Document:

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                                                                    Exhibit 10.3

                                      NOTE

$7,333,333.00                                               WOODBURY, NEW JERSEY

                                                            DECEMBER 20, 2002

      BETWEEN the Borrower K-TRON AMERICA, INC., A DELAWARE CORPORATION, whose
address is Routes 55 and 553, P.O. Box 888, Pitman, New Jersey 08071-0888,
referred to as "Borrower".

      AND the Lender, THE BANK, whose address is 100 Park Avenue, Woodbury, New
Jersey 08096, referred to as "THE BANK".

      The phrase "THE BANK" means the original Lender and anyone else who takes
this Note by transfer.

      BORROWER'S PROMISE TO PAY PRINCIPAL AND INTEREST. In return for a loan
that Borrower may receive hereunder, Borrower promises to pay $733,333,333.00 or
such lesser amount as may be advanced by the THE BANK as hereinafter set forth
(called "principal"), plus interest to the order of THE BANK. The borrower may
borrow any part of the loan up to an amount not to exceed $3,700,000.00 at a per
annum FIXED INTEREST RATE OF 5.625% and all or any part of the loan on a
floating rate basis equal to the one (1) month LIBOR rate plus 185 basis points,
as Borrower elects at the time of funding under this Note. Funding under this
Note will occur when requested by Borrower, with the anticipated date being
December 31, 2002 but in no event later than January 31, 2002, and will consist
of a $5,000,000.00 borrowing plus the amount necessary to refinance the
principal balance then due on the Borrower's $7,000,000.00 February 4, 2000 note
in favor THE BANK, with the total to be funded hereunder not to exceed
$7,333,333.00.
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Interest will be charged on the remaining part of the principal balance due on
this Note until all principal has been paid. Interest shall be calculated
hereunder for the actual number of days that principal is outstanding based on a
year of 360 days.

      PAYMENTS. Borrower will pay principal and interest based on a FIVE (5)
YEAR schedule with monthly principal payments of $83,333.33, PLUS INTEREST, on
the SIXTH DAY OF EACH MONTH BEGINNING ON FEBRUARY 6, 2003. The amount of each
said principal payment allocated to the fixed and floating rate portions of the
loan shall be in the same ratio as those fixed and floating rate portions bear
to each other. Borrower will pay all amounts owed under this Note no later than
JANUARY 6, 2008. All payments will be made to THE BANK at the address shown
above or to a different place if required by the THE BANK.

      LIBOR RATE. For the floating rate portion of the Note, a variable interest
rate equal to the one (1) month LIBOR rate plus 185 basis points. The rate of
interest shall be established on the twenty-fifth (25th) day of each calendar
month, during the term of this Note, or the next business day thereafter, with
such rate of interest to be effective on the first business day of the next
calendar month. For purposes of this Note, LIBOR interest rate shall be defined
as the rate of interest equal to the sum of (a) the London Interbank Offered
Rate (LIBOR) for maturities of one (1) month, expressed as an annual yield, as
reported in the Wall Street Journal or a comparable source on the date the quote
by THE BANK is given (the "LIBOR Index Rate"); and (b) 185 basis points. The
rate of interest so established shall remain in effect until the first business
day of the succeeding calendar month, at which time the rate of interest shall
be reestablished as provided herein. The interest rate established at time of
funding under the terms of this Note shall be the same as if established on the
first of said month.

      SECURITY. The Borrower hereunder has delivered as security for this
instrument a

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second mortgage bearing even date herewith covering premises designated on the
official tax map as Lot 3.01, Block 249, Township of Mantua, Gloucester County,
New Jersey, which Mortgage is about to be recorded in the office of the Clerk of
Gloucester County together with a second lien security interest, subject only to
THE BANK'S first lien perfected security interest, in the accounts receivable,
inventory, and equipment now owned or hereafter acquired by Borrower located at
Routes 55 and 553, Pitman, New Jersey 08071 and Suite 601, VPR Commerce Center,
1001 Lower Landing Road, Blackwood, New Jersey 08012. The provisions of any
mortgage or security agreement given as security for this Note are incorporated
herein by reference.

      COVENANTS AND CONDITIONS:

1. Borrower has provided to THE BANK acceptable current financial statements and
will provide annual updates on the Borrower and Guarantor. The updates for
financial statements and tax returns are to be submitted within thirty (30) days
of the date requested by THE BANK. Should the Borrower or Guarantor fail to
submit required financial information within thirty (30) days of the date of
request, THE BANK may, at its sole option, increase the interest rate of this
Note by one-half (1/2) of one (1) percent per annum.

2. The Borrower must maintain with THE BANK a meaningful deposit relationship.

3. Borrower agrees that until all obligations hereunder are fully paid and
discharged, Borrower and Guarantor will not without the prior written consent of
THE BANK:

      A. Permit the consolidated debt to net worth ratio of Guarantor to be more
than 1.25 at fiscal year-end 2003 and each fiscal year-end thereafter.

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      B. Permit the consolidated net worth of Guarantor to be less than $27
million at fiscal year-end 2003 and each fiscal year-end thereafter.

      C. Both of the above covenants set forth in paragraphs A and B above shall
be calculated exclusive of declines due to changes in foreign exchange rates
subsequent to December 28, 2002.

      D. Permit the consolidated annual debt coverage ratio of Guarantor at each
fiscal year end to be less than 1.50.

      E. Each of covenants set forth in paragraphs A, B, and D above shall be
calculated without taking into account Pennsylvania Crusher Corporation and its
subsidiaries.

      F. Permit upstreaming of funds from Borrower to Guarantor or K-Tron
Technologies, Inc. or downstreaming of funds from Guarantor to Pennsylvania
Crusher Corporation or its subsidiaries, except for management fees consistent
with past practice and royalties paid in the ordinary course of business and
except for dividends paid in connection with the Pennsylvania Crusher
Corporation acquisition, including to pay the $5 million note expected to be
issued by Guarantor to the stockholders of Pennsylvania Crusher Corporation.

      G. Permit any merger or acquisition by Guarantor or its subsidiaries
involving consideration of more than $2 million without the written approval of
THE BANK.

      PREPAYMENT: As to the amount borrowed under the Fixed Interest Rate
Option, Borrower shall have the right at any time during the term hereof to
prepay all or a part of the principal balance then outstanding under the Note to
which the Fixed Interest Rate Option applies provided that, if required, it also
pays the premiums and charges, if any are applicable, hereinafter set forth in
this paragraph. A principal prepayment requiring such a premium or charge shall
be deemed to have occurred upon Borrower's payment to THE BANK in any Loan

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Year of any sum in reduction of principal which exceeds one third of the
original principal amount borrowed under the Fixed Interest Rate Option,
excluding principal payments (including scheduled amortization) the Borrower is
obligated to make under any other term or provision of the Note, the Mortgage
securing the Note or any other document constituting a part of the loan
transaction evidenced by the Note. Upon the occurrence of such a principal
prepayment including prepayment of the entire debt, THE BANK shall be entitled
to charge and Borrower shall be obligated to pay, in addition to interest and
all other charges then properly due, a prepayment premium equal to 2% of the
amount prepaid which is in excess of what could have been prepaid without such a
premium. The term "Loan Year" as used herein is defined as any period of one
year commencing on the date of the Note or on any anniversary of such date.
Except as provided above, there shall be no prepayment premium or charge on a
prepayment of any amount borrowed under the Fixed Interest Rate Option.

      At no time will there by a prepayment penalty on the Variable Interest
Rate portion of the loan, which portion may be prepaid in full or in part at any
time.

      LATE CHARGE: The effective date of the receipt by the holder of any
installment of this Note shall be the day on which the holder receives cash or
collected funds at the place of payment as specified herein in payment of any
such installment. BORROWER shall be entitled to a FIFTEEN (15) DAY grace period
after which period a "late charge" of $0.05 FOR EACH $1.00 OVERDUE may be
charged by the holder for the purpose of defraying the expense incident to
handling such delinquent payment.

      DEFAULT: If any installment of this Note or interest payment is not paid
within 15 days of the date and at the place herein specified and after THE BANK
has given the BORROWER 15 days' written notice to cure said default, THE BANK
may at its option, and

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without further notice declare this Note to be in default and the entire
principal balance then remaining unpaid together with all interest which shall
have accrued on the unpaid principal balance from and after the date of such
default shall be due and payable in full without notice.

      It shall be a default of this Note if Borrower shall default in any
payment of principal or interest on any indebtedness or contingent obligation
for money borrowed (other than Borrower's obligations under this Note) or any
other event shall occur, the effect of which is to permit such indebtedness or
contingent obligation to be declared or such indebtedness or contingent
obligation shall otherwise become due prior to is stated maturity, provided,
however, that this provision shall not apply concerning obligations other than
Borrower's obligations under this Note unless the amount involved exceeds
$50,000.00

      If a default shall occur in this loan and not be cured as provided in the
loan documents or otherwise agreed to by THE BANK, THE BANK shall, after
declaring the loan to be in default, have the right to increase the interest
rate TWO (2%) PERCENT PER YEAR in excess of the note rate. This provision is in
addition to any late charges that may be due.

      ATTORNEY'S FEE: If this Note is placed in the hands of an attorney for
collection because of a default in the terms hereof or in the terms of the
mortgage given as security for the within obligation, the undersigned agrees to
pay the reasonable fees and costs of such attorney, whether or not legal action
is instituted and further consents that if a judgment is entered in any action
the amount of such fees shall form a part of such judgment in addition to any
fees allowed by Statute or Rule of the Court.

      COMMITMENT LETTER COMPLIANCE: This Note is contingent upon BORROWER'S
compliance with all of the terms and conditions contained in the commitment
letter issued by THE BANK to BORROWER on December 6, 2002. Upon breach of any
term

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or condition contained there THE BANK shall have the right to declare this loan
in default and demand payment in full of the principal balance remaining unpaid,
together with all interest which shall have accrued thereon. Further, providing
the said commitment letter so provides, THE BANK reserves the right to increase
the interest rate in accordance with the provisions of the loan commitment for
failure of the BORROWER or any guarantor to submit required financial
information within thirty days of the date of request by THE BANK. Should there
be any conflict between the provisions of said commitment letter and this Note,
the provisions of this Note shall apply.

      PAYMENT AT MATURITY: THIS LOAN IS PAYABLE IN FULL AT MATURITY OR UPON
DEMAND IN THE EVENT OF A DEFAULT HEREUNDER OR DEFAULT UNDER THE MORTGAGE
SECURING THIS NOTE OR DEFAULT UNDER THE TERMS OF ANY OTHER APPLICABLE LOAN
INSTRUMENT. YOU MUST REPAY THE ENTIRE PRINCIPAL BALANCE OF THE LOAN AND UNPAID
INTEREST THEN DUE. THE BANK IS UNDER NO OBLIGATION TO REFINANCE THE LOAN AT THAT
TIME. YOU WILL THEREFORE BE REQUIRED TO MAKE PAYMENT OUT OF OTHER ASSETS YOU MAY
OWN OR YOU WILL HAVE TO FIND A LENDER WILLING TO LEND YOU THE MONEY. IF YOU
REFINANCE THIS LOAN AT MATURITY, YOU MAY HAVE TO PAY SOME OR ALL OF THE CLOSING
COSTS NORMALLY ASSOCIATED WITH A NEW LOAN EVEN IF YOU OBTAIN REFINANCING FROM
THE BANK.

      WAIVER OF PRESENTMENT: EACH AND ALL PARTIES hereto whether maker,
endorsers, sureties, guarantor or otherwise do hereby jointly and severally
waive presentment and demand for payment, notice of dishonor, protest and notice
of protest.

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      IN WITNESS WHEREOF, the BORROWER hereunder has hereunto set its hand and
seal the day and year first above written.

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<S>                                   <C>
ATTEST:                               K-TRON AMERICA INC.
                                      BY:

/s/ Mary E. Vaccara                   /s/ Patricia M. Moore
--------------------------------      -----------------------------------
Mary E. Vaccara, Secretary            Patricia M. Moore, Vice President-Finance
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                                      -8-<PAGE>

                                                                    Exhibit 10.4

                              [THE BANK LETTERHEAD]

                                    THE BANK

                           LOAN MODIFICATION AGREEMENT

                              K Tron America, Inc.
                                  P.O. Box 888
                              Pitman, NJ 08071-0888

Date: December 20, 2002                                  Account #: 6039359-6600

Original Amount: $5,000,000.00                           Present Balance: $0.00

--------------------------------------------------------------------------------

WHEREAS, the undersigned Borrower executed the note referred to above on June
27, 1998; and,

WHEREAS, the loan documents, executed by the Borrower allow for a modification
of interest rate, due date or other terms or conditions without affecting the
priority of The Bank's lien;

NOW, therefore, in consideration of a modification fee of $0.00, the above
referenced note is modified as follows:

COMMITMENT:    The total commitment on the line of credit is hereby reduced from
               $5,000,000.00 to $4,000,000.00 effective December 20, 2002.

All other terms and conditions of the original note, commitment letter and any
security thereto attached is fully incorporated herein and fully ratified except
as specifically modified by this modification agreement.

THE BANK                                     K-TRON AMERICA, INC.
BY: /s/ David J. Hanrahan, Sr.               /s/ Patricia M. Moore,
   ---------------------------               ----------------------------------
        DAVID J. HANRAHAN, SR.               PATRICIA M. MOORE, V.P./FINANCE
        SENIOR VICE PRESIDENT
                                             /s/ Mary E. Vaccara,
                                             ----------------------------------
                                             MARY E. VACCARA, SECRETARY

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