How are payments applied to the Aunt Millies Bakeries financing note?

This Note, and all other obligations of the Borrower to Note Holder, shall be and become immediately due and payable at the option of the Note Holder, without any demand or notice whatsoever, upon the occurrence of any of the following described events, each of which shall constitute a default:

• a) any failure to make any payment when due of the principal, interest or late charges;
• b) Borrower's failure to comply with or perform any provisions or covenants under the Financing Security Agreement executed simultaneously herewith or any other agreement between Borrower and Note Holder;
• c) the expiration, cancellation or termination of the Distribution Agreement executed between Borrower and PERFECTION BAKERIES, INC.;
• d) the death of the Borrower;
• e) any failure to submit to Note Holder, in form satisfactory to Note Holder, current personal financial information, as requested by Secured Party, current quarterly business financial statements within 30 days of the close of each calendar quarter and annual tax returns within 30 days of the date due for filing;
• f) any reduction in the value of the Collateral, due to the fault of the Borrower, which adversely affects the likelihood of satisfaction of Borrower's obligations hereunder;
• g) any action or failure to act of Borrower which, in the reasonable judgment of Note Holder, adversely affects the Collateral or Borrower's ability to repay the obligations of this Note;

Exhibit B(4) Financing Documents with First Capital Acceptance Corp. Purchase of Receivables

PERFECTION BAKERIES, INC. PURCHASE OF RECEIVABLES

I, [DISTRIBUTOR'S NAME], president of [DISTRIBUTOR'S CORPORATION], hereby sell, assign and transfer to PERFECTION BAKERIES, INC., ("AUNT MILLIE'S") all of my right, title and interest in and to all my properly filled out and executed charge slips, all existing and future Accounts arising from the sale of Products to Chains or Outlets in the Sales Area and all proceeds thereof, at their face value, net of all discounts, free and clear of all liens, security agreements and encumbrances, other than in favor of AUNT MILLIE's. If any Chain elects to settle with me on the basis of scan results, rather than charge slips, the credit to me shall be adjusted for any difference between the charge slip and the actual sales reflected by the scan sale data. I further authorize AUNT MILLIE's to deduct each week from monies it owes me as a result of its purchase from me of certain accounts receivable, the following:

Source: Item 23 — RECEIPT (FDD pages 44–196)