Document:

Unassociated Document

Exhibit 10.22

 

BGS Acquisition Corp.,

BGS Acquisition Subsidiary, Inc. and

BGS Merger Subsidiary, Inc.

6342 North Bay Road

Miami Beach, FL 33141

November __, 2013

 

Black Diamond Financial Group, LLC

1610 Wynkoop Street, STE 400

Denver, CO 80202

Attention:  Patrick Imeson

 

and

 

TransnetYX, Inc.

c/o TransnetYX Holding Corp.

8110 Cordova Rd, Suite 119

Cordova, TN 38016

Attention: Robert J. Bean

 

RE:     Registration Rights Agreement

 

Dear Patrick and Robert:

 

Reference is made to the Amended and Restated Merger and Share Exchange Agreement (the “Merger Agreement”) dated August 13, 2013 by and among BGS Acquisition Corp., a British Virgin Islands business company with limited liability, BGS Acquisition Subsidiary, Inc., a Delaware corporation (“Purchaser”), BGS Merger Subsidiary, Inc., a Delaware corporation, TransnetYX Holding Corp., a Delaware corporation, Black Diamond Holdings LLC, a Colorado limited liability company, and Black Diamond Financial Group, LLC, a Delaware limited liability company.  Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Merger Agreement.

 

The parties hereby waive compliance with Section 11.8 of the Merger Agreement, regarding the Registration Rights Agreement, so long as, prior to the Closing Date, Purchaser shall have registered the Earn-Out Securities and the Lock-Up Securities pursuant to a Registration Statement on Form S-4.

 

No provision of this letter agreement may be amended except by a writing signed by the parties hereto.  This letter agreement may be executed in separate counterparts, each of which when executed will constitute one and the same original agreement.  This letter agreement shall be governed by the laws of the State of Delaware.  Except as provided in this letter agreement, the Merger Agreement shall remain in full force and effect in accordance with its terms.

 

[Remainder of page intentionally left blank]

 

  

  

  

 

If the foregoing terms are acceptable to you, please indicate your approval by signing a counterpart of this letter agreement where indicated below and return it to me.

 

	 	

Sincerely,

 

BGS ACQUISITION CORP.,

BGS ACQUISITION SUBSIDIARY, INC. and

BGS MERGER SUBSIDIARY, INC.

	 
	 	 	 	 
	
 

	By:	 	 
	 	 	Name: Cesar Baez	 
	 	 	Title:  Chief Executive Officer	 

 

Agreed and Accepted:

 

TRANSNETYX HOLDING CORP.

 

	

By:   

	 	 	 
	 	 	 
	Name:	 	 
	 	 	 
	Title:	 	 

 

BLACK DIAMOND HOLDINGS LLC

 

By: Black Diamond Financial Group, LLC, its manager

 

	

By:   

	 	 	 
	 	
Name: Patrick Imeson 

Title:  Manager

	 

 

BLACK DIAMOND FINANCIAL GROUP, LLC

 

	

By:   

	 	 	 
	 	
Name: Patrick Imeson 

Title:  Manager

	 

 

cc:           Heather Carmody (Duane Morris LLP)

Steven N. Levine (Messner Reeves LLP)

Al Bright, Jr. (Butler, Snow, O’Mara, Stevens & Cannada, PLLC)RESOLUTION
OF THE SHAREHOLDERS

 

OF

 

FOREVER
ZEN LTD.

 

 

The
following is a true copy of the resolution duly adopted by the Majority of the Shareholders of the Corporation at a special meeting,
notice to this meeting having been waived, held this 11th day of November, 2013

 

WHEREAS
there has been presented to and considered by this meeting a Motion to effectuate and elect a new Board of Directors of the Company;

 

NOW
THEREFORE BE IT RESOLVED that the majority of shareholders having considered this matter, and having opened the floor to all those
who voice a preference in the issue and pursuant to NRS 78.320, have overwhelmingly decided and RESOLVED that we have elected:

 

ALAN
CHEN, Director, CEO

 

Mr.
Chen, has been nominated and has accepted his position of DIRECTOR of the Company.

 

Said
Motion is hereby passed and the corporate books, records and the Company shall file this Resolution in the corporate records.

 

 

 Dated:
November 11th, 2013

 

	/s/
    Alan Chen	 
	Alan
                                                          Chen, Director, Pioneer Media Investments Co

        on
        behalf of the Majority ShareholdersTHE
BOARD OF DIRECTORS

 

OF

 

FOREVER
ZEN LTD.

 

 

 

 

The
following is a
true copy of
the resolution duly
adopted by the
Board of Directors of
this Corporation at a
special meeting, notice to this
meeting having been waived, held on November 11th, 2013;

 

The
Board of Directors
who was present
for this meeting
& took
active part therein was:

 

Hans
Van Niekerk

 

WHEREAS
there has been
presented to and
considered by this
meeting a Motion to
formally RESIGN my
position as DIRECTOR of
the company,

 

NOW
THEREFORE BE IT
RESOLVED that the corporation having
considered this matter, has opened
the floor to all
those who voice
a preference inthe
issue, has decided unanimously and
RESOLVED that: I do
herby formally RESIGN as director of the company, and do herby, by affixing,
my signature hereto, officially as my last corporate
act of Director, DO
HERBY RESIGN.

 

 

 

 

The
Director of the corporation,
by affixing
his signature hereto,
does hereby formally
resign, and shall allow
the company to
choose its Directors at a time and place of its choosing.

 

	/s/
    Hans Van Niekerk
	Hans
    Van Niekerk, DirectorEX-10.1

_________________________________________________________________

FIFTH 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: November 14, 2013

FIFTH 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, by a Third Amendment dated as of August 7, 2013, and by a Fourth Amendment, Waiver
and Consent effective as of October 21, 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, as amended by a First Amendment effective as of
October 21, 2013 between Lender and the parties executing the same as “Junior Creditors” thereto
(as so amended, 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 one or more Letters of Credit to be issued on behalf
of CBUSA under the Credit Agreement and the Revolving Credit Note. Borrower has also informed
Lender that CBI intends to sell shares (the “November 2013 Offering”) of CBI’s common stock having
an aggregate offering price of up to $6,000,000 (the “November 2013 Offered Shares”) pursuant to
the terms of a registration statement on Form S-3 (File No. 333-176005) filed with the Securities
and Exchange Commission, an Equity Distribution Agreement between CBI and Barrington Research
Associates, Inc. relating to the Offering, a Prospectus relating to the Offering, and such other
agreements, documents and instruments relating thereto, as the same may be amended or supplemented
after the date of this Agreement (collectively, the “November 2013 Offering Documents”). Pursuant
to the terms of the Credit Agreement Borrower is prohibited from distributing “Equity Interests”
(as defined in the Credit Agreement).

Upon the terms and conditions contained in this Amendment and Waiver Lender has agreed to provide
to CBUSA Letters of Credit under the Credit Agreement and the Revolving Credit Note, and to consent
to and waive all Defaults and Events of Default in connection with the issuance and sale of the
November 2013 Offered Shares to be sold in connection with the November 2013 Offering.

AGREEMENT:

1. Defined Terms. Unless otherwise defined in the Recitals or in the body of this
Amendment, Waiver and Consent (this “Agreement”), all capitalized terms shall have the meanings
ascribed to such terms in the Loan Documents.

2. Waiver and Consent. Subject to the terms, conditions, representations and warranties
contained in this Agreement, Lender hereby consents to issuance and sale of the November 2013
Offered Shares pursuant to the terms of the November 2013 Offering Documents, and further agrees to
waive all Defaults and Events of Default under the Loan Documents in connection with the issuance
and sale of the November 2013 Offered Shares pursuant to the terms of the November 2013 Offering
Documents.

3. Revolving Credit. Section 2.1 of the Credit Agreement is hereby amended by adding the
following to the end thereof:

“Borrower acknowledges and agrees that to the extent any portion of the Revolving Credit will be
made available to Borrower under any sublimit described in the Revolving Credit Sublimit
Schedule (each, a “Sublimit”), such Sublimit shall be subject to the terms and conditions of
this Agreement applicable to the Revolving Credit and to the additional terms and conditions
contained in the Revolving Credit Sublimit Schedule applicable to such Sublimit.”

4. Crediting of Funds. The first paragraph of Section 2.7 of the Credit Agreement is
hereby deleted in its entirety and replaced with the following:

“Each Banking Day Lender shall withdraw available funds from the Blocked Account, deposit such
funds in the Settlement Account, and credit available funds received in the Settlement Account
to the payment of the Obligations. Lender shall credit to the payment of the Obligations any
other form of funds received by Lender in the Settlement Account for which Lender has received
notice that such funds are collected and available to Lender (i) on the same day of Lender’s
receipt of such notice if such notice is received by Lender on or before 2 p.m. Eastern Time on
a Banking Day, and (ii) on the Banking Day immediately following Lender’s receipt of such notice
if such notice is received by Lender after 2 p.m. Eastern Time on a Banking Day, or if such
notice is received by Lender on a day that is not a Banking Day. In the absence of an Event of
Default, all funds credited to the repayment of the Obligations will be applied in the following
order:

	 	(a)	 	to reimburse Lender and/or Issuing Lender, as the case may be, for any L/C
Disbursements (or portion thereof) that remain outstanding and unpaid, and to any unpaid
interest, fees and expenses in connection therewith;

	 	(b)	 	to unpaid fees and expenses;

	 	(c)	 	to unpaid interest;

	 	(d)	 	if then due and payable, to the outstanding and unpaid principal balance of the
Term Loan;

	 	(e)	 	the outstanding principal balance of the Revolving Credit (including, but not
limited to, the outstanding principal balance of any Sublimit if then payable); and

	 	(f)	 	to all other Obligations in such order as Lender shall elect.”

5. Advance Definition. The defined term “Advance” contained in the Definitions Schedule to
the Credit Agreement is hereby deleted in its entirety and replaced with the following:

“Advance” means each principal amount of the Revolving Credit delivered to Borrower in
connection with a Notice of Borrowing (including each principal amount delivered to Borrower
under a Sublimit of the Revolving Credit), the aggregate L/C Exposure, and each other amount
charged to the principal of the Revolving Credit pursuant to this Agreement.”

6. Borrowing Base Definition. The defined term “Borrowing Base” contained in the
Definitions Schedule to the Credit Agreement is hereby deleted in its entirety and replaced with
the foregoing:

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

(a) an amount not to exceed eighty five percent (85.0%) of the aggregate amount of Eligible
Receivables at such time, plus;

(b) the least of (i) fifty percent (50.0%) of the Value of Eligible Inventory at such time;
provided, however, for purposes of determining the Borrowing Base at any time in no event shall
the Value of Eligible In-Transit Inventory at any time exceed Two Hundred Fifty Thousand and
00/100 Dollars ($250,000.00), (ii) Four Million and 00/100 Dollars ($4,000,000.00), and (iii)
sixty percent (60.0%) of the Borrowing Capacity at such time, less;

(c) the aggregate L/C Exposures at such time; less

(d) the aggregate amount of all Reserves in effect at such time.

For purposes of determining the amount to be advanced against Inventory in calculating the
Borrowing Base as described above, the “Value” of Inventory shall mean the lesser of cost
(including freight charges for Eligible Inventory, but excluding all profit and other mark-ups
for purchases of Inventory from Affiliates) or the fair market value of such Inventory.”

7. Termination Date Definition. The defined term “Termination Date” contained in the
Definitions Schedule to the Credit Agreement is hereby deleted in its entirety and replaced with
the following:

“Termination Date” means with respect to the Revolving Credit the Revolving Credit
Termination Date, and with respect to any Sublimit of the Revolving Credit the termination date
of such Sublimit as described in the Revolving Credit Sublimit Schedule, and with respect to the
Term Loan the Maturity Date.”

8. Revolving Credit Sublimit Schedule. A “Revolving Credit Sublimit Schedule” is hereby
added to the Credit Agreement in the form of the “Revolving Credit Sublimit Schedule” attached
hereto.

9. Notice of Borrowing: Exhibit A to the Credit Agreement (“Notice of Borrowing”) is
hereby deleted in its entirety and replaced with Exhibit A attached hereto.

10. Reimbursement of Lender. As consideration for Lender’s modification of the Revolving
Credit and amendment of the Credit Agreement described above, and provision of Lender’s consent and
waiver 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 10, 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.

11. Effective Date. This Agreement shall be effective as of November 14, 2013.

12. Specificity of Provisions. The amendments, waiver and consent 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 Agreement, 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 Agreement.

13. Binding Effect of Loan Documents. Borrower hereby acknowledges and agrees that upon
giving effect to this Agreement, 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.

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

15. Choice of Law. This Agreement 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.

16. Counterparts. This Agreement may be executed by one or more the parties to this
Agreement 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 Agreement 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:

Name:

Its:

Date:

	 	/s/ Fred Bubeck

Fred Bubeck

CFO

November 14, 2013
	 

	 	 

BORROWER:

CASTLE BRANDS INC.

	 	 	 
	By:

Name:

Its:

Date:

	 	/s/ Alfred J. Small

Alfred J. Small

CFO

November 14, 2013
	 

	 	 

CASTLE BRANDS (USA) CORP.

	 	 	 
	By:

Name:

Its:

Date:

	 	/s/ Alfred J. Small

Alfred J. Small

CFO

November 14, 2013
	 

	 	 

2

REVOLVING CREDIT SUBLIMIT SCHEDULE

Letters of Credit Sublimit. Subject to the terms a conditions of this Agreement, until the
date the Revolving Credit is earlier terminated pursuant to the terms of this Agreement (the “L/C
Sublimit Termination Date”), Lender shall provide to Borrower a portion of the Revolving Credit
(the “L/C Sublimit”) in an aggregate principal amount not to exceed Five Hundred Thousand and
00/100 Dollars ($500,000.00) (the “L/C Sublimit Borrowing Capacity”).

(a) L/C Sublimit Definitions. For purposes of this Agreement:

(i) “Issuing Lender” means Lender or any bank or financial institution selected by
Lender in Lender’s sole discretion that issues a Letter of Credit;

(ii) “L/C Disbursement” means each payment or distribution made by the Issuing Lender
to the beneficiary of a Letter of Credit under or in connection with such Letter of Credit;

(iii) “L/C Exposure” of a Letter of Credit shall mean, at any time, the undrawn face
amount of such Letter of Credit at such time (as such face amount may have been reduced
after issuance), plus the aggregate amount of all L/C Disbursements in connection with such
Letter of Credit that have not been paid or reimbursed to the Issuing Lender and/or Lender
(pursuant to paragraph (f) below) at such time; and

(iv) “Letter of Credit” means each letter of credit, if any, issued for the account of
Borrower under the Revolving Credit as further described in this Revolving Credit Sublimit
Schedule.

(b) Advances of the L/C Sublimit. Until the date that is twelve (12) calendar
months prior to the Revolving Credit Termination Date (the “L/C Issuance Expiration Date”)
Borrower may request Lender to issue or cause to be issued under the Revolving Credit one or
more Letters of Credit for its own account in such form as is acceptable to Lender and the
Issuing Lender (if not Lender) in Lender’s or the Issuing Lender’s sole discretion,
respectively. Each Letter of Credit shall constitute an Advance of the Revolving Credit in an
amount equal to the face amount of such Letter of Credit at the time of issuance, and in an
amount equal to the L/C Exposure attributable to such Letter of Credit thereafter. Without the
prior written consent of Lender, in no event shall Borrower make any request for, or Lender
recognize any request by Borrower for, the issuance of any Letter of Credit after the L/C
Issuance Expiration Date.

(c) Requests for Issuance of Letters of Credit; Amendment; Renewal or Extension.
Borrower shall deliver to Lender a Notice of Borrowing requesting the issuance of a Letter of
Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying
the date of issuance, amendment, renewal or extension (which shall be a Banking Day), the date
on which such Letter of Credit is to expire (in compliance with paragraph (e), below), the
amount of such Letter of Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare, amend, renew or extend such Letter of Credit as
applicable. Borrower also shall submit a letter of credit application on the Issuing Lender’s
standard form in connection with any request for a Letter of Credit or any request to amend,
renew or extend a Letter of Credit, and copies of all invoices, purchase orders and shipping
documents relating to the Inventory to be covered by such Letter of Credit as Lender and the
Issuing Lender may request. In the event of any inconsistency between the terms and conditions
of this Agreement and the terms and conditions of any form of letter of credit application or
other agreement submitted by Borrower to, or entered into by Borrower with, the Issuing Lender
relating to any Letter of Credit, the terms and conditions of this Agreement shall control.

(d) Limitations on Amounts. A Letter of Credit shall be issued, amended, renewed
or extended only if (and upon issuance, amendment, renewal or extension of each Letter of
Credit Borrower shall be deemed to represent and warrant that), after giving effect to such
issuance, amendment, renewal or extension (i) the L/C Exposure with respect to such Letter of
Credit shall not exceed Five Hundred Thousand and 00/100 Dollars ($500,000.00), (ii) the
issuance, amendment, renewal or extension of such Letter of Credit would not cause the
aggregate amount of L/C Exposures under the L/C Sublimit to exceed the L/C Sublimit Borrowing
Capacity, and (C) the issuance, amendment, renewal or extension of such Letter of Credit would
not cause the Obligations under the Revolving Credit to exceed the Revolving Credit Limit.

(e) Expiration Date. Each Letter of Credit issued hereunder shall expire at or
prior to the close of business on the earliest to occur of (A) the date which is twelve (12)
months after the date of the issuance of such Letter of Credit, (B) in the case of any
amendment, renewal or extension of a Letter of Credit, twelve (12) months after the then
current expiration date of such Letter of Credit, so long as such amendment, renewal or
extension occurs within three (3) months prior to the then current expiration date, and (C) the
L/C Sublimit Termination Date.

(f) Reimbursement. If the Issuing Lender shall make any L/C Disbursement in
respect of a Letter of Credit, or Lender shall reimburse an Issuing Lender in any amount with
respect to an L/C Disbursement, Borrower shall reimburse the Issuing Lender and/or Lender,
respectively, in the amount of such L/C Disbursement (and reimbursement by Lender, if
applicable) as directed by the Issuing Lender and Lender in a joint written instruction, by
paying to the Issuing Lender and/or Lender, as so directed, an amount equal to such L/C
Disbursement and all other amounts paid by the Issuing Lender and/or Lender with respect to
such L/C Disbursement not later than 12:00 noon, Eastern Time, on (A) the Banking Day that
Borrower receives notice of such L/C Disbursement, if such notice is received prior to 10:00
a.m., Eastern Time, or (B) the Banking Day immediately following the day that Borrower receives
such notice, if such notice is received after 10 a.m., Eastern Time, on a Banking Day, or is
not received on a Banking Day; provided that, Borrower may, subject to the conditions to
borrowing set forth in this Agreement, request from Lender in accordance with the applicable
provisions of this Agreement that such payment be financed with an Advance of the Revolving
Credit in an amount equal to such L/C Disbursement and, to the extent so financed, Borrower’s
obligation to make such payment in connection with an L/C Disbursement shall be discharged and
replaced by the resulting Advance. Each such request for an Advance shall be subject to all
applicable terms and conditions of this Agreement. With respect to any amount advanced by
Lender to an Issuing Lender with respect to an L/C Disbursement, Borrower agrees that Lender
may charge any such amount to the Revolving Credit on the date such reimbursement is made.

(g) Obligations Absolute. Borrower’s obligation to reimburse L/C Disbursements to
the Issuing Lender and/or Lender, as applicable, as provided in paragraph (f) above, shall
survive termination of the other provisions of this Agreement, shall be absolute, unconditional
and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement
under any and all circumstances whatsoever and irrespective of (i) any lack of validity or
enforceability of any Letter of Credit, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged, fraudulent or invalid
in any respect or any statement therein being untrue or inaccurate in any respect, (iii)
payment by the Issuing Lender under a Letter of Credit against presentation of a draft or other
document that does not comply strictly with the terms of such Letter of Credit, and (iv) any
other event or circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section, constitute a legal or equitable discharge of
Borrower’s obligations hereunder. Neither Lender nor the Issuing Lender, nor any of their
Affiliates, shall have any liability or responsibility by reason of or in connection with the
issuance or transfer of any Letter of Credit by the Issuing Lender or any payment or failure to
make any payment thereunder (irrespective of any of the circumstances referred to in the
preceding sentence), or any error, omission, interruption, loss or delay in transmission or
delivery of any draft, notice or other communication under or relating to any Letter of Credit
(including any document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the Issuing
Lender; provided that the foregoing shall not be construed to excuse the Issuing Lender from
liability to Borrower to the extent of any direct damages (as opposed to consequential damages,
claims in respect of which are hereby waived by Borrower to the extent permitted by applicable
law) suffered by Borrower that are caused by the Issuing Lender’s gross negligence or willful
misconduct when determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. Borrower expressly agrees that:

(i) the Issuing Lender may accept documents that appear on their face to be in
substantial compliance with the terms of a Letter of Credit without responsibility for
further investigation, regardless of any notice or information to the contrary, and may
make payment upon presentation of documents that appear on their face to be in substantial
compliance with the terms of such Letter of Credit;

(ii) the Issuing Lender shall have the right, in its sole discretion, to decline to
accept such documents and to make such payment if such documents are not in strict
compliance with the terms of such Letter of Credit; and

(iii) unless specifically provided otherwise by the Issuing Lender, this paragraph
shall establish the standard of care to be exercised by the Issuing Lender when determining
whether drafts and other documents presented under a Letter of Credit comply with the terms
thereof (and the parties hereto hereby waive, to the extent permitted by applicable law,
any standard of care inconsistent with the foregoing).

(h) Disbursement Procedures. The examination of all demands for payment under a
Letter of Credit, and the delivery and examination of documents and instruments under a Letter
of Credit, and the manner and timing of any L/C Disbursement made in connection therewith,
shall be prescribed by the Issuing Lender and any agreement, document or instrument executed by
Borrower and delivered to the Issuing Lender in connection with the application for or issuance
of a Letter of Credit hereunder.

(i) Letter of Credit Fees. Borrower shall pay to Lender annually a maintenance fee
to Lender (the “L/C Maintenance Fee”) with respect to each issued Letter of Credit, in arrears,
in an amount equal to six percent (6.00%) per annum on the average daily amount of the
aggregate L/C Exposure of such Letter of Credit during the period from and including the date
of issuance of such Letter of Credit to but excluding the date on which the Issuing Lender
ceases to have any L/C Exposure with respect to such Letter of Credit. The L/C Maintenance Fee
with respect to a Letter of Credit is deemed earned in full on the date of issuance of such
Letter of Credit (whether or not renewed or extended), and on each anniversary date of the
issuance of such Letter of Credit if renewed for an aggregate period of longer than one (1)
calendar year from the date of issuance. In the absence of the occurrence and continuation of
an Event of Default, the L/C Maintenance Fee shall be paid in twelve (12) equal monthly
installments, in arrears, on the first (1st) day of each calendar month commencing
on the first (1st) day of the calendar month immediately following the date of
issuance of such Letter of Credit. In addition to the foregoing fees, Borrower shall promptly
reimburse Lender for all costs and expenses incurred by or charged to Lender in connection with
the issuance of a Letter of Credit hereunder by the Issuing Lender or otherwise.

(j) Schedule; Borrower Acknowledgment. Borrower acknowledges that the above
provisions relating to the L/C Sublimit, although set apart in this Schedule, are not intended
to and do not set forth all terms, provisions and conditions between Lender and Borrower
relating to the L/C Sublimit, that the L/C Sublimit constitutes a portion of the Revolving
Credit, and that the L/C Sublimit is subject to all terms, provisions and conditions set forth
elsewhere in this Agreement, whether in the body of this Agreement, any Exhibit or any other
Schedule, including, but not limited to, all terms, provisions and conditions relating to the
Revolving Credit.

EXHIBIT A: NOTICE OF BORROWING

Keltic Financial Partners II, 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 Loan and Security Agreement dated as of August 19, 2011 between Keltic Financial Partners
II, LP and the undersigned, as amended, and as the same may be further 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 and such additional wire instructions attached hereto:

     

     

     

     

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

	 	 	 
	CASTLE BRANDS INC.

	 	CASTLE BRANDS (USA) CORP.
	By:

	 	By:
	 

	 	 
	Name:

	 	Name:
	 

	 	 
	Title:

	 	Title:
	 

	 	 

3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00223-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00223-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00223-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00223-of-00352.parquet"}]]