Document:

EX-4.1

_________________________________________________________________

SECOND AMENDMENT

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: March 11, 2013

SECOND AMENDMENT 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 (together, the “Credit Agreement”),
in connection with which Borrower delivered an Amended and Restated Revolving Credit Note dated
July 23, 2012 in a maximum principal amount of $7,000,000 (the “Revolving Credit Note”), and other
agreements, documents and instruments in connection therewith (all of the foregoing, as the same
may be amended, restated, or otherwise modified from time to time to be collectively referred to as
the “Loan Documents”).

Pursuant to the terms of the Loan Documents, Lender has extended a “Revolving Credit” to Borrower
in a maximum principal amount of $7,000,000. Borrower has requested that Lender increase the
principal amount of the Revolving Credit by $1,000,000, with a resulting maximum principal amount
of $8,000,000, and provide a Term Loan in the amount of $2,500,000 in connection with the
acquisition of specified inventory by Borrower. Upon the terms and conditions contained in this
Amendment Lender has agreed to consent to 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. Recitals. The Recitals in Credit Agreement are hereby amended by adding the phrase “and
a term loan” immediately following the phrase “revolving credit facility” contained therein.

3. Revolving Credit; Revolving Credit Note. The Section 2.1 of the Credit Agreement is
hereby deleted in its entirety and replaced with the following:

“2.1. Revolving Credit; Revolving Credit Note. Subject to the terms and conditions of this
Agreement and as long as no Default or Event of Default then exists, on Borrower’s request
prior to the Revolving Credit Termination Date Lender shall lend to Borrower under a revolving
credit facility (the “Revolving Credit”) a principal sum (the “Borrowing Capacity”) equal to
the lesser of (a) EIGHT MILLION AND 00/100 DOLLARS ($8,000,000.00) (the “Revolving Credit
Limit”), or (b) the Borrowing Base. The maximum principal amount of any Advance shall not
exceed an amount equal to the amount of the Borrowing Capacity less the aggregate amount of
all Obligations relating to the Revolving Credit then outstanding. Within the limits of the
Borrowing Capacity, and subject to terms and conditions of this Agreement, Borrower may
borrow, repay and reborrow the principal amount of the Revolving Credit. Borrower’s
obligation to pay the principal of, and interest on, Advances made to Borrower and the
Revolving Credit shall be evidenced by an Authenticated promissory note in the form of Exhibit
E (the “Revolving Credit Note”).

4. Exhibit E; Form of Revolving Credit Note. Exhibit E to the Credit Agreement shall be
deleted in its entirety are replaced with Exhibit E attached hereto.

5. Term Loan. A new Section 2.1.A is hereby added to the Credit Agreement to read as
follows:

“2.1.A. Term Loan. Subject to the terms and conditions of this Agreement Lender shall extend
to Borrower a term loan in an original principal amount equal to TWO MILLION FIVE HUNDRED
THOUSAND AND 00/100 DOLLARS ($2,500,000.00) (the “Term Loan”). The Term Loan shall be subject
to the terms and conditions of this Agreement and shall be subject to such additional terms
and conditions contained in an Authenticated promissory note in form and content acceptable to
Lender delivered by Borrower to Lender evidencing Borrower’s obligation to pay the principal
of, and interest on, the Term Loan (the “Term Note”). Prior to the Maturity Date of the Term
Loan Borrower may prepay the outstanding principal amount of the Term Loan, in whole or in
part. Each prepayment of the principal amount of the Term Loan shall be in a minimum
aggregate principal amount of Ten Thousand and 00/100 Dollars ($10,000.00) or in a larger
multiple of Five Thousand and 00/100 Dollars ($5,000.00). Each prepayment of principal of the
Term Loan shall also be subject to the requirements of Section 3.7.”

6. Crediting of Funds. Subparagraphs (a) through (d) of Section 2.7 of the Credit
Agreement are hereby deleted in their entirety and replaced with the following:

“(a) to unpaid fees and expenses;

(b) to unpaid interest;

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

(d) the outstanding principal balance of the Revolving Credit; and

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

7. Payment on Termination Date. Section 2.9 of the Credit Agreement is hereby deleted in
its entirety and replaced with the following:

“2.9. Payment on Termination Date; Termination of Advances. On the Termination Date of a Loan
Borrower shall pay to Lender in cash the entire outstanding principal balance of such Loan,
plus all accrued and unpaid interest thereon, plus all fees, costs, expenses and other amounts
payable to Lender under this Agreement and the other Loan Documents, plus all other
Obligations payable in connection with such Loan pursuant to the terms of this Agreement and
the other Loan Documents. Lender shall not be obligated to make or continue to extend any
Advance to Borrower under the Revolving Credit after the Revolving Credit Termination Date.”

8. Term Loan Interest. A new paragraph is hereby added to Section 3.1 of the Credit
Agreement immediately following paragraph (b) thereof and prior to the current final paragraph
thereof to read as follows:

“Borrower shall pay to Lender interest on the outstanding principal amount of the Term Loan at
such rates and at such times as provided in the Term Note until all Obligations with respect
to the Term Loan have been finally and indefeasibly paid to Lender in cash and performed in
full.”

9. Facility Fee. Section 3.2 of the Credit Agreement is hereby deleted in its entirety and
replaced with the following:

“3.2. Facility Fee. Borrower shall pay to Lender a fee (the “Facility Fee”) (a) annually with
respect to the Revolving Credit, that shall be earned in full on March 8, 2013 and on January
1 of each subsequent calendar year in an amount equal to one percent (1.0%) (the “Facility Fee
Percentage”) of the maximum principal amount of the Revolving Credit until all Obligations
with respect to the Revolving Credit are finally and indefeasibly paid in cash to Lender and
performed in full, plus (b) monthly with respect to the Term Loan, that shall be earned on the
first day of each calendar month an amount equal to Two Thousand and 00/100 Dollars
($2,000.00) until all Obligations with respect to the Term Loan are finally and indefeasibly
paid in cash to Lender and performed in full. In the absence of the occurrence and
continuation of an Event of Default, the Facility Fee with respect to the Revolving Credit
shall be paid in twelve (12) equal monthly installments, in arrears, on the first day of each
calendar month. Upon the occurrence of any Event of Default and written notice by Lender,
Borrower shall immediately pay to Lender the portion of the Facility Fee with respect to the
Revolving Credit 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.”

10. Liquidated Damages. Section 3.7 of the Credit 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 (a) prior to December 31, 2016 to prepay the outstanding principal amount
of the Term Loan in whole or in part, or (b) prior to December 31, 2016 to prepay in full the
entire outstanding principal balances of the Revolving Credit and the Term Loan, all accrued
and unpaid interest thereon, all fees, costs, expenses and other amounts payable to Lender in
connection with the Revolving Credit and the Term Loan, and all other Obligations payable to
Lender under this Agreement and the other Loan Documents. Borrower’s election to prepay the
Term Loan in whole or in part, or election to prepay the Obligations relating to the Revolving
Credit and the Term Loan 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 and the Term Loan shall
be terminated and all obligations of Lender to extend credit to Borrower under the Revolving
Credit shall terminate.

If (w) prior to December 31, 2016 Borrower prepays the principal amount of the Term Loan in
whole or in part pursuant to the foregoing paragraph, or (x) prior to December 31, 2016
Borrower prepays in full the entire outstanding principal balances of the Revolving Credit and
the Term Loan, all accrued and unpaid interest thereon, all fees, costs, expenses and other
amounts payable to Lender in connection with the Revolving Credit and the Term Loan, 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 December 31, 2016, 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 (z) at the time of such repayment,
prepayment, demand or acceleration Borrower shall pay liquidated damages to Lender in an
amount equal to:

(i) (A) if prepayment, repayment, demand or acceleration of the Revolving Credit,
the Revolving Credit Limit, and/or (B) if prepayment, repayment, demand or acceleration
of the Term Loan in whole or in part, the outstanding principal amount of the Term Loan
being prepaid, multiplied by

(ii) (A) five percent (5.00%) if such prepayment, repayment, demand or acceleration
occurs prior to January 1, 2014, (B) two percent (2.00%) if such prepayment, repayment,
demand or acceleration occurs on or after January 1, 2014 but prior to January 1, 2015,
and (C) one percent (1.00%) if such prepayment, repayment, demand or acceleration occurs
on or after January 1, 2015 but prior to December 31, 2016.”

Borrower acknowledges and agrees that (I) it would be difficult or impractical to calculate
Lender’s actual damages from early termination of the Revolving Credit and the Term Loan and
Lender’s compensation from Loans hereunder following such early termination, (II) the
liquidated damages provided above are intended to be fair and reasonable approximations of
such damages, and (III) the liquidated damages are not intended to be penalties.”

11. Definitions. The Definitions Schedule is hereby amended as follows:

	 	(a)	 	Borrowing Base. Clause (ii) of paragraph (b) of the definition of “Borrowing
Base” contained in the Definition Schedule is hereby deleted in its entirety and replaced
with “(ii) Three Million Five Hundred Thousand and 00/100 Dollars ($3,500,000.00);”.

	 	(b)	 	Default Rate. The definition of “Default Rate” contained in the Definition
Schedule is hereby deleted in its entirety and replaced with the following:

‘“Default Rate” means, with respect to a Loan, an annualized rate of interest that is
equal to three and one quarter percent (3.25%) more than the rate of interest applicable to
such Loan.’

	 	(c)	 	Maturity Date. A new definition is hereby added to the Definition Schedule to
read as follows:

‘“Maturity Date” means with respect to the Term Loan the earliest to occur of (a) the
maturity date of the Term Loan as provided in the Term Note, (b) the date Lender terminates
the Term Loan pursuant to Section 9.2(a), (c) the date on which repayment of the Term Loan,
or any portion thereof, becomes immediately due and payable pursuant to Section 9.2(b), and
(d) the Revolving Credit Termination Date.’

	 	(d)	 	Revolving Credit Termination Date. The definition of “Revolving Credit
Termination Date” is hereby deleted in its entirety and replaced with the following:

‘“Revolving Credit Termination Date” means the earliest to occur of (a) December 31,
2016, (b) the date Lender terminates the Revolving Credit pursuant to Section 9.2(a), and
(c) the date on which repayment of the Revolving Credit, or any portion thereof, becomes
immediately due and payable pursuant to Section 9.2(b).’

	 	(e)	 	Termination Date. A new definition is hereby added to the Definition Schedule
to read as follows:

‘“Termination Date” means with respect to the Revolving Credit the Revolving Credit
Termination Date, and with respect to the Term Loan the Maturity Date.’

12. 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 (a) pay to Lender on the date hereof a commitment fee for
the increase of the Revolving Credit Limit and for the extension of the Term Loan in the amount of
Seventy Thousand and 00/100 Dollars ($70,000.00), 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
Agreement. With respect to any amount required to be paid or reimbursed by Borrower pursuant to
the foregoing provisions of this paragraph 12, 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.

13. Effective Date. This Amendment shall be effective as of March 8, 2013.

14. 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.

15. 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.

16. 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.

17. 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.

18. 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.

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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 Szcaupak
	 

	 	 
	Name:

	 	Oleh Szcaupak
	
 
	 	 
	Its:

	 	Executive Vice President
	 

	 	 
	Date:

	 	March 11, 2013
	 

	 	 

BORROWER:

CASTLE BRANDS INC.

	 	 	 
	By:

	 	/s/ Alfred J. Small
	 

	 	 
	Name:

	 	Alfred J. Small
	
 
	 	 
	Its:

	 	Chief Financial Officer
	 

	 	 
	Date:

	 	March 11, 2013
	 

	 	 

CASTLE BRANDS (USA) CORP.

	 	 	 
	By:

	 	/s/ Alfred J. Small
	 

	 	 
	Name:

	 	Alfred J. Small
	
 
	 	 
	Its:

	 	Chief Financial Officer
	 

	 	 
	Date:

	 	March 11, 2013
	 

	 	 

2EX-4.2

AMENDED AND RESTATED

REVOLVING CREDIT NOTE

March 11, 2013

$8,0000,000.00 Tarrytown, New York

FOR VALUE RECEIVED, 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”) promises, jointly and severally,
to pay to the order of KELTIC FINANCIAL PARTNERS II, LP (“Lender”), at 580 White Plains Road, Suite
610, Tarrytown, New York 10591 or at such other place as Lender may from time to time in writing
designate, the principal sum of each Advance made by Lender to Borrower under that certain Loan and
Security Agreement dated as of August 19, 2011, as amended by a First Amendment dated July 23,
2012, and by a Second Amendment dated on or about the date of this Amended and Restated Note and as
it may be subsequently amended and/or modified (collectively, the “Loan Agreement”) (the Loan
Agreement together with all of the other documents, instruments or agreements executed and/or
delivered to Lender in connection therewith, as the same may be modified, amended, restated or
replaced from time to time, are hereinafter collectively referred to as, the “Loan Documents”).
The aggregate unpaid principal balance hereof shall not exceed at any time the sum of EIGHT MILLION
AND 00/100 DOLLARS ($8,000,000.00). Capitalized terms used herein and not otherwise defined shall
have the meaning given such terms in the Loan Documents.

The entire unpaid principal balance hereof, together with the accrued interest thereon and
accrued late charges, if any, and all other sums due hereunder and under the Loan Documents shall
be due and payable IN FULL on the Termination Date.

Borrower also promises to pay interest to Lender monthly, in arrears, on the first
(1st) day of each month commencing on February 1, 2013 on the average daily unpaid
principal balance of this Note until all amounts due and payable to the Lender in connection
herewith are irrevocably paid in full. For purposes of this Note, interest on the principal amount
of this Note shall be at the rate set forth in Section 3.1 of the Loan Agreement, unless otherwise
provided for by the terms of the Loan Agreement.

All repayments or prepayments of principal and payments of interest shall be made by Borrower,
or credited to the account of Borrower by Lender, pursuant to the terms of the Loan Agreement.
Borrower may prepay the indebtedness evidenced by this Note in whole or in part pursuant to, and
subject to, Article 2 of the Loan Agreement and all other applicable provisions of the Loan
Agreement. Any partial prepayments made by the undersigned will be applied against the remaining
unpaid payments due hereunder as provided in the Loan Agreement.

This is the “Revolving Credit Note” referred to in the Loan Agreement and is entitled to the
benefit of all of the terms and conditions and the security of all of the security interests and
liens granted by Borrower or any other person to Lender pursuant to the Loan Agreement or any other
Loan Document including, without limitation, supplemental provisions regarding mandatory and/or
optional prepayment rights and premiums. This Note amends and restates in its entirety, and is
given in replacement of and in substitution for, but not in payment of, an Amended and Restated
Revolving Credit Note dated July 23, 2012 and executed and delivered by Borrower to Lender, as such
Note may have been amended from time to time prior to the date hereof.

The entire unpaid indebtedness evidenced hereby shall become immediately due and payable,
without further notice or demand upon the happening of any Event of Default. After an Event of
Default, Lender shall have all of the rights and remedies set forth in the Security Agreement, the
other Loan Documents and at law.

Whenever any payment to be made under this Note shall be stated to be due on a day other than
a Banking Day, such payment shall be made on the next succeeding Banking Day and such extension of
time shall be included in the computation of any interest then due and payable hereunder.

The undersigned and all other parties who, at any time, may be liable hereon in any capacity
waive presentment, demand for payment, protest and notice of dishonor of this Note. This Note and
any provision hereof may not be waived, modified, amended or discharged orally, but only by an
agreement in writing which is signed by the holder and the party or parties against whom
enforcement of any waiver, change, modification, amendment or discharge is sought.

This Note shall be governed by and construed under the internal laws of the State of New York,
as the same may from time to time be in effect, without regard to principles of conflicts of laws
thereof. This Note shall be binding upon and shall inure to the benefit of the parties, their
successors and assigns. Lender shall have the right, without the necessity of any further consent
or authorization by Borrower, to sell, assign, securitize or grant participations in all, or a
portion of, Lender’s interest in this Note, to other financial institutions of Lender’s choice and
on such terms as are acceptable to Lender in its sole discretion. Borrower shall not assign,
exchange or otherwise hypothecate any rights or obligations under this Note, in whole or in part,
without the prior written consent of the Lender, and any attempted assignment, exchange or
hypothecation without such written consent shall be void and be of no effect.

IN WITNESS WHEREOF, the undersigned has executed this Note the day and year first above
written.

CASTLE BRANDS INC.

	 	 	 	 	 
	By:/s/ Alfred J. Small
	 	 	 	 
	 
	 	 	 	 
	Name:Alfred J. Small
	 	 	 	 
	 
	 	 	 	 
	Its:Chief Financial Officer
	 	 	 	 
	 
	 	 	 	 
	Date:March 11, 2013
	 	 	 	 
	 
	 	 	 	 
	STATE OF NEW YORK
	 	 	)	 
	 
	 	) SS.:
	COUNTY OF NEW YORK
	 	 	)	 

On the 11 day of March in the year 2013, before me, the undersigned, a notary public in and for
said state, personally appeared Alfred J. Small, personally known to me or proved to me on the
basis of satisfactory evidence to be the individual whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her capacity, and that by
his/her signature on the instrument, the individual, or the person upon behalf of which the
individual acted, executed the instrument.

/s/ Donna M. Hibbert

Notary Public, State of New York

Donna M. Hibbert

Qualified in Queens County

Certificate filed in NY County

Expires: Feb. 21, 2014

1

CASTLE BRANDS (USA) CORP.

	 	 	 	 	 
	By:/s/ Alfred J. Small
	 	 	 	 
	 
	 	 	 	 
	Name:Alfred J. Small
	 	 	 	 
	 
	 	 	 	 
	Its:Chief Financial Officer
	 	 	 	 
	 
	 	 	 	 
	Date:March 11, 2013
	 	 	 	 
	 
	 	 	 	 
	STATE OF NEW YORK
	 	 	)	 
	 
	 	) SS.:
	COUNTY OF NEW YORK
	 	 	)	 

On the 11 day of March in the year 2013, before me, the undersigned, a notary public in and for
said state, personally appeared Alfred J. Small, personally known to me or proved to me on the
basis of satisfactory evidence to be the individual whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her capacity, and that by
his/her signature on the instrument, the individual, or the person upon behalf of which the
individual acted, executed the instrument.

/s/ Donna M. Hibbert

Notary Public, State of New York

Qualified in Queens County

Certificate filed in NY County

Expires: Feb. 21, 2014

2

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