Exhibit 10.68


 


EXTENSION
TO DISTRIBUTION AGREEMENT


 


This Extension to Distribution Agreement (the
“Extension Agreement”) is made and entered into effective as of this 2nd
day of February, 2006, by and between the parties to that certain Food and
Packaging Distribution Agreement dated November 14, 2002 (the “Distribution
Agreement”) between Blue Line Distributing, a division of Little Caesar
Enterprises, Inc. (“BLD”) and TCBY Systems, LLC (“TCBY”). BLD
and TCBY are sometimes collectively referred to in this Extension Agreement as
the “parties.”  Capitalized terms used
but not otherwise defined herein shall have the same meaning given to them in
the Distribution Agreement.


 


A.                                   On August 5,
2005, TCBY received a notice from BLD (the “Termination Notice”), exercising
BLD’s option to terminate the Distribution Agreement, effective 180 days from
the date of such notice (the “Termination Effective Date”).


 


B.                                     The parties
thereafter entered into negotiations about the possibility of amending the
Distribution Agreement and/or extending the Termination Effective Date, and the
parties now wish to enter into this Extension Agreement to document their
understanding.


 


NOW, THEREFORE, in consideration of the
covenants set forth herein, the parties agree as follows:


 


1.                                       Extension of
Termination Effective Date; Rescission of Price Increase.  Subject to each of the covenants and
conditions set forth herein, BLD will continue to perform under the
Distribution Agreement, notwithstanding the Termination Notice, until the
earlier to occur of (a) 30 days following the date when TCBY notifies BLD
in writing that it has obtained a new distributor, and (b) 30 days
following the date, if any, when BLD notifies TCBY in writing that BLD
reasonably determines that TCBY is no longer making best efforts and progress
to obtain a new distributor (the “Final Termination Date”). The period
from the date of this Extension Agreement to the Final Termination Date is
referred to herein as the “Extension Period”. During the Extension
Period, the Distribution Agreement will remain in full force and effect as
modified by this Extension Agreement. BLD hereby rescinds its notice of price
increase dated September 23, 2005.


 


2.                                       TCBY Payments
to BLD; Guarantees.


 


(a)                                  TCBY
Account Balance.  Upon full execution
of this Extension Agreement, TCBY shall pay to BLD the amount of $98,983, in
full payment of BLD’s bad debt balance.


 


(b)                                 Monthly
Payment – Price Increase.  BLD shall
receive a monthly amount of $100,000 (the “Monthly Payment”), payable as
set forth below. For purposes of this provision, the effective date of this
Agreement


 


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shall be November 15, 2005 and the
Monthly Payment shall be due for each monthly period thereafter during the
Extension Period. In consideration of the Monthly Payment, BLD shall provide
services under the Distribution Agreement during the entire Extension Period at
the rates in effect as of the date of this Extension Agreement, and agrees not
to impose any further price increase to BLD’s fees and costs collected pursuant
to Section 3 of the Distribution Agreement during the Extension Period.


 


The Monthly
Payment shall be paid as follows:  (a) upon
execution of this Agreement, TCBY shall remit to BLD an amount equal to two
Monthly Payments; and (b) on the 15th day of each month during
the Extension Period commencing February 15, 2006, TCBY shall remit to BLD
an amount equal to one Monthly Payment. For any partial period at the end of
the Extension Period, TCBY shall pay to BLD a prorated amount of the Monthly
Payment within 15 days of the Final Termination Date.


 


(c )                               Guarantee
of Future Receivables. TCBY will guarantee payment of all amounts owed to
BLD by TCBY’s franchisees during the Extension Period (the “Franchisee
Receivables”). BLD will continue to use reasonable efforts to collect
Franchisee Receivables from franchisees in the ordinary course of business,
including ACH drafting and COD, where applicable. BLD will submit to TCBY a
monthly aging report detailing any past-due Franchisee Receivables. TCBY will
remit to BLD any Franchisee Receivables that remain unpaid on the Final
Termination Date within 15 days thereof, and BLD will execute a mutually
acceptable agreement assigning to TCBY all of its rights to the Franchisee
Receivables upon BLD’s receipt of TCBY’s payment.


 


(d)                                 Change
in Collection Method. TCBY acknowledges that some time during March or
April, 2006, BLD will no longer have the systems in place to prepay for the
royalty and advertising component upon purchase of product from TCBY’s
designated manufacturer. If this systems change occurs during the Extension
Period, the parties will implement billing and collections changes required by
BLD. BLD will give TCBY as much notice as possible of (i) the date that
the systems change will be implemented, and (ii) the nature of the billing
and collection changes that will be necessary.


 


3.                                       Early
Withdrawal From Distribution Centers; Pro-Rata Reduction in Monthly Payment.
 TCBY may be able to identify
distribution solutions that would allow transition and full withdrawal from
certain BLD distribution centers during the Extension Period, prior to the
Final Termination Date. Without limiting the foregoing, TCBY shall complete an
early withdrawal from the Swedesborough distribution center by March 15,
2006. Upon the completion of each early full withdrawal, the Monthly Payment
shall be decreased by an amount that corresponds with the pro-rata reduction in
services formerly provided by the exited


 


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centers. By way of example, if Distribution Center A represents 3% of
the total distribution network provided by BLD to TCBY under the Distribution
Agreement (based on delivered case volume), and TCBY completes a full
withdrawal from Distribution Center A before the end of the Extension Period,
the Monthly Payment will be decreased by $3,000 as of the date that the parties
accomplish the early withdrawal from Distribution Center A.


 


4.                                       Inventory
Upon Expiration or Termination.  Section 9.3
of the Distribution Agreement is hereby amended to provide that upon delivery
of the written notices set forth in Section 1 above, BLD shall provide to
TCBY an accounting of BLD’s  TCBY Product
inventory. On the Final Termination Date, TCBY or its designee shall purchase
all BLD’s existing Product inventory other than defective, non-conforming or
damaged Products and remove the purchased Products from the remaining BLD
Distribution Centers. The final two sentences of Section 9 will remain in
effect and are incorporated herein by reference.


 


5.                                       Transition.
 TCBY will keep BLD apprised of TCBY’s
efforts and progress toward identifying a new distributor. The parties will
continue to cooperate to ensure a smooth transition from BLD to TCBY’s new
distributor.


 


6.                                       Counterparts;
Distribution Agreement.  This
Extension Agreement may be signed in counterparts, all of which taken
together shall constitute one and the same instrument. The provisions of
Sections 13 through 21 of the Distribution Agreement are incorporated herein by
this reference.


 


The parties have caused this Extension
Agreement to be executed by their duly authorized representatives effective as
of the date first set forth above.


 


 


	
  BLD:

  	
  TCBY:

  
	
  BLUE LINE DISTRIBUTING

  	
  TCBY SYSTEMS, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
   /s/
  Charles Sciandra

  	
   

  	
  By

  	
   /s/
  Michael Ward

  	
   

  
	
  Its President

  	
  Its E.V.P.

  
						



 


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