EXHIBIT 10.17

                         SHELLS SEAFOOD RESTAURANT, INC.

                        FOOD SERVICE DISTRIBUTION PROGRAM

I.       PROGRAM PARAMETERS

         A.       As partners, U.S. FOODSERVICE and Shells Seafood Restaurant,
                  Inc. jointly agree that U.S. FOODSERVICE will be the primary
                  distributor for the food service requirements of Shells
                  Seafood Restaurant, Inc. from our servicing branches in the
                  following categories.

                           *  Perishables               *  Seafood
                           *  Dairy                     *  Frozen
                           *  Groceries                 *  Janitorial
                           *  Meats                     *  Paper
                           *  Poultry

                  As your Prime Supplier we request that 80% of your purchases
                  be directed to us for the above referenced categories.

         B.       The units to be serviced by our distribution centers in
                  (Insert our branches, if appropriate) are identified in
                  Attachment "A". The service benefits defined for this program
                  are automatically extended to any area, provided all
                  parameters and requirements of the program are met.

         C.       This program may be offered to new Shells Seafood Restaurant,
                  Inc. units operating outside of our existing program market
                  area providing that Shells Seafood Restaurant, Inc. Corporate
                  Management advises the U.S. FOODSERVICE Corporate Account
                  Manager with locations sixty (60) days prior to the requested
                  service date and that the units can meet all program
                  parameters. We will conduct a cost analysis and advise Shells
                  Seafood Restaurant, Inc. of our service decision within ten
                  (10) working days of the request.

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II.      PRODUCTS

         A.       In addition to nationally branded products, we offer several
                  U.S. FOODSERVICE brands.

         B.       Shells Seafood Restaurant, Inc. will specify product lines, IN
                  WRITING, to be included in our program and we will inventory
                  specific products required by Shells Seafood Restaurant, Inc.
                  within the following policy guidelines:

                  1.       It is requested that you give consideration to our
                           current vendor base if product changes or additions
                           are required.

                  2.       Proprietary products must meet U.S. FOODSERVICE
                           Corporate Policy of a minimum of twelve (12) turns
                           annually and/or a movement of ten (10) cases per week
                           per servicing branch.

                  3.       A minimum of thirty (30) days written notice is
                           required for new products to be brought into U.S.
                           FOODSERVICE inventory for distribution.

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                  4.       Shells Seafood Restaurant, Inc. will be responsible
                           for the disposition within forty-five (45) days of
                           items showing no movement for the past thirty-five
                           (35) days. If all solutions to eliminate dead
                           inventory are exhausted, U.S. FOODSERVICE will be
                           reimbursed for the cost of said product, if returned
                           to vendors or disposed of in any manner other than
                           distribution through normal channels. Shells Seafood
                           Restaurant, Inc. will be held responsible for
                           re-stocking charges or freight cost incurred.

                           If said product is distributed through normal
                           channels, the normal mark-up will apply.

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                  5.       If U.S. FOODSERVICE does not do business with a
                           supplier/packer designated by Shells Seafood
                           Restaurant, Inc. a complete Continuing Guaranty and
                           Indemnity Agreement from that supplier/packer is
                           required before any product is brought into
                           inventory. This process may take up to sixty (60)
                           days. The current insurance of $2,000,000 indemnifies
                           Shells Seafood Restaurant, Inc. and U.S. FOODSERVICE
                           from defect and the cost of litigation.

                  6.       In the event the program is canceled, Shells Seafood
                           Restaurant, Inc. will remain liable for products
                           purchased at its direction. Shells Seafood
                           Restaurant, Inc. assures that they will coordinate
                           the transfer of products to the new distributor
                           within 30 days from the last delivery to their units.

                  7.       Shells Seafood Restaurant, Inc. will notify U.S.
                           FOODSERVICE of special promotions that may cause
                           unusual or excessive demand on inventory.

                  8.       U.S. FOODSERVICE will work with Shells Seafood
                           Restaurant, Inc.'s management in taking whatever
                           action may be appropriate to resolve inventory
                           issues. Mutual support is essential in resolving
                           these issues.

                                    INVENTORY ISSUES:

                                         *  Poor or no movement items.
                                         *  Special order items.
                                         *  Promotional items.
                                         *  Discontinued items.
                                         *  Manufacturer shortages.
                                         *  Industry shortages.

         C.       DISPENSER SERVICE - At each distribution center, U.S.
                  FOODSERVICE, INC. maintains a service department trained in
                  installation, repair and preventive maintenance of beverage
                  and janitorial equipment. Each service department has a
                  well-stocked parts inventory to minimize the potential for
                  equipment down time. Service programs may be negotiated
                  separately.

III.     PROGRAM/PRICING STRUCTURE

         Our program has been developed by reviewing your service and product
         requests with the thought in mind to provide you with the best possible
         pricing in your selected markets. The following outlines our pricing
         structure:

         A.       COST: All prices quoted by U.S. FOODSERVICE in this program
                  will be on invoice cost. Invoice cost is defined as the
                  manufacturer's (supplier or packer) f.o.b. unit price plus
                  normal freight to the U.S. FOODSERVICE distribution center,
                  less off-invoice allowances. Prompt payment cash discounts,
                  and performance allowances are retained by U.S. FOODSERVICE
                  and do not reduce product cost.

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         B.       PRICE STRUCTURE: The price structure mark-up for this program
                  on all product categories at participating distribution
                  centers is:

                  PRODUCT CATEGORY                      MARK-UP
                  ----------------                      -------
                  Perishables
                  Dairy
                  Groceries                             SEE BELOW
                  Meats
                  Poultry
                  Seafood
                  Frozen
                  Janitorial
                  Paper
                  Supplies/Equipment
                  Broken Cases
                  Proprietary Inventory

                  The cost analysis and price structure was partially developed
                  by reviewing the proprietary and special inventory needs of
                  Shells Seafood Restaurant, Inc.

                  As an attempt to more efficiently measure and manage the true
                  costs associated with the successful execution of the
                  contractual relationship between Shells Seafood Restaurant,
                  Inc. and U.S. Foodservice, all price points will be determined
                  utilizing the following formula:

                  "Cost of Item" + $2.50 Fee/Case = "Sell Price"

         C.       If Shells Seafood Restaurant, Inc. chooses to position
                  product, an agreement will be negotiated based on the
                  financial terms and storage.

                  Shells Seafood Restaurant, Inc. agrees to pay U.S. Foodservice
                  inventory holding costs on a monthly basis using the annual
                  interest rate of 10% (0.833% monthly) multiplied by the
                  average of inventory dollar values determined at the beginning
                  and end of the month based on physical counts of seafood.
                  U.S. Foodservice will invoice Shells Seafood Restaurant, Inc.
                  monthly disclosing its interest calculation. Shells Seafood
                  Restaurant, Inc. will remit to U.S. Foodservice within thirty
                  (30) days from receipt of invoice.

         D.       PRICE GUARANTEES: Pricing will be guaranteed for one (1) month
                  effective with the first calendar day of the month. Exceptions
                  to monthly pricing will be eggs, dairy, fresh produce, oil and
                  oil based products, seafood, meat, poultry and other items
                  mutually deemed as commodity in nature, which will be priced
                  weekly. Should extreme or volatile market conditions develop,
                  U.S. FOODSERVICE may request pricing consideration from Shells
                  Seafood Restaurant, Inc.

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         E.       PRICE ADJUSTMENTS: Price increases and decreases are limited
                  to the amount of cost change and/or freight rate changes only,
                  with no change in the agreed upon mark-up percentage.

         F.       PRODUCT SUBSTITUTION: When substitution is necessary, the
                  substituted product will be priced according to our price
                  structure as described in III-C above.

         G.       CONTRACTS: Shells Seafood Restaurant, Inc.'s national
                  contracts with manufactures and manufacturer representatives
                  will be honored by U.S. FOODSERVICE. If Shells Seafood
                  Restaurant, Inc. contracts with a given manufacturer, Shells
                  Seafood Restaurant, Inc. will give consideration to a similar
                  product stocked by U.S. FOODSERVICE provided that the stocking
                  manufacturer will equalize the pricing.

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IV.      SERVICE ARRANGEMENTS
         Order, delivery, receiving and credit memo procedures have been
         included in Attachment "B" of this program.

         A.       DELIVERIES: Based on our cost analysis, each Shells Seafood
                  Restaurant, Inc.'s unit will receive two (2) deliveries per
                  week.

         B.       AVERAGE ORDER SIZE: As agreed upon, the overall average order
                  size for Shells Seafood Restaurant, Inc. will be $500.00 per
                  unit.

         C.       ON-LINE ORDER ENTRY SYSTEM: Our state of the art order entry
                  system through our Customer Service Departments or direct
                  order entry system provides complete order information to
                  include confirmation and reservation of inventory as well as
                  notification of out of stock products prior to completion of
                  your orders.

         D.       ORDER/DELIVERY SCHEDULE: A next day or skip-day order delivery
                  schedule will be mutually determined to achieve optimum
                  service levels.

V.       FINANCIAL

         A.       TERMS: Payment terms are to be determined after completed
                  credit application.

         B.       PRICE VERIFICATION: U.S. FOODSERVICE extends price
                  verification privileges to Shells Seafood Restaurant, Inc.'s
                  Management. Price verification will be scheduled at a time
                  that is mutually agreed upon by both parties. The following
                  procedures are required to perform a price verification
                  review.

                  1.       Shells Seafood Restaurant, Inc. will provide the U.S.
                           FOODSERVICE Corporate Account Manager with three (3)
                           weeks written notice to include:

                           a.       All products to be verified.

                           b.       Time period for price verification, i.e.
                                    previous month or previous week, depending
                                    on product in question not to exceed
                                    previous three (3) months.

                           c.       Price verification limited to twice a year
                                    unless a specific item is in question.

                           d.

                  2.       U.S. FOODSERVICE and Shells Seafood Restaurant,
                           Inc.'s Management personnel will participate. Shells
                           Seafood Restaurant, Inc. guarantees confidentiality
                           and information will be restricted to Shells Seafood
                           Restaurant, Inc.'s Senior Management.

                  3.       Credit memos will be processed at Shells Seafood
                           Restaurant, Inc.'s direction within one week. Details
                           of this procedure are in Attachment "B".

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VI.      ACCOUNT MANAGEMENT
         Many companies sell the same products as we do; however, we feel that
         we have the most qualified people to provide you with the best possible
         service offered in the industry today. The following outlines our
         account management system.

         A.       PERSONNEL

                  1.       U.S. FOODSERVICE will assign a Corporate Account
                           Manager to coordinate the management of all Shells
                           Seafood Restaurant, Inc. units.

                  2.       In addition, we will appoint a branch Chain Account
                           Manager to coordinate activities and insure program
                           integrity at the unit level.

                  3.       Each participating U.S. FOODSERVICE distribution
                           center will assign a non-commissioned telephone
                           Customer Service Representative.

                  4.       The Corporate Headquarters in Columbia, Maryland will
                           serve as a resource for all distribution centers
                           involved in the Shells Seafood Restaurant, Inc.'s
                           Distribution Program.

                  5.       If any of the participating units require the service
                           of a U.S. FOODSERVICE Salesperson to assist with the
                           on-going regular needs of the unit, such a
                           salesperson will be assigned to that unit with the
                           possibility of an increase in our mark-up structure.

         B.       BUSINESS REVIEW: We feel that the success of any program is
                  communication and business reviews assist both companies in
                  achieving their goals.

                  1.       FORMAT: At Shells Seafood Restaurant, Inc.'s
                           direction, quarterly, semi-annual or annual business
                           reviews will be conducted at the corporate and/or
                           regional office to develop proactive objectives to be
                           addressed during the designated time frame.

2.       MIS CAPABILITIES: In order to assist Shells Seafood Restaurant, Inc. in
         the growth and management of their operation, U.S. FOODSERVICE has an
         excellent selection of management reports. Two such reports are
         described below and may be printed on a monthly and/or quarterly basis.

                           *        PRODUCT USAGE (S-329/330)
                                    Ranks products ordered and shipped in
                                    descending dollar sales. Provides number of
                                    cases ordered/shipped, total dollar sales
                                    and average delivered price of each
                                    product. Amount totals are summarized.

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                           *        PRODUCT USAGE BY VENDOR (S-356/357)
                                    Provides a recap of products shipped and the
                                    associated vendor. Products are sequenced in
                                    descending dollar sales with the number of
                                    cased ordered/shipped reported.

                           An additional report will be utilized for program
                           performance and compliance review:

                           *        CHAIN ACCOUNT PROGRAM PERFORMANCE (SA-002)
                                    The Chain Account Program Performance Report
                                    provides a monthly purchasing recap for the
                                    most recent three-month period. Purchases
                                    are broken down by major product groups with
                                    detail dollar volume, piece volume, and
                                    service level shown. Prior year comparative
                                    totals are displayed.

                           Additional MIS Information is available provided
                           Shells Seafood Restaurant, Inc. utilizes U.S.
                           FOODSERVICE existing data programs and formats. Such
                           reporting will be provided to Shells Seafood
                           Restaurant, Inc. at U.S. FOODSERVICE production cost
                           schedule.

                  C.       PROGRAM PERFORMANCE REVIEW:
                           Our program to you was based on many factors and we
                           have offered you our best possible program; however,
                           should on-going performance review reveal significant
                           differences than our base data information, the
                           specific cause of the difference will be identified,
                           reviewed and a plan of action implemented to correct
                           the cause. The following information summarizes the
                           parameters of our program:

                           *        A minimum of 80% of unit purchases will be
                                    directed to U.S. FOODSERVICE.
                           *        Maximum delivery schedule is (2) deliveries
                                    per week.
                           *        Delivery information, etc., will be in
                                    accordance with the Operating Procedures
                                    Manual (Attachment "B").
                           *        Proprietary/specialty/inventory requirements
                                    are as of Program date.
                           *        Service will be provided to units identified
                                    in Attachment "A" plus additional units
                                    within the defined market area as approved
                                    by both corporate offices.
                           *        MIS support as identified in the program.
                           *        Payment terms as identified in the program.

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VII.     PROGRAM TERM AND TERMINATION:

         This agreement will be for a period of 1 years and will be open ended
         thereafter with mutual consent.

         This agreement may be terminated:
         A.       By either party at any time upon the occurrence of a breach of
                  default by the other party of any of the material terms and
                  conditions contained in this Agreement and said default is not
                  cured within thirty (60) days of written notice thereof given
                  by the non-defaulting party; provided, however, that if such
                  breach of default of which notice was given during the
                  preceding six months then the cure period shall be fifteen
                  (15) days.

         B.       By U.S. FOODSERVICE in the event of a change in control of
                  Shells Seafood Restaurant, Inc., a sale of all or a
                  substantial portion of Shells Seafood Restaurant, Inc. assets,
                  Shells Seafood Restaurant, Inc. no longer being in the food
                  business, or Shells Seafood Restaurant, Inc. assigning its
                  rights and obligations under the Agreement, in whole or in
                  part, to another person other than an Affiliate of Shells
                  Seafood Restaurant, Inc. without prior written consent of U.S.
                  FOODSERVICE.

         C.       U.S. FOODSERVICE reserves the right to cancel on the day of
                  notice if the default is due to non-compliance with the agreed
                  upon payment terms.

         D.       This agreement is not transferable.

         E.       This agreement is complete and supersedes any previous
                  agreements.

As evidence of this Agreement:

Signed /s/ W. E. HATTAWAY                       Date  1 JUNE 99
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Title  PRESIDENT
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Company SHELLS SEAFOOD RESTAURANT, INC.
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Signed /s/ SCOTT RIVERA                         Date  6/1/99
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Title  [ILLEGIBLE]
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Company U.S. FOODSERVICE
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