally established bank, and is qualified to operate the business
under the Contract.



    
      
         


      

      
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                          Party B

                        
	
                          Party A

                        	
                          Legal Person or other

                          Organization

                        	
                          Natural Person

                          (Not Applicable)

                        
	 
      	 
      	 
      
	
                          Seal
      of International Business

                          Department,
      Bank of Nanjing

                          Co.,
      Ltd.

                        	
                          Seal
      of Jiangsu Ever-Glory

                          International
      Group

                          Corporation

                        	
                          Signature:

                          (Or
      Authorized Agent):

                        
	 
      	 
      	
                          Kind
      of Identity Document:

                        
	 
      	
                          Legal
      Representative:

                        	
                          No.
      of Identity Document:

                        
	
                          Legal
      Representative

                        	
                          (Principle)
      Name Seal:

                        	 
      
	
                          (Principle)
      Name Seal:

                        	
                          (Or
      Authorized Agent):

                        	 
      
	
                          (Or
      Authorized Agent):

                        	
                          /s/ Dong Xuejun

                        	
                          Address:

                        
	
                          /s/ Dai Ling

                        	 
      	
                          Post
      Code:

                        
	 
      	
                          Address:

                        	
                          Contact
      No.:

                        
	
                          Address:

                        	
                          Post
      Code:

                        	
                          Date
      of Signing:

                        
	
                          Post
      Code:

                          Contact
      No.:

                          Date
      of Signing: 2008/07/31

                           

                        	
                          Contact
      No.:

                          Date
      of Signing: 2008/07/31

                        	 
      


                

              

            

          

        

      

    

     

    
      
         


      

      
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