EXHIBIT
4.1


 


CERTAIN
INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE
COMPANY IF PUBLICLY DISCLOSED. OMISSIONS ARE DESIGNATED AS [***].


 





 



 


EIGHTH
AMENDMENT


 


TO
THE


 


AMENDED
AND RESTATED LOAN AND SECURITY AGREEMENT


 


BETWEEN


 


CASTLE
BRANDS INC.,


 


CASTLE
BRANDS (USA) CORP.


 


AND


 


ACF
FINCO I LP


 


DATED
AS OF SEPTEMBER 22, 2014


 





 



 




    	 



    	 



    

 


EIGHTH
AMENDMENT TO

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT


 


This
Eighth Amendment to Amended and Restated Loan and Security Agreement (this “Amendment”) is dated as
of the date of execution of this Amendment by “Lender” (as defined below) (the “Eighth Amendment Effective
Date”) and is by and among CASTLE BRANDS INC., a corporation organized under the laws of the State of Florida
(“CBI”) and CASTLE BRANDS (USA) CORP., a corporation organized under the laws of the State of
Delaware (“CBUSA”, together with CBI, individually and collectively, “Borrower”),
and ACF FINCO I LP, a Delaware limited partnership and successor-in-interest to Keltic Financial Partners II, LP (“Lender”).


 


RECITALS:


 


Borrower
and Lender are parties to an Amended and Restated Loan and Security Agreement dated as of September 22, 2014, as amended by a
First Amendment dated as of August 7, 2015, by a Second Amendment dated as of August 17, 2015, by a Third Amendment dated as of
October 18, 2017, by a Fourth Amendment dated as of May 15, 2018, by a Fifth Amendment dated as of October 11, 2018, by a Sixth
Amendment dated as of November 8, 2018 and by a Seventh Amendment dated as of January 23, 2019 (as so amended, and as further
amended, restated, supplemented or otherwise modified from time to time, “Loan Agreement”), in connection
with which Borrower delivered a Amended and Restated Revolving Credit Note dated January 23, 2019 in a maximum principal amount
of $27,000,000 (the “Revolving Credit Note”), and other agreements, documents and instruments
in connection therewith (all of the foregoing, as the same may be amended, restated, supplemented or otherwise modified from time
to time to be collectively referred to as the “Loan Documents”).


 


Borrower
has requested that Lender increase the “Revolving Credit Limit” (as described in the Loan Agreement) to $60,000,000
and make certain other amendments to the Loan Agreement as set forth herein. Upon the terms and conditions contained in this Amendment,
Lender has agreed to amend the Loan Agreement as provided below.


 


AGREEMENT:


 


		1.	Defined
                                         Terms. Unless otherwise defined in the Recitals or in the body of this Amendment,
                                         all capitalized terms shall have the meanings ascribed to such terms in the Loan Documents.



 


		2.	Borrower
                                         Representations. Borrower hereby represents to Lender, that:



 


(a)
All Loan Documents executed by Borrower, including without limitation the Loan Agreement, constitute valid and legally
binding obligations of Borrower, enforceable against Borrower in accordance with the terms thereof;


 


(b)
Borrower has no claims, offsets, counterclaims, or defenses with respect to the payment or performance of any Obligations
owing to Lender under any of the Loan Documents;


 


(c)
After giving effect to this Amendment, no Default or Event of Default has occurred and is continuing under the terms of the
Loan Documents; and


 


(d)
As a material inducement to Lender entering into this Amendment, Borrower acknowledges and agrees that Lender is relying on
the accuracy and veracity of each of the above representations.


 




    	Page 1 of 12



    	 



    

 


		3.	Loan
                                         Agreement Amendments. The Loan Agreement is hereby amended as follows:



 


		(a)	Revolving
                                         Credit Limit. The reference to “TWENTY SEVEN MILLION AND 00/100 DOLLARS ($27,000,000.00)”
                                         contained in clause (a) of Section 2.1 of the Loan Agreement is hereby deleted in its
                                         entirety and replaced with “SIXTY MILLION AND 00/100 DOLLARS ($60,000,000.00)”.
                                         The reference to “the sum of (i) the Borrowing Base, plus (ii) the Purchased Inventory
                                         Sublimit Cap” contained in clause (b) of Section 2.1 of the Loan Agreement is hereby
                                         deleted in its entirety and replaced with “the Borrowing Base”.



 


		(b)	Revolving
                                         Credit Termination Date. Clause (a) of the definition of “Revolving Credit
                                         Termination Date” contained in the Definitions Schedule of the Loan Agreement is
                                         hereby amended by deleting the reference to “July 31, 2020” contained therein,
                                         and by substituting therefor “July 31, 2023”.



 


		(c)	Barreled
                                         Inventory Greater than 1 Year. The Definitions Schedule to the Loan Agreement is
                                         hereby amended by the addition of a new definition “Barreled Inventory Greater
                                         than 1 Year” in the appropriate alphabetical order to read as follows:



 


“Barreled
Inventory Greater than 1 Year” means, owned bourbon Inventory constituting raw materials, stored in barrels or tanks
and with an age of greater than 1 year.


 


		(d)	Barreled
                                         Inventory Less than 1 Year. The Definitions Schedule to the Loan Agreement is hereby
                                         amended by the addition of a new definition “Barreled Inventory Less than 1 Year”
                                         in the appropriate alphabetical order to read as follows:



 


“Barreled
Inventory Less than 1 Year” means, owned bourbon Inventory constituting raw materials, stored in barrels and with
an age of less than 1 year.


 


		(e)	Eligible
                                         Finished Goods. The Definitions Schedule to the Loan Agreement is hereby amended
                                         by the addition of a new definition “Eligible Finished Goods” in the appropriate
                                         alphabetical order to read as follows:



 


“Eligible
Finished Goods” means, Eligible Inventory consisting solely of finished goods.


 


		(f)	NOLV.
                                         The Definitions Schedule to the Loan Agreement is hereby amended by the addition of a
                                         new definition “NOLV” in the appropriate alphabetical order to read as follows:



 


“NOLV”
means, the net orderly liquidation value of Eligible Inventory determined from time to time based upon the most recent Inventory
appraisal conducted by Lender pursuant to Section 3.5 of this Agreement.


 


		(g)	Borrowing
                                         Base. The definition of Borrowing Base contained in the Definitions Schedule of the
                                         Loan Agreement is hereby deleted and replaced in its entirety with the following:



 


“Borrowing
Base” means, at any time, an amount equal to:


 


		(a)	An
                                         amount equal to 85% of the aggregate amount of Eligible Receivables at such time, plus;



 


		(b)	The
                                         lesser of (i) 75% of cost (including freight charges for Eligible Inventory, but excluding
                                         all profit and other mark-ups for purchases of Inventory from Affiliates) and (ii) 85%
                                         of the NOLV, in each case of Eligible Finished Goods; plus



 




    	Page 2 of 12



    	 



    

 


		(c)	The
                                         lesser of (i) 100% of cost (including freight charges for Eligible Inventory, but excluding
                                         all profit and other mark-ups for purchases of Inventory from Affiliates) and (ii) 85%
                                         of the NOLV, in each case of Barreled Inventory Greater than 1 Year; plus;



 


		(d)	The
                                         lesser of (i) 85% of cost (including freight charges for Eligible Inventory, but excluding
                                         all profit and other mark-ups for purchases of Inventory from Affiliates) and (ii) 85%
                                         of the NOLV, in each case of Barreled Inventory Less than 1 Year; plus;



 


		(e)	The
                                         lesser of (i) 50% of the NOLV of Borrower’s registered trademarks appraised pursuant
                                         to a recent appraisal in form and substance satisfactory to Lender and (ii) the lesser
                                         of (A) $15,000,000; provided, that such amount shall automatically decrease (any such
                                         decrease, a “Trademark Availability Decrease”) by an amount
                                         equal to $208,333.33 as of the first day of each successive calendar month following
                                         the Eighth Amendment Effective Date and (B) an amount equal to the product of the Borrowing
                                         Base at such time multiplied by 30%; provided, that such percentage shall automatically
                                         decrease by 0.50% as of the first day of each successive calendar month following the
                                         Eighth Amendment Effective Date; less



 


		(f)	The
                                         aggregate L/C Exposure at such time; less



 


		(g)	The
                                         aggregate amount of all Reserves in effect at such time.



 


		(h)	Eighth
                                         Amendment. The Definitions Schedule to the Loan Agreement is hereby amended by the
                                         addition of a new definition “Eighth Amendment” in the appropriate alphabetical
                                         order to read as follows:



 


“Eighth
Amendment” means that certain Eighth Amendment to Amended and Restated Loan and Security Agreement dated as of July
17, 2019 between Borrower and Lender.


 


		(i)	Eighth
                                         Amendment Effective Date. The Definitions Schedule to the Loan Agreement is hereby
                                         amended by the addition of a new definition “Eighth Amendment Effective Date”
                                         in the appropriate alphabetical order to read as follows:



 


“Eighth
Amendment Effective Date” has the meaning given to it in the Eighth Amendment.


 


		(j)	Revolving
                                         Credit Rate. The definition of Revolving Credit Rate contained in the Definitions
                                         Schedule of the Loan Agreement is hereby deleted and replaced in its entirety with the
                                         following:



 


“Revolving
Credit Rate” means, a fluctuating rate that, when annualized, is equal to the greatest of (i) the Prime Rate plus
1.50%, (ii) the LIBOR Rate plus 4.00% and (iii) 5.50%.


 


		(k)	Unfunded
                                         Capital Expenditures. The Definitions Schedule to the Loan Agreement is hereby amended
                                         by the addition of a new definition “Unfunded Capital Expenditures” in the
                                         appropriate alphabetical order to read as follows:



 


“Unfunded
Capital Expenditures” means as to Borrower, without duplication, a Capital Expenditure funded (a) from such Borrower’s
internally generated cash flow or (b) with the proceeds of an Advance under the Revolving Credit.


 


		(l)	Fixed
                                         Charge Coverage Ratio. The definition of Fixed Charge Coverage Ratio contained in
                                         the Definitions Schedule of the Loan Agreement is hereby deleted and replaced in its
                                         entirety with the following:



 




    	Page 3 of 12



    	 



    

 


“Fixed
Charge Coverage Ratio” means, for any period, the ratio of (A) EBITDA for such period, divided by (B) the sum of
the following for such period (calculated on a pre-tax basis): (I) all regularly scheduled cash repayments of principal of the
Obligations and other Indebtedness of Borrower (including the principal component of any payments in respect of capital lease
obligations), whether or not actually paid or whether accrued or capitalized during such period; plus (II) all regularly scheduled
cash payments of interest payable by Borrower in respect of the Obligations and other Indebtedness (including the interest component
of any payments in respect of capital lease obligations), whether or not actually paid or whether accrued or capitalized during
such period; plus (III) all fees, costs and expenses paid or payable by Borrower with respect to the Obligations and other Indebtedness;
plus (IV) Unfunded Capital Expenditures during such period, plus (V) all cash dividends or distributions on Borrower’s equity,
membership or partnership interests (as applicable) during such period, plus (VI) all cash distributions paid by Borrower during
such period on subordinated debt or equity, plus (VII) all Trademark Availability Decreases during such period.


 


		(m)	Fixed
                                         Charge Covenant. Section 8.21 is hereby deleted and replaced in its entirety with
                                         the following:



 


8.21
Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage Ratio, as of the last day of each fiscal quarter, to be less
than 1.1 to 1.0, measured on a rolling four (4) fiscal quarter basis.


 


		(n)	Revenue
                                         Covenant. A new Section 8.22 is hereby added to the Loan Agreement to read as follows:



 


8.22
Revenue. Permit Borrower’s Revenue arising from sales of Inventory consisting of the “Jefferson’s”
brand as of the last day of any fiscal quarter to be less than the applicable amount set forth below for such fiscal quarter:


 


	Fiscal Quarter	 	 	Revenue	 
	 	 	 	 	 
	September 30, 2019	 	$	[***]	 
	December 31, 2019	 	$	[***]	 
	March 31, 2020	 	$	[***]	 
	June 30, 2020	 	$	[***]	 
	September 30, 2020	 	$	[***]	 
	December 31, 2020	 	$	[***]	 
	March 31, 2021	 	$	[***]	 
	June 30, 2021	 	$	[***]	 
	September 30, 2021	 	$	[***]	 
	December 31, 2021	 	$	[***]	 
	March 31, 2022	 	$	[***]	 
	Each fiscal quarter thereafter	 	$	[***]	 



 




    	Page 4 of 12



    	 



    

 


		(o)	Revenue.
                                         The Definitions Schedule to the Loan Agreement is hereby amended by the addition of a
                                         new definition “Revenue” in the appropriate alphabetical order to read as
                                         follows:



 


“Revenue”
means with respect to revenue for any rolling four (4) fiscal quarter basis, recognized in accordance with GAAP during such
period.


 


		(p)	Purchased
                                         Inventory Sublimit. The Definitions Schedule to the Loan Agreement is hereby amended
                                         by deleting in its entirety the definition of “Purchased Inventory Sublimit”.



 


		(q)	Purchase
                                         Inventory Sublimit Availability. The Definitions Schedule to the Loan Agreement is
                                         hereby amended by deleting in its entirety the definition of “Purchased Inventory
                                         Sublimit Availability”.



 


		(r)	Revolving
                                         Credit Sublimit Schedule. The Revolving Credit Sublimit Schedule to the Loan Agreement
                                         is hereby amended by deleting in its entirety the section therein entitled “Purchased
                                         Inventory Sublimit” and all related defined terms, all of which such defined terms
                                         and references to such defined terms shall be deemed stricken from the Loan Agreement
                                         wherever they appear. For the avoidance of doubt, Borrower shall not have any ability
                                         to request or receive borrowings from Lender under the Revolving Credit in respect of
                                         Purchased Inventory Sublimit Availability.



 


		(s)	Overadvances.
                                         The last sentence of Section 2.3 of the Loan Agreement is hereby amended by deleting
                                         the following: “, including Advances made under the Purchased Inventory Sublimit,”.



 


		(t)	Eligible
                                         Inventory. The definition of Eligible Inventory contained in the Definitions Schedule
                                         of the Loan Agreement is hereby amended by deleting the last sentence of clause (a).



 


		(u)	Notice
                                         of Borrowing. The Notice of Borrowing attached to the Loan Agreement as Exhibit A
                                         thereto is hereby deleted in its entirety and replaced with the Notice of Borrowing attached
                                         hereto as Exhibit A.



 


		(v)	Facility
                                         Fee. Section 3.2 of the Loan Agreement is hereby deleted and replaced in its entirety
                                         with the following:



 


3.2
Facility Fee. Until all Obligations with respect to the Revolving Credit are finally and indefeasibly paid in cash to Lender
and performed in full, Borrower shall pay to Lender a fee (the “Facility Fee”) equal to the product
of one quarter of one percent (0.25%) multiplied by the maximum principal amount of the Revolving Credit, such Facility Fee to
be earned in full on the Eighth Amendment Effective Date and on the first (1st) day of each subsequent anniversary
thereof. In the absence of an Event of Default, the Facility Fee shall be paid in twelve (12) equal monthly installments, in advance,
on the first day of each calendar month. Upon the occurrence of any Event of Default and written notice by Lender, or on the Revolving
Credit Termination Date, Borrower shall immediately pay to Lender the portion of the Facility Fee remaining unpaid for the then-current
Contract Year. The Facility Fee shall be appropriately adjusted during any Contract Year in which the maximum principal amount
of any Loan is increased.


 




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		(w)	Collateral
                                         Management Fee. Section 3.3 of the Loan Agreement is hereby deleted and replaced
                                         in its entirety with the following:



 


3.3
Collateral Management Fee. Borrower shall pay to Lender a monthly collateral management fee (the “Collateral Management
Fee”) in an amount equal to Three Thousand and 00/100 Dollars ($3,000). The Collateral Management Fee shall be earned
in full on the Eighth Amendment Effective Date and on the first (1st) day of each calendar month until the date the
Obligations have been finally and indefeasibly paid in cash to Lender and performed in full. The Collateral Management Fee shall
be paid in arrears commencing on the first Banking Day of the calendar month immediately following the Effective Date and on the
first Banking Day of each calendar month thereafter. Upon the occurrence and during the continuance of a Default or Event of Default,
the monthly Collateral Management Fee shall equal Six Thousand Dollars ($6,000).


 


		(x)	Liquidated
                                         Damages. Section 3.7 of the Loan Agreement is hereby deleted in its entirety and
                                         replaced with the following:



 


“3.7.Liquidated
Damages. Subject to the terms and conditions of this Agreement, Borrower shall have the right prior to July 31, 2023 to prepay
in full the entire outstanding principal balance of the Revolving Credit, all accrued and unpaid interest thereon, all fees, costs,
expenses and other amounts payable to Lender in connection with the Revolving Credit, and all other Obligations payable to Lender
under this Agreement and the other Loan Documents. Borrower’s election to prepay the Obligations relating to the Revolving
Credit in full shall be delivered to Lender in writing (a “Principal Reduction Notice”) at least sixty
(60) calendar days’ prior to the date of such prepayment. A Principal Reduction Notice shall be irrevocable when delivered
to Lender, and if all Obligations relating to the Revolving Credit are finally and indefeasibly paid to Lender in connection with
such Principal Reduction Notice, the Revolving Credit shall be terminated and all obligations of Lender to extend credit to Borrower
under the Revolving Credit shall terminate.


 


If
(x) prior to July 31, 2023 Borrower prepays in full the entire outstanding principal balance of the Revolving Credit, all accrued
and unpaid interest thereon, all fees, costs, expenses and other amounts payable to Lender in connection with the Revolving Credit,
and all other Obligations payable to Lender under this Agreement and the other Loan Documents pursuant to the foregoing paragraph,
or (y) pursuant to the terms of this Agreement or any other Loan Document, and prior to July 31, 2023, either (I) Lender demands
repayment of the outstanding Obligations in whole or in part, or (II) repayment of the outstanding Obligations are otherwise accelerated
in whole or in part, then in the case of either clause (x) or (y) above, at the time of such repayment, prepayment, demand or
acceleration, and in addition to the principal balance(s) of the Loan(s) being prepaid, all accrued and unpaid interest thereon,
all fees, costs, expenses and other amounts payable to Lender in connection with the Loans, and all other Obligations paid to
Lender under this Agreement and the other Loan Documents required to be paid at such time, Borrower shall pay liquidated damages
to Lender in an amount equal to the product of (i) and (ii) below:


 




    	Page 6 of 12



    	 



    

 


(i)
if prepayment, repayment, demand or acceleration of the Revolving Credit, the Revolving Credit Limit;


 


multiplied
by


 


(ii)
(A) three percent (3.00%) if such prepayment, repayment, demand or acceleration occurs on or prior to July 31, 2021, (B) two percent
(2.00%) if such prepayment, repayment, demand or acceleration occurs on or prior to July 31, 2022, and (C) one percent (1.00%)
if such prepayment, repayment, demand or acceleration occurs after July 31, 2022; provided, that, to the extent any prepayment
occurs under the immediately foregoing clause (x) as a result of a sale of all or substantially all of Borrower’s assets
or equity interests and the Obligations are fully paid and satisfied as a result of such transaction, then such percentage shall
be equal to one quarter of one percent (0.25%).


 


Lender
and Borrower each hereby acknowledges and agrees that it would be impractical and extremely difficult to ascertain Lender’s
actual damages from early termination of the Revolving Credit and that the above liquidated damages have been arrived at by mutual
agreement of Lender and Borrower as to a reasonable calculation of Lender’s lost profits as a result of early termination
of the Revolving Credit. Lender and Borrower each further hereby acknowledges and agrees that the liquidated damages provided
above are intended to be fair and reasonable approximations of Lender’s actual damages from early termination of the Revolving
Credit, are presumed to be the amount of damages sustained by Lender as a result of such early termination, are reasonable under
the circumstances currently existing, and that the liquidated damages are not intended to be penalties.


 


		(y)	Permitted
                                         Payments. Section 8.6(a) of the Loan Agreement is hereby deleted in its entirety
                                         and replaced with the following:



 


“(a)
Permitted Payments. Subject to the terms and conditions hereof, CBI shall be permitted to make:


 


(i)
concurrently with the Effective Date principal payments in an aggregate amount equal to One Million Two Hundred Fifty Thousand
and 00/100 Dollars ($1,250,000.00) plus aggregate accrued and unpaid interest of Twenty Three Thousand Five Hundred Eight and
00/100 Dollars ($23,508.00) in full repayment of the Promissory Notes dated on or about August 7, 2013 in an aggregate original
principal amount equal to One Million Two Hundred Fifty Thousand and 00/100 Dollars ($1,250,000.00) issued by CBI (“CBI
August 2013 Subordinated Notes”) to the lending parties named therein (collectively, the “CBI August
2013 Subordinated Noteholders”);


 


(ii)
regularly scheduled payments of interest due and payable under the terms of the Castle Brands Inc. 5% Subordinated Convertible
Notes due 2018 Purchase Agreement dated on or about October 21, 2013 (the “2018 Subordinated Notes Purchase Agreement”),
the Castle Brands Inc. 5% Subordinated Convertible Notes due 2018 dated on or about October 21, 2013 (collectively, the “2018
Subordinated Notes”) and issued to the “Purchasers” (the “2018 Subordinated Noteholders”)
executing the 2018 Subordinated Notes Purchase Agreement, and the other agreements, documents and instruments executed and/or
delivered to CBI in connection therewith (all such agreements, documents and instruments, together with any amendments, restatements,
extensions or other modifications made from time to time, shall be collectively referred to herein as the, the “2018
Subordinated Debt Documents”), as the 2018 Subordinated Debt Documents are in effect on the date hereof, but not
any mandatory, voluntary, discretionary or optional payment, distribution, or other amount in repayment or prepayment of the 2018
Subordinated Notes or under the 2018 Subordinated Debt Documents, whether required or permitted pursuant to the terms of the 2018
Subordinated Debt Documents, due to the acceleration of maturity of 2018 Subordinated Notes, in whole or in part, or any other
2018 Subordinated Debt Document, in whole or in part, for any reason; and


 




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(iii)
concurrently with the Eighth Amendment Effective Date the entire amount then due and payable under the terms of the 11% Subordinated
Note due 2020 dated March 29, 2017, as amended, issued by Castle Brands Inc. in favor of Frost Nevada Investment Trust.


 


For
purposes of this Agreement the 2018 Subordinated Noteholders shall be collectively referred to as the “Junior Creditors”,
the 2018 Subordinated Debt Documents shall be referred to as the “Junior Creditor Loan Documents”, each
payment permitted pursuant to the provisions of this Section 8.6(a) shall be referred to as a “Permitted Payment”,
and any amendment, modification, restatement, extension or replacement of any Junior Creditor Loan Document after the date of
this Agreement shall be disregarded for purposes of determining Permitted Payments.


 


		(z)	Voting
                                         Rights, Dividends, Replacement/Release of Collateral. A new Section 4.9 is hereby
                                         added to the Loan Agreement to read as follows:



 


4.9
Voting Rights, Dividends, Replacement/Release of Collateral.


 


		(a)	So
                                         long as there has not occurred an Event of Default, or any event which with the giving
                                         of notice or the lapse of time, or both, would be such an Event of Default, Borrower
                                         shall be entitled to exercise any and all voting rights and powers relating or pertaining
                                         to the Collateral or any part thereof for any purpose consistent with the terms of this
                                         Agreement.



 


		(b)	So
                                         long as there has not occurred an Event of Default, or an event which with the giving
                                         of notice or the lapse of time, or both, would be such an Event of Default, Borrower
                                         shall be entitled to receive and retain any and all cash dividends and distributions,
                                         if any, paid on the Collateral. Any and all stock and/or liquidating dividends, distributions
                                         in property, redemptions or other distributions made on or in respect of the Collateral,
                                         whether resulting from a subdivision, combination or reclassification of the outstanding
                                         capital stock of the issuer thereof or received in exchange for Collateral or any part
                                         thereof or as a result of any merger, consolidation, acquisition or other exchange of
                                         assets to which issuer or Borrower may be a party or otherwise, and any and all cash
                                         and other property received in payment of the principal of or in redemption of or in
                                         exchange for any Collateral (either as maturity, upon call for redemption or otherwise),
                                         shall become part of the Collateral and, if received by Borrower, shall be held in trust
                                         for the benefit of Lender and shall forthwith be delivered to Lender or it designated
                                         agent or nominee (accompanied by proper instruments of assignment and/or stock powers
                                         executed by Borrower in accordance with Lender’s instructions) to be held subject
                                         to the terms of this Agreement.



 




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		(c)	Upon
                                         the occurrence of any Event of Default, or any event which with the giving of notice
                                         or the lapse of time, or both, would be such an Event of Default, at the option of Lender:
                                         (i) all rights of Borrower to exercise or refrain from exercising, the voting rights
                                         and powers which Borrower is entitled to exercise, pursuant to Section 4.9(a) above,
                                         shall cease, and all such rights shall thereupon be become vested in Lender, which shall
                                         have the sole and exclusive right and authority to exercise, or refrain from exercising,
                                         such voting and/or consensual rights and powers; and (ii) the Lender shall receive and
                                         be entitled to retain any and all cash dividends and distributions, if any, paid in respect
                                         of the Collateral. Any and all money and other property paid over to or received by the
                                         Lender, pursuant to the provisions of this Section 4.9 or Section 4.9(b) above, shall
                                         be retained by the Lender as part of the Collateral and be governed by, and applied in
                                         accordance with, the provisions of this Agreement. Notwithstanding the foregoing, pursuant
                                         to the terms of that certain Stockholders Agreement dated February 18, 2005, between
                                         Gosling-Castle Partners Inc. (f/k/a Gosling Partners Inc.) and the other “Stockholders”
                                         described therein, as amended by a Amendment No. 1 dated March 29, 2017 (as so amended,
                                         the “Stockholders Agreement”), Lender hereby acknowledges and
                                         agrees that it will be bound by the provisions of the Stockholders Agreement should it
                                         obtain title to the shares of Gosling-Castle Partners, Inc. pledged by Borrower to Lender
                                         hereunder.



 


		(d)	When
                                         the Obligations have been fully performed and paid and when Lender has no obligation
                                         to extend credit or make payments to or for the benefit of Borrower, at which time Lender
                                         shall immediately release, reassign and re-deliver (or cause to be so released, reassigned
                                         and re-delivered) to Borrower, without recourse or warranty and at the expense of Borrower
                                         against receipt, such of the Collateral (if any) as shall not have been sold or otherwise
                                         applied by Lender pursuant to the terms hereof and which is still held by Lender hereunder
                                         together with appropriate instruments of reassignment and release.



 


		4.	Amended
                                         and Restated Revolving Credit Note. As a condition precedent to the effectiveness
                                         of this Amendment and specifically Lender’s increase of the Revolving Credit Limit,
                                         on or before the date of this Amendment Borrower shall execute and deliver to Lender
                                         a Second Amended and Restated Revolving Credit Note in form and content acceptable to
                                         Lender in Lender’s sole discretion (the “Replacement Revolving Credit
                                         Note”). Upon the Lender’s receipt of the Replacement Revolving Credit
                                         Note, the Lender shall immediately destroy or return to the Borrower the Revolving Credit
                                         Note marked cancelled.



 


		5.	Reimbursement
                                         of Lender. As consideration for Lender’s increase of the Revolving Credit and
                                         amendment of the Loan Agreement described above, and pursuant to Section 10.10 of the
                                         Loan Agreement, Borrower shall (a) pay to Lender on the date hereof a commitment fee
                                         for the increase of the Revolving Credit provided for herein in the amount of One Hundred
                                         Fifty Thousand and 00/100 Dollars ($150,000.00), which commitment fee shall be deemed
                                         earned in full as of the date hereof, and (b) reimburse, indemnify and hold Lender harmless
                                         for the reasonable fees and costs and expenses incurred by Lender for the services of
                                         legal professionals engaged by Lender in connection with the negotiation and preparation
                                         of this Amendment. With respect to any amount required to be paid or reimbursed by Borrower
                                         pursuant to the foregoing provisions of this paragraph 5, it is hereby agreed that Lender
                                         may charge any such amount to the Revolving Credit on the dates such payment is due or
                                         such reimbursement is made. Borrower acknowledges and agrees that on and after the Eighth
                                         Amendment Effective Date the Facility Fee shall be calculated based on the Revolving
                                         Credit Limit as amended by the terms hereof.



 




    	Page 9 of 12



    	 



    

 


		6.	Eighth
                                         Amendment Effective Date. This Amendment shall be effective as the Eighth Amendment
                                         Effective Date.



 


		7.	Post
                                         Closing Covenant. Borrower hereby covenants and agrees that on or before the date
                                         that is 90 days after the date of this Amendment (or such later date as may be extended
                                         in writing by Lender in Lender’s sole discretion) Borrower shall execute and delivery
                                         an amended and restated loan and security agreement (the “A&R LSA”)
                                         to amend and restate in its entirety the Loan Agreement (together with a further amended
                                         and restated revolving credit note, if necessary and all other Loan Documents reasonably
                                         required in connect therewith), such A&R LSA to be in form and substance mutually
                                         agreeable to Borrower and Lender. Failure to satisfy this covenant shall be an immediate
                                         Event of Default under the Loan Agreement.



 


		8.	Specificity
                                         of Provisions. The amendments set forth herein are limited precisely as written and
                                         shall not be deemed to (a) be a consent to or a waiver of any other term or condition
                                         of the Loan Agreement or any other Loan Document, or (b) prejudice any right or rights
                                         which Lender may now have or may have in the future under or in connection with the Loan
                                         Agreement or any other Loan Document. From and after the Eighth Amendment Effective Date,
                                         whenever the Loan Agreement is referred to in the Loan Agreement or in any other Loan
                                         Document, it shall be deemed to mean the Loan Agreement as modified by this Amendment.



 


		9.	Binding
                                         Effect of Loan Documents. Borrower hereby acknowledges and agrees that upon giving
                                         effect to this Amendment, the Loan Agreement, the Replacement Revolving Credit Note and
                                         each other Loan Document shall continue to be binding upon such Borrower and shall continue
                                         in full force and effect.



 


		10.	Choice
                                         of Law. This Amendment and the legal relations among the parties hereto shall be
                                         governed by and construed in accordance with the internal laws of the State of New York
                                         without regard to conflicts of law principles.



 


		11.	Counterparts.
                                         This Amendment may be executed by one or more the parties to this Amendment on any number
                                         of separate counterparts and all of said counterparts taken together shall be deemed
                                         to constitute one and the same instrument.



 


[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]


 


[SIGNATURE
PAGE IMMEDIATELY FOLLOWS]


 




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IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their respective duly authorized
officers.


 


	LENDER:	 
	 	 	 
	ACF FINCO I LP	 
	 	 	 
	By:
    	/s/
    Oleh Szczupak	 
	Name:
    	Oleh
    Szczupak	 
	Its:
    	Vice
    President	 


 


Eighth
Amendment Effective Date: July 17, 2019


 


	BORROWER:	 
	 	 
	CASTLE BRANDS INC.	 
	 	                      	 
	By:	/s/
    Alfred J. Small	 
	Name:
    	Alfred
    J. Small	 
	Its:
    	CFO	 


 


	CASTLE BRANDS (USA) CORP.	 
	 	 	 
	By:	/s/
    Alfred J. Small	 
	Name:
    	Alfred
    J. Small	 
	Its:
    	CFO	 


 




    	Page 11 of 12



    	 



    

 


EXHIBIT
A: NOTICE OF BORROWING


 


ACF
FinCo I LP


580
White Plains Road


Suite
610


Tarrytown,
NY 10591


 


Re:
Request for Advance


 


The
undersigned requests the following Advance(s) of the Revolving Credit pursuant to Section 2.1 of the Amended and Restated Loan
and Security Agreement dated as of September 22, 2014 between ACF FinCo I LP (as successor-in-interest to Keltic Financial Partners
II, LP) and the undersigned, as the same may be amended, supplemented or otherwise modified (“Loan Agreement”).
Capitalized terms used herein and not otherwise defined herein shall have the meanings given to them in the Loan Agreement.


 


	Revolving
    Credit: 	$________________________
	Letter
    of Credit Sublimit:	$________________________


 


	Letter
    of Credit Issued to:	 	Beneficiary:
    ______________________________
	 	 	Address:
    _________________________________
	 	 	_________________________________________
	 	 	 
	 	 	Date
    of issuance: ___________________________
	 	 	Number
    of Letter of Credit amended, renewed or extended: 
	 	 	__________________


 


For
Credit to:


 


	CASTLE
    BRANDS INC.:	 	$______________________________________
	 	 	 
	CASTLE
    BRANDS (USA) CORP.:	 	$______________________________________


 


Please
wire the requested Advance(s) to our operating account number ____________________________ at ______________________________________________
in accordance with the following wire instructions:


 


_______________________________________________


 


_______________________________________________


 


_______________________________________________


 


_______________________________________________.


 


Please
call the undersigned to confirm receipt of this fax at (____) _______.


 


	CASTLE BRANDS INC.	 	CASTLE BRANDS (USA) CORP.
	 	               	 	 	             
	By:
    	 	 	By:
    	 
	Name:
    	 	 	Name:
    	 
	Title:
    	 	 	Title:
    	 


 




    	Page 12 of 12