Document:

PROMISSORY NOTE

$500,000.00                                     New York, New York
                                                September 15, 2000

      FOR VALUE RECEIVED,  the undersigned,  LIBERTY  PROCESSING & DISTRIBUTION,
INC., a Delaware  corporation with an address of 11 52nd Street,  Brooklyn,  New
York, 11232, (hereinafter referred to as "Maker"), hereby promises to pay to the
order of MARVIN N. RAAB,  whose address is 429 Coolidge  Road,  Cherry Hill, New
Jersey 08002 (hereinafter referred to as "Payee") without defalcation or offset,
the  principal  sum of FIVE HUNDRED  THOUSAND AND 00/100  ($500,000.00)  DOLLARS
lawful money in the United States of America,  together with interest calculated
at an interest rate as provided hereinafter.
            The obligations  evidenced by this Note arise pursuant to the terms,
conditions and provisions of that certain Stock Purchase Agreement ("Agreement")
dated  September  15,  2000,  among  Philadelphia  Foods,  Inc.,  a  New  Jersey
Corporation  ("Philadelphia  Foods"),  Maker and Payee for the  purchase  of the
stock ("Stock") of Philadelphia  Foods,  which Stock is owned by the Payee. This
Note represents payment for a portion of the cash payment as provided for in the
Agreement.  The amount due  hereunder  shall be due and payable  sixty (60) days
from the date hereof. If payment is not made within thirty (30) days of the date
hereof,  interest  shall  accrue on this Note at the rate equal to one (1) point
above the prime rate of Chase  Manhattan  Bank, N.A. from the 31st day following
the date hereof  until all amouts due  hereunder  are paid in full.  All amounts
required  to be paid  hereunder  shall be  payable  to Payee or his  assigns  or
designees at 429 Coolidge Road, Cherry Hill, New Jersey, 08002, or at such other
place as Payee may from time to time designate in writing.  In the event Closing
(as  defined  in the  Agreement)  of the sale of the  Stock is held on or before
November  15,  2000,  and all  amounts  due to Payee under this Note are paid in
full,  this Note shall  automatically  be cancelled  and of no further force and
effect.
            Concurrently  with the execution of this Note, Maker is executing an
additional   note  in  the  amount  of  One  Million   Five   Hundred   Thousand
($1,500,000.00)  Dollars  ("Second  Deposit Note") for payment of the balance of
the cash payment due under the terms of the Agreement.
            As security for the payments  due  hereunder,  Maker is providing an
Irrevocable   Letter  of  Credit  in  the  amount  of  Five   Hundred   Thousand
($500,000.00) Dollars ("LOC"), drawn on a bank ("Bank"), which is to be obtained
by September 22, 2000. If the entire outstanding  principal balance and interest
is not paid  within  sixty (60) days of the date  hereof,  Payee  shall have the
right to present  the LOC to the Bank for payment in full upon  presentation  to
the Bank of written statement  executed by the Payee that the Maker has not paid
the Note in full  within such sixty (60) days or that  another  Event of Default
has occurred.
            Alternatively,  as security for the  payments  due  hereunder in the
event the LOC is not obtained by September 22, 2000,  then, as security for this
Note,  Maker's parent  company,  Liberty Group  Holdings,  Inc.,  ("LGHI"),  and
Liberty  Food Group,  LLC, a company  owned by LGHI  ("LFG") have pledged all of
their respective  inventories and receivables  pursuant to the terms of Security
Agreements and UCC-1 Financing Statements (collectively referred to as "Security
Agreements")  dated  even date  herewith.  Payee  shall  have a second  security
position on the aforementioned  assets of LGHI and LFG, second only to a debt of
LFG to SUAN  INVESTMENTS  in a principal  amount of One Hundred  Fifty  Thousand
($150,000.00)  Dollars and interest  accruing  thereon from April,  2000. If the
entire outstanding  principal balance and interest is not paid within sixty (60)
days of the date hereof, Payee shall have the right to enforce all of its rights
under the Security Agreements.
            The Note and Security  Agreements  shall  sometimes  hereinafter  be
collectively referred to as the "Related Documents".
            Notwithstanding  anything  contained herein to the contrary,  in any
action  commenced  to enforce the  obligations  of the Maker  created or arising
hereunder, the judgment shall not be enforceable against any assets of the Maker
other than the Collateral  covered by the Security  Agreement.  Recourse for any
violation or breach of the terms of this Note or the Security  Agreements  shall
only be against the  Collateral  and any such  judgment  shall not be subject to
execution  on,  nor be a lien on,  any  other  assets  of the Maker or the Maker
itself.  LGHI and LFG have represented to Payee that the value of the Collateral
is sufficient to cover the  obligations  under this Note. All of the agreements,
conditions,  covenants,  provisions  and  stipulations  contained in the Related
Documents are to be kept and  performed by Maker,  and are hereby made a part of
this Note to the same  extent and with the same force and effect as if they were
fully set forth herein,  and the Maker  covenants and agrees to keep and perform
them, or cause them to be kept and performed,  strictly in accordance with their
terms.
            Maker shall have the privilege of pre-paying any sums due under this
Note in whole or in part, at any time and from time to time,  without premium or
penalty; provided, however, that such prepayment shall be accompanied by payment
of all accrued interest on the outstanding  principal balance then due and owing
under this Note.
            Each of the following is an "Event of Default" under this Note:
                  (a)   If  Maker  fails  to  make   payment  in  full  of  the
outstanding principal and interest under this Note within sixty (60) days of the
date of this Note.
                  (b) If (i) LGHI  and/or  LFG  fails to  deliver  the  Security
Agreements by September 22, 2000, if the LOC is not obtained; or if (ii) Payee's
security  interest as  aforementioned  is not a second position on the inventory
and  accounts  receivable  of LGHI and LFG; or if (iii) the amounts owed by LGHI
and LFG to SUAN  INVESTMENT  exceeds the  principal  amount of One Hundred Fifty
Thousand ($150,000.00) Dollars and interest accruing thereon from April, 2000.
                  (c)  The   commencement  of  levy,   execution  or  attachment
proceedings  against Maker or any of its  property,  or the  application  for or
appointment of a liquidator,  receiver,  custodian,  sequestrator,  conservator,
trustee or other similar  judicial  officer (and such action  commenced  against
Maker continues for a period of thirty (30) days).
                  (d)  The  assignment  for  the  benefit  of  creditors  or the
admission in writing of any inability to pay any debts  generally as they become
due, or the ordering the winding-up or liquidation of affairs by Maker.
                  (e) The  commencement  of a case by or against Maker under any
insolvency,  bankruptcy,  creditor adjustment,  debtor rehabilitation or similar
proceeding,  State or Federal  (and such action  commenced  against  Maker shall
continue for thirty (30) days, including without limitation the consent by Maker
to the appointment of or taking possession by a receiver, liquidator,  assignee,
trustee,  custodian,  sequestrator  or similar  official for Maker or for any of
Maker's property or assets.
            If any Event of Default  occurs  hereunder,  the entire  outstanding
principal  indebtedness  evidenced  hereby,  together  with  all  arrearages  of
interest  hereon and other  sums due  hereunder,  at the option of Payee,  shall
become due and  payable  immediately,  without  presentation,  demand or further
action and execution may forthwith  issue for the collection of same,  including
reasonable  attorneys' fees and all other sums due by Maker  hereunder.  In such
case,  Payee may also recover all costs of suit and other expenses in connection
therewith.
            The  remedies  of Payee as  provided  hereunder  and the  warranties
contained herein shall be cumulative and concurrent,  and may be pursued singly,
successively,  or together at the sole discretion of Payee, and may be exercised
as often as occasion therefore shall occur; and the failure to exercise any such
right or remedy shall in no event be construed as a waiver or release thereof.
            Maker  hereby   waives  and   releases   all  errors,   defects  and
imperfections  in any  proceedings by Payee under the terms of this Note as well
as all  benefit  that might  accrue to Maker by virtue of any  present or future
laws exempting  personal  property or any part of the proceeds  arising from any
sale of such property, from attachment, levy, sale under execution, or providing
for any stay of execution, exemption from civil process or extension of time for
payment;  and Maker  agrees that any personal  property  that may be levied upon
pursuant to a judgment obtained by virtue hereof on any writ of execution issued
thereon may be sold upon any such writ in whole or in part in any order  desired
by Payee.
            Maker  and all  endorsers,  sureties  and other  guarantors,  hereby
jointly and severally waive presentation for payment,  demand, notice of demand,
notice of  nonpayment  or dishonor,  protest and notice of protest of this Note,
they agree that the  liability  of each of them shall be joint and  several  and
unconditional, without regard to the liability of any other party, and shall not
be affected in any manner by any indulgence,  extension of time, renewal, waiver
or  modification  granted or  consented  to by Payee.  Maker and all  endorsers,
sureties and  guarantors  consent to any and all  extensions of time,  renewals,
waivers,  or  modifications  that may be granted  by Payee  with  respect to the
payment or other  provisions of this Note,  and to the release of any collateral
or any part  hereof,  with or without  substitution,  and agree that  additional
makers,  endorsers,  guarantors or sureties may become  parties  hereto  without
notice to them or affecting their liability hereunder.
            Payee shall not be deemed, by any act of omission or commission,  to
have  waived any of its rights or  remedies  hereunder  unless such waiver is in
writing and signed by Payee, and then only to the extent  specifically set forth
in writing.  A waiver on one event shall not be construed as  continuing or as a
bar to or waiver of any right or remedy to a subsequent event.
            Maker shall pay the cost of any  revenue tax or other  stamps now or
hereafter required by law at any time to be affixed to this Note.
            Whenever used, the singular  number shall include the plural and the
plural the  singular,  the use of any gender shall be applicable to all genders,
and the words  "Payee"  and "Maker"  shall be deemed to include  the  respective
heirs, personal representatives, successors and assigns of Payee and Maker.
            All notices required to be given shall be effectively  given only if
in  writing  and sent by  certified  mail,  return  receipt  requested,  postage
prepaid,  and addressed to the party entitled to receive the same at the address
specified  on the first  page of this Note or at such  other  address  as may be
directed or by personal notice or by such party or by telefax.  All notices sent
by mail shall be deemed given and received on the first mail delivery date after
such mailing. All notices given by telefax shall be deemed given and received on
the date the telefax is sent.
            Nothing herein contained,  nor any transaction related hereto, shall
be construed or so operate as to require  Maker,  or any other person liable for
repayment of same, to pay interest at a greater rate than is lawful in such case
to contract  for, or to make payment,  or to do any act contrary to law.  Should
any interest or other charges paid by Maker,  or parties  liable for the payment
of this Note,  result in the computation or earning of interest in excess of the
maximum  rate of  interest  which is  legally  permitted  under  the laws of the
applicable jurisdiction, then any and all excess shall be and the same is hereby
waived by Payee,  and any and all such  excess  automatically  shall be credited
against and in reduction of the balance due under this Note,  but such crediting
shall not cure or waive the default occasioning acceleration, and the portion of
said excess which  exceeds the balance due under the Note shall be paid by Payee
to Maker and other parties liable for the payment of this Note. If any clause or
provision herein contained shall be unenforceable under applicable law, in whole
or in part,  then only such clause or provision  or part  thereof  shall be held
void as though not contained  herein and the remainder of this Note shall remain
operative and in full force and effect.
      This Note shall be governed by and construed in  accordance  with the Laws
of the State of New York and the  Courts of New York,  or the  Federal  District
Court in New York, shall have jurisdiction for enforcement of this Note.
            IN WITNESS  WHEREOF,  Maker has  caused  these  presents  to be duly
executed the day and year first above written.
                                          LIBERTY PROCESSING AND
                                          DISTRIBUTION, INC.,
                                          a Delaware Corporation

                                          By:__________________________
                                                                     , PresidentPROMISSORY NOTE

$1,500,000.00                                   New York, New York
                                                September 15, 2000

      FOR VALUE RECEIVED,  the undersigned,  LIBERTY  PROCESSING & DISTRIBUTION,
INC., a Delaware  corporation with an address of 11 52nd Street,  Brooklyn,  New
York, 11232, (hereinafter referred to as "Maker"), hereby promises to pay to the
order of MARVIN N. RAAB,  whose address is 429 Coolidge  Road,  Cherry Hill, New
Jersey 08002 (hereinafter referred to as "Payee") without defalcation or offset,
the   principal   sum  of  ONE  MILLION   FIVE   HUNDRED   THOUSAND  AND  00/100
($1,500,000.00)  DOLLARS lawful money in the United States of America,  together
with interest calculated at an interest rate as provided hereinafter.
            The obligations  evidenced by this Note arise pursuant to the terms,
conditions and provisions of that certain Stock Purchase Agreement ("Agreement")
dated  September  15,  2000,  among  Philadelphia  Foods,  Inc.,  a  New  Jersey
corporation  ("Philadelphia  Foods,  Inc."), Maker and Payee for the purchase of
the stock  ("Stock") of Philadelphia  Foods,  which Stock is owned by the Payee.
This Note  represents  payment for a portion of the cash payment as provided for
in the Agreement.  The amount due hereunder  shall be due and payable sixty (60)
days from the date hereof. If payment is not made within thirty (30) days of the
date  hereof,  interest  shall  accrue on this Note at the rate equal to one (1)
point  above the prime  rate of Chase  Manhattan  Bank,  N.A.  from the 31st day
following the date hereof until all amouts due  hereunder are paid in full.  All
amounts  required to be paid hereunder  shall be payable to Payee or his assigns
or designees at 429 Coolidge Road,  Cherry Hill, New Jersey,  08002,  or at such
other place as Payee may from time to time  designate  in writing.  In the event
Closing  (as  defined in the  Agreement)  of the sale of the Stock is held on or
before  November 15,  2000,  and all amounts due to Payee under the terms of the
Agreement are paid in full, this Note shall automatically be cancelled and of no
further force and effect.
            Concurrently  with the execution of this Note, Maker is executing an
additional note in the principal amount of Five Hundred  Thousand  ($500,000.00)
Dollars  ("First  Deposit  Note") for payment of the balance of the cash payment
due under the terms of the  Agreement.  Said  First  Deposit  Note is secured by
either a Letter of Credit or a security interest in the inventories and accounts
receivable  of Liberty  Group  Holdings,  Inc.,  ("LGHI") the parent  company of
Maker, and Liberty Foods Group, LLC, ("LFG") another company owned by LGHI.
            All  of  the  agreements,   conditions,  covenants,  provisions  and
stipulations  contained in the  Agreement as to the payment of the First Deposit
Note are to be kept and  performed by Maker,  and are hereby made a part of this
Note to the same extent and with the same force and effect as if they were fully
set forth herein,  and the Maker  covenants and agrees to keep and perform them,
or cause them to be kept and performed, strictly in accordance with their terms.
Maker shall have the  privilege  of  pre-paying  any sums due under this Note in
whole or in part, at any time and from time to time, without premium or penalty;
provided,  however,  that such prepayment shall be accompanied by payment of all
accrued interest on the outstanding  principal  balance then due and owing under
this Note.
            The Agreement  provides that in the event the Closing on the sale of
the Stock from Payee to Maker does not occur on or before  November 15, 2000, as
contemplated  by the  Agreement,  the Agreement  will terminate and Payee's sole
remedy shall be to collect under the First Deposit Note by either presenting the
LOC for  payment or  enforcing  his rights  under the  security  interest  being
granted by LGHI and LFG. Consequently,  if the Agreement terminates as aforesaid
and Closing is not completed,  Maker's obligation for payment of this Note shall
terminate and this Note shall have no further force and effect.
            Maker  hereby   waives  and   releases   all  errors,   defects  and
imperfections  in any  proceedings by Payee under the terms of this Note as well
as all  benefit  that might  accrue to Maker by virtue of any  present or future
laws exempting  personal  property or any part of the proceeds  arising from any
sale of such property, from attachment, levy, sale under execution, or providing
for any stay of execution, exemption from civil process or extension of time for
payment;  and Maker  agrees that any personal  property  that may be levied upon
pursuant to a judgment obtained by virtue hereof on any writ of execution issued
thereon may be sold upon any such writ in whole or in part in any order  desired
by Payee.
            Maker  and all  endorsers,  sureties  and other  guarantors,  hereby
jointly and severally waive presentation for payment,  demand, notice of demand,
notice of  nonpayment  or dishonor,  protest and notice of protest of this Note,
they agree that the  liability  of each of them shall be joint and  several  and
unconditional, without regard to the liability of any other party, and shall not
be affected in any manner by any indulgence,  extension of time, renewal, waiver
or  modification  granted or  consented  to by Payee.  Maker and all  endorsers,
sureties and  guarantors  consent to any and all  extensions of time,  renewals,
waivers,  or  modifications  that may be granted  by Payee  with  respect to the
payment or other  provisions of this Note,  and to the release of any collateral
or any part  hereof,  with or without  substitution,  and agree that  additional
makers,  endorsers,  guarantors or sureties may become  parties  hereto  without
notice to them or affecting their liability hereunder.
            Payee shall not be deemed, by any act of omission or commission,  to
have  waived any of its rights or  remedies  hereunder  unless such waiver is in
writing and signed by Payee, and then only to the extent  specifically set forth
in writing.  A waiver on one event shall not be construed as  continuing or as a
bar to or waiver of any right or remedy to a subsequent event.
            Maker shall pay the cost of any  revenue tax or other  stamps now or
hereafter required by law at any time to be affixed to this Note.
            Whenever used, the singular  number shall include the plural and the
plural the  singular,  the use of any gender shall be applicable to all genders,
and the words  "Payee"  and "Maker"  shall be deemed to include  the  respective
heirs, personal representatives, successors and assigns of Payee and Maker.
            All notices required to be given shall be effectively  given only if
in  writing  and sent by  certified  mail,  return  receipt  requested,  postage
prepaid,  and addressed to the party entitled to receive the same at the address
specified  on the first  page of this Note or at such  other  address  as may be
directed or by personal notice or by such party or by telefax.  All notices sent
by mail shall be deemed given and received on the first mail delivery date after
such mailing. All notices given by telefax shall be deemed given and received on
the date the telefax is sent.
            Nothing herein contained,  nor any transaction related hereto, shall
be construed or so operate as to require  Maker,  or any other person liable for
repayment of same, to pay interest at a greater rate than is lawful in such case
to contract  for, or to make payment,  or to do any act contrary to law.  Should
any interest or other charges paid by Maker,  or parties  liable for the payment
of this Note,  result in the computation or earning of interest in excess of the
maximum  rate of  interest  which is  legally  permitted  under  the laws of the
applicable jurisdiction, then any and all excess shall be and the same is hereby
waived by Payee,  and any and all such  excess  automatically  shall be credited
against and in reduction of the balance due under this Note,  but such crediting
shall not cure or waive the default occasioning acceleration, and the portion of
said excess which  exceeds the balance due under the Note shall be paid by Payee
to Maker and other parties liable for the payment of this Note. If any clause or
provision herein contained shall be unenforceable under applicable law, in whole
or in part,  then only such clause or provision  or part  thereof  shall be held
void as though not contained  herein and the remainder of this Note shall remain
operative and in full force and effect.
      This Note shall be governed by and construed in  accordance  with the Laws
of the State of New York and the  Courts of New York,  or the  Federal  District
Court in New York, shall have  jurisdiction for enforcement of this Note and the
Agreement.
            IN WITNESS  WHEREOF,  Maker has  caused  these  presents  to be duly
executed the day and year first above written.
                                          LIBERTY PROCESSING AND
                                          DISTRIBUTION, INC.,
                                          a Delaware corporation

                                          By:__________________________
                                                                     , President

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