Contract
Exhibit
10.76
NEITHER
THIS WARRANT AGREEMENT NOR THE SECURITIES REPRESENTED BY THIS WARRANT AGREEMENT
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE. THIS WARRANT AGREEMENT AND, UPON ACQUISITION,
THE
SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT
BE
SOLD, OFFERED FOR SALE OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY APPLICABLE
STATE SECURITIES LAWS OR AN OPINION OF COUNSEL IN FORM AND FROM COUNSEL
REASONABLY ACCEPTABLE TO CASTLE BRANDS THAT THE TRANSACTION SHALL NOT RESULT
IN
A VIOLATION OF STATE OR FEDERAL SECURITIES LAWS.
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DATE:
|
October
22,
2007
|
|
|
PARTIES:
|
Frost
Nevada Investments Trust
0000
Xxxxxxxx Xxxxxxxxx
Xxxxx
0000
Xxxxx,
Xxxxxxx 00000
|
(“Investor”)
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|
000
Xxxxxxxxx Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
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(“Castle
Brands”)
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RECITALS:
1.
The
Investor is providing a credit facility of up to $5,000,000 pursuant to that
certain credit agreement and promissory note (the “Credit Facility”), each dated
as of the date hereof.
2.
The
board of directors of Castle Brands believes that it is in the best interests
of
Castle Brands to enable the provision of the Credit Facility by offering to
the
Investor the right to purchase (such right is hereinafter referred to as the
“Warrant Rights”) under this Warrant Agreement fifty thousand (50,000) shares of
Castle Brands common stock, $.01 par value per share (“Common
Stock”).
3.
The
issuance of the Warrant Rights is a condition to the provision of the Credit
Facility by the Investor and is being made in compliance with applicable
exemptions from state and federal securities laws.
NOW,
THEREFORE, in consideration of Investor’s entry in the definitive documentation
which provides the Credit Facility and the benefit therefrom that will inure
to
Castle Brands, and the mutual agreements contained herein, the parties agree
as
follows:
SECTION
1 GRANT
AND ACCEPTANCE OF WARRANT AGREEMENT
Castle
Brands grants and delivers this Warrant Agreement to Investor entitling it
and
its permitted transferees under Section 4.3 below, subject to the terms and
conditions set forth in this Warrant Agreement, to purchase from the date of
this Warrant Agreement to March 31, 2012 (the “Expiration Date”), Fifty Thousand
(50,000) shares of Castle Brands Common Stock at the purchase price of U.S.
$4.00 per
share
(subject to adjustment as hereafter provided), upon presentation of this Warrant
Agreement and payment of the purchase price in cash, certified check or bank
draft payable to Castle Brands or other form of payment acceptable to Castle
Brands at the office of Castle Brands at the address indicated above. Investor
accepts and agrees to the terms and conditions of this Warrant
Agreement.
SECTION
2 DURATION
AND EXERCISE OF WARRANT AGREEMENT
2.1 Term.
This
Warrant Agreement shall become void unless it is exercised and payment of the
purchase price is made prior to the Expiration Date.
2.2 Exercise
of Warrant Agreement.
This
Warrant Agreement may be exercised during its exercise period by Investor,
and
at its option, as to the whole at any time or in part from time to time. If
this
Warrant Agreement is exercised for less than the maximum number of shares of
Common Stock purchasable upon the exercise hereof, Castle Brands shall issue
to
Investor a new warrant agreement of like tenor and date representing the right
to purchase a number of shares of Common Stock equal to the difference between
the number of shares purchasable upon full exercise of this Warrant Agreement
and the number of shares that were purchased upon the exercise of this Warrant
Agreement. To be exercised, this Warrant Agreement must be surrendered by
Investor for cancellation at the office of Castle Brands accompanied with
written instructions as to the number of shares to be purchased and the payment
of the purchase price.
2.3 Investment
Interest.
Unless
the shares to be acquired hereunder have been registered under applicable
securities laws and a representation for investment intent is not needed to
comply with the securities laws, if required by Castle Brands at the time of
any
exercise of this Warrant Agreement, as a condition to such exercise, Investor
shall enter into an agreement with Castle Brands in form reasonably satisfactory
to counsel for Castle Brands by which Investor (1) shall represent that it
is an “accredited investor” as defined by Rule 501 of Regulation D
promulgated under the Securities Act of 1933, as amended (the “Securities Act”),
and the shares are being acquired for Investor’s own account for investment and
not with a view to, or for sale in connection with, any resale or distribution
of such shares, and (2) shall agree that, if Investor should decide to
sell, transfer, or otherwise dispose of any of such shares, Investor may do
so
only in accordance with this Warrant Agreement and applicable securities
laws.
2.4 Conversion
Notice.
The
Warrant Agreement may be exercised by Investor, at any time or from time to
time, prior to the Expiration Date, on any business day by delivering a written
notice of the exercise of this Warrant Agreement (the “Conversion Notice”) to
Castle Brands at its principal office specifying (i) the total number of shares
Investor will purchase pursuant to such conversion and (ii) a place and date
not
less than five nor more than 30 days from the date of the Conversion Notice
for
the closing of such purchase.
2
SECTION
3 COVENANTS
OF CASTLE BRANDS
3.1 Reservation
of Stock.
Castle
Brands covenants that, while this Warrant Agreement is exercisable, it shall
reserve a sufficient number of shares to provide for the delivery of shares
pursuant to the exercise of this Warrant Agreement.
3.2 Validly
Issued Stock.
Castle
Brands covenants and agrees that all shares of Common Stock that may be issued
upon the exercise of this Warrant Agreement shall, upon issuance, be duly and
validly issued, fully paid and nonassessable, and free from all taxes, liens
and
charges with respect to the purchase and the issuance of the
shares.
3.3 Due
Authorization.
Castle
Brands covenants that all acts and things necessary have been done and performed
to make this Warrant Agreement, when executed on behalf of Castle Brands, the
valid, binding and legal obligation of Castle Brands and to authorize the
execution and delivery of this Warrant Agreement, and Castle Brands covenants
that all acts and things necessary will have been done and performed prior
to
the issuance of the shares of Common Stock purchasable under this Warrant
Agreement to make such issuance a duly authorized, valid and legal act of Castle
Brands.
SECTION
4 RESTRICTIONS
ON TRANSFERABILITY
4.1 Transfer
Restrictions.
Unless
and until registered or an exemption is available from such registration, this
Warrant Agreement, the Warrant Rights, the shares of Common Stock purchased
upon
exercise of this Warrant Agreement (“Purchased Shares”) and purchasable upon
exercise of this Warrant Agreement (“Underlying Shares”) shall not be sold,
assigned, transferred or pledged except upon the conditions specified in
Section 4 of this Warrant Agreement, which conditions are intended to
ensure compliance with the provisions of the applicable federal and state
securities laws.
4.2 Securities
Compliance.
Investor represents that it is an “accredited investor” as defined by
Rule 501 of Regulation D promulgated under the Securities Act and
acquiring the Warrant Rights and the Underlying Shares for its own account
for
investment, and not with the view to, or for resale in connection with, any
distribution thereof. Investor understands that the Warrant Rights and the
Underlying Shares have not been registered under the Securities Act or any
applicable state securities laws by reason of specific exemptions from the
registration provisions of those securities laws, the availability of which
depends upon, among other things, the bona fide nature of the investment intent
and the accuracy of Investor’s representation herein. Investor acknowledges that
this Warrant Agreement, the Purchased Shares and the Underlying Shares must
be
held indefinitely, unless subsequently registered under the Securities Act
or
unless an exemption from registration is available.
4.3 Transferees
Bound By This Warrant Agreement.
Notwithstanding anything else to the contrary stated in this Warrant Agreement,
no transfer of the Warrant Agreement or the Warrant Rights shall be made unless
the transferee executes a counterpart copy of this Warrant Agreement, as
amended, pursuant to which the transferee agrees to be bound by the provisions
of this Warrant Agreement, as amended; provided, however, that this
Section 4.3 shall not apply to the extent that either the Underlying Shares
or the Purchased Shares are registered under applicable securities
laws.
3
4.4 Notice
of Proposed Transfers.
Prior
to any proposed sale, assignment, transfer or pledge of this Warrant Agreement,
Underlying Shares or Purchased Shares, unless there is in effect a registration
statement under the Securities Act, covering the proposed transfer, Investor
shall give written notice to Castle Brands of its intention to effect such
transfer, sale, assignment or pledge. Each such notice shall describe the manner
and circumstances of the proposed transfer, sale, assignment or pledge in
sufficient detail and, if Castle Brands reasonably so requests, shall be
accompanied at Investor’s expense by either (i) a written opinion of legal
counsel in form and from counsel reasonably acceptable to Castle Brands which
states that the proposed transfer of this Warrant Agreement, Underlying Shares
or Purchased Shares may be effected without registration under the Securities
Act or (ii) a “no action” letter from the Securities and Exchange
Commission (the “Commission”) to the effect that the transfer of such securities
without registration will not result in a recommendation by the staff of the
Commission that action be taken with respect thereto, whereupon the holder
of
such Warrant Agreement, Underlying Shares or Purchased Shares shall be entitled
to transfer such Warrant Agreement, Underlying Shares or Purchased Shares in
accordance with the terms of the notice delivered by Investor to Castle Brands.
Each certificate evidencing the Purchased Shares transferred as above provided
shall bear the appropriate restrictive legends set forth in this Warrant
Agreement, except that such certificate shall not bear such restrictive legends
if, in the opinion of counsel for Castle Brands, such legends are not required
in order to establish compliance with any provisions of the Securities
Act.
4.5 Restrictive
Legends.
Each
certificate representing the Purchased Shares and any other securities issued
in
respect of the Purchased Shares upon any stock split, stock dividend,
recapitalization, merger, consolidation or similar event unless the same are
registered prior to exercise of this Warrant Agreement, shall be stamped or
otherwise imprinted with a legend in substantially the following
form:
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, OFFERED FOR
SALE OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS
OR
AN OPINION OF COUNSEL IN FORM AND FROM COUNSEL REASONABLY ACCEPTABLE TO CASTLE
BRANDS THAT THE TRANSACTION SHALL NOT RESULT IN A VIOLATION OF STATE OR FEDERAL
SECURITIES LAWS.
Investor
consents to Castle Brands making a notation on its records and giving
instructions to any transfer agent of the Purchased Shares in order to implement
the restrictions on transfer established in this Warrant Agreement.
4.6 Modification
of this Section.
If a
registration statement under the Securities Act is hereafter filed with respect
to this Warrant Agreement, Purchased Shares or the Underlying Shares, the
provisions in this Warrant Agreement that would otherwise be required by this
Section 4 shall be appropriately modified or eliminated.
4
4.7 Otherwise
Transferable.
Subject
to the transfer conditions set forth in this Section 4, this Warrant Agreement
and the Warrant Rights, the Underlying Shares or Purchased Shares are
transferable, in whole or in part, without charge to Investor, upon surrender
of
this Warrant at the principal office of Castle Brands.
SECTION
5 ANTI-DILUTION
ADJUSTMENTS
5.1 Adjustment
of Exercise Price and Number of Shares.
In
order to prevent dilution of the Warrant Rights granted under this Warrant
Agreement, the purchase price of each Underlying Share (the “Exercise Price”)
shall be subject to adjustment from time to time as provided in this
Section 5, and the number of shares obtainable upon exercise of this
Warrant Agreement shall be subject to adjustment from time to time as provided
in this Section 5.
5.2 Subdivision
or Combination of Shares.
If
Castle Brands at any time subdivides (by any stock split or recapitalization)
one or more classes of its outstanding shares of its Common Stock into a greater
number of shares, the Exercise Price in effect immediately prior to such
subdivision shall be proportionately reduced and the number of Underlying Shares
obtainable upon exercise of this Warrant shall be proportionately increased.
If
Castle Brands at any time combines (by reverse stock split or otherwise) its
outstanding shares of its Common Stock into a smaller number of shares, the
Exercise Price in effect immediately prior to such combination shall be
proportionately increased and the number of Underlying Shares obtainable upon
exercise of this Warrant shall be proportionately decreased.
5.3 Reorganization,
Reclassification, Consolidation, Merger or Sale.
Any
recapitalization, reorganization, reclassification, consolidation, merger,
sale
of all or substantially all of Castle Brands’s assets or other transaction,
which in each case is effected in such a way that the holders of Common Stock
are entitled to receive (either directly or upon subsequent liquidation) stock,
securities or assets with respect to or in exchange for shares of Common Stock
is referred to herein as an “Organic
Change.”
Prior to
the consummation of any Organic Change, Castle Brands shall make appropriate
provision (in form and substance satisfactory to Investor) to insure that
Investor shall thereafter have the right, in lieu of or in addition to (as
the
case may be) the Underlying Shares immediately theretofore acquirable upon
the
exercise of this Warrant Agreement, to receive such shares of stock, securities
or assets as may be issued or payable with respect to or in exchange for the
number of shares of Common Stock immediately theretofore acquirable upon
exercise of this Warrant Agreement had such Organic Change not taken place.
In
any such case, Castle Brands shall make appropriate provision (in form and
substance satisfactory to Investor) with respect to Investor’s rights and
interests to insure that the provisions of this Section 5 shall thereafter
be
applicable to this Warrant Agreement (including, in the case of any such
consolidation, merger or sale in which the successor entity or purchasing entity
is other than Castle Brands, an immediate adjustment of the Exercise Price
to
the value for the shares reflected by the terms of such consolidation, merger
or
sale, and a corresponding immediate adjustment in the number of Underlying
Shares acquirable and receivable upon exercise of this Warrant Agreement, if
the
value so reflected is less than the Exercise Price in effect immediately prior
to such consolidation, merger or sale).
5
5.4 Notices.
(i) Immediately
upon any adjustment of the Exercise Price, Castle Brands shall give written
notice thereof to Investor, setting forth in reasonable detail and certifying
the calculation of such adjustment.
(ii) Castle
Brands shall give written notice to Investor at least 20 days prior to the
date on which Castle Brands closes its books or takes a record (A) with
respect to any dividend or distribution upon the shares of Common Stock,
(B) with respect to any pro rata subscription offer to holders of shares of
Common Stock or (C) for determining rights to vote with respect to any
Organic Change, dissolution or liquidation.
(iii) Castle
Brands shall also give written notice to Investor at least 20 days prior to
the date on which any Organic Change, dissolution or liquidation shall take
place.
SECTION
6 LIMITED
REGISTRATION RIGHTS
6.1 Limited
Registration Rights.
6.1.1 None
of
this Warrant Agreement, the Purchased Shares or the Underlying Shares has been
registered under the securities laws of any jurisdiction.
6.1.2 Except
as
specifically provided for in Section 6.1 of this Warrant Agreement, Castle
Brands is not obligated to register the Warrant Agreement, the Purchased Shares
or the Underlying Shares.
6.1.3 If
Castle
Brands shall determine to register any of its shares of Stock, either for its
own account or the account of a holder (as hereinafter defined) other than
(x) a registration relating solely to employee benefit plans or (y) a
registration relating solely to a Commission Rule 145 transaction, Castle
Brands will:
(i) promptly
give to Investor written notice thereof; and
(ii) include
in such registration (and any related qualification under blue sky laws or
other
compliance), and in any underwriting involved therein, all Purchased Shares
and
Underlying Shares (not previously disposed of) specified in a written request
or
requests made within 30 days after receipt of such written notice from Castle
Brands by any Investor (“Registrable Securities”).
6.1.4 Underwriting.
If the
registration of which Castle Brands gives notice is for a registered public
offering involving an underwriting, Castle Brands shall so advise Investor
as a
part of the written notice given pursuant to this Section 6.1. In such event,
the right of Investor to registration pursuant to this Section 6.1 shall be
conditioned upon Investor’s participation in such underwriting and the inclusion
of Registrable Securities in the underwriting to the extent provided herein.
All
holders proposing to distribute their securities through such underwriting
shall
(together with Castle Brands and the Investors distributing their shares of
Registrable Securities through such underwriting) enter into an underwriting
agreement in customary form with the managing underwriter selected for such
underwriting by Castle Brands and may, at their option, require that any or
all
of the representations and warranties by, and the other agreements on the part
of, Castle Brands to and for the benefit of such underwriters also be made
to
and for their benefit and that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement also be
conditions precedent to their obligations. No Investor other than an Investor
who, together with its affiliates (within the meaning of Rule 12b-2 under
the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), owns
at least a majority of the outstanding capital stock of Castle Brands (on an
as-converted basis, if applicable) shall be required to make any representations
or warranties to or agreements with Castle Brands or the underwriters other
than
representations, warranties or agreements regarding such Investor and its
ownership of the shares of capital stock being registered on its behalf and
such
Investor’s intended method of distribution and any other representation required
by law. Notwithstanding any other provision of this Section 6.1.4, if the
managing underwriter determines that marketing factors require a limitation
of
the number of shares of Registrable Securities to be underwritten, the managing
underwriter may limit the number of Registrable Securities to be included in
the
registration and underwriting (up to the exclusion of all Registrable
Securities), on a pro
rata
basis
based on the total number of shares of capital stock of Castle Brands (including
Registrable Securities) (on an as-converted basis) requested to be included
in
such registration. To facilitate the allocation of capital stock in accordance
with the above provisions, Castle Brands or the underwriters may round the
number of shares of Registrable Securities allocated to the Investor to the
nearest 10 shares of Registrable Securities. If the Investor disapproves of
the
terms of any such underwriting, it may elect to withdraw therefrom by written
notice to Castle Brands and the managing underwriter.
6
6.1.5 Right
to Terminate Registration.
Castle
Brands shall have the right to terminate or withdraw any registration initiated
by it under this Section 6.1 prior to the effectiveness of such registration,
whether or not the Investor has elected to include his Registrable Securities
in
such registration.
6.1.6 Registrable
Securities.
If at
any time Registrable Securities are to be included in a registration pursuant
to
this Section 6.1, the securities to be registered shall be the Purchased Shares
or Underlying Shares.
6.2 Expenses
of Registration.
All
registration and other related expenses incurred in connection with any
registration pursuant to this Section 6, and the reasonable cost of one special
legal counsel to represent all Investors, shall be borne by Castle Brands,
except for Investor’s share of underwriter’s fees, if any.
6.3 Indemnification.
6.3.1 Indemnification
by Castle Brands.
To the
extent permitted by law, Castle Brands will indemnify Investor within the
meaning of the Securities Act with respect to which registration, qualification
or compliance has been effected pursuant to this Section 6 against losses,
claims, damages, liabilities, investigations, actions, proceedings and expenses
caused by any untrue statement or alleged untrue statement of a material fact
contained in any registration statement, prospectus or preliminary or summary
prospectus, or any amendment thereof or supplement thereto, or any omission
or
alleged omission of a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, and Castle Brands will reimburse Investor for
any legal and other expenses reasonably incurred by Investor in connection
with
investigating or defending any such loss, claim, liability, investigation,
action or proceeding except insofar as the same was made in reliance upon and
in
conformity with written information furnished to Castle Brands by an instrument
duly executed by Investor expressly stated for use therein (“Investor’s
Information”) or such liability arises out of or is based on willful misconduct
of Investor.
7
6.3.2 Indemnification
by Investor.
To the
extent permitted by law, in connection with each registration relating to the
disposition of the Purchased Shares or Underlying Shares by Investor pursuant
to
Section 6, Investor will indemnify Castle Brands, each of its directors,
officers, agents, and any person who controls Castle Brands (within the meaning
of the Securities Act) against all losses, claims, damages, liabilities,
investigations, actions, proceedings and expenses described in Section 6.1
above, but only with respect to untrue statements or omissions made in the
registration statement, any preliminary or summary prospectus or the prospectus
or any amendment or supplement thereto in reliance upon and in conformity with
Investor’s Information; provided, however, that the liability of Investor for
indemnification under this Section 6.3.2 shall not exceed the gross proceeds
from the offering received by Investor, unless such liability arises out of
or
is based on the bad faith or willful misconduct of Investor.
6.3.3 Claims
for Indemnification.
Each
party entitled to indemnification under this Section 6 (the “Indemnified Party”)
shall give written notice to the party required to provide indemnification
(the
“Indemnifying Party”) promptly after such Indemnified Party has actual knowledge
of any claim as to which indemnity may be sought and shall unless in the
Indemnified Party’s reasonable judgment a conflict of interest may exist between
the Indemnified Party and the Indemnifying Party in respect of such claim,
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (which approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
party’s expense, and provided further that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party
of
its obligations under this Section 6 except to the extent that the failure
to
give such notice is materially prejudicial to an Indemnifying Party’s ability to
defend such action. No Indemnifying Party, in the defense of any such claim
or
litigation, shall, except with the consent of each Indemnified Party, consent
to
entry of any judgment or enter into any settlement that does not include as
an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim
or
litigation.
6.3.4 Survival
of Indemnification.
The
indemnification provided for under this Section 6 will remain in full force
and
effect regardless of any investigation made by or on behalf of the Indemnified
Party. The obligations of Castle Brands and Investor under this Section 6 shall
survive the completion of any offering of registrable securities in a
registration statement pursuant to this Warrant Agreement. The parties agree
to
make such provisions for contribution as are reasonably requested by the other
party hereto, in the event indemnification is unavailable for any
reason.
8
6.4 Information
by Investor; Copies of Prospectus.
Investor shall furnish to Castle Brands such information regarding itself,
the
Registrable Securities held by it and the distribution proposed by it as Castle
Brands may reasonably request in writing and as shall be required in connection
with any registration, qualification or compliance referred to in this Section
6. In connection with any such registration, Castle Brands shall furnish to
Investor the registration statement and each amendment and supplement thereto
and such other documents as Investor may reasonably request, and such numbers
of
copies as it may reasonably request, in order to facilitate the disposition
of
registrable securities owned by it, of any prospectus or preliminary or summary
prospectus prepared in conformity with the Securities Act.
6.5 Obligations
of Castle Brands.
Whenever required under this Section 6 to effect the registration of any
Purchased Shares or Underlying Shares pursuant to Section 6.1, Castle Brands
shall, as soon as practicable:
6.5.1 Prepare
and file with the Commission a registration statement with respect to such
securities and use its reasonable efforts to cause such registration statement
to become effective and remain effective for at least 120 days.
6.5.2 Prepare
and file with the Commission such amendments and supplements to such
registration statement and the prospectus used in connection with such
registration statement as may be necessary to keep such registration statement
effective for at least 120 days, and to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by
such
registration statement.
6.5.3 Use
its
reasonable efforts to register and qualify the securities covered by such
registration statement under such other securities or blue sky laws of such
jurisdictions where an exemption is not available as shall be reasonably
requested by Investor, to keep such registration or qualification in effect
for
so long as such registration statement remains in effect, provided that Castle
Brands shall not be required in connection therewith or as a condition thereto
to file a general consent to service of process in any such states or
jurisdictions.
6.5.4 Notify
Investor at any time when a prospectus relating thereto is required to be
delivered under the Securities Act upon discovery that or upon the happening
of
any event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact
or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances
then existing, and at the reasonable request of Investor furnish to Investor
a
reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in
the
light of the circumstances in which they were made.
6.5.5 Furnish,
at the request of Investor, on the date that such securities are delivered
to
the underwriters for sale in connection with a registration pursuant to this
Warrant Agreement, if such securities are being sold through underwriters,
or,
if such securities are not being sold through underwriters, on the date that
the
registration statement with respect to such securities becomes effective, (i)
an
opinion dated such date of the counsel representing Castle Brands for the
purposes of such registration, in form and substance as is customarily given
to
underwriters in an underwritten public offering, addressed to the underwriters,
if any, and to Investor and (ii) a letter dated such date from the independent
certified public accountants of Castle Brands in form and substance as is
customarily given to underwriters in an underwritten public offering, addressed
to the underwriters, if any, and to Investor. Any opinion or letter given shall
be subject to all of the qualifications, exceptions and conditions appropriate
to the then existing circumstances.
9
6.5.6 Use
its
reasonable efforts to cause all registered shares to be listed on each
securities exchange on which Castle Brands common stock is then
listed.
6.6 Removal
of Legend.
After
registration of the Purchased Shares and upon the reasonable request of Investor
and at Castle Brands’ expense, Castle Brands shall take such reasonable actions
as are necessary to remove the legends and restrictions on transfer established
in this Warrant Agreement.
6.7 Certain
Limitations.
The
Investor shall not have the right to participate in a registration under this
Section 6 if the Investor receives a written opinion of counsel for Castle
Brands, in substance and authorship acceptable to Investor, together with a
confirming opinion of counsel selected by Investor, that Investor may make
such
transfer of all Registrable Securities (if applicable) in a public sale which
will be in compliance with all applicable securities laws concerning transfer
of
non-registered securities. If the right to transfer Registrable Securities
publicly is not available to the Investor as described in the preceding
sentence, Investor will have the right to participate in a registration pursuant
to the terms and conditions of this Section 6.
6.8 Termination
of Rights.
The
rights of the Investor to cause Castle Brands to register securities under
Section 6 shall terminate on April 6, 2008.
SECTION
7 TAX
WITHHOLDING
If,
in
connection with the exercise of this Warrant Agreement or any sale, transfer
or
other disposition of any of the Purchased Shares acquired upon exercise of
this
Warrant Agreement, Castle Brands is required by applicable federal, state or
local law to withhold any amount on account of employment, income or similar
taxes, Investor agrees to pay to Castle Brands upon request the amount required
to be withheld.
SECTION
8 MISCELLANEOUS
8.1 Transfer;
Successors and Assigns.
Except
as the transferability of rights is expressly limited herein, the terms and
conditions of this Warrant Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties. Nothing
in
this Warrant Agreement, express or implied, is intended to confer upon any
party
other than the parties hereto or their respective successors and assigns any
rights, remedies, obligations or liabilities under or by reason of this Warrant
Agreement, except as expressly provided in this Warrant Agreement.
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8.2 Titles
and Subtitles.
The
titles and subtitles used in this Warrant Agreement are used for convenience
only and are not to be considered in construing or interpreting this Warrant
Agreement.
8.3 Notices.
All
notices, requests, demands or other communications required or permitted to
be
given under this Warrant Agreement shall be in writing, delivered to or sent
by
fax, or postage prepaid certified mail, addressed (a) if to Investor, at such
address as such Investor shall have furnished to Castle Brands in writing,
or
(b) if to Castle Brands, at such address as Castle Brands shall have furnished
in writing to Investor to the attention of the President. Any notice or other
communication shall be deemed to be given at the expiration of the fifth
(5th)
day
after the date of deposit in the United States mail. The addresses to which
notices or other communications shall be mailed may be changed from time to
time
by giving written notice to the other party as provided in this Section
8.3.
8.4 Severability.
If any
provision of this Warrant Agreement shall be invalid or unenforceable in any
respect for any reason, the validity and enforceability of any such provision
in
any other respect and of the remaining provisions of this Warrant Agreement
shall not be in any way impaired.
8.5 Attorneys
Fees.
If any
suit or action is filed by any party to enforce this Warrant Agreement or
otherwise with respect to the subject matter of this Warrant Agreement, the
prevailing party shall be entitled to recover reasonable attorneys fees incurred
in preparation or in prosecution or defense of such suit or action as fixed
by
the court or courts in which the suit or action, including any appeal therein,
is tried, heard or decided. Attorneys fees shall include fees of paralegals
and
deposition expenses, and shall further include attorneys fees incurred by any
party in connection with any bankruptcy or similar proceeding.
8.6 Governing
Law and Venue.
This
Warrant Agreement shall be governed by and construed in accordance with the
laws
of the State of New York. If any suit or action is filed by any party to enforce
this Warrant Agreement or otherwise with respect to the subject matter of this
Warrant Agreement, venue shall be in the federal or state courts in New York,
New York, unless venue there would prevent the joining of appropriate third
parties.
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IN
WITNESS WHEREOF, the parties have executed this Warrant Agreement as of the
date
first above written.
| CASTLE BRANDS INC., | ||
| a Delaware corporation | ||
| |
|
|
| By: | /s/ Xxxx Xxxxxxx | |
| Xxxx Xxxxxxx | ||
| Chairman and Chief Executive Officer | ||
| INVESTOR: | ||
| FROST NEVADA INVESTMENTS TRUST | ||
| |
|
|
| By: | /s/ Xxxxxxx Xxxxx | |
| Name: | Xxxxxxx Xxxxx, M.D. | |
| Title: | Trustee | |
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