SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 

 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
 
Date of report (Date of earliest event reported): August 4, 2010 (August 2, 2010)
 

 
EVER-GLORY INTERNATIONAL GROUP, INC.
(Exact name of registrant as specified in Charter)
 
Florida
 
000-28806
 
65-0420146
(State or other jurisdiction of
incorporation or organization)
 
(Commission File No.)
 
(IRS Employee Identification No.)

  Ever-Glory Commercial Center,
509 Chengxin Road, Jiangning Development Zone,
Nanjing, Jiangsu Province,
Peoples Republic of China  
 (Address of Principal Executive Offices)
 
(8625) 5209-6875
  (Issuer Telephone number)

100 N. Barranca Ave. #810
West Covina, CA 91791
  (Former name or former address, if changed since last report.)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 

 
 
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT .

On August 2, 2010, Goldenway Nanjing Garment Co., Ltd., a subsidiary of Ever-Glory International Group, Inc., (“Borrower” or “we”), entered into a two-year revolving line of credit agreement (“Revolving Line of Credit Agreement”) with Bank of Nanjing Co. Ltd. (“Lender”), a PRC Bank, which allows the Borrower to borrow up to RMB 50 million (approximately USD 7.3 million) during the period from July 6, 2010 to July 6, 2012. The Borrower is required to apply for a loan each time it needs to draw from this revolving line of credit. The terms of each loan, such as maturity date, interest rate, use of proceeds and etc, shall be further set out in each individual loan agreement. The Revolving Line of Credit is guaranteed by Jiangsu Ever-Glory International Group Corporation, an entity controlled by Mr. Kang, our Chief Executive Officer and secured by certain properties and land use rights of Goldenway Nanjing Garment Co., Ltd pursuant to certain guaranty and security agreements. We did not pay any fee to Jiangsu Ever-Glory International Group Corporation for such guaranty.

As of August 4, 2010, Borrower has used RMB10 million (approximately USD 1.46 million) of credit under this Revolving Line of Credit Agreement. 

The foregoing description of the Revolving Line of Credit Agreement contemplated thereby does not purport to be complete and is qualified in its entirety by reference to the complete text of the Revolving Line of Credit Agreement, Guaranty Agreement between Jiangsu Ever-Glory International Group Corporation. and Bank of  Nanjing Co. Ltd. and Security Agreement between  Goldenway Nanjing Garment Co., Ltd. and Bank of  Nanjing Co. Ltd. dated August 2, 2010, each attached hereto as Exhibit 10.1, 10.2 and 10.3 respectively.

ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.

See "Item 1.01. Entry into a Material Definitive Agreement," which is incorporated herein by reference.
 
ITEM 8.01. OTHER EVENTS.

We changed our principle executive offices to Ever-Glory Commercial Center, 509 Chengxin Road, Jiangning Development Zone, Nanjing, Jiangsu Province, Peoples Republic of China, effective from August 1, 2010.

ITEM 9.01. EXHIBITS.
  
10.1
Revolving Line of Credit Agreement between Goldenway Nanjing Garment Co., Ltd, and Bank of  Nanjing Co. Ltd. dated August 2, 2010;
10.2
Guaranty Agreement between Jiangsu Ever-Glory International Group Corporation. and  Bank of  Nanjing Co. Ltd .dated August 2, 2010;
10.3
Mortgage Agreement between Goldenway Nanjing Garment Co., Ltd. and Bank of Nanjing Co. Ltd. dated August 2, 2010.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.

Not applicable.

(b) PRO FORMA FINANCIAL INFORMATION.

Not applicable.

(c) SHELL COMPANY TRANSACTIONS

Not Applicable

(d) EXHIBITS.

 

 

SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
EVER-GLORY INTERNATIONAL GROUP, INC.
     
Date: August 4, 2010
 
By:
/s/ Edward Yihua Kang
 
 
Edward Yihua Kang
 
Chief Executive Officer
 
 

 

INDEX TO EXHIBITS

Exhibit
Number
 
Description
10.1
 
Revolving Line of Credit Agreement between Goldenway Nanjing Garment Co., Ltd, and Bank of  Nanjing Co. Ltd. dated August 2, 2010;
10.2
 
Guaranty Agreement between Jiangsu Ever-Glory International Group Corporation. and  Bank of  Nanjing Co. Ltd .dated August 2, 2010;
10.3
 
Mortgage Agreement between Goldenway Nanjing Garment Co., Ltd. and Bank of Nanjing Co. Ltd. dated August 2, 2010.
 
 

 

Exhibit 10.1
 
A04
 
Contract of Maximum Amount of Claim
 
No. A04000010070700005

Party A: Bank of Nanjing Co., Ltd.
Party B: Golden Way Nanjing Garment Co., Ltd.

In order to ensure Party A has its claim paid by Party B to the maximum amount, and to clarify the domain of credit of the guaranty of maximum amount, 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  Definitions and Explanations

1.1
Maximum Amount of Claim referred to in the Contract is the maximum amount of the claims (including but not limited to such on-or-off balance sheet businesses as a loan, a commitment of loan, an acceptance, a discount cash, 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.) that will be determinated in succession during a given term (i.e. Claim-determinating Term). It is the summation of the balances of a credit Party A grants Party B during a given term, including the following two portions of undue balances of claim and due but unpaid balances of claim:
(1)
Undue balance is the summation of all the claim balances to be paid but not paid because the term of debt-paying has not expired;
(2)
Due but unpaid balance is the summation of all the claim balances not paid by Party B despite of the expiration of the debt-paying term.
The above-mentioned Maximum Amount of Claim does not include a full amount pledge provided by a deposit certificate, national debt, guarantee deposit, Golden Plum Blossom financing product, or a full amount irrevocable guaranty of joint and several liability provided by a financial organization recognized by Party A, or a full amount policy-based credit insurance provided by China Export & Credit Insurance Corporation, or the credit amount guaranteed by other measures which are capable of risk compensation to the full amount and are recognized by Party A.
1.2
Claim-determinating Term in the Contract is the period of time when claims occur. The claim of a guaranty of maximum amount is determinated when this Term expires.

Article 2  The Maximum Amount of Claim and the Claim-determinating Term

The Maximum Amount of Claim under the Contract is RMB50,000,000.00, said Fifty Million RMB Yuan. The Claim-determinating Term is from July 6, 2010 to July 6, 2012.

 
 

 

During the above-mentioned period of Term, the summation of the credit balances granted to Party B by Party A shall not exceed the Maximum Amount of Claim. When some claims are repaid, Party B may apply for the re-use of the repaid portion.

Article 3  The Occurrence of Claim

The above-mentioned Maximum Amount of Claim does not mean a public granting of credit by Party A to Party B, and does not constitute any commitment of Party A for Party B.
During the Claim-determinating Term and within the Maximum Amount of Claim, Party B applies for specific businesses amount by amount based on its fund shortage, and only can use the capital after Party A has audited, ratified, and agreed to its usage. The beginning date of such a business shall be within the Claim-determinating Term, but the ending date of such a business shall or shall not be within this Term depending on the specific business contracts, agreements or the applications related to the business. These specific business contracts, agreements or the applications related to the business are all the legal part of the Contract.

Article 4  The Guaranty of Maximum Amount

4.1
To ensure that Party B makes the repayment of the claims occurred in succession during the Claim-determinating Term, one or more forms of guaranty are provided to Party A by the following sureties:
(1)
Jiangsu Ever-Glory International Group Corporation provides the guaranties of suretyship of maximum amount, and concludes with Party A related Contracts of Suretyship of Maximum Amount at the time when the Contract takes effect.
(2)
Golden Way Nanjing Garment Co., Ltd. provides a pledge guarantee of maximum amount, and concludes with Party A a related Contract of Pledge of Maximum Amount at the time when the Contract takes effect.
(3)
/ provides the pledge of rights guarantee of maximum amount, and concludes with Party A a related Contract of Pledge of Rights of Maximum Amount at the time when the Contract takes effect.
4.2
For any change to the guaranty under the Contract which went against the claim of Party A, Party B, by notification of Party A, shall provide further guaranty recognized by Party A as required.

Article 5  Remedy for Breach of the Contract

In case of any violation by Party B of laws, regulations, rules, etc. or any stipulations of the Contract, Party A is entitled to execute one or more of the following rights:
(1)
to demand Party B rectify its violation within a definite time;
(2)
to demand Party B provide further guaranty recognized by Party A;

 
 

 

(3)
to demand Party B takes the default liability, and compensate all loss sustained by the Party A and bear all charges and expenditures made by the Party A (including but not limited to a retaining fee, any legal cost, arbitration charge, appraisal charge, damage provention, enforcement cost, notarization fee, assessment fee, auction cost) ;
(4)
to execute other rights provided by laws, rules, regulations, or stipulations of the Contract.

Article 6  Applicable Laws and Settlement of Disputes

6.1
The Contract is concluded in accordance with the laws of People’s Republic of China, which are applicable to the Contract.
6.2
Any dispute occurred in the course of the execution of the Contract shall be settled through negotiations. In case of no settlement is reached, Type 1 shall be chosen from the following settling manners:
(Type 1) Bring a lawsuit to the People’s Court at the locality of Party A.
(Type 2)
Apply to / 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 executed or fulfilled.

Article 7  Effectiveness, Alteration and Termination of the Contract

7.1
The Contract shall enter into effect on the day when it is signed by or sealed with the name stamp of the legal representative, principle, or authorized 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 authorized representative of Party B and sealed with the Corporate Seal or Special Contract Seal of Party B
7.2
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 termination, 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 8  Other Stipulations

/

Article 9  Supplementary Provisions

9.1
The Contract is made in three copies, one is held by Party B, and one is held by Party A, and each copy has the equal legal force.

 
 

 

9.2
Any matters not covered by the Contract shall be handled in compliance with relevant national laws, regulations and rules.

Article 10  Declaration Provisions

10.1
In signing and exercising the Contract, both parties have been approved by law or have been given the approval by the competent decision-maker stipulated in their respective articles of corporation or by government supervision department, and obtained the necessary, sufficient and legal authorization.
10.2
In signing the Contract, the 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.
10.3
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 neither mistake nor omission of facts which disagrees with the truth.
10.4
Party B has read all the content of the Contract. As requested by Party B, Party A has made relevant 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.

Party A:
Party B:
Bank of Nanjing Co., ltd.
Golden Way Nanjing Garment Co., Ltd.
(Seal)
(Seal)
   
Legal Representative
Legal Representative
(Principle or Authorized Agent):
(or Authorized Agent):
(Signature)
(Signature)
Lin Fuzhi (name seal)
Sun Jiajun (name seal)
   
Address:
Address:
Post Code:
Post Code:
Contact No.:
Contact No.:
Date of Signing: 2010/8/2
Date of Signing: 2010/8/2

 
 

 
 

Exhibit 10.2
Ec1
Contract of Guaranty of Maximum Amount
No. Ec1000010070700002

Creditor (Party A): 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 Claim numbered A04 000010070700005, which was concluded between Party A and Golden Way 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 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  Statement and Assurance of Party B

1.1
Party B has the principal qualification of a surety, and is capable to provide with a guaranty of suertyship, according to the laws of People’s Republic of China.
1.2
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.
1.3
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 of guaranty absolutely out of his own will while all of his declaration of will under the Contract is true.
1.4
If being a natural person, Party B confirms and assures that before providing the guaranty of 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 Claim

2.1
The Principal Claim secured under the Contract is the full value of the Principal Claim, namely RMB50,000,000.00, said Fifty Million RMB Yuan, formed by specific granting of credit (including but not limited to such on-or-off balance sheet businesses as a loan, a commitment of loan, an acceptance, a discount cash, 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 6, 2010 to July 6, 2012, on the basis of the Principal Contract.

 
 

 

2.2
Party B provides a guaranty of maximum amount for the above-mentioned Principal Claim, 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  Mode of Guaranty

Party B provides a guaranty of joint and several liabilities. Where the debtor either wholly or partly defaults when the time limit for his performance of the obligation of a single debt under the Principal Contract 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 Claim and the interest thereof (including compound interest and default interest, similarly hereinafter), default fine, compensation for damage and expenses of Party A for enforcing the claim (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 the same below).
Party B confirms and accepts out of his will, that when the Debtor fails to perform his liability 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 claim 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 or terminates this agreement 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 or termination date of the Principal Contract.

 
 

 

Article 6  Conclusion and Alteration of the Principal Contract Guaranteed

Particulars related to specific amount, term, interest, usage, etc. of the Principal Claim, shall be stipulated by Party A and the Debtor in the Principal Contract.
Party B confirms that, except for the increase of line of credit and the extension of term of guaranty, the conclusion of the Principal Contract or the alteration of the Principal Contract through agreement by Party A and the Debtor, are deemed as being agreed in advance by Party B, and need not to be notified to Party B, while the guaranty liability on the part of Party B shall not be alleviated.
Where Party A and the Debtor alter the interest rates in the light of stipulations of the Principal Contract, such alteration shall also be deemed as being agreed in advance by Party B, and needs not to be notified to Party B, while Party B is still obliged to undertake the guaranty liability.

Article 7  Independent Effectiveness of the Contract

The effectiveness of the Contract is independent of the Principal Contract, complete or incomplete invalidity of the Principal Contract or its likely revocation or termination has no impact on the Contract’s effectiveness. Where it is confirmed that the Principal Contract was invalid or that it was revoked or it was terminated, Party B undertakes further guaranty of joint and several liabilities 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 Enforcement of Guaranty Liability

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:

9.4.1
Party B shall notify Party A in writing within 3 days of the occurring of the following events or of the founding of possibility of such occurrence on the side of Party B:
9.4.1.1
Party B meets with grave financial losses, which affects or possibly affects its repaying ability;
9.4.1.2
Party B involves or will involve in major lawsuits, arbitrations or other legal disputes;
9.4.1.3
Any change in Party B’s name, legal representative (responsible officer), address, telephone numbers, etc.;
9.4.1.4
Other events occurred on the side of Party B which affect or may affect its repaying ability.

9.4.2
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:
9.4.2.1
Separation, transformation, merger, termination, joint venture, etc. on the side of Party B;
9.4.2.2 
Changes in the business scope or of the registered capital of Party B;
9.4.2.3 
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 of the 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:
9.5.1
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;
9.5.2 
Party B changed his occupation;
9.5.3
Party B meets with such events as unemployment, divorce, or serious diseases;
9.5.4
Party B meets with other events which cause Party B to lose or possibly lose his capability of guaranty, or impact 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 assumes 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 for the unsatisfied claim of Party A under the Contract.
10.2
Party A has the right to supervise the status of fund, properties, economy, etc. of Party B, and has the right to demand Party B to present related documentation as it is.
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 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

If the Party B violates any law, rule, regulation or any term stipulated in this contract, the Party A has the right to demand the Party B rectify such violation within a limited period of time, further provide relevant guarantee, compensate the loss sustained by the Party A and bear all charges and expenditures made by the Party A (including but not limited to a retaining fee, any legal cost, arbitration charge, appraisal charge, damage provention, enforcement cost, notarization fee, assessment fee, auction cost) for the purpose of realizing a guaranty; and the Party A also has the right to take back the creditor's rights under the terms of the Main Contract, and demand the Party B to assume the responsibility of guarnaty in an immediate way.

Article 12  Applicable Laws and Settlement of Disputes

12.1
The Contract is concluded in accordance to the laws of People’s Republic of China, which are applicable to the Contract.
12.2
Any dispute occurred in the course of the execution of the Contract shall be settled through negotiations. In case of no settlement is reached, Type 1 shall be chosen from the following settling manners:
(Type 1) Bring a lawsuit to the People’s Court at the locality of Party A.
(Type 2)
Apply to / 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 it is 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.
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 termination, 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. If the Principal Contract adopts floating interest rate, Party B undertakes, out of his will, the guaranty liability increased because of such fluctuations.
14.2
All attachment to the Contract, and all the legal documents related to the execution of the Contract are the component part of the Contract, and have equal legal force as the Contract.
14.3 /

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 approved by law or have been given the approval by the competent decision-maker stipulated in their respective articles of corporation or by government supervision department, and obtained the necessary, sufficient and legal authorization.

 
 

 

16.2
In signing the Contract, the 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 neither mistake nor omission of facts which disagrees with the truth.
16.4
Party B has read all the content of the Contract. As requested by Party B, Party A has made relevant 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.

   
Party B
Party A
 
Legal Person or other 
Organization
 
Natural Person
(Void)
         
Bank of Nanjing Co., Ltd. (Seal)
 
Jiangsu Ever-Glory International Group Corporation (Seal)
 
Signature:
(or Authorized Agent):
         
Legal Representative (Principle or Authorize d Agent):
 
Legal Representative  or Authorized Agent):
 
Kind of Identity Document:
(Signature)
 
(Name Seal)
 
No. of Identity Document:
Lin Fuzhi (name seal)
 
Wei Ruqin (name seal)
   
         
Address:
 
Address:
 
Address:
Post Code:
 
Post Code:
 
Post Code:
Contact No.:
 
Contact No.:
 
Contact No.:
Date of Signing: 2010/8/2
 
Date of Signing: 2010/8/2
 
Date of Signing:
 
 
 

 

Exhibit 10.3

Contract of Mortgage of Maximum Amount
 
No. Ec2000010070700005

Mortgagee (Party A): Bank of Nanjing Co., Ltd.
Mortgagor (Party B): Golden Way Nanjing Garment Co., Ltd

In order to ensure the performance of the Contract of Maximum Amount of Claim numbered A04000010070700005, which was concluded between Party A and Golden Way 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 mortgage 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  Statement and Assurance of Party B

1-1 Party B is the absolute, effective and legal owner, or someone who has the right to dispose of , the mortgaged property, and there is no dispute about the ownership or the right of disposition of the mortgaged property.

1-2 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 of mortgage absolutely out of his own will.

1-3 All the declaration of intention by Party B under the Contract is true, and Party B has made a sufficient and reasonable written explanation on the flaws of the mortgaged property, and the explanation has been recognized and signed for by Party A.

1-4 The mortgaged property under the Contract may be used to provide a guaranty of mortgage in conformity with legal provisions, and has neither been subject to a close-down, seizure, supervision or any other legal enforcement measures, nor been publicly listed as within the scope of acquisition or removal and rebuilding.

1-5 Where all or a part of the mortgaged property under the Contract is Party B assures to notify the lessee of the mortgage arrangement, and notify Party A in writing of the situation about the leasing, in which case a written document should have been recognized and signed for by Party A.

1-6 If being a natural person, Party B confirms and assures that before the guaranty of mortgage under the Contract was provided, he has made proper arrangement on the bare necessities of life for himself and his family dependents, and the disposition of the mortgaged property under the Contract by Party A in satisfying his claim shall not have any impact on the normal lives of Party B and his family members.

 

 
 
Article 2  The Principal Claim

2-1 The Principal Claim secured under the Contract is the full value of the Principal Claim, namely RMB50,000,000.00, said fifty 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 6, 2010 to July 6, 2012, on the basis of the Principal Contract.

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

Article 3  The Mortgaged Property

The particulars of the mortgaged property are seen in the attached List of Mortgaged Property. Party B provides a guaranty of mortgage of maximum amount with the property listed in the List of Mortgaged Property. It has been confirmed by both Party A and Party B that the value assumption on the mortgaged property in the List, neither is the basis on which the mortgaged property is evaluated when it is disposed by Party A according to the stipulations of the Contract, nor makes up a limit to any extent against Party A in enforcing the mortgage.

Article 4  The Scope of the Guaranty of Mortgage

The scope of the guaranty of mortgage of maximum amount provided by Party B includes the Principal Claim and the interest thereof (including compound interest and default interest, and same in the following text), default fine, compensation for damage and expenses for enforcing the claim (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 claim of Party A under the Principal Contract is benefited with other guaranty (including but not limited to a guaranty with real rights).

Article 5  Conclusion and Alteration of the Principal Contract Guaranteed

Particulars related to specific amount, term, interest, usage, etc. of the Principal Claim, 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 suretyship liability on the part of Party B shall not be alleviated.

 

 

Where the interest rates are altered in the light of stipulations of the Principal Contract during the time when the mortgage right exists, 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 suretyship liability.

Article 6  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 suretyship of joint and several liability for the Debtor’s debts coming into being because he surrendered properties or compensated losses.
Party B’s suretyship liability under the Contract shall not change to any extent because of merger, separation, changes of shareholdings, the lapse of capacity of civil acts, disappearances, death or the declaration of disappearance or death of the Debtor, or any other causes.

Article 7  Possession of the Mortgaged Property and Its Document of Title

During the period of the existence of the mortgage right, the mortgaged property is possessed by Party B. Party B shall take good care of the mortgaged property and take responsibilities to repair and maintain the mortgaged property to keep it in good condition, and shall be ready to accept Party A’s inspection at any moment.
During the period of existence of the mortgage right, if any situation occurred causing any damage or loss to, or any decrease in the value of, the mortgaged property, Party B shall notify Party A of which instantly, and either restore the original value of the mortgaged property or provided further security recognized by Party A within 10 days. All the expenses for the restoration of the original value of the mortgaged property or the provision of the appended security are for the account of Party B.
During the period of the existence of the mortgage right, other ownership certificates of the mortgaged property are possessed by Party A.

Article 8  Registration of Mortgaged Property

The mortgaged property under the Contract shall be registered, while Party B shall actively cooperate with Party A to have the mortgaged property registered with the government department responsible for the registration, supported by the Contract and other relevant documents, within 3 days after the date of the conclusion of the Contract.

 

 

Article 9  Insurance of the Mortgaged Property

During the period of the existence of the mortgage right, Party B shall effect a property insurance for the mortgaged property according to laws and in compliance with the type, insured amount, and coverage of insurance assigned by Party A. The insurance period shall not fall short of the term of the credit granted plus 6 months starting from the expiration date of this term, and the insured amount shall not be lower than the principal claim. Party B shall not revoke or cut short the insurance on any excuse during the insurance period. If Party B fails to effect the insurance as assigned by Party A, and in case of an interruption, revocation or expiration of the insurance, Party A has the right to complete the insurance formalities instead, while all expenses occurred wherefrom shall be for Party B’s account and be additionally included in the Scope of the Guaranty of Mortgage. The original insurance policy is held by Party A, and it shall be stated in the insurance policy that Party A is the first beneficiary of the insurance of the mortgaged property, and Party A has the right to satisfy his claim directly with the insurance indemnity or satisfy all of his claims under the Principal Contract beforehand.

Article 10  Third Party Damage

If the conduct of a third party causes a decrease in the value of the mortgaged property, the indemnification of the loss shall be deposited in a bank account assigned by Party A. Party B agrees that Party A has the right to select whatever mode listed below to manage this indemnification of the loss, and Party B shall cooperate with Party A with the formalities:
(1)
Discharge or discharge ahead of time all or a part of the debt under the Principal Contract.
(2)
Transfer it into a fixed deposit, and use the deposit receipt to provide a guaranty of pledge on the debt under the Principal Contract, while conclude a relevant pledge contract with Party A.
(3)
Transfer it into a security to provide a guaranty of pledge on the debt under the Principal Contract, and conclude a relevant pledge contract with Party A.
(4)
Use it to renovate the mortgaged property by written agreement of Party A to restore the value of the mortgaged property.
(5)
After providing further guaranty in conformity of the requirement of Party A, Party B may dispose the indemnification at his will.
If the conduct of a third party causes the value of the mortgaged property to become insufficient to discharge all the debt under the Principal Contract, Party B shall provide a further guaranty recognized by Party A, while the remaining value of the mortgaged property is still used for the guaranty of the claim.

Article 11  The Disposal of the Mortgaged Property

Without a written consent of Party A, Party B shall not denote, transfer, swap, repeatedly mortgage, move the mortgaged property under the Contract, or dispose of it in any other manners, and any such disposal is invalid.
Where Party B disposes of the mortgaged property under the Contract with a written consent of Party A, the proceeds obtained by the disposal shall be deposited in an account assigned by Party A. Party B agrees that Party A has the right to select whatever mode listed below to manage the proceeds, and Party B shall cooperate with Party A with the formalities:
(1)
Discharge or discharge ahead of time all or a part of the debt under the Principal Contract.
(2)
Transfer it into a fixed deposit, and use the deposit receipt to provide a guaranty of pledge on the debt under the Principal Contract, while conclude a relevant pledge contract with Party A.

 

 

(3)
Transfer it into a security to provide a guaranty of pledge on the debt under the Principal Contract, and conclude a relevant pledge contract with Party A.
(4)
After providing further guaranty in conformity of the requirement of Party A, Party B may dispose the indemnification at his will.
Under the situations of requisition of removal and relocation, the proceeds obtained by the disposal shall be managed according to foregoing terms.

Article 12  Advanced Enforcement of the Right of Creditor

Where Party A proclaims an early maturity of the liability of the debtor under the Principal Contract according to laws, regulations, rules etc. or the stipulations of the Principal Contract, Party A has the right to dispose of the mortgaged property according to laws, and has the priority to satisfy his claim with the proceeds obtained from the disposal.

Article 13  Rights and Obligations of Party B

13-1 Where the mortgage right suffers or may suffer an infringement by a third party, Party B is obliged to notify Party A and to take necessary measures to avoid such infringement.

13-2 Where the liability under the Principal Contract is in a foreign currency, Party B shall undertake the suretyship 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 suretyship 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 suretyship liability is performed.

13-3 Party B shall pay the fees or expenses under the Contract for evaluation, notarization, insurance, registration, transference, appraisal, safekeeping, lawsuit, arbitration, enforcement, auction, attorney service etc. in full amount and in a timely manner.

13-4 Where a decrease of value, a destruction or a loss happens to the mortgaged property, or its physical form changes, or its ownership is disputed, Party B shall notify Party A in writing within 3 days after the above-mentioned occurrence or possible occurrence, and shall provide Party A further guaranty recognized by Party A.

13-5 Party B shall not refuse to fulfill the obligations under the Contract on the excuse of any dispute with a third party.

13-6 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 14  Rights ad Obligations of Party A

14-1 Party A has the right to directly demand Party B to undertake the mortgage guaranty liability under the Contract for the unsatisfied claim of Party A.

14-2 Upon enforcement of Party A of his mortgage right, as required by Party B, Party A may provide Party B the relevant evidence of Party B’s performance of his guaranty liability, with the exception of Party B being the debtor himself.

14-3 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 15  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, to compensate for the loss, or whatever.

Article 16  Applicable Laws and Settlement of Disputes

16-1 The Contract is concluded in accordance to the Laws of the People’s Republic of China, which are applicable to the Contract.

16-2 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 17  Effectiveness, Alteration and Termination of the Contract

17-1 Party A and Party B negotiated and confirm by their own will that the Contract enters into effect when satisfying the following conditions at the same time:
(1)
Where Party B is a legal person or any organization, the Contract shall be 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 be 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.

 

 

(2)
The registration has been completed of the mortgaged property listed in the List of the Mortgaged Property.

17-2 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 18  Other Stipulations

18-1 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.

18-2 Failing to perform his obligation under the Contract, Party B is willing to be subject to force implement.

18-3 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.

18-4 (Void)

Article 19  Supplementary Provisions

19-1 The Contract is made in three copies, one is held by Party B, one is held by Party A, and one is held by the registration department of the mortgaged property, while each copy has the equal legal force.

19-2 Any matters not covered by the Contract shall be handled in compliance with relevant national laws, regulations and rules.

Article 20  Declaration Provisions

20-1 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.

20-2 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.

20-3 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.

 

 

20-4 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.

20-5 Party A is a legally established bank, and is qualified to operate the business under the Contract.

Attachment: List of Mortgaged Property

Building Property Mortgage
Location
509 Chengxin Thoroughfare, Jiangning Development Zone, Nanjing, China
Plot No.
21206143019
Mortgaged
Area
2049.74m 2
Ownership
Certificate No.
江宁房权证东山字
J00032215
Usage
 
In Set
or Not
In Set
Land Use Right
Certificate No.
宁江国用( 2006 )第
06840
Appraised Value
4,389,200 RMB
Location
509 Chengxin Thoroughfare, Jiangning Development Zone, Nanjing, China
Land No.
21206143019
Mortgaged
Area
6669.14m 2
Ownership
Certificate No.
江宁房权证东山字
J00032216
Usage
 
In Set
or Not
In Set
Land Use Right
Certificate No.
宁江国用( 2006 )第
06840
Appraised Value
14,646,900RMB

Location
509 Chengxin Thoroughfare, Jiangning Development Zone, Nanjing, China
Plot No.
21206143019
Mortgaged
Area
2049.74m 2
Ownership
Certificate No.
江宁房权证东山字
J00032217
Usage
 
In Set
or Not
In Set
Land Use Right
Certificate No.
宁江国用( 2006 )第
06840
Appraised Value
4,389,200 RMB
 
 

 

Location
509 Chengxin Thoroughfare, Jiangning Development Zone, Nanjing, China
Land No.
21206143019
Mortgaged
Area
2474.12m 2
Ownership
Certificate No.
江宁房权证东山字第 J00032218
Usage
 
In Set
or Not
In Set
Land Use Right
Certificate No.
宁江国用( 2006 )第 06840
Appraised Value
5, 976,800RMB

Location
509 Chengxin Thoroughfare, Jiangning Development Zone, Nanjing, China
Plot No.
21206143019
Mortgaged
Area
6669.14m 2
Ownership
Certificate No.
江宁房权证东山字第 J00032219
Usage
 
In Set
or Not
In Set
Land Use Right
Certificate No.
宁江国用( 2006 )第 06840
Appraised Value
14,646,900RMB
Location
509 Chengxin Thoroughfare, Jiangning Development Zone, Nanjing, China
Land No.
21206143019
Mortgaged
Area
865.32m 2
Ownership
Certificate No.
江宁房权证东山字第 J00032220
Usage
 
In Set
or Not
In Set
Land Use Right
Certificate No.
宁江国用( 2006 )第 06840
Appraised Value
1,900,400RMB

Location
509 Chengxin Thoroughfare, Jiangning Development Zone, Nanjing, China
Plot No.
21206143019
Mortgaged
Area
2232.36m 2
Ownership
Certificate No.
江宁房权证东山字第 JN00036329
Usage
 
In Set
or Not
In Set
Land Use Right
Certificate No.
宁江国用( 2006 )第 06840
Appraised Value
4,902,700RMB
 
 

 

Location
509 Chengxin Thoroughfare, Jiangning Development Zone, Nanjing, China
Plot No.
21206143019
Mortgaged Area
2600.14m 2
Ownership
Certificate No.
江宁房权证东山字第 JN00036335
Usage
 
In Set
or Not
In Set
Land Use Right
Certificate No.
宁江国用( 2006 )第 06840
Appraised Value
5,710,400RMB
Location
509 Chengxin Thoroughfare, Jiangning Development Zone, Nanjing, China
Plot No.
21206143019
Mortgaged Area
4865.2 m 2
Ownership
Certificate No.
江宁房权证东山字第 JN00120702
Usage
 
In Set
or Not
In Set
Land Use Right
Certificate No.
宁江国用( 2006 )第 06840
Appraised Value
12,554,000RMB
Location
509 Chengxin Thoroughfare, Jiangning Development Zone, Nanjing, China
Plot No.
21206143019
Mortgaged Area
9148.35m 2
Ownership
Certificate No.
江宁房权证东山字第 JN00091775
Usage
 
In Set
or Not
In Set
Land Use Right
Certificate No.
宁江国用( 2006 )第 06840
Appraised Value
20,091,700RMB
Land Use Right Mortgage
Location
509 Chengxin Thoroughfare, Jiangning Development Zone, Nanjing, China
Land No.
 
Map No.
 
Mortgaged
Area
 
Use Right Certificate No.
 
Use Right
Type
 
Appraised
Value
 
Location
 
Land No.
 
Map No.
 
Mortgaged
Area
 
Use Right Certificate No.
 
Use Right
Type
 
Appraised
Value
 
Others
Name
 
Locative
 
Number or Area
 
Term of Usage
 
Appraised Value
 
Ownership Certificate No.
 
 
 

 
 
 
Party B
Party A
Legal Person or other Organization
Natural Person
(Void)
 
Bank of Nanjing Co., ltd.
(Seal)
 
Legal Representative
(Principle) Name Seal:
(Or Authorized Agent):
  Lin Fuzhi (name seal)
Address:
Post Code:
Contact No.:
Date of Signing: 2010/8/2
 
Golden Way
Nanjing Garment Co., Ltd.
(Seal)
 
Legal Representative:
(Principle) Name Seal:
(Or Authorized Agent):
  Sun Jiajun (name seal)
Address:
Post Code:
Contact No.:
Date of Signing: 2010/8/2
 
 
Signature:
(Or Authorized Agent):
 
Kind of Identity Document:
No. of Identity Document:
 
Address:
Post Code:
Contact No.:
Date of Signing: