Exhibit 4.1


 


UNSECURED PROMISSORY NOTE


 


	
   

  	
   

  	
   

  	
  Columbus, Ohio, U.S.A

  
	
  U.S.$250,000

  	
   

  	
   

  	
  Date: September 23, 2003

  



 


FOR VALUE RECEIVED,
the undersigned, Quality Products, Inc., a Delaware corporation, with offices
at 2222 S. Third St., Columbus, Ohio 43207-2402, (“Borrower”) promises to pay
to the order of Richard A. Drexler, TTEE, Richard A. Drexler Trust, U/A DTD
9/14/90, RD & J Corporation, a Delaware corporation, Eleanor Metnick, and
the Dale S. Drexler Living Trust, U/A/D March 15, 1999 (the “Lenders”)
their portion (as listed in Exhibit A to this note) of the principal sum of two
hundred fifty thousand and no/100 dollars (U.S.$250,000) and interest on the
outstanding principal from the date hereof at the rate of 9% per annum simple interest.


 


QPI Multipress, Inc., and Columbus Jack Corporation, subsidiaries of
Borrower are guaranteeing this Note in a separate instrument.


 


Definition of Holder -
Jason Drexler shall be the Holder of this note on behalf of the Lenders.  Lenders agree to act through Jason Drexler as
their agent.  Borrower shall consider
Jason Drexler as the duly appointed agent for the Lenders with the sole right
to act as the Holder of the Note unless and until he is replaced by a writing
signed by all Lenders and delivered to Borrower.


 


Payment Schedule -
The principal amount of this note shall be payable in thirty-five (35) equal
installments of U.S.$ 6,944.45 on the last day of each month commencing
October 31, 2005 and a final installment of $6,944.25 on
September 30, 2008.  Accrued
interest under this note shall be payable monthly on the last day of each month
beginning October 31, 2003. 
Borrower shall divide the monthly payments into separate checks for each
Lender.  Each check shall contain the
interest due on each Lender’s share of this Note plus such Lender’s
proportionate share of the principal payment then due.  All payments made shall be applied first to
accrued interest and only thereafter to reduction of the principal balance.


 


Default - If any of
the following events shall occur, the outstanding principal balance of this
note together with accrued interest thereon shall, on demand by the Holder of
this note, be due and payable: (a) any amount owing under (i) this Note, (ii)
Quality Products’ April 16, 2003 $770,000 note, or (iii) Quality Products’
May 24, 2002 Promissory Note to Schuler Incorporated is not paid within
ten (10) calendar days of the date due; (b) a default under any other provision
of this note or under any guarantee of this note; (c) a breach of any
representation or warranty under this note or under any such guarantee; (d) the
liquidation or dissolution of the undersigned corporation or a guarantor; (e)
the sale of a material portion of the business and assets of the undersigned or
any Guarantor; (f) the filing of a petition under any bankruptcy, insolvency or
similar law by the undersigned or by any Guarantor; (g) the making of any
assignment for the benefit of creditors by the undersigned or by any Guarantor;
(h) the filing of a petition under any bankruptcy, insolvency, or similar law
against Borrower or against any Guarantor and such petition not being dismissed
within a period of thirty (30) days of the filing.


 


Default Interest -
The outstanding balance of any amount owing under this note, which is not paid
when due shall bear interest at the rate of twelve percent (12%) per annum,
compounded daily.


 


Usury Clause -
Notwithstanding any other provision of this note, interest under this note
shall not exceed the maximum rate permitted by law; and if any amount is paid
under this note as interest in excess of such maximum rate, then the amount so
paid will not constitute interest but will constitute a prepayment on account
of the principal amount of this note. 
If at any time the interest rate under this note would, but for the


 


1

















 


provision of the preceding sentence, exceed the maximum rate permitted
by law, then the outstanding principal balance of this note shall, on demand by
the Holder of this note, become and be due and payable.


 


Where to Make Payments -
All payments of principal and interest shall be made in lawful currency of the
United States of America in immediately available funds at the addresses listed
in Exhibit A for each Lender, or in such other manner or at such other place as
the Holder of this note designates in writing.


 


Defenses, Set-offs, and Counterclaims
- All payments under this note shall be made without defense,
set-off, or counterclaim, free and clear of and without deduction for any taxes
of any nature now or hereafter imposed.


 


Expenses - The
undersigned agrees to pay on demand (i) all reasonable expenses (including,
without limitation, legal fees and disbursements) incurred in connection with
the negotiating and preparing this note and any documents in connection with
this note, and (ii) all reasonable expenses of collecting and enforcing this
note and any guarantee, including, without limitation, expenses and fees of
legal counsel, court costs, and the cost of appellate proceedings.


 


Governing Law -
This note and the obligations of the undersigned shall be governed by and
construed in accordance with the law of the State of Ohio, U.S.A.


 


Waiver of Presentment, Etc. – Except
for presentment for payment of the final installment, the undersigned waives
presentment for payment, demand, protest, and notice of protest and of
non-payment.


 


Delay; Waiver - The
failure or delay by the Holder of this note in exercising any of Lenders’
rights hereunder in any instance shall not constitute a waiver thereof in that
or any other instance.  The Holder of
this note may not waive any of Lenders’ rights except by an instrument in
writing signed by the Holder.


 


Prepayment - The
undersigned may prepay all or any portion of the principal of this note at any
time and from time to time without premium or penalty.  Any such prepayment shall be applied against
the installments of principal due under this note in the inverse order of their
maturity and shall be accompanied by payment of accrued interest on the amount
prepaid to the date of prepayment.


 


Amendment - This
note may not be amended without the written approval of the Holder.


 


	
  Date: September 23, 2003

  	
  QUALITY PRODUCTS, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/Tac D. Kensler

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Chief Financial Officer

  	
   

  	
   

  
	
   

  	
  Name and Title

  	
   

  	
   

  
								



 


2

















 


Exhibit A - Identification of Lenders
 


	Name
	 
	Address
	 
	Note Amount

	Richard A. Drexler, TTEE, Richard A. Drexler Trust, U/A DTD 9/14/90
	 
	N/A
	 
	$
	100,000

	RD & J Corporation
	 
	N/A
	 
	$
	100,000

	Eleanor Metnick
	 
	N/A
	 
	$
	25,000

	Dale S. Drexler Living Trust, U/A/D March 15, 1999.
	 
	N/A
	 
	$
	25,000

	 
	 
	Total
	 
	$
	250,000.00




 


3