Unassociated Document


    Exhibit
      10.74


    CASTLE
      BRANDS INC.

     

     

    CREDIT
      AGREEMENT

     

     

    October
      22, 2007

    


    


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    CASTLE
      BRANDS INC.

     

    CREDIT
      AGREEMENT

     

    This
      Credit Agreement (this "Agreement")
      is made
      as of the 22nd day of October, 2007 by and among Castle Brands Inc., a Delaware
      corporation (the "Company")
      and the
      Frost Nevada Investments Trust, a Nevada business trust (the "Lender").

     

    RECITAL

     

    The
      Company desires to borrow from the Lender, and the Lender desires to loan to
      the
      Company up to an aggregate principal amount of $5,000,000 (the "Commitment"),
      pursuant to the terms set forth in this Agreement.

     

    AGREEMENT

     

    In
      consideration of the mutual promises contained herein and other good and
      valuable consideration, receipt of which is hereby acknowledged, the parties
      to
      this Agreement agree as follows:

     

    1.  Definitions.

     

    As
      used
      in this Agreement, the following capitalized terms have the following
      meanings:

     

    "Advance"
      means
      the amount of US Dollars advanced pursuant to this Agreement and as evidenced
      by
      the Note.

     

    "Affiliate"
      means,
      with respect to any Person, a Person that owns or controls directly or
      indirectly such Person, any Person that controls or is controlled by or is
      under
      common control with such Person, and each of that Person's senior executive
      officers, directors, partners and, for any Person that is a limited liability
      company, that Person's managers and members;

     

    "Agreement"
      means
      this Credit Agreement, as amended from time to time;

     

    "Business
      Day"
      means
any
      day
      other than a day on which commercial banks in New York are required or permitted
      by law to be closed;

     

    "Closing"
      means
      the closing of the issuance of the Note;

     

    "Common
      Stock"
      means
the
      shares of common stock, $.01 par value, per share, of the Company;

     

    "Company"
      has the
      meaning set forth in the introductory paragraph above;

     

    "Event
      of Default"
      has the
      meaning set forth in Section 7
      below;

     

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    “Exchange
      Act”
has
      the
      meaning set forth in Section
      3.5
      below;

     

    "Material
      Adverse Effect"
      means a
      change or effect that is materially adverse to the financial condition, assets,
      or operations of the Company, or will prevent the transactions contemplated
      by
      this Agreement;

     

    "Maturity
      Date"
      shall
      have the meaning set forth in the Note;

     

    "Note"
      means
      the promissory note issued pursuant to this Agreement at the Closing, in
      substantially the form attached to this Agreement as Exhibit A;

     

    "Person" shall
      mean and include any individual, partnership, corporation (including a business
      trust), joint stock company, limited liability company, unincorporated
      association, joint venture, governmental entity or other entity;

     

    "Lender"
      has the
      meaning set forth in the introductory paragraph above; and

     

    "Securities
      Act"
      means
      the Securities Act of 1933, as amended;

     

    “SEC”
has
      the
      meaning set forth in Section
      3.5
      below;
      and

     

    “SEC
      Documents”
has
      the
      meaning set forth in Section 3.5 below.

     

    2.  Amount
      and Terms of Credit

     

    2.1  Closing
      and Advances.(a)
      Subject
      to the terms and conditions of this Agreement and the Note, the Lender agrees
      to
      make advances (the “Advance(s)”)
      to the
      Company, from time to time from the date of this Agreement until the Maturity
      Date (as such terms are defined in the Note), at such times as the Company
      may
      request in writing. Each Advance, up to the Commitment, shall be in increments
      of $1,000,000. Each Advance to the Company shall be made on ten days prior
      written notice by the Company to the Lender at its address as set forth on
      the
      signature page herein. Subject to the terms and conditions of this Agreement
      and
      the Note, the Lender agrees to make any requested Advance to the Company on
      the
      date specified in the Advance Notice.

     

    (b)  The
      Company shall execute and deliver to the Lender the Note to evidence the
      Commitment and the Advances, dated the date hereof, and substantially in the
      form of Exhibit
      A
      hereto
      (the “Note”).
      The
      Note shall represent the obligation of the Company to pay the amount of the
      Commitment or, if less, the aggregate unpaid principal amount of all Advances
      made by the Lender to the Company. The date and amount of each Advance and
      any
      payment of principal with respect thereto shall be recorded by the Company
      on
      its books and records, and by the Lender on the grid portion of the
      Note.

     

    (c)  At
      the
      Closing, the Lender shall deliver to the Company a validly executed IRS Form
      W-9
      or, if applicable, Form W-8 BEN.

     

    
      
         

      

      
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    (d)  At
      the
      Closing, the Company shall pay the Lender a facility fee of US $175,000. Upon
      receipt by the Company of its first Advance under this Credit Agreement, the
      Company shall promptly pay the Lender an additional facility fee of US
      $200,000.

     

    3.  Representations
      and Warranties of the Company.

     

    The
      Company hereby represents and warrants to the Lender that:

     

    3.1  Organization,
      Good Standing and Qualification.

     

    The
      Company is a corporation duly organized, validly existing and in good standing
      under the laws of the State of Delaware and has all requisite corporate power
      and authority to carry on its business as presently conducted or proposed to
      be
      conducted. The Company or its representatives are duly qualified to transact
      business and is in good standing in each jurisdiction in which the failure
      so to
      qualify would have a Material Adverse Effect.

     

    3.2  Authorization.

     

    All
      corporate actions on the part of the Company, its officers, directors and
      holders of Equity Securities necessary for (i) the authorization, execution
      and
      delivery of this Agreement and the Note, (ii) the performance of all obligations
      of the Company under this Agreement and the Note and (iii) the authorization,
      issuance and delivery of the Note have been taken or will be taken prior to
      the
      Closing, and this Agreement and the Note, when executed and delivered by the
      Company, shall constitute valid and legally binding obligations of the Company,
      enforceable against the Company in accordance with their respective terms except
      (i) as limited by applicable bankruptcy, insolvency, reorganization,
      moratorium, fraudulent conveyance, or other laws of general application relating
      to or affecting the enforcement of creditors' rights generally, or (ii) as
      limited by laws relating to the availability of specific performance, injunctive
      relief, or other equitable remedies.

     

    3.3  Compliance
      with Other Instruments;
      No Events of Default.

     

    The
      Company is not in violation or default of any provisions of its Certificate
      of
      Incorporation, as amended, or Bylaws, as amended, or of any instrument,
      judgment, order, writ, or decree, or under any note, indenture, mortgage, lease,
      agreement, contract or purchase order to which it is a party or by which it
      is
      bound or of any provision of state or federal statute, rule or regulation
      applicable to the Company, the violation of which would have a Material Adverse
      Effect. The execution, delivery and performance of this Agreement, the issuance
      of the Note and the consummation of the transactions contemplated hereby or
      thereby will not result in any such violation or be in conflict with or
      constitute, with or without the passage of time and giving of notice, either
      a
      default under any such provision, instrument, judgment, order, writ, decree
      or
      contract or an event which results in the creation of any lien, charge or
      encumbrance upon any assets of the Company in either case which would have
      a
      Material Adverse Effect. No Event of Default shall have occurred or occur as
      a
      result of the Company's execution of this Agreement or the Note.

     

    
      
         

      

      
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    3.4  Disclosure.

     

    The
      Company has made available to the Lender such information as the Lender has
      requested for deciding whether to acquire the Note.

     

    3.5  Financial
      Statements.

     

    Since
      the
      date of the initial public offering of its common stock, the Company has filed
      all reports required to be filed by it under the Securities Exchange Act of
      1934, as amended (the “Exchange
      Act”),
      including pursuant to Section 13(a) or 15(d) thereof (the foregoing materials,
      together with the Company's registration statement on Form S-1, Registration
      No.
      333-128676 (together with all amendments thereto), being collectively referred
      to herein as the “SEC
      Documents”))
      and
      has filed any such SEC Documents in a timely fashion. As of their respective
      dates, the SEC Documents complied in all material respects with the requirements
      of the Securities Act and the Exchange Act and the rules and regulations of
      the
      United States Securities and Exchange Commission (the “SEC”)
      promulgated thereunder, and none of the SEC Documents, when filed, contained
      any
      untrue statement of a material fact or omitted to state a material fact required
      to be stated therein or necessary in order to make the statements therein,
      in
      light of the circumstances under which they were made, not misleading. All
      material agreements to which the Company is a party or to which the property
      or
      assets of the Company are subject have been appropriately filed as exhibits
      to
      the SEC Documents as and to the extent required under the Exchange Act. The
      financial statements of the Company included in the SEC Documents comply in
      all
      material respects with applicable accounting requirements and the rules and
      regulations of the SEC with respect thereto as in effect at the time of filing,
      were prepared in accordance with GAAP applied on a consistent basis during
      the
      periods involved (except as may be indicated in the notes thereto, or, in the
      case of unaudited statements as permitted by Form 10-Q of the SEC), and fairly
      present in all material respects (subject in the case of unaudited statements,
      to normal, recurring audit adjustments) the financial position of the Company
      as
      of the dates thereof and the results of its operations and cash flows for the
      periods then ended. The Common Stock is traded on the American Stock
      Exchange.

     

    4.  Representations
      and Warranties of the Lender.

     

    The
      Lender hereby represents and warrants to the Company that:

     

    4.1  Authorization.

     

    The
      Lender has full power and authority to enter into this Agreement. This
      Agreement, when executed and delivered by the Lender, will constitute a valid
      and legally binding obligation of the Lender, enforceable in accordance with
      its
      terms, except as limited by applicable bankruptcy, insolvency, reorganization,
      moratorium, fraudulent conveyance, and any other laws of general application
      affecting enforcement of creditors' rights generally, and as limited by laws
      relating to the availability of a specific performance, injunctive relief,
      or
      other equitable remedies.

     

    
      
         

      

      
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    4.2  Purchase
      Entirely for Own Account.

     

    This
      Agreement is made with the Lender in reliance upon the Lender's representation
      to the Company, which by the Lender's execution of this Agreement, the Lender
      hereby confirms, that the Note to be acquired by the Lender will be acquired
      for
      investment for the Lender's own account, not as a nominee or agent, and not
      with
      a view to the resale or distribution of any part thereof, and that the Lender
      has no present intention of selling, granting any participation in, or otherwise
      distributing the same. By executing this Agreement, the Lender further
      represents that the Lender does not presently have any contract, undertaking,
      agreement or arrangement with any person to sell, transfer or grant
      participations to such person or to any third person, with respect to any of
      the
      Note. The Lender has not been formed for the specific purpose of acquiring
      the
      Note.

     

    4.3  Knowledge.

     

    The
      Lender is aware of the Company's business affairs and financial condition and
      has acquired sufficient information about the Company to reach an informed
      and
      knowledgeable decision to acquire the Note.

     

    4.4  Restricted
      Securities.

     

    The
      Lender understands that the Note has not been, and will not be, registered
      under
      the Securities Act, by reason of a specific exemption from the registration
      provisions of the Securities Act which depends upon, among other things, the
      bona fide nature of the investment intent and the accuracy of the Lender's
      representations as expressed herein. The Lender understands that the Note is
      "restricted security" under applicable U.S. federal and state securities laws
      and that, pursuant to these laws, the Lender must hold the Note
      indefinitely unless it is registered with the Securities and Exchange Commission
      and qualified by state authorities or an exemption from such registration and
      qualification requirements is available. The Lender acknowledges that the
      Company has no obligation to register or qualify the Note for resale. The Lender
      further acknowledges that if an exemption from registration or qualification
      is
      available, it may be conditioned on various requirements including, but not
      limited to, the time and manner of sale, the holding period for the Note, and
      on
      requirements relating to the Company which are outside of the Lender's control,
      and which the Company is under no obligation and may not be able to
      satisfy.

     

    4.5  No
      Public Market.

     

    The
      Lender understands that, except for the Common Stock, no public market now
      exists for any of the securities issued by the Company and the Company has
      made
      no assurances that a public market will ever exist for any of the Company's
      securities.

     

    
      
         

      

      
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    4.6  Accredited
      Investor.

     

    The
      Lender is an accredited investor as defined in paragraphs (a)(1), (a)(2),
      (a)(3), (a)(7) or (a)(8) of Rule 501(a) of Regulation D promulgated under
      the Securities Act and is a business trust having a net asset value of at least
      $5,000,000 and was not formed to invest in the Company.

     

    5.  Conditions
      to the Lender's Obligations to make any Advance.

     

    The
      obligation of the Lender to make an Advance under the Note is subject to the
      fulfillment of each of the following conditions, unless otherwise waived by
      the
      Lender:

     

    5.1  Representations
      and Warranties.

     

    The
      representations and warranties of the Company contained in Section 3
      shall be
      true on and as of each applicable Advance with the same effect as though such
      representations and warranties had been made on and as of the date of such
      Advance;

     

    5.2  Compliance
      with Agreements.

     

    The
      Company shall have performed under and complied in all material respects with
      each agreement, covenant and obligation required by this Agreement to be so
      performed by or complied with by the Company on or before any
      Advance;

     

    5.3  Consents.

     

    The
      obtaining of all third party consents, approvals and waivers required for the
      Company to consummate the transactions contemplated by this
      Agreement;

     

    5.4  Compliance
      with Laws.

     

    Compliance
      by the Company with all applicable federal and state securities laws with
      respect to the issuance of the Note.

     

    6.  Affirmative
      Covenants of the Company.

     

    The
      Company will do all of the following for so long as the Note is
      outstanding:

     

    6.1  Taxes.

     

    Make
      timely payment of all material federal, state, and local taxes or assessments
      other than any taxes or assessments that the Company is contesting in good
      faith
      and deliver to the Lenders, on demand, appropriate certificates attesting to
      such payment.

     

    
      
         

      

      
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    6.2  Corporate
      Existence and Compliance with Laws.

     

    Maintain
      its and its operating subsidiaries corporate existence and good standing under
      the laws of their state of incorporation and remain in good standing in each
      jurisdiction in which the failure to do so would have a Material Adverse
      Effect.

     

    7.  Events
      of Default.

     

    Any
      one
      of the following is an "Event
      of Default":

     

    7.1  Payment
      Default.

     

    If
      the
      Company fails to pay (i) any of the principal amount of and accrued interest
      on
      the Note on the Maturity Date of the Note or (ii) any fees or interest related
      to the Note when due, and such failure to pay such fees or interest remains
      unremedied after the Company has received ten (10) Business Days prior written
      notice.

     

    7.2  Covenant
      Default.

     

    If
      the
      Company fails to perform any obligation under Section 6
      and as
      to any default that can be cured, has failed to cure such default within thirty
      (30) days after the occurrence thereof; provided, however, that if the default
      cannot by its nature be cured within the thirty (30) day period or cannot after
      diligent attempts by the Company be cured within such thirty (30) day period,
      and such default is likely to be cured within a reasonable time, then the
      Company shall have an additional reasonable period (which shall not in any
      case
      exceed sixty (60) additional days) to attempt to cure such default, and within
      such reasonable time period the failure to have cured such default shall not
      be
      deemed an Event of Default;

     

    7.3  Insolvency.

     

    If
      the
      Company becomes insolvent or if the Company begins an insolvency proceeding
      or
      an insolvency proceeding is begun against the Company and not dismissed or
      stayed within ninety (90) days;

     

    8.  Miscellaneous.

     

    8.1  Successors
      and Assigns.

     

    Subject
      to the limitations set forth herein, the Lender may assign this Agreement and
      the rights and obligations conferred hereby, in whole or in part, only to
      eligible financial institutions and only upon the written consent of the
      Company. Any assignment made in violation of this Section
      8.1
      is null
      and void. The terms and conditions of this Agreement shall be binding upon
      and
      inure to the benefit of and be binding upon the respective successors and
      assigns of the parties. Nothing in this Agreement, express or implied, is
      intended to confer upon any party other than the parties hereto or their
      respective successors and assigns any rights, remedies, obligations,
      or liabilities under or by reason of this Agreement, except as expressly
      provided in this Agreement.

     

    
      
         

      

      
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    8.2  Governing
      Law.

     

    This
      Agreement and all acts and transactions pursuant hereto and the rights and
      obligations of the parties hereto shall be governed, construed and interpreted
      in accordance with the laws of the State of New York, without giving effect
      to
      principles of conflicts of law.

     

    8.3  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 constitute one
      instrument.

     

    8.4  Titles
      and Subtitles.

     

    The
      titles and subtitles used in this Agreement are used for convenience only and
      are not to be considered in construing or interpreting this
      Agreement.

     

    8.5  Notices.

     

    Any
      notice required or permitted by this Agreement shall be in writing and shall
      be
      deemed sufficient upon receipt, when delivered personally or by courier,
      overnight delivery service or confirmed facsimile, or 48 hours after being
      deposited in the U.S. mail as certified or registered mail with postage prepaid,
      if such notice is addressed to the party to be notified at such party's address
      or facsimile number as set forth below or as subsequently modified by written
      notice.

     

    8.6  Amendments
      and Waivers.

     

    Any
      term
      of this Agreement may be amended or waived only with the written consent of
      the
      Company and the holder of the Note. 

     

    8.7  Severability.

     

    If
      one or
      more provisions of this Agreement are held to be unenforceable under applicable
      law, the parties agree to renegotiate such provision in good faith, in order
      to
      maintain the economic position enjoyed by each party as close as possible to
      that under the provision rendered unenforceable. In the event that the parties
      cannot reach a mutually agreeable and enforceable replacement for such
      provision, then (i) such provision shall be excluded from this Agreement,
      (ii) the balance of the Agreement shall be interpreted as if such provision
      were so excluded and (iii) the balance of the Agreement shall be
      enforceable in accordance with its terms.

     

    
      
         

      

      
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    8.8  Entire
      Agreement.

     

    This
      Agreement, and the documents referred to herein constitute the entire agreement
      between the parties hereto pertaining to the subject matter hereof, and any
      and
      all other written or oral agreements existing between the parties hereto are
      expressly canceled.

     

    8.9  Exculpation
      By Lender.

     

    The
      Lender acknowledges that it is not relying upon any person, firm or corporation,
      other than the Company and its officers and directors, in making its investment
      or decision to invest in the Company.

     

    [Signature
      Pages Follow]

    


    
      
         

      

      
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    The
      parties have executed this Credit Agreement as of the date first written
      above.

     

    
      	 	 	 
	 	COMPANY:
	 	 
	 	CASTLE
              BRANDS INC.
	 
 	 
 	 
 
	 	By:  	/s/
              Mark
              Andrews
	 	 	Mark Andrews, Chairman & CEO
	 	 	 


    

    
      	 	Address:	
              29th
                Floor

              570 Lexington Avenue

              New York, NY 10022

            
	 	 
	 	Facsimile Number: (646)
              356-0222


    

     

    
      	 	 	 
	 	LENDER:
	 	 
	 	FROST
              NEVADA INVESTMENTS TRUST
	 
 	 
 	 
 
	 	By:  	/s/
              Phillip
              Frost
	 	 	 
	 	Name:	Phillip
              Frost, M.D
	 	 	 
	 	Title:	Trustee
	 	 	 


    

    
      	 	Address:	
              4400
                Biscayne Blvd.

            
	 	 	Suite
              1500
	 	 	Miami,
              Florida 33137
	 	 
	 	Facsimile Number: (305)
              575-6444


    

     

    
      
         

      

      
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