NOTE 9 —NOTES PAYABLE AND CAPITAL LEASE

	March 31,
	2013		2012
Notes payable consist of the following:
Foreign revolving credit facilities (A)	$	89,407	$	-
Note payable (B)		211,580		211,580
Keltic Facility (C)		6,501,321		3,849,831
Inventory Term Loan (D)		2,496,000		—

Total	$	9,298,308	$	4,061,411

	A.	The Company has arranged various facilities aggregating €350,000 or $448,571 (translated at the March 31, 2013 exchange rate) with an Irish bank, including overdraft coverage, creditors’ insurance, customs and excise guaranty, and a revolving credit facility. These facilities are payable on demand, continue until terminated by either party, are subject to annual review, and call for interest at the lender’s AA1 Rate minus 1.70%. The balance on the credit facilities included in notes payable totaled €69,761 or $89,407, (translated at the March 31, 2013 exchange rate) and $0 at March 31, 2013 and 2012, respectively.
	B.	In December 2009, GCP issued a promissory note (the “GCP Note”) in the aggregate principal amount of $211,580 to Gosling's Export (Bermuda) Limited in exchange for credits issued on certain inventory purchases. The GCP Note matures on April 1, 2020, is payable at maturity, subject to certain acceleration events, and calls for annual interest of 5%, to be accrued and paid at maturity. At March 31, 2013 and 2012, $10,579 of accrued interest was converted to amounts due to shareholders and affiliates. At March 31, 2013 and 2012, $211,580 of principal due on the GCP Note is included in long-term liabilities.

In August 2011, the Company and CB-USA entered into the Keltic Facility, a revolving loan agreement with Keltic Financial Partners II, LP ("Keltic"), providing for availability (subject to certain terms and conditions) of a revolving facility of up to $5,000,000 for the purpose of providing the Company and CB-USA with working capital. The Company and CB-USA are referred to individually and collectively as the Borrower.

In July 2012, the Company and CB-USA entered into a First Amendment to Keltic Facility to increase the availability (subject to certain terms and conditions) of the revolving facility from $5,000,000 to $7,000,000 for the purpose of providing the Company and CB-USA with working capital.

In March 2013, the Company and CB-USA entered into a Second Amendment to Keltic Facility (as amended, the "Loan Agreement") to increase the availability (subject to certain terms and conditions) of the revolving facility from $7,000,000 to $8,000,000 for the purpose of providing the Company and CB-USA with working capital. Unless sooner terminated in accordance with its terms, the Keltic Facility expires on December 31, 2016.

The Borrower may borrow up to the maximum amount of the revolving facility, provided that the Borrower has a sufficient borrowing base. The borrowing base equals (a) up to 85% of the aggregate amount of the Borrower’s "Eligible Receivables" (as defined in the Loan Agreement), plus (b) the least of (i) 50% of the "Value" (as defined in the Loan Agreement) of the Borrower’s "Eligible Inventory" (as defined in the Loan Agreement), (ii) $3,500,000 and (iii) 60% of the Borrowing Capacity (as defined in the Loan Agreement) at such time, less (c) the aggregate amount of all Reserves (as defined in the Loan Agreement) in effect at such time.

The revolving facility interest rate is the rate that, when annualized, is the greatest of (a) the Prime Rate plus 3.25%, (b) the LIBOR Rate plus 5.75%, and (c) 6.50%. Interest is payable monthly in arrears, on the first day of every month on the average daily unpaid principal amount of the revolving facility. After the occurrence and during the continuance of any "Default" or "Event of Default" (as defined under the Loan Agreement) the Borrower is required to pay interest at a rate that is 3.25% per annum above the then applicable revolving facility interest rate. In addition to a $40,000 commitment fee paid in connection with the First Amendment and $70,000 closing and commitment fee in connection with the Second Amendment, Keltic will also receive an annual facility fee in an amount equal to 1% per annum of the maximum revolving facility amount and a collateral management fee of $1,000 per month (increased to $2,000 after the occurrence of and during the continuance of an Event of Default).

The Loan Agreement contains standard borrower representations and warranties for asset-based borrowing and a number of reporting obligations and affirmative and negative covenants. The Borrower is required, among other things, to provide Keltic with weekly borrowing base certificates, monthly reports, annual financial statements and other current and periodic financial, operating and business records and reports, as well as tax returns and such other information as Keltic may from time to time request.

The Loan Agreement includes negative covenants that, among other things, restrict the Borrower’s ability to create additional indebtedness, dispose of properties, incur liens, and make distributions or cash dividends.

The Loan Agreement specifies certain Events of Default that include, among others, payment defaults, violations of affirmative and negative covenants in the Loan Agreement, imposition of certain liens, and events of insolvency and bankruptcy. Upon a Default or Event of Default, Keltic may terminate or suspend its obligation to make further advances and upon an Event of Default Keltic may, among other things, accelerate the facility repayment and declare all obligations under the Loan Agreement to be immediately due and payable.

The obligations of the Borrower under the Loan Agreement are secured by the grant of a pledge and security interest over all of the assets of the Borrower.

At March 31, 2013, the Company was in compliance, in all material respects, with the covenants under the Keltic Facility. At March 31, 2013 and 2012, $6,501,321 and $3,849,831, respectively, due on the revolving facility is included in long-term liabilities.

	D.	In March 2013, in connection with the Second Amendment to the Keltic Facility, the Company and CB-USA entered into an inventory term loan of $2,500,000 (the "Term Loan") that was used for the purchase of bourbon inventory on March 11, 2013. Unless sooner terminated in accordance with their respective terms, the Term Loan matures on December 31, 2016.

		The Term Loan interest rate is the rate that, when annualized, is the greatest of (a) the Prime Rate plus 4.25%, (b) the LIBOR Rate plus 6.75% and (c) 7.50%. Interest is payable monthly in arrears, on the first day of every month on the average daily unpaid principal amount of the Term Loan. After the occurrence and during the continuance of any "Default" or "Event of Default" (as defined under the Loan Agreement) the Borrower is required to pay interest at a rate that is 3.25% per annum above the then applicable Term Loan interest rate. The Borrower is required to pay down the principal balance of the Term Loan within 15 banking days from the completion of a bottling run of bourbon from the bourbon inventory stock purchased on or about the date of the Term Loan in an amount equal to the purchase price of such bourbon. The unpaid principal balance of the Term Loan, all accrued and unpaid interest thereon, all fees, costs and expenses payable in connection with the Term Loan are due and payable in full on the Maturity Date.

Keltic required as a condition to funding the Term Loan that Keltic had entered into a participation agreement (the "Participation Agreement") providing for an aggregate of $750,000 of the Term Loan to be purchased by junior participants. Certain related parties of the Company purchased a portion of these junior participations in the Term Loan, including Frost Gamma Investments Trust ($500,000), an entity affiliated with Phillip Frost, M.D., a director and principal shareholder of the Company, Mark E. Andrews, III ($50,000), a director of the Company and the Company’s Chairman, and an affiliate of Richard J. Lampen ($50,000), a director of the Company and the Company’s President and Chief Executive Officer. Under the terms of the Participation Agreement, the junior participants will receive interest at the rate of 11% per annum. Neither the Company nor CB-USA is a party to the Participation Agreement. However, the Borrower is party to a fee letter (the "Fee Letter") with the junior participants (including the related party junior participants) pursuant to which the Borrower is obligated to pay the junior participants an aggregate commitment fee of $45,000 in three equal annual installments of $15,000. The balance on the credit facilities included in notes payable totaled $2,496,000 and $0 at March 31, 2013 and 2012, respectively.

Payments due on notes payable are as follows:

Years ending March 31,	Amount
2014	$	89,407
2015		—
2016		—
2017		8,997,321
Thereafter		211,580

Total	$	9,298,308