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                                                                   EXHIBIT 10.11

                          MASTER DEMAND PROMISSORY NOTE

$2,000,000.00                    CLEVELAND, OHIO                 AUGUST 28, 2002

         ON DEMAND, the undersigned, NATIONAL INTERSTATE CORPORATION (herein
called "Borrower") promises to pay to the order of KEYBANK NATIONAL ASSOCIATION,
Cleveland, Ohio at its main office (herein called "Bank"), the lesser of (1) Two
Million Dollars ($2,000,000.00) or (2) the aggregate unpaid principal amount of
all advances made by Bank to Borrower pursuant to a line of credit evidenced by
the Bank's letter to Borrower dated August 28, 2002, including all
reaffirmations, renewals, and modifications thereof, the terms, conditions, and
provisions of which are hereby incorporated by reference as though fully
rewritten herein (herein called "Line Facility"), together with interest
(calculated on the basis of a year of 360 days for the actual number of days
elapsed) on the daily unpaid principal balance hereof from the respective date
or dates upon which such advances are made, payable on the first day of each
month beginning September 1, 2002, and on demand, at a rate per annum determined
in accordance with the attached "Interest Rate Appendix", which is incorporated
herein as if fully rewritten.

         Prior to a demand for payment of the entire unpaid balance due upon
this Note, if any payment of principal or interest is not paid when due Borrower
shall pay Bank a late fee equal to the greater of ten percent (10%) of the
amount of such payment or twenty five dollars ($25). After demand, the unpaid
principal of and accrued interest on this Note shall, until paid, bear interest
(calculated on the basis of a year of 360 days for the actual number of days
elapsed) at a rate per annum equal to the greater of three percent (3%) in
excess of the Prime Rate, which rate shall be adjusted immediately and
correspondingly with each change in the Prime Rate, but in no event shall the
interest rate on this Note exceed the highest rate permitted by law on the date
of demand for payment of this Note. The Prime Rate of Bank is defined as that
rate established from time to time by Bank as Bank's Prime Rate, whether or not
such rate is publicly announced. The Prime Rate may not be the lowest interest
rate charged by Bank for commercial or other extensions of credit.

         This Note shall serve as a master note and shall evidence all advances
to Borrower under the Line Facility. Bank is authorized to endorse on a schedule
to be attached to this Note or on other business records of the Bank an
appropriate notation evidencing each advance made by Bank and each payment of
principal and interest received by Bank. In the event of any discrepancy between
the principal balance indicated on such records of the Bank and in any records
of Borrower, the principal balance indicated on such records of the Bank shall
prevail absent manifest error.

         Without limitation upon Bank's right at any time and for any reason to
demand payment on this Note, at the option of Bank, all Obligations shall become
immediately due and payable without notice or demand upon the occurrence of any
of the following Events of Default: (a) default in the payment or performance of
any Obligation when it becomes due, (b) untruthfulness, proved to the
satisfaction of Bank, of any statement, representation, or certification
contained in any financial statement, credit application, or other document
given by Borrower in connection with any advance evidenced by this Note, (c)
material breach by Borrower of any provision, agreement, warranty, or covenant
set forth in this Note, in any other instrument, document, or agreement
evidencing or relating to any Obligation, or in any mortgage deed, assignment,
pledge, or security agreement given as or evidencing security for any Obligation
of Borrower, or (d) dissolution, termination of existence, insolvency,
appointment of a receiver of any part of the property of, assignment for the
benefit of creditors by, failure or inability of Borrower to pay its debts as
they come due, or the commencement of any proceedings under any bankruptcy or
insolvency laws by or against Borrower. "Obligations" means this Note and every
other obligation, indebtedness, and liability of the Borrower to Bank, whether
joint or several, absolute or contingent, due or to become due, and whether
heretofore or hereafter contracted or existing and in whatsoever manner acquired
by or accruing to Bank, whether before or after maturity and whether the same
may have been or shall be participated, in whole or in part to others, and
including all amendments, extensions, and renewals thereof, and "Obligation
means any of the Obligations".

         Wherever used in this Note, the term "Bank" shall include any holder of
this Note. Borrower waives presentment, demand, notice, protest, and all other
demands and notices in connection with delivery, acceptance, performance,
default, or enforcement of this Note, assents to any extension or postponement
of the time of payment or any other indulgence, and to the addition or release
of any other person primarily or secondarily liable, Borrower



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understands and agrees that this Note is subject to and shall be construed
according to the laws of the State of Ohio, without regard to principles of
conflict of laws.

         Any deposits or sums at any time credited by or due from Bank to the
Borrower and any securities or other personal property of the Borrower in the
possession of Bank may at all times be held and treated as additional security
for the payment of the Obligations. Upon the occurrence and continuance of an
Event of Default (as defined above), Bank may apply or set off such deposits or
other sums against the Obligations at any time in the case of Borrower.

         Any waiver of Bank's rights hereunder must be in writing and signed by
Bank. A waiver on any one occasion shall not be construed as a bar to or waiver
of any such right or remedy on a future occasion.

         Any notice required or authorized to be given to Borrower pursuant to
the provisions of this Note shall be sufficiently given when such notice is
either delivered, sent by telegram, or mailed (deposited for delivery, postage
prepaid, by U.S. registered or certified mail, return receipt requested) to
Borrower either at the address set forth below (as modified by any change
therein which Borrower has supplied in writing to Bank) or at any other address
at which Bank customarily communicates with Borrower.

         If any provision of this Note, or any covenant, stipulation,
obligation, agreement, act, or action, or part thereof made, assumed, entered
into, or taken hereunder or any application thereof, is for any reason held to
be illegal or invalid, such illegality or invalidity shall not affect any other
provision or any other covenant, stipulation, obligation, agreement, act, or
action or part thereof, made, assumed, entered into, or taken, each of which
shall be construed and enforced as if such illegal or invalid portion were not
contained herein. Such illegality or invalidity of any application of any
provision hereof shall not affect any legal and valid application thereof, and
each such provision, covenant, stipulation, obligation, agreement, act, or
action, or part shall be deemed to be effective, operative, made, entered into,
or taken in the manner and to the full extent permitted by law.

         The relationship between Borrower and Bank with respect to this Note
and any writing executed or delivered in connection herewith is and shall be
solely that of debtor and creditor, respectively, and Bank has no fiduciary
obligation toward Borrower with respect to any such document or the transactions
contemplated thereby.

         This Note and any agreement, document or instrument referred to herein
or executed on or as of the date hereof integrate all of the terms and
conditions mentioned herein or incidental hereto and supersede all oral
representations and negotiations and prior writings with respect to the subject
matter hereof.

         Borrower agrees to promptly reimburse Bank for all reasonable costs and
expenses, including reasonable attorney's fees, incurred by Bank in connection
with any collection proceedings as a result of nonpayment of this Note, as and
when due and payable.

         Borrower has received consideration that is the reasonable equivalent
value of the obligations and liabilities that Borrower has incurred to Bank.
Borrower is not insolvent as defined in any applicable state or federal statute,
nor will Borrower be rendered insolvent by the execution and delivery of this
Note to Bank. Borrower is not engaged or about to engage in any business or
transaction for which the assets retained by it shall be an unreasonably small
capital, taking into consideration the obligations to Bank incurred hereunder.
Borrower does not intend to, nor does it believe that it will, incur debts
beyond its ability to pay them as they mature.

         Borrower authorizes any attorney-at-law to appear for Borrower in any
court of record in the State of Ohio after this Note becomes due and waive the
issuing and service of process and confess judgment against Borrower in favor of
Bank for the amount then appearing due, together with costs of suit, and
thereupon to waive all errors and all rights of appeal and stay of execution.
The foregoing warrant of attorney shall survive any judgment, and if any
judgment is vacated for any reason. Bank may thereafter use the foregoing
warrant of attorney to obtain any additional judgments against Borrower.
Borrower agrees that Bank's attorney may confess judgment pursuant to the
foregoing warrant of attorney. Borrower further agrees that the attorney
confessing judgment pursuant to the foregoing warrant of attorney may receive a
legal fee or other compensation from Bank.




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         Borrower, to the extent permitted by law, waives any right to have a
jury participate in resolving any dispute, whether sounding in contract, tort,
or otherwise, between Bank and Borrower arising out of, in connection with,
related to, or incidental to the relationship established between Borrower and
Bank in connection with this Note or any other agreement, instrument or document
executed or delivered in connection therewith or the transactions related
thereto. This waiver shall not in any way affect waive, limit, amend or modify
Bank's ability to pursue remedies pursuant to any confession of judgment or
cognovit provision contained in this Note, or any other agreement, instrument or
document related thereto.

         WARNING: BY SIGNING THIS PAPER, YOU GIVE UP YOUR RIGHT TO NOTICE AND
COURT TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU
WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR
RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT,
OR ANY OTHER CAUSE. FOR THE PURPOSES OF THIS NOTICE "YOU" AND "YOUR" MEANS THE
BORROWER, AND "HIS" AND "CREDITOR"MEANS THE BANK.

BORROWER:                                   NATIONAL INTERSTATE CORPORATION


                                            By:  /s/ Gary N. Monda
                                                 ---------------------------
                                                 Name:  Gary N. Monda
                                                        --------------------
                                                 Title: Vice President & CFO
                                                        --------------------
                                            Address:   3250 Interstate Drive
                                                       Richfield, Ohio 44286



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                             INTEREST RATE APPENDIX
                                       TO
                          MASTER DEMAND PROMISSORY NOTE
                              DATED AUGUST 28, 2002
                         NATIONAL INTERSTATE CORPORATION

A.       Interest Rate.

(a)      Defined Terms. As used herein:

         "Business Day" means a day of the year on which banks are not required
or authorized to close in Cleveland, Ohio and, if the applicable Business Day
relates to any Libor Rate Loan, on which dealings are carried on in the London
interbank Eurodollar market.

         "Interest Period" means, with respect to any Libor Rate Loan, the
period commencing on the date such Loan is made, continued, or convened and
ending on the last day of such period as selected by the Borrower pursuant to
the provisions below and, thereafter, each subsequent period commencing on the
last day of the immediately preceding Interest Period and ending on the last day
of such period as selected by the Borrower pursuant to the provisions below. The
duration of each Interest Period for any Libor Rate Loan shall be one, two, or
three months, in each case as the Borrower may select upon notice, as set forth
in (c) below, provided that whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of such
Interest Period shall occur on the next succeeding Business Day; provided that
if such extension of time would cause the last day of such Interest period for a
Libor Rate Loan to occur in the next following calendar month, the last day of
such Interest Period shall occur on the next preceding Business Day.

         "Libor Rate" means, for any interest Period for any Libor Rate Loan, an
interest rate per annum (rounded upwards to the next higher whole multiple of
1/16% if such rate is not such a multiple) equal at all times during such
interest Period to the quotient of (a) the rate per annum (rounded upwards to
the next higher whole multiple of 1/16% if such rate is not such a multiple) at
which deposits in United States dollars are offered at 11:00 a.m. (London,
England time) (or as soon thereafter as is reasonably practicable) by prime
banks in the London interbank eurodollar market two Business Days prior to the
first day of such Interest Period in an amount and maturity of such Libor Rate
Loan, divided by (b) a number equal to 1.00 minus the aggregate (without
duplication) of the rates (expressed as a decimal fraction) of the Libor Reserve
Requirements current on the date two Business Days prior to the first day of
such Interest Period.

         "Libor Rate Loan" means any Loan that bears interest with reference to
the Libor Rate.

         "Libor Reserve Requirements" means, for any Interest Period for any
Libor Rate Loan, the maximum reserves (whether basic, supplemental, marginal,
emergency, or otherwise) prescribed by the Board of Governors of the Federal
Reserve System (or any successor) with respect to liabilities or assets
consisting of or including "Eurocurrency Liabilities" (as defined in Regulation
D of the Board of Governors of the Federal Reserve System) having a term equal
to such Interest Period.

         "Loan" means any Libor Rate Loan or Prime Rate Loan evidenced by the
Note.

         "Note" means the Master Demand Promissory Note in the amount of
$2,000,000.00, dated August 28, 2002, executed by the Borrower in favor of the
Bank.

         "Prime Rate Loan" means any Loan that bears interest with reference to
the Prime Rate.

         "Prime Rate" of Bank is defined as that rate established from time to
time by the Bank as the Bank's Prime Rate, whether or not such rate is publicly
announced; the Prime Rate may not be the lowest interest rate charged by Bank
for commercial or other extensions of credit. In the event of any change in the
Prime Rate, the rate of interest upon such Loan shall be adjusted to immediately
correspond with such change, except such interest rate shall not exceed the
highest rate permitted by law.





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(b)            Interest Rate. The Loan shall bear interest prior to maturity at
a rate per annum, selected by the Borrower pursuant to (c) below, equal to (i)
the Prime Rate minus one half of one percent (.50%) or (ii) the Libor Rate plus
two and one half percent (2.50%).

(c)            Loans; Loan Conversions. The outstanding principal amount of the
Loan may be made or converted into a Prime Rate Loan on such Business Day and in
such amount as the Borrower shall request by written notice given to the Bank no
later than 11:00 a.m. (Cleveland, Ohio time) on the date of disbursement of or
conversion into the requested Prime Rate Loan. Provided that no Event of Default
or any potential default as defined in the Note, has occurred and is continuing,
the outstanding principal amount of the Loan may be made or continued as or
converted into a Libor Rate Loan on such Business Day, in such amount (equal to
$100,000.00 or an integral multiple thereof), and with such an Interest Period
as the Borrower shall request by written notice given to the Bank no later than
11:00 a.m. (Cleveland, Ohio time) on the second Business Day prior to the date
of disbursement or continuation of or conversion into the requested Libor Rate
Loan. Each written notice of any Libor Rate Loan shall be irrevocable and
binding on the Borrower and Borrower shall indemnify the Bank against any loss
or expense incurred by the Bank as a result of any failure by the Borrower to
consummate such transaction, including, without limitation, any loss (including
loss of anticipated profits) or expense incurred by reason of liquidation or
reemployment of deposits or other funds acquired by the Bank to fund the Loan. A
certificate as to the amount of such loss or expense submitted by the Bank to
the Borrower shall be conclusive and binding for all purposes, absent manifest
error. In the event that the Borrower fails to provide the Bank with the
required written notice, the Borrower shall be deemed to have given a written
notice that such Loan shall be converted to a Prime Rate Loan on the last day of
the applicable Interest Period. The Borrower may not elect the Libor Rate if
U.S. dollar deposits are not available to the Bank in the London Eurodollar
Interbank Market for the period and in the amount requested by the Borrower.

(d)               Additional Costs.

                  (i) If, due to either (i) the introduction of, or any change
         in, or in the interpretation of, any law or regulation or (ii) the
         compliance with any guideline or request from any central bank or other
         governmental authority (whether or not having the force of law), there
         shall be any increase in the cost to the Bank of making, funding or
         maintaining Loans, then the Borrower shall from time to time, upon
         demand by the Bank pay to the Bank additional amounts sufficient to
         reimburse the Bank for any such additional costs. A certificate of the
         Bank submitted to the Borrower as to the amount of such additional
         costs, shall be conclusive and binding for all purposes, absent
         manifest error. Upon notice from the Borrower to the Bank within five
         (5) Business Days after the Bank notifies the Borrower of any such
         additional costs pursuant to this paragraph (b), the Borrower may
         either (A) prepay in full all Loans of any types so affected then
         outstanding, together with interest accrued thereon to the date of such
         prepayment, or (B) convert all Loans of any types so affected then
         outstanding into Loans of any other type not so affected upon not less
         than four (4) Business Days' notice to the Bank. If any such prepayment
         or conversion or any Libor Rate Loan occurs on any day other than the
         last day of the applicable Interest Period for such Loan, the Borrower
         also shall pay to the Bank such additional amounts sufficient to
         indemnify the Bank against any loss, cost, or expense incurred by the
         Bank as a result of such prepayment or conversion, including, without
         limitation, any loss (including loss of anticipated profits), cost, or
         expense incurred by reason of the liquidation or reemployment of
         deposits or other funds acquired by the Bank to fund any such Loan, and
         a certificate as to the amount of any such loss, cost, or expense
         submitted by the Bank to the Borrower shall be conclusive and binding
         for all purposes, absent manifest error.

                  (ii) If either (i) the introduction of, or any change in, or
         in the interpretation of, any law or regulation or (ii) the compliance
         with any guideline or request from any central bank or other
         governmental authority (whether or not having the force of law),
         affects or would affect the amount of capital required or expected to
         be maintained by the Bank or any corporation controlling the Bank and
         the Bank determines that the amount of such capital is increased by or
         based upon the existence of the Loans (or commitment to make the Loans)
         and other extensions of credit (or commitments to extend credit) of
         similar type, then, upon demand by the Bank, the Borrower shall pay to
         the Bank from time to time as specified by the Bank additional amounts
         sufficient to compensate the Bank in the light of such circumstances,
         to the extent that the Bank reasonably determines such increase in
         capital to be allocable to the existence of the Bank's Loans




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         (or commitment to make the Loans). A certificate of the Bank submitted
         to the Borrower as to such amounts shall be conclusive and binding for
         all purposes, absent manifest error. Upon notice from the Borrower to
         the Bank within five (5) Business Days after the Bank notifies the
         Borrower of any such additional costs pursuant to this paragraph (b),
         the Borrower may either (A) prepay in full all Loans of any types so
         affected then outstanding, together with interest accrued thereon to
         the date of such prepayment, or (B) convert all Loans of any types so
         affected then outstanding into Loans of any other type not so affected
         upon not less than four (4) Business Days' notice to the Bank. If any
         such prepayment or conversion of any Libor Rate Loan occurs on any day
         other than the last day of the applicable Interest Period for such
         Loan, the Borrower also shall pay to the Bank such additional amounts
         sufficient to indemnify the Bank against any loss, cost, or expense
         incurred by the Bank as a result of such prepayment or conversion,
         including, without limitation, any loss (including loss of anticipated
         profits), cost, or expense incurred by reason of the liquidation or
         reemployment of deposits or other funds acquired by the Bank to fund
         any such Loan, and a certificate as to the amount of any such loss,
         cost, or expense submitted by the Bank to the Borrower shall be
         conclusive and binding for all purposes, absent manifest error.

(e)      Illegality. Notwithstanding any other provision of this Agreement, if
the introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other governmental
authority shall assert that it is unlawful, for the Bank to perform its
obligations hereunder to make, continue, or convert Libor Rate Loans hereunder,
then, (a) on notice thereof by the Bank to the Borrower, the obligation of the
Bank to make or continue a Loan of a type so affected or to convert any type of
Loan into a Loan of a type so affected shall terminate and the Bank shall
thereafter be obligated to make Prime Rate Loans whenever any written notice
requests any type of Loans so affected and (b) upon demand therefor by the Bank
to the Borrower, the Borrower shall either (i) forthwith prepay in full all
Loans of the type so affected then outstanding, together with interest accrued
thereon or (ii) request that the Bank, upon four (4) Business Days' notice,
convert all Loans of the type so affected then outstanding into Loans of a type
not so affected. If any such prepayment or conversion of any Libor Rate Loan
occurs on any day other than the last day of the applicable Interest Period for
such Loan, the Borrower also shall pay to the Bank such additional amounts
sufficient to indemnify the Bank against any loss, cost, or expense incurred by
the Bank as a result of such prepayment or conversion, including, without
limitation, any loss (including loss of anticipated profits), cost, or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by the Bank to fund any such Loan, and a certificate as to the amount
of any such loss, cost, or expense submitted by the Bank to the Borrower shall
be conclusive and binding for all purposes, absent manifest error.

B.       Interest Payments.

         The Borrower shall pay to the Bank interest on the unpaid principal
balance of each Prime Rate Loan on the first day of each month, beginning
September 1, 2002. The Borrower shall pay to the Bank interest on the unpaid
principal balance of each Libor Rate loan on (i) the date such Loan is converted
to a Prime Rate Loan, or (ii) the last day of the applicable Interest Period of
such Loan, whichever is earlier.

C.       Prepayment.

         The Borrower may prepay any Prime Rate Loans in whole, or in part, at
any time or times upon not less than one (1) Business Days' prior notice made by
telephone to the Bank. The Borrower may prepay any Libor Rate Loan, in whole or
in part, in the minimum principal amount of $100,000.00, only on the last day of
the Interest Period applicable to such Loan upon not less than three (3)
Business Days' prior written notice given to the Bank.

D.       Computation of Interest and Fees.

         Interest on each Loan shall be computed on the basis of a year of 360
days and paid for the actual number of days elapsed. Interest on unpaid fees and
the Prepayment Premium, if any, hereunder shall be computed on the basis of a
year of 360 days and paid for the actual number of days elapsed.



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