First Amended And Restated Trust Indenture

CASTLE BRANDS (USA) CORP.


9 % SENIOR SECURED NOTES, SERIES 2004


DUE MAY 31, 2009


FIRST AMENDED AND RESTATED
TRUST INDENTURE


ORIGINAL DATED AS OF JUNE 1 , 2004


AMENDED AND RESTATED AS OF AUGUST 15, 2005


================================================================================
TABLE OF CONTENTS


Page
---- ARTICLE 1 DEFINED TERMS................................................. 3
1.1 Special Definitions........................................... 3


ARTICLE 2 FORM, EXECUTION, ISSUE AND DELIVERY OF NOTES.................. 9
2.1 Issue of Notes................................................ 9
2.2 Authentication of Physical Notes; Denominations of Notes;
Form; Custody.............................................. 9
2.3 Registration of Owners........................................ 9
2.4 Exchange of Physical Notes.................................... 9
2.5 Pledges....................................................... 10
2.6 Proof of Ownership............................................ 10
2.7 Transfer of Beneficial Interest in the Notes.................. 10
2.8 Valid Obligations............................................. 10
2.9 Execution and Delivery........................................ 11
2.10 Payments...................................................... 11


ARTICLE 3 PAYMENTS OF INTEREST AND PRINCIPAL............................ 11
3.1 Payment by Issuer............................................. 11
3.2 Issue Taxes................................................... 11
3.3 Required Payments............................................. 11
3.4 Registered Owner List......................................... 12


ARTICLE 4 ACCOUNTS...................................................... 13
4.1 Payment Account............................................... 13
4.2 Collection Account............................................ 13


ARTICLE 5 RECEIPT, DISTRIBUTION AND APPLICATION OF TRUST ESTATE......... 13
5.1 Application of the Payment Account When No Event of Default
is Continuing.............................................. 13
5.2 Application of Payments During Continuance of an Event of
Default.................................................... 13
5.3 Amounts Held by Trustee....................................... 14
5.4 Allocation of Payments........................................ 14
5.5 Method of Payment to Owners................................... 14


ARTICLE 6 EVIDENCE OF ACTS OF OWNERS.................................... 15
6.1 Execution by Note Owners or Agents............................ 15
6.2 Future Owners Bound........................................... 15


ARTICLE 7 INDENTURE DEFAULTS - REMEDIES................................. 15
7.1 Indenture Events of Default................................... 15
7.2 Acceleration of Notes......................................... 16
7.3 Annulment of Acceleration of Notes............................ 16
7.4 Default Remedies.............................................. 16
7.5 Other Enforcement Rights...................................... 17
7.6 Effect of Sale, etc........................................... 18


-1
7.7 Restoration of Rights and Remedies............................ 18
7.8 Application of Sale Proceeds and Deficiency................... 19
7.9 Cumulative Remedies........................................... 19
7.10 Limitations on Suits.......................................... 19


ARTICLE 8 AFFIRMATIVE COVENANTS......................................... 20
8.1 Financial Statements.......................................... 20
8.2 Existence, Compliance and Insurance........................... 20
8.3 Further Assurances............................................ 21
8.4 Performance of Obligations.................................... 21
8.5 Filings to Perfect Security Interests......................... 21


ARTICLE 9 NEGATIVE COVENANTS............................................ 21
9.1 Mergers, Etc.................................................. 21
9.2 Proceeds of Notes............................................. 21
9.3 Transactions with Affiliates.................................. 22
9.4 Jurisdiction of Incorporation................................. 22


ARTICLE 10 THE TRUSTEE................................................... 22
10.1 Certain Duties and Responsibilities of Trustee................ 22
10.2 Trustee's Compensation and Expenses........................... 23
10.3 Certain Rights of Trustee..................................... 24
10.4 Status of Monies Received..................................... 25
10.5 Resignation of Trustee........................................ 26
10.6 Removal of Trustee............................................ 26
10.7 Successor Trustee............................................. 26
10.8 Appointment of Successor Trustee.............................. 26
10.9 Merger or Consolidation of Trustee............................ 26
10.10 Acceptance of Appointment by Successor Trustee................ 27
10.11 Conveyance upon Request of Successor Trustee.................. 27
10.12 Co-Trustee and Collateral Agent............................... 27
10.13 Registrar..................................................... 28


ARTICLE 11 SUPPLEMENTAL INDENTURES, WAIVERS.............................. 28
11.1 Supplemental Indentures Without Note Owners' Consent.......... 28
11.2 Waivers and Consents by Owners; Supplemental Indentures with
Consent.................................................... 28
11.3 Notice of Supplemental Indenture.............................. 29
11.4 Solicitation of Note Owners................................... 29
11.5 Opinion of Counsel Conclusive as to Supplemental Indentures... 29
11.6 Effect of Supplemental Indentures............................. 29


ARTICLE 12 DISCHARGE AND UNCLAIMED FUNDS................................. 30
12.1 Satisfaction and Discharge of Agreement....................... 30
12.2 Return of Unclaimed Monies.................................... 30


ARTICLE 13 MISCELLANEOUS................................................. 30
13.1 Successors and Assigns........................................ 30


-2
13.2 Unenforceability of Provision................................. 31
13.3 Communications................................................ 31
13.4 Governing Law................................................. 33
13.5 Limitation on Interest........................................ 33
13.6 Counterparts.................................................. 33
13.7 Headings, etc.; Gender........................................ 33
13.8 Amendments.................................................... 34
13.9 Benefits of Agreement Restricted to Parties and Owners........ 34
13.10 Waiver of Notice.............................................. 34
13.11 Non-Recourse Persons.......................................... 34
13.12 Additional Financing Statement Filings........................ 34
13.13 Officers' Certificate and Opinions of Counsel; Statements to
be Contained Therein....................................... 34
13.14 No Oral Agreements............................................ 35


Exhibit A Form of Note


Exhibit B Instruction for Transfer of Registration Request


TRUST INDENTURE


FIRST AMENDED AND RESTATED TRUST INDENTURE dated as of August 15, 2005 (the "Indenture"), between CASTLE BRANDS (USA) CORP., a Delaware corporation (the "Issuer"), and JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, a national banking association and the indenture trustee hereunder (the "Trustee"; including any other Person serving as a successor or co-trustee hereunder), and is joined in by MHW, LTD., a New York corporation as the Collateral Agent hereunder and under the Security Documents (as defined herein).


RECITALS:


WHEREAS, the defined terms used in this Indenture shall have the respective meanings set forth in Section 1.1 unless elsewhere defined or the context shall otherwise require;


WHEREAS, the Issuer and Trustee, joined by the Collateral Agent, have entered into a First Supplemental Indenture dated of even date herewith ("First Supplemental Indenture") which amends and restates, as set forth below, the Trust Indenture entered into as of June 1, 2004.


WHEREAS, the Issuer is authorized by law, and deems it necessary to borrow money for its proper legal purposes and to grant a continuing security interest in certain of its Property to secure the payment thereof, and to that end, in the exercise of said authority, has duly authorized the execution and delivery of this Indenture providing for the issue of senior secured promissory notes;


WHEREAS, the Issuer has executed and delivered the Security Documents thereby granting continuing security interests in the Collateral;


-3
WHEREAS, the Issuer has duly authorized the issuance from time to time of its Ten Million Dollars ($10,000,000) of its 9% Senior Secured Notes, Series 2004 on the terms herein provided and to be secured by the Collateral pursuant to the Security Documents;


WHEREAS, the Notes will be issued in the form set forth as Exhibit A in the aggregate amount not to exceed $10,000,000, and the Issuer will sell uncertificated beneficial interests in the Notes to Persons who will become the Owners thereof and the beneficiaries under this Indenture; and


WHEREAS, all acts and proceedings required by law and by the Certificate of Incorporation and Bylaws of the Issuer necessary to make the Notes, when executed by the Issuer and authenticated and delivered by the Trustee, the legal, valid and binding obligations of the Issuer, and all acts and proceedings required by law and by the Certificate of Incorporation and Bylaws of the Issuer necessary to constitute this Indenture a legal, valid and binding agreement for the uses and purposes herein set forth, in accordance with its terms, have been done and taken; and the Issuer has duly authorized, executed and delivered this Indenture;


NOW, THEREFORE, THIS INDENTURE WITNESSETH, that to secure the prompt and complete payment of the principal of and interest on the Notes, the payment of all other sums owing hereunder and under all Security Documents and the performance of the covenants contained herein and in all Security Documents, and in consideration of the premises and of the covenants contained herein, and the purchase of beneficial interests in the Notes by the Owners, the Issuer has hereby granted, bargained, sold, conveyed, assigned, transferred, mortgaged, affected, pledged, set over, confirmed, granted a continuing security interest in, and does hereby grant, bargain, sell, convey, assign, transfer, mortgage, affect, pledge, set over, confirm, grant a continuing security interest to the Trustee (subject to Section 12.1), all of its right, title and interest in, to and under (i) all accounts and subaccounts established under this Indenture and (ii) all funds now or hereafter paid or deposited or required to be paid or deposited to or with the Trustee pursuant to any term hereof or any term of the Security Documents or the Parent Guaranty (all such Properties, including without limitation all properties hereafter specifically subjected to the lien of this Indenture by any indenture supplement hereto, being hereinafter collectively referred to as the "Trust Estate").


TO HAVE AND TO HOLD, all and singular, the Trust Estate for the uses and purposes, and subject to the terms and provisions set forth in this Indenture, unto the Trustee and its successors and assigns in trust forever.


IN TRUST NEVERTHELESS, under and subject to the terms and conditions herein set forth and for the equal and proportionate, unless otherwise stated herein, benefit and security of the Owners from time to time of the Outstanding Notes and for the enforcement of the prompt and complete payment when due of all sums due in connection with the Outstanding Notes from time to time, this Indenture and each of the Security Documents and for the performance and observance by the Issuer of the covenants, obligations and conditions to be performed and observed by the Issuer;


PROVIDED, HOWEVER, that these presents are upon the condition that if the Issuer, its successors or assigns, shall satisfy the conditions set forth in Section 12.1 for a release of the Trust Estate in full, then this Indenture, and the estates and rights assigned to the Trustee and in the Security Documents, shall cease, terminate and be void; otherwise they shall remain and be in full force and effect;


-2-
IT IS HEREBY FURTHER COVENANTED AND AGREED that the Trust Estate is to be held and applied by the Trustee for the benefit of the Owners, subject to the further covenants, agreements, conditions, uses and trust hereafter set forth. The Issuer, for itself and its successors and assigns, does hereby covenant and agree with the Trustee for the benefit of all present and future Owners, or any of them, as follows:


ARTICLE 1
DEFINED TERMS


1.1 Special Definitions. For purposes of this Indenture, capitalized terms shall have the respective meanings (i) set forth below, (ii) set forth in the Section or other part of this Indenture following such term, or (iii) provided for in the Security Documents (such definitions to be equally applicable to both the singular and plural forms of the terms defined):


Affiliate -- at any time, and with respect to any Person, any other
Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control
with, such first Person. As used in this definition, "Control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise (and "Controlled"
shall be construed accordingly). Unless the context otherwise clearly
requires, any reference to an "Affiliate" is a reference to an Affiliate of
the Issuer.


Amended Note - has the meaning set forth in the First Supplemental
Indenture.


Business Day -- means any day other than a Saturday, Sunday, legal
holiday or a day on which banking institutions in the City of New York, New
York and any other city where the Trustee shall have a corporate trust
office administering any of its duties under this Indenture are authorized
to close by law or executive order of a regulatory or administrative issuer
having jurisdiction in connection therewith.


Closing Date -- the date of the initial issuance of a Note (but
excluding a Note issued in substitution for an outstanding Note). One or
more Notes may be issued from time to time hereunder.


Collateral - as defined in the Security Documents.


Collateral Agent - as defined in the Security Documents; initially,
MHW, Ltd.


Collection Account -- has the meaning set out in Section 4.2.


Contested in Good Faith -- actively contested in good faith by
appropriate actions or proceedings provided that the action to be taken
will not result in any risk of imposition of civil or criminal penalties on
the Trustee or the Owners of the Notes or substantial danger of sale,
forfeiture or loss of a material part of the Collateral.


Debt -- for any Person the sum of the following (without duplication):
(i) all obligations of such Person for borrowed money or evidenced by
bonds, debentures, notes or other similar instruments (including principal,
interest, fees and charges); (ii) all obligations


-3-
of such Person (whether contingent or otherwise) in respect of bankers'
acceptances, letters of credit, surety or other bonds and similar
instruments; (iii) all obligations of such Person to pay the deferred
purchase price of Property; (iv) all obligations under leases which shall
have been, or should have been, in accordance with GAAP, recorded as
capital leases in respect of which such Person is liable; (v) all Debt (as
described in the other clauses of this definition) and other obligations of
others secured by a Lien on any asset of such Person, whether or not such
Debt or other obligation is assumed by such Person; and (vi) all Debt (as
described in the other clauses of this definition) and other obligations of
others guaranteed by such Person or in which such Person otherwise assures
a creditor against loss of the debtor or obligations of others.


Default Rate - ten percent (10%) per annum.


Event of Default -- has the meaning set out in Section 7.1.


Excepted Liens -- (i) Liens for taxes, assessments or other
governmental charges or levies not yet due or which are being Contested In
Good Faith; (ii) Liens in connection with workmen's compensation,
unemployment insurance or other social security, old age pension or public
liability obligations not yet due or which are being Contested In Good
Faith; (iii) operators', vendors', carriers', warehousemen's, repairmen's,
mechanics', workmen's, materialmen's, or other like Liens arising by
operation of law in the ordinary course of business or statutory landlord's
liens (so long as no action has been taken to file or enforce such Liens)
or which are being Contested In Good Faith; (iv) deposits of cash or
securities to secure the performance of bids, trade contracts, leases,
statutory obligations and other obligations of a like nature incurred in
the ordinary course of business; and (v) other Liens expressly permitted by
the Security Documents.


First Supplemental Indenture - has the meaning set forth in the second
recital to this Agreement.


GAAP -- generally accepted accounting principles and practices which
are recognized as such in the United States by the Financial Accounting
Standards Board (or any generally recognized successor) as in effect from
time to time.


Governmental Authority -- the country, the state, county, city and
political subdivisions in which any Person or such Person's Property is
located or which exercises jurisdiction over any such Person or such
Person's Property, and any court, agency, department, commission, board,
body, bureau or instrumentality of any of them including monetary
authorities which exercises jurisdiction over any such Person or such
Person's Property. Unless otherwise specified, all references to
Governmental Authority herein shall mean a Governmental Authority having
jurisdiction over, where applicable, the Issuer, the Parent or any of their
Property or the Trustee or any Note Owner.


Governmental Requirements - meaning any applicable law, statute, code,
ordinance, order, determination, rule, regulation, publication, judgment,
decree, injunction, franchise, permit, registration, consent, approval,
certificate, license, authorization or other directive or requirement
(whether or not having the force of law), of any Governmental Authority.


-4-
Indenture -- this Indenture, as originally executed or as it may from
time to time be supplemented or amended in accordance with the provisions
hereof.


Interest Payment Date - each May 31st and November 30th of each year,
with the first Interest Payment Date being November 30, 2004 and the last
Interest Payment Date being the Maturity Date.


Issuer -- has the meaning set out in the first paragraph of this
Indenture and includes any successor to the Issuer by way of merger,
consolidation, conversion or transfer of all or substantially all assets of
the Issuer.


Investment Grade -- a rating equal to or higher than "BBB-" by
Standard & Poor's Rating Services, a division of The McGraw Hill Companies,
Inc. or any successor thereto or equal to or higher than "Baa3" by Moody's
Investors Service, Inc. or any successor thereto and equal to or higher
than "BBB-" by Duff & Phelps Credit Rating Co. or any successors thereto
(if Duff & Phelps Credit Rating Co. is then rating the applicable security)
or a comparable rating by another nationally recognized statistical rating
organization, which rating and organization are approved by the Issuer.


Lien -- any interest in Property securing an obligation owed to, or a
claim by, a Person other than the owner of the Property, whether such
interest is based on the common law, statute or contract, and including but
not limited to the security interest or lien arising from a mortgage,
encumbrance, pledge, conditional sale or other title retention agreement,
trust receipt or a lease, consignment or bailment for security purposes.


Majority of Owners -- at any time, Owners of more than fifty percent
(50%) of the beneficial interest in the aggregate principal amount owed by
the Issuer pursuant to all Notes then Outstanding.


Maturity Date - May 31, 2009.


Notes - any or all of the Notes executed by the Issuer and
authenticated by the Trustee in the form of Exhibit A attached hereto.


Opinion of Counsel -- an opinion of outside counsel (which may from
time to time serve as counsel for the Issuer, for the Trustee or for an
Owner) reasonably acceptable to the Trustee, which opinion is in scope,
form and substance reasonably satisfactory to the Trustee.


Original Note - has the meaning as set forth in the First Supplemental
Indenture.


Outstanding -- when used with reference to Notes shall mean, as of any
particular time, all Notes executed by the Issuer and authenticated and
delivered by Trustee to the Depository under this Indenture, except:


(a) Notes theretofore cancelled;


(b) Notes for the payment or prepayment of which moneys in the
necessary amount shall have been deposited in trust with the Trustee;
and


-5-
(c) Notes in lieu of or in substitution for which other Notes
shall have been delivered pursuant to the terms of this Indenture.


Owner - A Person who is the owner of a beneficial interest in the
Notes and who is registered as such with the Registrar as provided in
Section 2.3.


Owner Register - as defined in Section 2.3.


Parent - Castle Brands, Inc., a Delaware corporation and owner of all
the capital stock of Issuer.


Parent Guaranty - Guaranty of even date herewith executed by the
Parent to the Trustee for the benefit of the Owners.


Payment Account - has the meaning set out in Section 4.1.


Permitted Investments -- (a) direct obligations of the United States
of America (including obligations issued or held in book-entry form on the
books of the Department of the Treasury of the United States of America and
certificates or other instruments evidencing ownership interests in such
direct obligations of the United States of America such as CATS, TIGRS,
Treasury Receipts and Stripped Treasury Coupons) which mature within one
(1) year after the acquisition thereof; (b) obligations for which the
timely payment of the principal thereof are fully guaranteed by the United
States of America or the Federal Deposit Insurance Corporation, which
mature within one (1) year after the acquisition thereof; (c) certificates
of deposit of, or time deposits in, any bank (including any Trustee) or
trust company organized under the laws of the United States of America or
any state thereof whose unsecured obligations are accorded one of the two
highest ratings by Standard & Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc. or Moody's Investors Service, Inc. and by Duff
& Phelps Credit Rating Co. (if such unsecured obligations are rated by Duff
& Phelps Credit Rating Co.) and which have at least Five Hundred Million
Dollars ($500,000,000) of stated capital and surplus, maturing within
ninety (90) days after the acquisition thereof; (d) readily marketable
commercial paper of corporations doing business in and incorporated under
the laws of the United States of America or any State thereof given on the
date of the investment a credit rating of at least P-l by Moody's Investor
Services, Inc., or A-1 by Standard & Poor's Ratings Services, a division of
The McGraw Hill Companies, Inc. and D-1 by Duff & Phelps Credit Rating Co.
(if Duff & Phelps Credit Rating Co. is then rating such commercial paper)
in each case due within 90 days after the date of the making of the
investment; and (e) investments in a money-market fund (including any fund
for which a Trustee or any Affiliate of a Trustee serves as adviser or
sponsor or otherwise receives compensation with respect to such fund) rated
AAA or better by Standard & Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc. or Aaa by Moody's Investors Services, Inc. and
having the equivalent rating from Duff & Phelps Credit Rating Co., if such
investments are then rated by Duff & Phelps Rating Co. (or equivalent
categories that may be established by such rating services).


Person -- an individual, partnership, corporation, limited liability
company, trust, unincorporated association or organization, government,
governmental agency or governmental subdivision.



*End of Preview*
Click the 'Add to Cart' button to download the complete and formatted agreement.