EXHIBIT 10.50

                                 LOAN AGREEMENT

      THIS LOAN AGREEMENT (hereinafter the "Agreement") is made as of this 15th
day of January, 1998, by and between MANUFACTURERS BANK OF FLORIDA, a national
banking association, having an address of 4144 North Armenia Avenue, Post Office
Box 4040, Tampa, Florida 33677 (hereinafter referred to as "Bank") and SHELLS
SEAFOOD RESTAURANTS, INC., a Delaware corporation, having as its principal
address of 16313 North Dale Mabry Highway, Suite 100, Tampa, Florida 33618
(hereinafter referred to as "Borrower").

                              W I T N E S S E T H:

      WHEREAS, Borrower has requested that Bank make available to Borrower a
loan in the amount of Eight Hundred Fifty Thousand and No/l00ths Dollars
($850,000.00) (the "Loan"), which Loan shall be secured by certain furniture,
fixtures, equipment and other personal property (collectively, the "Property")
in the Shell's Seafood Restaurants located at 2136 North Monroe Street,
Tallahassee. Florida 32303 and 3415 Southwest College Road, Ocala, Florida
34474 (collectively, the "Real Property'); and

      WHEREAS, Bank is willing to make available to Borrower the Loan as
requested, under the terms and subject to the conditions set forth herein.

      NOW, THEREFORE, in consideration of the premises, the mutual covenants and
agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

      1. LOAN: On the date hereof, Borrower shall make the Loan available to
Bank. The Loan shall be evidenced by that certain Promissory Note of even date
herewith (the "Note"), in the original principal amount of Eight Hundred Fifty
Thousand and No/100ths Dollars ($850,000.00), made by Borrower to the order of
Bank, and secured by that certain Security Agreement of even date herewith (the
"Security Agreement"), by and between Borrower and Bank, granting to Bank a
security interest in the Personal Property. The Note, the Security Agreement and
all other documents executed as part of the Loan are hereinafter collectively
referred to as the "Security Documents."

      2. TERM: The term of this Agreement shall be for a period beginning with
the date hereof and terminating upon payment of the unpaid principal and accrued
interest under the Note, unless sooner terminated pursuant to the terms of this
Agreement.

      3. REPRESENTATIONS AND WARRANTIES: Borrower represents and warrants that:

         (a) FINANCIAL CONDITION: All balance sheets, financial statements,
      profit and loss statements, and all other financial information heretofore
      furnished to Bank are true and correct in all material respects and fairly
      reflect the financial condition of Borrower

<PAGE>

      and each of its subsidiary companies (collectively, the "Subsidiaries") as
      of the dates thereof, including all contingent liabilities of every type
      and that the financial condition of Borrower and its Subsidiaries as
      stated in the financial statements provided to Bank has not changed
      materially and adversely since the dates of such documents.

         (b) CAPACITY AND STANDING: This Agreement, the Note, Security
      Agreement, and any related documents executed pursuant to this Agreement,
      when executed, shall constitute valid and binding obligations of Borrower.
      Borrower warrants and represents that it is a corporation duly organized
      and existing under the laws of the State of Delaware and is duly qualified
      and in good standing in the State of Florida and in every other state in
      which the nature of its business shall require such qualification (except
      where the failure to be so qualified will not have a material adverse
      effect on Borrower's operations), and is duly authorized to make and
      perform the obligations under the Security Documents.

         (c) VIOLATION OF OTHER AGREEMENTS: The execution of this Agreement and
      the Security Documents specified herein, and the performance of the
      undersigned pursuant to this Agreement and the Security Documents will not
      violate any provision of law, or any agreement, indenture, note or other
      instrument binding upon Borrower or give cause for the acceleration of any
      obligations of Borrower.

         (d) AUTHORITY: All authority from and approval by any governmental
      body, commission or agency, State or Federal, necessary to the making or
      validity of this Agreement or the Security Documents has been obtained or
      will be obtained.

         (e) ASSET OWNERSHIP: Except as set forth in EXHIBIT A attached hereto,
      Borrower has good and marketable title to the Property, and the right to
      grant to Bank a security interest in the Property as contemplated by the
      Security Agreement. Borrower or its Subsidiaries has good and marketable
      title to all of the properties and assets reflected on the balance sheets
      and financial statements supplied to the Bank by Borrower, and that all
      such properties and assets are free and clear of mortgages, security
      deeds, pledges, liens, charges, and all other encumbrances, except as
      otherwise disclosed by the financial statements submitted to Bank.

         (f) DISCHARGE OF LIENS AND TAXES: Borrower has duly filed, paid and/or
      discharged all taxes or other claims which are due and which may become
      a lien on any of its property or assets, excepting to the extent that
      such items are being appropriately contested in good faith and an
      adequate reserve for the payment thereof is being maintained.

         (g) REGULATION U: None of the proceeds of the Loan made pursuant to
      this Agreement shall be used directly or indirectly for the purposes of
      purchasing or carrying any stock in violation of any of the provisions of
      Regulation U of the Board of Governors of the Federal Reserve System.

                                     - 2 -
<PAGE>

         (h) DEBT TO WORTH RATIO: Borrower shall at all times during the term
      hereof, beginning the fiscal quarter commencing immediately following the
      date hereof, maintain a Debt to Worth Ratio (as hereinafter defined) of
      not more than 2.00 to 1.00. For the purposes hereof, the term "Debt to
      Worth Ratio" shall mean the ratio of (a) Effective Tangible Net Worth (as
      hereinafter defined), to (b) Total Liabilities (as hereinafter defined).
      Further, for the purposes of this computation, "Total Liabilities" shall
      mean all liabilities, including debt fully subordinated to the Loan,
      capitalized leases and all reserves for deferred taxes and other deferred
      sums appearing on the liabilities side of a balance sheet, in accordance
      with generally accepted accounting principles applies on a consistent
      basis, and the term "Effective Tangible Net Worth" shall mean total assets
      minus total liabilities. Finally, for the purposes of this computation,
      the aggregate amount of any intangible assets of Borrower, including,
      without limitation, goodwill, franchise, licenses, patents, trademarks,
      trade names, copyrights, service marks, and brand names, shall be
      subtracted from total assets.

         (i) DEBT COVERAGE RATIO: Borrower shall for each fiscal year during the
      term hereof maintain a Debt Coverage Ratio (as hereinafter defined) of
      greater than 2.00 to 1.00. For the purposes hereof, the term "Debt
      Coverage Ratio" shall mean the ratio of (a) earnings before interest,
      taxes, depreciation and amortization, to (b) current maturities of long
      term debt plus interest expense.

         (j) DIVIDENDS: Except for dividends paid to holders of preferred shares
      of stock in Shells, Inc., Borrower shall not, during any fiscal year
      during the term hereof, declare or pay cash dividends.

         (k) ERISA: Each employee benefit plan, as defined in the Employee
      Retirement Income Security Act of 1974 ("ERISA") maintained by Borrower
      or by any Subsidiary of Borrower meets, as of the date hereof, the
      minimum funding standards of Section 302 of ERISA, all applicable
      requirements of ERISA and of the Internal Revenue Code of 1986, as
      amended, and no "Reportable Event" (as defined by ERISA) has occurred with
      respect to any such plan.

      4. AFFIRMATIVE COVENANTS: Borrower covenants and agrees that from the
date hereof and until payment in full of the principal of and interest on the
Note, and its satisfaction of its obligations hereunder, unless Bank shall
otherwise consent in writing, Borrower will:

        (a) BUSINESS CONTINUITY: Conduct its business in substantially the
      same manner as such business is now and has heretofore been carried on
      and conducted.

        (b) CORPORATE EXISTENCE AND PROPERTIES: Comply fully with all applicable
      statutes, laws and regulations in all material respects, and maintain the
      corporate existence of itself and shall maintain, preserve and keep its
      property and assets (including the Property) in good repair, working order
      and condition, reasonable wear and tear excluded,

                                     - 3 -

<PAGE>
      making all needed replacemennts, additions, improvement and renewals
      thereto, to the extent allowed by this Agreement.

        (c) ACCESS TO BOOKS AND RECORDS: Allow Bank, or its agents, upon
      reasonable notice, during normal business hours, at Borrower's primary
      place of business to have access to the books, financial records and
      such other financial documents of Borrower and its Subsidiaries, as Bank
      shall reasonable require, and allow Bank to make copies thereof at Bank's
      expense which copies will be kept confidential by Bank.

        (d) INSURANCE: Maintain adequate insurance coverage consistent with
      standard industry practice, including but not limited to, insurance
      against loss by fire, and other hazards included in the term "extended
      coverage," workmen's compensation insurance, and business interruption
      insurance with such companies selected by Borrower as shall be reasonably
      acceptable to Bank and in such amounts as Bank may from time to time
      reasonably require, and shall promptly pay all premiums therefor when due.

        (e) COMPLIANCE WITH OTHER AGREEMENTS: Comply in all material respects
      with all covenants, terms and conditions contained in this Agreement, the
      Security Documents and any other agreements or instruments entered into
      pursuant to this Agreement.

       5. NEGATIVE COVENANTS: Borrower covenants and agrees that from the date
hereof and until payment in full of the principal and interest on the Note, and
Borrower's satisfaction of its obligations hereunder, unless Bank shall
otherwise consent in writing, Borrower will not:

        (a) GUARANTEES: Guarantee or otherwise become responsible for
      obligations of any other person, corporation, or entity (provided,
      however, that Borrower shall have the right to guarantee up to
      $1,000,000.00 of the debt or lease obligations of any joint venture of
      which Borrower is a participant and to guarantee the obligations of any
      Subsidiary).

        (b) ENCUMBRANCES: Create, assume, or permit to exist any mortgage,
      security deeds, pledge, lien, charge or other encumbrance on any of the
      Property given as security for the Loan contemplated by this Agreement,
      whether now owned or hereafter acquired.

        (c) [INTENTIONALLY DELETED]

        (d) TRANSFER OF INTERESTS: Except as may be transacted by Borrower in
      the ordinary course of business, sell, convey, assign, lease, pledge or
      otherwise transfer any of Borrower's interest in or to the Property given
      as security for the loans contemplated by this Agreement.

        (e) CHANGE IN FISCAL YEAR: Change its fiscal year, which is presently
      based upon a 52-53 week fiscal year ending on the Sunday closest to
      December 31st without the consent of Bank (which consent shall not be
      unreasonably withheld).

                                      - 4-

<PAGE>

       6. FINANCIAL STATEMENTS: For so long as any balance remains unpaid on the
Note, the Borrower shall at all times comply with the following unless Bank
shall otherwise consent in writing:

        (a) ANNUAL STATEMENTS: Deliver to Bank within ninety (90) days after the
      end of each fiscal year of Borrower, a consolidated balance sheet and a
      consolidated statement of income (loss) and surplus (deficit), a
      statement of cash flows, and its 10K's, together with supporting
      schedules, all in reasonable detail and prepared in conformity with
      generally accepted accounting principles, applied on a basis consistent
      with that of the preceding year, all examined by an independent certified
      public accountant acceptable to Bank, showing the financial condition of
      Borrower and its Subsidiaries, at the close of such year and the result of
      operations of Borrower and its Subsidiaries, during the year. The opinion
      of such independent certified public accountant shall not be acceptable to
      Bank if qualified due to any limitations in scope imposed by Borrower or
      its Subsidiaries. Any other qualification of the opinion by the
      accountant shall render the acceptability of the financial statements
      subject to Bank approval.

        (b) UNAUDITED STATEMENTS: Deliver to Bank within forty-five (45) days
      after the end of each fiscal quarter similar financial statements to those
      referred to in subparagraph (a) above, together with a copy of its 10Q's
      and management's quarterly memorandum, if any, to Borrower's board of
      directors, unaudited but certified as to their correctness by the chief
      financial officer of Borrower, all in reasonable detail, prepared in
      accordance with generally accepted accounting principles applied on a
      consistent basis throughout the period involved and prior periods, such
      balance sheets to be as of the end of such period and such statements of
      income and surplus to be for the period from beginning of the fiscal year
      to the end of such period, and in each case subject to audit and year-end
      adjustments. Such unaudited statements shall be kept confidential by Bank.

        (c) OTHER FINANCIAL INFORMATION: Borrower shall deliver, promptly, such
      other information regarding the operation, business affairs, and
      financial condition of the Borrower or any of its subsidiaries, if any,
      which the Bank may reasonably request, which shall be kept confidential by
      Bank.

        (d) CONSOLIDATED FINANCIAL STATEMENTS: Borrower acknowledges and agrees
      that its financial statements are presently prepared on a consolidated
      basis together with its Subsidiaries and, during the term of this
      Agreement, Borrower shall continue to prepare its financial statements on
      a consolidated basis together with its Subsidiaries.

       7. CONDITIONS PRECEDENT: The obligations of Bank to make the Loan
pursuant to this Agreement are subject to the following conditions precedent:

        (a) COMMITMENT LETTER: Borrower's full compliance with all conditions
      set forth in the commitment letter from Bank to Borrower dated October 6,
      1997.

                                     - 5 -

<PAGE>

        (b) RESOLUTIONS: On or prior to the date hereof Bank shall have
       received:

            (i) Certified copies of resolutions of the Board of Directors of
        Borrower authorizing the execution, delivery and performance of this
        Agreement, the Notes, and all documentation executed pursuant to this
        Agreement.

            (ii) A copy of the By-laws of Borrower, certified as to completeness
        and accuracy by an appropriate officer of Borrower.

        (c) CERTIFICATE OF INCUMBENCY: Receipt by Bank of a certificate of an
      appropriate officer of Borrower as to the incumbency and signatures of the
      officers of Borrower executing this Agreement, the Security Documents and
      all other documents executed pursuant to this Agreement.

        (d) CHARTER DOCUMENTS: Receipt by Bank of a copy of the Articles of
      Incorporation and all other charter documents of Borrower all certified by
      the Secretary of State of the State of Delaware.

        (e) CERTIFICATE OF GOOD STANDING: Receipt of Bank of a certificate of
      the Secretary of State of the State of Borrower's or the applicable
      Subsidiary's incorporation as to the good standing of Borrower and each
      Subsidiary and its charter documents on file.

       8. SECURITY: The obligations of Borrower to Bank pursuant to this
Agreement and the Security Documents executed pursuant thereto, are secured
wholly or partially as hereinafter described and are subject to the following
terms and conditions:

        (a) LEASE: Both the lease for the Real Property located in Tallahassee
      and the lease for the Real Property located in Ocala are in full force and
      effect, Borrower is not in default under either of said leases, and no
      events have occurred which with the giving of notice or the passage of
      time, or both, will constitute a default under either of said leases. The
      remaining terms of both the Tallahassee lease and the Ocala lease are for
      more than five (5) years from the date hereof.

        (b) INSURANCE: Borrower agrees to continually maintain insurance against
      loss by fire, hazards included in the term "extended coverage" and such
      other hazards as Bank may require from time to time in such companies
      selected by Borrower and reasonably acceptable to Bank, upon all Property
      securing the Loan made pursuant to this Agreement, and shall pay all
      premiums therefor when due. All such insurance policies shall contain a
      long form loss payee clause in favor of Bank and shall provide that no
      such policy may be canceled without ten (10) days prior written notice to
      Bank. In the event of loss, Borrower shall give immediate notice to Bank,
      which may make proof of loss. Each insurance company shall be directed to
      make payment for such loss jointly to Borrower and Bank, and any such
      insurance proceeds or any part thereof may, in Borrower's discretion, be
      applied to the debt secured hereby or placed into an escrow account with
      Bank and used

                                     - 6 -

<PAGE>

      for the repair or restoration of the Property, provided, however, that in
      the event of a total loss (which shall be deemed to be a loss of greater
      than 80% of the value of the Property), any such insurance proceeds may
      be applied by Bank in its discretion to the debt hereby secured or for the
      repair or restoration of the Property pursuant to the terms and conditions
      of the Security Agreement. In the event Borrower or Bank shall elect to
      apply the insurance proceeds to Borrower's debts, such application may be
      made at Bank's discretion to that portion last falling due or in such
      other manner as Bank may deem desirable.

        (c) ACCESS: Bank and its agents, upon reasonable notice and provided
      that they shall not unreasonably interfere with the business of
      Borrower, shall at all times have the right of entry and free access to
      all of the Real Property for the purposes of inspecting the Property
      securing the Loan.

        (d) PERFECTION: Bank's lien and security interest as above described
      must be properly perfected, and Borrower agrees to execute all documents
      necessary to effectuate such perfection including but not limited to
      financing statements and to reimburse Bank for all reasonable expenses
      incurred in the perfection of such lien and security interest.

       9. EVENTS OF DEFAULT: The following shall be events of default hereunder
by Borrower (a "Default"):

        (a) Any material representation or warranty made in this Agreement shall
      prove to be false or misleading in any material respect; or

        (b) Any material report, certificate, financial statement or other
      document furnished in connection with this Agreement or the Loan made
      pursuant hereto, shall prove to be false or misleading in any material
      respect; or

        (c) Failure to make payment of any installment of principal or interest
      on any Note within five (5) days after receipt of written notice that
      such payment is due and payable in accordance with the terms and
      conditions thereof; or

        (d) Borrower shall otherwise default on any Note or fail to pay any
      other obligation of Borrower to Lender within five (5) days after receipt
      of written notice that such obligation is due and payable or shall default
      in the performance of any obligation incurred for money borrowed where any
      applicable grace or cure period shall have expired such that the lender
      thereof could accelerate the debt; or

        (e) Material breach of any covenant, condition, or agreement made by
      Borrower pursuant to this Agreement or any of the Security Documents, if
      such breach shall continue beyond the applicable cure period described
      therein, or the occurrence of a default thereunder; or

                                     - 7 -

<PAGE>

        (f) Should a custodian, as that term is defined in Bankruptcy Code, be
      appointed for or take possession of any or all of the assets of
      Borrower or any subsidiary or should Borrower or any subsidiary either
      voluntarily or involuntarily become subject to any insolvency
      proceeding, proceeding to dissolve Borrower or any subsidiary, proceeding
      to have a receiver appointed or should Borrower or any subsidiary make an
      assignment for the benefit of creditors, or should there be an attachment,
      execution, or other judicial seizure of all or any portion of Borrower's
      or any subsidiary's assets, provided, however, that in the event Borrower
      or any subsidiary should involuntarily become subject to any insolvency
      proceeding or proceeding to dissolve Borrower or any subsidiary, said
      event shall not be deemed a default hereunder if the same shall be stayed,
      dismissed or bonded off with an surety company reasonably acceptable to
      Bank within sixth (60) days from the commencement thereof; or

        (g) Dissolution or termination of the existence of a corporate Borrower;
      or

        (h) Borrower or any subsidiary shall be a debtor, either voluntarily or
      involuntarily, under (as the term "debtor" is defined in) Bankruptcy Code.

       10. REMEDIES UPON DEFAULT: In the event of the occurrence of any of the
above listed events of default, then Bank may at any time thereafter during the
continuance of any such event of default, at its option, take any or all of the
following actions, at the same or different times:

        (a) Declare the balance of each Note to be forthwith due and payable,
      both as to principal and interest, without presentment, demand, protest,
      or other notice of any kind, all of which are hereby expressly waived by
      Borrower, anything contained herein or the Note to the contrary
      notwithstanding; and/or

        (b) Require Borrower to pledge additional collateral to Bank from
      Borrower's assets and properties, the acceptability and sufficiency of
      such collateral to be determined solely by Bank; and/or

        (c) Take immediate possession of any or all collateral including, but
      not limited to, the Property on which the Bank holds a security interest
      as security for the obligations of Borrower under this Agreement; and/or

        (d) Exercise such other rights and remedies as Bank may be provided in
      any Note, the Security Documents and any other documents executed pursuant
      to this Agreement, or as provided by law or equity.

       11. MISCELLANEOUS PROVISIONS:

        (a) [INTENTIONALLY DELETED]

                                     - 8 -

<PAGE>

        (b) INDIRECT MEANS: Any act which Borrower is prohibited from doing
      shall not be done indirectly through a subsidiary or by any other
      indirect means.

        (c) NON-IMPAIRMENT: If any one or more provisions contained in this
      Agreement or any other document executed pursuant to this Agreement shall
      be held invalid, illegal or unenforceable in any respect, the validity,
      legality and enforceability of the remaining provisions contained in this
      Agreement and the documentation executed pursuant hereto, shall not in any
      way be affected or impaired thereby and this Agreement shall otherwise
      remain in full force and effect.

        (d) APPLICABLE LAW: This Agreement, the Note, the Security Documents
      and all other documentation executed pursuant to this Agreement shall be
      construed in accordance with and governed by the laws of the State of
      Florida.

        (e) WAIVER: Neither the failure nor any delay on the part of Bank in
      exercising any right, power, or privilege granted pursuant to this
      Agreement, the Note, the Security Documents or any other documents
      executed pursuant to this Agreement, shall operate as a waiver thereof,
      nor shall a single or partial exercise thereof preclude any other or
      further exercise or the exercise of any other right, power or privilege.

        (f) MODIFICATION: No modification, amendment, or waiver of any provision
      of this Agreement, the Note, the Security Documents or any other document
      executed pursuant to this Agreement shall be effective unless in writing
      and signed by Bank and if applicable, by Borrower, it being acknowledged
      by the parties hereto that all terms, conditions and covenants therein and
      herein contained are deemed to be material and relied upon by Bank.

        (g) STAMPS AND FEES: Borrower shall pay all Federal or State documentary
      stamps or taxes, or other fees and charges, if any, payable or determined
      to be payable by reason of the execution, delivery or issuance of this
      Agreement, the Note, the Security Documents, or any security granted to
      Bank, or the making of any advance from time to time, whether they be
      payable upon execution or recurring from time to time, and Borrower agrees
      to indemnify and hold harmless Bank against any and all liability in
      respect thereof.

        (h) ATTORNEYS' FEES: In the event that Borrower shall Default in any of
      its obligations under this Agreement, the Note, the Security Documents, or
      any other document executed pursuant to this Agreement, and Bank believes
      it reasonably necessary or proper to employ an attorney to assist in the
      enforcement or collection of the indebtedness of Borrower to Bank or to
      enforce any other term or condition of this Agreement, the Note, the
      Security Documents, or any other document executed pursuant to this
      Agreement, or in the event Bank voluntarily or otherwise shall become a
      party to any suit or legal proceeding (including a proceeding conducted
      under Bankruptcy Code) which Bank, in good faith, believes is necessary
      or prudent to protect its rights hereunder

                                     - 9 -

<PAGE>

      or under the Note, the Security Documents or any other document executed
      pursuant to this Agreement, Borrower agrees to pay the reasonable
      attorneys' fees of Bank and all other costs that may reasonable by
      incurred by Bank; provided, however, in no event shall Borrower be
      liable to Bank for any such fees and costs incurred as part of lawsuits
      between Bank and any third party unrelated to this matter. Borrower shall
      be liable for such attorneys' fees and costs whether or not any suit or
      proceeding is commenced (including costs for appellate proceedings, if
      any.)

        (i) INTEREST: Anything contained herein, the Note, or any other
      document executed pursuant to this Agreement, notwithstanding, if for any
      reason the effective rate of interest payable thereunder shall exceed the
      maximum lawful rate of interest, the effective rate of interest shall be
      deemed reduced to and shall be such maximum lawful rate, and any sums of
      interest which have been collected in excess of such maximum lawful rate
      shall be applied by Bank as a credit against the unpaid principal amount
      due thereunder.

        (j) ASSIGNMENT: This Agreement shall be binding upon the parties and
      their respective successors and assigns.

        (k) VENUE: Borrower and Bank fully agree that venue for each action,
      suit, or other legal proceeding arising under or relating to this
      Agreement, the Note, the Security Documents, or any other documents
      executed pursuant to this Agreement shall be the County Court or Circuit
      Court located in Hillsborough County, Florida, or the Federal District
      Court for the Middle District of Florida, Hillsborough County, Florida,
      and Borrower and Bank hereby waive any right to sue or be sued in any
      other county in Florida or any other State, unless it shall be lawfully
      required that any such action, suit or other legal proceeding have venue
      elsewhere.

        (l) WAIVER OF JURY TRIAL: By the execution hereof, Borrower and Bank
      hereby knowingly, voluntarily and intentionally agree that neither of them
      nor any assignee, successor, heir, or legal representative of them shall
      seek a jury trial in any lawsuit, proceeding, counterclaim or other
      litigation procedure arising from or based upon this Agreement, the Note,
      the Security Documents, or any other documents evidencing, securing, or
      relating to the indebtedness evidenced by the Note or to the dealings or
      relationship between or among the parties hereto. Neither Borrower nor
      Bank shall seek to consolidate any such action in which a jury trial has
      been waived with any other action in which a jury trial has not or cannot
      be waived. The provisions of this Section have been fully negotiated by
      the parties hereto, and these provisions shall be subject to no exception.
      Neither Bank nor Borrower has in any way agreed with or represented to any
      other party that the provisions of this Section will not be fully
      enforced in all instances. This provision is a material inducement for
      Bank to enter into this transaction.

        (m) NOTICES: Each required notice, consent or approval, if any, under
      this Agreement will be valid only if it is given in writing (or sent by
      telecopy and promptly

                                     - 10 -

<PAGE>

      confirmed in writing) and addressed by the sender to the recipient's
      address that is listed in this Agreement or to such other addresses as
      either party may designate by written notice to the other party. A validly
      given notice, consent, or approval will be effective (i) on receipt of
      hand delivery to the recipient, (ii) seven (7) days after having been
      deposited in the United States mail, certified or registered, return
      receipt requested, sufficient postage affixed or prepaid, or (iii) one (1)
      business day after it is deposited with an expedited, overnight courier
      service (such as by way of example but not limitation, U.S. Express Mail,
      Federal Express or Purolator). These notice provisions apply only if a
      notice is required by this Agreement. The notice addressed are as follows:

          If to Bank, to:     Manufacturers Bank of Florida
                              4144 N. Armenia Avenue
                              Post Office Box 4040
                              Tampa, FL 33677-4040
                              Attn.: Mr. Joseph V. Chillura, Sr. Vice President

          With a copy to:     Hill, Ward & Henderson, P.A.
                              101 E. Kennedy Boulevard
                              Suite 3600 - Barnett Plaza
                              Post Office Box 2231
                              Tampa, FL 33601
                              Attn.: Jonathan P. Jennewein, Esq.

          If to Borrower, to: Shells Seafood Restaurants, Inc.
                              16313 N. Dale Mabry Highway
                              Suite 100
                              Tampa, FL 33618
                              Attn.: Mr. Warran R. Nelson, CFO

          With a copy to:     Fulbright & Jaworski, L.L.P.
                              666 Fifth Avenue
                              New York, New York 10103
                              Attna.: Sheldon Nussbaum, Esq.

                    [Signature Lines Continue on Next Page]

                                     - 11 -

<PAGE>

       IN WITNESS WHEREOF, Borrower and Bank have caused this Loan Agreement to
be duly executed all as of the day and year first above written.

WITNESSES:                                   BORROWER:

                                             SHELLS SEAFOOD RESTAURANTS, INC.
                                               a Delaware corporation

------------------------------------         By: /s/ WARREN R. NELSON
                                                 -------------------------------
Name:                                            Warren R. Nelson
     -------------------------------             Secretary
           (Type or Print)


------------------------------------               (Corporate Seal)

Name:
     -------------------------------
           (Type or Print)

                                             BANK:

                                             MANUFACTURERS BANK OF FLORIDA,
                                               a national banking association
/s/ JONATHEN P. JENNEWEIN
------------------------------------         By: /s/ JOSEPH V. CHILLURA
                                                 -------------------------------
Name: Jonathan P. Jennewein                      Joseph V. Chillura, Sr.
     -------------------------------             Vice President
           (Type or Print)

/s/ DANA L. FERLITA
------------------------------------               (Corporate Seal)

Name: Dana L. Ferlita
     -------------------------------
           (Type or Print)