Exhibit 10.4
 
RESTATED AND AMENDED
PROMISSORY NOTE
OF
FIVE STAR GROUP, INC.
PAYABLE TO THE ORDER OF
BANK OF AMERICA, N.A.

Amount of Note: $35,000,000
Interest Rate:
Set forth below
       
Dated:
June 26, 2008
       
Maturity Date:   
June 30, 2011, unless sooner accelerated or terminated as provided below

 
 
1.           GENERAL PROMISE TO PAY:   FIVE STAR GROUP, INC., a corporation
organized and existing under the laws of the State of Delaware with its
principal place of business at 903 Murray Road, East Hanover, Morris County, New
Jersey 07936 with its mailing address at 903 Murray Road, P.O. Box 357, East
Hanover, Morris County, New Jersey 07936 (being hereinafter referred to as
“BORROWER”) hereby promises to pay to the order of BANK OF AMERICA, N.A.
(hereinafter called “LENDER”) the principal sum of THIRTY-FIVE MILLION AND
NO/100 DOLLARS ($35,000,000), or, if any lesser sum is outstanding hereunder,
the aggregate unpaid principal amount of all advances, re-advances, loans and
re-loans made by LENDER to BORROWER hereunder, such payment to be made in lawful
money of the United States, together with interest as hereinafter provided.
 
2.           NOTE AND RECORDS OF LENDER TO EVIDENCE LOAN:
 
(a)           This Note is BORROWER’s “master” Revolving Note described in that
certain Restated and Amended Loan and Security Agreement by and between LENDER
and BORROWER and dated even date herewith, such certain Restated and Amended
Loan and Security Agreement and all extensions, modifications (including without
limitation modifications increasing or decreasing the amount of the Revolving
Loan described below and/or any other financial accommodation provided
thereunder), refinancings, renewals, substitutions, replacements and/or
redatings thereof being hereinafter called the “Loan Agreement” in this Note.
 

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(b)           This Note restates, replaces and substitutes for the $35,000,000
“master” Revolving Note executed by BORROWER in favor of LENDER (then known as
Fleet Capital Corporation) and dated as of June 1, 2005.  This Note evidences
the Revolving Loan described and defined in the Loan Agreement.
 
(c)           It is BORROWER’s intention that, in addition to this Note, the
borrowing and the indebtedness owed by BORROWER to LENDER under the Revolving
Loan shall be evidenced by LENDER’s records described below.
 
(d)           (1)           As it relates to LENDER’s aforementioned records,
BORROWER hereby authorizes LENDER to record on LENDER’s records all advances
made by LENDER to BORROWER under this Note and all interest and other amounts
due hereon and all payments made on account of principal and/or interest and/or
such other amounts.  The aggregate unpaid principal and/or interest and/or other
amounts entered and shown on LENDER’s records shall further evidence the
principal and/or interest and/or other amounts owing and unpaid on the Revolving
Loan. LENDER may from time to time render, or cause LENDER to render, a
statement of the aforementioned records. If BORROWER fails to object to any such
statement within sixty (60) days after it is received by BORROWER, such
statement shall be deemed to be an account stated and binding upon BORROWER,
provided, however, that nothing in the foregoing shall prevent LENDER or
BORROWER from correcting manifest errors in such statements.
 
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(2)           Notwithstanding the foregoing, the following shall apply:
 
 
(A)
Any failure by LENDER to enter on its records the date and amount of any advance
or interest or other amount due on this Note or any failure by LENDER to render
any such statement shall not, however, limit or otherwise affect the obligations
of BORROWER under the Loan Agreement or under this Note to repay the principal
amount of the advances, re-advances, borrowings and re-borrowings made by LENDER
to BORROWER under the Revolving Loan and this Note, together with all interest
accruing and other amounts due thereon.

 
(B)
The failure by LENDER to enter on its records the date and amount of any payment
made by BORROWER shall not, however, limit or otherwise affect the right of
BORROWER under the Revolving Loan or this Note to demonstrate its payment of any
Advance or any interest accruing and other amounts due thereon.

3.           LIMITATION ON OUTSTANDING BORROWINGS:  Notwithstanding the face
amount of this Note, the total of all outstanding borrowings under this Note
shall not at any one time exceed the Lending Formula set forth in the Loan
Agreement.
 
4.           PROCEDURE FOR ADVANCES AND DISBURSEMENTS:  All requests by BORROWER
for an advance under this Note and all disbursements made by LENDER under this
Note shall be made pursuant to the terms of the Loan Agreement.
 
5.           RIGHT TO RECEIVE ADVANCES:  BORROWER may receive advances under
this Note to the extent allowed by the Loan Agreement.
 
6.           REPAYMENT OF PRINCIPAL:  The principal due under this Note shall be
paid in full on June 30, 2011, or in all cases sooner at the times and in the
manner set forth in the Loan Agreement.
 
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7.           PAYMENT OF INTEREST ON THE REVOLVING LOAN:  The interest payable
under this Note shall be calculated and paid at the times and in the manner set
forth in the Loan Agreement.
 
8.           INDEMNIFICATION RELATING TO LIBOR OPTION:
 
(a)           BORROWER agrees to indemnify LENDER against any loss or expense
which LENDER may sustain or incur as a consequence of (1) any failure by
BORROWER to borrow all or any portion of any Principal Balance (relating to
Advances Outstanding under the Revolving Loan as to which BORROWER has elected
to have interest determined or to be determined, as applicable, at a LIBOR Based
Rate and as more fully defined above) or (2) the receipt or recovery by LENDER
of all or any part of any Principal Balance prior to the maturity thereof
whether by voluntary or involuntary prepayment, acceleration or
otherwise.  Capitalized terms used in this Paragraph shall have the meaning
given those terms in the Loan Agreement.
 
(b)           The aforementioned indemnification will be governed in the manner
and in the amounts set forth in the Loan Agreement.
 
(c)           In addition, nothing in the foregoing shall limit BORROWER’s
liability under any Master Agreement described in the Loan Agreement.
 
9.           AUTHORIZATION TO CHARGE ACCOUNT: Although LENDER may bill BORROWER
monthly for accrued monthly interest and other amounts (including principal) due
under this Note and the Revolving Loan, it is understood that LENDER will, and
BORROWER hereby authorizes LENDER to, charge as of each due date such interest
and any other amounts (including principal)and effect payment by increasing the
principal balance of the Revolving Loan as though an advance were taken by
BORROWER against the Revolving Loan in the amount of any payment effected by
LENDER.
 
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10.           PREPAYMENT:  BORROWER may prepay the amounts due under this Note
only as allowed by the Loan Agreement.
 
11.           LATE CHARGES:  BORROWER shall be liable for the payment of “late”
charges in the amounts and as set forth in the Loan Agreement.
 
12.           AUTHORIZATION TO CHARGE ACCOUNT:  BORROWER hereby authorizes
LENDER to charge and effect payment as of each due date of all interest and
other amounts (including principal) due under this Note and the Revolving Loan
in the manner set forth in the “Authorization to Charge” (as defined in the Loan
Agreement).
 
13.           PLACE OF PAYMENT:  All payments made under this Note shall be made
at LENDER’s offices as specified in the Loan Agreement or at any other location
that the holder of this Note may designate by written notice to BORROWER given
in accordance with the Loan Agreement.
 
14.           DEFINITIONS:  The definitions contained in the Loan Agreement are
incorporated herein by reference.
 
15.           CONTINUING RIGHTS OF LENDER:  LENDER’s rights under this Note
shall remain in full force and effect until all Liabilities (as defined in the
Loan Agreement) are paid in full.
 
16.           HOLDER ENTITLED TO BENEFITS OF LOAN AGREEMENT:  The terms of the
Loan Agreement are incorporated herein by reference and the holder of this Note
is entitled to the benefits of the Loan Agreement.
 
17.           EVENTS OF DEFAULT:  The occurrence of any of the following shall
be an event of default (an “Event of Default”) hereunder:
 
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(a)
BORROWER’s failure to pay any principal or interest when due under this Note;

 
 
(b)
BORROWER’s failure to perform any obligation due under this Note; and

 
(c)           the occurrence of any Event of Default under the Loan Agreement.
 
18.           REMEDIES:
 
(a)           Upon the occurrence of an Event of Default, LENDER may do any or
all of the following:
 
(1)                      LENDER may declare the entire principal amount of this
Note or the unpaid balance hereof, together with all accrued interest and all
other lawful and proper charges and other sums due hereunder and under the Loan
Agreement (including attorneys fees for collection and enforcement of LENDER's
rights) immediately due and payable with interest thereafter at the Default
Rate, without presentment, demand, protest or other notice of any kind, all of
which are hereby expressly waived by BORROWER; and/or
 
(2)                      LENDER may exercise all other rights and remedies
available to it at law or in equity.
 
(b)           The remedies of LENDER under this Note are in addition to all
other remedies, statutory and otherwise, which are available to it under law or
under the terms of the Loan Agreement and all other Loan Documents.
 
19.           WAIVER OF PRESENTMENT:  Presentment, demand, protest, notice of
dishonor and any other notice of any kind are hereby expressly waived.
 
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20.           NEW JERSEY LAW GOVERNS:  This Note shall be governed in accordance
with the laws of the State of New Jersey.
 
21.           LOST NOTE:  Upon receipt of an affidavit of an officer of LENDER
as to the loss, theft, destruction or mutilation of this Note, BORROWER will
issue, in lieu thereof, a replacement Note in the same principal amount hereof
and otherwise of like tenor.
 
22.           PLEDGE TO FEDERAL RESERVE:  LENDER may at any time pledge all or
any portion of its rights under the aforementioned Loan Documents, including any
portion of this Note, to any of the twelve Federal Reserve Banks organized under
Section 4 of the Federal Reserve Act, 12 U.S.C. Section 341.  No such pledge or
enforcement thereof shall release LENDER from its obligations under any of such
Loan Documents.
 
23.           ASSIGNMENTS/PARTICIPATIONS:  Assignments and Participations of
LENDER’s interest in this Note are allowed as set forth in the Loan Agreement.
 
24.           WAIVER OF JURY TRIAL:  BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES ITS RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED
HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE, THE LOAN
AGREEMENT AND ANY OTHER LOAN DOCUMENTS CONTEMPLATED TO BE EXECUTED IN CONNECTION
HEREWITH OR THEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF LENDER. THIS WAIVER CONSTITUTES A
MATERIAL INDUCEMENT FOR LENDER TO ENTER INTO THE LOAN AGREEMENT AND MAKE AND
CONTINUE THE REVOLVING LOAN.

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IN WITNESS WHEREOF, BORROWER has caused this Note to be signed by its duly
authorized representatives on the date first above written.
 

ATTEST:    FIVE STAR GROUP, INC.                
/s/ IRA SOBOTKO
 
By:
/s/ JOHN BELKNAP   Ira Sobotko, Secretary      John Belknap, Vice  President    
             

 
 
 
 
 
 
 
 
 
 
 
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