By: /s/ David Ogburn Name: J. David Ogburn Title: Sr. Vice President An Affiliate of The Colonial BancGroup, Inc. 400 North Tampa Street, Suite 2500, Tampa, Florida 33602 Telephone 813 ###-###-#### www.colonialbank.com AN EQUAL OPPORTUNITY EMPLOYER

September 28, 2006

Mr. Warren R. Nelson

Shells Seafood Restaurants, Inc.

16313 N. Dale Mabry Hwy

Suite 100

Tampa, FL 33618

Re:	Colonial Bank, NA (the “Bank”)

Loan to Shells Seafood Restaurants, Inc. (“Shells”)

Dear Mr. Nelson:

This letter will confirm that effective as of September 28, 2006, the Bank has agreed to renew Loan Number ###-###-#### (the “Loan”) and the repayment of the Promissory Note in the principal amount of $500,000 (the “Note”) issued thereunder from September 28, 2006 to October 28, 2006. The Bank acknowledges and agrees that no Event of Default has occurred under the Loan or the Note from the date it was entered into through the date of hereof. Except as set forth above, all of the terms and conditions of the Loan and the Note remain in full force and effect.

Please call me at ###-###-#### with any questions.

Sincerely,

COLONIAL BANK, NA

By: /s/ David Ogburn

Name: J. David Ogburn

Title: Sr. Vice President

An Affiliate of The Colonial BancGroup, Inc.

400 North Tampa Street, Suite 2500, Tampa, Florida 33602

Telephone 813 ###-###-####

AN EQUAL OPPORTUNITY EMPLOYER