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                                                                    EXHIBIT 10.3

Demand Note                                                   LOGO CITIZENS BANK
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$15,000,000.00                                                      Nov. 7, 2003

FOR VALUE RECEIVED, and intending to be legally bound, Undersigned, as defined
below, with an address at PO Box 334, Hanover, PA 17331 promises to pay Citizens
Bank of Pennsylvania, a Pennsylvania state chartered bank ("Bank") or its order
at 2001 Market Street, Suite 600, Philadelphia, Pennsylvania 19103 ON DEMAND,
the sum of Fifteen Million Dollars ($15,000,000.00), or such lesser or greater
principal amount as may be outstanding from time hereunder, with interest on the
outstanding balance from the date of this Note ("Note") at the rate(s)
("Contractual Rate(s))" specified herein. This Note is issued in connection with
any other agreements and documents between Undersigned and Bank, the terms of
which are incorporated herein by reference and is secured by the collateral
described therein (as amended, modified or renewed from time to time,
collectively the "Credit Documents").

UNDERSIGNED UNDERSTANDS AND ACKNOWLEDGES THAT BANK MAY DEMAND PAYMEnt, HEREUNDER
AT ANY TIME AND WITHOUT ANY REASON. NOTHING CONTAINED IN THIS NOR ANY OTHER
CREDIT DOCUMENT SHALL BE CONSTRUED TO PREVENT BANK FROM MAKING DEMAND FOR
PAYMENT HEREUNDER AT ANY TIME THAT BANK, IN THE EXERCISE OF ITS SOLE DISCRETION,
DEEMS NECESSARY OR DESIRABLE; AND, IN THE EVENT OF ANY SUCH DEMAND, (A) BANK
SHALL HAVE NO FURTHER OBLIGATION TO MAKE ADVANCES OR TO EXTEND CREDIT, AND (B)
THE ENTIRE UNPAID PRINCIPAL BALANCE HEREUNDER, AND ALL ACCRUED INTEREST AND ALL
OTHER OBLIGATIONS HEREUNDER SHALL BECOME DUE AND PAYABLE FOR ALL PURPOSES
IMMEDIATELY UPON THE MAKING OF SUCH DEMAND.

So long as Bank is the holder hereof, Bank's books and records shall be
presumed, except in the case of manifest error, to accurately evidence at all
times all amounts outstanding under this Note and the date and amount of each
advance payment made pursuant hereto.

The prompt and faithful performance of all of Undersigned's obligations
hereunder, including without limitation time ofpayment, is of the essence of
this Note.

The Undersigned hereby grants to Bank a security interest in, lien upon, and
right of setoff against, all deposit accounts, credits, securities, moneys, or
other property of Undersigned which may at any time be in the possession of,
delivered to, or owed by Bank, including any proceeds or returned or unearned
premiums of insurance, and the proceeds of all the foregoing property.

1. Advances. Undersigned may request advances hereunder upon giving written
notice to the Bank by 10:00 a.m. (New York time) (a) on the day of the proposed
advance, in the case of advances to bear interest under the Prime Rate Option
(as hereinafter defined) and (b) not less than two (2) nor more than five (5)
Business Days prior to the proposed advance, in the case of advances to bear
interest under the LIBOR Rate Options (as hereinafter defined). The aggregate
unpaid principal amount of advances under this Note shall not exceed the face
amount of this Note.

2. Rate of Interest. The advances under this Note shall bear interest at the
rate or rates set forth below as selected by Undersigned (each, a "Rate
Option"):

         (i) Prime Rate Option. A rate per annum equal to the Prime Rate. For
purposes hereof, the term "Prime Rate" means a per annum rate of interest,
calculated on a 360 day basis but charged on the actual number of days elapsed,
equal to the rate of interest announced from time to time by Bank as its Prime
Rate which rate is not necessarily the lowest interest rate charged by the Bank
for loans, such Prime Rate to change from time to time as of the effective date
of each change in the Prime Rate. If and when the Prime Rate changes, the rate
of interest with respect to any advance to which the Prime Rate Option applies
will change automatically without notice to Undersigned, effective on the date
of any such change. There are no required minimum interest periods for advances
bearing interest under the Prime Rate Option.
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         (ii) LIBOR Rate Option. A rate per annum (computed on the basis of a
year of 360 days for the actual number of days elapsed) equal to the sum of (A)
the LIBOR Lending Rate plus (B) Seventy Five (75) basis points (0.75%), for the
applicable Interest Period. Advances under the LIBOR Rate Option shall be in a
minimum amount $500,000.00 and integral multiples of $1,000.00 with an Interest
Period selected by Undersigned in accordance with this Note. The LIBOR Lending
Rate shall be adjusted with respect to any advance to which the LIBOR Rate
Option applies on and as of the effective date of any change in the LIBOR
Reserve Percentage. The Bank shall give prompt notice to Undersigned of the
LIBOR Lending Rate as determined or adjusted in accordance herewith, which
determination shall be conclusive absent manifest error.

         (iii) LIROR Advantage Rate Option. A rate of interest per annum
(computed on the basis of a year of 360 days, but charged on the actual number
of days elapsed) equal to the sum of (A) the LIBOR Lending Rate plus (B) Seventy
Five (75) basis points (0.75%), for the applicable Interest Period. Advances
under the LIBOR Advantage F Option shall be in a minimum amount of $1,000.00
with an integral multiples of $1,000.00 with an Interest Period selected by
Undersigned in accordance with this Note. The LIB0R Lending Rate shall be
adjusted with respect to any advance to which the LIBOR Advantage Rate Option
applies on and as of the effective date of any change in the LIBOR Reserve
Percentage. The Bank shall give prompt notice to Undersigned of the LIBOR
Lending Rate as determined or adjusted in accordance herewith, which
determination shall be conclusive absent manifest error.

For purposes hereof, the following terms shall have the following meanings:

         "Business Day" shall mean (a) any day which is neither a Saturday or
         Sunday nor a legal holiday on which commercial banks are authorized or
         required to be closed in Philadelphia, Pennsylvania; (b) when such term
         is used to describe a day on which a borrowing, payment, prepaying, or
         repaying is to be made in respect of any LIBOR Rate Loan, any day which
         is: (i) neither a Saturday or Sunday nor a 1egal holiday on which
         commercial banks are authorized or required to be closed in New York
         City; and (ii) a London Banking Day; and (c) when such term is used to
         describe a day on which an interest rate determination is to be made in
         respect of any LIBOR Rate Loan, any day which is a London Banking Day.

         "Interest Period" means:

            relative to any LIBOR Rate Loans made pursuant to the LIBOR Rate
            Option (i) initially, the period beginning on (and including) the
            date on which such LIBOR Rate Loan is made or continued as, or
            converted into, a LIBOR Rate Loan and ending on (but excluding) the
            day which numerically corresponds to such date one, two, or three
            months thereafter (or, if such month has no numerically
            corresponding day, on the last Business Day of such month), in each
            case as Undersigned may select; and (ii) thereafter, each period
            commencing on the last day of the next preceding Interest Period
            applicable to such LIBOR Rate Loan and ending one, two, or three
            months thereafter, as selected by Undersigned by irrevocable notice
            to Bank not less than two Business Days prior to the last day of the
            then current Interest Period with respect thereto;

            relative to any LIBOR Rate Loans made pursuant to the LIBOR
            Advantage Rate Option (i) initially, the period beginning on (and
            including) the date on which such LIBOR Rate Loan is made or
            continued as, or converted into, a LIBOR Rate Loan and ending on
            (but excluding) the day which numerically corresponds to such date
            three months thereafter (or, if such month has no numerically
            corresponding day, on the last Business Day of such month), in each
            case as Undersigned may select; and (ii) thereafter, each period
            commencing on the last day of the next preceding Interest Period
            applicable to such LIBOR Rate Loan and ending three months
            thereafter, as selected by Undersigned by irrevocable notice to Bank
            not less than two Business Days prior to the last day of the then
            current Interest Period with respect thereto;
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         Provided, however, that (a) Undersigned shall not be permitted to
         select Interest Periods to be in effect at any one time which have
         expiration dates occurring on more than three (3) different dates; (b)
         Interest Periods commencing on the same date for LIBOR Rate Loans
         comprising part of the same advance under this agreement shall be of
         the same duration; (c) Interest Periods for LIBOR Rate Loans in
         connection with which Undersigned has or may incur Hedging Obligations
         with Bank shall be of the same duration as the relevant periods set
         under the applicable Hedging Contracts; (d) if such Interest Period
         would otherwise end on a day which is not a Business Day, such Interest
         Period shall end on the next follow Business Day unless such day falls
         in the next calendar month, in which case such Interest Period shall
         end on, the first preceding Business Day; and (e) no interest Period
         may end later than the Termination Date.

         "LIBOR Advantage Rate Interest Payment Date" means initially, the last
         day of December, 2003, and thereafter the numerically corresponding
         date of each month. If a month does not contain a day that numerically
         corresponds to the date of the LIBOR Advantage Rate Interest Payment
         Date, the LIBOR Advantage Rate Interest Payment Day shall be last day
         of such month.

         "LIBOR Lending Rate" means, relative to any LIBOR Rate Loan to be made,
         continued, or maintained as, or converted into, a LIBOR Rate Loan for
         any Interest Period, a rate per annum determined pursuant to the
         following formula:

         LIB0R Lending Rate                           LIBOR Rate
                                =         ---------------------------------
                                          (1.00 - LIBOR Reserve Percentage)

         "LIBOR Rate" means relative to any Interest Period, the offered rate
         for deposits of U.S. Dollars in an amount approximately equal to the
         amount of the requested LIBOR Rate Loan for a term coextensive with the
         designated Interest Period which the British Bankers' Association fixes
         as its LIBOR rate and which appears on the Telerate Page 3750 as of
         11:00 a.m. London time: (a) for LIBOR Rate Loans m pursuant to the
         LIBOR Rate Option, on the day which is two London Banking Days prior to
         the beginning of such Interest Period; and (b) for LIBOR Rate Loans
         made pursuant to the LIBOR Advantage Rate Option, on the first day of
         such Interest Period. For purposes of any LIBOR Rate Loan made pursuant
         to the LIBOR Advantage Rate Option, if the first day of any Interest
         Period is not a day which is both a (i) Business Day, and (ii) a London
         Banking Day, the LIBOR Rate shall be determined in reference to the
         next preceding day which is both a Business Day and a London Banking
         Day. If for any reason the LIBOR Rate is unavailable and/or the Bank is
         unable to determine the LIBOR Rate for any Interest Period, the LIBOR
         Rate shall be deemed to be equal to the Bank's Prime rate.

         "LIBOR Rate Interest Payment Date" means relative to any loan under the
         LIBOR Rate Option, having an Interest Period of three months or less,
         the last Business Day of such Interest Period, and as to any LIBOR Rate
         Loan having an Interest Period longer than three months, each Business
         Day which is three months, or a whole multiple thereof, after the first
         day of such Interest Period and the last day of such Interest Period.

         "LIBOR Rate Loan" means any loan or advance the rate of interest
         applicable to which is based upon the LIBOR Rate.

         "LIBOR Reserve Percentage" means, relative to any day of any Interest
         Period for LIBOR Rate Loans, the maximum aggregate (without
         duplication) of the rates (expressed as a decimal fraction) of reserve
         requirements (including all basic, emergency, supplemental, marginal
         and other reserves and taking into account any transitional adjustments
         or other scheduled changes in reserve requirements) under any
         regulations of the Board of Governors of the Federal Reserve System
         (the "Board") or other governmental authority having jurisdiction with
         respect thereto as issued from time to time and then applicable to
         assets or liabilities consisting of "Eurocurrency Liabilities", as
         currently defined in Regulation D of the Board, having a term
         approximately equal or comparable to such Interest Period.

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         "London Banking Day" means a day on which dealings in US dollar
         deposits are transacted in the London interbank market.

         "Hedging Contracts" means, interest rate swap agreements, interest rate
         cap agreements and interest rate collar agreements, or any other
         agreements or arrangements entered into between Undersigned and Bank
         and designed to protect Undersigned against fluctuations in interest
         rates or currency exchange rates.

         "Hedging Obligations" means, with respect to Undersigned, all
         liabilities of Undersigned to Bank under Hedging Contracts.

If Bank shall have determined that (a) US dollar deposits in the relevant amount
and for the relevant Interest Period are not available to Bank in the London
interbank market; (b) by reason of circumstances affecting Bank in the London
interbank, adequate means do not exist for ascertaining the LIBOR Rate
applicable hereunder to LIBOR Rate Loans of any duration, or (c) LIBOR no longer
adequately reflects Bank's cost of funding loans, then, upon notice from Bank to
Undersigned, the obligations of Bank under this Note to make or continue any
loans as, or to convert any loans into, LIBOR Rate Loans of such duration shall
forthwith be suspended until Bank shall notify Undersigned that the
circumstances causing such suspension no longer exist. Thereafter, until Bank
notifies Undersigned that the circumstances giving rise to such suspension no
longer exist, (a) the availability of the LIBOR Rate Option and the LIBOR
Advantage Rate Option shall be suspended, and (b) the interest rate for all
advances then bearing interest under the LIBOR Rate Option and the LIBOR
Advantage Rate Option shall be converted at the expiration of the then current
Interest Period(s) to the Prime Rate Option. If Bank shall determine (which
determination shall, upon notice thereof to Undersigned be conclusive and
binding on Undersigned) that the introduction of or any change in or in the
interpretation of any law, rule, regulation or guideline, (whether or not having
the force of law) makes it unlawful, or any central bank or other governmental
authority asserts that it is unlawful, for Bank to make, continue or maintain
any LIBOR Rate Loan as, or to convert any loan into, a LIBOR Rate Loan of a
certain duration, the obligations of Bank to make, continue, maintain or convert
into any such LIBOR Rate Loans shall, upon such determination, forthwith be
suspended until Bank shall notify Undersigned that the circumstances causing
such suspension no longer exist, and all LIBOR Rate Loans of such type shall
automatically convert into the Prime Rate Option at the end of the then current
Interest Periods with respect thereto or sooner, if required by such law or
assertion.

If any law, regulation, order, decree or guideline or interpretation or
application thereof by any governmental authority charged with the
interpretation or administration thereof or compliance by Bank with any request
or directive of any governmental authority (whether or not having the force of
law) shall either impose, modify or deem applicable any capital adequacy or
similar requirement against assets (funded or contingent) of, or credits or
commitments to extend credit extended by Bank and the result of any of the
foregoing is to increase the cost to, reduce the income receivable by, or impose
any expense (including loss of margin) upon Bank with respect to the Credit
Documents, this Note, or the making, maintenance or funding of any part of the
loans (or, in the case of capital adequacy or similar requirement, to have the
effect of reducing the rate of return on Bank's capital, taking into account
Bank's policies with regard to capital adequacy) by an amount which Bank deems
to be material, Bank shall from time to time notify Undersigned of the amount
determined in good faith by Bank (which determination shall be conclusive absent
manifest error) to be necessary to compensate Bank for such increase, reduction
or imposition. Such amount shall be due and payable by Undersigned to Bank ten
(10) business days after such notice is given.

3. Increased Rate; Late Charge. Following a demand for payment hereunder and the
failure of Undersigned to pay the amount demanded, at Bank's option, interest
shall accrue at a rate equal to two percent (2%) per annum above the
Contractual Rate(s) specified (the "Increased Rate") until all sums due
hereunder are paid, Interest shall continue to accrue after the entry of
judgment by confession or otherwise at the Increased Rate until all sums due
hereunder and/or under the judgment are paid.

If any payment (including without limitation any regularly scheduled payment or
any payment following demand) is not paid within seven (7) days after it is due,
Undersigned will pay a late charge as specified below, regardless of whether the
payment due consists of principal and interest, principal only or interest only:

         Two percent (2%) of the unpaid portion of the payment due

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Such late charge shall be in addition to any increase made to the Contractual
Rate(s) applicable to the outstanding balance hereof as a result of the failure
to pay following a demand for payment hereunder, as well as in addition to any
other applicable fees, charges and costs.

4. Payment. Undersigned shall pay accrued interest on the unpaid principal
balance of this Note in arrears: (a) for the portion of advances bearing
interest under the Prime Rate Option, on the last day of each month during the
term hereof, (b) for the portion of advances bearing interest under the LIBOR
Rate Option, on the LIBOR Rate Interest Payment Date for such, advance, and (c)
for all advances on demand until paid in full.

If any payment under this Note is due on a day which is not a business day under
the laws of the State where Bank's office indicated above is located, such
payment shall be made on the next succeeding business day and such extended time
shall be included in the computation of interest. Undersigned hereby authorizes
Bank to charge any deposit account of Undersigned at Bank for any payment due.
Payments received will be applied first to charges, fees and expenses (including
attorneys' fees), second to any accrued but unpaid interest and lastly to the
unpaid installment of principal in the reverse order of their scheduled
maturity.

5. [Intentionally omitted]

6. Continuation and Conversion Elections. By delivering a
continuation/conversion notice to Bank in accordance with the provisions for
advances contained in Section 1 of this Note, Undersigned may from time to time
irrevocably elect, to renew the Rate Option applicable to such advance or to
convert such advance to a different Rate Option, provided, however, that no
portion of the outstanding principal amount of any advances may be converted to,
or continued as, LIBOR Rate Loans when Bank has made demand for payment
hereunder which demand Undersigned has not paid. In the absence of delivery of a
continuation/conversion notice with respect to any advances, such advances shall
automatically convert to a loan that accrues interest by reference to the Prime
Rate.

7. Representations. Undersigned hereby makes the following representation and
warranties which shall be true and correct on the date of this Note and shall
continue to be true and correct for so long as any indebtedness evidenced hereby
remains outstanding: (a) Undersigned's residence and/or Chief Executive Office,
as the case may be, is as stated below or as otherwise stated in a subsequent
written notice delivered to Bank pursuant to the terms hereof; and (b) if any of
the Undersigned is an individual, each such individual is at least 18 years of
age and under no legal disability or incapacity.

8. Covenants. Undersigned covenants and agrees that until all indebtedness
evidenced hereby has been paid in full Undersigned shall: (a) use the proceeds
of the loan evidenced hereby only for the business purpose(s) specified to Bank
at or prior to the execution hereof; (b) promptly notify Bank in writing of any
change in its or their residence, Chief Executive Office, place of business or
state of incorporation or organization; (c) purchase and maintain policies of
insurance (including flood insurance) to protect against such risks and
casualties, and in such amounts, as shall be required by Bank and/or applicable
law, which policies shall (1) be in form and substance satisfactory to Bank, (2)
at Bank's option, designate Bank as loss payee and/or as additional insured,
and/or contain a lender's loss payable endorsement, and (3) be (or certificates
evidencing same shall be) deposited with Bank; (d) provide, upon request,
financial or other information, documentation or certifications to Bank
(including balance sheets and income statements), all in form and content
satisfactory to Bank; (e) pay, upon demand by Bank, (1) all costs and fees
pertaining to the filing of any financing, continuation or termination
statements, mortgages, satisfaction pieces, judgments and any other type of
document which Bank deems necessary or desirable to be filed with regard to
security interests which secure the indebtedness evidenced hereby, regardless of
whether such security interests were granted by Undersigned, and (2) all costs
and expenses incurred by Bankin connection with any collateral securing this
Note (including without limitation all advances made by Bank for taxes, levies,
insurance, repairs to or maintenance of the collateral, appraisal or valuation
of the collateral, and determination and monitoring of flood hazard status),
regardless of whether such collateral is owned by Undersigned; and (f) pay, upon
demand by Bank, all amounts incurred by Bank in connection with any action or
proceeding taken or commenced by Bank to enforce or collect this Note, including
attorneys' fees and costs and all costs of legal proceedings

<PAGE>


Bank shall promptly notify Undersigned in writing of the occurrence of any such
event, such notice to state, in reasonable detail, the reasons therefor and the
additional amount required fully to compensate Bank for such increased cost or
reduced amount. Such additional amounts shall be payable by Undersigned to Bank
within five days of its receipt of such notice, and such notice shall, in the
absence of manifest error, be conclusive and binding on Undersigned. Undersigned
understands, agrees and acknowledges the following: (i) Bank does not have any
obligation to purchase, sell and/or match funds in connection with the use of
LIBOR Rate as a basis for calculating the rate of interest on a LIBOR Rate Loan,
(ii) the LIBOR Rate may be used merely as a reference in determining such rate,
and (iii) Undersigned has accepted the LIBOR Rate as a reasonable and fair basis
for calculating such rate, the Prepayment Fee, and other funding losses incurred
by Bank. Undersigned further agrees to pay the Prepayment Fee and other funding
losses, if any, whether or not Bank elects to purchase, sell and/or match
funds.

12. Taxes. All payments by Undersigned of principal of, and interest on, the
LIBOR Rate Loans and all other amounts payable hereunder shall be made free and
clear of and without deduction for any present or future income, excise, stamp
or franchise taxes and other taxes, fees, duties, withholdings or other charges
of any nature whatsoever imposed by any taxing authority, but excluding
franchise taxes and taxes imposed on or measured by Bank's net income or
receipts (such non-excluded items being called "Taxes"). In the event that any
withholding or deduction from any payment to be made by Undersigned hereunder is
required in respect of any Taxes pursuant to any applicable law, rule or
regulation, then Undersigned will

         (a) pay directly to the relevant authority the full amount required to
         be so withheld or deducted;

         (b) promptly forward to Bank an official receipt or other documentation
         satisfactory to Bank evidencing such payment to such authority; and

         (c) pay to Bank such additional amount or amounts as is necessary to
         ensure that the net amount actually received by Bank will equal the
         full amount Bank would have received had no such withholding or
         deduction been required.

Moreover, if any Taxes are directly asserted against Bank with respect to any
payment received by Bank hereunder, Bank may pay such Taxes and Undersigned will
promptly pay such additional amount (including any penalties, interest or
expenses) as is necessary in order that the net amount received by Bank after
the payment of such Taxes (including any Taxes on such additional amount) shall
equal the amount Bank would have received had not such Taxes been asserted.

If Undersigned fails to pay any Taxes when due to the appropriate taxing
authority or fails to remit to Bank the required receipts of other required
documentary evidence, Undersigned shall indemnify Bank for any incremental
Taxes, interest or penalties that may become payable by Bank as a result of any
such failure.

13. Increased Costs. If on or after the date hereof the adoption of any
applicable law, rule or regulation or guideline (whether or not having the force
of law), or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by Bank with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency:

         (a) shall subject Bank to any tax, duty or other charge with respect to
         its LIBOR Rate Loans or its obligation to make LIBOR Rate Loans, or
         shall change the basis of taxation of payments to Bank of the principal
         of or interest on its LIBOR Rate Loans or any other amounts due under
         this agreement in respect of its LIBOR Rate Loans or its obligation to
         make LIBOR Rate Loans (except for the introduction of, or change in the
         rate of, tax on the overall net income of the Bank or franchise taxes,
         imposed by the jurisdiction (or any political subdivision or taxing
         authority thereof) under the laws of which Bank is organized or in
         which Bank's principal executive office is located); or

         (b) shall impose, modify or deem applicable any reserve, special
         deposit or similar requirement (including, without limitation, any such
         requirement imposed by the Board of Governors of the Federal Reserve
         System of the United States) against assets of, deposits with or for
         the account of, or credit

<PAGE>

         extended by, Bank or shall impose on Bank or on the London interbank
         market any other condition affecting its LIBOR Rate Loans or its
         obligation to make LIBOR Rate Loans;

and the result of any of the foregoing is to increase the cost to Bank of making
or maintaining any LIBOR Rate Loan, or to reduce the amount of any sum received
or receivable by Bank under this Note with respect thereto, by an amount deemed
by Bank to be material, then, within 15 days after demand by Bank, Undersigned
shall pay to Bank such additional amount or amounts as will compensate Bank for
such increased cost or reduction.

14. Remedies. Following a demand for payment hereunder and the failure of
Undersigned to pay the amount demanded, Bank may immediately and without demand
exercise any of its rights and remedies granted herein, under applicable law, or
which it may otherwise have, against Undersigned or otherwise. In the event (a)
any assignment for the benefit of creditors is made by Undersigned or any other
obligor of any of Undersigned's liabilities to Bank (each an "Obligor"); (b) any
Obligor becomes insolvent, or (c) there is filed or commenced any petition,
action, case or proceeding voluntary or involuntary, under any state or federal
law regarding bankruptcy, insolvency, reorganization, receivership or
dissolution, including the Bankruptcy Reform Act of 1978, as amended, by or
against any Obligor (a "Bankruptcy Event"), Bank shall be deemed to have made a
demand for payment of all amounts outstanding hereunder immediately prior to
such Bankruptcy Event.

15. Bank's Rights. Undersigned hereby authorizes Bank, and Bank shall have the
continuing right, at its sole option and discretion, to: (a) do anything which
Undersigned is required but fails to do hereunder, and in particular Bank may,
if Undersigned fails to do so, obtain and pay any premiums payable on any policy
of insurance required to be obtained or maintained hereunder; (b) direct any
insurer to make payment of any insurance proceeds including any returned or
unearned premiums, directly to Bank, and apply such moneys to any indebtedness
or other amount evidenced hereby in such order or fashion as Bank may elect; and
(c) pay the proceeds of the loans evidenced by this Note to any or all of the
Undersigned individually or jointly, or to such other persons as any of the
Undersigned may direct and (d) add any amounts paid or incurred by Bank under
Section 8(e), Section 8(f) or Section 16(a) to the principal amount of the
indebtedness evidenced by this Note.

16. Definitions; Miscellaneous Provisions. (a) Undersigned waives protest of all
commercial paper at any time held by Bank on which Undersigned is in any way
liable, notice of nonpayment at maturity of any and all accounts, and (except
where requested hereby) notice of action taken by Bank; and hereby ratifies and
confirms whatever Bank may do. Bank shall be entitled to exercise any right
notwithstanding any prior exercise, failure to exercise or delay in exercising
any such right. (b) Bank shall retain, and Undersigned hereby ratifies, the lien
of any judgment entered on account of the indebtedness evidenced hereby (and any
financing statement filed in connection with said indebtedness). Undersigned
warrants that Undersigned has no defense whatsoever to any action or proceeding
that may be brought to enforce or realize on any such judgment. (c) If any
provision hereof shall for any reason be held invalid or unenforceable, no other
provision shall be affected thereby, and this Note shall be construed as if the
invalid or unenforceable provision had never been a part of it. The descriptive
headings of this Note are for convenience only and shall not in any way affect
the meaning or construction of any provision hereof. (d) The rights and
privileges of Bank contained in this Note shall inure to the benefit of its
successors and assigns, and the duties of Undersigned shall bind all heirs,
personal representatives, successors and assigns. (e) This Note shall in all
respects be governed by the laws of the state in which this Note is payable
(except to the extent that federal law governs). (f) Undersigned hereby
irrevocably appoints Bank and each holder hereof as Undersigned's
attorney-in-fact to endorse Undersigned's name to any draft or check which may
be payable to Undersigned in order to collect the proceeds of any insurance or
any returned or unearned premiums in respect of any policies of insurance
required to be maintained hereunder. Undersigned hereby acknowledges that this
appointment of Bank and each holder hereof as attorney-in-fact is irrevocable
and is coupled with an interest. (g) Undersigned assigns to Bank all moneys
which may become payable on any policy of insurance required to be maintained
under this Note, including any returned or unearned premiums. (h) "Chief
Executive Office" means the place from which the main part of the business
operations of an entity is managed, (i) "Environmental Law" means any federal,
state or local environmental law, statute, regulation, rule, ordinance, court or
administrative order or decree, or private agreement or interpretation, now or
hereafter in existence, relating to the manufacture, distribution, labeling,
use, handling, collection, storage, treatment, disposal or otherwise of
Hazardous Substances, or in any way relating to pollution or protection of the
environment or public health. (j) "Environmental Permit" means any federal,
state or local permit, license or authorization issued under or in connection
with any Environmental Law. (k) "Hazardous Substances" means petroleum and
petroleum products, radioactive materials, asbestos, radon, lead containing
materials, sewage or any materials or substances defined as or included in the
definition of "hazardous wastes", "hazardous substances", "hazardous materials",
"toxic substances" "hazardous air pollutants", "toxic pollutants", "pollution",
or terms of similar meaning as those terms are used in any Environmental law.
(1) "Undersigned" refers individually and collectively to all makers of this
Note, including, in the case of any partnership, all general partners of such
partnership individually and collectively, whether or not such partners sign
below. Undersigned shall each be jointly and severally bound by the terms
hereof, and, with respect to any partnership executing this Note, each general
partner shall be bound hereby both in such general partner's individual and
partnership capacities, and Bank need not first exhaust its recourse against
partnership assets before proceeding individually against the general partners.


<PAGE>

17. Confession of Judgment. Undersigned hereby irrevocably authorizes and
empowers Bank, by its attorney, or by the prothonotary or clerk of any court of
record in the Commonwealth of Pennsylvania or in any jurisdiction where
permitted by law, following a demand for payment hereunder and the failure of
Undersigned to pay the amount demanded, or at any time thereafter, to appear for
Undersigned and confess and enter judgment against Undersigned in favor of Bank
in any jurisdiction in which Undersigned or any of Undersigneds' property is
located for the amount of all obligations under this Note, together with costs
of suit and with actual collection costs (including reasonable attorneys' fees),
with or without declaration, without stay of execution and with release of all
errors and the right to issue execution forthwith, and for doing so this Note or
a copy verified by affidavit shall be a sufficient warrant. Undersigned hereby
waives and releases all relief from any and all appraisement, stay or exemption
law of any state now in force or hereafter enacted. This authority and power
shall not be exhausted by the exercise thereof, and shall continue until the
obligations are fully paid, performed, discharged and satisfied.

Being fully aware of its rights to prior notice and hearing on the validity of
any claims that may be asserted against Undersigned by Bank under this Note
before judgment can be entered and before assets of the Undersigned can be
garnished and attached, Undersigned hereby knowingly, voluntarily and
intentionally waives these rights and expressly agrees and consents to Bank,
following a demand for payment hereunder and the failure of Undersigned to pay
the amount demanded, or at any time thereafter, entering judgment against
Undersigned by confession and attaching and garnishing the bank accounts and
other assets of Undersigned, without prior notice or opportunity for a hearing.

Signatures

Witness the due execution hereof as of the date first written above.

                                         HANOVER FOODS CORPORATION
Attest/Witness

By: /s/ Pietro D. Giraffa, Jr.        By: /s/ Gary T. Knisely             (Seal)
  ------------------------------         ---------------------------------
  Pietro D. Giraffa, Jr.              Print Name:  Gary T. Knisely
  Vice President/Controller           Print Title: Executive Vice President

                                      Business     1486 York Street, PO Box 334
  (Corporate Seal)                    Address;     Hanover, FA 17331