|   | March      25, 2008 |   |
|--------|---------------------|--------|

|   | Re:    | $35,000,000      Revolving Loan from Bank of America, N.A. to Five Star Group,      Inc.                                                                                                                                                                                                                                                                              |
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|   |   |                                                                                                                                                                                                                                                                                                                                                                  |
|   |   | EIGHTH      MODIFICATION AGREEMENT:                                                                                                                                                                                                                                                                                                                                   |
|   |   | waiver of Borrower’s      compliance with Capital Expenditures covenant of Section 6.16 (a) of the      Loan Agreement for the fiscal year ended December 31,      2007 amendment of the      formula which determines Borrower’s compliance with the Fixed Charge      Coverage covenant set forth in Section 5.21 of the Loan      Agreement  |

|   | (a) | an      instrument of modification dated as of May 28, 2004 and entitled “First      Modification Agreement”; |
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|   | (b) | an      instrument of modification dated as of March 22, 2005 and entitled “Second      Modification Agreement”; |
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|   | (c) | an      instrument of modification dated as of June 1, 2005 and entitled “Third      Modification Agreement”; |
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|   | (d) | an      instrument of modification dated as of September 26, 2005, but effective      as of August 1, 2005, and entitled “Fourth Modification      Agreement”; |
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|   | (e) | an      instrument of modification dated as of November 14, 2005, but effective as      of August 1, 2005, and constituting a fifth modification      agreement; |
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|   | (f) | an      instrument of modification dated as of March 23, 2006, but effective as of      December 31, 2005, and constituting a sixth modification agreement;      and |
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|   | (g) | an      instrument of modification dated as of March 23, 2007, and constituting a      seventh modification agreement |
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| (c) (1)       For      purposes of this covenant, “Fixed      Charge Coverage” means the following ratio: |
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|                                                                                                                       |   |   |
|                                                                                                                       | BORROWER’s      earnings before interest, taxes, depreciation and amortization and before      the income statement component of any change in valuation arising under      the Master Agreement,PLUS non-cash charges      related to any equity instruments (common stock, options and warrants)      issued to any employee, director, or consultant,LESS BORROWER’s “Unfunded Capital      Expenditures”,LESS cash payment of      income tax liabilities,LESS cash distributions      to stockholders,LESS all scheduled      principal payments paid as allowed by the Subordinated Seller Note (at the      present time there being no scheduled payments allowed by the Subordinated      Seller Note) |   |
|                                                                                                                       |   |   |
|                                                                                                                       | --divided      by-- |   |
|                                                                                                                       |   |   |
|                                                                                                                       | interest      expense,PLUS the current      maturities oflong      term debt as reported in BORROWER’s annualfinancial      statements for its fiscal year immediately preceding the applicable test      period,PLUS current maturities      of Capital Lease Obligations as reported in BORROWER’s annual financial      statements for its fiscal year immediately preceding the applicable test      period |   |

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|   | (1) | This      consent relates only to Borrower’s failure to comply with Section 6.16 (a)      of the Loan Agreement for the fiscal year ended December 31, 2007, and      only to the extent necessary to accommodate the aforesaid $665,000 of      Capital Expenditures and waive the aforesaid Event of    Default. |
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|   | (2) | The      provisions of Section 6.16 of the Loan Agreement will otherwise remain in      effect without change for all otherpurposes. |
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|   | (3) | This      consent relates only to the amendment of the formula determining      Borrower’s compliance with the Fixed Charge Coverage covenant of Section      5.21 of the Loan Agreement and Borrower’s compliance with the “No      Year-to-Date Net Loss in Excess of $300,000” covenant set forth in Section      6.14 of the Loan Agreement and Borrower’s compliance with the “Losses in      Any Two Consecutive Fiscal Quarters” covenant set forth in Section 6.15 of      the Loan Agreement, in all cases as at December 31, 2007, and test dates      thereafter. |
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|   | (4)    | (a)    | Borrower      must confirm and, by its acceptance and execution of a copy of this      letter, does confirm that all amounts due and owing under the Revolving      Loan, the Loan Agreement and the Loan Documents described therein      (hereinafter the “Loan      Documents”) are owed to Lender without offset, defense, recoupment,      set-off, deduction, or counterclaim. |
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|   |   |   |                                                                                                                                                                                                                                                                                                                                                                                             |
|   |   | (b)    | Borrower      must confirm and, by its acceptance and execution of a copy of this      letter, does confirm that as of March 12, 2008, the following principal      and interest amounts were owed on the Revolving Loan:                                                                                                                                                                        |
|   |   |   |                                                                                                                                                                                                                                                                                                                                                                                             |
|   |   |   | (1)           Principal                      $ 24,375,532.98                                                                                                                                                           |
|   |   |   | (2)                Interest:                      interest      which has accrued from March 1, 2008                                                                                                                             |

|   | (5) | Borrower      must confirm and, by its acceptance and execution of a copy of this      letter, does confirm that there exist no claims or charges against any      actions or inactions of Lender in extending the Revolving Loan or in      making disbursements thereunder or in otherwise administering the      Revolving Loan, the Loan Agreement and/or the Loan    Documents. |
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|   | (6) | Borrower      must waive, release and discharge and, by its acceptance and execution of      a copy of this letter, does waive, release and discharge any and all      claims or causes of action of any kind whatsoever, whether at law or in      equity, arising on or prior to the date hereof, which Borrower may have      against Lender, its predecessors, its successors and assigns, agents,      employees and counsel, in connection with the Revolving Loan, the Loan      Agreement and the Loan Documents.  The waivers and releases made      herein include the waiver of any damages which may have been or may in the      future be caused to Borrower or to its properties or business prospects      because of the actions waived and released and the agreements made herein,      including without limitation, any actual or implicit, direct or indirect,      incidental or consequential damages suffered by Borrower therefrom,      including but not limited to (a) lost profits, (b) loss of business      opportunity, (c) increased financing costs, (d) increased legal and other      administrative fees and (e) damages to business  reputation. |
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|   | (7) | Borrower      must confirm and, by its acceptance and execution of a copy of this      letter, does confirm that all of the terms, covenants and provisions of      the Revolving Loan, the Loan Agreement and the Loan Documents (as all have      been heretofore and hereby amended) shall continue in full force and      effect. |
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|   | (8) | Borrower      must continue to comply with the terms of the Revolving Loan and not be in      default thereunder. |
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|   | (9) | All      rights of Lender shall continue to be determined in accordance with the      Loan Agreement and the Loan Documents until all Liabilities (as defined in      the Loan Agreement) are paid infull. |
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|   | (10) | This      letter will be deemed a modification of the Loan Agreement and Borrower’s      obligations hereunder will be considered a covenant of the Loan      Agreement. |
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|   | (11) | All      of the Loan Documents described and defined in the Loan Agreement shall be      deemed to be amended in manner consistent hereto and conforming      herewith. |
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|   | (12) | Five      Star Products, Inc., as guarantor of the amounts owed under the Loan      Agreement, must confirm to Lender that its instrument of guaranty      continues in full force and effect and is not impaired or otherwise      lessened or adversely affected by the waiver and amendment granted by this      letter. |
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|   | (13) | JL      Distributors, Inc., as the      holder of debt whose payment has been subordinated to the payment of the      Liabilities owed under the Loan Agreement, must confirm to Lender that its      instrument of subordination continues in full force and effect and is not      impaired or otherwise lessened or adversely affected by the waiver and      amendment granted by this letter. |
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|   | (14) | Borrower      must pay for the services of Lender’s counsel who was engaged to review      the Loan Agreement and to assist in the preparation of this letter and      authorizes Lender to effect payment of such fee in the manner allowed by      the “Authorization to Charge Accounts” as set forth in the Loan      Agreement. |
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|   | Very      truly yours,     |                              |
|--------|----------------------------|-----------------------------------|
|   |                       |                              |
|   | BANK      OF AMERICA, N.A. |                              |
|   |                       |                              |
|   | /s/      EDMUNDO KAHN      |                              |
|   |                       |                              |   |
|   | By:                        | Edmundo      Kahn, Vice President |   |

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| WITNESS:            |   | FIVE STAR GROUP,      INC. |
|--------------------------|--------|----------------------------|
|                     |   |                       |   |
|                     |   |                       |   |
| /s/ CAROLE      NUSSBAUM |   | By:                        | /s/      JOHN BELKNAP |
| Carole      Nussbaum     |   |                       | John      Belknap |
|                     |   |                       | Vice    President |

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