First Amendment To Collateral Agreement

FIRST AMENDMENT TO COLLATERAL AGREEMENT
(MHW, LTD.)


THIS FIRST AMENDMENT TO COLLATERAL AGREEMENT (this "AMENDMENT"), dated effective as of August 15, 2005, between MHW, LTD, a New York corporation, having an office at 272 Plandome Road, Manhasset, New York 11030 (together with its successors and/or assigns, "COLLATERAL AGENT"), CASTLE BRANDS (USA) CORP., a Delaware corporation, with its principal place of business located at 570 Lexington Avenue, 29th Floor, New York, NY 10022 ("CB-US") and JPMORGAN CHASE BANK, a New York corporation,, having an address at 700 Lavaca, 2nd Floor, Austin, TX 78701 (together with its successors and assigns, "TRUSTEE").


WITNESSETH:


WHEREAS, CB-US and the Trustee, joined by the Collateral Agent, have heretofore entered into a Trust Indenture dated as June 1, 2004 (the "ORIGINAL INDENTURE") authorizing the issuance of up to Five Million Dollars ($5,000,000) of the Issuer's 8% Senior Secured Notes, Series 2004, due May 31, 2007 (the "ORIGINAL NOTES");


WHEREAS, CB-US has heretofore issued Four Million Six Hundred Sixty Thousand Dollars ($4,660,000) of Original Notes;


WHEREAS, CB-US desires to amend the terms of the Original Notes (i) to extend the maturity date from May 31, 2007 to May 31, 2009, and (ii) to increase the interest rate payable on the Original Notes from eight percent (8%) to nine percent (9%) (hereinafter referred to as the "AMENDED NOTES");


WHEREAS, CB-US desires to amend the terms of the Original Indenture (i) to authorize a maximum of Ten Million Dollars ($10,000,000) of Amended Notes to be issued thereunder (inclusive of the $4,660,000 of outstanding Original Notes being amended hereby) and (ii) to amend and restate the Original Indenture to conform to the terms of the Amended Notes;


WHEREAS, CB-US's obligations under the Original Notes are secured by, among other things, a Collateral Agreement executed by Collateral Agent and CB-US and dated as of June 1, 2004 (as may be further amended, supplemented, modified, restated, renewed or extended from time to time, the "COLLATERAL AGREEMENT"), covering certain Alcoholic Beverages, Accounts and other assets of CB-US in the possession or under the control of Collateral Agent, as more particularly described and as such terms are defined therein;


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