Exhibit 10.1

CASTLE BRANDS INC.

SEPARATION AGREEMENT

SEPARATION AGREEMENT (“Agreement”), dated as of March 20, 2007, between Castle
Brands Inc. (“Castle Brands”) (Castle Brands, together with all of its
subsidiaries, parents, and any other affiliates shall herein be referred to as
the “Company”), and Herbert Roberts (“Employee”) (the Company and Employee shall
collectively be referred to as the “Parties”).

RECITALS

A.

WHEREAS, the Parties had entered into that certain Employment Agreement, dated
December 5, 2006 (the “Employment Agreement”).

B.

WHEREAS, the Employment Agreement set forth, amongst other provisions,
Employee’s compensation and termination provisions.

C.

WHEREAS the Parties desire to terminate the Employment Agreement on the terms
and conditions set forth below.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants
contained herein, the Parties hereto do hereby agree as follows:

1.

Termination of Employment.  Except as otherwise provided in this Section 1,
Employee’s employment with the Company shall terminate as of March 15, 2007.
 The last day of Employee’s employment as provided in this Section 1 shall be
deemed the “Termination Date.”    

2.

Duties of Employee; Base Salary and Benefits; Other Business Activities.

(a)

Duties of Employee. As of the Termination Date, Employee shall cease to be Chief
Financial Officer, Treasurer and Principal Financial Officer or otherwise act as
an employee of the Company.  Beginning on the Termination Date, as and to the
extent requested by the Company from time to time, Employee shall perform the
following duties: (a) act as a historical and knowledge resource to Company
employees in connection with matters related to the Company, including financial
matters, as requested by the Company, (b) train and transition his
responsibilities to other Company employees, and (c) other duties related to the
duties set forth in (a) and (b) above. Employee shall vacate the Company’s
offices as of the Termination Date and perform the duties described herein
generally from an office he shall establish.  In connection with such duties,
the Company will have no obligation or liability in respect of such office.

(b)

Base Salary and Benefits Through Termination Date. Employee shall continue to be
paid a base salary at the annual rate of $261,000 up to and until March 15,
2007.  As of the Termination

Date, Employee shall cease to be eligible for benefits under any Company
benefits plan or program or otherwise, except (i) as expressly provided in this
Agreement, or (ii) as otherwise required under (A) the terms of a Company
benefits plan or program or (B) applicable law.

(c)

Other Business Activities. Employee shall be permitted to engage in other
business activities (including employment) during his remaining period of
employment with the Company, provided that such activities do not otherwise
violate the terms of this Agreement or the Employment Agreement or impair his
ability to perform his duties hereunder or comply with other obligations
Employee may have to the Company.

3.

Consideration. Although, in the absence of this Agreement, the Company is not
required to provide any of the following consideration to Employee, the Company,
in exchange for promises made herein by Employee, shall provide Employee with
the following benefits:

(a)

Severance Payment. The Company agrees to pay Employee an aggregate severance
payment of $100,000.  Such payment shall be made in four installments as
follows:

$25,000 payable on March 31, 2007

$25,000 payable on April 30, 2007

$25,000 payable on May 31, 2007

$25,000 payable on June 30, 2007

(b)

COBRA. The Company agrees that it will instruct its applicable employees and/or
agents not to challenge Employee’s right to continue welfare benefits coverage
under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
(“COBRA”) based upon the circumstances that led to the modification of
Employee’s duties as provided herein. The Company reserves the right to
challenge or deny continuing coverage under COBRA for other reasons, as
appropriate. Provided that Employee timely elects COBRA continuation coverage
(and the Company has no reasonable grounds to challenge or deny such coverage)
or employee converts to a personal plan, the Company will pay through the COBRA
Payment End Date (as defined below) for the monthly premiums for the level of
coverage Employee maintained on the Termination Date (the “Monthly Premiums”).
 In no event (including by reasons of Employee’s election to convert to a
personal plan) shall the Company be required to pay any amount in excess of the
Monthly Premiums.  The “COBRA Payment End Date” shall be the earlier of (i) 12
months following the Termination Date and (ii) the date Employee becomes
employed by a third party and is eligible for coverage, and such coverage may
actually commence, under the group benefits plan of the new employer. If during
the period Employee is receiving this benefit, Employee obtains new employment
and becomes eligible for coverage under the group benefits plan of the new
employer, Employee must notify the Company in writing

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of such new employment and the date on which Employee will first be eligible for
coverage under the group benefits plan of such new employer so that the Company
receives such notification prior to the commencement of such employment.

(c)

Taxes and Withholdings. The payments and benefits to be made pursuant to this
Section 3 and in Section 2 shall be subject to all applicable withholdings for
federal, state and local income taxes, Social Security, and all other customary
withholdings. The Company makes no representations regarding the tax
implications of the compensation, payments and benefits to be paid to Employee
under this Agreement.    

4.

Non-Admission of Liability. The Company is providing Employee with the
consideration described in this Agreement in exchange for Employee’s agreement
to undertake certain obligations, as described herein. The fact that the Company
is offering this consideration to Employee should not be understood as an
admission that the Company has violated Employee’s rights (or the rights of
anyone else), any statute or law, or breached any duty or obligation in any
manner whatsoever.  The fact that Employee is accepting such consideration
should not be understood as an admission that Employee has violated any statute
or law, or breached any duty or obligation in any manner whatsoever.

5.

Release and other Promises. The intent of this section is to secure Employee’s
release of claims against the Company or anyone connected with it for any harm
Employee may claim to have suffered for any period prior to his execution of
this Agreement in connection with Employee’s employment or the termination of
Employee’s employment, in return for the benefits described in this Agreement.
Accordingly, in exchange for the consideration described above, Employee hereby
agrees as follows:

(a)

Release. Employee, with the intention of binding himself and his heirs,
beneficiaries, trustees, administrators, executives, assigns and legal
representatives (collectively, the “Releasors”), hereby irrevocably and
unconditionally releases, remises, and forever discharges the Company and all of
its present, former and/or future officers, employees, directors, stockholders,
agents, representatives, partners, administrators, attorneys, insurers,
fiduciaries, subsidiaries, divisions, affiliates, predecessors, successors and
assigns, in their individual and/or representative capacities (hereinafter
collectively referred to as the “Released Parties”), from any and all
liabilities, causes of action, suits, agreements, promises, damages, disputes,
controversies, contentions, grievances, differences, judgments, debts, claims
and demands of any kind whatsoever, both in law and in equity, known or unknown,
fixed or contingent, and whether asserted or unasserted (“Claims”), including,
without limitation, (i) any and all rights and claims arising out of or in
connection with Employee’s employment by Castle Brands Inc., the terms and
conditions of such employment, or the termination of Employee’s employment; (ii)
any and all contract claims, claims for bonuses, claims for severance
allowances, or claims of constructive discharge

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or entitlements; (iii) fraud claims, defamation, disparagement and other
personal injury and tort claims; and (iv) claims under any federal, state, or
municipal employee benefit, wage payment, discrimination, or retaliation, or
fair employment practices law (e.g., on the basis of sex, religion, age, race,
or disability or any other legally protected characteristic), statute, or
regulation, and claims for costs and expenses (including but not limited to
experts’ fees and attorneys’ fees) with respect thereto.  This General Release
includes, without limitation, any and all rights and claims under the Title VII
of the Civil Rights Act of 1964, as amended, the Employee Retirement Income
Security Act of 1974, the Americans with Disabilities Act of 1990, the U.S.
 Pregnancy Discrimination Act, the U.S.  Fair Labor Standards Act, the U.S.
 Equal Pay Act, The Workers Adjustment and Notification Act, the Equal Pay Act
of 1963, the Age Discrimination in Employment Act of 1967, the Older Workers
Benefit Protection Act of 1990, the Civil Rights Act of 1866, the Civil Rights
Act of 1991, the New York Conscientious Employee Protection Act, the New York
Equal Pay Act, the New York Smokers’ Rights Law, the New York Genetic Privacy
Act, and the New York Constitution, in each case as such laws have been or may
be amended.  Such released Claims also include, without limitation, any and all
Claims under state contract or tort law; any and all Claims based on the design
or administration of any Company employee benefit plan or program arising under
any Company policy, procedure, or employee benefit plan; any and all Claims for
wages, commissions, bonuses, continued employment with the Company in any
position, and compensatory, punitive or liquidated damages; and any and all
Claims for attorney’s fees and costs. Notwithstanding the foregoing, nothing
contained herein shall interfere with or waive Employee’s right to enforce this
Agreement or any other agreement between the Parties to the extent expressly
preserved by this Agreement, or the Company’s right to enforce any of Employee’s
obligations contained in this Agreement or any other agreement between the
Parties to the extent expressly preserved by this Agreement.  In the event that
any Released Party other than the Company asserts a claim against Employee
involving any acts, omissions or facts that occurred during any period prior to
Employee’s signing of this Agreement, the said Released Party shall not have the
benefit of the foregoing release by Employee, and Employee shall be free to
assert any claims or counterclaims against said Released Party as if this
Agreement had not been signed.

(b)

No Prior Lawsuits. Employee hereby represents that Employee has not filed any
Claim against the Released Parties relating to Employee’s employment and/or
separation from employment with the Company, or otherwise involving facts which
occurred in any period prior to Employee’s signing of this Agreement. Employee
hereby further represents and warrants that Employee has not assigned or
transferred, or purported to have assigned or transferred to any entity or
person, any claim or cause of action released in this Section 5(b), or any
amount of money related hereto.  Employer reciprocally represents that it has no
knowledge of any material claims or investigations which could materially impact
Employee’s entering into this Agreement on the terms hereof.

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(c)

Continued Obligations Under the Employment Agreement. Employee agrees that it is
a material condition of this Agreement that Employee comply with Paragraphs 7,
9, 10 and 22 of the Employment Agreement, which are incorporated by reference
herein.

(d)

Cooperation with the Company. Employee shall fully cooperate and assist the
Company with the following matters to the extent the Company may, from time to
time, so request: (i) effecting a transition of Employee’s responsibilities and
to ensure that the Company is aware of all matters being handled by Employee,
and (ii) cooperation and assistance with any investigation, litigation, or other
dispute in which the Company may become involved which may relate to the
Employee or the performance of his duties with the Company. Such cooperation and
assistance shall include providing information, documents, etc., submitting to
interviews with the Company’s counsel and accountants, submitting to
depositions, providing testimony and general cooperation to assist the Company
in defending its position with reference to any matter. Employee will be
reimbursed in accordance with the Company’s expense reimbursement policy for any
reasonable out-of-pocket expense Employee may incur in fulfilling Employee’s
obligations under this paragraph. Such obligation shall be in addition to, and
not in lieu of, Employee’s obligation under Paragraph 10 of the Employment
Agreement.  Subsequent to the Termination Date, the services to be provided
pursuant to this Section 5(d) shall be performed at times and on schedules that
are reasonably consistent with Executive’s other business activities and
commitments.

 

6.

Release of Employee.

(a)

Release. Except as necessary to enforce the terms of this Agreement, and in
exchange for and in consideration of the promises, covenants and agreements set
forth herein, the Company hereby releases and forever discharges Employee from
any and all liabilities, causes of action, suits, agreements, promises, damages,
disputes, controversies, contentions, grievances, differences, judgments, debts,
claims and demands of any kind whatsoever, both in law and in equity, known or
unknown, fixed or contingent, and whether asserted or unasserted (“Company
Claims”), (i) which the Company may have or claim to have based upon or in any
way related to Employee’s employment or termination of employment with the
Company for any period prior to the Company’s execution of this Agreement or
(ii) which otherwise involve any act, omission or facts that occurred during any
period prior to the Company’s signing of this Agreement; provided, however, that
while, to the best of the Company’s knowledge as of the date hereof, no such
action by the Employee has taken place,  the Company does not release or
discharge herein any Company Claims it may now or in the future have against
Employee for acts of fraudulent, criminal or other willful misconduct of
Employee of which the Company currently is not aware and which has or would have
an adverse effect on the Company, provided

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that such unreleased or non-discharged Company Claim must be directly related to
or result from:

(i) an act of criminal misconduct where (x) the Employee is convicted or enters
a plea of guilty or nolo contendre with respect to such criminal misconduct in
or before a court of competent jurisdiction or in a non-judicial disposition of
such a proceeding; and (y) if applicable, sentencing shall have taken place;
and/or

(ii) an act of fraud or willful misconduct, where the proceeding by a court of
competent jurisdiction, non-judicial proceeding or other alternative dispute
resolution mechanism terminates with a materially adverse finding against the
Employee or a non-judicial disposition of such proceeding.

Except for Company Claims related to fraudulent, criminal or other willful
misconduct, the Company further covenants not to voluntarily participate or
assist in any lawsuit, arbitration or other legal action asserting any claims
that are released under this Agreement.

7. Acknowledgments. By signing this Agreement below, Employee hereby
acknowledges as follows:

(a)

Sufficiency of Consideration. The consideration received by Employee in Sections
3 and 6 of this Agreement in exchange for the release contained in Section 5 and
the other promises contained in this Agreement, are greater in value than
anything else which Employee may have otherwise been entitled under any existing
Company separation, benefit or compensation policy if Employee did not execute
this Agreement and are in lieu of any other compensation which Employee may have
otherwise been entitled to receive under the Employment Agreement upon
termination.

(b)

No Other Wages or Benefits Due. Except as described in this Agreement, Employee
has been paid all wages and attendant benefits due Employee from the Company in
consideration of the services Employee rendered for the Company during the
period prior to his execution of this Agreement, including, but not limited to,
vacation pay, sick or disability pay, overtime pay, holiday pay, expense
reimbursement, bonuses, and any and all monetary or other benefits that are or
were due Employee pursuant to policies of the Company in effect prior to his
execution of this Agreement.

(c)

Entire Agreement; Prior Agreements. This Agreement contains the entire agreement
between Employee and the Company regarding the subject matter hereto and, as
such, fully supersedes any and all prior agreements or understandings between
Employee and the Company pertaining to the subject matter addressed in this
Agreement (including, without limitation, the

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Employment Agreement); provided, that, this Agreement shall not supersede,
replace, or otherwise affect in any manner, (i) Employee’s continuing
obligations under Paragraphs 7, 9, 10 and 22 of the Employment Agreement (as
modified in Section 5(c) of this Agreement), and (ii) the waiver, binding effect
(as to preserved paragraphs of the Employment Agreement), notice, severability,
headings and other provisions contained in Paragraphs 13, 14, 15, 17, 20 and 22
of the Employment Agreement.  The Parties acknowledge that this Agreement is not
intended to limit the indemnification provisions of Company’s certificate of
incorporation and bylaws nor the terms of Section 145 of the Delaware General
Corporation Law.  Employee has carefully read and fully understands all of the
provisions of this Agreement, which, except as noted in this Agreement, sets
forth the entire understanding between Employee and the Company. In agreeing to
the terms of this Agreement, Employee is not relying upon any written or oral
promise or representation made to Employee by any employee or representative of
the Company, other than the promises contained herein. This Agreement may not be
amended, superseded, cancelled or terminated other than in a writing signed both
by Employee and by the Company or its attorney or other designated
representative.

(d)

No Duress. Employee has not been forced or pressured in any manner whatsoever to
sign this Agreement, and Employee has agreed to all of its terms voluntarily.

8.

Severability. If any provision of this Agreement is held to be illegal, void or
unenforceable, such provision shall be of no force or effect.  However, the
illegality or unenforceability of such provision shall have no effect upon, and
shall not impair the legality or enforceability of, any other provision of this
Agreement; provided, however, that upon any finding by a court (or other
tribunal) of competent jurisdiction that the releases contained in Paragraph 5
are illegal, void or unenforceable, you agree, promptly upon the request of the
Company, to execute a new general release that is legal and enforceable.

9.

Return of Company Property. On the Termination Date or upon earlier request by
the Company, Employee shall return to the Company any Company property in
Employee’s possession, custody or control; provided, however, that paychecks,
policies, benefit documents or other similar non-confidential materials received
by Employee regarding the Employee’s employment with the Company in the ordinary
course of such employment shall not be subject to such return.

10.

Choice of Law; Forum. This Agreement (including any of Employee’s continuing
obligations under Paragraphs 7, 9, 10 and 22 of the Employment Agreement) shall
be governed by the laws of the State of New York without giving effect to the
principle of choice of law thereof. The interpretation and enforcement of the
provisions of this Agreement (including any dispute regarding Employee’s
continuing obligations under Paragraphs 7, 9, 10 and 22 of the Employment
Agreement) shall be resolved and

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determined exclusively by the state or federal courts sitting in New York, New
York, and such courts are hereby granted exclusive jurisdiction for such
purpose.

11.

Effective Date. Because this Agreement includes a release of claims under the
Age Discrimination in Employment Act, the Company hereby advises you that you
should consult an attorney regarding this Agreement, that you are entitled to
twenty-one (21) days from your receipt of this Agreement to consider it and that
you may have seven (7) days from the date you sign this Agreement to revoke it.
 At the conclusion of that seven (7) day period, this Agreement will become
final and effective and your right to revoke this Agreement will have expired.

12.

Notice. Whenever any notice is required or permitted hereunder, it shall be
given in writing addressed as follows:

    

To the Company:

Castle Brands Inc.

570 Lexington Avenue, 29th Floor

New York, NY 10022

Facsimile: (646) 356-0222

Attention: Chief Executive Officer

 

To the Executive:    

To his home address as shown on the records of the Company, Attention: Herbert
Roberts.

Notice shall be deemed given and effective (a) five (5) business days after the
deposit in the U.S. mail of a writing addressed as above and sent first class
mail, certified, return receipt requested, (b) when received by the addressee,
if sent by a nationally recognized air courier for next day delivery service
(receipt requested), or (c) upon personal delivery (with written confirmation of
receipt). Each party shall also provide a courtesy notice via email to the
other, which courtesy notice shall not constitute notice pursuant to this
Section 12.  Either party may change the address for notice by notifying the
other party of such change in accordance with this Section 12.

13.

Assignment and Transfer. This Agreement shall inure to the benefit of and be
enforceable by, and may be assigned by the Company without Employee’s consent
to, any purchaser of all or substantially all of the Company’s business or
assets, any successor to the Company or any assignee thereof (whether direct or
indirect, by purchase, merger, consolidation or otherwise), and upon such
assignment this Agreement shall be binding upon such successor or assignee.
Employee’s rights and obligations under this Agreement shall not be transferable
by Employee by assignment or otherwise, and any purported assignment, transfer
or delegation thereof shall be void; provided, however, that if Employee shall
die, all amounts payable to Employee hereunder shall be paid in accordance with
the terms of this Agreement to Employee’s estate.

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15.

No Waiver. No waiver by the parties hereto of any default or breach of any term,
condition or covenant of this Agreement shall be deemed to be a waiver of any
other term, condition or covenant contained herein or on any subsequent default
or breach of the same term, condition or covenant.

16.

No Obligation to Mitigate. In no event shall Employee be obliged to seek other
employment or consulting or take any other action by way of mitigation of the
amounts payable to Employee under any of the provisions of this Agreement, nor
shall the amount of any payment hereunder be reduced by any compensation earned
by Employee as a result of self-employment or employment by another employer.

17.

No Right of Set-off, Etc. Except as set forth in this Agreement, the obligation
of the Company to make the payments provided for in this Agreement and otherwise
to perform its obligations hereunder shall not be affected by any circumstances,
including without limitation, set-off, counterclaim, recoupment, defense or
other claim, right or action which the Company may have against Employee or
others.

 

18.

Counterparts. This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original and all of which together shall be deemed
to be one and the same instrument. Execution of this Agreement by the Parties
evidenced by signatures transmitted by facsimile or electronic mail shall be
deemed the same as original signatures.

[REMAINDER OF PAGE INTENIONALLY LEFT BLANK]

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ACCEPTED AND AGREED:

  

CASTLE BRANDS INC.

  

By:   /s/ Mark Andrews             

Name:

Mark Andrews

Title:

Chief Executive Officer

Dated:

March 20, 2007

 

   /s/ Herbert Roberts             

HERBERT ROBERTS

Dated:

March 20, 2007

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