Document:

EX-4.1

EXHIBIT 4.1

EXECUTION COPY

CREDIT AGREEMENT

THIS CREDIT AGREEMENT (this “Agreement”), dated as of December 30, 2009, is entered into by
and among Castle Brands Inc., a Delaware corporation (“Borrower”), Castle Brands (USA) Corp., a
Delaware corporation (the “Subsidiary”), and the lenders listed on Exhibit A (the “Lenders”).

RECITALS

WHEREAS, the Lenders desire to provide Borrower with a senior line of credit (the “Line of
Credit”) in the amount of $2,500,000 (the “Available Amount”) on the terms set forth herein.

NOW, THEREFORE, in consideration of the covenants, promises and representations set forth
herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby
expressly and mutually acknowledged, and intending to be legally bound hereby, the parties hereto
agree as follows:

ARTICLE I

LINE OF CREDIT

Section 1.1. The Line of Credit. From time to time prior to the Maturity Date (as
defined in the Note (as hereafter defined)), subject to the provisions below, Lenders shall make
Advances (as hereafter defined) to Borrower, which Borrower shall pay and may reborrow, so long as
the aggregate amount of Advances outstanding at any one time shall not exceed the Available Amount.

Section 1.2. Note. The indebtedness of Borrower to Lenders will be evidenced by a
senior note in substantially the form of Exhibit B (the “Note”) and secured by a security interest
in all unencumbered inventory of the Subsidiary located in the United States and all trade accounts
receivable of the Subsidiary pursuant to a security agreement in the form of Exhibit C (the
"Security Agreement” and together with this Agreement, the Note and any other agreement,
instrument, certificate, affidavit or other document evidencing or securing the Line of Credit, the
"Loan Documents”). The parties understand and agree that certain proceeds of this Line of Credit
will be provided by the Borrower to the Subsidiary or other subsidiaries of the Borrower for proper
business purposes and that the grant of a security interest hereunder by the Subsidiary is at
least, in part, in consideration for the Subsidiary’s receipt of such proceeds. The original
principal amount of the Note will be up to $2,500,000; provided, however, that notwithstanding the
face amount of the Note, Borrower’s liability under the Note shall be limited at all times to the
unpaid principal amount outstanding of all Advances, accrued and unpaid interest under the Note and
all fees, charges, expenses and reasonable attorneys’ fees and costs and other amounts,
obligations, covenants and duties owing by Borrower to Lenders (or any permitted assignee) of any
kind and description (whether pursuant to or evidenced by the Note or this Agreement), whether
direct or indirect, absolute or contingent, due or to become due, now existing or hereafter
arising, including Lenders’ Expenses (collectively, the “Obligations”), in each case as then
outstanding hereunder and under the Note. As used herein, “Lenders’ Expenses” means all reasonable
attorneys’ fees, costs and expenses incurred in amending, enforcing or defending the Note
(including fees and expenses of appeal or review), including the exercise of any rights or remedies
afforded under the Loan Documents or under applicable law, whether or not suit is brought, whether
before or after bankruptcy or insolvency, including without limitation all fees and costs incurred
by the Lenders in connection with Lenders’ enforcement of its rights in a bankruptcy or insolvency
proceeding filed by or against Borrower.

Section 1.3. Use of Proceeds. Funds advanced under the Line of Credit shall be used
for working capital or general corporate purposes of Borrower and its subsidiaries, including the
Subsidiary.

Section 1.4. Payment of Outstanding Amount. The aggregate Obligations outstanding on
the Maturity Date shall be due and payable on the Maturity Date in accordance with the terms of the
Note.

Section 1.5. Interest. Interest on the outstanding principal amount of all Advances
shall accrue at a rate equal to eleven percent (11%) per annum (the “Interest Rate”), compounded
quarterly, and shall be payable on the last day of each calendar quarter until the repayment in
full of all Obligations, the termination of this Agreement and cancellation of the Note.

Section 1.6. Default Rate. Upon the Maturity Date, whether by acceleration, demand or
otherwise, and at the Lenders’ option upon the occurrence of any Event of Default (as defined in
the Note) and during the continuance thereof, the Note shall bear interest at a rate that shall be
five percent (5.0%) in excess of the Interest Rate but not more than the maximum rate allowed by
law (the “Default Rate”). The Default Rate shall continue to apply whether or not judgment shall be
entered on the Note. The Default Rate is imposed as liquidated damages for the purpose of defraying
Lenders’ expenses incident to the handling of delinquent payments, but are in addition to, and not
in lieu of, Lenders exercise of any rights and remedies hereunder or under applicable law, and any
fees and expenses of any agents or attorneys which Lenders may employ. In addition, the Default
Rate reflects the increased credit risk to Lenders of carrying a loan that is in default. Borrower
agrees that the Default Rate is a reasonable forecast of just compensation for anticipated and
actual harm incurred by Lenders, and that the actual harm incurred by Lenders cannot be estimated
with certainty and without difficulty.

Section 1.7. Advances. Borrower shall give the Lenders prior written notice not later
than 11:00 a.m., Eastern Time, on the third business day prior to the date of any advance of credit
pursuant to the Line of Credit hereunder (an “Advance”). Any such notice shall be in the form of
the Borrowing Notice set forth as Exhibit D (the “Borrowing Notice”), shall be certified by
the President, Chief Operating Officer or Chief Financial Officer of Borrower, and shall set forth
the aggregate amount of the requested Advance. Upon receiving a request for an Advance to which
Borrower is entitled hereunder and under the Note, and provided there is no Event of Default (as
defined in the Note), Lenders shall make available to Borrower the amount of the requested Advance
by wire transfer of immediately available funds to a bank account designated by Borrower on the
third business day after receipt of such Borrowing Notice.

Section 1.8. Prepayment. Borrower may prepay the outstanding Obligations under the
Line of Credit at any time without premium or penalty. Prepayments of all or any portion of the
Obligations shall not reduce the Available Amount, and funds may be reborrowed hereunder up to the
Available Amount, subject to the provision hereof and the Note.

Section 1.9. Payment Application. Any and all payments on account of the Obligations
will be applied first to accrued and unpaid interest and second to outstanding principal and other
sums due hereunder. If Borrower makes a payment or payments and such payment or payments, or any
part thereof, are subsequently invalidated, declared to be fraudulent or preferential, set aside or
are required to be repaid to a trustee, receiver or any other person under any bankruptcy act,
state, provincial or federal law, common law or equitable cause, then to the extent of such payment
or payments, the Obligations or part thereof hereunder intended to be satisfied shall be revived
and continued in full force and effect as if said payment or payments had not been made.

Section 1.10. Conditions to First Advance. The obligation of Lenders to make the
first Advance shall be subject to:

(a) Lenders’ receipt of the following documents, each in form and substance satisfactory to
Lenders:

(i) This Agreement. This Agreement duly executed by Borrower, the Subsidiary and
Lenders.

(ii) Promissory Note. The Note in the form of Exhibit B attached hereto in favor of
the Lenders, duly executed by Borrower.

(iii) Security Agreement. The Security Agreement duly executed by the Subsidiary and
Lenders with respect to all U.S. inventory and receivables of the Subsidiary except as set forth on
the Schedule of Exceptions set forth as Exhibit E.

(iv) Borrowing Notice. A completed Borrowing Notice required under Section 1.7
hereof.

(v) Borrower and Subsidiary’s Secretary’s Certificates. The duly authorized Secretary
of Borrower and Subsidiary, respectively, shall each have delivered a certified copy of its
Certificate of Incorporation, as amended, and a certificate as to its Bylaws and resolutions
adopted by its board of directors authorizing this Agreement and the transactions contemplated
hereby.

Section 1.11. Subsequent Advances(a) . The obligation of the Lenders to make
additional Advances shall be subject to Lender’s receipt of a completed Borrowing Notice and such
additional documents as Lenders reasonably may request, as well as the absence of any Event of
Default.

Section 1.12. Ranking. The Line of Credit and Note will rank senior in right of
payment to all of Borrower’s subordinated indebtedness incurred after the date of this Agreement
and equal in right of payment with all other senior indebtedness of Borrower incurred after the
date of this Agreement.

Section 1.13. Commitment Fees. On each of the date of this Agreement and the first
and second anniversaries thereof, Borrower shall pay to Lenders a commitment fee of $25,000.

ARTICLE II

CLOSING

Section 2.1. Closings. The closings (the “Closings”) of Advances under this Agreement
shall take place at 122 E. 42nd Street, Suite 4700, New York, NY, at such other
location(s) as the parties may agree or by fax or e-mail commencing at 9:00 a.m. local time on the
date set forth in the Borrowing Notice (provided timely delivery of such Borrowing Notice to
Lenders has been made). At each such Closing, Lenders shall have timely received a completed
Borrowing Notice and such additional documents as Lenders reasonably may request.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF BORROWER

Borrower represents to each Lender, as of the date of this Agreement as follows:

Section 3.1. Capacity; Execution of Agreement. Each of Borrower and Subsidiary has
all requisite power, authority and capacity to enter into this Agreement and to perform the
transactions and obligations to be performed by it hereunder. The execution and delivery of this
Agreement, and the performance by Borrower and Subsidiary of the transactions and obligations
contemplated hereby have been duly authorized by all requisite corporate action of Borrower and
Subsidiary. This Agreement has been duly executed and delivered by Borrower and Subsidiary and
constitutes a valid and legally binding agreement of Borrower and Subsidiary, enforceable in
accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws, both state and federal, affecting the enforcement
of creditors’ rights or remedies in general from time to time in effect and the exercise by courts
of equity powers or their application of principles of public policy.

Section 3.2. Power and Authority. Each of Borrower and Subsidiary has all requisite
legal and other power and authority to execute and deliver this Agreement and to carry out and
perform its other obligations hereunder.

Section 3.3. SEC Documents, Financial Statements.

(a) All reports, registration statements, proxy statements and other documents required to
have been filed by Borrower with the SEC since April 1, 2008 (the “SEC Documents”) have been so
filed on a timely basis. As of the time it was filed with the SEC (or, if amended or superseded by
a filing prior to the date of this Agreement, then on the date of such filing): (i) each of the SEC
Documents complied in all material respects with the applicable requirements of the Securities Act
of 1933, as amended (the “Securities Act”) or the Securities Exchange Act of 1934, as amended (as
the case may be); and (ii) none of the SEC Documents contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they were made, not
misleading.

(b) The financial statements contained in the SEC Documents: (i) complied as to form in all
material respects with the published rules and regulations of the SEC applicable thereto; (ii) were
prepared in accordance with generally accepted accounting principles applied on a consistent basis
throughout the periods covered (except as may be indicated in the notes to such financial
statements and, in the case of unaudited statements, as permitted by Form 10-Q of the SEC, and
except that unaudited financial statements may not contain footnotes and are subject to normal and
recurring year-end audit adjustments which will not, individually or in the aggregate, be material
in amount); and (iii) fairly presented the consolidated financial position of Borrower as of the
respective dates thereof and the consolidated results of operations and cash flows of Borrower for
the periods covered thereby.

Section 3.4. Material Adverse Effect. Since December 31, 2008, there has been no
development or event which has had or could reasonably be expected to have, a Material Adverse
Effect. “Material Adverse Effect” shall mean a material adverse effect on (a) the business,
results of operations, condition (financial or otherwise), assets or liabilities of the Borrower
and its Subsidiaries taken as a whole, (b) the ability of the Borrower to perform its obligations,
when such obligations are required to be performed, under this Agreement, the Note or any other
Loan Document, or (c) the validity or enforceability of this Agreement, the Note or any of the
other Loan Documents or the rights or remedies of the Lenders hereunder or thereunder.

Section 3.5. Brokers or Finders. Neither Borrower nor any of its Subsidiaries have
engaged any brokers, finders or agents, or incurred, directly or indirectly, any liability for
brokerage or finders’ fees or agents’ commissions or any similar charges in connection with this
Agreement and the transactions contemplated hereby.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF LENDERS

Each Lender represents and warrants, individually and not severally, to Borrower and
Subsidiary, as of the date of this Agreement as follows:

Section 4.1. Capacity; Execution of Agreement. Each Lender has all requisite power,
authority, and capacity to enter into this Agreement and to perform the transactions and
obligations to be performed by it hereunder. The execution and delivery of this Agreement, and the
performance by Lenders of the transactions and obligations contemplated hereby have been duly
authorized by all requisite action of Lenders. This Agreement has been duly executed and delivered
by Lenders and constitutes a valid and legally binding agreement of Lenders enforceable in
accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws, both state and federal, affecting the enforcement
of creditors’ rights or remedies in general from time to time in effect and the exercise by courts
of equity powers or their application of principles of public policy.

Section 4.2. Formation and Standing. Each Lender, if an entity, is an entity duly
formed, validly existing and in good standing under the laws of the jurisdiction of its
organization. Each Lender has the requisite power and authority to own and operate its properties
and assets, and to carry on its business as currently conducted.

Section 4.3. Accredited Investor. Each Lender is an “accredited investor” as defined
in Rule 501(a) of Regulation D promulgated under the Securities Act.

Section 4.4. Brokers or Finders. Lenders have not engaged any brokers, finders or
agents, or incurred, directly or indirectly, any liability for brokerage or finders’ fees or
agents’ commissions or any similar charges in connection with this Agreement and the transactions
contemplated hereby.

ARTICLE V

MISCELLANEOUS

Section 5.1. Survival of Representations and Warranties; Indemnification.

	 	(a)	 	The representations and warranties of Borrower and Lenders
contained in or made pursuant to this Agreement will survive the execution and
delivery of this Agreement and the Closing of the first Advance, and for an
additional 12 months subsequent to the Closing of the first Advance, and with
respect to the representations and warranties of Borrower only, for the longer
of an additional 12 months subsequent to any subsequent Advance and the time
period during which any Obligations are outstanding.

	 	(b)	 	Borrower hereby agrees to indemnify and hold harmless each
Lender and, as applicable, each such Lender’s officers, directors,
stockholders, agents and representatives from and against any and all claims,
demands, losses, damages, expenses or liabilities (including reasonable
attorneys’ fees) due to or arising out of a material breach of any
representation, warranty or covenant provided, made or agreed to by Borrower
hereunder or under the Note.

	 	(c)	 	Each Lender hereby agrees individually and not severally to
indemnify and hold harmless Borrower and, its officers, employees, managers,
directors, stockholders, members, agents and representatives from and against
any and all claims, demands, losses, damages, expenses or liabilities
(including reasonable attorneys’ fees) due to or arising out of a material
breach of any representation, warranty or covenant provided, made or agreed to
by such Lender hereunder.

Section 5.2. Successors and Assigns. This Agreement is binding upon and inures to the
benefit of the parties and their successors and assigns. Neither Borrower nor Subsidiary may assign
this Agreement or any rights or obligations hereunder without the prior written consent of Lenders.
Each Lender may assign its rights and obligations hereunder to an entity directly or indirectly
controlled by or under common control with such Lender.

Section 5.3. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, and all of which together shall constitute
one instrument.

Section 5.4. Facsimile. A facsimile copy of an original written signature shall be
deemed to have the same effect as an original written signature.

Section 5.5. Captions and Headings. The captions and headings used in this Agreement
are used for convenience only and are not to be considered in construing or interpreting this
Agreement.

Section 5.6. Notices. Unless otherwise provided herein, all notices, requests,
waivers and other communications made pursuant to this Agreement will be in writing and will be
conclusively deemed to have been duly given (i) when hand delivered to the other party; (ii) upon
receipt, when sent by facsimile to the number set forth below or email to the address set forth
below; (iii) five business days after deposit in the U.S. mail, postage prepaid and addressed to
the other party at the address set forth below; or (iv) the next business day after deposit with a
national overnight delivery service, postage prepaid, addressed to the parties as set forth below
with next business day delivery guaranteed. Each person making a communication hereunder by
facsimile or email will promptly confirm by telephone to the person to whom such communication was
addressed each communication made by it by facsimile or email pursuant hereto but the absence of
such confirmation will not affect the validity of any such communication. A party may change or
supplement the addresses given below, or designate additional addresses for purposes of this
Section 5.6, by giving the other party written notice of the new address in the manner set
forth above.

If to Borrower or Subsidiary:

122 East 42nd Street

Suite 4700

New York, NY 10168

Attention: Alfred Small, Senior Vice President, Chief Financial Officer, Treasurer
and Secretary of Castle Brands Inc.

Phone: (646) 356-0213

Facsimile: (646) 356-0222

If to the Lenders:

To the addresses set forth on Exhibit A.

Section 5.7. Amendments and Waivers. Any term of this Agreement may be amended and
the observance of any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written consent of Borrower,
Subsidiary and all Lenders.

Section 5.8. Enforceability; Severability. If any provision of this Agreement or the
application thereof to any party hereto or circumstances shall be invalid or unenforceable to any
extent, the remainder of this Agreement and the application of such provisions to any other party
thereto of circumstances shall not be affected thereby and shall be enforced to the greater extent
permitted by law.

Section 5.9. Governing Law and Jurisdiction. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Florida, without giving effect to
principles of conflict of laws, and shall inure to the benefit of and be binding upon the
successors and assigns of the parties hereto. Each of the Borrower, Subsidiary and the Lenders
hereby specifically authorize any action brought upon the enforcement of this Agreement by the
other to be instituted and prosecuted in the State or Federal courts located in Miami-Dade County,
Florida. Each of the Borrower, Subsidiary and the Lenders hereby specifically consents and submits
to the personal jurisdiction of the State and Federal courts located in Miami-Dade County, Florida
in any action instituted by the other arising under or related to this Agreement.

Section 5.10. Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES ITS RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY DEALINGS BETWEEN THE PARTIES HERETO RELATING TO THE SUBJECT MATTER HEREOF. EACH OF
THE PARTIES HERETO ALSO WAIVES ANY BOND OR SURETY OR SECURITY UPON SUCH BOND THAT MIGHT, BUT FOR
THIS WAIVER, BE REQUIRED OF THE OTHER PARTY. THE SCOPE OF THIS WAIVER IS INTENDED TO BE
ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE
SUBJECT MATTER OF THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO, CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH OF THE PARTIES HERETO
ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO THIS AGREEMENT. EACH OF THE
PARTIES HERETO HEREBY FURTHER ACKNOWLEDGES AND AGREES THAT EACH HAS REVIEWED OR HAD THE OPPORTUNITY
TO REVIEW THIS WAIVER WITH ITS RESPECTIVE LEGAL COUNSEL, AND THAT IT KNOWINGLY AND VOLUNTARILY
WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH SUCH LEGAL COUNSEL. IN THE EVENT OF
LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

Section 5.11. Further Assurances; Access. Lenders, Borrower and Subsidiary will from
time to time and at all times hereafter make, do, execute or cause or procure to be made, done and
executed such further acts, deeds, conveyances, consents and assurances, without further
consideration, which may reasonably be required to effect the transactions contemplated by this
Agreement. Upon reasonable written notice, Borrower and Subsidiary shall afford the officers,
employees and authorized agents and representatives of Lenders reasonable access, during normal
business hours, to the offices, properties, books, records and such additional financial and
operating data and other information regarding the assets, goodwill and business of Borrower and
its subsidiaries, including the Subsidiary, as Lenders may from time to time reasonably request.

Section 5.12. Entire Agreement. This Agreement, the Note and the Security Agreement,
and all exhibits hereto and thereto constitute the entire agreement among the parties with respect
to the subject matter hereof and thereof and no party will be liable or bound to any other party in
any manner by any warranties, representations or covenants except as specifically set forth herein
or therein.

Section 5.13. Delays or Omissions. No delay or omission to exercise any right, power
or remedy accruing to any party under this Agreement, or upon any breach or default of any other
party under this Agreement, will impair any such right, power or remedy of such non-breaching or
non-defaulting party nor will it be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of or in any similar breach or default thereafter occurring; nor will any
waiver of any single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any party of any provisions or conditions of this Agreement, must be in
writing and will be effective only to the extent specifically set forth in such writing. Except as
otherwise set forth herein, all remedies, either under this Agreement or by law or otherwise
afforded to any party, will be cumulative and not alternative.

Section 5.14. No Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and assigns, and is not for
the benefit of, nor may any provision hereof be enforced by, any other person or entity.

Section 5.15. No Strict Construction. The language used in this Agreement is deemed
to be the language chosen by the parties to express their mutual intent, and no rules of strict
construction will be applied against any party.

Section 5.16. Public Announcements. No public announcements shall be made by any
party hereto relating to the transactions contemplated by this Agreement without the prior written
consent of the Borrower, Subsidiary and Lenders, such consent not to be unreasonably withheld,
except where required by applicable law; provided, however, that in the event of such a legally
required disclosure, the disclosing party will consult with the other consenting party with respect
to the text of such disclosure and will provide the other consenting party with a copy of the
disclosure prior to its publication.

Section 5.17. Expenses. Each party shall bear its own costs and expenses in
connection with the transactions contemplated hereby, except to the extent that Lenders’ Expenses
shall be Obligations subject to the provisions hereof.

Section 5.18. Exhibits and Schedule of Exceptions. All exhibits, annexes and
schedules, including the Schedule of Exceptions set forth as Exhibit E hereto, annexed hereto or
referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in
full herein. A disclosure in any particular Schedule of the Schedule of Exceptions or otherwise in
this Agreement will be deemed adequate to disclose another exception to a representation or
warranty made herein if the disclosure identifies the exception with reasonable particularity so
that any exception to any other Schedule is reasonably apparent.

[Signatures begin on next page.]

1

IN WITNESS THEREOF, this Agreement has been executed by the undersigned as of the day, month
and year first above written.

Castle Brands Inc.

By: /s/ Alfred J. Small

Name: Alfred J. Small

Title: Senior Vice President, CFO, Treasurer and Secretary

Castle Brands (USA) Corp.

By: /s/ Alfred J. Small

Name: Alfred J. Small

Title: CFO

Lenders

Frost Gamma Investments Trust

By: /s/ Phillip Frost, M.D.

Name: Phillip Frost, M.D.

Title: Trustee

Vector Group Ltd.

By: /s/ J. Bryant Kirkland III

Name: J. Bryant Kirkland III

Title: Vice President, CFO and Treasurer

/s/ Mark Andrews

Mark Andrews

IVC Investors, LLLP

By: /s/ Glenn L. Halpryn

Name: Glenn L. Halpryn

Title: Vice President

Lafferty Ltd.

By: /s/ Patricia Whitford

Name: Patricia Whitford

Title: For Azure Ltd. as Corporate Director of Lafferty Ltd.

Jacqueline Simkin Trust As Amended and Restated 12/16/2003

By: /s/ Jacqueline Simkin

Name: Jacqueline Simkin

Title: Trustee

/s/ Richard J. Lampen

Richard J. Lampen

EXHIBIT A

LENDERS

NAME AND ADDRESSCOMMITMENT AMOUNT

	 	 	 	 	 	 	 	 	 
	 	 	COMMITMENT PERCENTAGE	 	 	 	 
	Frost Gamma Investments Trust
	 	$	1,100,000		 		44	%
	4400 Biscayne Boulevard
15th Floor
Miami, Florida 33137
	 	 	 	 	 	 	 	 
	Vector Group Ltd.
	 	$	900,000		 		36	%
	100 S.E. Second Street, 32nd Floor
Miami, Florida 33131
	 	 	 	 	 	 	 	 
	Mark Andrews
	 	$	100,000		 		4	%
	122 East 42nd Street
Suite 4700
New York, New York 10168
	 	 	 	 	 	 	 	 
	IVC Investors, LLLP
	 	$	100,000		 		4	%
	Suite 950
4400 Biscayne Boulevard
Miami, Florida 33137
	 	 	 	 	 	 	 	 
	Lafferty Ltd.
	 	$	100,000		 		4	%
	c/o Mr. Warren Roiter
Roiter Zucker
5-7 Broadhurst Gardens
Swiss Cottage
London NW6 3RZ, England
	 	 	 	 	 	 	 	 
	Jacqueline Simkin Trust As Amended and Restated
	 	$	100,000		 		4	%
	12/16/2003
801 Brickell Avenue
Suite 2350
Miami, Florida 33131
	 	 	 	 	 	 	 	 
	Richard J. Lampen
	 	$	100,000		 		4	%
	350 Costa Brava Court
Coral Gables, FL 33143
	 	 	 	 	 	 	 	 
	TOTAL
	 	$	2,500,000		 		100	%

EXHIBIT B

NOTE

$      New York, NY

Dated as of ____________ __, 2010

FOR VALUE RECEIVED, Castle Brands Inc., a Delaware corporation with offices at 122 E. 42nd
Street, Suite 4700, New York, NY 10168 (“Borrower”), pursuant to this promissory note
(“Note”), hereby promises to pay to the lenders listed on Exhibit A hereto
(“Lenders”) at such place as Lenders may designate from time to time in writing, in lawful
money of the United States of America, the aggregate principal amount of up to $2,500,000, or such
lesser amount as shall equal the outstanding principal balance of all Advances (the “Loan”)
made to Borrower by Lenders pursuant to that certain Credit Agreement, dated as of December 30,
2009, by and among Borrower, Castle Brands (USA) Corp., a Delaware corporation
(“Subsidiary”), and the Lenders (the “Credit Agreement”) and this Note, and to pay
all other amounts due with respect to the Loan on the dates and in the amounts set forth in the
Credit Agreement and this Note.

1. Definitions. All terms used, but not defined herein, shall have the meanings
ascribed to them in the Credit Agreement. In addition, the terms set forth below shall have the
following meanings:

(a) “Event of Default” shall mean the occurrence of one or more of the following
events:

(1) Borrower shall fail to make any payment due to Lenders under this Note, when the same
shall become due and payable, whether at maturity, by acceleration or otherwise, within ten (10)
business days after receipt of written notice from Lenders that such payment is due and unpaid.

(2) Borrower violates any of the covenants contained in Sections 6 and 7 of this Note and
fails to remedy such violation within ten (10) days after receipt of written notice from Lenders
that such a violation has occurred.

(3) Any material portion of Borrower’s or Subsidiary’s (each, a “Loan Party”) assets
is attached, seized, subjected to a writ or distress warrant, or is levied upon, or comes into the
possession of any trustee, receiver or person acting in a similar capacity and such attachment,
seizure, writ or distress warrant or levy has not been removed, discharged or rescinded within ten
(10) business days, or if any Loan Party is enjoined, restrained, or in any way prevented by court
order from continuing to conduct all or any material part of its business affairs, or if a judgment
or other claim becomes a lien or encumbrance upon any material portion of any Loan Party’s assets,
or if a notice of lien, levy or assessment is filed of record with respect to any Loan Party’s
assets by the United States Government, or any department, agency or instrumentality thereof, or by
any state, county, municipal or governmental agency, and the same is not paid within ten (10)
business days after any Loan Party receives notice thereof; provided that none of the foregoing
shall constitute an Event of Default where such action or event is stayed or an adequate bond has
been posted pending a good faith contest by such Loan Party.

(4) Any document executed in connection with the Loan ceases to be, or any Loan Party asserts
that such document is not, in any material respect, a legal, valid and binding obligation of such
Loan Party or enforceable in accordance with its terms.

(5) A proceeding shall have been instituted in a court having jurisdiction in the premises
seeking a decree or order for relief in respect of any Loan Party in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or for the
appointment of a receiver, liquidator, assignee, custodian, trustee (or similar official) of any
Loan Party or for any substantial part of its property, or for the winding-up or liquidation of its
affairs, and such proceeding shall remain undismissed or unstayed and in effect for a period of
sixty (60) consecutive days or such court shall enter a decree or order granting the relief sought
in such proceeding.

(6) Any Loan Party commences a voluntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, consents to the entry of an order for relief in an
involuntary case under any such law, or consents to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian (or other similar official) of such Loan Party
or for any substantial part of its property, or shall make a general assignment for the benefit of
creditors, or shall fail generally to pay its debts, other than debts contested in good faith, as
they become due, or shall take any corporate action in furtherance of any of the foregoing.

(7) One or more defaults shall exist under any agreement of any Loan Party with any third
party or parties which consists of the failure to pay any Indebtedness of such Loan Party at
maturity or which results in the acceleration of any Indebtedness of such Loan Party prior to its
stated maturity and the aggregate amount of such Indebtedness is in excess of Five Hundred Thousand
Dollars ($500,000) and such acceleration is not annulled within forty-five (45) days or such
payment default continues for forty-five (45) days.

(8) A final, non-appealable judgment or judgments entered by a court or courts of competent
jurisdiction for the payment of money in an amount, individually or in the aggregate, of at least
Five Hundred Thousand Dollars ($500,000) shall be rendered against any Loan Party and shall remain
unsatisfied, unbonded and unstayed for a period of forty-five (45) days or more.

(9) Any material misrepresentation or material misstatement that exists now or hereafter in
any warranty, representation, statement, certification or report made to Lenders by Borrower or any
officer, employee, agent or director of Borrower shall prove to have been false or misleading in
any material respect when made or furnished.

(b) “Indebtedness” means, with respect to Borrower, the aggregate amount of, without
duplication, (a) all obligations of Borrower for borrowed money, (b) all obligations of Borrower
evidenced by bonds, debentures, notes or other similar instruments, (c) all obligations of Borrower
to pay the deferred purchase price of property or services (excluding trade payables aged less than
one hundred eighty (180) days), (d) all capital lease obligations of Borrower, (e) all obligations
or liabilities of others secured by a Lien on any asset of Borrower, whether or not such obligation
or liability is assumed, (f) all obligations or liabilities of others guaranteed by Borrower, and
(g) any other obligations or liabilities which are required by GAAP to be shown as debt on the
balance sheet of Borrower.

(c) “Interest Rate” shall be 11% per annum, compounded quarterly.

(d) “Lenders’ Expenses” means all reasonable attorneys’ fees, costs and expenses
incurred in amending, enforcing or defending the Note (including fees and expenses of appeal or
review), including the exercise of any rights or remedies afforded under the Note; or under
applicable law, whether or not suit is brought, whether before or after bankruptcy or insolvency,
including without limitation all fees and costs incurred by Lenders in connection with Lenders’
enforcement of their rights in a bankruptcy or insolvency proceeding filed by or against Borrower
or its property.

(e) “Lien” means any voluntary or involuntary security interest, pledge, bailment,
lease, mortgage, hypothecation, conditional sales and title retention agreement, encumbrance or
other lien with respect to any property of the Borrower in favor of any person.

(f) “Obligations” shall mean actual indebtedness, principal, interest, fees, charges,
expenses and reasonable attorneys’ fees and costs and other amounts, obligations, covenants and
duties owing by Borrower to Lenders (or any permitted assignee) of any kind and description
(whether pursuant to or evidenced by this Note or the Credit Agreement), whether direct or
indirect, absolute or contingent, due or to become due, now existing or hereafter arising,
including Lenders’ Expenses, in each case as then outstanding hereunder and under the Credit
Agreement.

(g) “Permitted Indebtedness” means and includes:

(1) Indebtedness of Borrower to Lenders;

(2) Indebtedness arising from the endorsement of instruments in the ordinary course of
business;

(3) Indebtedness existing on the date hereof and disclosed in the Schedule of Exceptions to
the Credit Agreement;

(4) Indebtedness of Borrower which is subordinated to the Indebtedness of Borrower under this
Note; and which is in an aggregate original principal amount not to exceed $500,000 at any time;

(5) Indebtedness consisting of purchase money Indebtedness or capital lease obligations in the
maximum aggregate amount of $500,000 at any time outstanding; and

(6) Any extensions, refinancings, modifications, amendments and restatements of any items of
Permitted Indebtedness above; provided that the principal amount thereof is not increased or the
terms thereof are not modified to impose more burdensome terms upon Borrower.

(h) “Permitted Liens” means:

(1) Liens for fees, taxes, levies, imposts, duties or other governmental charges of any kind
which are not yet delinquent or which are being contested in good faith by appropriate proceedings
which suspend the collection thereof (provided that Borrower or Subsidiary has adequately bonded
such Lien or reserves sufficient to discharge such Lien have been provided on the books of Borrower
or Subsidiary).

(2) Liens existing as of the date hereof and identified in the Schedule of Exceptions to the
Credit Agreement, as well as Liens created pursuant to the Credit Agreement.

(3) Carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other similar Liens
arising in the ordinary course of business and which are not delinquent or remain payable without
penalty or which are being contested in good faith and by appropriate proceedings (provided that
Borrower or Subsidiary has adequately bonded such Lien or reserves sufficient to discharge such
Lien have been provided on the books of Borrower or Subsidiary).

(4) Liens upon any equipment or other personal property acquired by Borrower after the date
hereof to secure (i) the purchase price of such equipment or other personal property, or (ii) lease
obligations or indebtedness incurred solely for the purpose of financing the acquisition of such
equipment or other personal property; provided that such Liens are confined solely to the equipment
or other personal property so acquired and the proceeds thereof and the amount secured does not
exceed the acquisition price thereof.

(5) Bankers’ liens, rights of setoff and similar Liens incurred on deposits made in the
ordinary course of business and Liens in favor of financial institutions arising in connection with
Borrower’s deposit accounts or securities accounts held at such institutions to secure customary
fees and charges;

(6) Any judgment, attachment or similar Lien not resulting in an Event of Default hereunder;
and

(7) Liens incurred in the extension, renewal or refinancing of the indebtedness secured by
Liens described above but any extension, renewal or replacement Lien must be limited to the
property encumbered by the existing Lien and the principal amount of the indebtedness may not
increase.

(i) “Person” means and includes any individual, any partnership, any corporation, any
business trust, any joint stock company, any limited liability company, any unincorporated
association or any other entity and any domestic or foreign national, state or local government,
any political subdivision thereof, and any department, agency, authority or bureau of any of the
foregoing.

2. Advances Under the Note and Obligations. From time to time prior to the Maturity
Date, subject to the provisions of the Credit Agreement, the Lenders may make Advances to the
Borrower, which the Borrower may pay and reborrow, so long as the aggregate amount of Advances
outstanding at any one time shall not exceed the Available Amount. Notwithstanding the face amount
of the Note, Borrower’s liability under the Note shall include the Obligations. Lenders may
determine to include Obligations other than interest payable at the Interest Rate in calculating
the Available Amount.

3. Payments of Obligations, including Principal and Interest. The outstanding
principal amount of the Loan evidenced hereby, together with any accrued and unpaid interest
hereunder, and any and all other unpaid Obligations, including unpaid costs, fees and expenses
accrued, such as Lenders’ Expenses, shall be due and payable on April 1, 2013 (the “Maturity
Date”). Borrower shall pay all accrued and unpaid interest hereunder on the last day of each
calendar quarter until repayment in full of all Obligations.

4. Interest; Ranking. The principal balance outstanding hereunder, together with all
other amounts outstanding from time to time hereunder, shall bear interest until such amounts are
paid at the Interest Rate; provided that following any Event of Default (including before or after
any judgment is entered) and after the Maturity Date, the principal balance outstanding hereunder,
together with all such other amounts outstanding hereunder, shall bear interest at a rate per annum
equal to the Default Rate. This Note shall rank senior in right of payment to all of Borrower’s
subordinated indebtedness incurred after the Initial Closing Date and equal in right of payment
with all other senior indebtedness of Borrower incurred after the Initial Closing Date.

5. Prepayments. Borrower may prepay in cash, at any time or from time to time, all or
any portion of the amounts due hereunder, without penalty or premium. Prepayments of all or any
portion of the Obligations shall not reduce the Available Amount, and funds may be reborrowed
hereunder up to the Available Amount, subject to the provision hereof and the Credit Agreement. If
Borrower makes a payment or payments and such payment or payments, or any part thereof, are
subsequently invalidated, declared to be fraudulent or preferential, set aside or are required to
be repaid to a trustee, receiver, or any other person under any bankruptcy act, state, provincial
or federal law, common law or equitable cause, then to the extent of such payment or payments, the
obligations or part thereof hereunder intended to be satisfied shall be revived and continued in
full force and effect as if said payment or payments had not been made.

6. Affirmative Covenants. Borrower covenants that, so long as any amounts are due and
payable hereunder to Lenders or any commitment to make any Loan still exists, Borrower shall:

(a) Maintain its corporate existence and its good standing in its jurisdiction of
incorporation and maintain qualification in each jurisdiction in which the failure to so qualify
could reasonably be expected to have a Material Adverse Effect, except that Borrower may, in its
sole discretion, reincorporate in Florida. Borrower shall maintain in force all licenses,
approvals and agreements, the loss of which could reasonably be expected to have a Material Adverse
Effect.

(b) Comply with all statutes, laws, ordinances and government rules and regulations to which
it is subject, noncompliance with which could reasonably be expected to have a Material Adverse
Effect.

(c) As soon as possible, and in any event within five (5) days after the discovery of a
default or an Event of Default, provide Lenders with an Officer’s Certificate setting forth the
facts relating to or giving rise to such default or Event of Default and the action which Borrower
proposes to take with respect thereto.

7. Negative Covenants. Except as identified in the Schedule of Exceptions to the
Credit Agreement, Borrower covenants that, so long as any amounts are due and payable hereunder to
Lenders or any commitment to make any Loan still exists, without the prior approval of Lenders,
Borrower shall not:

(a) Change its name or principal place of business without thirty (30) days prior written
notice to Lenders.

(b) Create, incur, assume or suffer to exist any Lien of any kind upon any of Borrower’s
property, whether now owned or hereafter acquired, except Permitted Liens.

(c) (i) Prepay, redeem, purchase, defease or otherwise satisfy in any manner prior to the
scheduled repayment thereof any Indebtedness for borrowed money (other than amounts due or
permitted to be prepaid under this Agreement) or lease obligations or any of the indebtedness of
the Company to Betts & Scholl, L.L.C., or (ii) amend, modify or otherwise change the terms of any
Indebtedness for borrowed money or lease obligations so as to accelerate the scheduled repayment
thereof.

(d) Create, incur, assume or permit to exist any Indebtedness except Permitted Indebtedness.

8. Lenders’ Rights and Remedies. Upon the occurrence of any Default hereunder, while
such Default is continuing (provided that an Event of Default shall be continuing at all times
after any cure period therefor expires), Lenders shall not have any further obligation to advance
money or extend credit to or for the benefit of Borrower. In addition, upon the occurrence and
during the continuance of an Event of Default, the entire unpaid principal sum hereunder, plus any
and all interest accrued thereon, plus all other sums due and payable to Lenders hereunder shall,
at the option of Lenders, become due and payable immediately without presentment, demand, notice of
nonpayment, protest, notice of protest, or other notice of dishonor, all of which are hereby
expressly waived by Borrower.

9. Remedies Cumulative, Etc.

(a) No right or remedy conferred upon or reserved to Lenders hereunder or now or hereafter
existing at law or in equity is intended to be exclusive of any other right or remedy, and each and
every such right or remedy shall be cumulative and concurrent, and in addition to every other such
right or remedy, and may be pursued singly, concurrently, successively or otherwise, at the sole
discretion of Lenders, and shall not be exhausted by any one exercise thereof but may be exercised
as often as occasion therefor shall occur.

(b) Borrower hereby waives presentment, demand, notice of nonpayment, protest, notice of
protest, notice of dishonor and any and all other notices in connection with any default in the
payment of, or any enforcement of the payment of, all amounts due under this Note. To the extent
permitted by law, Borrower waives the right to any stay of execution and the benefit of all
exemption laws now or hereafter in effect.

(c) Costs and Expenses. Following the occurrence of any Event of Default, Borrower shall pay
upon demand all costs and expenses (including reasonable attorneys’ fees and expenses) incurred by
Lenders in the exercise of any of its rights, remedies or powers under this Note and any amount
thereof not paid promptly following demand therefor shall be added to the principal sum hereunder
and shall bear interest at the Default Rate from the date of such demand until paid in full.

10. Indemnification and Waiver. Whether or not the transactions contemplated hereby
shall be consummated:

(a) General Indemnity. Borrower agrees upon demand to pay or reimburse Lenders for
all liabilities, obligations and out-of-pocket expenses, including Lenders’ expenses and reasonable
fees and expenses of counsel for Lenders from time to time arising in connection with the
enforcement or collection of sums due under this Note or the Credit Agreement, and in connection
with any amendment or modification of such documents or any “work-out” in connection with
such documents. Borrower shall indemnify, reimburse and hold Lenders, and each of its respective
successors, assigns, agents, attorneys, officers, directors, shareholders, servants, agents and
employees (each an “Indemnified Person”) harmless from and against all liabilities, losses,
damages, actions, suits, demands, claims of any kind and nature (including claims relating to
environmental discharge, cleanup or compliance), all costs and expenses whatsoever to the extent
they may be incurred or suffered by such Indemnified Person in connection therewith (including
reasonable attorneys’ fees and expenses), fines or penalties (and other charges of any applicable
governmental authority) (each, a “Claim”), directly or indirectly relating to or arising
out of the use of the proceeds of the Loans or otherwise, the falsity of any representation or
warranty of Borrower or Borrower’s failure to comply with the terms of this Note or the Credit
Agreement. Such indemnities shall continue in full force and effect, notwithstanding the
expiration or termination of this Note. Upon Lenders’ written demand, Borrower shall assume and
diligently conduct, at its sole cost and expense, the entire defense of Lenders, each of its
partners, and each of their respective, agents, employees, directors, officers, shareholders,
successors and assigns against any indemnified Claim described in this Section. Borrower shall not
settle or compromise any Claim against or involving Lenders without first obtaining Lenders’
written consent thereto, which consent shall not be unreasonably withheld.

11. Notices. All notices required to be given to any of the parties hereunder shall
be in writing and shall be deemed to have been sufficiently given for all purposes when presented
personally to such party or sent by hand delivery, facsimile, courier service guaranteeing next
business day delivery, or overnight U.S. express mail, return receipt requested, to such party at
its address set forth in the Credit Agreement with copies to the parties designated to receive
copies in the Credit Agreement. Such notice shall be deemed to be given when received. Any notice
of any change in such address shall also be given in the manner set forth above. Whenever the
giving of notice is required, the giving of such notice may be waived in writing by the party
entitled to receive such notice.

12. Enforceability; Severability. The parties hereto agree that each provision of
this Note will be interpreted in such a manner as to be effective and valid under applicable law.
If one or more provisions of this Note are nevertheless held to be prohibited, invalid or
unenforceable under applicable law, such provision will be effective to the fullest extent possible
excluding the terms affected by such prohibition, invalidity or unenforceability, without
invalidating the remainder of such provision or the remaining provisions of this Note. If the
prohibition, invalidity or unenforceability referred to in the prior sentence requires such
provision to be excluded from this Note in its entirety, the balance of the Note will be
interpreted as if such provision were so excluded and will be enforceable in accordance with its
terms.

13. Successors and Assigns. This Note inures to the benefit of Lenders and binds
Borrower, and their respective successors and assigns, and the words “Borrower” and
“Lenders” whenever occurring herein shall be deemed and construed to include such
respective successors and assigns; provided, however, that neither this Note nor any rights
hereunder may be assigned by Borrower without Lenders’ prior written consent, which consent may be
granted or withheld in Lenders’ sole discretion.

14. Governing Law and Jurisdiction. This Note shall be governed by and construed in
accordance with the internal laws of the State of Florida, without giving effect to principles of
conflict of laws, and shall inure to the benefit of and be binding upon the successors and assigns
of the Borrower and the Lenders. Each of the Borrower and the Lenders hereby specifically
authorize any action brought upon the enforcement of this Agreement by the other to be instituted
and prosecuted in the State or Federal courts located in Miami-Dade County, Florida. Each of the
Borrower and the Lenders hereby specifically consents and submits to the personal jurisdiction of
the State and Federal courts located in Miami-Dade County, Florida in any action instituted by the
other arising under or related to this Agreement.

15. Entire Agreement; Construction; Amendments and Waivers.

(a) Entire Agreement. This Note and each of the related loan documents dated as of
the date hereof, taken together, constitute and contain the entire agreement between Borrower and
Lenders with respect to the subject matter hereof and supersede any and all prior agreements,
negotiations, correspondence, understandings and communications between the parties, whether
written or oral, with respect to such subject matter. Borrower acknowledges that it is not relying
on any representation or agreement made by Lenders or any employee, attorney or agent thereof,
other than the specific agreements set forth in this Note and the related loan documents.

(b) Construction. This Note is the result of negotiations between and has been
reviewed by each of Borrower and Lenders as of the date hereof and their respective counsel;
accordingly, this Note shall be deemed to be the product of the parties hereto, and no ambiguity
shall be construed in favor of or against Borrower or Lenders. Borrower and Lenders agree that
they intend the literal words of this Note and the related loan documents and that no parole
evidence shall be necessary or appropriate to establish Borrower’s or Lenders’ actual intentions.

(c) Amendments and Waivers. Any term of this Note may be amended and the observance
of any terms of this Note may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of Lenders and Borrower.

16. Reliance by Lenders. All covenants, agreements, representations and warranties
made herein by Borrower shall be deemed to be material to and to have been relied upon by Lenders,
notwithstanding any investigation by Lenders.

17. No Set-Offs by Borrower. All sums payable by Borrower pursuant to this Note or
any of the related loan documents shall be payable without notice or demand and shall be payable in
United States Dollars without set-off or reduction of any manner whatsoever.

18. Survival. All covenants, representations and warranties made in this Agreement
shall continue in full force and effect so long as any obligations hereunder or commitment to fund
remain outstanding. The obligations of Borrower to indemnify Lenders with respect to the expenses,
damages, losses, costs and liabilities described in Section 10 shall survive until all applicable
statute of limitations periods with respect to actions that may be brought against Lenders have
run.

19. WAIVER OF TRIAL BY JURY. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ITS
RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS NOTE OR ANY
DEALINGS BETWEEN THE PARTIES HERETO RELATING TO THE SUBJECT MATTER HEREOF. EACH OF THE PARTIES
HERETO ALSO WAIVES ANY BOND OR SURETY OR SECURITY UPON SUCH BOND THAT MIGHT, BUT FOR THIS WAIVER,
BE REQUIRED OF THE OTHER PARTY. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY
AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS NOTE,
INCLUDING, BUT NOT LIMITED TO, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER
COMMON LAW AND STATUTORY CLAIMS. EACH OF THE PARTIES HERETO ACKNOWLEDGES THAT THIS WAIVER IS A
MATERIAL INDUCEMENT TO ENTER INTO THIS NOTE. EACH OF THE PARTIES HERETO HEREBY FURTHER ACKNOWLEDGES
AND AGREES THAT EACH HAS REVIEWED OR HAD THE OPPORTUNITY TO REVIEW THIS WAIVER WITH ITS RESPECTIVE
LEGAL COUNSEL, AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH SUCH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, THIS NOTE MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.

[SIGNATURE PAGE FOLLOWS]

2

IN WITNESS WHEREOF, Borrower has duly executed this Note as of the day and year first above
written.

Castle Brands Inc.

By:      

Name:

Title:

3

EXHIBIT D

NOTICE OF BORROWING

[ Lenders ]

	 	 	Re: Notice of Borrowing

Date: _________________

Gentlemen:

Pursuant to the terms of Credit Agreement dated as of December 30, 2009 (“Credit Agreement”),
we hereby request you to make an advance in the amount of $     .

This notice constitutes a reaffirmation by the undersigned that the representations and
warranties in the Credit Agreement are true, correct and accurate in all material respects as if
the date hereof was the Initial Closing Date and a certification by the undersigned that it is in
compliance with the Credit Agreement and the Note in all material respects as of the date of this
Notice of Borrowing as if the date hereof was the Initial Closing Date.

Capitalized terms used but not defined herein shall have the meanings ascribed to them in the
Credit Agreement.

	 	 	Very truly yours,

	 	 	Castle Brands Inc.

	 	 	By:

	 	 	Name:

	 	 	Title:

EXHIBIT E

SCHEDULE OF EXCEPTIONS

All Inventory and receivables in which Betts & Scholl, L.L.C. has a security
interest pursuant to that certain Security Agreement by and between Castle Brands
Inc. and Betts & Scholl, L.L.C., dated September 21, 2009

4EX-4.2

EXHIBIT 4.2

EXECUTION COPY

SECURITY AGREEMENT

THIS SECURITY AGREEMENT (this “Agreement”) is made and entered into as of the
30th day of December, 2009 by and between Castle Brands (USA) Corp., a Delaware
corporation (the “Maker”), and the lenders listed on Exhibit “A” hereto
(collectively, the “Holder”). Capitalized terms used herein, but not otherwise defined
herein, shall have the meanings ascribed to them in the Credit Agreement (as defined below).

W I T N E S S E T H:

WHEREAS, the Maker, Castle Brands Inc., a Delaware corporation (the “Borrower”), and
the Holder are parties to that certain Credit Agreement, dated December 30, 2009 (the “Credit
Agreement”), pursuant to which the Maker may execute a promissory note in the aggregate
principal amount of up to $2.5 million (the “Note”); and

WHEREAS, also concurrently herewith, the Maker will become indebted to the Holder for the
Indebtedness (as defined in the Note); and

WHEREAS, the Maker has agreed to grant to the Holder a security interest in certain of the
assets of the Maker in order to secure the Indebtedness.

NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the Maker and the
Holder hereby agrees as follows:

1. Creation of Security Interest in Collateral. The Maker hereby grants a continuing
security interest to the Holder in and into the following property, whether now existing or owned,
or hereafter arising or acquired, wherever the same may be now or hereafter located (all of such
property specified in clauses (a), (b) and (c) being hereinafter collectively referred to as the
“Collateral”):

(a) All inventory located in the United States in all it its forms that are held by the Maker
for sale or lease or to be furnished under contracts of service or work in process or materials
used or consumed in the business of the Maker, including, without limitation, all raw materials,
work in process, finished goods and materials used or consumed in the manufacture, production,
preparation or shipping thereof, including all bulk liquor and finished goods (in each case,
whether in process or in bottles); unlabeled case goods, raw materials (whether expensed or not),
including work in process; packaging supplies, labels, bottles and caps; and merchandise, packaging
materials and other supplies related thereto (the “Inventory”).

Notwithstanding anything contained herein to the contrary, Collateral shall not include
Inventory acquired prior to the date hereof from Betts & Scholl, LLC.

(b) All proceeds realized from the sale, lease, license, insurance on or use of any of the
Inventory or any interest or right therein.

(c) All of the Maker’s trade accounts receivable.

The Collateral, and all proceeds thereof, are pledged, assigned and transferred, and a
security interest therein is granted to the Holder as security for the payment and performance of
the Note, including without limitation, the payment of the Indebtedness and Obligations in
accordance with the terms thereof.

2. Financing Statements. The Maker will join with the Holder in the execution and
filing of appropriate financing statements or other documents under the Uniform Commercial Code of
the State of Delaware (the “UCC”) and at all times the Maker will do, execute, acknowledge
and deliver, and will cause to be done, executed, acknowledged and delivered, itself and by any
corporation or person obligated to the Maker so to do, all and every such further acts, deeds, and
assurances as the Holder shall reasonably require for the better assuring, perfecting and
confirming unto the Holder, the security interest in the Collateral and the rights, privileges and
remedies hereby or in any other agreement created, granted or assigned, or intended so to be, or
which it may herein or hereafter become bound to create, grant or assign to the Holder.

3. Use of Collateral. In the absence of an Event of Default (as hereinafter defined),
the Maker shall have all rights to retain possession of and use the Collateral and to sell or
otherwise dispose of the Inventory in the ordinary course of business.

4. Maintenance of Books and Records. During the term of this Agreement, the Maker
will not remove its books and records from its current principal executive offices, 122 East 42nd
Street, Suite 4700, New York, New York 10168, without prior written notification to the Holder;
provided, however, that the filing by the Maker of any publicly-available report
with the United States Securities and Exchange Commission designating new principal executive
offices of the Maker shall constitute notice for purposes of this Section 4.

5. Holder Appointed Attorney-in-Fact. Upon the occurrence and during the continuance
of an Event of Default, with notice to the Maker, the Maker hereby irrevocably constitutes and
appoints the Holder as the Maker’s true and lawful attorney in fact, with full power of
substitution, to execute, acknowledge and deliver any instruments and to exercise and enforce every
right, power, remedy, option and privilege of the Maker with respect to the Collateral, and do in
the name, place and stead of the Maker, all such acts, things and deeds for and on behalf of and in
the name of the Maker which the Maker could or might do or which the Holder may deem necessary or
desirable to more fully vest in the Holder the rights and remedies provided for herein and to
accomplish the purposes of this Agreement. The foregoing power of attorney is irrevocable and
coupled with an interest. Upon the occurrence and during the continuance of an Event of Default,
the Holder may perform any such agreement, and any reasonable expenses of the Holder incurred in
connection therewith shall be paid by the Maker.

6. Reasonable Care. The Holder shall be deemed to have exercised reasonable care in
the custody and retention of the Collateral in its possession if the Collateral is accorded
treatment substantially equal to that which the Holder accords its own property, it being
understood that the Holder shall not have responsibility for taking any necessary steps to preserve
rights against any parties with respect to any Collateral.

7. Representations and Warranties, Covenants and Agreements.

(a) The Maker represents and warrants that:

(i) The Maker has not made or filed any other lien, encumbrance, security agreement or
financing statement, other than those herein created, covering the Collateral or any part thereof
in which the Maker purports to grant a security interest hereunder, and the Maker has not created,
attached or perfected any security interest, other than the one herein created, in the Collateral
or any part thereof in which the Maker purports to grant a security interest hereunder other than
Permitted Liens;

(ii) The Maker is the sole legal, registered, record and beneficial owner of the Collateral in
which the Maker purports to grant a security interest hereunder, having good title thereto free and
clear of any and all liens and encumbrances other than Permitted Liens, subject to the Holder’s
proper conveyance of the Collateral to the Maker; and

(iii) The Maker has the full power, right and authority to enter into this Agreement, to grant
the security interest granted herein to the Holder and to carry out the transactions contemplated
by this Agreement.

(b) The Maker shall:

(i) promptly furnish the Holder with any information or documents which the Holder may
reasonably request concerning the Collateral;

(ii) promptly notify the Holder of any material claim, action or proceeding affecting title,
or any other matter relating to the Collateral, or any part thereof, or the security interest
created herein, and at the Holder’s request, appear in and defend, at the Maker’s expense, any such
claim, action or proceeding, provided that such claim, action or proceeding is not caused by or the
fault of the Holder or in existence prior to date hereof;

(iii) promptly make such further assurances and take such further actions as may be reasonably
necessary to establish proof of the Maker’s title to the Collateral and/or to protect the Holder’s
interest in the Collateral, provided that such actions or assurances are not necessitated or caused
by or the fault of the Holder or in existence prior to date hereof;

(iv) promptly furnish the Holder with true copies of all notices (including notices of
default) sent or received by the Maker with respect to the Collateral or any agreements relating to
the Collateral; and

(v) not, without the Holder’s prior written consent, in the Holder’s sole and absolute
discretion, (A) create any other security interest in, assign, pledge or otherwise encumber the
Collateral or any part thereof, or (B) permit any part of the Collateral to be or become subject to
any lien, attachment, execution, sequestration, other legal or equitable process, or encumbrance of
any kind or character other than the security interests created by this Agreement and the rights of
the Maker pursuant to Section 3 hereof.

8. Event of Default. The following shall constitute an “Event of Default”
hereunder:

(a) If an “Event of Default” occurs under the terms of the Note and the Borrower shall
have failed to cure such event of default within any applicable period for cure; or

(b) If the Maker shall fail to perform any covenant or agreement set forth herein and the
Maker shall not have cured such failure within ten days after receiving notice thereof from the
Holder.

9. Remedies. If any Event of Default shall have occurred and be continuing:

(a) In addition to all other rights and remedies granted to it under this Agreement, the Note
or other applicable law, if any Event of Default shall have occurred and be continuing, the Holder
may exercise all rights and remedies of a secured party under the UCC.

(b) Any surplus of such cash or cash proceeds held by the Holder and remaining after payment
in full of the Indebtedness shall be paid over to the Maker.

10. Termination. This Agreement shall terminate automatically upon the complete and
final satisfaction in full of all Indebtedness and Obligations under the Note and the release of
the Borrower by the holder of the Note.

11. Expenses. The Maker will pay to the Holder the amount of any and all reasonable
expenses, including the reasonable fees and expenses of its counsel and of any experts and agents,
which the Holder may incur in connection with (a) the custody or preservation of, or the sale of,
collection from, or other realization upon, any of the Collateral, (b) the exercise or enforcement
of any of the rights of the Holder hereunder upon an Event of Default, or (c) the failure by the
Maker to perform or observe any of the provisions hereof.

12. Amendments and Waivers. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written consent of Maker and
Holder.

13. No Waiver. No failure on the part of the Holder to exercise, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right, power or remedy by the Holder preclude any other or
further exercise thereof or the exercise of any other right, power or remedy. All remedies
hereunder are cumulative and are not exclusive of any other remedies provided by law.

14. Enforceability; Severability. If any provision of this Agreement or the
application thereof to any party hereto or circumstances shall be invalid or unenforceable to any
extent, the remainder of this Agreement and the application of such provisions to any other party
thereto of circumstances shall not be affected thereby and shall be enforced to the greater extent
permitted by law.

15. Notices. All notices, requests, demands and other communications required or
permitted to be given hereunder shall be in writing and shall be given personally, sent by
facsimile transmission or sent by prepaid air courier. Any such notice shall be deemed to have been
duly given (i) when hand delivered to the other party; (ii) upon receipt, when sent by facsimile to
the number set forth below or email to the address set forth below; (iii) five business days after
deposit in the U.S. mail, postage prepaid and addressed to the other party at the address set forth
below; or (iv) the next business day after deposit with a national overnight delivery service,
postage prepaid, addressed to the parties as set forth below with next business day delivery
guaranteed, in any such case as follows:

If to Maker:

Castle Brands Inc.

122 East 42nd Street, Suite 4700

New York, NY 10168

Attention: John Glover

Facsimile: (646) 356-0222

If to Holder:

To the address set forth on Exhibit A to the Credit Agreement

16. Incorporation by Reference. The terms of the Credit Agreement and the Note are
deemed incorporated herein by reference.

17. Interpretation. No provision of this Agreement shall be construed against or
interpreted to the disadvantage of any party hereto by any court or other governmental or judicial
authority by reason of such party having or being deemed to have structured or dictated such
provision.

18. Counterparts. This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered will be an original, but all such
counterparts will together constitute one and the same instrument. Each counterpart may consist of
a number of copies, facsimiles or facsimiles of copies hereof each signed by less than all, but
together signed by all of the parties hereto.

19. Governing Law and Jurisdiction. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of Florida, without giving effect to principles
of conflict of laws, and shall inure to the benefit of and be binding upon the successors and
assigns of the parties hereto. Each of the Maker and the Holder hereby specifically authorize any
action brought upon the enforcement of this Agreement by the other to be instituted and prosecuted
in the State or Federal courts located in Miami-Dade County, Florida. Each of the Maker and the
Holder hereby specifically consents and submits to the personal jurisdiction of the State and
Federal courts located in Miami-Dade County, Florida in any action instituted by the other arising
under or related to this Agreement.

EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ITS RIGHT TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THE PARTIES
HERETO RELATING TO THE SUBJECT MATTER HEREOF. EACH OF THE PARTIES HERETO ALSO WAIVES ANY BOND OR
SURETY OR SECURITY UPON SUCH BOND THAT MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF THE OTHER PARTY.
THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE
FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING, BUT NOT
LIMITED TO, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS. EACH OF THE PARTIES HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT
TO ENTER INTO THIS AGREEMENT. EACH OF THE PARTIES HERETO HEREBY FURTHER ACKNOWLEDGES AND AGREES
THAT EACH HAS REVIEWED OR HAD THE OPPORTUNITY TO REVIEW THIS WAIVER WITH ITS RESPECTIVE LEGAL
COUNSEL, AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH SUCH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.

1

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of
the date first written above.

MAKER

CASTLE BRANDS (USA) CORP.

By: /s/ Alfred J. Small

Name: Alfred J. Small

Title: CFO

HOLDER

Frost Gamma Investments Trust

By: /s/ Phillip Frost, M.D.

Name: Phillip Frost, M.D.

Title: Trustee

Vector Group Ltd.

By: /s/ J. Bryant Kirkland III

Name: J. Bryant Kirkland III

Title: Vice President, CFO and Treasurer

/s/ Mark Andrews

Mark Andrews

IVC Investors, LLLP

By: /s/ Glenn L. Halpryn

Name: Glenn L. Halpryn

Title: Vice President

Lafferty Ltd.

By: /s/ Patricia Whitford

Name: Patricia Whitford

Title: For Azure Ltd. as Corporate Director of Lafferty Ltd.

Jacqueline Simkin Trust As Amended and Restated 12/16/2003

By: /s/ Jacqueline Simkin

Name: Jacqueline Simkin

Title: Trustee

/s/ Richard J. Lampen

Richard J. Lampen

EXHIBIT A

LENDERS

	 
	NAME AND ADDRESS

	 

	Frost Gamma Investments Trust

4400 Biscayne Boulevard

15th Floor

Miami, Florida 33137

	Vector Group Ltd.

100 S.E. Second Street, 32nd Floor

Miami, Florida 33131

	Mark Andrews

122 East 42nd Street

Suite 4700

New York, New York 10168

	IVC Investors, LLLP

Suite 950

4400 Biscayne Boulevard

Miami, Florida 33137

	Lafferty Ltd.

c/o Mr. Warren Roiter

Roiter Zucker

5-7 Broadhurst Gardens

Swiss Cottage

London NW6 3RZ, England

	Jacqueline Simkin Trust As Amended and Restated 12/16/2003

801 Brickell Avenue

Suite 2350

Miami, Florida 33131

	Richard J. Lampen

350 Costa Brava Court

Coral Gables, FL 33143

2

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