**Exhibit 10.68**

 

**EXTENSIONTO DISTRIBUTION AGREEMENT**

 

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

 

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

 

B.                                     The partiesthereafter entered into negotiations about the possibility of amending theDistribution Agreement and/or extending the Termination Effective Date, and theparties now wish to enter into this Extension Agreement to document theirunderstanding.

 

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

 

1.                                       Extension ofTermination Effective Date; Rescission of Price Increase.  Subject to each of the covenants andconditions set forth herein, BLD will continue to perform under theDistribution Agreement, notwithstanding the Termination Notice, until theearlier to occur of (a) 30 days following the date when TCBY notifies BLDin writing that it has obtained a new distributor, and (b) 30 daysfollowing the date, if any, when BLD notifies TCBY in writing that BLDreasonably determines that TCBY is no longer making best efforts and progressto obtain a new distributor (the “Final Termination Date”). The periodfrom the date of this Extension Agreement to the Final Termination Date isreferred to herein as the “Extension Period”. During the ExtensionPeriod, the Distribution Agreement will remain in full force and effect asmodified by this Extension Agreement. BLD hereby rescinds its notice of priceincrease dated September 23, 2005.

 

2.                                       TCBY Paymentsto BLD; Guarantees.

 

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

 

(b)                                 MonthlyPayment – Price Increase.  BLD shallreceive a monthly amount of $100,000 (the “Monthly Payment”), payable asset forth below. For purposes of this provision, the effective date of thisAgreement

 

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shall be November 15, 2005 and theMonthly Payment shall be due for each monthly period thereafter during theExtension Period. In consideration of the Monthly Payment, BLD shall provideservices under the Distribution Agreement during the entire Extension Period atthe rates in effect as of the date of this Extension Agreement, and agrees notto impose any further price increase to BLD’s fees and costs collected pursuantto Section 3 of the Distribution Agreement during the Extension Period**.**

 

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

 

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

 

(d)                                 Changein Collection Method. TCBY acknowledges that some time during March orApril, 2006, BLD will no longer have the systems in place to prepay for theroyalty and advertising component upon purchase of product from TCBY’sdesignated manufacturer. If this systems change occurs during the ExtensionPeriod, the parties will implement billing and collections changes required byBLD. BLD will give TCBY as much notice as possible of (i) the date thatthe systems change will be implemented, and (ii) the nature of the billingand collection changes that will be necessary.

 

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

 

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centers. By way of example, if Distribution Center A represents 3% ofthe total distribution network provided by BLD to TCBY under the DistributionAgreement (based on delivered case volume), and TCBY completes a fullwithdrawal 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 partiesaccomplish the early withdrawal from Distribution Center A.

 

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

 

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

 

6.                                       Counterparts;Distribution Agreement.  ThisExtension Agreement may be signed in counterparts, all of which takentogether shall constitute one and the same instrument. The provisions ofSections 13 through 21 of the Distribution Agreement are incorporated herein bythis reference.

 

The parties have caused this ExtensionAgreement to be executed by their duly authorized representatives effective asof 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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