Document:

LIMITED
      LIABILITY LIMITED PARTNERSHIP AGREEMENT

    OF

    ROCK
      BEACH GRILL OF PEMBROKE PINES, LLLP

    

    

    This
      LIMITED LIABILITY LIMITED PARTNERSHIP AGREEMENT (“Agreement”) is made and
      entered into effective as of June 26, 2008, by and among ROCK BEACH HOLDINGS,
      LLC, a Florida limited liability company, as General Partner (the “General
      Partner”); and SHELLS SEAFOOD RESTAURANTS, INC., a Delaware corporation
      (“Shells”), and Philip R. Chapman and Barry Bernstein (each a “Investor Limited
      Partner” and together “Investor Limited Partners”) as Limited Partners. Shells
      and the Investor Limited Partner are sometimes hereinafter individually referred
      to as a “Limited Partner” and collectively referred to as the “Limited
      Partners.” The General Partner and the Limited Partners are sometimes
      hereinafter individually referred to as a “Partner” and collectively referred to
      as the “Partners.” The definitions of certain other terms used in this Agreement
      are set forth in Section 20.

    

    WITNESSETH:

    

    WHEREAS,
      the Partners desire to form a limited partnership under the laws of the State
      of
      Florida for the purpose of owning and operating one “Rock Beach Grill”
restaurant under the Shells System (as described herein) to be located at 11825
      Pines Boulevard, Pembroke Pines, Florida; and

    

    WHEREAS,
      Shells and the Partnership have entered into a Management and License Agreement
      of even date herewith (the “Management Agreement”) relating to the operation and
      management of the restaurant owned by the Partnership and the license by Shells
      of certain proprietary information to the Partnership. 

    

    NOW,
      THEREFORE, in consideration of the mutual promises and agreements herein
      contained and for other good and valuable consideration, the receipt and
      sufficiency of which is hereby acknowledged, the parties hereto, intending
      to be
      legally bound thereby, agree as set forth herein.

    

    Section
      1. Organization of the Limited Partnership.

    

    (a) Formation.
      The
      Partners hereby form a limited partnership (the “Partnership”) under the Florida
      Revised Uniform Limited Partnership Act, which Act, except as otherwise provided
      herein, shall govern the rights and obligations of the parties hereto. The
      Partnership shall be formed as a limited liability limited partnership under
      Chapter 620, of the Act.

    

    (b) Name.
      The
      Partnership name shall be, and the business of the Partnership shall be
      conducted under, the name “Rock Beach Grill of Pembroke Pines, LLLP.” The
      business of the Partnership may be conducted under any other name permitted
      by
      the Act that is selected by the General Partner, in its sole and absolute
      discretion. The General Partner, on behalf of the Partnership, shall promptly
      execute, file, and record any assumed or fictitious name certificates required
      by the laws of the State of Florida or any other state in which the Partnership
      conducts business.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    (c) Principal
      Address.
      The
      principal office address of the Partnership in Florida, unless changed by the
      General Partner upon notice to the Limited Partners, shall be 16313 North Dale
      Mabry Highway, Tampa, Florida 33618.

    

    (d) Purpose
      and Character of the Business of the Partnership.
      The
      purpose and character of the business of the Partnership shall be:

    

    (i) to
      operate one restaurant under the Shells System (together with any and all other
      directly or indirectly related business) at 11825 Pines Boulevard, in Pembroke
      Pines, Florida (the “Business”); and

    

    (ii) to
      undertake and carry on all activities necessary or advisable in connection
      with
      the operations and management of the Business, all upon such terms and
      conditions as the General Partner may deem to be in the best interest of the
      Partnership subject to the limitations provided herein.

    

    (e) Term.
      The
      Partnership shall commence as of the date of the filing of the Certificate
      of
      Limited Partnership after the execution of this Agreement by all the Partners
      and shall continue for a period ending on the earliest to occur of the
      following:

    

    (i) June
      30,
      2058;

    

    (ii) the
      date
      on which all or substantially all of the property owned by the Partnership
      is
      sold or otherwise disposed of and the proceeds distributed in accordance with
      the provisions hereof;

    

    (iii) the
      date
      on which the Partnership is dissolved pursuant to the pro-visions hereof;

    

    (iv) the
      date
      on which the Partnership is dissolved by judicial decree; or

    

    (v) the
      date
      on which the Management Agreement terminates or expires.

    

    Section
      2. Capital of the Partnership.

    

    (a) General
      Partner.

    

    (i) The
      General Partner and its address are set forth on Exhibit
      A
      hereto.

     

    
      
         

      

      
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    (ii) The
      General Partner has made or shall immediately make Capital Contributions to
      the
      Partnership as set forth opposite its name on Exhibit
      A
      hereto.

    

    (b) Limited
      Partners.

    

    (i) The
      Limited Partners and their addresses are set forth on Exhibit
      A
      hereto.

    

    (ii) The
      Limited Partners shall immediately make, or have already made, Capital
      Contributions to the Partnership in the amounts set forth opposite their
      respective names in Exhibit
      A
      hereto.
      The Limited Partners shall not have the right to withdraw or reduce their
      respective contributions to capital except upon dissolution or as otherwise
      provided in this Agreement.

    

    (c) Capital
      Accounts.

    

    (i) The
      initial balance in each Partner’s Capital Account shall be equal to the Capital
      Contributions made by such Partner.

    

    (ii) Each
      Partner’s Capital Account shall be increased by:

    

    (A) the
      amount of cash and the Book Value of any property subsequently contributed
      to
      the Partnership by such Partner (net of liabilities secured by such contributed
      property which the Partnership is considered to assume or take subject to under
      Code Section 752); and

    

    (B) such
      Partner’s allocated share of Profits; and 

    

    (C) any
      items
      of income or gain of the Partnership specially allocated to such
      Partner.

    

    (iii) Each
      Partner’s Capital Account shall be decreased by:

    

    (A) the
      amount of cash and the Book Value of any property distributed to such Partner
      (net of liabilities secured by such distributed property which the distributee
      Partner is considered to assume or take subject to under Code Section 752);
      and

    

    (B) such
      Partner’s share of Losses; and

    

    (C) any
      items
      of deduction, loss or deduction specially allocated to such
      Partner.

    

    (d) Repayment
      of Capital Accounts and Interest Thereon.

    

    (i) Each
      Partner shall not accrue interest on its Capital Account.

     

    
      
         

      

      
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    (ii) Under
      circumstances involving a return of any Capital Contribution, no Partner shall
      have the right to receive property other than cash, except as may be otherwise
      specified by the General Partner.

    

    (e) Liability
      of Partners.

    

    (i) Except
      as
      otherwise provided in the Act, no Limited Partner shall have any personal
      liability whatsoever in its capacity as a Limited Partner, whether to the
      Partnership, to any of the Partners or to the creditors of the Partnership,
      for
      the debts, liabilities, contracts or any other obligations of the Partnership,
      or for any losses of the Partnership. A Limited Partner shall not be required
      to
      repay to the Partnership, any Partner or any creditor of the Partnership all
      or
      any fraction of any negative amount of such Limited Partner’s Capital
      Account.

    

    (ii) The
      General Partner shall not have any personal liability to any Limited Partner
      for
      the repayment of any amounts outstanding in the Capital Account of a Limited
      Partner, including, but not limited to, Capital Contributions. Any such payment
      shall be solely from the assets of the Partnership. The General Partner shall
      not be liable to any Limited Partner by any reason of any change in the federal
      income tax laws as they apply to the Partnership and the Limited Partners,
      whether such change occurs through legislative, judicial or administrative
      action.

    

    (iii) The
      General Partner shall have no personal liability to repay to the Partnership
      any
      portion or all of any negative amount of the General Partner’s Capital
      Account.

    

    Section
      3. Additional Capital Contributions and Loans.

    

    (a) Additional
      Capital Contributions.
      The
      Partners shall not be required to make any additional Capital Contributions
      to
      the Partnership. Upon the agreement of all of the Partners, a Partner may make
      an additional Capital Contribution. The Interests of the Partners shall be
      adjusted to reflect any additional Capital Contribution at the time it is made
      in the manner determined by all of the Partners.

    

    (b) Loans.
      At any
      time prior to the dissolution of the Partnership, if the General Partner
      determines that there is insufficient Net Cash Flow to fund the ownership,
      operation and business activities of the Partnership, each of the Partners
      shall
      be given the opportunity to make a loan to the Partnership, in proportion to
      their respective Interests (a “Partner Loan”). No Partner shall be obligated to
      make a Partner Loan. In the event a Partner Loan is made to the Partnership,
      such Partner Loan shall be evidenced by a promissory note of the Partnership
      to
      the Partner(s) making such Partner Loan and such Partner Loan shall bear
      interest and shall become payable at a rate, on terms and on a date which is
      mutually agreed between the General Partner and the Partner or Partners making
      such Partner Loan (whether or not the General Partner is the Partner making
      such
      Partner Loan).

     

    
      
         

      

      
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    (c) Shells
      Loan.
      If at
      any time prior to the dissolution of the Partnership, an Investor Limited
      Partner declines to make a Partner Loan and the General Partner determines
      funds
      are necessary to discharge the Partnership’s obligations under the Management
      Agreement or that capital expenditures at the Restaurant are needed for the
      Business (e.g.,
      furniture, fixtures and equipment and capital improvements) from time to time,
      Shells shall be obligated to make a loan to the Partnership to discharge the
      Partnership’s obligations under the Management Agreement and to provide it with
      funds sufficient for the Partnership to make such capital expenditures (a
“Shells Loan”); provided,
      however,
      that
      Shells’ cumulative obligation under this Section 3(c) shall not exceed
      $175,000.00 in the aggregate. Any such Shells Loan shall be evidenced by a
      promissory note and bear interest at ten percent (10%) per annum. 

    

    (d) Priority
      of Obligations.
      For any
      given period, (i) the Partnership’s obligations owing under the Management
      Agreement shall be satisfied prior to (1) the repayment of principal or interest
      owing under any Shells Loan or Partner Loan for such period or (2) the
      distribution of Net Cash Flow to satisfy the Preferred Return for such period;
      (ii) principal and interest owing under any Shells Loan shall be repaid in
      full
      prior to (1) the repayment of principal or interest under any Partner Loan
      for
      such period (with the older of any Shells Loan being repaid first) or (2) the
      distribution of Net Cash Flow to satisfy the Preferred Return for such period;
      and (iii) principal and interest owing under any Partner Loan shall be repaid
      in
      full prior to any distribution of Net Cash Flow to satisfy the Preferred Return
      for such period (with the older of any Partner Loan being repaid
      first).

    

    Section
      4. Profits, Losses.

    

    (a) Sharing
      of Losses.
      

    

    (i) For
      each
      Fiscal Year, after giving effect to the special allocations set forth in
      Sections 4(c)-(d) below, if any, Losses shall be allocated to the Partners
      in
      proportion to their Interests. 

    

    (ii) The
      Losses allocated pursuant to Section 4(a)(i) shall not exceed the maximum amount
      of Losses that can be so allocated without causing any Partner to have a
      Negative Capital Account at the end of any Fiscal Year. In the event some but
      not all of the Partners would have a Negative Capital Account as a consequence
      of an allocation of Losses pursuant to Section 4(a)(i), the limitation set
      forth
      in this Section 4(a)(ii) shall be applied on a Partner by Partner basis so
      as to
      allocate the maximum permissible Losses to each Partner under Treasury
      Regulation Section 1.704-1(b)(2)(ii)(d). All Losses in excess of the limitations
      set forth in this Section 4(a)(ii) shall be allocated to the General
      Partner.

    

    (b) Sharing
      of Profits.
      For
      each Fiscal Year, after giving effect to the special allocations set forth
      in
      Sections 4(c)-(d) below, if any, Profits shall be allocated to the Partners
      as
      follows:

     

    
      
         

      

      
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    (i) First,
      to
      the Partners up to the aggregate of, and in proportion to, any unrecovered
      Losses previously allocated to each Partner in accordance with Section 4(a)
      in
      the reverse order in which such Losses were allocated;

    

    (ii) Second,
      one hundred percent (100%) to the Investor Limited Partners pro rata until
      such
      time as they have been allocated Profits equal to the Preferred Return for
      such
      Fiscal Year and any prior Fiscal years; and

    

    (iii) Third,
      to
      each of the Partners in proportion to their Interests.

    

    (c) Qualified
      Income Offset.
      In the
      event any Partner unexpectedly receives any adjustments, allocations or
      distributions described in Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4),
      1.704-1(b)(2)(ii)(d)(5) or 1.704-1(b)(2)(ii)(d)(6) (“Unexpected Adjustments”),
      items of Partnership income and gain shall be specially allocated to such
      Partner in an amount and manner sufficient to eliminate the deficit balances
      in
      such Partner’s Capital Account created by such Unexpected Adjustments as quickly
      as possible. Any special allocations of items of income or gain pursuant to
      this
      Section shall be taken into account in computing subsequent credits of Profits
      or minimum gain so that the net amount of any items so allocated and the Profits
      or Losses or minimum gain, to the extent possible, be equal to the net amount
      that would have been allocated to each such Partner if such Unexpected
      Adjustments had not occurred.

    

    (d) Nonrecourse
      Deductions.
      The
      Partnership shall allocate any nonrecourse deductions consistent with Treasury
      Regulation Section 1.704-2, and subsequent allocations of income or gain shall
      take into account the minimum gain chargeback requirement of Treasury Regulation
      Section 1.704-2(f). Partner nonrecourse deductions shall be specially allocated
      to the Partner that bears the economic risk of loss with respect to the partner
      nonrecourse debt to which such partner nonrecourse deductions are attributable
      in accordance with Treasury Regulation Section 1.704-2(i)(1), and subsequent
      allocations of income or gain shall take into account the partner minimum gain
      chargeback requirement of Treasury Regulation Section
      1.704-2(i)(4).

    

    (e) Tax
      Allocations.
      Partnership income, gain, loss, deduction and credit, as calculated for tax
      purposes, shall be allocated among the Partners, to the extent possible, in
      accordance with the allocations of the corresponding Profit, Losses or items
      of
      income, gain, loss or deduction among the Partners pursuant to Sections
      4(a)-(d).

    

    Section
      5. Distributions.

    

    (a) Distribution
      of Net Cash Flow.
      Distributions of Net Cash Flow may be made from time to time in the discretion
      of the General Partner, in the following order of priority:

    

    (i) First,
      to
      the Investor Limited Partners pro rata equal to their respective Preferred
      Returns for the current or most recently completed Fiscal Year;

     

    
      
         

      

      
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    (ii) Second,
      to the Investor Limited Partners pro rata equal to their respective Preferred
      Returns accrued but unpaid from prior Fiscal Years; and

    

    (iii) Third,
      any remaining amounts shall be distributed to the Partners in proportion to
      their Interests.

    

    (b) Distribution
      of Capital.
      The
      General Partner may at anytime proportionately return to the Partners all or
      any
      portion of their respective Capital Contributions, subject to the limitations
      provided in the Act.

    

    Section
      6. No Participation in the Management of Partnership
      Business.

    

    (a) Except
      as
      specifically provided herein, the Limited Partners shall not take part in,
      or
      interfere in any manner with, the conduct or control of the Partnership or
      the
      Business, and the Limited Partners shall not have any right or authority to
      act
      for or bind the Partnership, and the Limited Partners therefore have no personal
      liability. Any individual Limited Partner (or employee, partner, shareholder,
      officer or director of a Limited Partner) may be an employee, officer and/or
      director of the General Partner and/or of the Partnership and accomplish any
      duties as such employee, executive or director in his representative corporate
      or employee capacity and not as a limited partner or as an
      individual.

    

    (b) The
      Partnership and/or the General Partner may engage any Limited Partner or persons
      or firms associated with them for specific purposes and may otherwise deal
      with
      such Limited Partner or persons in firms associated with them on terms and
      for
      compensation to be agreed upon by any such Limited Partner (or persons or firms
      associated with them, as the case may be) and the Partnership or the General
      Partner, as the case may be.

    

    (c) All
      matters related to the Partnership and this Agreement, including but not limited
      to the amendment of this Agreement, shall be under the exclusive discretion
      of
      the General Partner.

    

    Section
      7. Rights, Powers and Duties of the General Partner.

    

    (a) Rights
      and Powers of the General Partner.

    

    (i) Except
      as
      otherwise provided herein, the General Partner shall have the full and exclusive
      right, power and authority to manage and control the business and affairs of
      the
      Partnership and to make all decisions regarding the business of the Partnership,
      and the General Partner shall have all of the rights, powers and obligations
      of
      a general partner of a limited partnership under the Act.

    

    (ii) In
      addition to any other rights and powers which it may possess, and except as
      otherwise limited by this Agreement, the General Partner shall have specific
      rights and powers required or appropriate to the management of the Partnership
      and the Business which are as follows:

     

    
      
         

      

      
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    (A) to
      do all
      acts and things in the ordinary course of business related to the
      Business;

    

    (B) to
      manage, develop, promote, improve, maintain and service the
      Business;

    

    (C) to
      acquire and to enter into any contract or policy of liability and/or other
      insurance which the General Partner deems necessary and proper for the
      protection of the Partners and the Partnership and for the conservation of
      its
      assets or for any purpose convenient or beneficial to the
      Partnership;

    

    (D) to
      employ
      from time to time persons, firms or corporations for the operation and
      management of the Business, including, but not limited to, attorneys,
      accountants, advisors, supervisors, managers and personnel, consultants and
      engineers, on reasonable terms and for reasonable compensation;

    

    (E) to
      compromise, arbitrate, or otherwise adjust claims in favor of or against the
      Partnership and to commence or defend litigation with respect to the Partnership
      or any assets of the Partnership;

    

    (F) to
      make
      (or elect not to make) elections under the tax laws of the United States or
      any
      other country or any state as to the treatment of Partnership income, gain,
      loss, deduction and credit, and as to all other relevant matters;
      and

    

    (G) to
      perform any and all other acts or activities customary or incidental to the
      Partnership purposes and the foregoing powers and to execute any and all
      instruments to effectuate the Partnership purposes and foregoing
      powers.

    

    (iii) The
      General Partner shall have all the rights and powers and shall be subject to
      all
      of the liabilities of a partner in a partnership without limited
      partners.

    

    (b) Transactions
      Between the Partnership and its Partners.

    

    (i) The
      Partnership may enter into reasonable arms’-length transactions, contracts,
      agreements or arrangements with any Partner (including the General Partner)
      and/or any affiliate of any Partner (including the General Partner) if approved
      in advance by the General Partner.

    

    (ii) The
      Partnership may purchase materials, goods, and supplies, and may purchase or
      rent equipment from any Partner (including the General Partner) and/or any
      affiliate of any Partner (including the General Partner) if approved in advance
      by the General Partner. 

     

    
      
         

      

      
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    (iii) Nothing
      herein shall preclude reimbursement for reasonable and necessary out-of-pocket
      Partnership business expenses paid by a Partner (including the General Partner)
      which are not otherwise provided for in this Agreement so long as such
      reimbursements are approved in advance by the General Partner.

    

    (c)
      Duties
      and Obligations of the General Partner.

    

    (i) With
      the
      assistance of such accounting firm as may be selected by the General Partner,
      the General Partner shall prepare, or cause to be prepared, and shall file
      on or
      before the due date (or any extension thereof) any United States federal, state
      or local tax returns required to be filed by the Partnership. The General
      Partner shall cause the Partnership to pay any taxes payable by the
      Partnership.

    

    (ii) The
      General Partner shall manage the Partnership to the best of its ability and
      conduct the operations contemplated under this Agreement in a careful and
      prudent manner in accordance with reasonable business practices. The General
      Partner shall be responsible for and shall have the authority to conduct all
      general administrative and business matters of the Partnership.

    

    Section
      8. Limited Partner Special Provisions.

    

    (a) Withdrawal
      of or Distributions in Reduction of Capital Contributions.

    

    (i) No
      Limited Partner shall have the right to withdraw its Capital Contribution to
      the
      Partnership, except with the consent of the General Partner or as a result
      of
      the dissolution of the Partnership.

    

    (ii) No
      Limited Partner shall have the right to demand or receive property other than
      cash in return for its Capital Contribution. Any withdrawal or reduction of
      Partnership capital actually received by a Partner shall be made in accordance
      with this Agreement; provided,
      however,
      that no
      part of the capital shall be withdrawn unless all liabilities of the Partnership
      (except liabilities to Partners) have been paid, or unless the Partnership
      has
      assets sufficient to secure payment of the same.

    

    (iii) The
      Limited Partners understand that pursuant to the Act if the Partnership
      distributes cash (or other assets), which causes a reduction of their respective
      Capital Accounts in the Partnership below the stated capital of the Partnership,
      for one (1) year such Limited Partner may be liable to the Partnership for
      any
      sum returned to such Partner, but not in excess of the sum distributed to it
      which reduced the Capital Account below the stated capital, with interest,
      to
      discharge Partnership liabilities to all creditors who extended credit, or
      whose
      claims arose, before such return of capital to such Limited
      Partner.

    

    (b) No
      Right of Partition or Right to Compel Sale.
      The
      Limited Partners shall not have the right to require the partition of
      Partnership property or to compel any sale or appraisal of Partnership assets,
      notwithstanding any provision of law to the contrary.

     

    
      
         

      

      
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    (c) Right
      to List of Partners on Request.
      Any
      Limited Partner shall be entitled, upon request, to have mailed to it a list
      of
      the names, addresses, and ownership of record of each Partner of the
      Partnership.

    

    (d) Right
      to Information.
      Each
      Limited Partner shall be entitled to:

    

    (i) inspect,
      for any proper purpose, the Partnership books kept at the place selected by
      the
      General Partner, during reasonable business hours, upon reasonable notice,
      and
      copy any of them at such Limited Partner’s expense; and

    

    (ii) obtain,
      upon reasonable request, accurate information concerning matters materially
      affecting the Partnership and a formal accounting (at such Limited Partner’s
      expense) of Partnership affairs whenever circumstances render it just and
      reasonable.

    

    (e) Exercise
      of Rights Under This Agreement.
      No
      right exercised by a Limited Partner under this Agreement shall impose any
      personal liability on any Limited Partner. Upon the imposition of any personal
      liability, such grant or exercise shall be void ab initio.

    

    (f) Withdrawal
      of a Limited Partner.
      No
      Limited Partner may withdraw from the Partnership without the consent of the
      General Partner, which consent is solely with the discretion of the General
      Partner and which the General Partner is under no obligation to
      give.

    

    Section
      9. Transfers
      of Interests.
      

    

    (a) No
      Interest may be Assigned without the prior written consent of the General
      Partner, which consent is solely within the discretion of the General Partner
      and which the General Partner is under no obligation to give.

    

    (b) A
      Person
      who acquires one or more Interests of a Limited Partner but who is not admitted
      as a substituted Limited Partner pursuant to Section 9(c) shall be entitled
      only
      to allocations and distributions with respect to such Interests in accordance
      with this Agreement, and shall have no right to any information or accounting
      of
      the affairs of the Partnership, shall not be entitled to inspect the books
      or
      records of the Partnership, and shall not have any of the rights of a General
      Partner or a Limited Partner under the Act or this Agreement. Any such Assignee
      of an Interest of a Limited Partner, including an Assignee of an Investor
      Limited Partner, shall be subject to the terms of this Agreement, including,
      Sections 9, 10 and 11.

     

    (c) An
      Assignee of the Interest of a Limited Partner may be admitted to the Partnership
      as a substitute Limited Partner only upon satisfaction of the conditions set
      forth below:

     

    
      
         

      

      
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    (i) the
      General Partner consents to such admission, which consent maybe given or
      withheld in the sole and absolute discretion of the General
      Partner;

     

    (ii) the
      Interests with respect to which the Assignee is being admitted were acquired
      by
      means of an Assignment not in violation of this Agreement;

     

    (iii) the
      Assignee becomes a party to this Agreement as a Limited Partner and executes
      such documents and instruments as the General Partner may reasonably request
      (including, without limitation, amendments to the Certificate of Limited
      Partnership) as may be necessary or appropriate to confirm such Assignee as
      a
      Limited Partner in the Partnership and such Assignee’s agreement to be bound by
      the terms and conditions of this Agreement; and

     

    (iv) the
      Assignee pays or reimburses the Partnership for all reasonable legal, filing,
      and publication costs that the Partnership incurs in connection with the
      admission of the Assignee as a Limited Partner with respect to the Assigned
      Interests.

     

    (d) No
      Person
      owning or holding any shares of stock or membership, partnership or equity
      interest of an Investor Limited Partner (a “Second Tier Owner”) or any Person
      owning or holding any shares, membership, partnership or equity interest of
      any
      Second Tier Owner may Assign any shares, membership, partnership or equity
      interest in an Investor Limited Partner or Second Tier Owner nor shall a
      nInvestor Limited Partner or Second Tier Owner issue additional shares,
      membership, partnership or equity interests or otherwise modify its capital
      structure without the prior written consent of the General Partner, which
      consent is solely within the discretion of the General Partner and which the
      General Partner is under no obligation to give.

     

    Section
      10. Involuntary
      Transfers.

     

    (a) Notice.
      In the
      event any Interest held by an Investor Limited Partner or any shares of stock
      or
      membership, partnership or other equity interest of an Investor Limited Partner
      or any of its stockholders, members, partners or owners, is the subject of
      an
      involuntary transfer, whether due to divorce, bankruptcy, assignment for benefit
      of creditors, judicial order, legal process, execution, attachment, enforcement
      of a pledge or other encumbrance or otherwise, or the subject of a charging
      order or charging lien (collectively, an “Involuntary Transfer”), the Interest
      held by an Investor Limited Partner (hereinafter referred to as the “Affected
      Interest”) may be purchased by Shells pursuant to the provisions of this Section
      10, and the Investor Limited Partner shall notify the Partnership and Shells
      in
      writing within three (3) days of the Interest becoming an Affected Interest.
      

     

    (b) Purchase
      of Affected Interest.

     

    (i) Option.
      Within
      thirty (30) days after the General Partner and Shells have received actual
      notice of the proposed Involuntary Transfer, Shells shall have the option,
      but
      not the duty, to purchase all but not less than all of the Affected Interest.
      Shells shall not be obligated to redeem all of the Interest under this Section
      10.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    (ii) Notice
      of Exercise.
      The
      notice of exercise of option under this Section 10 shall specify a date for
      the
      closing of the purchase of the Affected Interest (hereinafter referred to as
      the
“Closing”). The Closing shall be held at the principal office of Shells. The
      Closing shall occur on a date not less than thirty (30) days nor more than
      ninety (90) days after the expiration of the time within which Shells may
      exercise its option to purchase, unless the Investor Limited Partner and Shells
      otherwise mutually agree. Once Shells has elected to purchase the Affected
      Interest pursuant to the provisions of this Section 10, the acceptance of the
      option to purchase shall be binding. 

     

    (c) Purchase
      Price and Payment.
      If
      Shells elects to purchase all of the Affected Interest, the price for the
      Affected Interest shall be payable in immediately available funds and shall
      be
      the lesser of: 

     

    (i) the
      fair
      market value of the Affected Interest as determined by an appraiser mutually
      agreeable to the Investor Limited Partner and Shells; or 

     

    (ii) The
      total
      amount due to the creditor of the Limited Partner who was to be the recipient
      of
      the Affected Interest.

     

    Notwithstanding
      the foregoing, if the Involuntary Transfer triggering the purchase rights under
      this Section 10 is divorce or legal separation, then the purchase price shall
      be
      the price for the Interest established by Section 10(c)(i) above. 

     

    Section
      11. Intentionally Left Blank.

    

    Section
      12. Dissolution, Liquidation and Termination of the
      Partnership.

    

    (a) Dissolution
      of the Partnership.
      The
      Partnership shall automatically dissolve upon the first to occur of any of
      the
      following events:

    

    (i) The
      withdrawal, as defined in the Act, of a General Partner, unless:

    

    (A) the
      remaining General Partner(s), if any, elect in writing within ninety (90) days
      after such event to reconstitute the Partnership, to continue as the General
      Partner(s) and to continue the Partnership and its business as provided
      hereinafter; or

     

    (B) if
      there
      is no remaining General Partner, within ninety (90) days after such event,
      all
      of the Limited Partners agree in writing to reconstitute the Partnership and
      to
      elect a substitute General Partner, as of the date of the withdrawal of the
      General Partner or Partners, to continue the business of the Partnership, and
      such substitute General Partner agrees in writing to accept such election as
      provided hereinafter.

    

    (ii) The
      sale
      or other disposition, not including an exchange, of all or substantially all
      of
      the assets of the Partnership (except under circumstances where all or a portion
      of the purchase price is payable after the closing of the sale or other
      disposition);

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    

    (A) The
      expiration of the term of the Partnership as set forth herein; or

    

    (B) The
      execution by those Partners owning at least a majority of the Interests of
      the
      Partnership of an instrument dissolving the Partnership.

    

    (b) Continuation
      of the Partnership.

    

    (i) Notwithstanding
      anything contained herein to the contrary, (A) the dissolution and commencement
      of winding up of a General Partner that itself is a separate partnership, or
      (B)
      in the case of a General Partner that is an entity, the filing of a certificate
      or articles of dissolution or its equivalent or the revocation and
      nonreinstatement of its character, shall not constitute the “withdrawal” of any
      such General Partner for purposes of the Act and shall not consequently cause
      the dissolution of the Partnership. In any such event, however, the Interest
      in
      the Partnership of any General Partner with respect to which any such event
      has
      occurred shall, upon election of a majority vote in Interest of the Limited
      Partners, be converted to that of a Limited Partner, and such Partner shall
      have
      none of the powers of a General Partner under this Agreement or applicable
      law,
      and shall have only the rights and powers of a Limited Partner in the
      Partnership with the same rights of a Limited Partner to share in any
      Partnership profits, losses, gains and distributions in accordance with its
      Interest.

    

    (ii) Upon
      the
      occurrence of the Partnership having no General Partners, all of the Limited
      Partners may, within ninety (90) days after the occurrence of such event,
      continue the Partnership and the Partnership shall continue as a limited
      partnership pursuant to this Agreement; provided,
      however,
      that
      all of the Limited Partners then shall elect a substitute General Partner who
      agrees to act as General Partner and continue the Partnership. If a substitute
      General Partner is so selected and accepts, such substitute General Partner
      shall acquire an Interest in the Partnership which will entitle the substitute
      General Partner to hold in the aggregate at least a one percent (1%) Interest,
      which one percent (1%) Interest shall be transferred by and come from the
      Interest of the former General Partner without compensation to the former
      General Partner for same. Subject to other written agreements and exceptions
      agreed to by the Limited Partners, the substitute General Partner shall assume
      from and after the date of substitution and upon becoming a party to this
      Agreement, all the rights, powers and obligations of the General Partner under
      this Agreement. In the event a substitute General Partner cannot be appointed
      and admitted within a reasonable time after the special meeting called pursuant
      to this Section, and there is no General Partner remaining, the Partnership
      shall be dissolved and liquidated as provided herein.

    

    (iii) Upon
      the
      occurrence of the expiration of the term of the Partnership, all of the Partners
      may within thirty (30) days after the occurrence of such event, elect to
      continue the Partnership. Upon such election, this Agreement shall be amended
      to
      reflect the new expiration date of the term of the Partnership as selected
      by a
      majority vote in Interest of the Partners and an amended Certificate of Limited
      Partnership shall be filed by the General Partner to reflect same.

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    

    (c) Substitute
      General Partner.
      In the
      event a General Partner’s Interest is converted to that of a Limited Partner, a
      majority vote in Interest of the Limited Partners may agree to admit a
      substitute General Partner to the Partnership.

    

    (d) Death,
      Etc. of a Limited Partner.
      The
      death, disability, dissolution, or adjudication as bankrupt of a Limited Partner
      shall not dissolve the Partnership.

    

    (e) Provisions
      Cumulative; Waiver.
      All
      provisions of this Agreement relative to the dissolution, liquidation and
      termination of the Partnership shall be cumulative, that is, the exercise or
      use
      of one of the provision hereof shall not preclude the exercise or use of any
      other provision hereof. Each Partner expressly waives any right that it might
      otherwise have to dissolve the Partnership except as set forth in this Section
      12. Nothing contained in this Section 12 is intended to grant any Partner the
      right to dissolve the Partnership at will (by retirement, dissolution,
      resignation, withdrawal or otherwise), or to exonerate any Partner from
      liability to the Partnership and the remaining Partners if such Partner acts
      in
      contravention hereof.

    

    (f) Liquidation.

    

    (i) Upon
      dissolution of the Partnership, its liabilities shall be paid in the order
      provided herein. The General Partner shall cause the Partnership’s property to
      be sold in such manner as to obtain the best prices for such property, and
      shall
      cause the cancellation of the Partnership’s Certificate of Limited Partnership.
      Pending such sales, the General Partner shall have the right to continue to
      operate and otherwise to deal with the Partnership property. In the event there
      is no General Partner remaining, the other Partners by majority vote in Interest
      shall elect, in accordance with the provisions hereof, a Person to perform
      the
      functions of the General Partner in liquidating the assets of the Partnership
      and winding up its affairs. Gain or loss realized on the sale(s) or other
      disposition(s) of the Partnership’s assets will be credited to (in the case of
      gain) or charged against (in the case of loss) each Partner’s Capital Account to
      the extent allocable to it hereunder.

    

    (ii) In
      settling accounts after dissolution, the assets of the Partnership shall be
      paid
      out in the following priority order after the allocation of the Partnership
      Profits and Losses pursuant to Section 4:

    

    (A) to
      creditors of the Partnership in repayment of indebtedness owed in order of
      priority as provided by law; provided,
      however,
      that
      any obligations owing under the Management Agreement shall have priority over
      any Shells Loan or Partner Loan and that any Shells Loan shall have priority
      over any Partner Loan;

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    

    (B) to
      reserves as specified by the General Partner; provided,
      however,
      that at
      the expiration of such period of time as a majority vote in Interest of the
      Partners determines, the balance of such reserves remaining after the payment
      of
      such contingencies shall be distributed in the manner hereinafter set forth
      in
      this Section;

    

    (C) to
      the
      Investor Limited Partners pro rata equal to their respective Preferred Returns
      accrued but unpaid from the most recently completed or any prior Fiscal Years;
      and

    

    (D) 
      thereafter, to the Partners proportionately in accordance with their positive
      Capital Accounts.

    

    (g) Termination
      of Partnership.

    

    (i) Upon
      dissolution and liquidation of the Partnership, the Partnership shall be
      terminated as rapidly as business circumstances will permit. 

    

    (ii) After
      payment of all expenses of liquidation and of all debts and liabilities of
      the
      Partnership in such order or priority as provided herein, and all resulting
      items of Partnership income, gain, loss or deduction are credited or debited
      to
      the Capital Accounts of the Partners the Partnership shall be terminated
      formally for state and federal purposes.

    

    (h) Final
      Accounting.
      Each of
      the Partners shall be furnished an audited statement setting forth the assets
      and liabilities of the Partnership as of the date of the winding-up of the
      Partnership’s affairs. Upon compliance by the winding-up General Partner or the
      dissolution trustee, as the case may be, the Partners shall cease to be partners
      and the General Partner or trustee shall execute and cause to be filed a
      certificate of cancellation of the Certificate of Limited Partnership of the
      Partnership and any and all other documents necessary with respect to such
      termination and cancellation.

    

    Section
      13. Powers and Compliance.

    

    (a) Powers.
      The
      Partnership shall be empowered to do any and all acts and things necessary,
      appropriate, incidental to, or convenient for, the furtherance and
      accomplishment of the purposes stated in Section 1(d) hereof, including, but
      not
      limited to, the following:

    

    (i) to
      enter
      into the Management Agreement and perform its obligations thereunder;

    

    (ii) to
      develop, convey, buy, own, improve, rent, lease, sell, operate and generally
      deal in all kinds of property (personal and real) in any manner or way
      whatsoever;

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    

    (iii) to
      borrow
      money and issue evidences of indebtedness and to secure the same by mortgage,
      pledge or other lien or security interest in furtherance of the business and
      all
      purposes of the Partnership;

    

    (iv) to
      carry
      on any other activities and enter into, perform and carry out contracts of
      any
      kind necessary to, in connection with, or incidental to the accomplishment
      of
      the purposes of the Partnership, specifically including, but not limited to,
      the
      execution and delivery of leases, mortgage documents, other real property
      instruments, the execution of contracts with brokers, contractors, engineers,
      and architects, and other related documents;

    

    (v) to
      repay
      in whole or in part, refinance, recast, increase, modify or extend any mortgages
      affecting the assets of the Partnership, and in connection therewith to execute
      any extensions, renewals or modifications of such mortgages;

    

    (vi) to
      employ
      managers, agents and representatives for the purpose of accomplishing the
      business of the Partnership and to pay compensation therefor; and 

    

    (vii) to
      do any
      and all other acts and things that may be necessary, incidental to, or
      convenient to, the conduct and continuance of the Partnership business as
      contemplated under this Agreement.

    

    (b) Certificate
      of Limited Partnership.
      The
      General Partner may file this Limited Partnership Agreement and Certificate
      of
      Limited Partnership as the Certificate of Limited Partnership of the Partnership
      with the Office of the Secretary of State of the State of Florida, or the
      General Partner may at its sole option file a separate Certificate of Limited
      Partnership disclosing only the information about this Limited Partnership
      which
      is required to be disclosed by the Act. The General Partner shall also file
      as
      appropriate the Affidavit of Capital Contributions certifying the Capital
      Contributions of the Limited Partners.

    

    (c) Compliance
      with Law.
      The
      General Partner shall from time to time execute or cause to be executed all
      such
      certificates and other documents and do or cause to be done all such filings,
      recordings, publications and other acts necessary (or, in the judgment of the
      General Partner, appropriate) to comply with the applicable laws of any
      jurisdiction in which the Partnership shall conduct its business.

    

    (d) Registered
      Agent.
      The
      registered agent for service of process on the Partnership is Fowler White
      Boggs
      Banker P.A., c/o David M. Doney, whose address is 501 East Kennedy Boulevard,
      Suite 1700, Tampa, Florida 33602. The registered agent for service of process
      may be changed at any time by act of the General Partner.

    

    Section
      14. Proposal and Adoption of Amendments.

    

    (a) Any
      amendment to this Agreement may be proposed by any Partner.

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    

    (b) Any
      Amendment to this Agreement shall be adopted only if the General Partner has
      approved the Amendment and such amendment is set forth in a writing signed
      by
      all of the Partners; provided,
      however,
      this
      Agreement may be amended by the General Partner, after written notice to, but
      without the consent of, any of the Limited Partners: (a) to add to the
      representations, duties or obligations of the General Partner or surrender
      any
      right or power granted to the General Partner herein, for the benefit of the
      Limited Partners; (b) to cure any ambiguity, to correct or supplement any
      provision hereof which may be inconsistent with any other provisions hereof,
      or
      to make any other provision with respect to matters or questions arising under
      this Agreement not inconsistent with the intent of this Agreement; or (c) to
      change any provision of this Agreement required to be so changed by the staff
      of
      the Securities and Exchange Commission or other federal agency or by the state
      “Blue Sky” commissioner or similar official, which change is deemed by such
      commissioner, agency or official to be for the benefit or protection of the
      Limited Partners, provided that no amendment shall be adopted pursuant to this
      Section 14(b) unless the adoption thereof is not adverse to the interest of
      the
      Limited Partners.

    

    (c) The
      General Partner, without the necessity of signatures of other Partners, except
      as required hereunder, shall, as soon as possible after the adoption and
      execution of any amendment to this Agreement, make any filings or publications
      required or desirable to reflect such amendment, including any required filing
      or recordation of any certificate of limited partnership or other instrument
      or
      similar document.

    

    Section
      15. Meetings, Consents and Voting.

    

    (a) Meetings.
      The
      General Partner may call a meeting of the Partners at the principal place of
      business of the Partnership in Florida or at such other location as the General
      Partner shall deem appropriate.

    

    (b) Consents
      and Acts.
      Any
      consent or act of a Partner required by this Agreement may be given as
      follows:

    

    (i) by
      a
      written consent, given by the Partner, to the act or thing or
      consent.

    

    (ii) by
      the
      affirmative vote by the Partner to the doing of the act or thing for which
      the
      consent is solicited at any meeting of the Partners.

    

    (c) Voting.
      

    

    (i) Each
      Partner shall be entitled to one vote per percentage point of Interest
      (proportioned for fractions of a percent). Except as specifically otherwise
      provided for in this Agreement, decisions of the Partners or Limited Partners,
      as the context requires, shall be accomplished by a vote of a majority of the
      Interests of the Partners or the Limited Partners, as the context requires
      (a
“majority vote in Interest”). Any vote of a Partner may be cast by another
      Partner or Person pursuant to a written proxy in favor of such other Partner
      or
      Person. 

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    

    (ii) The
      Limited Partners shall have no right to remove the General Partner.

    

    Section
      16. Notice; Notification.

    

    (a) Manner
      of Notice and Change of Address.
      Any
      Notice required or desired to be made in connection with this Agreement shall
      be
      made in conformance with the definition of same contained herein. Any Partner
      may, by Notice to the other Partners, specify any other address for the receipt
      of notices, notifications, requests, consents, approvals, waivers or other
      communications in connection with this Agreement.

    

    (b) Notification
      to the Partnership or the General Partner.
      Any
      Notice to the Partnership or the General Partner shall be sent to the principal
      office of the Partnership, as set forth in this Agreement, or as same may be
      changed by Notice of the General Partner.

    

    Section
      17. Books and Records; Accounting; Tax Elections; Etc.

    

    (a) Capital
      Transfers.

    

    (i) Except
      for any Negative Capital Account or other adverse tax status of a Partner,
      which
      shall always remain with the transferring Partner in a partner-to-partner
      transfer until the Interest of the transferring Partner no longer exists, if
      any
      Interest or part thereof is transferred in accordance with the terms of this
      Agreement, then the transferee shall succeed to the Capital Account of the
      transferor to the extent it relates to the transferred Interest.

    

    (ii) In
      the
      event any assets of the Partnership are distributed in-kind, the Capital
      Accounts of the Partners shall be adjusted prior to any such distribution to
      reflect how any resulting Profit and Loss, based on the Book Value of such
      asset
      at the time of distribution, would have been allocated.

    

    (b) Tax
      Information and Elections.
      The
      General Partner shall use its best efforts to furnish to the Partners within
      ninety (90) days of the end of each Fiscal Year all information necessary to
      permit the Partners to prepare all federal, state and local tax returns they
      are
      required to file for the Fiscal Year. The Partnership shall elect to use such
      methods of depreciation as the General Partner determines. In the event of
      a
      transfer of all or part of the Interest of any Partner in the Partnership,
      the
      Partnership may elect pursuant to Section 754 of the Code to adjust the basis
      of
      the assets of the Partnership upon written request of the transferee, unless
      such election will have a materially unfavorable effect upon the Partners other
      than the transferee Partner.

     

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    

    (c) Code
      Section 754 Election.
      In the
      event of a distribution of property made in the manner provided in Section
      734
      of the Code, or in the event of a transfer of any Interest permitted by this
      Agreement made in the manner provided in Section 743 of the Code, the Partners,
      by majority vote in Interest, may elect to file an election under Section 754
      of
      the Code in accordance with the procedures set forth in the applicable
      regulations promulgated thereunder.

    

    (d) Tax
      Returns and Audit.
      The tax
      returns of the Partnership shall be prepared by, and any Partnership audits
      by,
      the accounting firm selected by the General Partner.

    

    (e) Allocation
      in Event of Transfer.
      Each
      item of income, gain, loss, deduction or credit allocable to a Partner’s
      Interest that is transferred in whole or in part during any Fiscal Year shall,
      if permitted by law, be allocated according to the varying ownership Interests
      of the Partners during the Fiscal Year. In applying this rule, the General
      Partner shall choose one of the following two methods:

    

    (i) prorate
      the Limited Partnership items over the Limited Partnership’s Fiscal Year by
      assigning the appropriate portion of each such item to each day in the period
      to
      which it is attributable; or

    

    (ii) elect
      to
      utilize the precise method of an interim closing of the Limited Partnership’s
      books. If the General Partner chooses the latter method, then any period subject
      to this method shall be treated as a Fiscal Year for purposes
      hereof.

    

    (f) Tax
      Matters Partner.
      The
      General Partner shall be the “Tax Matters Partner” for purposes of the Tax
      Treatment of Partnership Items Act of 1982, and shall have the authority to
      exercise all functions provided for in said Act, or in regulations promulgated
      thereunder by Treasury, including, but not limited to, the extent permitted
      by
      such regulations, the authority to delegate the function of Tax Matters Partner
      to any other person. The General Partner shall be reimbursed for all reasonable
      expenses incurred as a result of its duties as Tax Matters Partner. If the
      General Partner resigns as Tax Matters Partner or its entire general partnership
      interest is disposed of or terminated or changed to a limited partnership
      interest, then a majority vote in Interest of the Partners other than the
      General Partner shall designate another General Partner who shall become the
      Tax
      Matters Partner.

    

    (g) Tax
      Basis.
      An
      individual tax basis record shall be maintained for each Partner. The tax basis
      record of each Partner shall be established and shall be adjusted as of the
      close of each Fiscal Year of the Partnership (or, when appropriate, as of the
      close of the Fiscal Year of the Partnership for such Partner) in accordance
      with
      United States federal income tax law and procedure as the same may exist from
      time to time.

    

    (h) Compliance
      with Code Section 704(b).
      The
      manner in which Capital Accounts are to be maintained pursuant to Section 2
      is
      intended to comply with the requirements of Section 704(b) of the Code, as
      amended, and the Treasury Regulations promulgated thereunder (or corresponding
      sections of later statutes and regulations).

     

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    

    (i) Additional
      Partners.
      In the
      event additional Partners are admitted to the Partnership pursuant to the
      provisions hereof on different dates during any Fiscal Year, the Profits (or
      Losses) allocated to the Partners for each such Fiscal Year shall be allocated
      among the Partners in proportion to the Interest each holds from time to time
      during such Fiscal Year in accordance with Section 706 of the Code, using any
      convention permitted by law and selected by the General Partner. 

    

    (j) Allocation
      Timing.
      For
      purposes of determining the Profits, Losses or any other items allocable to
      any
      period, Profits, Losses, and any such other items shall be determined on a
      daily, monthly, or other basis, as determined by the General Partner using
      any
      permissible method under Section 706 of the Code and the Treasury Regulations
      thereunder.

    

    (k) Accounting.

    

    (i) The
      Fiscal Year and taxable year of the Partnership shall be the fifty-two (52)
      or
      fifty-three (53) week period ending on the Sunday nearest to December
      31.

    

    (ii) The
      books
      of account of the Partnership shall be kept and maintained at all times at
      the
      principal place of business of the Partnership or at another place or places
      approved by the General Partner. The books of account shall be maintained
      according to generally accepted accounting principles, consistently applied,
      and
      shall show all items of income and expense.

    

    Section
      18. Indemnities.

    

    (a) The
      General Partner and its affiliates or agents, employees, directors or officers
      shall not be liable, responsible or accountable in damages or otherwise to
      the
      Partnership or any of the Partners for any act or omission performed or omitted
      in good faith on behalf of the Partnership and in a manner reasonably believed
      by it or them to be within the scope of the authority granted to a General
      Partner by this Agreement and in the best interests of the Partnership,
      including, but not limited to, errors of judgment, except for bad faith or
      willful misconduct. For purpose of this provision, any action or omission taken
      on advice of counsel for the Partnership shall be deemed as having been taken
      in
      good faith; provided,
      however,
      that
      the absence of such advice shall not be deemed to constitute evidence of other
      than good faith.

    

    (b) The
      Limited Partners and their affiliates or agents, employees, directors or
      officers shall not be liable, responsible or accountable in damages or otherwise
      to the Partnership or any of the Partners for any act or omission performed
      or
      omitted in good faith on behalf of the Partnership and in a manner reasonably
      believed by it or them to be in the best interests of the Partnership,
      including, but not limited to, errors of judgment. For purposes of this
      provision, any action or omission taken on advice of counsel shall be deemed
      in
      the best interest of the Partnership.

     

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    

    (c) The
      Partnership, or its receiver, custodian or trustee, shall (from the assets
      of
      the Partnership, no Limited Partner being obligated to contribute to the
      Partnership for such purpose) indemnify, save harmless and pay all judgments
      and
      claims against any Partner, or its affiliates or agents, employees, directors
      or
      officers, from and with respect to any liability or damage (including all
      liabilities under federal and state securities laws) incurred by reason of
      any
      action, inaction or decision performed or made in connection with the business
      of the Partnership, including, but not limited to, errors of judgment, provided
      that such actions, inactions or decisions were reasonably believed by the
      Partner, or its affiliates or agents, employees, directors or officers, to
      be in
      the best interests of the Partnership and, provided
      further
      that,
      with regard to General Partner, such actions, inactions, or decisions were
      reasonably believed by the General Partner, or its affiliates or agents,
      employees, director or officers, to be within the scope of its or their
      authority under this Agreement. This indemnification shall include the payment
      of all attorneys’ fees and other expenses incurred by the Partner, or its
      affiliates or agents, employees, directors and officers, in connection with
      the
      defense of any such claim made against it or them, including, without
      limitation, any claim asserted by any Limited Partner individually, as a class
      action or as a Partnership derivative action.

    

    Section
      19. Miscellaneous Provisions.

    

    (a) Investment
      Representation.
      Each
      Investor Limited Partner represents and warrants to the Partnership, the General
      Partner and Shells that such Investor Limited Partner (a) is an “accredited
      investor” as defined in the Term Sheet, and
      is
      financially capable of bearing the risk of an investment in the Partnership;
      (b)
      is not acquiring its Interest in the Partnership with a view to resale thereof;
      (c) is familiar with and understands the restrictions on resales as set forth
      in
      this Agreement and under applicable securities law and regulations; (d)
      understands that there are restrictions on its ability to transfer its Interest
      in the Partnership and that it will have to bear the economic risk of its
      investment for an indefinite period of time; and (e) has carefully reviewed
      the
      Term Sheet and has had the opportunity to obtain and examine all information
      and
      documentation required to evaluate the merits and risks of an investment in
      the
      partnership.

    

    (b) Binding
      Provisions.
      The
      covenants and agreements contained herein shall be binding upon and shall inure
      to the benefit of the heirs, personal representatives, permitted successors
      and
      permitted assigns of the respective parties hereto.

    

    (c) Applicable
      Law and Venue.
      This
      Agreement shall be construed in accordance with and governed by the laws of
      the
      State of Florida, without regard to principles of conflicts of law that would
      result in the application of laws of another jurisdiction. Any action or
      proceeding seeking to enforce any provision of, or based on any right arising
      out of, this Agreement shall be brought against either of the parties
      exclusively in the courts of the State of Florida, County of Hillsborough,
      or if
      it has or can acquire jurisdiction, in the United States District Court for
      the
      Middle District of Florida, Tampa Division, and each of the parties consents
      to
      the jurisdiction of such courts (and of the appropriate appellate courts) in
      any
      such action or proceeding and waives any objection to venue laid
      therein.

     

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    

    (d) Separability
      of Provisions.
      If any
      provision or provisions hereof are determined to be invalid and contrary to
      any
      existing or future law, such invalidity shall not impair the operation of,
      or
      affect those portions of, this Agreement that are valid.

     

    (e) Entire
      Agreement.
      This
      Agreement constitutes the entire agreement among the parties. This Agreement
      supersedes any prior agreement or understanding among the parties and may not
      be
      modified or amended in any manner other than as set forth herein.

    

    (f) Section
      Titles; Construction.
      Section
      titles are for convenience of reference only and shall not control or alter
      the
      meaning of this Agreement as set forth in the text. Unless otherwise indicated,
      all references to “Section” or “Sections” refer to the corresponding Section or
      Sections of this Agreement. Any reference to any federal, state, local, or
      foreign statute or law shall be deemed also to refer to all rules and
      regulations promulgated thereunder, unless the context requires otherwise.
      The
      word “including” shall mean including, without limitation. All words use in this
      Agreement will be construed to be of such gender or number as the circumstances
      require. 

    

    (g) Waiver
      of Appraisal.
      If any
      individual Partner, if any, shall die, any inventory and appraisement of the
      property of the Partnership right provided for under Florida law, or any similar
      provision of law which may be enacted in substitution therefor, is hereby waived
      by all Partners and the Interest of such Partner in the Partnership shall be
      settled and disposed of as provided in this Agreement.

    

    (h) Further
      Action.
      Each
      Partner shall execute and deliver all documents, provide all information and
      take or forebear from all such action as may be necessary or appropriate to
      achieve the purposes of this Agreement.

    

    (i) Trial
      By Jury Waiver.
      The
      Partners waive trial by jury to the extent permitted by law.

    

    (j) Legal
      Representation.
      The
      General Partner shall select an attorney or attorneys to represent the
      Partnership. Individual attorneys for each Partner are not prohibited from
      representing, and are entitled to represent, the Partnership and each Partner,
      from time to time, subject to itemization of all charges and strict allocation
      of those legal services provided to the Partnership and those legal services
      provided to a Partner. Itemized billings shall be available for review by any
      Partner.

    

    (k) Tax
      Consequences.
      The
      Partners are aware of the income tax consequences of the tax allocations made
      under this Agreement and hereby agree to be bound by the provisions of this
      Agreement in reporting their share of the Partnership’s Profit and Losses for
      federal income tax purposes. Each Partner acknowledges that the tax consequences
      to it of investing in the Partnership will depend on its particular
      circumstances, and neither the Partnership, the General Partner, the Limited
      Partners, nor the partners, shareholders, members, agents, officers, directors,
      employees, affiliates, or consultants of any of them will be responsible or
      liable for the tax consequences to him of an investment in the Partnership.
      Each
      Partner will look solely to, and rely upon, its own advisers with respect to
      the
      tax consequences of an investment in the Partnership.

     

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

    

    (l) Counterparts.
      This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed an original but all of which together will constitute one and the same
      instrument.

    

    (m) Enforcement
      by Creditors.
      None of
      the provisions of this Agreement or the Certificate of Limited Partnership
      shall
      be for the benefit or enforceable by any creditors of the Company.

    

    Section
      20. Defined Terms.
      The
      defined terms used in this Agreement shall, unless the context otherwise
      requires, have the meanings specified in this Section. The singular shall
      include the plural and the masculine gender shall include the feminine and
      neuter and vice versa, as the context requires.

    

    (a) “Act”
means
      the Florida Revised Uniform Limited Partnership Act, as amended.

    

    (b) “Adjusted
      Capital Contributions”
of
      a
      Partner as of any date means the amount of such Partner’s Capital Contributions
      pursuant to Section 2 and, if applicable, Section 3, reduced by the aggregate
      amount of cash and the fair market value of any assets previously distributed
      to
      such Partner pursuant to Sections 5(a)(iii) and (b) and Section
      12(f)(ii)(D).

    

    (c) “affiliate”
shall
      mean with respect to any Person, any other Person controlling, controlled by
      or
      under common control with such Person.

    

    (d) “Assign”
means
      to sell, transfer, assign, pledge, hypothecate, mortgage or otherwise dispose
      of, whether voluntarily or by operation of law. “Assignor,” “Assignee” and
“Assignment” have meanings corresponding to the foregoing.

     

    (e) “Book
      Value”
means,
      with respect to any asset of the Partnership, the adjusted basis of the asset
      for Federal income tax purposes, except as follows:

    

    (i) The
      initial Book Value of any asset contributed by a Partner to the Partnership
      shall be the gross fair market value of such asset, as determined by the
      contributing Partner and the Partnership;

    

    (ii) The
      Book
      Values of all Partnership assets may be adjusted to equal their respective
      gross
      fair market values, as determined by accountants, appraisers or valuation
      consultants designated by the General Partner in accordance with Sections 704
      and 7701(g) of the Code as of the following times:

     

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

    

    (A) acquisition
      of an additional interest in the Partnership by any new or existing Partner
      in
      exchange for more than a de minimus capital contribution if, at the time of
      such
      acquisition, the Partnership assets have appreciated by more than a de minimus
      amount since acquisition of such Partnership assets;

    

    (B) the
      liquidation of a Partner’s Interest in the Partnership, other than on
      dissolution of the Partnership, in exchange for more than a de minimus
      distribution of money by the partnership if, at the time of distribution, the
      Partnership assets have appreciated by more than a de minimus
      amount;

    

    (C) distribution,
      other than on dissolution of the Partnership, by the Partnership to a Partner
      of
      more than a de minimus amount of Partnership assets other than money, if the
      General Partner reasonably determine that such adjustment is necessary or
      appropriate to reflect the relative economic interests of the Partners;
      or

    

    (D) the
      termination of the Partnership for Federal income tax purposes pursuant to
      Section 708(b)(1) of the Code, constituting a liquidation of the Partnership
      within the meaning of Treasury Regulation Section
      1.704-1(b)(2)(ii)(g).

    

    (iii) The
      Book
      Value of any Partnership asset distributed to any Partner shall be the gross
      fair market value, determined as described above, of such asset on the date
      of
      distribution; and

    

    (iv) If
      the
      Book Value of an asset has been determined or adjusted pursuant to the sections
      above, such Book Value may thereafter be adjusted by the Depreciation taken
      into
      account with respect to such asset for purposes of computing Profits and
      Losses.

     

    (f) “Capital
      Account,”
as
      to
      any Partner, means such partner’s capital account as provided in Section 2
      hereof.

    

    (g) “Capital
      Contribution,”
as
      to
      any Partner, means such partner’s contribution to capital as provided in
      Sections 2 and 3 hereof.

    

    (h) “Certificate
      of Limited Partnership”
means
      the Certificate of Limited Partnership as originally filed with the Secretary
      of
      State of the State of Florida and as amended from time to time.

    

    (i) “Code”
means
      the United States Internal Revenue Code of 1986, as amended (or any
      corresponding provision of succeeding law).

    

    (j) “Fiscal
      Year”
means,
      with respect to the Partnership the fifty-two (52) or fifty-three (53) week
      period ending on the Sunday nearest to December 31.

     

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

    

    (k) “General
      Partner”
means
      Shells Holdings, LLC, a Florida limited liability company, or any substitute
      General Partner.

    

    (l) “Interest”
means
      the entire ownership interest of a Partner at any particular time, including
      the
      rights and obligations of such Partner under this Agreement and the Act,
      expressed as a percentage as set forth on Exhibit
      A
      opposite
      each Partner’s name. “Interests”
means
      the sum of each Partner’s Interest in the Partnership. Exhibit
      A
      shall be
      amended and restated by the General Partner if the Partners’ Interests are
      adjusted as provided in Section 3(a).

    

    (m) “Limited
      Partner”
means
      Shells and any Investor Limited Partner and any Person who is a Limited Partner
      at the time of reference thereto, in such Person’s capacity as a Limited Partner
      in the Partnership.

    

    (n) “majority
      vote in Interest”
has
      the
      meaning set forth in Section 15(c).

    

    (o) “Negative
      Capital Account”
means,
      as to a Partner at a point in time, the amount, if any, by which (a) the sum
      of
      the aggregate Losses, and distributions allocated to such Partner prior to
      such
      point in time exceeds (b) the sum of the aggregate Capital Contributions of
      such
      Partner, the aggregate Profits and gains allocated prior to such point in time
      to such Partner.

    

    (p) “Net
      Cash Flow”
means
      the excess of cash revenues of the Partnership over cash payments by the
      Partnership made in the ordinary course of business, including, but not limited
      to cash receipts and payments generated by the operations of the business of
      the
      Partnership, but determined as follows:

    

    (i) depreciation,
      amortization and pre-opening expense shall not be considered as a
      deduction;

    

    (ii) principal
      debt reduction of any liability shall be considered as a deduction;

    

    (iii) amounts
      paid for capital expenditures shall be considered as a deduction, unless paid
      for by funds provided from insurance or unless provided for by a Capital
      Contribution;

    

    (iv) any
      amount of compensation, fringe benefit who is acting in a capacity other than
      as
      a Partner, pursuant to an employment or other agreement with the Partnership
      shall be treated as an expense of the Partnership in determining Net Cash Flow;
      and

    

    (v) any
      amounts set aside by the General Partner for the restoration or creation of
      reserves, in amounts determined by the General Partner in its sole and absolute
      discretion, to provide for working capital, improvements, payment of
      indebtedness, taxes, expenses, purchases or contingent liabilities, shall be
      excluded.

     

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

    

    (q) “Notice”
means
      a
      writing, containing the information required by this Agreement or otherwise
      desired to be communicated to any Person in connection with this Partnership,
      sent by courier, telecopier, hand delivery or registered or certified mail,
      return receipt requested, postage prepaid, to such Person at the address of
      such
      Person specified in Exhibit
      A
      hereto
      if such Person is a Partner or as changed by such Partner by Notice hereunder,
      and if such Person is not a Partner, then at the last known address for such
      Person; provided,
      however,
      that
      any communication containing the information sent to the Person and actually
      received by the Person shall constitute Notice for all purposes of this
      Agreement as of the date of receipt by the Person. Each such notice shall be
      deemed delivered:

    

    (i) on
      the
      date delivered to the said address if by hand delivery,

    

    (ii) on
      the
      date upon which it is transmitted by telecopier, if sent by telecopier, to
      the
      proper telephone fax number of the recipient, and

    

    (iii) on
      the
      date upon which the return receipt is signed or delivery is refused or the
      notice is designated by the postal authorities as not deliverable, as the case
      may be, if mailed by registered certified mail.

    

    (r) “Partner”
or
      “Partners”
mean
      each and every General Partner, Limited Partner, substitute General Partner,
      substitute Limited Partner, additional Limited Partner, and each Investor
      Limited Partner but shall exclude an Assignee not otherwise admitted to the
      Partnership as a partner.

    

    (s) “Partnership”
means
      the Limited Partnership formed hereby, as said Limited Partnership may from
      time
      to time be constituted.

    

    (t) “Person”
means
      any individual, partnership (other than this Partnership), limited liability
      company, corporation, trust or other entity.

    

    (u) “Preferred
      Return”
means
      a
      sum equal to ten percent (10%) per annum, determined on the basis of a year
      of
      365 or 366 days, as the case may be, for the actual number of days in the Fiscal
      Year for which the Preferred Return is being determined, cumulative but not
      compounded, of the average daily balance of one hundred percent (100%) of the
      aggregate Adjusted Capital Contributions of any Investor Limited Partner from
      time to time during the Fiscal Year to which the Preferred Return relates,
      calculated from the date that the Business is first open to the public as a
      “Shells Seafood restaurant.” 

    

    (v) “Profits”
or
      “Losses”
for
      any
      Fiscal Year or other period shall mean the taxable income or loss of the
      Partnership for such year as determined for Federal income tax purposes, in
      accordance with Section 703(a) of the Code (for this purpose, all items of
      income, gain, loss or deduction required to be separately stated pursuant to
      Section 703(a)(1) of the Code shall be included in taxable income or loss)
      with
      the following adjustments:

     

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

    

    (i) any
      income of the Partnership that is exempt from Federal income tax shall be added
      to such taxable income or loss;

    

    (ii) gain
      or
      loss resulting from any disposition of Partnership property with respect to
      which gain or loss is recognized for Federal income tax purposes shall be
      computed with reference to the Book Value of the property disposed
      of;

    

    (iii) in
      lieu
      of the depreciation, amortization and other cost recovery deduction taken into
      account in computing such taxable income or loss, Depreciation shall be taken
      into account for such Fiscal Year.

    

    (iv) any
      expenditure of the Partnership described in Code Section 705(a)(2)(B) or treated
      as Code Section 705(a)(2)(B) expenditures pursuant to Treasury Regulation
      Section 1.704-1(b)(2)(iv) and not otherwise taken into account in computing
      Profits and Losses shall be subtracted from such taxable income or
      loss;

    

    (v) in
      the
      event the Book Value of any Partnership asset is adjusted pursuant to the
      provisions hereof, the amount of such adjustment shall be taken into account
      as
      gain or loss from the disposition of such asset for purposes of computing
      Profits or Losses;

    

    (vi) notwithstanding
      the foregoing, any items which are specially allocated shall not be taken into
      account in computing Profits or Losses; and

    

    (vii) any
      amount of compensation, fringe benefit or return on Adjusted Capital
      Contributions paid to a Partner for any Fiscal Year pursuant to an employment
      or
      other agreement with the Partnership shall be treated as an expense of the
      Partnership in computing Profits or Losses for such Fiscal Year.

    

    (w) Intentionally
      left blank.

    

    (x) Intentionally
      left blank.

    

    (y) “Shells
      System”
means
      the unique system of restaurant development, theme and operation developed
      and
      owned by Shells which is, in part, characterized by (1) the maintenance of
      uniform high quality standards in connection with the preparation and sale
      of
      Shells-approved food and beverage products, (2) the uniform high standards
      of
      appearance of the individual restaurant units, (3) the use of distinctive
      trademarks, service marks, building designs and advertising signs representing
      a
      uniformly high quality of product and services, and (4) the undertaking by
      Shells and its affiliates of the obligation to maintain and enhance the goodwill
      and public acceptance of the system (and of Shells’ trade names, service marks,
      trademarks) by strict adherence to the high standards required by
      Shells.

    

    (z) “Term
      Sheet”
means
      the Term Sheet dated June 25, 2008 (including all exhibits and appendices
      thereto), relating to the offer and sale of the Interest that has been accrued
      by the Investor Limited Partners and which sets forth certain information
      regarding, among other things, the Partnership, the Business, the General
      Partner, and Shells.

     

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

    This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      deemed an original, and all of which shall constitute one and the same
      instrument.

    

    IN
      WITNESS WHEREOF, the General Partner and the Limited Partners have executed
      this
      Agreement effective as of the filing of the Certificate of Limited Partnership.
      

     

    
      	 	
              ROCK
                BEACH HOLDINGS, LLC,

              a
                Florida limited liability company

              

              By:
                /s/
                Warren R. Nelson

              Name:
                Warren
                R. Nelson

              Title:
                President

              

              “GENERAL
                PARTNER”

              

              

              SHELLS
                SEAFOOD RESTAURANTS, INC., 
a Delaware corporation

              

              By:
                /s/
                Warren R. Nelson

              Name:
                Warren
                R. Nelson

              Title:
                President
                and CFO

              

              “Shells”

              

              Philip
                R. Chapman

              By:
                /s/
                Philip R. Chapman

              Name:
                Philip
                R. Chapman

               

              “Investor
                Limited Partner”

              

              Barry
                Bernstein

              By:
                /s/
                Barry Bernstein

              Name:
                Barry
                Bernstein

               

              “Investor
                Limited Partner”

               

              “LIMITED
                PARTNERS”

            

    

     

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

    EXHIBIT
      A

    

    

    GENERAL
      PARTNER:

    

      
        	
                Name
                  and Address

              	 	
                Capital
                  Contribution

              	 	
                Interest

              
	 	 	 	 	 
	
                Rock
                  Beach Holdings, LLC

              	 	
                $6,000

              	 	
                1%

              
	 	 	 	 	 
	
                16313
                  North Dale Mabry

              	 	 	 	 
	
                Highway

              	 	 	 	 
	
                Tampa,
                  Florida 33618

              	 	 	 	 

      

    

    

    LIMITED
      PARTNERS:

    

      
        	
                Name
                  and Address

              	 	
                Capital
                  Contribution

              	 	
                Interest

              
	 	 	 	 	 
	
                Shells
                  Seafood Restaurants, Inc.

              	 	
                $402,000

              	 	
                69%

              
	
                16313
                  North Dale Mabry

              	 	 	 	 
	
                Highway

              	 	 	 	 
	
                Tampa,
                  Florida 33618

              	 	 	 	 
	 	 	 	 	 
	
                Philip
                  R. Chapman

              	 	
                $87,500

              	 	
                15%

              
	
                175
                  E. 64th Street

              	 	 	 	 
	
                New
                  York, NY 10021

              	 	 	 	 
	 	 	 	 	 
	
                Barry
                  Bernstein

              	 	
                $87,500

              	 	
                15%

              
	
                86
                  California Place South

              	 	 	 	 
	
                Island
                  Park, NY 11558

              	 	 	 	 

      

       

      
        
           

        

        
          29MANAGEMENT
      AND LICENSE AGREEMENT

     

    This
      Management and License Agreement (“Agreement”) is entered into this 26th day of
      June, 2008, by and between Shells Seafood Restaurants, Inc. (the “Manager”), a
      Delaware corporation maintaining its business office at 16313 North Dale Mabry
      Highway, Tampa, Florida 33618, and Rock Beach Grill of Pembroke Pines, LLLP
      (the
“Owner”), a Florida limited liability limited partnership, maintaining its
      business offices at 16313 North Dale Mabry Highway, Tampa, Florida
      33618.

     

    BACKGROUND
      INFORMATION

     

    Pursuant
      to that certain Limited Partnership Agreement of Owner of even date herewith
      by
      and among the Manager, Rock Beach Holdings, LLC, a Florida limited liability
      company, and Philip R. Chapman and Barry Bernstein (each a “Investor Limited
      Partner”) (the “Partnership Agreement”), the Owner owns and operates a former
      Shells restaurant located at 11825 Pines Boulevard, Pembroke Pines, Florida
      (the
“Restaurant”). The Manager currently acts as the exclusive manager for all
      existing Shells restaurants and has agreed to manage the Restaurant and license
      certain proprietary information to the Owner, but only on the terms and
      conditions contained herein. The Owner desires to employ the Manager as its
      agent to operate the Restaurant and to license the proprietary information.
      Accordingly, in consideration of the covenants and agreements contained herein,
      the Owner and the Manager agree as follows:

     

    OPERATIVE
      PROVISIONS

     

    ARTICLE
      1. 

     

    APPOINTMENT
      OF MANAGER; LICENSE: KEY TERMS AND CONDITIONS

     

    Section
      1.1.  Appointment
      of Manager; License of Proprietary Information.
      Owner
      hereby appoints and employs Manager to act as the Owner’s exclusive agent for
      the supervision, direction and control of the operation and management of the
      Restaurant and in connection with such management, the Manager hereby
      acknowledges he is applying to register the service mark “Rock Beach Grill” and
      thereafter, regardless of the success of said registration, will license such
      service mark to the Owner as well as certain other proprietary information
      (the
“Proprietary Information”) necessary to operate the Restaurant, all upon the
      terms and conditions hereinafter set forth. The location of the Restaurant
      may
      not be changed without the prior written consent of the Manager, which consent
      may not be unreasonably withheld.

     

    Section
      1.2.  Key
      Terms.
      The
      following are certain of the key terms of this Agreement, cross-referenced
      to
      the sections of this Agreement in which they are more fully
      discussed:

    

      
        	
                (a)

              	
                Original
                  Term:

              	
                30
                  years.

              
	 	 	 
	
                (b)

              	
                Renewal
                  Terms:

              	
                An
                  indefinite number of five year terms.

              
	 	 	 
	
                (c)

              	
                Management
                  and License Fee:

              	
                Six
                  percent (6.0%) of Gross
                  Sales.

              

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    ARTICLE
      2. 

     

    THE
      TERM

     

    Section
      2.1. The
      Term.
      The
      term of this Agreement shall mean the Original Term and any Renewal Terms,
      as
      such terms are defined below.

     

    Section
      2.2. Original
      Term.
      The
      original term of this Agreement (the “Original Term”) shall commence on the day
      following the last day of operation of Shells of Pembroke Pines as a Shells
      restaurant (the “Commencement Date”) and shall continue for 30 years
      thereafter.

     

    Section
      2.3. Renewal
      Terms.
      The
      Original Term of this Agreement shall automatically be extended by an unlimited
      number of five year renewal terms (the “Renewal Terms”), unless the Manager
      gives the Owner written notice at least 90 days prior to the expiration of
      the
      Original or any Renewal Term, as applicable, of the Manager’s intent not to
      extend this Agreement beyond the end of such Original or Renewal Term. The
      terms
      and conditions set forth in this Agreement shall continue to apply during all
      Renewal Terms.

     

    ARTICLE
      3. 

     

    COMPENSATION
      OF MANAGER

     

    Section
      3.1.  Management
      and License Fee.
      In
      consideration for the services rendered by Manager hereunder, as well as the
      Owner’s use of the Proprietary Information in connection with the Restaurant’s
      operations, the Owner agrees to pay Manager a management and license fee (the
      “Management and License Fee”) as follows:

     

    (a) Fee
      Structure.
      The
      amount of the Management and License Fee shall be six percent (6%) of the
      Restaurant’s Gross Sales, as such term is defined below.

     

    (b) Definition
      of Gross Sales.
      The
      term “Gross Sales” as used herein shall mean all sales made (and not refunded or
      returned) at or from the Restaurant and/or revenues derived from or in
      connection with the operation of the Restaurant including, without limitation,
      all sales of food, beverages, merchandise or services at or from the Restaurant.
      Sales made at less than the stated menu price shall be included in Gross Sales
      only in the amount paid by the customer, and the amount of any discount or
      promotional allowance shall not be included in Gross Sales. In computing the
      Management and License Fee, there shall be excluded from Gross Sales (or there
      shall be deducted from Gross Sales to the extent previously included) the
      following:

     

    
      	
            	(i)	
              Any
                gratuities or service charges added to a customer’s bill or statement in
                lieu of gratuities, which are payable to the Restaurants’
                employees;

            

    

     

    
      	
            	(ii)	
              All
                sales taxes, excise taxes, gross receipt taxes, occupational license
                taxes, admission taxes, entertainment taxes, tourist taxes or similar
                charges (but the Management and License Fee shall be computed before
                the
                payment of federal, state or municipal income or franchise
                taxes);

            

    

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    
      	
            	(iii)	
              All
                sums and credits received in settlement of claims for loss or damage
                to
                furnishings, equipment of the Restaurant or to the building where
                the
                Restaurant is located;

            

    

     

    
      	
            	(iv)	
              Gain
                or loss from the sale of any capital assets or furniture, fixtures
                and
                equipment used in connection with the
                Restaurant;

            

    

     

    
      	
            	(v)	
              Any
                compensation payments or insurance proceeds for claims against third
                parties arising out of or during the course of the operation of the
                Restaurant;

            

    

     

    
      	
            	(vi)	
              The
                proceeds of any financing or refinancing of the Restaurant or any
                improvements, fixtures or equipment used in connection with the
                Restaurant;

            

    

     

    
      	
            	(vii)	
              Proceeds
                from the condemnation, sale or other disposition of the Restaurant;
                and

            

    

     

    
      	
            	(viii)	
              Proceeds
                from intercompany transactions.

            

    

     

    (c)  Payment
      of the Management and License Fee.
      The
      Management and License Fee shall be paid at the end of every monthly accounting
      period (on a 4-4-5 basis), in arrears, in the amount set forth on the Monthly
      Statement prepared in accordance with Section 7.2 hereof. The monthly Management
      and License Fee payments shall constitute installment payments of the Management
      and License Fee, subject to reconciliation based on the Annual Statement
      prepared in accordance with Section 7.4 hereof. Any overpayment or underpayment
      shall be adjusted by payment or refund, as appropriate, within 30 days after
      the
      preparation of the Annual Statement.

     

    ARTICLE
      4. 

     

    DUTIES
      OF
      THE MANAGER

     

    Section
      4.1.  Standard
      of Operations.
      The
      Manager shall manage and operate the Restaurant in a manner consistent with
      the
      standards of quality that are characteristic of the other Shells restaurants
      managed by Manager. There shall apply to the Restaurant the same policies,
      practices and procedures as apply generally such other Shells restaurants with
      respect to restaurant management, operations, accounting, purchasing, control
      of
      operating expenses and general administration; provided that (a) the Manager
      shall otherwise have sole discretion to establish all policies for the
      Restaurant, including, without limitation, menu items, prices, purchasing,
      design and decor, maintenance, employment, standards of operation, quality
      of
      service, marketing and promotional activities, and other matters affecting
      customer opinion of the Restaurant and its operation, and (b) exceptions to
      general policies, practices and procedures may be made by the Manager at the
      Restaurant or other Shells restaurants managed by Manager to deal with
      exceptional circumstances affecting a particular store if, in the Manager’s
      reasonable judgment, there is an adequate business justification for doing
      so
      and if the Restaurant is not treated in an arbitrary or discriminatory manner.
      Subject to such justified exceptions, the Manager shall make the same efforts
      at
      the Restaurant as it does at other Shells restaurants to achieve, and to
      balance, the objectives of increasing sales, optimizing profits, maintaining
      standards, maintaining and/or improving the level of customer service and
      quality of product, and other objectives that apply to the Shells chain of
      restaurants generally. The Manager shall periodically review the Restaurant’s
      operations and performance with the Owner at a mutually convenient time and
      place. At such times, the Manager shall review with the Owner the results of
      any
      pertinent financial planning, forecasting, sales budgeting or other reports
      or
      analyses that may be prepared by the Manager for the Restaurant (which shall
      be
      done for the Restaurant on the same general basis as for all other Shells
      restaurants). It is understood that as part of such a review the Owner may
      make
      suggestions or recommendations relating to the operation of the Restaurant.
      The
      Manager shall give such suggestions or recommendations its reasonable
      consideration, but the Manager shall not be obligated to adopt or implement
      them.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    Section
      4.2.  Personnel.
      The
      Manager shall be responsible for hiring, supervising, directing the work of,
      promoting, discharging and determining the compensation and other benefits
      of
      all personnel working in the Restaurant. With the exception of the Restaurant’s
      general manager and assistant manager(s), all personnel of the Restaurant shall
      be considered the employees of the Owner, provided that the compensation and
      benefits of all Restaurant personnel, including the Restaurant’s general manager
      and assistant manager(s), shall be considered a Restaurant expense and an
      obligation of the Owner. The salaries, other compensation and benefits of such
      personnel shall be consistent with those that apply at other Shells restaurants
      (with appropriate allowance for factors that may affect the labor market serving
      the Restaurant). The Manager may incur, at the Owner’s expense, reasonable and
      customary employment agency fees and employee relocation expenses for employees
      of the Restaurant. The Owner shall also bear the financial burden of the wages
      and other compensation of any management personnel, such as area directors,
      who
      are employed to oversee the Restaurant, on a pro rata basis1  For
      example, if a area director supervised eight restaurants in a geographical
      area,
      one of which was the Restaurant, the Owner would bear 12.5% of the expenses
      associated with the employment and expenses incurred by such area
      director..
      The
      Owner shall not hire or solicit any of Manager’s on-site managers or assistant
      managers for a period of two years after the termination of this Agreement,
      unless this Agreement is terminated due to a breach by the Manager.

     

    Section
      4.3.  Permits
      and Licenses.
      The
      Manager, at the Owner’s expense, shall be responsible for obtaining, maintaining
      and renewing all licenses and permits that may be required for the renovation
      and operation of the Restaurant, including liquor, bar, restaurant, and sign
      licenses and permits. The Manager shall pursue such responsibility with due
      diligence and in good faith, and the Owner shall in good faith cooperate with
      the Manager as may reasonably be required to obtain such licenses and
      approvals.

     

    Section
      4.4.  Contracts.
      The
      Manager, as agent of the Owner, shall have authority to enter into such
      concessionaire, service and other contracts or agreements, which are in the
      ordinary course of business, as are in the Manager’s reasonable professional
      judgment necessary for the operation, supply and maintenance of the Restaurant
      as required by this Agreement.

     

    Section
      4.5.  Maintenance.
      Subject
      to the limitations set forth in Section 4.4, the Manager, at the Owner’s
      expense, shall be responsible for maintaining the Restaurant in good condition
      and repair consistent with the standards applicable to the other Shells
      restaurants managed by Manager, including without limitation, all necessary
      repairs and replacements of the furniture, fixtures and equipment used in
      connection with the Restaurant. The Manager will, at Owner’s expense, insure
      that the Owner will comply with the Owner’s leasehold maintenance
      obligations.

     

    ________________

      
        	1	
                For
                  example, if a area director supervised eight restaurants in a geographical
                  area, one of which was the Restaurant, the Owner would bear 12.5%
                  of the
                  expenses associated with the employment and expenses incurred by
                  such area
                  director.

              

      

    

    
       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

       

    

    Section
      4.6.  Alterations
      to the Restaurant.
      The
      Manager shall have the right to make such alterations, additions or improvements
      in or to the Restaurant as it deems necessary, including without limitation
      (a)
      alterations, additions or improvements to the Restaurant’s buildings and (b)
      additions to the fixed asset list of furniture, fixtures and equipment used
      at
      the Restaurant; provided that such alterations, additions or improvements are
      consistent with what the Manager is doing in other Shells restaurants managed
      by
      the Manager. The cost of such alterations, additions or improvements shall
      be
      charged directly to current expenses or capitalized on the books of account
      of
      the Restaurant in accordance with the Manager’s standard accounting practices.
      The Manager will furnish the Owner substantiating documentation for capitalized
      expenditures.

     

    In
      the
      event that, at any time during the Term of this Agreement, repairs or
      alterations to the Restaurant shall be required by reason of any laws,
      ordinances, rules or regulations now or hereafter in force, or by order of
      any
      governmental or municipal power, department, agency, authority or officer,
      such
      repairs or changes may be made by Manager on, Owner’s behalf and at Owner’s
      expense.

     

    Section
      4.7.  Professional
      Services.
      The
      Manager may, at the Owner’s expense, hire independent contractors to provide
      such legal, accounting, and other professional or technical service as the
      Manager reasonably deems advisable for the management, operation and maintenance
      of the Restaurant. During the Term of this Agreement, the professional and
      technical services of the Manager’s corporate staff shall be provided to the
      Restaurant to the same extent as they are provided to other Shells restaurants
      managed be the Manager. The Management and License Fee shall cover such
      services, except that any out-of-pocket expenses incurred in performing such
      services shall be reimbursed to the Manager as an operating expense of the
      Restaurant. It is understood and agreed that the basic functions performed
      by
      the Manager in consideration of the Management and License Fee shall remain
      substantially the same as they are as of the date of this Agreement, but it
      is
      acknowledged and agreed that there may be changes in the allocation of certain
      tasks as between corporate overhead (covered by the Management and License
      Fee)
      and the Restaurant (paid out of Working Capital, as such term is defined
      herein); provided that (a) there is a reasonable business justification for
      the
      change, (b) the change is not being made solely for the benefit of the Manager
      and is not detrimental to the Owner, and (c) the Restaurant is treated the
      same
      as the other Shells restaurants managed by the Manager. The Manager may use
      outside contractors to provide services that are covered by the Management
      and
      License Fee; provided that the quality of the services rendered to the
      Restaurant is not reduced and the cost to the Owner is not
      increased.

     

    Section
      4.8.  Compliance
      With Laws.
      The
      Manager shall make good faith and reasonable efforts to comply with all
      applicable statutes, ordinances, rules and regulations of federal, state and
      local governmental bodies having jurisdiction over the Restaurant or its
      operation including, without limitation, laws governing the sale of alcoholic
      beverages (“Governing Laws”). Notwithstanding anything herein to the contrary,
      the Manager may contest the application of any Governing Laws to the Restaurant
      in the event the Manager deems it prudent to do so. The cost of any such contest
      shall be included in the operating expenses of the Restaurant. The Manager,
      at
      Owner’s expense, may institute, defend and settle litigation and claims
      affecting the Restaurant. No settlement involving injunctive relief against,
      or
      prohibiting any act on the part of, the Owner shall be entered into by the
      Manager, without the prior written approval of the Owner.

     

    Section
      4.9.  Arms-Length
      Transactions.
      The
      Manager shall not enter into any contracts with any entity that is affiliated
      with the Manager unless the same are at market rates and on competitive terms.
      Except as expressly permitted in this Agreement, the Manager shall not add
      any
      markup, profit or other add-on charge to the cost of any items purchased by
      the
      Manager for the Restaurant. The Restaurant shall receive the benefit of any
      discounts or rebates that are netted out by the vendor against the price of
      items that are purchased for the Restaurant. The Restaurant shall be treated
      the
      same as the other Shells restaurants managed by the Manager with respect to
      the
      allocation or other disposition of any savings resulting from the Manager’s
      buying power in the marketplace, quantity discounts, rebates and promotional
      allowances or other cost reductions or advantages that are not netted out
      against the price of the item purchased.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    Section
      4.10. Compliance
      with Leases.
      The
      Manager shall, subject to the availability of funds therefor, cause the Owner
      to
      remain in compliance with its leasehold obligations.

     

    ARTICLE
      5. 

     

    OWNER’S
      FINANCIAL OBLIGATIONS

     

    Section
      5.1.  Obligations
      of Owner and Manager.
      All
      cost and expense of operating the Restaurant, including without limitation
      the
      funding of operating deficits and working capital and other obligations and
      liabilities hereunder (“Owner’s Financial Obligations”) shall be the sole and
      exclusive responsibility and obligation of Owner, except where it is expressly
      and specifically stated in this Agreement that such item shall be at the
      Manager’s expense. It is understood that statements herein indicating that
      Manager shall “furnish,” “provide” or otherwise supply items or perform services
      hereunder shall not be interpreted or construed to mean that the Manager shall
      be obligated to pay for such items or services unless it is expressly and
      specifically so provided. Owner’s Financial Obligations shall include, without
      limitation, the following:

     

    
      	
            	(a)	
              The
                Working Capital (as defined in Section 6.1
                hereof);

            

    

     

    
      	
            	(b)	
              Capital
                Expenditures (as defined in Section 6.2
                hereof);

            

    

     

    
      	
            	(c)	
              The
                operating expenses of the Restaurant including, without limitation,
                Restaurant employee payroll and benefits, food and beverage inventory,
                supplies, repair and maintenance, contract services, professional
                services, training, advertising, marketing, and
                insurance;

            

    

     

    
      	
            	(d)	
              The
                cost of all licenses and permits required for the occupancy or operation
                of the Restaurant including, without limitation, any certificate
                of
                occupancy, health permit, food service license, liquor license or
                the
                like;

            

    

     

    
      	
            	(e)	
              Bank
                charges and processing fees charged by the local depository bank
                for the
                Restaurant or by credit card companies for the processing of credit
                card
                sales made at the Restaurant;

            

    

     

    
      	
            	(f)	
              All
                taxes applicable to the Restaurant, including, without limitation,
                real
                estate taxes, franchise taxes, gross receipts taxes, rent taxes or
                income
                taxes (other than any income taxes payable by the Manager on the
                Management and License Fee);

            

    

     

    
      	
            	(g)	
              Occupancy
                costs of the Restaurant, including, without limitation, depreciation,
                amortization, interest, rent, common area charges, impact fees, user
                fees,
                parking charges, dues or assessments and the like;
                and

            

    

     

    
      	
            	(h)	
              The
                Management and License Fee.

            

    

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    
      The
        Manager
        shall have complete and absolute control of the receipts from the Restaurant
        and
        the bank accounts into which such receipts are to be deposited. The above
        mentioned obligations of the Owner shall be paid by the Manager on behalf
        of the
        Owner out of the Working Capital and/or from the current distributions payable
        to Owner pursuant to Section 6.3 hereof, to the extent
        available.

    

     

    The
      following services shall be provided by the Manager during the Term of this
      Agreement in consideration of the Management and License Fee and shall not
      be
      charged as operating expenses of the Restaurant: (i) supervisory operations
      management, above the store level, exclusive of the Restaurant’s pro rata
      expense of the district and regional manager, which is borne, in part, by the
      Owner as set forth above; (ii) accounting performed out of the Manager’s
      corporate accounting department, including accounts payable, accounts
      receivable, fixed assets, financial reporting, record keeping, revenue/cost
      variance analysis, financial analysis and forecasting; (iii) payroll and
      corporate-level personnel and benefits administration; (iv) corporate-level
      data
      processing services; (v) tax administration; (vi) corporate legal services;
      (vii) corporate support, including real estate, architectural and
      construction-related support services; (viii) corporate facilities department
      support services regarding maintenance, repair and capital alterations and
      additions; (ix) corporate marketing administration; (x) multi-unit procurement
      services; and (xi) research and development.

     

    Section
      5.2.  Manager
      Not Obligated to Advance Funds.
      Except
      as otherwise provided in the Partnership Agreement, the Manager shall have
      no
      obligation to pay for any of the Owner’s Financial Obligations. Except as
      otherwise provided in the Partnership Agreement, subject to the consolidation
      of
      certain payables and receivables of the Restaurant with those of other Shells
      restaurants managed by the Manager, the Manager shall not be obligated to
      advance any of its own funds to or for the account of the Owner or to incur
      on
      its own account any liability with respect to the Restaurant.

     

    Section
      5.3.  Consolidated
      Payables and Receivables.
      The
      cash flow and accounting functions for the Restaurant will be handled by
      Manager, to the extent reasonably practicable, in the same manner that they
      are
      handled for other Shells restaurants managed by the Manager and on a
      consolidated basis with such other stores; provided, however, that separate
      books and records (with appropriate substantiating documentation) showing the
      revenues and expenses of the Restaurant on an unconsolidated basis shall be
      maintained by the Manager as provided in Article 7 hereof; and provided further
      that any discounts or rebates obtained as a result of such consolidation shall
      be subject to the provisions of Section 4.9 hereof. The Manager shall not impose
      any additional fees or add-on charges as a result of any such consolidation.
      As
      a general rule, to the extent reasonably practicable, the following items will
      be handled on a consolidated basis:

     

    (a)  The
      processing of revenues from sales made through the use of credit
      cards;

     

    (b)  The
      payment of vendors who sell to other Shells restaurants in addition to the
      Restaurant.

     

    Payables
      that relate solely to the Restaurant, including without limitation the payroll
      for the Restaurant, shall, to the extent of available funds belonging to the
      Owner, be paid out of the Manager’s corporate office by the Manager’s corporate
      check, subject to the Manager’s right to be reimbursed out of the Working
      Capital of the Restaurant as provided in Article 6 hereof. It is understood
      that
      payment directly by the Restaurant may be required in the case of certain
      vendors or local service contractors. Regardless of whether payment in the
      first
      instance is made directly by the Restaurant or by the Manager’s corporate check,
      the Owner shall bear any loss arising out of any breach of contract, breach
      of
      warranty or other failure to perform any contract with any vendor, supplier
      or
      contractor of the Restaurant.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    ARTICLE
      6.

     

    WORKING
      CAPITAL AND DISTRIBUTIONS TO OWNER

     

    Section
      6.1.  Working
      Capital
      . The
      Owner shall maintain with the Manager sufficient working capital for the ongoing
      operation of the Restaurant (“Working Capital”). Working Capital shall consist
      of the following: (a) an amount that approximates the average value of the
      food
      and beverage inventory of the Restaurant carried at cost, (b) the cash balance
      in the Restaurant account at the Restaurant local depository bank, (c) the
      cash
      on hand at the Restaurant, and (d) an amount determined by the Manager to be
      adequate for the operation of the Restaurant based upon the Manager’s estimate
      of the reasonably foreseeable income and expenses of the Restaurant, including,
      without limitation, capitalized expenditures for the replacement of furniture,
      fixtures and equipment, which is initially estimated to be $50,000. It is the
      intention of the parties to operate on a “pay as you go” basis to the extent
      possible, without the retention by the Manager of any reserves or contingency
      funds except for immediately foreseeable needs. The Owner shall fund any deficit
      in the Working Capital within 30 days after the Owner’s receipt of written
      notice from the Manager of the need for additional Working Capital; provided
      that the Owner shall use its best efforts to fund such a deficit within three
      days or as soon thereafter as possible. If the Owner fails to do so, then in
      addition to any other right or remedy that the Manager may otherwise have,
      the
      Manager shall have the right to deduct such amount from any amount payable
      to
      the Owner hereunder.

     

    Section
      6.2.  Capital
      Expenditures.
      Capital
      expenditures during the Term for furniture, fixtures and equipment and capital
      improvements at the Restaurant shall, to the extent possible, be paid for out
      of
      the Working Capital.

     

    Section
      6.3.  Distributions
      to Owner.
      Any
      amount in the Restaurant’s account held by the Manager in excess of (a) the
      amount of Working Capital required pursuant to Section 6.1 above, (b) the amount
      of the Management and License Fee payable to Manager and (c) the operating
      expenses of the Restaurant (including allocations for insurance, marketing
      and
      management training), less the amount of any offsets or deductions provided
      for
      hereunder, shall be distributed to the Owner within 30 days after the end of
      each fiscal month. The monthly distributions to the Owner shall constitute
      prepayments subject to reconciliation based on the Annual Statement for the
      fiscal year in which such monthly distributions are made, with the payment
      for
      the final fiscal month being adjusted as may be necessary.

     

    ARTICLE
      7. 

     

    ACCOUNTING

     

    Section
      7.1.  Standards.
      The
      Manager, at the Manager’s own cost and expense, shall maintain books and records
      of account relating to the Manager’s operation and management of the Restaurant
      and prepare and deliver to Owner the statements required under Sections 7.2,
      7.3
      and 7.4 hereof. The books and records for the Restaurant shall be kept
      substantially in accordance with the systems utilized by the Manager for the
      other Shells restaurants managed by the Manager. The Owner and its designees
      shall have the right, upon 10 days prior written notice to the Manager, to
      examine said books and records at the Manager’s corporate headquarters at any
      reasonable time during regular business hours. Such books and records of account
      shall be in sufficient detail to show compliance with the requirements of Rule
      7A-3.0141(2)(a), Florida Administrative Code, or any successor regulation,
      with
      regard to the percentage of food and non-alcoholic beverage sales.

     

    Section
      7.2.  Monthly
      Statement.
      Within
      30 days of the end of each month, the Manager shall provide the Owner with
      a
      balance sheet and a profit and loss statement showing the Restaurant’s financial
      position as of the date of the balance sheet and the operating results for
      the
      preceding fiscal month and fiscal year to date (collectively the “Monthly
      Statement”).

     

    Section
      7.3.  Quarterly
      Statement.
      Within
      45 days of the end of each fiscal quarter, the Manager shall provide the Owner
      a
      balance sheet, profit and loss statement, and statement of cash flows, and
      supporting schedules, showing the Restaurant’s financial position as of the date
      of the balance sheet and the operating results and statement of cash flows
      for
      the preceding fiscal quarter and fiscal year to date (collectively the
“Quarterly Statement”).

     

    Section
      7.4.  Annual
      Statement.
      Within
      90 days following the end of each fiscal year, the Manager shall provide the
      Owner a statement showing the Restaurant’s operating results for the preceding
      fiscal year (the “Annual Statement”). The Annual Statement shall contain a
      balance sheet, profit and loss statement, statement of cash flows and supporting
      schedules, and shall be certified as true and correct by the Manager’s Chief
      Financial Officer.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    Section
      7.5.  Adjustments.
      Any
      adjustment required to make up an underpayment or to refund an overpayment
      by
      the Owner or the Manager shall be made within 30 days after completion of the
      statement that shows the need for an adjustment. Adjustments based on the Annual
      Statement shall be made during the first month following completion of the
      Annual Statement. Adjustments made upon the expiration or termination of this
      Agreement shall be made through payment or refund, as required, within 30 days
      after the end of the Term of this Agreement.

     

    Section
      7.6.  Right
      to Audit.
      At any
      time during the two year period following the Owner’s receipt of an Annual
      Statement, the Owner shall have the right, upon 10 days’ prior written notice to
      the Manager, at Owner’s expense, to have an accountant selected by the Owner
      audit the Manager’s books and records relating to the Restaurant for the period
      covered by such Annual Report. If there is a discrepancy between such financial
      statements and the findings of Owner’s accountant or any other dispute between
      the parties regarding the financial statements, the Manager’s accountants and
      the Owner’s accountant shall attempt to resolve such discrepancy, and their
      mutual decision shall be binding upon Owner and Manager. If the accountants
      for
      the parties are unable to resolve the discrepancy, the matter shall be referred
      to an arbitration panel composed of the Owner’s independent CPA, the Manager’s
      independent CPA, and a third independent CPA selected by the parties’
independent CPA’s, and the decision of such arbitration panel shall be binding
      upon Owner and Manager. The cost of conducting an independent audit of the
      Restaurant’s financial statements shall be paid by the Owner unless the audit
      shows an underpayment to Owner in excess of three percent of the amount that
      should have been distributed to Owner; in such case Manager shall bear the
      cost
      of the audit. In the event that the actual amount is resolved in favor of the
      Owner, the Manager shall pay the amount due plus interest thereon at the
      Interest Rate specified in Section 16.13.

     

    Section
      7.7.  Fiscal
      Year.
      The
      fiscal year of the Restaurant shall be the fiscal year used by Manager for
      its
      company-owned restaurants. As of the date of this Agreement, the Manager
      proposes using a fifty-two (52) or fifty-three (53) week period ending on the
      Sunday nearest to December 31.

     

    Section
      7.8.  GAAP.
      All
      financial statements to be prepared by the Manager hereunder shall be prepared
      in accordance with generally accepted accounting principles.

     

    ARTICLE
      8. 

     

    INSURANCE
      AND INDEMNITY

     

    Section
      8.1.  Required
      Coverage.
      Except
      for such coverage otherwise maintained by the landlord of the Restaurant under
      the lease agreement with such landlord, the following forms of insurance
      coverage shall be maintained by the Restaurant: 

     

    (a)  Property
      Insurance:
      Property
      insurance covering the interior and exterior improvements made by the Owner.
      Property insurance shall insure against any and all risks of direct physical
      loss to the Restaurant and its furniture, fixtures and equipment, with limits
      of
      not less than the full replacement cost thereof, subject to the same deductible
      that applies to other Shells restaurants managed by the Manager;

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    (b)  Business
      Interruption:
      All Risk
      Business Interruption insurance with a limit sufficient to reimburse the Owner
      for loss of income resulting from the Owner’s inability to continue operations
      due to the Restaurant’s sustaining a loss from an insured peril. The limit shall
      also include sufficient insurance to ensure that the Owner will be able to
      meet
      its monetary obligations to the Manager under this Agreement, including Section
      9.1 hereof;

     

    (c)  General
      Liability:
      Comprehensive general liability insurance, including product and liquor
      liability coverage, with a combination of primary and excess limits of not
      less
      than $3,000,000, each occurrence, bodily injury and property damage combined,
      including dram shop insurance or similar coverage if required by applicable
      statute or rule;

     

    (d)  Employers’
      Liability:
      Workers’
Compensation and Employers’ Liability insurance, as well as other insurance as
      may be required by law, in such amounts as may be required by applicable statute
      or rule; provided that the Employer’s Liability insurance shall carry a limit of
      not less than $500,000;

     

    (e)  Fidelity
      Coverage:
      Comprehensive Dishonesty, Disappearance and Destruction (3-d) Coverage, insuring
      employee dishonesty and depositors forgery; and

     

    (f)  Additional
      Coverage:
      Such
      additional coverages and higher policy limits as may reasonably be required
      from
      time to time by the Manager for Shells restaurants managed by the
      Manager.

     

    The
      Manager shall be named as an additional insured and loss payee in all policies
      required hereunder, and all such policies shall be primary to any policies
      which
      either of the parties hereto may carry on its own. The limits set forth above
      in
      this Section 8.1 shall be subject to adjustment periodically (annually if
      reasonably possible) to reflect current costs and availability.

     

    Section
      8.2.  Responsibility
      For Obtaining Coverage.
      Although the Owner shall bear the financial responsibility for the insurance
      coverage required under Section 8.1 hereof, the Manager shall negotiate, obtain
      and be responsible for obtaining such policies on behalf of the Owner. The
      Manager will make an annual presentation of proposed insurance programs to
      the
      Owner and the Owner shall have at least 45 days to obtain alternative
      coverage.

     

    Section
      8.3.  Evidence
      of Coverage.
      Upon a
      request from the Owner, the Manager shall cause to be delivered to the Owner
      a
      certificate of insurance to evidence that the foregoing insurance coverage
      requirements have been complied with by the Manager. Such evidence shall include
      a statement by the insurer that the policy or policies will not be canceled
      or
      materially altered without at least 30 days prior written notice to Owner and
      Manager.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    
      
        Section
          8.4.Indemnity.

      

    

     

    (a)  Owner’s
      Indemnification of Manager.
      The
      Owner agrees to indemnify, defend and hold the Manager free and harmless from
      any liability for injury or death to persons or damage or destruction of
      property, as a result of the Manager’s performance of its duties in accordance
      with this Agreement, as well as the performance by the Manager’s agents,
      officers, directors or employees. Notwithstanding the foregoing, the Owner
      shall
      not be obligated to indemnify and hold the Manager harmless or to reimburse
      the
      Manager or to defend the Manager from any liability which results from the
      negligence, fraud or willful misconduct of the Manager, its agents, employees,
      officers or directors, or any action by the Manager, its agents, employees,
      officers or directors in violation of any provision of this
      Agreement.

     

    (b)  Manager
      Indemnification of Owner.
      The
      Manager agrees to indemnify, defend and hold the Owner free and harmless from
      any liability for injury or death to persons or damage or destruction of
      property arising out of the operation of the Restaurant by the Manager or
      resulting from any act of the Manager, its agents, officers, directors or
      employees in violation of any provision of this Agreement, and from any
      liability resulting from any breach of any law, rule or ordinance, including
      by
      way of example, but not limitation, any “employment” violations, antitrust
      action, any liquor license violations or any other matter within the control
      of
      the Manager. Notwithstanding the foregoing, the Manager shall not be obligated
      to indemnify and hold the Owner harmless or to reimburse the Owner or to defend
      the Owner from any liability that results from the negligence, fraud or willful
      misconduct of the Owner, its agents, employees, officers or directors, or any
      action of the Owner, its agents, employees, officers or directors in violation
      of any provision of this Agreement.

     

    Section
      8.5.  Waiver
      of Subrogation.
      Each
      party hereto (the “Releasing Party”) hereby releases the other (the “Released
      Party”) from any liability which the Released Party would, but for this
      paragraph, have had to the Releasing Party arising out of or in connection
      with
      any accident or occurrence or casualty (a) which is or would be covered by
      a
      property damage policy (with fire, extended coverage, vandalism and malicious
      mischief endorsement included) or by a sprinkler leakage or water damage policy
      regardless of whether or not such coverage is being carried by the Releasing
      Party, and (b) to the extent of recovery under any other casualty or property
      damage insurance being carried by the Releasing Party at the time of such
      accident or occurrence or casualty, which accident or occurrence or casualty
      may
      have resulted in whole or in part from any act or neglect of the Released Party,
      its officers, agents or employees; provided, however, the release hereinabove
      set forth shall become inoperative and null and void if the Releasing Party
      contracts for insurance with an insurance company which (i) takes the position
      that the existence of such release vitiates or would adversely affect any policy
      so insuring the Releasing Party in a substantial manner and notice thereof
      is
      given to the Released Party, or (ii) requires the payment of a higher premium
      by
      reason of the existence of such release, unless in the latter case the Released
      Party within 10 days after notice thereof from the Releasing Party pays such
      increase in premium.

     

    ARTICLE
      9. 

     

    [RESERVED]

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    ARTICLE
      10. 

    

    REPRESENTATIONS
      AND WARRANTIES

     

    Section
      10.1.  Title
      to the Restaurant and/or Leasehold Interests.
      Except
      as otherwise provided in the lease agreement for the lease of the Restaurant
      premises, the Owner covenants that it has, and that throughout the Term of
      this
      Agreement it will maintain, (i) either full ownership of the location where
      the
      Restaurant is located or a valid leasehold estate in the building where the
      Restaurant is located, and (ii) full ownership of or a valid leasehold estate
      in
      the furniture, equipment and operating supplies that are used in the Restaurant.
      The Owner represents and warrants that there is and shall be no material
      conflict between this Agreement and any provision of any lease or deed, mortgage
      or deed of trust, restrictive covenant or other agreement affecting the
      Restaurant. The Owner further agrees that throughout the Term of this Agreement,
      it will keep, observe and perform all terms, covenants, conditions and
      obligations to be kept, observed or performed by the Owner under the Owner’s
      lease or any concession or other agreement or security instrument in respect
      of
      the Restaurant, and the furniture, fixtures and equipment in the Restaurant. The
      Owner agrees that it will not amend or modify any provision of a lease that
      has
      a material effect on this Agreement or the operation of the Restaurant, without
      in each instance obtaining the prior written consent of the Manager, which
      must
      be granted or withheld by the Manager within 30 days after the Manager’s receipt
      of the Owner’s request for consent. The Owner hereby agrees to indemnify the
      Manager and hold the Manager harmless from and against any loss, cost or damage
      incurred by the Manager as a result of the Owner’s breach of any of the
      foregoing representations, warranties or covenants or as a result of any claim
      made against the Manager by any landlord, mortgagee or other party in privity
      with the Owner.

     

    Section
      10.2.  Liquor
      License.
      The
      Owner represents and warrants that the jurisdictions in which the Restaurant
      is
      located permit the sale of alcoholic beverages at tables and a stand-up bar
      seven (7) days per week and that the Restaurant is not located in an area in
      which the issuance of the appropriate licenses or permits would be prohibited.
      The Owner shall use reasonable efforts and all due diligence to maintain the
      liquor license for the Restaurant. The Owner and the Manager shall cooperate
      with each other and with the licensing authority in renewing the liquor license
      for the Restaurant.

     

    Section
      10.3.  Operation
      of the Restaurant.
      The
      Owner represents and warrants that there is no legal impediment to the operation
      of the Restaurant by the Manager as contemplated by this Agreement; that the
      Owner shall not create or suffer to exist any condition that materially
      interferes with the normal use of the Restaurant, including without limitation
      the accessways, parking areas, lighting, service areas and utilities serving
      the
      Restaurant; and that the Owner shall not interfere with the Manager’s operation
      of the Restaurant or give, or attempt to give, orders or instructions to
      personnel employed at the Restaurant.

     

    Section
      10.4.  Authority
      of Owner and Manager.
      The
      Owner represents and warrants that it has full right, power and lawful authority
      to execute and deliver this Agreement and to perform its obligations hereunder
      in the manner and upon the terms contained herein, with no other person needing
      to join in the execution of this Agreement in order for it to be binding upon
      all persons. The person(s) executing this Agreement on behalf of the Owner
      represent and warrant that they are the only person(s) required to execute
      this
      Agreement in order to bind the Owner. The Manager represents and warrants that
      it has full right, power and lawful authority to execute and deliver this
      Agreement and to perform its obligations hereunder in the manner and upon the
      terms contained herein. The person(s) executing this Agreement on behalf of
      the
      Manager represent and warrant that they are the only person(s) required to
      execute this Agreement in order to bind the Manager.

     

    
      
         

      

      
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    Section
      10.5.  Confidentiality.
      The
      Owner represents and warrants that it shall at all times treat as confidential
      any proprietary information, trade secrets, knowledge or know-how relating
      to
      the Restaurant that the Owner may acquire in connection with this Agreement
      or
      otherwise, including, without limitation, any financial information relating
      to
      the revenues, costs or profits of the Restaurant; personnel policies or
      procedures; budgets and compensation figures; operating systems and methods;
      and
      recipes or training materials (referred to collectively as “Confidential
      Information”); and that it shall use its best efforts to keep any Confidential
      Information secret and confidential, both during and after the Term of this
      Agreement. The Owner may disclose pertinent information relating to the
      Restaurant on an as-needed basis to lenders, joint ventures, accountants,
      attorneys, and potential purchasers; provided that the Owner shall use
      reasonable efforts to ensure that such information is disseminated on a “need to
      know” basis only. The Manager represents and warrants that it shall at all times
      treat as confidential any proprietary information, trade secrets, knowledge
      or
      know-how relating to the Owner or the Owner’s business that the Manager may
      acquire in connection with this Agreement or otherwise.

     

    ARTICLE
      11. 

     

    DEFAULT,
      TERMINATION AND REMEDIES

     

    Section
      11.1.  Default,
      Notice and Cure.
      If
      either party hereto shall default in the performance of any of its obligations
      under this Agreement and
      such
      default is a result of that party’s gross negligence, gross abuse of authority,
      fraud or criminal misconduct, and such default is not cured within 40 days
      after
      written notice from the non-defaulting party then the party who delivered the
      notice of such default shall have, in addition to its rights at law or in
      equity, the right to terminate this Agreement.

     

    Section
      11.2.  Limitation
      of Liability.
      Notwithstanding anything to the contrary, the Manager shall in no event have
      any
      liability, directly or indirectly, for:

     

    
      	 	
              (i)

            	 	
              Any
                liability of the Owner under the Owner’s lease or any damages payable to
                the landlord; or

            

    

     

    
      	 	
              (ii)

            	 	
              Any
                liability of the Owner to any mortgagee or lender of the Owner or
                any
                damages payable to any such mortgagee or
                lender;

            

    

     

    provided
      that the limitation of liability set forth in this Section 11.2 shall not limit
      the Manager’s liability with respect to any of the insurance coverage for which
      the Manager is responsible to obtain on the Owner’s behalf under Article 8
      hereof and shall not limit the Manager’s liability for negligence or other
      tortious or unlawful conduct. Each party to this Agreement shall be bound to
      make reasonable efforts to mitigate any damages incurred as the result of any
      breach of this Agreement by the other party.

     

    
      
         

      

      
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    ARTICLE
      12.

     

    SUCCESSORS
      AND ASSIGNS

     

    Section
      12.1.  Assignment
      by the Manager.
      The
      Manager may, without the Owner’s consent, assign its interest in this Agreement
      to (i) an affiliate of the Manager, provided that the Restaurant continues
      to be
      operated as a Shells restaurant and the Manager continues to remain fully liable
      under this Agreement; or (ii) a successor of the Manager that may result from
      a
      merger, reorganization, consolidation or acquisition, provided that the
      surviving or acquiring entity acquires all or substantially all of the assets
      of
      the Manager relating to the Shells restaurants owned and/or managed by the
      Manager; otherwise the Manager shall not assign all or any part of its interest
      in this Agreement to any person without the prior written consent of the Owner.
      The Manager shall furnish the Owner with any information regarding the proposed
      assignee that is reasonably requested by the Owner.

     

    Section
      12.2.  Assignment
      by the Owner.
      The
      Owner may, without the Manager’s consent, make a collateral assignment of this
      Agreement to Owner’s lender or assign Owner’s interest in this Agreement to (i)
      an affiliate of the Owner, provided that the Owner continues to be fully liable
      under this Agreement, or (ii) a purchaser of the Owner’s entire interest in the
      Restaurant; otherwise the Owner shall not assign all or any part of its interest
      in this Agreement to any person or entity without the prior written consent
      of
      the Manager. In a case in which the Manager’s consent to an assignment is
      required, the Manager shall not unreasonably withhold its consent to the Owner’s
      transfer of its interest in this Agreement, but the Manager’s consent to such a
      transfer may be conditioned upon the following:

     

    
      	
            	(a)	
              All
                of the Owner’s accrued monetary obligations to the Manager and all other
                outstanding obligations related to the Restaurant shall have been
                satisfied;

            

    

     

    
      	
            	(b)	
              The
                Owner shall have executed a general release, in a form satisfactory
                to the
                Manager, of any and all claims against the Manager and its affiliates
                and
                their shareholders and employees, in their corporate and individual
                capacities;

            

    

     

    
      	
            	(c)	
              The
                transferee shall enter into a written assumption agreement, in a
                form
                satisfactory to the Manager, assuming and agreeing to discharge all
                of the
                Owner’s obligations under this Agreement and reducing to writing any
                custom, usage or course of dealings that has been accepted in practice
                by
                the Owner and the Manager without having been memorialized in a formal
                amendment to this Agreement;

            

    

     

    
      	
            	(d)	
              The
                transferee shall demonstrate to the Manager’s satisfaction that it meets
                the Manager’s managerial and business standards; has a good business
                reputation and credit rating; meets the criteria relating to character,
                reputation and the like that apply in connection with the issuance,
                and/or
                renewal of liquor licenses and other licenses or permits required
                for the
                Restaurant; and has the requisite financial resources and capital
                to fund
                the operation of the Restaurant as required by this
                Agreement;

            

    

     

    
      	
            	(e)	
              The
                Owner shall not be in default under this Agreement, any amendments
                thereto
                or any other agreements with the Manager, its subsidiaries or affiliates;
                or

            

    

     

    
      	
            	(f)	
              The
                assignee must have been approved as a licensee of a liquor license
                suitable for use at the Restaurant before the assignment is binding
                upon
                the Manager.

            

    

     

    
      
         

      

      
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    Section
      12.3.  Transfer
      to Affiliates.
      Transfers of a party’s interest in this Agreement to an affiliate (as defined
      below) shall not require the consent of the other party provided that the
      transferor remains fully liable under this Agreement. The term “affiliate” as
      used herein shall mean any parent, subsidiary, affiliated or related corporation
      or other entity of the Owner or the Manager, respectively, or of any said
      parent, subsidiary, affiliated or related corporation or other
      entity.

     

    Section
      12.4.  Parties
      Bound.
      The
      terms, provisions, covenants, undertakings, agreements, obligations and
      conditions of this Agreement shall be binding upon and shall inure to the
      benefit of the successors-in-interest and assigns of the parties hereto with
      the
      same effect as if mentioned in each instance where the party hereto is named
      or
      referred to, except that no assignment, transfer, pledge, mortgage, lease or
      sublease made by either the Owner or the Manager in violation of this Agreement
      shall vest any rights in the assignee, transferee, mortgagee, pledge, lessee,
      sublessee or occupant.

     

    ARTICLE
      13. 

     

    PROPRIETARY
      ITEMS: TRADEMARKS, TRADE SECRETS AND

    INDICIA
      OF OWNERSHIP

     

    Section
      13.1.  Trademarks.
      The
      Owner understands that the Manager uses certain proprietary names, trademarks,
      service marks and other terms and notations (collectively referred to as the
      “Trademarks”) in its operation of Shells restaurants, including, without
      limitation, the registered marks “Shells” and the “jumping fish
      logo”.

     

    Section
      13.2.  Trade
      Secrets.
      The
      Owner understands that the Manager from time to time creates or develops
      copyright materials and trade secrets in connection with the management and
      operation of Shells restaurants (“Trade Secrets”), including, without
      limitation, the standards and specifications for design, construction,
      furniture, fixtures and equipment, decor, operating procedures, recipes, and
      management, marketing, training and accounting programs and
      materials.

     

    Section
      13.3.  Indicia
      of Ownership.
      The
      Owner recognizes that the Shells restaurants and the system used by the Manager
      in operating them are characterized by certain indicia of ownership (“Indicia of
      Ownership”) including, without limitation, (i) certain unique features of
      concept, design, appearance, and decor, which form the trade dress for Shells
      restaurants; and (ii) certain concepts, presentations and menu
      items.

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

    Section
      13.4.  Ownership
      By the Manager.
      The
      Manager covenants that it owns all right, title and interest in and to the
      Trademarks, Trade Secrets and the Indicia of Ownership (referred to collectively
      as the “Proprietary Items”) so as to permit their use in connection with the
      Restaurant. The Owner expressly acknowledges the Manager’s exclusive right,
      title and interest in and to the Proprietary Items, both collectively and
      individually, and agrees not to represent in any manner that the Owner has
      any
      ownership rights therein. The Owner further agrees that use of the Proprietary
      Items at the Restaurant shall not create in Owner’s favor any right, title or
      interest or other attributes of ownership in or to the Proprietary Items. The
      Owner acknowledges and expressly agrees that any and all goodwill associated
      with the Proprietary Items and the Manager’s system for developing and operating
      Shells restaurants shall inure exclusively to the benefit of the Manager. The
      Owner shall have no claim for compensation for any part of the goodwill
      attributable to the use of the Proprietary Items at the Restaurant or to the
      Owner’s performance of its duties under this Agreement.

     

    Section
      13.5.  No
      Infringement By Owner.
      The
      Owner acknowledges that use of the Proprietary Items by the Owner without in
      each instance obtaining the Manager’s prior written consent shall be an
      infringement of the Manager’s exclusive right, title and interest in and to the
      Proprietary Items. The Owner expressly covenants that both during and after
      the
      Term of this Agreement, the Owner shall not, directly or indirectly, (i) commit
      an act of infringement, (ii) contest or aid in contesting the validity or
      ownership of the Proprietary Items, or (iii) take any other action in derogation
      of the Manager’s rights in and to the Proprietary Items. The Owner shall not
      hold out or otherwise employ the Proprietary Items to perform any activity
      or to
      incur any obligation or indebtedness in a manner that might in any way make
      the
      Manager liable therefor. The Owner shall promptly notify the Manager of any
      attempt by any other person, firm or corporation to use the Proprietary Items
      or
      any colorable variation thereof, and of any claim, demand or cause of action
      based upon or arising therefrom. The Owner shall also promptly notify the
      Manager of any litigation instituted against the Owner involving the Manager’s
      Proprietary Items. The Manager shall use its reasonable efforts, including
      prosecution or defense of legal proceedings, to protect the Proprietary Items
      against infringement. In the event the Manager undertakes the defense or
      prosecution of any litigation relating to the Proprietary Items, the Owner
      agrees to execute any and all documents and to do such acts and things as may,
      in the opinion of counsel for the Manager, be necessary to carry out such
      defense or prosecution; provided that the Manager shall reimburse the Owner
      for
      any out-of-pocket expenses that the Owner incurs in doing so and the cost of
      the
      litigation shall be paid by the Manager. If the Owner operates a business other
      than the Restaurant, the Owner shall not use the Proprietary Items or any
      reproduction, copy or colorable imitation thereof in either the operation or
      promotion of such business or otherwise conduct such business in any manner
      that
      infringes any right of the Manager or constitutes unfair competition with the
      Manager.

     

    Section
      13.6.  Subsequent
      Business.
      The
      Owner understands and agrees that discontinuance of use of the Indicia of
      Ownership shall require substantial revision of the decor of the Restaurant
      if
      the Owner intends to continue to conduct any type of business at the Restaurant
      following termination of this Agreement. Within 30 days after termination or
      expiration of this Agreement for any reason, including but not limited to the
      breach of this Agreement by the Manager, the Owner shall cease using the
      Trademarks, Trade Secrets, Indicia of Ownership and any other Proprietary Items
      owned by the Manager; and the Owner shall make such modifications or alterations
      to the Restaurant as may be necessary to prevent the operation of any business
      thereon by Owner or others in derogation of this Article 13; provided that
      structural changes to the Restaurant shall not be required except to the extent
      specified below in this Section 13.6. In the event the Owner fails or refuses
      to
      comply with the requirements of this Article 13, the Manager shall have the
      right, subject to and in accordance with the terms of the Owner’s lease, to
      enter upon the Restaurant premises without being guilty of trespass or any
      other
      tort, for the purpose of making or causing to be made such changes as may be
      required at the expense of the Owner, which expense the Owner agrees to pay
      to
      the Manager upon demand. The Owner shall alter or remove or cause to be removed
      from the Restaurant premises the all Indicia of Ownership, including without
      limitation, all signage and all Proprietary Items, such as menus, recipes or
      any
      other items bearing the Manager’s name or any of the Manager’s
      Trademarks.

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

     

    Section
      13.7.  Purchase
      of Proprietary Items.
      Upon
      termination or expiration of this Agreement, the Manager shall have the option
      to purchase from the Owner any or all items in the Restaurant that bear any
      of
      the Manager’s Trademarks, at Owner’s cost or fair market value, whichever is
      less. If the parties cannot agree on fair market value within 30 days after
      the
      termination of this Agreement, a mutually acceptable independent appraiser
      shall
      be designated by the parties hereto, and the appraiser’s determination shall be
      binding.

     

    ARTICLE
      14. 

     

    ADVERTISING,
      PROMOTION AND TRAINING

     

    Section
      14.1.  Cost
      of Advertising.
      The
      cost of marketing and advertising for the Restaurant shall be an operating
      expense of the Restaurant. The cost of in-store advertising and promotion that
      applies only to the Restaurant shall be one category of such expenses. In
      addition, the cost of marketing and advertising that is applicable to all Shells
      restaurants on a state, regional, or national basis shall be allocated among
      all
      of the Shells restaurants managed by the Manager, based upon the Manager’s
      standard method of allocating such cost. If the Manager provides marketing
      or
      advertising services within a defined market area that includes the Restaurant
      and other Shells restaurants, the cost of such marketing or advertising shall
      be
      allocated among the Restaurant and such other Shells restaurants within such
      market area.

     

    Section
      14.2.  Promotions.
      The
      Manager may offer promotions, discounts and other incentives at the Restaurant
      in a manner similar to those offered at other Shells restaurants managed by
      the
      Manager. Sales made in connection with any such promotion, discount or other
      incentive shall be included in Gross Sales in the amount paid by the customer
      rather than at the menu price. The costs incurred by the Restaurant in
      connection with such items shall be included in the operating expenses of the
      Restaurant.

     

    Section
      14.3.  Training.
      The
      cost of store-level management training for the Restaurant shall be borne by
      the
      Owner. If the Manager moves store level management of the Restaurant to other
      Shells’ restaurants managed by the Manager, other than the initial store level
      management of the Restaurant (to which this Section 14.3 shall not apply),
      the
      recipient store will pay the Owner the sum of $15,000 for a general manager
      or
      $12,000 for an assistant manager, and if the Restaurant receives store level
      management trained at other restaurants managed by the Manager, the Owner shall
      pay the transferor store the sum of $15,000 for a general manager or $12,000
      for
      an assistant manager.

     

    ARTICLE
      15. 

     

    NOTICES

     

    Section
      15.1.  Notice
      Addresses.
      Written
      communications between the Owner and the Manager shall be sent to their
      respective addresses shown on the first page of this Agreement (“Notice
      Address”); provided that the Owner or the Manager may change its Notice Address
      by giving written notice of such change to the other party in accordance with
      this paragraph.

     

    Section
      15.2.  Notices.
      Wherever this Agreement provides for notice, such notice shall be in writing
      and
      shall be delivered to a party at its Notice Address, either by hand delivery
      or
      by United States mail, certified, with return receipt requested. A
      hand-delivered notice shall be effective on the date of receipt by the party
      being served with the notice. A mailed notice shall be effective on the earlier
      of (i) the date of receipt or refusal of receipt, or (ii) five days after the
      date of mailing. Either party may, in a written notice to the other party,
      designate a reasonable number of third parties to receive a copy of notices
      sent
      under this Agreement. Copies of notices may be sent by regular U.S.
      mail.

     

    
      
         

      

      
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    ARTICLE
      16. 

     

    GENERAL
      PROVISIONS

     

    Section
      16.1.  Relationship
      of the Parties.
      The
      provisions of this Agreement relating to the determination and payment of
      management fees hereunder are included solely for the purpose of providing
      a
      method whereby the such fees can be measured and ascertained. The Manager and
      the Owner shall not be construed as joint venturers or partners of each other
      and neither shall have the power to bind or obligate the other except as set
      forth in this Agreement.

     

    Section
      16.2.  Entire
      Agreement.
      This
      Agreement supersedes all prior agreements and understandings, whether written
      or
      oral. The Owner and the Manager have neither made nor relied upon any promises,
      representations or warranties in connection with this Agreement that are not
      expressly set forth in this Agreement. In entering into this Agreement, the
      Owner and the Manager have relied on the representations and warranties
      contained in this Agreement.

     

    Section
      16.3.  Modifications
      and Waiver.
      This
      Agreement may not be modified except by a written agreement signed by the party
      against whom such modification is sought to be enforced. No waiver of any
      condition or covenant in this Agreement by either party shall be effective
      unless made in writing, nor shall any waiver be deemed to imply or constitute
      a
      future waiver of the same or any other condition or covenant of this
      Agreement.

     

    Section
      16.4.  Governing
      Law.
      This
      Agreement shall be construed and enforced in accordance with the laws of the
      State of Florida.

     

    Section
      16.5.  Construction.
      Whenever a word appears herein in its singular form, such word shall include
      the
      plural; and the masculine gender shall include the feminine and neuter genders.
      This Agreement shall be construed without reference to the titles of Articles,
      Sections or Clauses, which are inserted for convenient reference only. This
      Agreement shall be construed without regard to any presumption or other rule
      permitting construction against the party causing this Agreement to be drafted
      and shall not be construed more strictly in favor of or against either of the
      parties hereto.

     

    Section
      16.6.  Severability.
      If any
      term or provision of this Agreement or the application thereof to any person
      or
      circumstances shall to any extent be invalid or unenforceable, the remainder
      of
      this Agreement, or the application of such term or provision to persons or
      circumstances other than those as to which it is held invalid or unenforceable,
      shall not be affected thereby, and each term and provision of this Agreement
      shall be valid and enforceable to the fullest extent permitted by
      law.

     

    Section
      16.7.  Consent
      or Approval
      .
      Whenever it is necessary under the terms of this Agreement for either party
      to
      obtain the consent or approval of the other party, such consent or approval
      shall not be unreasonably withheld or delayed.

     

    Section
      16.8.  Certificate
      of Performance.
      The
      Owner and the Manager shall, within 20 days after receipt of a written request
      from the other, execute, acknowledge and deliver a statement in writing
      certifying whether this Agreement is unmodified and in full force and effect
      (or
      if modified, whether the same is in full force and effect as so modified),
      whether any conditions to the full enforceability of this Agreement remain
      unsatisfied, and such other facts, including the nature of any claim of default
      on the part of the other, as either party may reasonably request.

     

    Section
      16.9.  Excuse
      for Nonperformance.
      If
      either party hereto shall be delayed or prevented, from the performance of
      any
      act required hereunder by reason of acts of God, strikes, lockouts, labor
      troubles, inability to procure materials, restrictive governmental laws or
      regulations, adverse weather, unusual delay in transportation, delay by the
      other party hereto or other cause without fault and beyond the control of the
      party obligated to perform (financial inability excepted), then upon notice
      to
      the other party, the performance of such act shall be excused for the period
      of
      the delay and the period for the performance of such act shall be extended
      for a
      period equal to the period of such delay; provided, however, the party so
      delayed or prevented from performing shall exercise good faith efforts to remedy
      any such cause of delay or cause preventing performance.

     

    
      
         

      

      
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    Section
      16.10.  Disputes.
      If a
      dispute shall arise as to any amount or sum of money to be paid by one party
      to
      the other or any work to be performed by either of them under the provisions
      hereof, a party shall have the right to make payment or perform such work “under
      protest,” without waiver or prejudice to its right to recover from the other
      party. If it shall later be determined (by agreement of the parties, arbitration
      or litigation) that one party has paid or performed an obligation that should
      have been paid or performed by the other party, the party who paid or performed
      “under protest” shall be entitled to recover the amount paid or the cost
      incurred, plus interest thereon at the Interest Rate specified in Section 16.13
      hereof, from the date on which such payment was made until the date on which
      reimbursement is received.

     

    Section
      16.11.  Arbitration.
      All
      claims, disputes and other matters in question between the parties to this
      Agreement arising out of or relating to this Agreement or the breach thereof,
      shall be decided by mandatory and binding arbitration in accordance with the
      Commercial Arbitration Rules of the American Arbitration Association (“AAA”) or
      as otherwise agreed by the parties in such controversy, and judgement on the
      award rendered by the arbitrator(s) may be entered in any court having
      jurisdiction thereof.

     

    Section
      16.12.  Attorney’s
      Fees.
      If the
      Owner or the Manager brings action through arbitration or at law or equity
      against the other in order to enforce the provisions of this Agreement or as
      a
      result of an alleged default under this Agreement, the prevailing party in
      such
      action shall be entitled to recover from the other party reasonable attorney’s
      fees (including paralegals employed by such attorney and costs of litigation
      at
      the trial and appellate level).

     

    Section
      16.13.  Interest.
      All
      monetary obligations under this Agreement shall bear interest from the date
      on
      which they become due and payable until the date on which payment is received
      by
      the party entitled to payment. Except where a different rate of interest is
      expressly provided for elsewhere in this Agreement, such interest shall be
      paid
      at an annual rate (the “Interest Rate”) equal to ten percent (10%) per
      annum.

     

    Section
      16.14.  Date
      of Agreement.
      All
      references to the “date of this Agreement,” the “date hereof,” and the like
      shall be deemed to be the last date on which this Agreement shall be executed
      by
      the Owner and by the Manager.

     

    In
      witness whereof, the Owner and the Manager do hereby execute this Management
      and
      License Agreement on the date first appearing in the preamble to this
      Agreement.

     

    
      	 	
              SHELLS
                SEAFOOD RESTAURANTS, INC.,
                
a Delaware corporation

              

              By:/s/
                Warren R Nelson

              Name:
                Warren
                R Nelson

              Title:
                President
                and CFO

               

              ROCK
                BEACH GRILL OF PEMBROKE PINES, LLLP,

              a
                Florida limited liability limited partnership

              

              By:
                ROCK
                BEACH HOLDINGS, LLC,

              its
                general partner

              

              By:
                /s/
                Warren R. Nelson

              Name:
                Warren
                R Nelson

              Title:
                President

            

    

     

    
      
         

      

      
        19

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