Exhibit 10.44
SHELLS SEAFOOD RESTAURANTS, INC.
00000 Xxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
January 18, 2002
Best Que, LLC
000 Xxx Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
The Lark Group LLC
000 Xxx Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Reference is made to that certain letter agreement ("Letter Agreement")
dated as of April 17, 2001 by and among Best Que, LLC ("Best Que"), Shells
Seafood Restaurants, Inc. ("Shells"), Famous Dave's Ribs, Inc. ("Famous Dave's")
and The Lark Group LLC ("Lark") and to that certain Management and Licensing
Agreement ("License Agreement") between Best Que and Shells with a draft date of
July 7, 2001. Capitalized terms used but not defined herein shall have the
meaning set forth in the Letter Agreement.
Simultaneously with the execution and delivery of this letter, Lark and
Best Que shall cause to be paid to Shells the amount of $88,815.26 ("Past Due
Amounts") representing amounts now past due under the License Agreement and the
Letter Agreement. Shells shall pay the Past Due Amounts to the parties entitled
thereto.
In addition, Lark and Best Que shall cause to be executed that certain
Secured Promissory Note ("Note") dated as of the date hereof from Xxxxxxx X.
Xxxxxx, XX ("Sloane") and Best Que to Shells in the amount of $100,000.00 and
Lark and Best Que shall cause the original of such Note to be delivered to
Shells at its address set forth above by overnight courier scheduled for
delivery on the next business day after the date hereof, with a fax copy of such
Note delivered to Shells and its counsel by facsimile today. Upon receipt of the
original Note, Shells shall return to Best Que the two (2) original Notes (as
defined in the Letter Agreement) previously executed by Best Que with respect to
the FFE located in the Xxxxxxxx Restaurant and the Middletown Restaurant. Shells
is hereby authorized without modification of the amount of the Note or any
credit thereunder and without compensation to Best Que or Lark to remove one (1)
tilt skillet and one (1) dip tank from the Xxxxxxxx Restaurant and one (1) tilt
skillet and one (1) dip tank from the Middletown Restaurant (collectively, the
"Shells Equipment") and to retain the Shells Equipment as its own free and clear
of any claim from Best Que or Lark. Best Que and Lark covenant and agree to
permit access to the Xxxxxxxx Restaurant and the Middletown Restaurant by any
person authorized by Shells in writing to remove the Shells
Equipment within seven (7) days of the date hereof. The Note shall be secured by
the FFE located at the Middletown Restaurant and in connection therewith, Best
Que and Lark shall cause to be executed that certain Security Agreement dated
the date hereof from Sloane and Best Que to Shells, together with UCC-1
Financing Statements encumbering the FFE at the Middletown Restaurant.
By its execution of this letter, Lark hereby acknowledges and confirms to
Shells that the amount evidenced by the Note continues to be secured by the
Guaranty (as defined in the Note).
No later than January 29, 2002, Best Que and Lark shall pay to Shells
amounts due for December, 2001 sales taxes and for the December, 2001 License
Fee for the Middletown Restaurant and the Clearwater Restaurant in the
anticipated aggregate amount believed to be $12,704.53, plus any penalties and
interest that accrue thereon prior to receipt of payment ("December License Fees
and Sales Taxes").
No later than February 18, 2002, Best Que and Lark shall pay to Shells
amounts due under the Letter Agreement and License Agreement with respect to the
Restaurants for Lease Obligations, operating expenses and the License Fee (as
defined in the License Agreement ) related to the Restaurants for the month of
January, 2002 ("January Operating Costs").
Best Que and Lark covenant and agree with Shells that Best Que and/or Lark
shall honor all gift certificates ("Restaurant Gift Certificates") issued in
connection with operation of the Restaurants pursuant to the Letter Agreement
and License Agreement by issuing immediately, upon request of a customer, a
complete refund to any customer who purchased or was otherwise issued a
Restaurant Gift Certificate, or, if Shells refunds to any customer the amount of
any Restaurant Gift Certificate, Best Que and/or Lark shall immediately, upon
request, reimburse Shells for the amount thereof and Shells shall surrender to
Best Que or Lark each Restaurant Gift Certificate for which Shells receives
reimbursement from Best Que or Lark.
If the December License Fees and Sales Taxes, the January Operating Costs
and/or the amounts payable on account of Restaurant Gift Certificates
(collectively, "Future Fees and Costs") are not paid by Best Que and/or Lark on
or prior to the date due as set forth herein, then a late fee equal to five
percent (5%) of the amount due shall be immediately due and payable by Best Que
and Lark, and, in addition, if the Future Fees and Costs (and any late fee
imposed thereon) are not paid when due, then Best Que and Lark shall pay
interest on any such past due amounts at the rate of interest set forth in the
Note commencing on the date due and ending on receipt by Shells of the Future
Fees and Costs (and any late fee imposed thereon) and interest then due and
payable with respect thereto in immediately available Florida funds. The
obligations of Best Que and Lark under this letter are joint and several. The
provisions of this paragraph are in addition to any other rights and remedies
available to Shells under the Letter Agreement, License Agreement, the Note, at
law or in equity.
With respect to the Middletown Restaurant, Shells is presently negotiating
a termination agreement ("Termination Agreement") with Shoney's, Inc.
("Shoney's") whereby Shells would terminate its sublease with Shoney's for the
Middletown Restaurant and surrender possession thereof to Shoney's. Shoney's has
requested that Shells make certain representations and warranties to Shoney's
relating to the Middletown Restaurant and the operations thereat prior to the
effective date of the Termination Agreement. Upon request, Best Que and Lark
covenant and agree to join in the Termination Agreement for the sole purpose of
confirming
and/or making to Shoney's certain representations reasonably requested by
Shoney's relating to operations at the Restaurants, Shells' subleasehold estate
therefor, sales, employment and other taxes and assessments payable by Best Que
under the Letter Agreement and./or License Agreement from the date of Takeover
of the Middletown Restaurant until the effective date of the Termination
Agreement.
Upon receipt of the Past Due Amounts and a fax copy of the fully-executed
Note and this letter, Shells shall forward to the landlord ("Xxxxxxxx Landlord")
of the Xxxxxxxx Restaurant four (4) original counterparts of an Assignment and
Assumption of Lease ("Xxxxxxxx Assignment") executed on behalf of Shells and
Famous Dave's for execution of the Landlord Consent attached thereto on behalf
of the Xxxxxxxx Landlord. Upon receipt of a fully-executed copy of the Xxxxxxxx
Assignment (and the Landlord's Consent attached thereto), Best Que and Lark
shall be permitted to commence construction at the Xxxxxxxx Restaurant to the
extent necessary to convert the same to a "Famous Dave's" restaurant as
permitted in section 9.4 of the Xxxxxxxx Assignment but subject to the terms of
the Xxxxxxxx Assignment. Best Que and Lark acknowledge and agree that Shells is
agreeing to execute and deliver the Xxxxxxxx Assignment to the Xxxxxxxx Landlord
in consideration of the execution and delivery of this letter and the
performance of the terms of this letter, without which Shells would not have
executed and delivered the same.
If the foregoing is in accordance with your understanding, execute a copy
of this letter in the space provided below and return it to me today by
facsimile. This letter may be executed in counterparts and/or by facsimile and
the signature to any counterpart may be attached to any other counterpart by
either party, however, each counterpart and facsimile shall be deemed one and
the same document. This letter shall be governed by the laws of the State of
Florida, without giving effect to its conflict of laws provisions.
Very truly yours,
Shells Seafood Restaurants, Inc.
By: /s/
Xxxxxx X. Xxxxxx
Executive Vice President
Acknowledged and agreed to
this 18th day of January, 2002
Best Que, LLC
By: /s/
Xxxxxxx X. Xxxxxx, XX
Manager
The Lark Group LLC
By: /s/
Xxxxxxx X. Xxxxxx, XX
Manager
