EXHIBIT 10.1

 

INDEMNIFICATION AGREEMENT

 

THIS INDEMNIFICATION AGREEMENT, dated as of the ____ day of ________, 20__, is
between CASTLE BRANDS INC., a Florida corporation (the “Company”), and
__________________ (the “Indemnitee”).

 

Recitals

 

A. The Indemnitee is currently serving as a director and/or executive officer of
the Company and the Company desires to continue to retain the services of the
Indemnitee as a director and/or executive officer of the Company.

 

B. The Company and the Indemnitee recognize the increased risk of litigation and
other claims being asserted against directors and officers of public companies
and the subsidiaries of such companies.

 

C. The Articles of Incorporation of the Company, as amended (the “Articles of
Incorporation”), provide for indemnification to its directors and officers and
eliminates or limits the liability of a director or officer to the fullest
extent authorized or permitted by the Florida Business Corporation Act (the
“Florida Act”), and the Indemnitee has been serving and continues to serve as a
director and/or officer of the Company, in part, in reliance on such provisions
of the Articles of Incorporation.

 

D. The Indemnitee has indicated that the Indemnitee does not regard the
indemnities available under the Articles of Incorporation and bylaws and
available insurance, if any, as adequate to protect the Indemnitee against the
risks associated with services by the Indemnitee to the Company. As a condition
to the Indemnitee’s agreement to continue to serve as such, the Indemnitee
requires that the Indemnitee be indemnified from liability in accordance with
the provisions of this Agreement to the fullest extent permitted by law.

 

E. The Company recognizes that the Indemnitee needs substantial protection
against personal liability in order to maintain the Indemnitee’s continued
service to the Company in an effective manner and is willing to indemnify the
Indemnitee in accordance with the provisions of this Agreement to the fullest
extent permitted by law in order to continue to retain the services of the
Indemnitee.

 

F. The Company desires to provide in this Agreement for indemnification of, and
the advance of expenses to, the Indemnitee to the fullest extent (whether
partial or complete) permitted by law, as set forth in this Agreement and, to
the extent officers’ and directors’ liability insurance is maintained by the
Company, to provide for the continued coverage of the Indemnitee under the
Company’s officers’ and directors’ liability insurance policies, in part to
provide the Indemnitee with specific contractual assurance that the protection
promised by the indemnification provisions of the Articles of Incorporation will
be available to the Indemnitee (regardless of, among other things, any amendment
to or revocation of such provisions of the Articles of Incorporation or any
change in the composition of the Company’s Board of Directors or any acquisition
transaction relating to the Company).

 

 

NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants contained herein and the Indemnitee’s past and continued service to
the Company, the Company and the Indemnitee agree as follows:

 

Section 1.      Indemnification in Proceedings Other Than Those by or in the
Right of the Company. Subject to Section 4 and Section 13 hereof, the Company
shall indemnify and hold harmless the Indemnitee from and against any and all
expense, liability and loss (including attorneys’ fees, judgments, fines, excise
taxes or penalties and amounts paid or to be paid in settlement), actually and
reasonably incurred or paid by the Indemnitee in connection with the
investigation, defense, prosecution, settlement or appeal of, or being or
preparing to be a witness in, or participating in, any threatened, pending or
completed action, suit, investigation that the Indemnitee in good faith believes
might lead to the institution of such action, or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the Company) and to which the Indemnitee was or is a party or is
threatened to be made a party or was or is a witness or participates or may
participate in by reason of the fact that the Indemnitee is or was an officer,
director, manager, consultant, stockholder, employee or agent of the Company or
any of its subsidiaries, or is or was serving at the request of the Company or
any of its subsidiaries as an officer, director, consultant, partner, trustee,
employee or agent of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise, or by reason of anything done or not
done by the Indemnitee in any such capacity or capacities, provided that the
Indemnitee acted in good faith and in a manner the Indemnitee reasonably
believed to be in or not opposed to the best interests of the Company and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
that the Indemnitee’s conduct was unlawful.

 

Section 2.      Indemnification in Proceedings by or in the Right of the
Company. Subject to Section 4 and Section 13 hereof, the Company shall indemnify
and hold harmless the Indemnitee from and against any and all expenses
(including attorneys’ fees) and amounts paid in settlement actually and
reasonably incurred by the Indemnitee in connection with the investigation,
defense, prosecution, settlement or appeal of, or being or preparing to be a
witness in, or participating in, any threatened, pending or completed action,
suit, investigation that the Indemnitee in good faith believes might lead to the
institution of such action, or proceeding by or in the right of the Company to
procure a judgment in its favor, whether civil, criminal, administrative or
investigative, and to which the Indemnitee was or is a party or is threatened to
be made a party or was or is a witness or participate or may participate in by
reason of the fact that the Indemnitee is or was an officer, director, manager,
consultant, stockholder, employee or agent of the Company or any of its
subsidiaries, or is or was serving at the request of the Company or any of its
subsidiaries as an officer, director, consultant, partner, trustee, employee or
agent of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise, or by reason of anything done or not done by
the Indemnitee in any such capacity or capacities, provided that (i) the
Indemnitee acted in good faith and in a manner the Indemnitee reasonably
believed to be in or not opposed to the best interests of the Company, (ii)
indemnification for amounts paid in settlement shall not exceed the estimated
expense of litigating the proceeding to conclusion and (iii) no indemnification
shall be made under this Section 2 in respect of any claim, issue or matter as
to which the Indemnitee shall have been adjudged to be liable unless, and only
to the extent that, the court in which such proceeding was brought (or any other
court of competent jurisdiction) shall determine upon application that, despite
the adjudication of such liability but in view of all the circumstances of the
case, the Indemnitee is fairly and reasonably entitled to indemnity for such
expenses which such court shall deem proper.

 

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Section 3.      Reimbursement of Expenses Following Adjudication of Negligence.
Subject to Section 4 and Section 13 hereof, the Company shall reimburse the
Indemnitee for any expenses (including attorney’s fees) and amounts paid in
settlement actually and reasonably incurred by the Indemnitee in connection with
the investigation, defense, settlement or appeal of any action, suit or
proceeding described in Section 2 hereof that results in an adjudication that
the Indemnitee was liable, other than for willful misconduct in the performance
of his duty to the Company; provided, however, that the Indemnitee acted in good
faith and in a manner the Indemnitee believed to be in the best interests of the
Company.

 

Section 4.      Authorization of Indemnification or Reimbursement.

 

4.1.            No Presumptions. Any indemnification under Section 1 and Section
2 hereof (unless ordered by a court) and any reimbursement made under Section 3
hereof shall be made by the Company only as authorized in the specific case upon
a determination (the “Determination”) that indemnification or reimbursement of
the Indemnitee is proper in the circumstances because the Indemnitee has met the
applicable standard of conduct set forth in Section 1, Section 2 or Section 3
hereof, as the case may be. Subject to Sections 5.5, 5.6 and Section 8 of this
Agreement, the Determination shall be made in the following order of preference:

 

(1)first, by the Company’s Board of Directors (the “Board”) by majority vote or
consent of a quorum consisting of directors (“Disinterested Directors”) who are
not, at the time of the Determination, named parties to such action, suit or
proceeding; or

 

(2)next, if such a quorum of Disinterested Directors cannot be obtained, by
majority vote or consent of a committee duly designated by the Board (in which
designation all directors, whether or not Disinterested Directors, may
participate) consisting solely of two or more Disinterested Directors; or

 

(3)next, if such a committee cannot be designated, by any independent legal
counsel selected in accordance with Section 5.5.

 

4.2.            No Presumptions. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
the Indemnitee did not act in good faith and in a manner that the Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company, and with respect to any criminal action or proceeding, knew that the
Indemnitee’s conduct was unlawful.

 

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4.3.            Benefit Plan Conduct. The Indemnitee’s conduct with respect to
an employee benefit plan for a purpose the Indemnitee reasonably believed to be
in the interests of the participants in and beneficiaries of the plan shall be
deemed to be conduct that the Indemnitee reasonably believed to be not opposed
to the best interests of the Company.

 

4.4.            Reliance as Safe Harbor. For purposes of any Determination
hereunder, the Indemnitee shall be deemed to have acted in good faith and in a
manner the Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company or, with respect to any criminal action or proceeding,
to have had no reasonable cause to believe or did not know the Indemnitee’s
conduct was unlawful, if the Indemnitee’s action is based on (i) the records or
books of account of the Company or another enterprise, including financial
statements, (ii) information supplied to the Indemnitee by the officers of the
Company or another enterprise in the course of their duties, (iii) the advice of
legal counsel for the Company or another enterprise, or (iv) information or
records given or reports made to the Company or another enterprise by an
independent certified public accountant or by an appraiser or other expert
selected with reasonable care by the Company or another enterprise. The term
“another enterprise” as used in this Section 4.4 shall mean any other
corporation or any partnership, joint venture, trust, employee benefit plan or
other enterprise of which the Indemnitee is or was serving at the request of the
Company or any of its subsidiaries as an officer, director, consultant, partner,
trustee, employee or agent. The provisions of this Section 4.4 shall not be
deemed to be exclusive or to limit in any way the other circumstances in which
the Indemnitee may be deemed to have met the applicable standard of conduct set
forth in Section 1, Section 2 or Section 3 hereof, as the case may be.

 

4.5.            Success on Merits or Otherwise. To the extent that the
Indemnitee has been successful on the merits or otherwise in defense of any
action, suit or proceeding described in Section 1 or Section 2 hereof, or in
defense of any claim, issue or matter therein, the Indemnitee shall be
indemnified against expenses (including attorneys’ fees) actually and reasonably
incurred by the Indemnitee in connection with the investigation, defense,
settlement or appeal thereof. For purposes of this Section 4.5, the term
“successful on the merits or otherwise” shall include, but not be limited to,
(i) any termination, withdrawal, or dismissal (with or without prejudice) of any
claim, action, suit or proceeding against the Indemnitee without any express
finding of liability or guilt against the Indemnitee, (ii) the expiration of 120
days after the making of any claim or threat of an action, suit or proceeding
without the institution of the same and without any promise or payment made to
induce a settlement, or (iii) the settlement of any action, suit or proceeding
under Section 1, Section 2 or Section 3 hereof pursuant to which the Indemnitee
pays less than $25,000.

 

4.6.            Partial Indemnification or Reimbursement. If the Indemnitee is
entitled under any provision of this Agreement to indemnification and/or
reimbursement by the Company for some or a portion of the claims, damages,
expenses (including attorneys’ fees and costs of other professionals),
judgments, fines or amounts paid in settlement by the Indemnitee in connection
with the investigation, defense, settlement or appeal of any action specified in
Section 1, Section 2 or Section 3 hereof, but not, however, for the total amount
thereof, the Company shall nevertheless indemnify and/or reimburse the
Indemnitee for the portion thereof to which the Indemnitee is entitled. The
party or parties making the Determination shall determine the portion (if less
than all) of such claims, damages, expenses (including attorneys’ fees),
judgments, fines or amounts paid in settlement for which the Indemnitee is
entitled to indemnification and/or reimbursement under this Agreement.

 

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Section 5.      Procedures for Determination of Whether Standards have been
Satisfied.

 

5.1.            Costs. All costs of making any Determination required by Section
4 or Section 5 hereof shall be borne solely by the Company, including, but not
limited to, the costs of legal counsel and judicial determinations. The Company
shall also be solely responsible for paying (i) all reasonable expenses incurred
by the Indemnitee to enforce this Agreement, including, but not limited to, the
costs incurred by the Indemnitee to obtain court-ordered indemnification
pursuant to Section 8 hereof, regardless of the outcome of any such application
or proceeding, and (ii) all costs of defending any suits or proceedings
challenging payments to the Indemnitee under this Agreement.

 

5.2.            Timing of the Determination. The Company shall use its best
efforts to make the Determination contemplated by Section 4 or Section 5 hereof
promptly. In addition, the Company agrees:

 

(a)                if the Determination is to be made by the Board or a
committee thereof, such Determination shall be made not later than 15 days after
a written request for a Determination (a “Request”) is delivered to the Company
by the Indemnitee; and

 

(b)               if the Determination is to be made by independent legal
counsel, such Determination shall be made not later than 30 days after a Request
is delivered to the Company by the Indemnitee.

 

The failure to make a Determination within the above-specified time period shall
constitute a Determination approving full indemnification or reimbursement of
the Indemnitee. Notwithstanding anything herein to the contrary, the
Determination may be made in advance of (i) the Indemnitee’s payment (or
incurring) of expenses with respect to which indemnification or reimbursement is
sought, and/or (ii) final disposition of the action, suit or proceeding with
respect to which indemnification or reimbursement is sought.

 

5.3.            Reasonableness of Expenses. The evaluation and finding as to the
reasonableness of expenses incurred by the Indemnitee for purposes of this
Agreement shall be made (in the following order of preference) within 15 days of
the Indemnitee’s delivery to the Company of a Request that includes a reasonable
accounting of expenses incurred:

 

(a)                first, by the Board by a majority vote of a quorum consisting
of Disinterested Directors; or

 

(b)               next, if a quorum of Disinterested Directors cannot be
obtained by majority vote or consent of a committee duly designated by the Board
(in which designation all directors, whether or not Disinterested Directors, may
participate), consisting solely of two or more Disinterested Directors; or

 

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(c)                next, if such a committee cannot be designated, by any
independent legal counsel selected in accordance with Section 5.5; provided,
that, if the determination for authorization of Indemnification was made by
independent counsel pursuant to 4.1(3) hereof, then the evaluation and finding
of reasonableness shall in all events be made by independent legal counsel.

 

All expenses shall be considered reasonable for purposes of this Agreement if
the finding contemplated by this Section 5.3 is not made within the prescribed
time. The finding required by this Section 5.3 may be made in advance of the
payment (or incurring) of the expenses for which indemnification or
reimbursement is sought.

 

5.4.            Payment of Indemnified Amount. Immediately following a
Determination that the Indemnitee has met the applicable standard of conduct set
forth in Section 1, Section 2 or Section 3 hereof, as the case may be, and the
finding of reasonableness of expenses contemplated by Section 5.3 hereof, or the
passage of time prescribed for making such determination(s), the Company shall
pay to the Indemnitee in cash the amount to which the Indemnitee is entitled to
be indemnified and/or reimbursed, as the case may be, without further
authorization or action by the Board; provided, however, that the expenses for
which indemnification or reimbursement is sought have actually been incurred by
the Indemnitee.

 

5.5.            Selection of Independent Legal Counsel. If the Determination
required under Section 4 or Section 5 is to be made by independent legal
counsel, such counsel shall be selected by the Board described in 4.1(1) hereof
or the committee of the Board described in 4.1(2) hereof. The fees and expenses
incurred by counsel in making any Determination (including Determinations
pursuant to Section 5.7 hereof) shall be borne solely by the Company regardless
of the results of any Determination and, if requested by counsel, the Company
shall give such counsel an appropriate written agreement with respect to the
payment of their fees and expenses and such other matters as may be reasonably
requested by counsel.

 

5.6.            Right of Indemnitee to Appeal an Adverse Determination by Board.
If a Determination is made by the Board or a committee thereof that the
Indemnitee did not meet the applicable standard of conduct set forth in Section
1, Section 2 or Section 3 hereof or that the Indemnitee’s expenses are not
reasonable as set forth in Section 5.3 hereof, upon the written request of the
Indemnitee and the Indemnitee’s delivery of $5,000 to the Company, the Company
shall cause a new Determination to be made by independent legal counsel, which
independent legal counsel shall be selected in accordance with Section 5.5.
Subject to Section 8 hereof, such Determination by such independent legal
counsel shall be binding and conclusive for all purposes of this Agreement.

 

5.7.            Right of Indemnitee To Select Forum For Determination. If, at
any time subsequent to the date of this Agreement, “Continuing Directors” do not
constitute a majority of the members of the Board, or there is otherwise a
change in control of the Company (as contemplated by Item 403(c) of Regulation
S-K), then the Determination required by Section 4 or Section 5 hereof shall be
made by independent legal counsel selected by the Indemnitee and approved by the
Board (which approval shall not be unreasonably withheld), which counsel shall
be deemed to satisfy the requirements of clause (3) of Section 4 and clause (c)
of Section 5.3 hereof. If none of the legal counsel selected by the Indemnitee
are willing and/or able to make the Determination, then the Company shall cause
the Determination to be made by a majority vote or consent of a Board committee
consisting solely of Continuing Directors. For purposes of this Agreement, a
“Continuing Director” means either a member of the Board at the date of this
Agreement or a person nominated to serve as a member of the Board by a majority
of the then Continuing Directors.

 

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5.8.            Access by Indemnitee to Determination. The Company shall afford
to the Indemnitee and the Indemnitee’s representatives ample opportunity to
present evidence of the facts upon which the Indemnitee relies for
indemnification or reimbursement, together with other information relating to
any requested Determination.

 

5.9.            Judicial Determinations in Derivative Suits. In each action or
suit described in Section 2 hereof, the Company shall cause its counsel to use
its best efforts to obtain from the court in which such action or suit was
brought (i) an express adjudication whether the Indemnitee is liable for
negligence or misconduct in the performance of his duty to the Company, and, if
the Indemnitee is so liable, (ii) a determination whether and to what extent,
despite the adjudication of liability but in view of all the circumstances of
the case (including this Agreement), the Indemnitee is fairly and reasonably
entitled to indemnification.

 

5.10.        Burden of Proof. In the event of any claim by the Indemnitee for
indemnification hereunder, there shall be a presumption that the Indemnitee is
entitled to indemnification hereunder and the Company shall have the burden of
proving that the Indemnitee is not entitled to such indemnification.

 

Section 6.      Scope of Indemnity. The actions, suits and proceedings described
in Section 1 and Section 2 hereof shall include, for purposes of this Agreement,
any actions that involve, directly or indirectly, activities of the Indemnitee
both in his official capacities as a Company director or officer and actions
taken in another capacity while serving as director or officer, including, but
not limited to, actions or proceedings involving (i) compensation paid to the
Indemnitee by the Company, (ii) activities by the Indemnitee on behalf of the
Company, including actions in which the Indemnitee is plaintiff, (iii) actions
alleging a misappropriation of a “corporate opportunity,” (iv) responses to a
takeover attempt or threatened takeover attempt of the Company, (v) transactions
by the Indemnitee in Company securities, and (vi) the Indemnitee’s preparation
for and appearance (or potential appearance) as a witness in any proceeding
relating, directly or indirectly, to the Company. In addition, the Company
agrees that, for purposes of this Agreement, all services performed by the
Indemnitee on behalf of, in connection with or related to any subsidiary of the
Company, any employee benefit plan established for the benefit of employees of
the Company or any subsidiary, any corporation or partnership or other entity in
which the Company or any subsidiary has a 5% ownership interest, or any other
affiliate shall be deemed to be at the request of the Company.

 

Section 7.      Advance for Expenses.

 

7.1.            Mandatory Advance. Expenses (including attorneys’ fees) incurred
by the Indemnitee in investigating, defending, settling or appealing, or being
or preparing to be a witness in, any action, suit or proceeding described in
Section 1 or Section 2 hereof shall, subject to Section 13 hereof, be paid by
the Company in advance of the final disposition of such action, suit or
proceeding. The Company shall promptly pay the amount of such expenses to the
Indemnitee, but in no event later than 5 days following the Indemnitee’s
delivery to the Company of a written request for an advance pursuant to this
Section 7, together with a reasonable accounting of such expenses.

 

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7.2.            Undertaking to Repay. The Indemnitee hereby undertakes and
agrees to repay to the Company any advances made pursuant to this Section 7 if
and to the extent that a court of competent jurisdiction shall make a final
judgment (as to which all rights of appeal therefrom have been exhausted or
lapsed) that the Indemnitee is not entitled to be indemnified by the Company for
such amounts or such advances were in violation of Section 13 hereof.

 

7.3.            Miscellaneous. The Company shall make the advances contemplated
by this Section 7 regardless of the Indemnitee’s financial ability to make
repayment, and regardless whether indemnification of the Indemnitee by the
Company will ultimately be required. Any advances and undertakings to repay
pursuant to this Section 7 shall be unsecured and interest-free.

 

Section 8.      Court-Ordered Indemnification. Regardless of whether the
Indemnitee has met the standard of conduct set forth in Section 1, Section 2 or
Section 3 hereof, as the case may be, and notwithstanding the presence or
absence of any Determination whether such standards have been satisfied and
notwithstanding any other provision hereof, the Indemnitee may apply for
indemnification (and/or reimbursement pursuant to Section 3 or Section 12
hereof) to the court conducting any proceeding to which the Indemnitee is a
party or a witness or to any other court of competent jurisdiction. On receipt
of an application, the court, after giving any notice the court considers
necessary, may order indemnification (and/or reimbursement) if it determines the
Indemnitee is fairly and reasonably entitled to indemnification (and/or
reimbursement) in view of all the relevant circumstances (including this
Agreement).

 

Section 9.      Contribution. If and to the extent that a final adjudication
shall specify that the Company is not obligated to indemnify Indemnitee under
this Agreement for any reason (by reason of public policy, as a matter of law or
otherwise), then in respect of any threatened, pending or completed action, suit
or proceeding in which the Company is jointly liable with Indemnitee (or would
be so liable if joined in such action, suit or proceeding), the Company shall
contribute to the amount of expenses (including attorneys’ fees and costs of
other professionals), judgments, penalties, fines (including excise taxes
assessed), settlements and all other liabilities incurred and paid or payable by
Indemnitee in connection with such action, suit or proceeding in such proportion
as is appropriate to reflect (i) the relative benefits received by the Company
on the one hand and Indemnitee on the other hand from the transaction with
respect to which such action, suit or proceeding arose, and (ii) the relative
fault of the Company on the one hand and of Indemnitee on the other hand in
connection with the circumstances which resulted in such expenses, judgments,
fines or settlement amounts, as well as any other relevant equitable
considerations. The relative fault of the Company on the one hand and of
Indemnitee on the other hand shall be determined by reference to among other
things, the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent the circumstances resulting in such expense,
judgments, fines or settlement amounts. The Company agrees that it would not be
just and equitable if contribution pursuant to this Section 9 were determined by
pro rata allocation or any other method of allocation which does not take
account of the foregoing equitable considerations.

 

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Section 10.  Nondisclosure Of Payments. Except as required by law, neither party
shall disclose any payments under this Agreement unless prior approval of the
other party is obtained. Any payments to the Indemnitee that must be disclosed
shall, unless otherwise required by law, be described only in Company proxy or
information statements relating to special and/or annual meetings of the
Company’s shareholders, and the Company shall afford the Indemnitee the
reasonable opportunity to review all such disclosures and, if requested, to
explain in such statement any mitigating circumstances regarding the events
reported.

 

Section 11.  Covenant Not to Sue, Limitation of Actions and Release of Claims.
No legal action shall be brought and no cause of action shall be asserted by or
on behalf of the Company (or any of its subsidiaries) against the Indemnitee,
the spouse, heirs, executors, personal representatives or administrators of the
Indemnitee after the expiration of five years from the date the Indemnitee
ceases (for any reason) to serve as either an officer or a director of the
Company, and any claim or cause of action of the Company (or any of its
subsidiaries) shall be extinguished and deemed released unless asserted by
filing of a legal action within such five year period.

 

Section 12.  Indemnification of Indemnitee’s Estate; Term of Agreement.
Notwithstanding any other provision of this Agreement, and regardless whether
indemnification of the Indemnitee would be permitted and/or required under this
Agreement, if the Indemnitee is deceased, the Company shall indemnify and hold
harmless the Indemnitee’s estate, spouse, heirs, administrators, personal
representatives and executors (collectively the “Indemnitee’s Estate”) against,
and the Company shall assume, any and all claims, damages, expenses, costs
(including attorneys’ fees and costs of other professionals), penalties,
judgments, fines and amounts paid in settlement actually incurred by the
Indemnitee or the Indemnitee’s Estate in connection with the investigation,
defense, settlement or appeal of any action described in Section 1 or Section 2
hereof. Indemnification of the Indemnitee’s Estate pursuant to this Section 12
shall be mandatory and not require a Determination or any other finding that the
Indemnitee’s conduct satisfied a particular standard of conduct. This Agreement
shall continue until and terminate upon the later of: (i) ten (10) years after
the date that the Indemnitee shall have ceased to serve as an officer or
director of the Company; or (ii) the entry of a judgment, order or award, not
subject to appeal, in any claim asserted against the Indemnitee subject to this
Agreement.

 

Section 13.  Limitation on Indemnification. Notwithstanding any other provisions
of this Agreement, but subject to the provisions of Section 15 hereof, the
Indemnitee shall not be entitled to indemnification or advancement of expenses
if: (i) a judgment or other final adjudication establishes that the actions of
the Indemnitee, or omissions to act, were material to the cause of action so
adjudicated and constitute: (a) a violation of the criminal law, unless the
Indemnitee had reasonable cause to believe the conduct of the Indemnitee was
lawful or had no reasonable cause to believe the conduct of the Indemnitee was
unlawful; (b) a transaction from which the Indemnitee derived an improper
personal benefit; (c) in the case of a director, a circumstance under which the
liability provisions relating to unlawful distributions under Section 607.0834
of the Florida Act are applicable; or (d) willful misconduct or a conscious
disregard for the best interests of the Company in a proceeding by or in the
right of the Company to procure a judgment in its favor or in a proceeding by or
in the right of a shareholder; or (ii) such indemnification or advancement of
expenses is prohibited by law.

 

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Section 14.  Maintenance of Insurance. The Company hereby agrees that during the
period commencing on the date hereof and ending five years from the date the
Indemnitee ceases to serve the Company, the Company shall purchase and maintain
in effect for the benefit of the Indemnitee such insurance providing coverage at
least as favorable to the Indemnitee as that presently provided, if such
insurance can be purchased for premiums not in excess of 150% of the amount of
the current premiums, adjusted from time to time in accordance with the Consumer
Price Index, or, if such coverage cannot be obtained, the maximum coverage that
can be obtained for 150% of the amount of the current premiums adjusted from
time to time in accordance with the Consumer Price Index.

 

Section 15.  Changes in the Law. If any change after the date of this Agreement
in any applicable law, statute or rule or the Articles of Incorporation expands
the power of the Company to indemnify the Indemnitee, such change shall be
within the purview of the Indemnitee’s rights and the Company’s obligations
under this Agreement. If any change in any applicable law, statute or rule or
the Articles of Incorporation narrows the right of the Company to indemnify a
person such as the Indemnitee, such change, to the extent not otherwise required
by such law, statute or rule or the Company’s Articles of Incorporation to be
applied to this Agreement, shall have no effect on this Agreement or the
parties’ rights and obligations thereunder.

 

Section 16.  Miscellaneous.

 

16.1.        Notice Provision. Any notice, payment, demand or communication
required or permitted to be delivered or given by the provisions of this
Agreement shall be deemed to have been effectively delivered or given and
received on the date personally delivered to the respective party to whom it is
directed, or when deposited by registered or certified mail, with postage and
charges prepaid and addressed to the parties at the addresses set forth below
opposite their signatures to this Agreement.

 

16.2.        Entire Agreement. Except for the Articles of Incorporation, this
Agreement constitutes the entire understanding of the parties and supersedes all
prior understandings, whether written or oral, between the parties with respect
to the subject matter of this Agreement. Nothing in this Agreement shall be
deemed to limit any other indemnification to which the Indemnitee may be
entitled, including under the Articles of Incorporation, without duplication of
payment.

 

16.3.        Severability of Provisions. If any provision of this Agreement is
held to be illegal, invalid, or unenforceable under present or future laws
effective during the term of this Agreement, such provision shall be fully
severable; this Agreement shall be construed and enforced as if such illegal,
invalid, or unenforceable provision had never comprised a part of this
Agreement; and the remaining provisions of this Agreement shall remain in full
force and effect and shall not be affected by the illegal, invalid, or
unenforceable provision or by its severance from this Agreement. Furthermore, in
lieu of each such illegal, invalid, or unenforceable provision there shall be
added automatically as a part of this Agreement a provision as similar in terms
to such illegal, invalid or unenforceable provision as may be possible and be
legal, valid, and enforceable.

 

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16.4.        Applicable Law. This Agreement shall be governed by and construed
under the laws of the State of Florida.

 

16.5.        Execution in Counterparts. This Agreement and any amendment may be
executed simultaneously or in counterparts, each of which together shall
constitute one and the same instrument.

 

16.6.        Cooperation and Intent. The Company shall cooperate in good faith
with the Indemnitee and use its best efforts to ensure that the Indemnitee is
indemnified and/or reimbursed for liabilities described herein to the fullest
extent permitted by law.

 

16.7.        Amendment. No amendment, modification or alteration of the terms of
this Agreement shall be binding unless in writing, dated subsequent to the date
of this Agreement, and executed by the parties.

 

16.8.        Binding Effect. The obligations of the Company to the Indemnitee
hereunder shall survive and continue as to the Indemnitee even if the Indemnitee
ceases to be a director, officer, consultant, employee and/or agent of the
Company. Each and all of the covenants, terms and provisions of this Agreement
shall be binding upon and inure to the benefit of the successors to the Company
and, upon the death of the Indemnitee, to the benefit of the estate, heirs,
executors, administrators and personal representatives of the Indemnitee.

 

16.9.        Nonexclusivity. The rights of indemnification and reimbursement
provided in this Agreement shall be in addition to any rights to which the
Indemnitee may otherwise be entitled by statute, the Articles of Incorporation,
bylaw, agreement, vote of stockholders or disinterested directors or otherwise.

 

16.10.    Effective Date. The provisions of this Agreement shall cover claims,
actions, suits and proceedings whether now pending or hereafter commenced and
shall be retroactive to cover acts or omissions or alleged acts or omissions
which heretofore have taken place.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.

 

  THE COMPANY:         CASTLE BRANDS INC.               By:     Name:     Title:
          ADDRESS:         122 East 42nd Street, Suite 4700   New York, New York
10168   Attention: Chief Financial Officer         THE INDEMNITEE:              
    Name:           ADDRESS: