Document:

EX-4.2

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS NOTE NOR THE SECURITIES
INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (“SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE
OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, OR (B)
AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT
AND APPLICABLE STATE SECURITIES LAWS.

CASTLE BRANDS INC.

5% SUBORDINATED CONVERTIBLE NOTE DUE 2018

(this “Note”)

	 	 	 
	     , 2013
	 	New York, New York

$[?]

FOR VALUE RECEIVED, the undersigned, Castle Brands Inc., a Florida corporation (the
“Company”), promises to pay to the order of [?] (the “Holder”), the principal sum
of $[?] plus interest to the extent and at the rate specified in Section 1 below from and
after the date hereof. This Note is issued pursuant to the terms of that certain 5% Subordinated
Convertible Notes Purchase Agreement, made as of October 21, 2013, by and among the Company and
each person or entity named on the Schedule of Purchasers thereto (the “Agreement”).

1. Payments; Subordination.

a) The unpaid principal balance of this Note, and all accrued but unpaid interest earned
hereon, shall be due and payable, without demand or notice, on December 15, 2018 (the “Maturity
Date”). The Company will pay interest quarterly on the unpaid balance of this Note in arrears
on December 15, March 15, June 15 and September 15 of each year, or if any such day is not a
business day, on the next succeeding business day. Interest on this Note will accrue from the most
recent date to which interest has been paid or, if no interest has been paid, from the date of
issuance; provided that the first interest payment date shall be December 15, 2013. Interest shall
be due and payable, without demand or notice, on such dates, at a rate of five percent (5.00%) per
annum, (computed on the basis of a 360-day year of twelve (12) thirty (30)-day months) from the
date hereof until paid in full.

b) All payments (including payments) of principal or interest made by the Company hereunder
shall be made without set off, deduction, or counterclaim on the due date thereof by wire transfer
of immediately available funds to the Holder at such account as shall be specified in writing by
the Holder to the Company. If payment hereunder becomes due and payable on a day that is not a
business day, the payment due date shall be extended to the next succeeding business day.

c) Optional Prepayment. This Note may be prepaid by the Company, in whole or in part,
without penalty, at any time.

d) Subordination. All claims of the Holder to principal, interest and any other
amounts owed under this Note are hereby subordinated in right of payment to all indebtedness of the
Company existing as of the date hereof.

2. Conversion.

a) Conversion by Holder. This Note and any accrued but unpaid interest thereon shall
be convertible, in whole or in part, at the option of the Holder at any time prior to the Maturity
Date, into the number (rounded to the nearest whole) of fully paid shares of Common Stock of the
Company (the “Common Stock”) equal to (i) the aggregate principal amount of this Note and
any accrued but unpaid interest thereon being converted through the Date of Conversion (as defined
below), divided by (ii) $0.90 (the “Conversion Price”). If the Company, at any time while
this Note is outstanding: (i) pays a stock dividend or otherwise makes a distribution or
distributions payable in shares of Common Stock on shares of Common Stock or any other Common Stock
Equivalents (which, for avoidance of doubt, shall not include any shares of Common Stock issued by
the Company upon conversion of this Note), (ii) subdivides outstanding shares of Common Stock into
a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding
shares of Common Stock into a smaller number of shares, or (iv) issues, in the event of a
reclassification of shares of the Common Stock, any shares of capital stock of the Company, then
the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number
of shares of Common Stock (excluding any treasury shares of the Company) outstanding immediately
before such event, and of which the denominator shall be the number of shares of Common Stock
outstanding immediately after such event. Any adjustment made pursuant to this ýSection 2(a) shall
become effective immediately after the record date for the determination of shareholders entitled
to receive such dividend or distribution and shall become effective immediately after the effective
date in the case of a subdivision, combination or reclassification. For purposes hereof,
“Common Stock Equivalents” shall mean any securities of the Company or its subsidiaries
which would entitle the holder thereof to acquire at any time Common Stock, including, without
limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any
time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof
to receive, Common Stock.

b) Conversion Procedures. In order to convert this Note and/or accrued but unpaid
interest thereon, or a portion thereof, into Common Stock, the Holder shall deliver prior to 5:00
p.m., New York time, on any business day, a copy of the fully executed notice of conversion in the
form attached hereto as Exhibit A (the “Notice of Conversion”) to the Company at
its principal office, which notice shall specify the principal amount of this Note and/or accrued
but unpaid interest thereon to be converted on the date the Notice of Conversion is delivered to
the Company (the “Date of Conversion”), duly completed as appropriate.

c) Share Issuance. The Company shall issue and deliver, within ten (10) business days
after delivery to the Company of the Notice of Conversion, to the Holder or to the nominee of such
Holder, at the address of the Holder on the books of the Company or as otherwise directed by such
Holder on the Notice of Conversion, a certificate evidencing the shares of Common Stock to which
the Holder shall be entitled. The person or persons entitled to receive the shares of Common Stock
issuable upon such conversion shall be treated for all purposes as the record holder of such Common
Stock on the Date of Conversion. The Company shall not be obligated to issue certificates
evidencing the shares of Common Stock issuable upon conversion unless this Note is delivered to the
Company or the Holder notifies the Company that this Note has been lost, stolen or destroyed and
executes an agreement satisfactory to the Company to indemnify the Company from any loss incurred
by it in connection with this Note. The Company shall, within ten (10) business days after such
delivery, or such agreement and indemnification, issue and deliver a certificate representing the
number of fully paid shares of Common Stock into which the Note converts in accordance with the
provisions herein.

d) Adjustment of Principal and Accrued Interest Upon Conversion. Following any
conversion, the principal amount of this Note and accrued but unpaid interest thereon shall be
reduced in an amount equal to the portion of the principal amount of this Note and accrued but
unpaid interest thereon so converted. Within ten (10) business days after delivery to the Company
of the Notice of Conversion and this Note, the Company shall issue and deliver to the Holder or to
the nominee of such Holder, at the address of the Holder on the books of the Company or as
otherwise directed by such Holder, a replacement note otherwise identical to this Note evidencing
the principal amount of this Note and accrued but unpaid interest thereon that has not been
converted.

e) Reserved Shares. The Company shall at all times keep authorized and approved under
its Articles of Incorporation, as amended, solely for the purpose of effecting the conversion, the
number of shares of Common Stock issuable upon the conversion of the outstanding principal amount
of this Note and accrued but unpaid interest thereon and shall take all such action as may be
required from time to time in order that it may, subject to the surrender of this Note, validly and
legally issue shares of Common Stock upon such conversion.

f) Adjustment for Reorganizations. If, prior to the Maturity Date or the conversion
of the entire principal amount of this Note and accrued but unpaid interest thereon, there shall be
any merger, consolidation, share exchange, business combination, issuance of securities, direct or
indirect acquisition of securities, recapitalization, tender offer, exchange offer, sale of all or
substantially all of the Company’s assets or other similar transaction as a result of which the
shares of Common Stock shall be changed into the same or a different amount of equity interests,
shares of a class or classes of stock or securities of the Company or another entity, or other
property, then the Holder shall thereafter have the right to purchase and receive upon conversion
of this Note, upon the basis and upon the terms and conditions specified herein and in lieu of the
shares of Common Stock immediately theretofore issuable upon conversion, such equity interests,
shares of stock, securities and/or other property as may be issued or payable with respect to or in
exchange for the shares of Common Stock immediately theretofore purchasable and receivable upon the
conversion of this Note held by such Holder had such merger, consolidation, share exchange,
business combination, issuance of securities, direct or indirect acquisition of securities,
recapitalization, tender offer, exchange offer, sale of all or substantially all of the Company’s
assets or other similar transaction not taken place, and in any such case appropriate provisions
shall be made with respect to the rights and interests of the Holder to the end that the provisions
hereof (including, without limitation, provisions for adjustment of the Conversion Price and of the
number of shares issuable upon conversion of this Note) shall thereafter be applicable, as nearly
as may be practicable in relation to any shares of stock or securities thereafter deliverable upon
the exercise hereof.

g) Legend. All certificates representing shares of Common Stock issued hereunder
shall bear on the face thereof a legend substantially in the form set forth below:

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR APPLICABLE STATE SECURITIES LAW. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A)
AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT AND
APPLICABLE STATE SECURITIES LAWS, OR (B) AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY,
THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS.

h) Forced Conversion. Notwithstanding anything herein to the contrary, if (a) the
average daily volume of the Common Stock (as reported on the principal market or exchange on which
the Common Stock is listed or quoted for trading (the “Principal Trading Market”) exceeds
$50,000 per Trading Day and (b) the volume weighted average price of the Common Stock for at least
twenty (20) Trading Days during any thirty (30) consecutive Trading Day period exceeds 250% of the
then-current Conversion Price, the Company may, within five (5) Trading Days after the end of any
such thirty (30) consecutive Trading Day period, deliver a written notice to holders of all notes
issued pursuant to the Agreement (a “Forced Conversion Notice” and the date such notice is
delivered to all such holders, the “Forced Conversion Notice Date”) to cause each holder to
convert all or part of such holder’s notes (as specified in such Forced Conversion Notice) plus all
accrued but unpaid interest thereon, it being agreed that the “Conversion Date” shall be
deemed to occur on the third Trading Day following the Forced Conversion Notice Date (such third
Trading Day, the “Forced Conversion Date”). Any Forced Conversion Notices shall be applied
ratably to the holders of all notes issued pursuant to the Agreement based on each holder’s
then-current note holdings. For purposes hereof, “Trading Day” shall mean a day on which
the Principal Trading Market is open for trading.

3. Representations and Warranties. The Company represents and warrants to the Holder
that:

a) It is duly organized, validly existing and in good standing under the laws of the State of
Florida;

b) It has full power and legal right to execute and deliver this Note and to perform its
obligations hereunder, and its execution and delivery of this Note, and the performance by it of
its obligations hereunder, have been duly authorized by all necessary corporate action and do not
conflict with any law or contractual restriction binding upon or affecting it or any of its
property or assets, except where such conflict, individually or in the aggregate, could not
reasonably be expected to result in a material adverse effect;

c) This Note constitutes the legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as the enforcement hereof may be limited
by bankruptcy, insolvency, or other laws affecting the enforcement of creditors’ rights generally
and subject to the applicability of general principles of equity;

d) No consent, approval or authorization of, or registration, declaration or filing with, any
governmental authority or other person or entity is required as a condition to or in connection
with the due and valid execution, delivery and performance by the Company of this Note that has not
been received or made, as applicable; and

e) There are currently no material judgments entered against the Company, and the Company is
not in default with respect to any judgment, writ, injunction, order, decree or consent of any
court or other judicial authority.

4. Events of Default.

a) The occurrence of any of the following events shall constitute an “Event of
Default” under this Note:

i) Failure by the Company to pay when due an installment of principal, interest or other
amount owing under this Note on or before the date such payment is due, and such failure continues
for five (5) days following written notice of such default to the Company;

ii) The Company fails to comply with or perform any other term, obligation, covenant or
condition contained in this Note and which failure shall continue for five (5) consecutive days
following written notice of such default to the Company;

iii) The Company or Castle Brands (USA) Corp., a Delaware corporation and wholly-owned
subsidiary of the Company (“CBUSA”), shall (a) commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in effect; (b) consent to
the entry of an order for such relief in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect; (c) consent to the appointment of or
taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official for either the Company or CBUSA, or for all or substantially all of the assets of
the Company or CBUSA; or (d) make any general assignment for the benefit of creditors;

iv) There shall have occurred a default by the Company or CBUSA in the payment of principal or
interest on any obligation in excess of $50,000 for borrowed money beyond the period of grace, if
any, provided with respect thereto or default in the performance or observance of any other term,
condition or agreement contained in any such obligation or in any agreement relating thereto, if
the effect thereof is to cause, or permit the holder or holders of such obligation (or a trustee on
behalf of such holder or holders) to cause such obligation to become due prior to its stated
maturity and such default remains unremedied for a period of 10 days;

v) A final judgment for the payment of money in excess of $50,000 shall be rendered against
the Company or CBUSA and the same shall remain undischarged for a period of thirty (30) days during
which execution of such judgment shall not be effectively stayed; or

vi) The non-payment, for any reason, of any check tendered to Holder by the Company.

b) Upon the occurrence of an Event of Default, all amounts due hereunder, including, without
limitation, the unpaid principal balance and accrued and unpaid interest thereon, shall, at the
Holder’s option, become immediately due and payable upon written notice to the Company; provided,
however, that upon the occurrence of an Event of Default described in Section 4.a)iii), all
such amounts shall be immediately due and payable automatically and without written notice or
demand by the Holder. Upon the occurrence of an Event of Default, the Holder may additionally
exercise any of its other rights and remedies granted hereunder or under applicable law. Such
remedies shall be cumulative and concurrent and may be pursued singly, successively or together, at
the Holder’s option, and as often as the occasion therefore arises.

5. Miscellaneous.

a) Governing Law. The validity and interpretation of this Note, and the terms and
conditions set forth herein, shall be governed by and construed in accordance with the laws of the
State of New York, without regard to any choice of law or conflict of law provision or rule that
would cause the application of the laws of any jurisdiction other than the state of New York.

b) Submission to Jurisdiction. THE COMPANY, AND THE HOLDER BY ITS ACCEPTANCE HEREOF
AND AS SET FORTH IN THE AGREEMENT, HEREBY EXPRESSLY AND IRREVOCABLY (I) SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF THE FEDERAL, TO THE EXTENT PERMITTED BY APPLICABLE LAW, AND STATE
COURTS SITTING IN NEW YORK COUNTY, NEW YORK IN ANY SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY; AND (II) WAIVES (A) ITS RIGHT TO A TRIAL BY JURY
IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS NOTE, THE TRANSACTIONS CONTEMPLATED HEREBY, OR
ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY
PURCHASER AND FOR ANY COUNTERCLAIM RELATED TO ANY OF THE FOREGOING AND (B) ANY OBLIGATION WHICH IT
MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH
COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.

c) Costs. The Company agrees to pay all cost of collection, including reasonable
attorney’s fees (including attorney’s fees on appeal) in case the principal of this Note or any
payment on the principal or interest thereon is not paid at the respective maturity thereof,
whether suit be brought or not.

d) Presentment. The Company hereby waives presentment, demand for payment (except as
expressly required herein), protest, notice of protest, notice of dishonor and any and all other
notices or demands in connection with the delivery, acceptance, performance, default or enforcement
of this Note. No delay on the part of the Holder in exercising any right hereunder shall operate
as a waiver of such right or any other right.

e) Lost, Stolen, Destroyed or Mutilated Note. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of this Note, the Company
will issue a new Note of like tenor and amount and dated the date to which interest has been paid,
in lieu of such lost, stolen, destroyed or mutilated Note, and in such event the Holder agrees to
indemnify and hold the Company harmless in respect of any such lost, stolen, destroyed or mutilated
Note.

f) Notices. All notices and other communications required or permitted hereunder
shall be in writing and shall be deemed given or delivered when delivered personally or sent by
telecopy with confirmation of transmission by the transmitting equipment, four days after being
mailed by registered or certified mail, return receipt requested, or one day after being sent by
private overnight courier, addressed as follows:

	 
	If to the Company:

	Castle Brands Inc.

122 East 42nd Street, Suite 4700

New York, NY 10168

Attention: Alfred J. Small

Facsimile: (646) 356.0222

	 

	with a copy (which shall not constitute notice) to:

	Greenberg Traurig, P.A

333 Avenue of the Americas (333 S.E. Second Ave.)

Miami, Florida 33131

Attn: Robert L. Grossman

Facsimile: (305) 961.5756

	 

If to the Holder: To the address listed in the Purchase Agreement

g) Severability. If any provision of this Note is held to be invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law, (i) the other
provisions hereof shall remain in full force and effect in such jurisdiction and (ii) the
invalidity or unenforceability of any provision hereof in any jurisdiction shall not affect the
validity or enforceability of such provision in any other jurisdiction.

[Remainder of page intentionally left blank.]

1

IN WITNESS WHEREOF, the undersigned has executed and delivered this Note as of the date first
above written.

COMPANY:

CASTLE BRANDS INC.

By:

Name:

Title:

Exhibit A

Notice of Conversion

       (“Holder”) hereby elects to convert $      principal amount
and $      accrued but unpaid interest thereon of the 5% Subordinated Convertible Note due
2018, dated        (the “Note”), issued by Castle Brands Inc., a Florida
corporation (the “Company”), into        shares of        Common Stock of the Company (the
“Shares”) at a Conversion Rate of        according to the conditions set forth in the
Note as of the date written below. No fee will be charged to Holder for any conversion.

Date of Conversion:

Name of Holder:

Signature:

Title:

Address for delivery of stock certificate:

      

      

      

2EX-4.3

_________________________________________________________________

FOURTH AMENDMENT, WAIVER AND CONSENT

TO THE

LOAN AND SECURITY AGREEMENT

BETWEEN

CASTLE BRANDS INC.,

CASTLE BRANDS (USA) CORP.

AND

KELTIC FINANCIAL PARTNERS II, LP

DATED AS OF AUGUST 19, 2011

Effective Date: October 21, 2013

FOURTH AMENDMENT, WAIVER AND CONSENT TO LOAN AND SECURITY AGREEMENT

RECITALS:

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”)
(individually and collectively, “Borrower”) and KELTIC FINANCIAL PARTNERS II, LP, a Delaware
limited partnership (“Lender”), are parties to a Loan and Security Agreement dated as of August 19,
2011, as amended by a First Amendment dated as of July 23, 2012, by a Second Amendment dated as of
March 11, 2013, and by a Third Amendment dated as of August 7, 2013 (as so amended, the “Credit
Agreement”), in connection with which Borrower delivered an Amended and Restated Revolving Credit
Note dated March 11, 2013 in a maximum principal amount of $8,000,000 (the “Revolving Credit
Note”), an Amended and Restated Term Note dated August 7, 2013 in the original principal amount of
$4,000,000 (the “Term Note”), a Subordination Agreement dated August 7, 2013 between Lender and the
parties executing the same (the “Subordination Agreement”) and other agreements, documents and
instruments in connection therewith (all of the foregoing, as the same may be amended, restated, or
otherwise modified from time to time to be collectively referred to as the “Loan Documents”).

Borrower has requested that the Lender permit CBI to incur indebtedness in an aggregate original
principal amount of $2,125,000 (the “2018 Subordinated Debt”) pursuant to the terms of the Castle
Brands Inc. 5% Subordinated Convertible Notes due 2018 Purchase Agreement dated on or about the
date of this Amendment (the “2018 Notes Purchase Agreement”), the Castle Brands Inc. 5%
Subordinated Convertible Notes due 2018 dated on or about the date of this Amendment and issued to
the “Purchasers” described in the 2018 Notes Purchase Agreement (collectively, the “2018
Subordinated Notes”), and the other agreements, documents and instruments executed and/or delivered
to CBI in connection therewith (collectively, the “2018 Subordinated Debt Documents”). The Loan
Documents prohibit Borrower from incurring additional indebtedness in such amount without Lender’s
consent.

Borrower has requested that Lender consent to CBI’s incurrence of the 2018 Subordinated Debt, waive
all Defaults and Events of Default occurring as a result of CBI’s execution and delivery of the
2018 Subordinated Debt Documents and incurrence of the 2018 Subordinated Debt, and amend the
“EBITDA” covenant contained in the Credit Agreement in connection therewith. Upon the terms and
conditions contained in this Amendment Lender has agreed to provide such consent, waive such
Defaults and Events of Default and amend the Credit 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. Consent; Waiver. Subject to the terms, conditions, representations and warranties
contained herein, Lender hereby consents to CBI’s execution and delivery of the 2018 Subordinated
Debt Documents and CBI’s incurrence of the 2018 Subordinated Debt in an original principal amount
equal to Two Million One Hundred Twenty Five Thousand and 00/100 Dollars ($2,125,000.00), and
hereby agrees to waive all Defaults and Events of Default under the Loan Agreement specifically
caused by CBI’s execution and delivery of the 2018 Subordinated Debt Documents and incurrence of
the 2018 Subordinated Debt.

3. Amendment of Subordination Agreement. As a condition precedent to the effectiveness of
this Amendment and specifically the incurrence of the 2018 Subordinated Debt described herein, the
Subordination Agreement shall be amended, in form and content acceptable to Lender in Lender’s sole
discretion, to reflect the addition of the 2018 Subordinated Debt as “Junior Obligations” as
defined therein, the addition of the 2018 Subordinated Debt Documents as “Junior Creditor Loan
Documents” as described therein, and the addition of each holder of a 2018 Subordinated Note as a
“Junior Creditor” for all purposes of the Subordination Agreement, and containing such other terms
and conditions thereto as Lender deems reasonable, necessary and/or appropriate in Lender’s sole
discretion.

4. Dividends and Distributions; Payment of Indebtedness. Paragraphs (a) and (b) of Section
8.6 of the Credit Agreement are hereby deleted in their entirety and replaced with the following:

“(a) Permitted Payments. Subject to the terms and conditions hereof, CBI shall be
permitted to make (i) regularly scheduled payments of principal and interest due and payable under
the terms of the Loan Agreement between Castle Brands Inc. and the lending parties named therein
dated on or about August 7, 2013 (the “CBI August 2013 Subordinated Loan Agreement”) and 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”) and such other agreements, documents and instruments
executed and/or delivered to the CBI August 2013 Subordinated Noteholders 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 “CBI August 2013 Subordinated Loan Documents”), as the CBI August 2013 Subordinated Loan
Documents are in effect on the date hereof, and voluntary prepayments of principal and interest
permitted under the terms of the CBI August 2013 Subordinated Loan Documents as the CBI August 2013
Subordinated Loan 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
CBI August 2013 Subordinated Notes or under the CBI August 2013 Subordinated Loan Documents,
whether required or permitted pursuant to the terms of the CBI August 2013 Subordinated Loan
Documents, due to the acceleration of maturity of the CBI August 2013 Subordinated Notes, in whole
or in part, or any other CBI August 2013 Subordinated Loan Document, in whole or in part, for any
reason, and (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. For purposes of this Agreement
the CBI August 2013 Subordinated Noteholders and the 2018 Subordinated Noteholders shall be
collectively referred to as the “Junior Creditors”, the CBI August 2013 Subordinated Loan Documents
and 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.

(b) Termination of Permitted Payments. Notwithstanding anything of this Section 8.6
to the contrary (specifically including paragraph (a) immediately above), or anything to the
contrary in the Junior Creditor Loan Documents, no Junior Creditor shall demand, take, accept, or
receive from or on behalf of CBI, Borrower or any Person that is a co-borrower with Borrower of the
Obligations, or that has guaranteed the repayment of the Obligations or the performance by the
Borrower of the terms and conditions of the Loan Documents in whole or in part or that has provided
any letter of credit, pledge, financial instrument or other accommodation to Lender as security for
or in support of the Obligations, any Permitted Payment:

(i) if any payment of principal or interest then due with respect to the Obligations
shall not have been paid to Lender in full; or

(ii) if after giving effect to such Permitted Payment the remainder of the Borrowing
Capacity less the aggregate amount of all Obligations then outstanding would not exceed One
and 00/100 Dollar ($1.00) (as determined on a pro forma basis); or

(iii) if after giving effect to such Permitted Payment a Default or Event of Default
would occur (as determined on a pro forma basis); or

(iv) during any period in which a Default or Event of Default has occurred and is
continuing.”

5. EBITDA Covenant. Section 8.19 of the Credit Agreement shall be deleted in its entirety
and replaced with the following:

“8.19. EBITDA. Permit EBITDA as of and for:

(a) The twelve (12) consecutive calendar month period ending on September 30, 2013, to
be a negative number greater than negative Two Hundred Fifty Thousand and 00/100 Dollars
(-$250,000.00); and

(b) The twelve (12) consecutive calendar month period ending on December 31, 2013, to
be less than Zero and 00/100 Dollars ($0.00); and

(c) The twelve (12) consecutive calendar month period ending on March 31, 2014, to be
less than Five Hundred Thousand and 00/100 Dollars ($500,000.00); and

(d) The twelve (12) consecutive calendar month period ending on June 30, 2014, and for
each period of twelve (12) consecutive calendar months ending on a Fiscal Quarter
thereafter, to be less than Seven Hundred Fifty Thousand and 00/100 Dollars ($750,000.00).”

6. Reimbursement of Lender. As consideration for Lender’s increase of the Revolving Credit
and amendment of the Credit Agreement described above, and pursuant to Sections 3.4 and 10.9 of the
Credit Agreement, Borrower shall 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 Agreement. With respect to any
amount required to be paid or reimbursed by Borrower pursuant to the foregoing provisions of this
paragraph 9, 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 Effective Date of this Amendment the Facility Fee shall be calculated based on the
Revolving Credit Limit as amended by the terms hereof.

7. Effective Date. This Amendment shall be effective as of October 21, 2013.

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 Credit Agreement or any of the documents referred to therein, or (b) prejudice any right or
rights which Lender may now have or may have in the future under or in connection with the Credit
Agreement or any or any other Loan Document. From and after the effective date of this Amendment,
whenever the Credit Agreement is referred to in the Credit Agreement or in any of the other Loan
Documents, it shall be deemed to mean the Credit 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 Credit Agreement, the Revolving Credit Note and each Loan
Document shall continue to be binding upon such Borrower and shall continue in full force and
effect.

10. No Other Events of Default. Borrower hereby represents and warrants that upon giving
effect to the terms and provisions of this Amendment no default or Event of Default shall have
occurred and be continuing under the terms of the Credit Agreement.

11. 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.

12. 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]

1

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

LENDER:

KELTIC FINANCIAL PARTNERS II, LP

By: Keltic Financial Services, LLC, its general partner

	 	 	 
	By: /s/ Oleh Szczupak

	Name:

	 	Oleh Szczupak

Its: Chief Credit Officer

BORROWER:

CASTLE BRANDS INC.

	 	 	 
	By:

Name:

Its:

	 	/s/ Alfred J. Small

Alfred J. Small

CFO

CASTLE BRANDS (USA) CORP.

	 	 	 
	By:

Name:

Its:

	 	/s/ Alfred J. Small

Alfred J. Small

CFO

2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00222-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00222-of-00352.parquet"}]]