Exhibit 10.23

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Commercial Banking - GTRF Receivables Finance Division
(CARM 180525, 180124 & CM 180530, 180209)

 

CONFIDENTIAL

 

THE DIRECTORS
TREASURE SUCCESS INTERNATIONAL LIMITED

JERASH GARMENTS AND FASHIONS

Manufacturing company limited

19/F FORD GLORY PLAZA

37-39 WING HONG STREET

CHEUNG SHA WAN

KOWLOON

 

14 June 2018

 

Dear Sirs

 

Offer Letter Invoice Discounting / Factoring Agreement

 

This offer letter supersedes our previous letter of 28 February 2018.

 

With reference to our recent discussions, we are pleased to advise that we have
reviewed and revised the debts purchase services provided to Treasure Success
International Limited (“TSL”) and Jerash Garments And Fashions Manufacturing
Company Limited (“JGL”) (previously TSL only).

 

We offer to continue to provide you with the debt purchase services on the terms
and subject to conditions set out in this letter as well as the Invoice
Discounting / Factoring Agreement among TSL, JGL and us (incorporating, among
other things, our Standard Conditions For Invoice Discounting / Factoring
(“Standard Conditions”) (together constituting the “Invoice Discounting /
Factoring, Agreement”)). These services are subject to review at any time and,
in any event by 1 May 2019.

 

This is the Offer Letter referred to in the Invoice Discounting / Factoring,
Agreement among TSL, JGL and us. An expression used in this letter shall have
the meaning given to it in the Invoice Discounting / Factoring Agreement, such
expression appears there.

 

A.SERVICES OFFERED BY THE BANK

 

·Credit Management - we provide services in respect of the collection or debts
and/or maintenance of a sales ledger in the manner from time to time determined
by the Bank.

 

·Debt shall be purchased on a disclosed basis as set out in Section E below.

 

·Credit Protection - we purchase Credit Protected Debts on a Without Recourse
basis (Note: please refer in the Standard Conditions on the meaning of “Without
Recourse” as used in this Offer Letter).

 

·Finance - we may give you the benefit of Prepayments.

 

The Hongkong and Shanghai Banking Corporation Limited

Commercial Banking Hong Kong

GTRF Receivables Finance Division

9/F, HSBC Building MongKok, 673 Nathan Road, MongKok, Kowloon

Tel: 3941 6211 Fax: 3418 4982 SWIFT; HSBCKIIH

Web: www.hsbc.com.hk

 

 

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TREASURE SUCCESS INTERNATIONAL LIMITED   JERASH GARMENTS AND FASHIONS  
MANUFACTURING COMPANY LIMITED 14 June 2018    

 

B.BASIC TERMS OF -FINANCE SERVICE

 

1.

Funds In Use Limit (FIU Limit): USD12,000,000.- or its equivalent       2.

Discounting Charge (on Funds In Use):

In respect of each day on which the rate for Discounting Charge is to be
determined, such rate to be:-           For HKD Financing: at 1.5% per annum
over 2 months HIBOR (HongKong Interbank Offered Rate) on such day.           For
USD Financing at 1.5% per annum over 2 months LIBOR (London Interbank Offered
Rate) on such day.           For details of benchmark interest rates, please
refer to the attached Appendix.       3.

Prepayment Percentage /Funding Limit:

As specified in a Customer Limit Advice issued in respect of the relevant
Customer.       4. Concentration Percentage: 85%       5. Eligible Debt Grace
Period: Nil

 

C.BASIC TERMS OF CREDIT PROTECTION SERVICE

 

1.

Credit Cover Percentage(s) /Credit Cover Limit(s) /Credit Protection Events:

As specified in a Customer Limit Advice issued in respect of the relevant
Customer.       2. First Loss: As specified in a Customer Limit Advice issued in
respect of the relevant Customer. If no First Loss is specified in the Customer
Limit Advice, the First Loss of such Customer will be “Nil”.       We may in our
own name take out credit insurance and/or appoint Correspondent Factor(s) to
collect payment of the Debts.

 

D.BASIC TERMS APPLICABLE TO ALL SERVICES

 

1. Customers: To be approved by the Bank from time to time and as advised by the
Bank to the Client.       2. Service Charge: 0.35% flat on the face value of the
invoice for each Debt.       3. Maximum Terms of Payment: 90 days unless
otherwise specified in a Customer Limit Advice issued in respect of the relevant
Customer.       4. Maximum Invoicing Period: 30 days after the date of delivery
of the Good unless otherwise specified in a Customer Limit Advice issued in
respect of the relevant Customer.

 

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TREASURE SUCCESS INTERNATIONAL LIMITED   JERASH GARMENTS AND FASHIONS  
MANUFACTURING COMPANY LIMITED 14 June 2018    

 

E.NOTICE OF ASSIGnmenT FOR DEBTS AND COLLECTION

 

1.The Debts of all Customers will he purchased on a disclosed basis (that is,
giving the notices of assignment for the Debts) except as otherwise agreed by us
in writing.

 

2.The Debts shall be collected and paid into the designated account maintained
by you with us and held on trust for us. However, we have the overriding right
at any time to direct any Debt to be paid directly to us.

 

F.DOCUMENTS REQUIRED

 

1.TSL, and JGL shall provide us with the following documents in each case in the
form and substance satisfactory to us;-

 

(a)the Invoice Discounting Factoring Agreement made between JGL and us;

 

(b)a certified extract of your board resolutions approving and authorizing the
execution, delivery and performance of this letter mid the Invoice Discounting /
Factoring Agreement and designating the Authorized Peron(s) in connection with
the Invoice Discounting / Factoring Agreement;

 

(c)all security documents referred to in Section G below; [and]

 

(d)such other documents, terms or evidence that we may require from time to
time.

 

No request For any Prepayment may be submitted prior to our receipt of the above
documents.

 

2.The following supporting documents ate required in relation to each Debt:-

 

(a)A copy of the confirmed purchase order (if applicable);

 

(b)A copy of the invoice endorsed with and/or accompanied by a note in the form
approved by us stating our interest as assignee; and

 

(c)Evidence of Delivery of the Goods satisfactory to us.

 

3.If we agree, you may provide us with the lists of the Debts (which shall
include the names of Customers, invoices numbers, invoices amounts, due dates or
the Debts as well is such other information as required by us) in lieu of the
copies of the invoices in respect of the Debts. Notwithstanding this, you shall
at any time, upon request, by us, promptly provide us with the copies of the
invoices evidencing the Debts.

 

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TREASURE SUCCESS INTERNATIONAL LIMITED   JERASH GARMENTS AND FASHIONS  
MANUFACTURING COMPANY LIMITED 14 June 2018    

 

G.SECURITY AND OTHER DOCUMENTATION

 

As security for your obligations and liabilities to us under, inter alia, this
letter and the Invoice Discounting/ Factoring Agreement, we are holding the
following:-

 

1.The Invoice Discounting / Factoring Agreement executed by TSL it supported by
Board Minutes both dated 21 August 2017.

 

All security document(s) and guarantee(s), if any, given in our favour for
securing and/or guaranteeing your obligations and liabilities to us (including,
without limitation, the relevant security document(s) and guarantee(s), if any,
referred to in any banking facility letter(s) issued by us to you), will
continue to apply in full force and effect and to the extent applicable cover
debts purchase services extended to you.

 

In addition, we will require to hold:-

 

2.A Guarantee (unlimited amount) from TSL together with a Board Resolution in
substantially the form of that enclosed with this facility letter. We enclose
our standard form of Guarantee for your completion and return securing the
obligations and liabilities of JGL which will be held by us to secure both
general banking facilities and debts purchase services extended to JGL.

 

3.A Guarantee (unlimited amount) from Jerash Holdings (US) Inc., together with a
Board Resolution in substantially the form of. that unclosed with this facility
letter. We enclose our standard form of Guarantee for your completion and return
securing the obligations and liabilities of JGL which will be held by us to
secure both general banking facilities and debts purchase services extended to
JGL.

 

The authorised signatories of Jerash Holdings (US) Inc. should be duly verified
by their bankers. Please also let the Bank have a certified copy of Certificate
of Incorporation, Articles of Association and List of current directors of
Jerash Holdings (US) Inc., for the Bank’s records.

 

As Jerash Holdings (US) Inc. is incorporated in United States of America, the
Bank also requires a Legal Opinion (in form and substance satisfactory to the
Bank) from qualified lawyer in the jurisdiction of the Company’s incorporation,
confirming the corporate capacity and the authority of the Company to enter into
the security, and also confirming that all necessary documents have been or will
be property executed. The Legal Opinion, together with the properly executed
security documents, should be forwarded to the Bank directly by the solicitor.

 

Upon completion of the above security documentation, we shall release the
following documents. Security documents as stated as below will be released
after a retention period considered by us to be reasonably appropriate, which is
normally 6 months:-

 

4.The Guarantee (unlimited amount) dated 7 September 2017 from Mr Choi Lin Hung
and Mr Ng Lun.

 

5.A charge over your deposits for USD3,000,000.- placed with us together with a
“Charge over Securities and Deposits (Unlimited Amount”) both dated 27 July
2017. The Charge over Securities and Deposits, (Unlimited Amount) is required to
be discharged at the Companies Registry. Relative filing fees will be for your
account.

 

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TREASURE SUCCESS INTERNATIONAL LIMITED   JERASH GARMENTS AND FASHIONS  
MANUFACTURING COMPANY LIMITED 14 June 2018    

 

Please note that all costs and expenses (including legal fees) incurred by us in
connection with the extension of these facilities and any matters arising
therefrom are to be reimbursed by you on demand.

 

H.SPECIAL TERMS

 

1.CONFIRMATION OF SURETY(IES)

 

Jerash Holdings (US) Inc, (the “Surety(ies)”) confirm(s) by countersigning this
letter that their guarantee and security remain in full force and effect and
continuo to guarantee or secure the indebtedness referred to in this letter.
Furthermore, such liability under the guarantee and security will not be
discharged or. affected by the Bank extending, increasing, renewing, or
otherwise varying the indebtedness referred to in this letter or by any other
act, omission or circumstance. which might discharge the Surety(ies) to any
extent.

 

2.Section 83 of the Banking Ordinance and the related regulations in Hong Kong
have imposed on the Bank certain limitations on advances to persons related to
HSBC Group. In accepting this Letter, you should, to the best of your knowledge,
advise the Bank whether you are in any way related or connected to the HSBC
Group. In the absence of such advice, the Bank will assume that you are not so
related or connected. The Bank would also ask that if you become aware that you
become so related or connected in future, that you immediately advises the Bank
in writing. You may refer to the reference page for information on whether you
may be considered related or connected to the HSBC Group.

 

3.Unless expressed in writing from you to the contrary, we may provide any
information relating to any of your accounts with us and any facilities we may
Provide to you from time to time or their conduct or any other information
concerning your relationship with us to any other company or office which at the
relevant time belongs to or is part of the HSBC Group.

 

4.Please note that our standard service charges are stipulated in the Bank’s
Tariff which is accessible at
https://www.commercial.hsbc.com.hk/1/2/commercial/customer-service/tariffs. We
will provide you with a hard copy of the Tarff at your Request.

 

5.This letter is governed by and construed in accordance with the laws of Hong
Kong.

 

6.No person other than you and us will have any right under the Contracts
(Rights of Third Parties) Ordinance to enforce or enjoy the benefit of any of
the provisions of this letter.

 

7.As JGL is incorporated in Jordan, we also require a Legal Opinion from a
qualified lawyer practising in the jurisdiction of the Company’s incorporation,
confirming the authority of the Company to enter into facility(ies), and also
confirming that all necessary documents have been or will be properly executed.
The Legal Opinion together with the properly executed by security documents
should be forwarded to us directly by such lawyer.

 

8.Tax Gross Up

 

Payments by you shall be made to the Bank without any set-off, counter-claim,
withholding or condition of any kind except that if you are compelled by law to
make such withholding, the sum payable by you to the Bank shall be increased so
that the amount actually received by the Bank is the amount it would have
received if there had been no withholding.

 

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TREASURE SUCCESS INTERNATIONAL LIMITED   JERASH GARMENTS AND FASHIONS  
MANUFACTURING COMPANY LIMITED 14 June 2018    

 

9.In the event from time to time that the actual amount of Prepayment (as
defined in the Invoice Discounting/ Factoring Agreement) exceeds the
Availability, we may, at our sole and absolute discretion, debit such excess
amount from your account(s) maintained with us.

 

10.The first on-site audit shall be conducted in 6 months from the commencement
of the facility. (To be deleted)

 

11.70% (previously 50%) of payment and/or prepayment or the Purchase Price under
or pursuant to the invoice Discounting / Factoring Agreement shall, at our
discretion, first be applied to pay and settle all sums of money, obligations
and liabilities due or owing by you to the Bank due within 7 days in respect of
any account whatsoever between you and the Bank (including, but without
limitation, all moneys and liabilities owing by you in respect of the Invoice
Discounting / Factoring Agreement, all general banking facilities and any other
advances and Facilities granted by the Bank to you and all interest thereon).

 

12.Buyers Consent is obtained to establish change orbiting; to your company.

 

13.Buyers consent should he obtained for assignment of receivable.

 

14.The initial Prepayment Shall be subject to the Customer(s) confirming the
Notified Debts existing on the Commencement Date. (For JGL Only) [New]

 

15.Audit for JGL, to be conducted before the commencement of the Facility. [New]

 

16.To obtain a legal opinion covering 1) Jordan law legal opinion on
enforceability of the various factoring documents; 2) Jordan law legal opinion
on capacity and authority in relation to various factoring documents to be
entered into with JGL. [New]

 

17.Any Amounts payable to the bank are exclusive of any sales tax, or similar,
and that where such tax applies the borrowers (or Sellers) must pay such amount
to the tax authority. [New]

 

18.The Borrowers (or Sellers) and the Guarantors undertaking to indemnify the
Bank for foreign taxes in the event that the borrowers (or the Sellers) fail to
pay or deduct tax and the tax authority makes a claim against the Bank. [New]

 

19.The Borrowers (or Sellers) give the Bank the right to ask for evidence of
payment or relevant withholding / sales taxes at anytime. [New]

 

20.Broaden the clause 4.7 of the conditions to encompass all stamp duty, not
just amounts demanded by the Bank. [New]

 

21.TSL and JGL will be required for so long as these facilities are available to
you to comply with the following undertaking(s)covenant(s). Your compliance or
otherwise with the following undertaking(s) / covenant(s) will not in any way
prejudice or affect our right to suspend, withdraw or make demand in respect of
the whole or any part of the facilities made available to you at any time. By
signing this letter, you expressly acknowledge that we may suspend, withdraw or
make demand for repayment of the whole or any part of the facilities at any time
notwithstanding the fact that the following undertaking(s)/covenant(s)are
included in this letter and whether or not you are in breach of any such
undertaking(s)/covenant(s).

 

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TREASURE SUCCESS INTERNATIONAL LIMITED   JERASH GARMENTS AND FASHIONS  
MANUFACTURING COMPANY LIMITED 14 June 2018    

 

The borrower, TSL, hereby undertakes that Mr Choi Lin Hung and Mr Ng Tsze Lun
undertake should maintain no less than 40% of shareholding of Treasure Success
International Limited.

 

The Borrower, JGL, hereby undertake to:

 

1)Legal opinion should be obtained from panel law firm on JGL’s legality and
capacity in obtaining banking facilities from HSBC Hong Kong as a
Jordan-incorporated company.

 

2)Confirmation should be obtained from Big Four tax specialists that HSBC Hong
Kong dues not incur any tax obligation in granting facilities to TSL.

 

Please arrange for your authorised signatories to sign and return to us the
duplicate copy of this letter with Appendix to signify your understanding and
acceptance of the terms and conditions under which debts purchase services are
offered. Additionally please arrange for the delivery a certified copy of your
Articles of Association for your reference.

 

This offer will remain open for acceptance until the close of business on July
2018 and if not accepted by that date will be deemed to have lapsed.

 

We are pleased to be of continued assistance.

 

Yours faithfully For and on behalf of The Hongkong and Shanghai Banking
Corporation Limited

 

/s/ Teddy Young   Teddy Young   Vice President   /na       Encl.  

 

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TREASURE SUCCESS INTERNATIONAL LIMITED   JERASH GARMENTS AND FASHIONS  
MANUFACTURING COMPANY LIMITED 14 June 2018    

 

We agree to and accept all the terms and conditions set out above,

 

For and on behalf of   Treasure Success International Limited       /s/ Choi Lin
Hung   Name: Choi Lin Hung   Title: Director       For and on behalf of   Jerash
Garments and Fashions Manufacturing Company Limited       /s/ Choi Lin Hung  
Name: Choi Lin Hung   Title: Director       CONFIRMATION OF SECURITY(IES)      
/s/ Choi Lin Hung  

Name: Choi Lin Hung

Title: Chief Executive Officer

Name of Surety(ies) : Jerash Holdings (US) Inc.

 

 

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TREASURE SUCCESS INTERNATIONAL LIMITED   JERASH GARMENTS AND FASHIONS  
MANUFACTURING COMPANY LIMITED 14 June 2018    

 

APPENDIX: DETAIL$ OF BENCHMARK RATES

 

Benchmark   Applicable
Currency   Definition of Benchmark Hong Kong Interbank Offered Rate (HIBOR) *
and 1   HKD  

“HIBOR” means, in relation to any advance, the applicable Screen Rate at or
around 11:00 am Hong Kong time on the proposed date of advance (or such other
time or day if the market practice differs in Hong Kong interbank market, as
determined by the Bank), if any such rate is below zero, HIBOR will be deemed to
be zero.

 

“Screen Rate” means the Relevant Administrator’s Interest Settlement Rate for
Hong Kong dollars and for the relevant period displayed on the appropriate page
of the Reuters screen provided that (a) if the Bank’s sole determination its
funding cost is in excess of HIBOR, the Bank may specify the cost of funding any
facility or financial arrangement; or (b) if the screen page is replaced, not
available or such service ceases to be available, the Bank may specify another
page or service displaying the appropriate rate.

 

“Relevant Administration” means the Hong Kong Association of Banks or any other
person to whom the administrator function of the HIBOR fixing process is
transferred from time to time.

 

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TREASURE SUCCESS INTERNATIONAL LIMITED   JERASH GARMENTS AND FASHIONS  
MANUFACTURING COMPANY LIMITED 14 June 2018    

 

Benchmark   Applicable
Currency   Definition of Benchmark London Interbank Offered Rate (LIBOR) * and 1
  USD  

“LIBOR” means, in relation to any advance, the applicable Screen Rate at or
around 11:00 am London time two Business days (or such other time or day as
determined by the Bank if the market practice differs) before the proposed date
of advance and, if any such rate is below zero, LIBOR will be deemed to be zero.

 

“Business Day” means a day other than a Saturday or Sunday on which banks are
open for general business in London.

 

“Screen Rate” means the Relevant Administrator’s Interest Settlement Rate for
the relevant currency and period displayed on the appropriate page of the
Reuters screen provided that (a) if the Bank’s sole determination its funding
cost is in excess of LIBOR, the Bank may specify the cost of funding any
facility or financial arrangement; or (b) if the screen page is replaced, not
available or such service ceases to be available, the Bank may specify another
page or service displaying the appropriate rate.

 

“Relevant Administration” means the ICE Benchmark Administration Limited or any
other person to whom the administrator function of the LIBOR fixing process is
transferred from time to time.

 

Note:

 

1

Interpolated rates, which refers to rate calculated using linear interpolation
method as recommended by The International Swaps and Derivatives Association
(ISDA) for situation where there is no current quote available for below
maturities:-         · LIBOR: 2 weeks, 4 months, 5 months, 7 months, 8 months, 9
months, 10 months and 11 months     · From 1 April 2014, HIBOR: 4 months, 5
months, 7 months, 8 months, 9 months, 10 months and 11 months     * For tenors
where fixing is riot published by the relevant administrator and the
interpolated rate does not apply, the benchmark rate shall be the rate as
specified by the Bank in its sole discretion as its cost of funding the relevant
facility or financial arrangement.

 

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TREASURE SUCCESS INTERNATIONAL LIMITED   JERASH GARMENTS AND FASHIONS  
MANUFACTURING COMPANY LIMITED 14 June 2018    

 

Reference Page

 

You may be considered as related or connected to the HSBC Group if you are:

 

(a)a director or employee of a member of the HSBC Group;   

(b)a relative of a director or employee of a member of the HSBC Group;   

(c)a firm, partnership or non-listed company in which a member of HSBC Group or
director of HSBC Group (or such director’s relative) is interested as director,
partner, manager or agent;   

(d)an individual, firm, partnership or non-listed company of which any director
of HSBC Group (or such director’s relative) is a guarantor;   

(e)a firm, partnership or non-listed company which any of the persons listed
above is able to control and a person has “control” if such person is:   

(i)an indirect controller, that is, in relation to company, any person in
accordance with whose directions or instructions the directors of the company or
of another company of which it is a subsidiary are accustomed to act, or    

(ii)a majority shareholder controller, that is, in relation to a company, any
person who, either alone or with any associate or associates, is entitled to
exercise, or control the exercise of, more than 50% of the voting power at any
general meeting of the company or of another company of which it is a
subsidiary.

 

“HSBC Group” means HSBC Holdings plc, its subsidiaries, related bodies
corporate, associated entities and undertakings and any of their branches and
member or office of the HSBC Group shall be construed accordingly.

 

“relative” for the purposes of this clause means:

 

(i)any immediate ascendant, any spouse or former spouse of any such ascendant,
and any brother or sister of any such spouse or former spouse;    

(ii)any immediate descendant, and any spouse or former spouse of any such
descendant;    

(iii)any brother or sister, aunt or uncle and any nephew or niece and any first
cousin;    

(iv)any spouse or former spouse, any immediate ascendant of any such spouse or
former spouse, and any brother or sister of any such spouse or former spouse,
   

and, for the purposes of this definition, any step-child shall be deemed to be
the child of both its natural parent and of its step-parent and any adopted
child to be the child of the adopting parent, and a spouse shall include anyone
living as such.

 

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