Is an Aunt Millies Bakeries borrower allowed to pledge assets pledged as collateral?

According to the 2025 Aunt Millies Bakeries FDD, a borrower is generally restricted from pledging assets already pledged as collateral. However, there are specific exceptions to this rule.

The FDD states that a default occurs if there is "the assignment, lease, pledge or other transfer of any of the assets pledged as Collateral for this Note, without the prior written consent of the Note Holder." This means that without obtaining prior written consent from the note holder, an Aunt Millies Bakeries borrower cannot pledge their assets already used as collateral.

However, the FDD also states that a default will occur from "the creation of any lien or the issuance of an attachment against or seizure of any property of, or the entry of judgment against, the Borrower except that the Borrower may execute general liens and grant security interests to and in favor of PERFECTION BAKERIES, INC., Distribution Services of America, Inc. and B&G Leasing, Inc. for obligations other than those created hereunder". This clause allows a borrower to grant security interests to Perfection Bakeries, Distribution Services of America, and B&G Leasing for obligations outside the current agreement.

Therefore, an Aunt Millies Bakeries borrower's ability to pledge assets used as collateral is limited, requiring the note holder's consent for any pledges, except when granting security interests to Perfection Bakeries, Distribution Services of America, and B&G Leasing for other obligations.