Exhibit 10.50
SECOND AMENDMENT TO
MANAGEMENT AND LICENSE AGREEMENT
This SECOND AMENDMENT TO MANAGEMENT AND LICENSE AGREEMENT (this
"Amendment") is made and entered into by SHELLS SEAFOOD RESTAURANTS, INC., a
Florida corporation (the "Manager"), and SHELLS OF SARASOTA SOUTH, INC., a
Florida corporation (the "Owner").
WHEREAS, the Manager and the Owner desire to amend the Management and
License Agreement dated effective July 28, 1993, as amended (the "Management
Agreement");
NOW, THEREFORE, in consideration of the mutual obligations contained
herein, the parties hereto agree as follows:
Paragraph 1. Amendment. Section 1.02(c) of the Management Agreement shall
be amended in its entirety to read as follows:
"(c) Management and License Fee: The Management and License Fee
shall be equal to four percent (4%) of Gross Sales (as defined
below); provided, however, that the Management Fee shall be
increased to five percent (5%) of Gross Sales when the Owner's
"adjusted cash flow" for any fiscal quarter or three consecutive
fiscal months is at least eighty percent (80%) of adjusted cash flow
for the same accounting period from fiscal year ended January 2,
2000, as set forth on Exhibit A (the "First Benchmark"); and
provided, further, that the Management and License Fee shall be
increased to six percent (6%) of Gross Sales when Owner's adjusted
cash flow for any fiscal quarter or three consecutive fiscal months
is at least ninety percent (90%) of adjusted cash flow for the same
accounting period from fiscal year ended January 2, 2000, as set
forth on Exhibit A (the "Second Benchmark"). Once the Owner's
Management and License Fee is increased to five percent (5%) or six
percent (6%) as described above, the Management and License Fee
shall not be adjusted downward even if adjusted cash flow
subsequently decreases below the First Benchmark or the Second
Benchmark, as applicable.
The term "adjusted cash flow" shall mean net income (loss) of the
Owner as set forth on its monthly Statement of Operations adding
back special disbursements (as defined below) and the amounts
recorded in the line items reflected on the Statement of Operations
under the captions "Depreciation/Amortization," "Gain/Loss sale of
assets," "Management Fees," "Other Owner Benefits," "Interest
Expense," and "Legal and Professional." The term "special
disbursements" shall mean (i) bonuses, salary increases, or other
compensation or benefits authorized and paid by the Owner to any
manager or employee of the Owner which are outside the scope of the
compensation and incentive policies of
the Manager and (ii) payments, charges, or credits by the Manager or
Owner outside the ordinary course of business, unless such payments,
charges, or credits are otherwise approved by the Manager and the
Owner. The term "ordinary course of business" shall mean the ordinary
course of the Owner's seafood restaurant business consistent with its
past custom and practice (including with respect to quantity and
frequency)."
Paragraph 2. Ratification. In all other respects, the Management Agreement
is ratified and confirmed.
IN WITNESS WHEREOF, the parties hereto have executed to this Amendment
effective as of the 4th day of October, 2001.
MANAGER:
SHELLS SEAFOOD RESTAURANTS,
INC., a Florida corporation
By: /s/
Xxxxx Xxxx, President/CEO
OWNER:
SHELLS OF SARASOTA SOUTH, INC.,
a Florida corporation
By: /s/
Xxxxxxx Xxxxxxxx, President
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