Document:

Exhibit
4.8

 

NOTE

 

	
  $300,000

  	
  October 15, 2002

  

 

FOR VALUE RECEIVED, the undersigned, QUALITY PRODUCTS,
INC. a Delaware corporation (“Borrower”), with offices at 2222 South Third
Street, Columbus, Ohio 43207, hereby promises to pay to the order of Dennis Mellman
or any subsequent holder of this Note (“Holder”) in lawful money of the United
States and in immediately available funds, the principal amount Three Hundred
Thousand Dollars ($300,000) as follows: commencing June 30, 2004, the Company
shall make quarterly payments of principal in the amount of Twelve Thousand
Five Hundred Dollars ($12,500) on the last calendar day of June, September,
December and March, with a final payment of Two Hundred Thirty Seven Thousand
Five Hundred Dollars ($237,500) due on September 30, 2005 (the “Maturity
Date”).

 

Interest shall accrue on the unpaid balance of said
principal sum at the rate of  Ten
Percent (10%) per annum (computed on the basis of a 360 day year) from the date
hereof until said principal sum is fully paid. 
Payments of interest under this Note shall be made on the last calendar
day of each of December, March, June and September, commencing on December 31,
2002.

 

Principal and interest under this Note may be prepaid,
in whole or in part, at any time without premium or penalty.

 

1.             Subordination.  Notwithstanding anything to the contrary
herein, all Subordinated Indebtedness shall be subordinate and junior in right
of payment to all Superior Indebtedness, in each case to the extent and in the
manner set forth in this Section 1.

 

(a)           As
used in this Section 1, the following terms have the following respective
meanings:

 

(i)  “Superior Indebtedness” shall mean all
indebtedness of Borrower from time to time other than Subordinated
Indebtedness, including, without limitation, indebtedness incurred from time to
time to U.S. Bank National Association or any of Borrower’s secured lenders (as
described on Borrower’s financial statements), but excluding indebtedness to
unsecured creditors of Borrower; and 
(ii)  “Subordinated Indebtedness”
shall mean all principal of and interest on this Note.

 

(b)           Notwithstanding anything to the
contrary contained herein, in the event Borrower shall default in the payment
or performance of any obligations with respect to any Superior Indebtedness
when the same becomes due, whether at maturity or at a date fixed for
prepayment or by declaration, acceleration or otherwise, then, unless and until
such default shall have been remedied or waived, no direct or indirect payment
(in cash, property or securities or by set-off or otherwise) shall be made of
or on account of any Subordinated Indebtedness or as a sinking fund for
Subordinated Indebtedness or in

 

 

respect of any redemption, retirement, purchase or
other acquisition of any Subordinated Indebtedness.

 

(c)           So long as any Superior Indebtedness
remains outstanding, no holder of Subordinated Indebtedness shall declare or
join in any declaration of acceleration of the maturity of the Subordinated
Indebtedness during a period commencing on the occurrence of a Default (as
defined below) and ending on the acceleration of any Superior Indebtedness.

 

(d)           The holders of Subordinated
Indebtedness shall execute and deliver such documents and instruments and take
such further actions as are necessary in the reasonable judgment of Borrower or
any holder of Superior Indebtedness to effectuate the provisions of this
Section 1.

 

2.             Default.  Each of the following events or occurrences
shall constitute a “Default” under this Note: (a) Borrower shall fail to pay to
Holder any interest or principal owing hereunder when it becomes due and
payable, either at maturity, upon declaration or acceleration or otherwise and
such default shall continue for a period of thirty (30) days after Borrower has
received written notice informing it of such default from Holder; (b) Borrower
shall fail to duly perform any of its other agreements or obligations under
this Note, within thirty (30) days after Holder provides written notice to
Borrower thereof; (c) the dissolution or liquidation (by operation of law or
otherwise) which is not remedied within thirty (30) days of Borrower; (d) if
any default shall be declared pursuant to the terms of any Superior
Indebtedness; or (e) a receiver, trustee or custodian shall be appointed for Borrower
or any part of its property, or any proceeding shall be commenced by or against
Borrower, under any bankruptcy, reorganization, debt arrangement or insolvency
law, and, in the case of any such proceeding commenced against Borrower, such
proceeding shall not be dismissed within thirty (30) days thereafter.

 

3.             Default
Interest.  Upon any Default, any
unpaid amounts shall bear default interest, from such date until the date of
actual payment (and before as well as after judgment) at the per annum rate of
twelve percent (12%), computed daily on the basis of a 360 day year.

 

4.             Remedy
Upon Default.  Upon the occurrence
and during the continuance of a Default, Holder at its option shall have all
rights and remedies of a creditor under Ohio law.  In addition to the foregoing rights and remedies, following a
Default, Holder, by written notice to Borrower, shall have the right to declare
all or any amounts shall become immediately due and payable, without further
notice, demand, declaration or presentment of any kind (provided that upon a
Default described in clause (d) of Section 2, all amounts owing hereunder
automatically shall become due and payable, without declaration, notice, demand
or presentment of any kind).  The
Company agrees to pay to Holder all reasonable expenses incurred or paid by
Holder, including reasonable attorneys’ fees and court costs, in connection
with the collection of this Note after a Default under this Note.

 

5.             Waiver
of Presentment.  Except as provided
herein, Borrower hereby waives presentment, diligence in the collection or
protection, protest, notice of protest and default, and

 

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notice of dishonor.  No delay by
Holder in the exercise of any right or remedy shall operate as a waiver
thereof, and no single or partial exercise by Holder of any right or remedy
shall preclude any other or further exercise thereof or the exercise of any
other right or remedy. If any part of this Note is unenforceable, that will not
make any other part unenforceable.

 

6.             Successors
and Assigns. This Note and the agreements made herein shall inure to the
benefit of and be binding upon Borrower, the holder hereof and their respective
successors and permitted assigns .

 

7.             Amendment:
Modification. This Note may not be amended or modified except by an
agreement in writing signed by the party to be charged.

 

8.             Fees,
Expenses.  Borrower agrees to pay
all collection expenses, court costs, and reasonable attorneys fees and
disbursements (whether or not litigation is commenced) that may be incurred in
connection with the collection or enforcement of this Note.

 

9.             Governing
Law; Jurisdiction.  This Note shall
be governed by and construed in accordance with the laws of Ohio, without
giving effect to principles of conflicts of law. Borrower hereby (i)
irrevocably consents and agrees that any action or proceeding for the
enforcement of this Note may be brought in any Federal or state court situated
in Franklin County, Ohio, (ii) agrees that any process in any action commenced
in such court under this Agreement may be served upon Borrower at the address
above (or such new address for service, which shall be the same address as
Borrower’s principal office, as Borrower may notify Holder in writing by
certified mail, return receipt requested), which, by certified or registered
mail, return receipt requested, or by an overnight courier service which
obtains evidence of delivery, with the same full force and effect as if
personally served upon Borrower, in addition to any other method of service
permitted by law, and (iii) waives any claim that such court is not a
convenient forum for any such action and waives any defense of lack of in
personam jurisdiction or improper venue with respect thereon.

 

10.           Registrar.   The Company shall maintain books for the
transfer and registration of this Note. 
Such registers shall show the names and addresses of the respective
Holders of this Note and the principal amount thereof.

 

11.           Transfer.  In addition to the other provisions of this
Note, any transfer of this Note shall be effected only if Borrower shall have
received an opinion of counsel addressed to Borrower, to the effect that the
proposed transfer of the Note may be effected in compliance with applicable
law.

 

12.           Lost
Note.  In case this Note shall be
mutilated or lost, stolen or destroyed, Borrower may in its discretion issue
and deliver in exchange and substitution for a mutilated Note which shall be
cancelled, or in lieu of and substitution for a lost, stolen or destroyed Note,
a new Note of like tenor and in the same principal amount; but only upon
receipt of evidence satisfactory to Borrower of such loss, theft or destruction
and indemnity, if requested, also

 

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satisfactory to it. Applicants for such substitute Notes shall also
comply with such other reasonable regulations and pay such other reasonable
charges as Borrower may prescribe.

 

IN WITNESS WHEREOF, Borrower has executed and delivered this Note as of
the date first above written.

 

 

	
   

  	
  QUALITY PRODUCTS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard Drexler

  	
   

  
	
   

  	
  Its:

  	
  Chairman

  	
   

  

 

4Exhibit 4.9

 

U.S. BANK NATIONAL ASSOCIATION

 

REVOLVING NOTE

 

 

	
  $1,700,000.00

  	
  Columbus, Ohio

  	
  October 10, 2002

  

 

FOR VALUE
RECEIVED, Quality Products, Inc. (“Borrower”), a Delaware corporation, with its
principal place of business located at 2222 South Third Street, Columbus, Ohio
43207, promises to pay to the order of U.S. Bank National Association (“Bank,”
which term shall include any holder hereof) at 175 South Third Street,
Columbus, Ohio 43215 or at such other place as the Bank may designate in
writing, the sum of $1,700,000.00 (“Principal Sum”), together with interest as
hereinafter provided and payable at the times and in the manner hereinafter
provided.

 

This Revolving Note (the “Note”) is executed
and the advances contemplated hereunder are to be made pursuant to a certain
Revolving Loan Agreement and Security Agreement (“Loan Agreement”) executed by
and between the Borrower, QPI Multipress, Inc., Columbus Jack Corporation and
the Bank, of even date herewith, and all the covenants, representations, agreements,
terms and conditions contained therein, including, but not limited to, Events
of Default, are incorporated herein as if fully rewritten.  All capitalized terms not otherwise defined
herein shall have the meanings ascribed to such terms in the Loan Agreement.

 

INTEREST

 

The Principal Sum shall bear interest at an
annual rate equal to one-half of one percent (1/2%) plus the Bank’s Prime Rate
(as hereinafter defined) from time to time in effect, with each change in the
Prime Rate automatically and immediately changing the interest rate on the
Principal Sum without notice to the Borrower.

 

As used herein, “Prime Rate” means, a
variable commercial lending rate of interest per annum as determined from time
to time by the Bank, and designated as the Bank’s “Prime Rate,” based upon its
consideration of economic, money market, business and competitive factors.  The Borrower waives any right to claim that
the Prime Rate is an interest rate other than that rate designated by the Bank
as its APrime Rate” on the grounds that : (i) such rate may or may not be
published or otherwise made known to the Borrower; or (ii) the Bank may make
loans to certain borrowers at interest rates which are lower than the Bank’s
“Prime Rate.”

 

Upon the occurrence of any Event of Default,
the applicable interest rate shall be increased by 3.00%.

 

 

MANNER OF PAYMENT

 

The interest accruing on the unpaid Principal
Sum shall be paid on the first day of each month
beginning           ,
2002, and continuing until February 5, 2004 (the “Maturity Date”), at which
time the unpaid Principal Sum and any accrued and unpaid interest shall be paid
in full.  Any payment required to be
made on a day which is not a Business Day shall be made on the next Business
Day.  As used herein, ABusiness Day” means
a day, other than a Saturday, Sunday or holiday, on which banks in the State of
Ohio are authorized by law to close.

 

In addition to the terms of the foregoing
paragraph, the unpaid balance of the Principal Sum and all accrued and unpaid
interest shall be due and payable on date of the Bank’s acceleration of the
Principal Sum and the interest.

 

All payments received by the Bank shall be
applied first to the payment of interest, fees and expenses which are due and
payable and then to the Principal Sum.

 

LATE CHARGE

 

If any payment of the Principal Sum or of
interest or any combination thereof is not paid in full within 10 days after
such payment is due, then in addition to the amount of said payment, there
shall be due, and the Borrower promises to pay, a late charge in respect of
each such payment in the amount of 5.00% of such payment, but in no event an
amount less than $50.00, which the Borrower agrees is a fair and reasonable
charge for costs incurred by the Bank in processing such late payment and shall
not be deemed a penalty.

 

DEFAULT

 

Upon the occurrence of any of the following
events:

 

(1)                                  the
failure of the Borrower to make any payment of interest or of the Principal Sum
on or before the date such payment is due; or

 

(2)                                  an
“Event of Default” under the Loan Agreement,

 

then the Bank may, at its option, without notice or demand, accelerate
the maturity of the obligations evidenced hereby, which obligations shall
become immediately due and payable.  In
the event the Bank shall institute any action for the enforcement or collection
of the obligations evidenced hereby, the Borrower agrees to pay all costs and
expenses of such action, including reasonable attorneys’ fees, to the extent
permitted by law.

 

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GENERAL PROVISIONS

 

The Borrower, and any indorser, surety or
guarantor, hereby jointly and severally waive presentment, notice of dishonor,
protest, notice of protest and diligence in bringing suit against any party
hereto, waive the defenses of impairment of collateral for the obligation
evidenced hereby, impairment of recourse against any person against whom the
Bank has any right of recourse, all defenses of any accommodation maker and all
discharges based upon suretyship, and agree that without discharging any of
them, the time of payment and any other provision of this Note may be extended
or modified an unlimited number of times before or after maturity without
notice to the Borrower.  The Borrower,
and any indorser, surety or guarantor, hereby jointly and severally agree that
they will pay the obligations evidence hereby, irrespective of any action or
lack of action on the part of the Bank in connection with the acquisition,
perfection, possession, enforcement, disposition or modification of all of the
obligations evidenced hereby or any and all security therefor, and no omission
or delay on the part of the Bank in exercising any right against, or taking any
action to collect from or pursue the remedies of the Bank against any parties
hereto will release, discharge or modify the duties of the Borrower to make
payments hereunder.  The Borrower, and
any indorser, surety or guarantor, hereby jointly and severally agree that the
Bank, without notice to or further consent from the Borrower, may release or
modify any collateral, security, document or other guaranties now held or
hereafter acquired, or substitute other collateral, security or other
guaranties, and no such action will release, discharge or modify the duties of
the Borrower hereunder.  The Borrower,
and any indorser, surety or guarantor, hereby jointly and severally agree that
the Bank will not be required to pursue or exhaust any of its rights or
remedies against the Borrower with respect to the payment of any of the
obligations evidenced hereby, or to pursue, exhaust or preserve any of the
rights or remedies of the Bank with respect to any collateral, security or
other guaranties given to secure said obligations.

 

The obligations evidenced hereby may from
time to time be evidenced by another 
note or notes given in substitution, renewal or extension hereof.  Any security interest or mortgage which
secures the obligations evidenced hereby shall remain in full force and effect
notwithstanding any such substitution, renewal, or extension.

 

The captions used herein are for reference
only and shall not be deemed a part of this Note.  If any of the terms or provisions of this Note shall be deemed
unenforceable, the enforceability of the remaining terms and provisions shall
not be affected.  This Note shall be
governed by and construed in accordance with the law of the State of Ohio.

 

WAIVER OF RIGHT TO TRIAL BY JURY

 

THE BORROWER
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION (1) ARISING UNDER THIS NOTE OR ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR (2) IN
ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE BORROWER
OR THE BANK WITH RESPECT TO THIS NOTE OR ANY OTHER INSTRUMENT, DOCUMENT OR

 

3

 

AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN
CONTRACT OR TORT OR OTHERWISE, AND THE BORROWER HEREBY AGREES AND CONSENTS THAT
ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT
TRIAL WITHOUT A JURY, AND THAT THE BORROWER OR THE BANK MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF THE BORROWER TO THE WAIVER OF THE RIGHTS OF THE BORROWER TO TRIAL BY
JURY.

 

WARRANT OF ATTORNEY

 

The Borrower authorizes any attorney at law
to appear in any court of record in Franklin County, Ohio or in the county
where Borrower has its principal place of business or can be found doing
business, after the above indebtedness becomes due, whether by acceleration or
otherwise, to waive the issuing and service of process, and to confess judgment
against the Borrower in favor of the Bank for the amount then appearing due,
including interest, late charges, collections costs, attorneys’ fees and the
like, together with costs of suit, and thereupon to waive and release all error
in said proceedings and judgments, and all petitions in error and rights of
appeal from said judgements, and all stays of execution.

 

WARNING - BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND
COURT TRIAL.  IF YOU DO NOT PAY ON TIME
A COURT JUDGEMENT 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.

 

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Quality Products, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bruce C. Weaver

  	
   

  
	
   

  	
   

  	
  Bruce C. Weaver

  
	
   

  	
   

  	
  President

  

 

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