What rights does the Secured Party have before and after default by an Aunt Millies Bakeries distributor?

• §3.8 DEFAULT: Nothing herein shall be deemed to require AUNT MILLIE'S to fill an order of DISTRIBUTOR during any time when DISTRIBUTOR is in default of any payment or other obligation to AUNT MILLIE'S.

4. DEFAULT:

The following shall constitute a default by the Borrower:

• a) Borrower's failure to pay to Secured Party when due any obligation secured by this Agreement;
• b) any termination of the Distributor's Agreement executed between Borrower and PERFECTION BAKERIES, INC., d/b/a AUNT MILLIE'S of even date herewith;
• c) Borrower's failure to comply with or perform any provisions or covenants of this Agreement or any other agreement between Borrower and Secured Party;
• d) Borrower's failure to maintain the insurance required in Article 3 above;
• e) Borrower's failure to submit current financial statements and tax returns as required in Article 3 above;
• f) any reduction in the value of the collateral, due to the fault of the Borrower, which imperils satisfaction of Borrower's obligations hereunder;
• g) Any action or failure to act of Borrower which, in the reasonable judgment of the Secured Party, adversely affects the collateral or the ability to satisfy any of Borrower's obligations hereunder
• h) the making of any seizure, sale, assignment, lease, pledge or other transfer of any collateral, except as otherwise permitted under this Agreement;
• i) a notice of lien, levy, attachment or assessment is filed or recorded with respect to any collateral, and the claim is not fully discharged and satisfied within 30 days of such filing or recordation;
• j) with respect to Borrower or a guarantor of Borrower's obligations hereunder: dissolution, insolvency, inability to pay debts as they mature, appointment of a receiver for any part of its/his/her property, assignment for the benefit of creditors, the commencement of any proceeding under any bankruptcy or insolvency laws, or other material adverse change in financial condition or means or ability to pay.

5. REMEDIES:

Termination under either Section 9.2 or Section 9.3 above, shall entitle AUNT MILLIE'S to operate the business for the account of the DISTRIBUTOR, deducting from the revenues generated the reasonable expenses of such performance and delivering the balance, if any, to DISTRIBUTOR. Termination shall require DISTRIBUTOR to sell the Distribution Rights, and in the event that DISTRIBUTOR has not consummated a sale to a qualified purchaser within 90 days of the date of termination, AUNT MILLIE'S shall be authorized to sell DISTRIBUTOR'S Distribution Rights to such a purchaser at the best price which can be obtained after proper notice and advertisement. Said sale shall be for the account of the DISTRIBUTOR, and the provisions of Sections 7.3, 7.4 and 7.5 hereof shall apply.

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