Exhibit
4.1


 


PROMISSORY
NOTE


 


	
   

  	
   

  	
  Columbus,
  Ohio, U.S.A

  
	
  U.S.$770,000

  	
   

  	
  Date:
  April 16, 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. and Clare F.
Drexler as joint tenants with rights of survivorship, Dan L. Drexler, Jason
Drexler, Theodore P. Schwartz, Eleanor Metnick and Nicole E. Drexler as joint
tenants with rights of survivorship, RD&J Corporation, Dale S. Drexler
Living Trust, Karen K. Hart, and Alyce A. Lazar Declaration of Trust Dated
September 24, 1992 (the “Lenders”) their portion (as listed in Exhibit A to
this note) of the principal sum of seven
hundred seventy thousand and no/100 United States dollars (U.S.$770,000) and
interest on the outstanding principal balance from the date hereof at the rate
of 8% per annum simple
interest.


 


Security Agreement and Guarantee –
As of April 16, 2003, Borrower and its subsidiaries, QPI Multipress, Inc., an
Ohio corporation, and Columbus Jack Corporation, an Ohio corporation
(collectively the “Guarantors”) have entered into a separate Security Agreement
with Lenders securing payment of this Note and QPI Multipress, Inc., and
Columbus Jack Corporation have entered into a separate Guarantee of this Note.


 


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.  Upon final payment of monies owed to Mr. Schwartz under this
Note, he shall no longer be a Lender.


 


Payment Schedule - The principal amount of this note shall be
payable in fifty nine (59) equal installments as follows: U.S. $12,833.33 on the last day of each month commencing April
30, 2003 with the final installment of the remaining amount due and payable on
March 31, 2008 upon Holder’s presentation of this Note for final payment.  Accrued interest under this note shall be
payable with each installment of principal. 
Borrower shall divide the monthly installment into a separate check
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.  Initially, Borrower shall pay
all principal paid under this Note to Theodore P. Schwartz until Borrower has
paid Mr. Schwartz’ share of the principal in full.  Thereafter, principal payments shall be apportioned in accordance
with each Lender’s share of the remaining amount due on this Note.


 


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 this note 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 or the agreement providing
security for the payment of this note; (c) a breach of any representation or
warranty under this note or under any such guarantee or security agreement; (d)
the liquidation or dissolution of the undersigned corporation or one of the two
Guarantors who are also providing security for the payment of this note; (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


 


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Page 2                                                                    April 16,2003


Promissory Note


 


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
ten percent (10%) 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
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
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 or obtaining control over and selling any collateral securing
this note, 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. - The
undersigned waives presentment for payment (except for payment of the final
installment), 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.


 


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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: April 16, 2003

  	
  QUALITY PRODUCTS, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/Tac D. Kensler

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Chief Financial Officer

  	
   

  
	
   

  	
  Name and Title

  	
   

  
					



 


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Exhibit
A - Identification of Lenders


 


	
  Name

  	
   

  	
  Note Amount

  	
   

  
	
  Richard A. and
  Clare F. Drexler as joint tenants with rights of survivorship

  	
   

  	
  $

  	
  300,000

  	
   

  
	
  Dan L. Drexler

  	
   

  	
  $

  	
  100,000

  	
   

  
	
  Jason I. Drexler

  	
   

  	
  $

  	
  200,000

  	
   

  
	
  Theodore P.
  Schwartz

  	
   

  	
  $

  	
  25,000

  	
   

  
	
  Eleanor Metnick
  and Nicole E. Drexler as joint tenants with rights of survivorship

  	
   

  	
  $

  	
  25,000

  	
   

  
	
  RD&J
  Corporation

  	
   

  	
  $

  	
  25,000

  	
   

  
	
  Dale S. Drexler
  Living Trust U/A March 15, 1999 Dale S. Drexler, Trustee

  	
   

  	
  $

  	
  25,000

  	
   

  
	
  Karen K. Hart

  	
   

  	
  $

  	
  20,000

  	
   

  
	
  Alyce A. Lazar
  Declaration of Trust dated September 24, 1992

  	
   

  	
  $

  	
  50,000

  	
   

  
	
  TOTAL

  	
   

  	
  $

  	
  770,000.00

  	
   

  



 


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