Document:

Unassociated Document

    THIS
      NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN
      REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS NOTE AND THE
      COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED
      FOR
      SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
      STATEMENT AS TO THIS NOTE UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY
      SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
      REQUIRED.

     

    
      	Principal Amount: $________.00	 	Issue Date: July ___,
              2007

    

     

    CONVERTIBLE
      NOTE

    

    FOR
      VALUE
      RECEIVED, EVER-GLORY INTERNATIONAL GROUP, INC., a Florida corporation
      (hereinafter called "Borrower"), hereby promises to pay to
      ____________________________ (the "Holder"), without demand, the sum of _______
      Dollars ($_______), with simple and unpaid interest thereon, on July ___, 2009
      (the "Maturity Date"), if not paid sooner.

    

    This
      Note
      has been entered into pursuant to the terms of a Subscription Agreement between
      the Borrower, the Holder and certain other subscribers of the Borrower’s
      convertible notes, dated of even date herewith (the “Subscription Agreement”),
      and shall be governed by the terms of such Subscription Agreement. Unless
      otherwise separately defined herein, all capitalized terms used in this Note
      shall have the same meaning as is set forth in the Subscription Agreement.
      The
      following terms shall apply to this Note:

    

    ARTICLE
      I

    

    GENERAL
      PROVISIONS

    

    1.1 Payment
      Grace Period.
      The
      Borrower shall have a twelve (12) business day grace period to pay any monetary
      amounts due under this Note, after which grace period and during the pendency
      of
      an Event of Default (as defined in Article III) a default interest rate of
      twelve percent (12%) per annum shall apply to the amounts owed
      hereunder.

    

    1.2.  Interest
      Rate.
      Interest payable on this Note shall accrue at the annual rate of six percent
      (6%). Accrued interest will be payable in arrears on September 28, 2007, on
      the
      last business day of each calendar quarter thereafter and on the Maturity Date,
      whether by acceleration or otherwise. Interest will be payable in cash or
      Provided an Event of Default or an event which with the passage of time or
      giving of notice could become and Event of Default has not occurred, at the
      election of the Borrower, by the Borrower’s delivery of registered shares of
      Common Stock (“Interest Shares”) valued at 110% of the volume weighted average
      price as reported by Bloomberg L.P. for the ten (10) trading days preceding
      such
      interest payment date.

    

    1.3. Conversion
      Privileges.
      The
      conversion rights of the Holder as set forth in Article II of this Note shall
      remain in full force and effect immediately from the date hereof and until
      the
      Note is paid in full regardless of the occurrence of an Event of Default. The
      principal amount of the Note and the remaining accrued but unpaid interest
      shall
      be payable in full on the Maturity Date, unless previously paid or converted
      into Common Stock in accordance with Article II hereof.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    1.4. Application
      of Payments.
      Payments received by Holder from Borrower shall be applied first to outstanding
      liquidated and other damages, then to accrued but unpaid interest and then
      to
      principal. 

    

    1.5 Optional
      Redemption by Borrower.
      At
      any
      time after the date of issuance of this Note, the Borrower may deliver a notice
      to the Holder (an “Optional Redemption Notice” and the date such notice is
      deemed delivered hereunder, the “Optional Redemption Notice Date”) of its
      irrevocable election to redeem, without penalty, all of the then outstanding
      principal amount of this Note for cash in an amount equal to 125% of the then
      outstanding principal and accrued unpaid interest hereunder (“Optional
      Redemption Amount”), on the 30th
      Trading
      Day following the Optional Redemption Notice Date (such date, the “Optional
      Redemption Date” and such redemption, the “Optional Redemption”). The Optional
      Redemption Amount may not be paid prior to the Optional Redemption Date. The
      Optional Redemption Amount shall payable in full on the Optional Redemption
      Date. The Borrower covenants and agrees that it will honor all Notices of
      Conversion tendered from the time of delivery of the Optional Redemption Notice
      through the date all amounts owing thereon are due and paid in full. Should
      the
      Borrower elect to exercise it rights under the Optional Redemption, commencing
      on the Optional Redemption Notice Date, the conversion limitations set forth
      in
      Section 2.4 of this Note shall increase so that the
      Holder is permitted to be the beneficial owner of up to 9.99% of the
      issued and outstanding shares of Common Stock of the Borrower. 

    

    ARTICLE
      II

    

    CONVERSION
      RIGHTS

    

    The
      Holder shall have the right to convert the entire principal amount under this
      Note and the accrued but unpaid interest thereon into shares of the Borrower's
      Common Stock as set forth below.

    

    2.1. Voluntary
      Conversion into the Borrower's Common Stock.

    

    (a) The
      Holder shall have the right from and after the Issue Date of the issuance of
      this Note and then at any time until this Note is fully paid, to convert any
      outstanding and unpaid principal portion of this Note, at the election of the
      Holder (the date of giving of such notice of conversion being a "Conversion
      Date") into fully paid and nonassessable shares of Common Stock as such stock
      exists on the date of issuance of this Note, or any shares of capital stock
      of
      Borrower into which such Common Stock shall hereafter be changed or
      reclassified, at the conversion price as defined in Section 2.1(b) hereof (the
      "Conversion Price"), determined as provided herein. Upon delivery to the
      Borrower of a completed Notice of Conversion, a form of which is annexed hereto,
      Borrower shall issue and deliver to the Holder within three (3) business days
      after the Conversion Date (such third day being the “Delivery Date”) that number
      of shares of Common Stock for the portion of the Note converted in accordance
      with the foregoing. The number of shares of Common Stock to be issued upon
      each
      conversion of this Note shall be determined by dividing that portion of the
      principal of the Note to be converted, by the Conversion Price.

    

    (b)  Subject
      to adjustment as provided for in Section 2.1(c) hereof, the Conversion Price
      per
      share of Common Stock shall be $0.22 (“Conversion Price”).

    

    (c) 
      The
      Conversion Price and the number and kind of shares or other securities to be
      issued upon conversion of this Note, shall be subject to adjustment from time
      to
      time upon the happening of certain events while this conversion right remains
      outstanding, as follows:

    

    A. Merger,
      Sale of Assets, etc.
      If the
      Borrower at any time shall consolidate with or merge into or sell or convey
      all
      or substantially all its assets to any other corporation, this Note, as to
      the
      unpaid principal portion thereof and accrued interest thereon, shall thereafter
      be deemed to evidence the right to purchase such number and kind of shares
      or
      other securities and property as would have been issuable or distributable
      on
      account of such consolidation, merger, sale or conveyance, upon or with respect
      to the securities subject to the conversion or purchase right immediately prior
      to such consolidation, merger, sale or conveyance. The foregoing provision
      shall
      similarly apply to successive transactions of a similar nature by any such
      successor or purchaser. Without limiting the generality of the foregoing, the
      anti-dilution provisions of this Section shall apply to such securities of
      such
      successor or purchaser or surviving entity of the surviving corporation after
      any such consolidation, merger, sale or conveyance.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    B. Reclassification,
      etc.
      If the
      Borrower at any time shall, by reclassification or otherwise, change the Common
      Stock into the same or a different number of securities of any class or classes
      of the Borrower’s capital stock that may be issued or outstanding, this Note, as
      to the unpaid principal amount thereof and accrued interest thereon, shall
      thereafter be deemed to evidence the right to purchase an adjusted number of
      such securities and kind of securities as would have been issuable as the result
      of such change with respect to the shares of Common Stock subject to the
      conversion of this Note immediately prior to such reclassification or other
      change.

    

    C. Stock
      Splits, Combinations and Dividends.
      If the
      shares of Common Stock are subdivided or combined into a greater or smaller
      number of shares of Common Stock, or if a dividend is paid on the Common Stock
      in shares of Common Stock, the Conversion Price shall be proportionately reduced
      in case of subdivision of shares or stock dividend or proportionately increased
      in the case of combination of shares, in each such case by the ratio which
      the
      total number of shares of Common Stock outstanding immediately after such event
      bears to the total number of shares of Common Stock outstanding immediately
      prior to such event.

     

    D. Share
      Issuance.
      So long
      as this Note is outstanding, if the Borrower shall issue or agree to issue
      any
      shares of Common Stock other than with respect to any Excepted Issuances for
      a
      price per share less than the Conversion Price in effect at the time of such
      issue, then, and thereafter successively upon each such issue, the Conversion
      Price shall be reduced to such other lower issue price. For the purposes of
      this
      adjustment, the issuance of any security carrying the right to convert such
      security into shares of Common Stock or of any warrant, right or option to
      purchase Common Stock shall result in an adjustment to the Conversion Price
      upon
      the issuance of the above-described security and again upon the issuance of
      shares of Common Stock upon exercise of such conversion or purchase rights
      if
      such issuance is at a price lower than the then applicable Conversion Price.
      The
      reduction of the Conversion Price described in this paragraph is in addition
      to
      other rights of the Holder described in this Note and the Subscription
      Agreement.

    

    (d) Whenever
      the Conversion Price is adjusted pursuant to Section 2.1(c) above, the Borrower
      shall promptly provide notice to the Holder setting forth the Conversion Price
      after such adjustment and setting forth a statement of the facts requiring
      such
      adjustment.

    

    (e) The
      Borrower will reserve from its authorized and unissued shares of Common Stock,
      the number of shares of Common Stock during the time periods and in the amounts
      described in the Subscription Agreement. The Borrower represents that upon
      issuance, such shares of Common Stock will be duly and validly issued, fully
      paid and non-assessable. The Borrower agrees that its issuance of this Note
      shall constitute full authority to its officers, agents, and transfer agents
      who
      are charged with the duty of executing and issuing stock certificates to execute
      and issue the necessary certificates for shares of the Borrower’s Common Stock
      upon the conversion of this Note.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    2.2 No
      Fractional Shares.
      No
      fractional shares of Common Stock shall be issued upon conversion of this Note,
      but an adjustment in cash will be made, in respect of any fraction of a share
      (which will be valued based on the Conversion Price) which would otherwise
      be
      issuable upon the surrender of this Note for conversion and a check in the
      amount of the value of such fractional share shall be delivered to the Holder.
      

    

    2.3 Method
      of Conversion.
      This
      Note may be converted by the Holder in whole or in part as described in Section
      2.1(a) hereof and the Subscription Agreement. Upon partial conversion of this
      Note, a new Note containing the same date and provisions of this Note shall,
      at
      the request of the Holder, be issued by the Borrower to the Holder for the
      principal balance of this Note and interest which shall not have been converted
      or paid.

    

    2.4 Maximum
      Conversion.
      The
      Holder shall not be entitled to convert on a Conversion Date that amount of
      the
      Note in connection with that number of shares of Common Stock which would be
      in
      excess of the sum of (i) the number of shares of Common Stock beneficially
      owned
      by the Holder and its affiliates on a Conversion Date, and (ii) the number
      of
      shares of Common Stock issuable upon the conversion of the Note with respect
      to
      which the determination of this provision is being made on a Conversion Date,
      which would result in beneficial ownership by the Holder and its affiliates
      of
      more than 4.99% of the issued and outstanding shares of Common Stock of the
      Borrower on such Conversion Date. For the purposes of the provision to the
      immediately preceding sentence, beneficial ownership shall be determined in
      accordance with Section 13(d) of the Securities Exchange Act of 1934, as
      amended, and Regulation 13d-3 thereunder. Subject to the foregoing, the Holder
      shall not be limited to aggregate conversions of only 4.99% and aggregate
      conversion by the Holder may exceed 4.99%. The Holder shall have the authority
      and obligation to determine whether the restriction contained in this Section
      2.4 will limit any conversion hereunder and to the extent that the Holder
      determines that the limitation contained in this Section applies, the
      determination of the amount of the Note which is convertible shall be the
      responsibility and obligation of the Holder. The
      Holder may increase the permitted beneficial ownership amount up to 9.99% upon
      and effective after 61 days prior written notice to the Borrower.
      The
      Holder may allocate which of the equity of the Borrower deemed beneficially
      owned by the Holder shall be included in the 4.99% amount described above and
      which shall be allocated to the excess above 4.99%.

    

    ARTICLE
      III

    

    EVENT
      OF DEFAULT

    

    The
      occurrence of any of the following events of default ("Event of Default") shall,
      at the option of the Holder hereof, make all sums of principal and accrued
      interest then remaining unpaid hereon and all other amounts payable hereunder
      immediately due and payable, upon demand, without presentment or grace period,
      all of which hereby are expressly waived, except as set forth
      below:

    

    3.1 Failure
      to Pay Principal or Interest.
      The
      Borrower fails to pay any installment of interest or other sum due under this
      Note when due and such failure continues for a period of twelve (12) business
      days after the due date. The twelve (12) day period described in this Section
      3.1 is the same twelve (12) business day period described in Section 1.1
      hereof.

    

    3.2 Breach
      of Covenant.
      The
      Borrower breaches any material covenant or other material term or condition
      of
      the Subscription Agreement or any other material term or condition of this
      Note
      in any material respect and such breach continues for a period of twelve (12)
      business days 

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    3.3 Breach
      of Representations and Warranties.
      Any
      material representation or warranty of the Borrower made herein, in any
      Transaction Document, or in any agreement, statement or certificate given in
      writing pursuant hereto or in connection herewith or therewith shall be false
      or
      misleading in any material respect as of the date made and as of the Closing
      Date.

    

    3.4 Receiver
      or Trustee.
      The
      Borrower shall make an assignment for the benefit of creditors, or apply for
      or
      consent to the appointment of a receiver or trustee for it or for a substantial
      part of its property or business; or such a receiver or trustee shall otherwise
      be appointed without the consent of the Borrower if such receiver or trustee
      is
      not dismissed within forty-five (45) days of appointment.

    

    3.5 Judgments.
      Any
      money judgment, writ or similar final process shall be entered or filed against
      the Borrower or any of its property or other assets for more than $100,000,
      and
      shall remain unpaid, unvacated, unbonded or unstayed for a period of forty-five
      (45) days.

    

    3.6 Bankruptcy.
      Bankruptcy, insolvency, reorganization or liquidation proceedings or other
      proceedings or relief under any bankruptcy law or any law, or the issuance
      of
      any notice in relation to such event, for the relief of debtors shall be
      instituted by or against the Borrower and if instituted against Borrower are
      not
      dismissed within forty-five (45) days of initiation.

    

    3.7 Delisting.
      Failure
      of the Borrower’s Common Stock to be listed for trading or quotation on a
      Principal Market, and such failure continues for more than 10 consecutive
      trading days.

    

    3.8 Non-Payment.
      A
      default by the Borrower under any one or more obligations in an aggregate
      monetary amount in excess of $100,000 for more than thirty (30) days after
      the
      due date, unless the Borrower is contesting the validity of such obligation
      in
      good faith and has segregated cash funds equal to not less than one-half of
      the
      disputed amount.

    

    3.9 Stop
      Trade.
      An SEC
      or judicial stop trade order or Principal Market trading suspension with respect
      to the Borrower’s Common Stock that lasts for ten (10) or more consecutive
      trading days.

    

    3.10 Failure
      to Deliver Common Stock or Replacement Note.
      The
      Borrower's failure to deliver Common Stock to the Holder pursuant to and in
      the
      form required by this Note and Sections 7 and 11 of the Subscription Agreement,
      or, if required, a replacement Convertible Note more than ten (10) business
      days
      after the required delivery date of such Common Stock or replacement Convertible
      Note.

    

    3.11 Non-Registration
      Event.
      The
      occurrence of a Non-Registration Event as described in Section 11.4 of the
      Subscription Agreement.

    

    3.12 Reservation
      Default.
      The
      failure by the Borrower to have reserved for issuance upon conversion of the
      Note the number of shares of Common Stock as required in the Subscription
      Agreement, which condition continues uncured for 10 business days.

    

    ARTICLE
      IV

    

    SECURITY
      INTEREST

    

    4. Security
      Interest/Waiver of Automatic Stay.
      This
      Note is secured by a security interest granted to the Holder pursuant to a
      Security Agreement, as delivered by Borrower to Holder. The Borrower
      acknowledges and agrees that should a proceeding under any bankruptcy or
      insolvency law be commenced by or against the Borrower, or if any of the
      Collateral (as defined in the Security Agreement) should become the subject
      of
      any bankruptcy or insolvency proceeding, then the Holder should be entitled
      to,
      among other relief to which the Holder may be entitled under the Transaction
      Documents and any other agreement to which the Borrower and Holder are parties
      (collectively, "Loan Documents") and/or applicable law, an order from the court
      granting immediate relief from the automatic stay pursuant to 11 U.S.C. Section
      362 to permit the Holder to exercise all of its rights and remedies pursuant
      to
      the Loan Documents and/or applicable law. THE BORROWER EXPRESSLY WAIVES THE
      BENEFIT OF THE AUTOMATIC STAY IMPOSED BY 11 U.S.C. SECTION 362. FURTHERMORE,
      THE
      BORROWER EXPRESSLY ACKNOWLEDGES AND AGREES THAT NEITHER 11 U.S.C. SECTION 362
      NOR ANY OTHER SECTION OF THE BANKRUPTCY CODE OR OTHER STATUTE OR RULE
      (INCLUDING, WITHOUT LIMITATION, 11 U.S.C. SECTION 105) SHALL STAY, INTERDICT,
      CONDITION, REDUCE OR INHIBIT IN ANY WAY THE ABILITY OF THE HOLDER TO ENFORCE
      ANY
      OF ITS RIGHTS AND REMEDIES UNDER THE LOAN DOCUMENTS AND/OR APPLICABLE LAW.
      The
      Borrower hereby consents to any motion for relief from stay that may be filed
      by
      the Holder in any bankruptcy or insolvency proceeding initiated by or against
      the Borrower and, further, agrees not to file any opposition to any motion
      for
      relief from stay filed by the Holder. The Borrower represents, acknowledges
      and
      agrees that this provision is a specific and material aspect of the Loan
      Documents, and that the Holder would not agree to the terms of the Loan
      Documents if this waiver were not a part of this Note. The Borrower further
      represents, acknowledges and agrees that this waiver is knowingly, intelligently
      and voluntarily made, that neither the Holder nor any person acting on behalf
      of
      the Holder has made any representations to induce this waiver, that the Borrower
      has been represented (or has had the opportunity to he represented) in the
      signing of this Note and the Loan Documents and in the making of this waiver
      by
      independent legal counsel selected by the Borrower and that the Borrower has
      discussed this waiver with counsel.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      V

    

    MISCELLANEOUS

    

    5.1 Failure
      or Indulgence Not Waiver.
      No
      failure or delay on the part of the Holder hereof in the exercise of any power,
      right or privilege hereunder shall operate as a waiver thereof, nor shall any
      single or partial exercise of any such power, right or privilege preclude other
      or further exercise thereof or of any other right, power or privilege. All
      rights and remedies existing hereunder are cumulative to, and not exclusive
      of,
      any rights or remedies otherwise available.

    

    5.2 Notices.
      All
      notices, demands, requests, consents, approvals, and other communications
      required or permitted hereunder shall be in writing and, unless otherwise
      specified herein, shall be (a) personally served, (b) deposited in the mail,
      registered or certified, return receipt requested, postage prepaid, (c)
      delivered by a reputable overnight courier service with charges prepaid, or
      (d)
      transmitted by hand delivery, telegram, or facsimile, addressed as set forth
      below or to such other address as such party shall have specified most recently
      by written notice. Any notice or other communication required or permitted
      to be
      given hereunder shall be deemed effective upon hand delivery or delivery by
      facsimile, with accurate confirmation generated by the transmitting facsimile
      machine, at the address or number designated below (if delivered on a business
      day during normal business hours where such notice is to be received), or the
      first business day following such delivery (if delivered other than on a
      business day during normal business hours where such notice is to be received),
      (ii) on the first business day following the date deposited with an overnight
      courier service with charges prepaid, or (iii) on the third business day
      following the date of mailing pursuant to subpart (b) above, or upon actual
      receipt of such mailing, whichever shall first occur. The addresses for such
      communications shall be: 

     

    
      	To Borrower:	 	Ever-Glory International Group, Inc.,
              
	
            	 	100 N. Barranca Ave # 810 
	
            	 	West Covina, CA 91791, 
	
            	 	Attn: Edward Kang 
	
            	 	telecopier:
              (626)839-9118,

    

    
       

      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    
       

      
        	With a copy by fax to:	 	
                Edgar D. Park, Esq. 

                
                  Richardson
                    & Patel LLP

                  10900
                    Wilshire Boulevard, Suite 500

                  Los
                    Angeles, CA 90024

                  Fax:
                    (310) 208-1154

                

              

      

      
        
           

          
            	To Holder:	 	
                    To the addresses and fax numbers set forth

                      on
                        the signature pages hereto

                    

                  

          

          
            
              
                 

                
                  	With a copy
                          by fax to:	 	
                          Grushko & Mittman, P.C. 
                            551
                              Fifth Avenue, Suite 1601

                            New
                              York, New York 10176

                            Fax:
                              (212) 697-3575

                          

                        

                

                 

              

            

          

        

      

    

    5.3 Amendment
      Provision.
      The
      term "Note" and all reference thereto, as used throughout this instrument,
      shall
      mean this instrument as originally executed, or if later amended or
      supplemented, then as so amended or supplemented.

    

    5.4 Assignability.
      This
      Note shall be binding upon the Borrower and its successors and assigns, and
      shall inure to the benefit of the Holder and its successors and assigns. This
      Note shall not be divided by the Holder except in increments of not less than
      $25,000 in principal amount and, in any event, the Holder shall immediately
      provide the Borrower written notice of an assignment of any of the rights under
      this Note.

    

    5.5 Cost
      of Collection.
      If
      default is made in the payment of this Note, Borrower shall pay the Holder
      hereof reasonable costs of collection, including reasonable attorneys'
      fees.

    

    5.6 Governing
      Law.
      This
      Note shall be governed by and construed in accordance with the laws of the
      State
      of New York. Any action brought by either party against the other concerning
      the
      transactions contemplated by this Agreement shall be brought only in the state
      or Federal courts located in the State and County of New York. Both parties
      and
      the individual signing this Agreement on behalf of the Borrower agree to submit
      to the jurisdiction of such courts. The prevailing party shall be entitled
      to
      recover from the other party its reasonable attorney's fees and costs.
In
      the
      event that any provision of this Note is invalid or unenforceable under any
      applicable statute or rule of law, then such provision shall be deemed
      inoperative to the extent that it may conflict therewith and shall be deemed
      modified to conform with such statute or rule of law. Any such provision which
      may prove invalid or unenforceable under any law shall not affect the validity
      or unenforceability of any other provision of this Note. Nothing contained
      herein shall be deemed or operate to preclude the Holder from bringing suit
      or
      taking other legal action against the Borrower in any other jurisdiction to
      collect on the Borrower's obligations to Holder, to realize on any collateral
      or
      any other security for such obligations, or to enforce a judgment or other
      decision in favor of the Holder. This
      Note shall be deemed an unconditional obligation of Borrower for the payment
      of
      money and, without limitation to any other remedies of Holder, may be enforced
      against Borrower by summary proceeding pursuant to New York Civil Procedure
      Law
      and Rules Section 3213 or any similar rule or statute in the jurisdiction where
      enforcement is sought. For purposes of such rule or statute, any other document
      or agreement to which Holder and Borrower are parties or which Borrower
      delivered to Holder, which may be convenient or necessary to determine Holder’s
      rights hereunder or Borrower’s obligations to Holder are deemed a part of this
      Note, whether or not such other document or agreement was delivered together
      herewith or was executed apart from this Note.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    5.7 Maximum
      Payments.
      Nothing
      contained herein shall be deemed to establish or require the payment of a rate
      of interest or other charges in excess of the maximum rate permitted by
      applicable law. In the event that the rate of interest required to be paid
      or
      other charges hereunder exceed the maximum rate permitted by applicable law,
      any
      payments in excess of such maximum rate shall be credited against amounts owed
      by the Borrower to the Holder and thus refunded to the Borrower.

    

    5.8 Shareholder
      Status.
      The
      Holder shall not have rights as a shareholder of the Borrower with respect
      to
      unconverted portions of this Note. However, the Holder will have all the rights
      of a shareholder of the Borrower with respect to the shares of Common Stock
      to
      be received by Holder after delivery by the Holder of a Conversion Notice to
      the
      Borrower.

    

    

    [THIS
      SPACE INTENTIONALLY LEFT BLANK]

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF,
      Borrower has caused this Note to be signed in its name by an authorized officer
      as of the ____ day of July, 2007.

    
      	 	 	 
	 	EVER-GLORY INTERNATIONAL GROUP,
              INC.
	 
 	 
 	 
 
	Date: 	By:  	 
	 	
              
                

              

              Name:
                

              Title:

            

     

    WITNESS:

    

    

    

    ______________________________________

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A

    

    NOTICE
      OF CONVERSION

    

    (To
      be
      executed by the Registered Holder in order to convert the Note)

    

    

    The
      undersigned hereby elects to convert the principal amount of the Convertible
      Note (the “Note”) issued by Every-Glory International Group, Inc. on June ___,
      2007 and the accrued but unpaid interest thereon into shares of Common Stock
      of
      Every-Glory International Group, Inc. (the "Borrower") according to the
      conditions set forth in such Note, as of the date written below.

     

    

    Date
      of
      Conversion:____________________________________________________________________

    

    

    Conversion
      Price:______________________________________________________________________

    

    

    Shares
      To
      Be
      Delivered:_________________________________________________________________

    

    

    Signature:____________________________________________________________________________

    

    

    Print
      Name:__________________________________________________________________________

    

    

    Address:_____________________________________________________________________________

    

    ____________________________________________________________________________

    

    
      
        
        

      

      
        10Unassociated Document

    THIS
      WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
      BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS WARRANT
      AND
      THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD,
      OFFERED FOR SALE, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
      REGISTRATION STATEMENT UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY
      SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
      REQUIRED.

    

    
      	 	
              Right
                to Purchase ________shares of Common Stock of Ever-Glory International
                Group, Inc. (subject to adjustment as provided
                herein)

            

    

    

    CLASS
      A COMMON STOCK PURCHASE WARRANT

     

    
      
        	No. 2007-001	 	
                Issue
                  Date: July __,
                  2007

              

      

    

           

    EVER-GLORY
      INTERNATIONAL GROUP, INC., a corporation organized under the laws of the State
      of Florida (the “Company”), hereby certifies that, for value received,
      _______________________________________, or its assigns (the “Holder”), is
      entitled, subject to the terms set forth below, to purchase from the Company
      at
      any time after the Issue Date until 5:00 p.m., E.S.T. on the fifth anniversary
      of the actual effective date of the Registration Statement covering the shares
      issuable upon exercise this Warrant, as described in the Subscription
      Agreement (the
      “Expiration Date”), up to _____________ fully paid and nonassessable shares of
      the common stock of the Company (the “Common Stock”), $0.0001 par value per
      share at a per share purchase price of $0.__. The aforedescribed purchase price
      per share, as adjusted from time to time as herein provided, is referred to
      herein as the "Purchase Price." The number and character of such shares of
      Common Stock and the Purchase Price are subject to adjustment as provided
      herein. The Company may reduce the Purchase Price without the consent of the
      Holder. Capitalized terms used and not otherwise defined herein shall have
      the
      meanings set forth in that certain Subscription Agreement (the “Subscription
      Agreement”),
      dated
      as of June __, 2007, entered into by the Company and the Holder.

    

    As
      used
      herein the following terms, unless the context otherwise requires, have the
      following respective meanings: 

     

    (a) The
      term
“Company” shall include Ever-Glory International Group, Inc. and any corporation
      which shall succeed or assume the obligations of Ever-Glory International Group,
      Inc. hereunder. 

     

    (b) The
      term
“Common Stock” includes (a) the Company's Common Stock, $0.0001 par value
      per share, as authorized on the date of the Subscription Agreement, and (b)
      any
      other securities into which or for which any of the securities described in
      (a) may be converted or exchanged pursuant to a plan of recapitalization,
      reorganization, merger, sale of assets or otherwise.

     

    (c) The
      term
“Other Securities” refers to any stock (other than Common Stock) and other
      securities of the Company or any other person (corporate or otherwise) which
      the
      holder of the Warrant at any time shall be entitled to receive, or shall have
      received, on the exercise of the Warrant, in lieu of or in addition to Common
      Stock, or which at any time shall be issuable or shall have been issued in
      exchange for or in replacement of Common Stock or Other Securities pursuant
      to
      Section 4 or otherwise. 

     

    (d) The
      term
“Warrant Shares” shall mean the Common Stock issuable upon exercise of this
      Warrant.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    1. Exercise
      of Warrant.

     

    1.1. Number
      of Shares Issuable upon Exercise.
      From
      and after the Issue Date through and including the Expiration Date, the Holder
      hereof shall be entitled to receive, upon exercise of this Warrant in whole
      in
      accordance with the terms of subsection 1.2 or upon exercise of this
      Warrant in part in accordance with subsection 1.3, shares of Common Stock
      of the Company, subject to adjustment pursuant to Section 4.

     

    1.2. Full
      Exercise.
      This
      Warrant may be exercised in full by the Holder hereof by delivery of an original
      or facsimile copy of the form of subscription attached as Exhibit A hereto
      (the “Subscription Form”) duly executed by such Holder and delivery within two
      days thereafter of payment, in cash, wire transfer or by certified or official
      bank check payable to the order of the Company, in the amount obtained by
      multiplying the number of shares of Common Stock for which this Warrant is
      then
      exercisable by the Purchase Price then in effect. The original Warrant is not
      required to be surrendered to the Company until it has been fully exercised.
      

     

    1.3. Partial
      Exercise.
      This
      Warrant may be exercised in part (but not for a fractional share) by surrender
      of this Warrant in the manner and at the place provided in subsection 1.2
      except that the amount payable by the Holder on such partial exercise shall
      be
      the amount obtained by multiplying (a) the number of whole shares of Common
      Stock designated by the Holder in the Subscription Form by (b) the Purchase
      Price then in effect. On any such partial exercise provided the Holder has
      surrendered the original Warrant, the Company, at its expense, will forthwith
      issue and deliver to or upon the order of the Holder hereof a new Warrant of
      like tenor, in the name of the Holder hereof or as such Holder (upon payment
      by
      such Holder of any applicable transfer taxes) may request, the whole number
      of
      shares of Common Stock for which such Warrant may still be exercised for the
      balance of.

     

    1.4. Fair
      Market Value.
      Fair
      Market Value of a share of Common Stock as of a particular date (the
      "Determination Date") shall mean: 

     

    (a) If
      the
      Company's Common Stock is traded on an exchange or is quoted on the National
      Association of Securities Dealers, Inc. Automated Quotation ("NASDAQ"), Global
      Market, the NASDAQ Capital Market or the American Stock Exchange, LLC, then
      the
      closing or last sale price, respectively, reported for the last business day
      immediately preceding the Determination Date;

     

    (b) If
      the
      Company's Common Stock is not traded on an exchange or on the NASDAQ Global
      Market, the NASDAQ Capital Market or the American Stock Exchange, Inc., but
      is
      traded in the over-the-counter market, then the average of the closing bid
      and
      ask prices reported for the last business day immediately preceding the
      Determination Date;

     

    (c) Except
      as
      provided in clause (d) below, if the Company's Common Stock is not publicly
      traded, then as the Holder and the Company agree, or in the absence of such
      an
      agreement, by arbitration in accordance with the rules then standing of the
      American Arbitration Association, before a single arbitrator to be chosen from
      a
      panel of persons qualified by education and training to pass on the matter
      to be
      decided; or

     

    (d) If
      the
      Determination Date is the date of a liquidation, dissolution or winding up,
      or
      any event deemed to be a liquidation, dissolution or winding up pursuant to
      the
      Company's charter, then all amounts to be payable per share to holders of the
      Common Stock pursuant to the charter in the event of such liquidation,
      dissolution or winding up, plus all other amounts to be payable per share in
      respect of the Common Stock in liquidation under the charter, assuming for
      the
      purposes of this clause (d) that all of the shares of Common Stock then
      issuable upon exercise of all of the Warrants are outstanding at the
      Determination Date.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    1.5. Company
      Acknowledgment.
      The
      Company will, at the time of the exercise of the Warrant, upon the request
      of
      the Holder hereof acknowledge in writing its continuing obligation to afford
      to
      such Holder any rights to which such Holder shall continue to be entitled after
      such exercise in accordance with the provisions of this Warrant. If the Holder
      shall fail to make any such request, such failure shall not affect the
      continuing obligation of the Company to afford to such Holder any such
      rights.

     

    1.6. Trustee
      for Warrant Holders.
      In the
      event that a bank or trust company shall have been appointed as trustee for
      the
      Holder of the Warrants pursuant to Subsection 3.2, such bank or trust
      company shall have all the powers and duties of a warrant agent (as hereinafter
      described) and shall accept, in its own name for the account of the Company
      or
      such successor person as may be entitled thereto, all amounts otherwise payable
      to the Company or such successor, as the case may be, on exercise of this
      Warrant pursuant to this Section 1. 

     

    1.7 Delivery
      of Stock
      Certificates. etc. on Exercise.
      The
      Company agrees that the shares of Common Stock purchased upon exercise of this
      Warrant shall be deemed to be issued to the Holder hereof as the record owner
      of
      such shares as of the close of business on the date on which this Warrant shall
      have been surrendered and payment made for such shares as aforesaid. As soon
      as
      practicable after the exercise of this Warrant in full or in part, and in any
      event within three (3) business days thereafter (“Warrant Share Delivery Date”),
      the Company at its expense (including the payment by it of any applicable issue
      taxes) will cause to be issued in the name of and delivered to the Holder hereof
      or as such Holder (upon payment by such Holder of any applicable transfer taxes)
      may direct in compliance with applicable securities laws, a certificate or
      certificates for the number of duly and validly issued, fully paid and
      nonassessable shares of Common Stock (or Other Securities) to which such Holder
      shall be entitled on such exercise, plus, in lieu of any fractional share to
      which such Holder would otherwise be entitled, cash equal to such fraction
      multiplied by the then Fair Market Value of one full share of Common Stock,
      together with any other stock or other securities and property (including cash,
      where applicable) to which such Holder is entitled upon such exercise pursuant
      to Section 1 or otherwise. The Company understands that a delay in the delivery
      of the Warrant Shares after the Warrant Share Delivery Date could result in
      economic loss to the Holder. As compensation to the Holder for such loss, the
      Company agrees to pay (as liquidated damages and not as a penalty) to the Holder
      for late issuance of Warrant Shares upon exercise of this Warrant the amount
      of
      $100 per business day after the Warrant Share Delivery Date for each $10,000
      of
      Exercise Price (and
      proportionately for other amounts) of
      Warrant Shares for which this Warrant is exercised which are not timely
      delivered. The Company shall pay any payments incurred under this Section in
      immediately available funds upon demand. Furthermore, in addition to any other
      remedies which may be available to the Holder, in the event that the Company
      fails for any reason to effect delivery of the Warrant Shares by the Warrant
      Share Delivery Date, the Holder may revoke all or part of the relevant Warrant
      exercise by delivery of a notice to such effect to the Company whereupon the
      Company and the Holder shall each be restored to their respective positions
      immediately prior to the exercise of the relevant portion of this Warrant,
      except that the liquidated damages described above shall be payable through
      the
      date notice of revocation or rescission is given to the Company. 

     

    1.8 Buy-In.
      In
      addition to any other rights available to the Holder, if the Company fails
      to
      deliver to a Holder the Warrant Shares as required pursuant to this Warrant,
      within seven (7) business days after the Warrant Share Delivery Date and the
      Holder or a broker on the Holder’s behalf, purchases (in an open market
      transaction or otherwise) shares of common stock to deliver in satisfaction
      of a
      sale by such Holder of the Warrant Shares which the Holder was entitled to
      receive from the Company (a "Buy-In"),
      then
      the Company shall pay in cash to the Holder (in addition to any remedies
      available to or elected by the Holder) the amount by which (A) the Holder's
      total purchase price (including brokerage commissions, if any) for the shares
      of
      common stock so purchased exceeds (B) the aggregate Purchase Price of the
      Warrant Shares
      required
      to have been delivered together
      with interest thereon at a rate of 12% per annum, accruing until such amount
      and
      any accrued interest thereon is paid in full (which amount shall be paid as
      liquidated damages and not as a penalty). For
      example, if a Holder purchases shares of Common Stock having a total purchase
      price of $11,000 to cover a Buy-In with respect to $10,000 of Purchase Price
      of
      Warrant Shares to have been received upon exercise of this Warrant, the Company
      shall be required to pay the Holder $1,000,
      plus interest. The
      Holder shall provide the Company written notice indicating the amounts payable
      to the Holder in respect of the Buy-In.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    2. Cashless
      Exercise.

     

    (a) If
      a
      registration statement covering the shares issuable upon exercise of this
      Warrant (as described in Section 11 of the Subscription Agreement)
      (“Registration Statement”) is effective and the Holder may sell its shares of
      Common Stock upon exercise hereof pursuant to the registration statement, this
      Warrant may be exercisable in whole or in part for cash only as set forth in
      Section 1 above. Commencing fifteen (15) months after the Issue Date, if such
      Registration Statement is unavailable, then payment upon exercise may be made
      at
      the option of the Holder either in (i) cash, wire transfer or by certified
      or official bank check payable to the order of the Company equal to the
      applicable aggregate Purchase Price, (ii) by delivery of Common Stock issuable
      upon exercise of the Warrants in accordance with Section (b) below or
      (iii) by a combination of any of the foregoing methods, for the number of
      Common Stock specified in such form (as such exercise number shall be adjusted
      to reflect any adjustment in the total number of shares of Common Stock issuable
      to the holder per the terms of this Warrant) and the holder shall thereupon
      be
      entitled to receive the number of duly authorized, validly issued, fully-paid
      and non-assessable shares of Common Stock (or Other Securities) determined
      as
      provided herein.

     

    (b) Subject
      to the provisions herein to the contrary, if the Fair Market Value of one share
      of Common Stock is greater than the Purchase Price (at the date of calculation
      as set forth below), in lieu of exercising this Warrant for cash, the holder
      may
      elect to receive shares equal to the value (as determined below) of this Warrant
      (or the portion thereof being cancelled) by surrender of this Warrant at the
      principal office of the Company together with the properly endorsed Subscription
      Form in which event the Company shall issue to the holder a number of shares
      of
      Common Stock computed using the following formula:

     

    X
      =
Y
      (A-B)

               
      A

     

    Where X
      = the
      number of shares of Common Stock to be issued to the holder

    

    
      	 	
              Y
                =

            	
              the
                number of shares of Common Stock purchasable under the Warrant or,
                if only
                a portion of the Warrant is being exercised, the portion of the Warrant
                being exercised (at the date of such
                calculation)

            

    

     

    
      	 	
              A
                =

            	
              the
                average Fair Market Value of one share of the Company’s Common Stock for
                the ten (10) trading days prior to the exercise
                date

            

    

     

    
      	 	
              B
                =

            	
              Purchase
                Price (as adjusted to the date of such
                calculation)

            

    

     

    For
      purposes of Rule 144 promulgated under the 1933 Act, it is intended, understood
      and acknowledged that the Warrant Shares issued in a cashless exercise
      transaction shall be deemed to have been acquired by the Holder, and the holding
      period for the Warrant Shares shall be deemed to have commenced, on the date
      this Warrant was originally issued pursuant to the Subscription
      Agreement.

     

    3. Adjustment
      for Reorganization, Consolidation, Merger, etc.

     

    3.1. Reorganization,
      Consolidation, Merger, etc.
      In case
      at any time or from time to time, the Company shall (a) effect a
      reorganization, (b) consolidate with or merge into any other person or
      (c) transfer all or substantially all of its properties or assets to any
      other person under any plan or arrangement contemplating the dissolution of
      the
      Company, then, in each such case, as a condition to the consummation of such
      a
      transaction, proper and adequate provision shall be made by the Company whereby
      the Holder of this Warrant, on the exercise hereof as provided in
      Section 1, at any time after the consummation of such reorganization,
      consolidation or merger or the effective date of such dissolution, as the case
      may be, shall receive, in lieu of the Common Stock (or Other Securities)
      issuable on such exercise prior to such consummation or such effective date,
      the
      stock and other securities and property (including cash) to which such Holder
      would have been entitled upon such consummation or in connection with such
      dissolution, as the case may be, if such Holder had so exercised this Warrant,
      immediately prior thereto, all subject to further adjustment thereafter as
      provided in Section 4.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    3.2. Dissolution.
      In the
      event of any dissolution of the Company following the transfer of all or
      substantially all of its properties or assets, the Company, prior to such
      dissolution, shall at its expense deliver or cause to be delivered the stock
      and
      other securities and property (including cash, where applicable) receivable
      by
      the Holder of the Warrants after the effective date of such dissolution pursuant
      to this Section 3 to a bank or trust company (a "Trustee") having its
      principal office in New York, NY, as trustee for the Holder of the
      Warrants. 

     

    3.3. Continuation
      of Terms.
      Upon
      any reorganization, consolidation, merger or transfer (and any dissolution
      following any transfer) referred to in this Section 3, this Warrant shall
      continue in full force and effect and the terms hereof shall be applicable
      to
      the Other Securities and property receivable on the exercise of this Warrant
      after the consummation of such reorganization, consolidation or merger or the
      effective date of dissolution following any such transfer, as the case may
      be,
      and shall be binding upon the issuer of any Other Securities, including, in
      the
      case of any such transfer, the person acquiring all or substantially all of
      the
      properties or assets of the Company, whether or not such person shall have
      expressly assumed the terms of this Warrant as provided in Section 4. In
      the event this Warrant does not continue in full force and effect after the
      consummation of the transaction described in this Section 3, then only in
      such event will the Company's securities and property (including cash, where
      applicable) receivable by the Holder of the Warrants be delivered to the Trustee
      as contemplated by Section 3.2.

     

    3.4 Share
      Issuance.
      Until
      the Expiration Date, if the Company shall issue any Common Stock except for
      the
      Excepted Issuances (as defined in the Subscription Agreement), prior to the
      complete exercise of this Warrant for a price per share less than the Purchase
      Price that would be in effect at the time of such issue, then, and thereafter
      successively upon each such issue, the Purchase Price shall be reduced to such
      other lower price for then outstanding Warrants. For the purposes of this
      adjustment, the issuance of any security or debt instrument of the Company
      carrying the right to convert such security or debt instrument into Common
      Stock
      or of any warrant, right or option to purchase Common Stock shall result in
      an
      adjustment to the Purchase Price upon the issuance of the above-described
      security, debt instrument, warrant, right, or option if such issuance is at
      a
      price lower than the Purchase Price in effect upon such issuance and again
      at
      any time upon any subsequent issuances of shares of Common Stock upon exercise
      of such conversion or purchase rights if such issuance is at a price lower
      than
      the Purchase Price in effect upon such issuance. The reduction of the Purchase
      Price described in this Section 3.4 is subject to the provisions of, and in
      addition to the other rights of the Holder described in, the Subscription
      Agreement.

     

    4. Extraordinary
      Events Regarding Common Stock.
      In the
      event that the Company shall (a) issue additional shares of the Common
      Stock as a dividend or other distribution on outstanding Common Stock,
      (b) subdivide its outstanding shares of Common Stock, or (c) combine
      its outstanding shares of the Common Stock into a smaller number of shares
      of
      the Common Stock, then, in each such event, the Purchase Price shall,
      simultaneously with the happening of such event, be adjusted by multiplying
      the
      then Purchase Price by a fraction, the numerator of which shall be the number
      of
      shares of Common Stock outstanding immediately prior to such event and the
      denominator of which shall be the number of shares of Common Stock outstanding
      immediately after such event, and the product so obtained shall thereafter
      be
      the Purchase Price then in effect. The Purchase Price, as so adjusted, shall
      be
      readjusted in the same manner upon the happening of any successive event or
      events described herein in this Section 4. The number of shares of Common
      Stock that the Holder of this Warrant shall thereafter, on the exercise hereof
      as provided in Section 1, be entitled to receive shall be adjusted to a
      number determined by multiplying the number of shares of Common Stock that
      would
      otherwise (but for the provisions of this Section 4) be issuable on such
      exercise by a fraction of which (a) the numerator is the Purchase Price
      that would otherwise (but for the provisions of this Section 4) be in
      effect, and (b) the denominator is the Purchase Price in effect on the date
      of such exercise.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    5. Certificate
      as to Adjustments.
      In each
      case of any adjustment or readjustment in the shares of Common Stock (or Other
      Securities) issuable on the exercise of the Warrants, the Company at its expense
      will promptly cause its Chief Financial Officer or other appropriate designee
      to
      compute such adjustment or readjustment in accordance with the terms of the
      Warrant and prepare a certificate setting forth such adjustment or readjustment
      and showing in detail the facts upon which such adjustment or readjustment
      is
      based, including a statement of (a) the consideration received or
      receivable by the Company for any additional shares of Common Stock (or Other
      Securities) issued or sold or deemed to have been issued or sold, (b) the
      number of shares of Common Stock (or Other Securities) outstanding or deemed
      to
      be outstanding, and (c) the Purchase Price and the number of shares of
      Common Stock to be received upon exercise of this Warrant, in effect immediately
      prior to such adjustment or readjustment and as adjusted or readjusted as
      provided in this Warrant. The Company will forthwith mail a copy of each such
      certificate to the Holder of the Warrant and any Warrant Agent of the Company
      (appointed pursuant to Section 11 hereof).

     

    6. Reservation
      of Stock, etc. Issuable on Exercise of Warrant; Financial
      Statements.
      The
      Company will at all times reserve and keep available, solely for issuance and
      delivery on the exercise of the Warrants, all shares of Common Stock from time
      to time issuable on the exercise of the Warrant. This Warrant entitles the
      Holder hereof to receive copies of all financial and other information
      distributed or required to be distributed to the holders of the Company's Common
      Stock. 

     

    7. Assignment;
      Exchange of Warrant.
      Subject
      to compliance with applicable securities laws, this Warrant, and the rights
      evidenced hereby, may be transferred by any registered holder hereof (a
      "Transferor"). On the surrender for exchange of this Warrant, with the
      Transferor's endorsement in the form of Exhibit B attached hereto (the
“Transferor Endorsement Form") and together with an opinion of counsel
      reasonably satisfactory to the Company that the transfer of this Warrant will
      be
      in compliance with applicable securities laws, the Company will issue and
      deliver to or on the order of the Transferor thereof a new Warrant or Warrants
      of like tenor, in the name of the Transferor and/or the transferee(s) specified
      in such Transferor Endorsement Form (each a "Transferee"), calling in the
      aggregate on the face or faces thereof for the number of shares of Common Stock
      called for on the face or faces of the Warrant so surrendered by the
      Transferor.

     

    8. Replacement
      of Warrant.
      On
      receipt of evidence reasonably satisfactory to the Company of the loss, theft,
      destruction or mutilation of this Warrant and, in the case of any such loss,
      theft or destruction of this Warrant, on delivery of an indemnity agreement
      or
      security reasonably satisfactory in form and amount to the Company or, in the
      case of any such mutilation, on surrender and cancellation of this Warrant,
      the
      Company at its expense, twice only, will execute and deliver, in lieu thereof,
      a
      new Warrant of like tenor.

     

    9. Registration
      Rights.
      The
      Holder of this Warrant has been granted certain registration rights by the
      Company. These registration rights are set forth in the Subscription Agreement.
      The terms of the Subscription Agreement are incorporated herein by this
      reference.

     

    10. Maximum
      Exercise.
      The
      Holder shall not be entitled to exercise this Warrant on an exercise date nor
      may the Company exercise its right to give a Call Notice (as defined in Section
      11) in connection with that number of Common Stock which would be in excess
      of
      the sum of (i) the number of Common Stock beneficially owned by the Holder
      and its affiliates on an exercise date or Call Date, and (ii) the number of
      Common Stock issuable upon the exercise of this Warrant with respect to which
      the determination of this limitation is being made on an exercise date or Call
      Date, which would result in beneficial ownership by the Holder and its
      affiliates of more than 4.99% of the outstanding Common Stock on such date.
      For
      the purposes of the immediately preceding sentence, beneficial ownership shall
      be determined in accordance with Section 13(d) of the Securities
      Exchange Act of 1934, as amended, and Regulation 13d-3 thereunder. Subject
      to
      the foregoing, the Holder shall not be limited to aggregate exercises which
      would result in the issuance of more than 4.99%. The restriction described
      in
      this paragraph may be waived, in whole or in part, upon sixty-one (61) days
      prior notice from the Holder to the Company to increase such percentage to
      up to
      9.99%. The Holder may allocate which of the equity of the Company deemed
      beneficially owned by the Subscriber shall be included in the 4.99% amount
      described above and which shall be allocated to the excess above
      4.99%.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    11. Call.
      The
      Company shall have the option to "call" the exercise of the Warrant Shares
      issuable upon exercise of this Warrant (the "Warrant Call"), one time only,
      in
      accordance with and governed by the following:

     

    (a) The
      Company shall exercise the Warrant Call by giving to the Warrant Holder a
      written notice of call (the "Call Notice") during the period in which the
      Warrant Call may be exercised. The effective date of each Call Notice (the
“Call
      Date”) is the date on which notice is effective under the notice provision of
      Section 14 of this Warrant.

     

    (b) The
      Company's right
      to
      exercise the Warrant Call shall commence when all of following criteria have
      been satisfied: (i) the Warrant Registration Statement as defined in Section
      11.1(iv) of the Subscription Agreement has been declared effective by the
      Securities Exchange Comission, (ii) the Company’s stock is included for trading
      and quotation on one
      of
      the following stock exchanges, National
      Association of Securities Dealers Automated Quotations Global Market
      (“NASDAQ-GM”), National
      Association of Securities Dealers Automated Quotations Capital
      Market
      (“NASDAQ-CM”), American
      Stock Exchange
      (“AMEX”)
      and New
      York
      Stock Exchange
      (“NYSE”)
      (each a “Major Market”), (iii) Volume
      Weighted Average Price of the Company’s Common Stock on the Major Market as
      reported by Bloomberg, L.P. for each of thirty (30) consecutive trading days
      preceding the Call Date (“Lookback
      Period”)
      exceeds
      $0.50, and (iv) the daily trading volume of the Company’s Common Stock as
      reported by Bloomberg, L.P. for each trading day during the Lockback Period
      exceeds 2,500,000 shares.

    

    (c) The
      number of shares of Common Stock to be issued upon exercise of the Warrant
      which
      are subject to a Call Notice must be registered in a Registration Statement
      effective from thirty (30) trading days prior to the Call Date and through
      the
      date such Common Stock is actually delivered to the Warrant Holder (“Delivery
      Date”).

    

    (d) The
      Common Stock must be listed on the Major Market for the Lookback Period and
      through the Delivery Date.

     

    (e) The
      Company shall not have received a notice from the Major
      Market
      during the ninety calendar days prior to the Call Date that the Company or
      its
      Common Stock does not meet the requirements for continued quotation, listing
      or
      trading on the Major
      Market.

     

    (f) The
      Company and the Common Stock shall meet the requirements for continued
      quotation, listing or trading on the Major
      Market
      for the Lookback Period and through the Delivery Date.

     

    (g) Unless
      otherwise agreed to by the Holder of this Warrant, a Call Notice must be given
      to all Warrant Holders who receive Warrants similar to this Warrant (in terms
      of
      exercise price and other principal terms) issued on or about the same Issue
      Date
      as this Warrant, in proportion to the amounts of Common Stock which may be
      purchased by the respective Warrant Holders in accordance with the respective
      Warrants held by each.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (h) The
      Warrant Holder shall exercise his Warrant rights and purchase the Called Warrant
      Shares and pay for same within fourteen trading days after the Call Date. If
      the
      Warrant Holder fails to timely pay the amount required by the Warrant Call,
      the
      Company’s sole remedy shall be to cancel a corresponding amount of this
      Warrant.

     

    12. Warrant
      Agent.
      The
      Company may, by written notice to the Holder of the Warrant, appoint an agent
      (a
“Warrant Agent”) for the purpose of issuing Common Stock on the exercise of this
      Warrant pursuant to Section 1, exchanging this Warrant pursuant to
      Section 7, and replacing this Warrant pursuant to Section 8, or any of
      the foregoing, and thereafter any such issuance, exchange or replacement, as
      the
      case may be, shall be made at such office by such Warrant Agent. 

     

    13. Transfer
      on the Company's Books.
      Until
      this Warrant is transferred on the books of the Company, the Company may treat
      the registered holder hereof as the absolute owner hereof for all purposes,
      notwithstanding any notice to the contrary. 

     

    14. Notices.
      All
      notices, demands, requests, consents, approvals, and other communications
      required or permitted hereunder shall be in writing and, unless otherwise
      specified herein, shall be (i) personally served, (ii) deposited in the mail,
      registered or certified, return receipt requested, postage prepaid, (iii)
      delivered by reputable air courier service with charges prepaid, or (iv)
      transmitted by hand delivery, telegram, or facsimile, addressed as set forth
      below or to such other address as such party shall have specified most recently
      by written notice. Any notice or other communication required or permitted
      to be
      given hereunder shall be deemed effective (a) upon hand delivery or delivery
      by
      facsimile, with accurate confirmation generated by the transmitting facsimile
      machine, at the address or number designated below (if delivered on a business
      day during normal business hours where such notice is to be received), or the
      first business day following such delivery (if delivered other than on a
      business day during normal business hours where such notice is to be received)
      or (b) on the second business day following the date of mailing by express
      courier service, fully prepaid, addressed to such address, or upon actual
      receipt of such mailing, whichever shall first occur. The addresses for such
      communications shall be: 

     

    
      	To Company:	 	Ever-Glory International Group, Inc.,

              100
                N. Barranca Ave # 810 

              West
                Covina, CA 91791, 

              Attn:
                Edward Kang 

              telecopier:
                (626)839-9118

            

    

    
       

      
        	With a copy by fax to:	 	Edgar D. Park, Esq. 
                Richardson
                  & Patel LLP

                10900
                  Wilshire Boulevard, Suite 500

                Los
                  Angeles, CA 90024

                Fax:
                  (310) 208-1154

              

      

      
         

        
          	To Holder:	 	To the addresses and fax numbers
                  set forth
                  
                  on
                    the signature pages hereto

                

        

        
           

          
            	With a copy by fax
                    to:	 	Grushko & Mittman, P.C. 
                    551
                      Fifth Avenue, Suite 1601

                    New
                      York, New York 10176

                    Fax:
                      (212) 697-3575

                  

          

           

          
            
              
              

            

            
              8

              
                

              

            

            
              
              

            

          

        

      

    

     

    15. Miscellaneous.
      This
      Warrant and any term hereof may be changed, waived, discharged or terminated
      only by an instrument in writing signed by the party against which enforcement
      of such change, waiver, discharge or termination is sought. This Warrant shall
      be construed and enforced in accordance with and governed by the laws of New
      York. Any dispute relating to this Warrant shall be adjudicated in New York
      County in the State of New York. The headings in this Warrant are for purposes
      of reference only, and shall not limit or otherwise affect any of the terms
      hereof. The invalidity or unenforceability of any provision hereof shall in
      no
      way affect the validity or enforceability of any other provision. 

     

    

     

    [THIS
      SPACE INTENTIONALLY LEFT BLANK]

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the Company has executed this Warrant as of the date first
      written above. 

     

    
      	 	 	 
	 	EVER-GLORY
              INTERNATIONAL GROUP INC. 
	 
 	 
 	 
 
	 	By:  	 
	 	
              
Name:

    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    Exhibit A

    

    FORM
      OF
      SUBSCRIPTION

    (to
      be
      signed only on exercise of Warrant)

    TO:
      EVER-GLORY INTERNATIONAL GROUP INC.

    The
      undersigned, pursuant to the provisions set forth in the attached Warrant
      (No.____), hereby irrevocably elects to purchase (check applicable
      box):

     

    
      	___	 	________ shares of the Common Stock
              covered
              by such Warrant; or
	___	 	the maximum number of shares of Common
              Stock
              covered by such Warrant pursuant to the cashless exercise procedure
              set
              forth in Section 2.

    

     

    The
      undersigned herewith makes payment of the full purchase price for such shares
      at
      the price per share provided for in such Warrant, which is $___________. Such
      payment takes the form of (check applicable box or boxes):

    
       

      
        	___	 	$__________ in lawful money of the
                United
                States; and/or
	___	 	the cancellation of such portion of
                the
                attached Warrant as is exercisable for a total of _______ shares
                of Common
                Stock (using a Fair Market Value of $_______ per share for purposes
                of
                this calculation); and/or
	___	 	the cancellation of such number of
                shares of
                Common Stock as is necessary, in accordance with the formula set
                forth in
                Section 2, to exercise this Warrant with respect to the maximum
                number of shares of Common Stock purchasable pursuant to the cashless
                exercise procedure set forth in
                Section 2.

      

       

    

    The
      undersigned requests that the certificates for such shares be issued in the
      name
      of, and delivered to
      ___________________________________________________________________________________________________________
      whose address is
      _______________________________________________________________________________________________________.

    

    The
      undersigned represents and warrants that all offers and sales by the undersigned
      of the securities issuable upon exercise of the within Warrant shall be made
      pursuant to registration of the Common Stock under the Securities Act of 1933,
      as amended (the "Securities Act"), or pursuant to an exemption from registration
      under the Securities Act.

    

    
      	
              Dated:___________________

            	
              _______________________________________

              (Signature
                must conform to name of holder as specified on the face of the
                Warrant)

               

              _______________________________________

              _______________________________________

              (Address)

            

    

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    Exhibit B

    

    FORM
      OF
      TRANSFEROR ENDORSEMENT

    (To
      be
      signed only on transfer of Warrant)

     

    For
      value
      received, the undersigned hereby sells, assigns, and transfers unto the
      person(s) named below under the heading "Transferees" the right represented
      by
      the within Warrant to purchase the percentage and number of shares of Common
      Stock of EVER-GLORY INTERNATIONAL GROUP INC. to which the within Warrant relates
      specified under the headings "Percentage Transferred" and "Number Transferred,"
      respectively, opposite the name(s) of such person(s) and appoints each such
      person Attorney to transfer its respective right on the books of EVER-GLORY
      INTERNATIONAL GROUP INC. with full power of substitution in the
      premises.

     

    

    
      	
              Transferees

            	
              Percentage
                Transferred

            	
              Number
                Transferred

            
	 	 	 
	 	 	 
	 	 	 

    

    

    

    
      	
              Dated:
                ______________, ___________

               

               

               

              Signed
                in the presence of:

               

              _________________________________________

              (Name)

               

               

              ACCEPTED
                AND AGREED:

              [TRANSFEREE]

               

               

              _________________________________________

              (Name)

            	 	
              _________________________________________

              (Signature
                must conform to name of holder as specified on the face of the
                warrant)

               

               

               

              _________________________________________

              _________________________________________

              (address)

               

              _________________________________________

              _________________________________________

              (address)

            

    

    

    
      
        
        

      

      
        12

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00127-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00127-of-00352.parquet"}]]