What is the borrower obligated to do regarding financing statements for Aunt Millies Bakeries?

According to Aunt Millies Bakeries' 2025 Franchise Disclosure Document, as part of the Financing Security Agreement, the borrower is obligated to execute all proper financing statements for filing. This is to ensure the security interest granted to the Secured Party is properly documented and legally enforceable. The security interest applies to the borrower's rights under the Distributor's Agreement with Perfection Bakeries, all equipment, inventory, accounts, and other assets related to the borrower's business, as well as any proceeds from these assets.

This requirement means that a prospective Aunt Millies Bakeries distributor must cooperate with the lender (Secured Party) in completing and submitting all necessary paperwork to perfect the lender's security interest in the assets of the distributorship. These financing statements are typically filed with state or local authorities to provide public notice of the lender's claim on the assets. Failure to comply with this covenant can result in a default under the Financing Security Agreement.

Specifically, the borrower's failure to comply with the provisions of the Financing Security Agreement, including the execution of financing statements, constitutes a default. A default allows the Note Holder to declare all obligations immediately due and payable. This could lead to the loss of the distributorship and its assets if the borrower cannot meet the accelerated payment demands. Therefore, understanding and fulfilling this obligation is critical for any Aunt Millies Bakeries distributor seeking financing.