Unassociated Document

Exhibit 4.1


    THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY APPLICABLE STATE
SECURITIES OR “BLUE SKY” LAWS.  THE SECURITIES MAY NOT BE SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SECURITIES UNDER SAID ACT, OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE
AND SCOPE CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR UNLESS SOLD PURSUANT TO RULE 144
OR REGULATION S UNDER SAID ACT.

     

    CONVERTIBLE
NOTE

     

    


     

    October  24,
2007 $100,000

     

    FOR VALUE RECEIVED, BEVERLY HOLDINGS, INC., a
Nevada corporation (hereinafter called the “Borrower”), hereby promises to
pay to the order of ________________ or registered assigns (the “Holder”) the sum of One
Hundred Thousand Dollars ($100,000), with any unpaid principal balance due on
October 24, 2008 (the “Maturity
Date”), and to pay interest on the unpaid principal balance hereof at the
rate of twelve percent (12%) (the “Interest Rate”) per annum from
October 24, 2007 (the “Issue
Date”) until the same becomes due and payable, whether at maturity or
upon acceleration or by prepayment or otherwise. Interest shall commence
accruing on the Issue Date, shall be computed on the basis of a 365-day year and
the actual number of days elapsed and shall be payable monthly in
arrears.  All payments due hereunder (to the extent not converted into
the common stock, $0.001 par value per share, of the Borrower (the “Common Stock”) in accordance
with the terms hereof) shall be made in lawful money of the United States of
America. All payments shall be made at such address as the Holder shall
hereafter give to the Borrower by written notice made in accordance with the
provisions of this Note.  Whenever any amount expressed to be due by
the terms of this Note is due on any day which is not a business day, the same
shall instead be due on the next succeeding day which is a business day and, in
the case of any interest payment date which is not the date on which this Note
is paid in full, the extension of the due date thereof shall not be taken into
account for purposes of determining the amount of interest due on such
date.

     

    The
following terms shall apply to this Note:

     

    ARTICLE
I.CONVERSION RIGHTS

     

    
      
        
        

      

      
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    1.1 Holder
Conversion Right.

     

    (a) The
Holder shall have the right from time to time, and at any time on or prior to
the date of payment of (1) the outstanding principal amount of this Note plus (2) accrued and
unpaid interest, if any, due hereunder, to convert all or any part of the
outstanding principal amount of this Note into fully paid and non-assessable
shares of Common Stock, at a conversion price equal to $0.50 (the “Conversion Price”) determined
as provided herein (a “Conversion”).  Except
in the case of an Exempt Issuance as defined below, if the Borrower, prior to
the earlier of (i) the payment or conversion in full of the Note or (ii) October
24, 2010, shall issue shares of Common Stock or rights, warrants, options or
other securities or debt that are convertible into or exchangeable for shares of
Common Stock (“Common
Stock Equivalents”) in connection with any financing entitling any party
to acquire shares of Common Stock, at a price per share less than the Conversion
Price, then, at the sole option of the Holder, the Conversion Price shall be
reduced to the price (calculated to the nearest one hundredth of a
cent).  No adjustment under this Section shall be made as a result of
an Exempt Issuance which shall be defined as any issuance of shares of Common
Stock or Common Stock Equivalents that are not in connection with a financing
transaction including, but not limited to, (a) shares of Common Stock or Common
Stock Equivalents to employees, officers or directors of the Corporation
pursuant to any stock or option plan, and (b) securities upon the exercise of or
conversion of any securities issued hereunder, convertible securities, options
or warrants issued and outstanding on the date of the Note, provided that such
securities have not been amended since the date of the Note to increase the
number of such securities or to decrease the exercise or conversion price of any
such securities.

     

    (b) The
number of shares of Common Stock to be issued upon each conversion of this Note
shall be determined by dividing the Conversion Amount (as defined below) by the
Conversion Price as specified in the notice of conversion, in the form attached
hereto as Exhibit A (the “Notice of Conversion”),
delivered to the Borrower by the Holder in accordance with Section 1.3 below;
provided that the Notice of Conversion is submitted by facsimile (or by other
means resulting in, or reasonably expected to result in, notice) to the Borrower
on such conversion date (the “Conversion
Date”).  The term “Conversion Amount” means, with
respect to any conversion of this Note, the sum of (1) the principal amount of
this Note to be converted in such conversion plus (2) accrued and
unpaid interest, if any, on such principal amount at the interest rates provided
in this Note to the Conversion Date.

     

    1.2 Authorized
Shares.  The Borrower
covenants that during the period the conversion right exists, the Borrower will
reserve from its authorized and unissued Common Stock a sufficient number of
shares, free from preemptive rights, to provide for the issuance of Common Stock
upon the full conversion of this Note (the “Reserved
Amount”).  The Borrower represents that upon issuance, such
shares will be duly and validly issued, fully paid and
non-assessable.

     

    1.3 Method of
Conversion.

     

    (a) Mechanics
of Conversion.  Subject to
Section 1.1, this Note may be converted by the Holder in whole or in part at any
time from time to time after the Issue Date, by (A) submitting to the
Borrower a Notice of Conversion (by facsimile or other reasonable means of
communication dispatched on the Conversion Date) and (B) subject to Section
1.3(b), surrendering this Note at the principal office of the
Borrower.

     

    
      
        
        

      

      
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    (b) Surrender
of Note Upon Conversion.  Notwithstanding
anything to the contrary set forth herein, upon conversion of this Note in
accordance with the terms hereof, the Holder shall not be required to physically
surrender this Note to the Borrower unless the entire unpaid principal amount of
this Note is so converted.  The Holder and the Borrower shall maintain
records showing the principal amount so converted and the dates of such
conversions or shall use such other method, reasonably satisfactory to the
Holder and the Borrower, so as not to require physical surrender of this Note
upon each such conversion.  In the event of any dispute or
discrepancy, such records of the Borrower shall be controlling and determinative
in the absence of manifest error.  Notwithstanding the foregoing, if
any portion of this Note is converted as aforesaid, the Holder may not transfer
this Note unless the Holder first physically surrenders this Note to the
Borrower, whereupon the Borrower will forthwith issue and deliver upon the order
of the Holder a new Note of like tenor, registered as the Holder (upon payment
by the Holder of any applicable transfer taxes) may request, representing in the
aggregate the remaining unpaid principal amount of this Note.  The
Holder and any assignee, by acceptance of this Note, acknowledge and agree that,
by reason of the provisions of this paragraph, following conversion of a portion
of this Note, the unpaid and unconverted principal amount of this Note
represented by this Note may be less than the amount stated on the face
hereof.

     

    (c) Payment
of Taxes.  The Borrower
shall not be required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery of shares of Common Stock or other
securities or property on conversion of this Note in a name other than that of
the Holder (or in street name), and the Borrower shall not be required to issue
or deliver any such shares or other securities or property unless and until the
person or persons (other than the Holder or the custodian in whose street name
such shares are to be held for the Holder’s account) requesting the issuance
thereof shall have paid to the Borrower the amount of any such tax or shall have
established to the satisfaction of the Borrower that such tax has been
paid.

     

    (d) Delivery
of Common Stock Upon Conversion.  Upon receipt by
the Borrower from the Holder of a facsimile transmission (or other reasonable
means of communication) of a Notice of Conversion meeting the requirements for
conversion as provided in this Section 1.4, the Borrower shall issue and deliver
or cause to be issued and delivered to or upon the order of the Holder
certificates for the Common Stock issuable upon such conversion after such
receipt (and, solely in the case of conversion of the entire unpaid principal
amount hereof, surrender of this Note) in accordance with the terms
hereof.

     

    (e) Obligation
of Borrower to Deliver Common Stock.  Upon receipt by
the Borrower of a Notice of Conversion, the Holder shall be deemed to be the
holder of record of the Common Stock issuable upon such conversion, the
outstanding principal amount and the amount of accrued and unpaid interest on
this Note shall be reduced to reflect such conversion, and, unless the Borrower
defaults on its obligations under this Article I, all rights with respect to the
portion of this Note being so converted shall forthwith terminate except the
right to receive the Common Stock or other securities, cash or other assets, as
herein provided, on such conversion.  If the Holder shall have given a
Notice of Conversion as provided herein, the Borrower’s obligation to issue and
deliver the certificates for Common Stock shall be absolute and unconditional,
irrespective of the absence of any action by the Holder to enforce the same, any
waiver or consent with respect to any provision thereof, the recovery of any
judgment against any person or any action to enforce the same, any failure or
delay in the enforcement of any other obligation of the Borrower to the holder
of record, or any setoff, counterclaim, recoupment, limitation or termination,
or any breach or alleged breach by the Holder of any obligation to the Borrower,
and irrespective of any other circumstance which might otherwise limit such
obligation of the Borrower to the Holder in connection with such
conversion.  The Conversion Date specified in the Notice of Conversion
shall be the Conversion Date so long as the Notice of Conversion is received by
the Borrower on such date.

     

    
      
        
        

      

      
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    1.4 Concerning
the Shares.  The shares of
Common Stock issuable upon conversion of this Note may not be sold or
transferred unless  (i) such shares are sold pursuant to an effective
registration statement under the Act or (ii) the Borrower or its transfer agent
shall have been furnished with an opinion of counsel (which opinion shall be in
form, substance and scope customary for opinions of counsel in comparable
transactions) to the effect that the shares to be sold or transferred may be
sold or transferred pursuant to an exemption from such registration or
(iii) such shares are sold or transferred pursuant to Rule 144 under the
Act (or a successor rule) (“Rule 144”).  Each
certificate for shares of Common Stock issuable upon conversion of this Note
shall bear a legend substantially in the following form, as
appropriate:

     

    “THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.  THE SECURITIES MAY NOT BE SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SECURITIES UNDER SAID ACT, OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE
AND SCOPE CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS, THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT  UNLESS SOLD PURSUANT TO
RULE 144 OR REGULATION S UNDER SAID ACT.”

     

    The
legend set forth above shall be removed and the Borrower shall issue to the
Holder a new certificate therefor free of any transfer legend if (i) the
Borrower or its transfer agent shall have received an opinion of counsel, in
form, substance and scope customary for opinions of counsel in comparable
transactions, to the effect that a public sale or transfer of such Common Stock
may be made without registration under the Act and the shares are so sold or
transferred, (ii) such Holder provides the Borrower or its transfer agent with
reasonable assurances that the Common Stock issuable upon conversion of this
Note (to the extent such securities are deemed to have been acquired on the same
date) can be sold pursuant to Rule 144 or (iii) in the case of the Common Stock
issuable upon conversion of this Note, such security is registered for sale by
the Holder under an effective registration statement filed under the Act or
otherwise may be sold pursuant to Rule 144 without any restriction as to the
number of securities as of a particular date that can then be immediately
sold.

     

    1.5 Trading
Market Limitations.
Unless permitted by the applicable rules and regulations of the principal
securities market on which the Common Stock is then listed or traded, in no
event shall the Borrower issue upon conversion of or otherwise pursuant to this
Note more than the maximum number of shares of Common Stock that the Borrower
can issue pursuant to any rule of the principal United States securities market
on which the Common Stock is then traded (the “Maximum Share Amount”), which
shall be 19.99% of the total shares outstanding on the Conversion Date, subject
to equitable adjustment from time to time for stock splits, stock dividends,
combinations, capital reorganizations and similar events relating to the Common
Stock occurring after the date hereof.  Once the Maximum Share Amount
has been issued (the date of which is hereinafter referred to as the “Maximum Conversion
Date”).

     

    
      
        
        

      

      
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    1.6 Status as
Shareholder.  Upon submission
of a Notice of Conversion by a Holder, (i) the shares covered thereby (other
than the shares, if any, which cannot be issued because their issuance would
exceed such Holder’s allocated portion of the Reserved Amount or Maximum Share
Amount) shall be deemed converted into shares of Common Stock and (ii) the
Holder’s rights as a Holder of such converted portion of this Note shall cease
and terminate, excepting only the right to receive certificates for such shares
of Common Stock and to any remedies provided herein or otherwise available at
law or in equity to such Holder because of a failure by the Borrower to comply
with the terms  of this Note.  Notwithstanding the
foregoing, if a Holder has not received certificates for all shares of Common
Stock prior to the tenth (10th) day after delivery of the Notice of Conversion
with respect to a conversion of any portion of this Note for any reason, then
(unless the Holder otherwise elects to retain its status as a holder of Common
Stock by so notifying the Borrower) the Holder shall regain the rights of a
Holder of this Note with respect to such unconverted portions of this Note and
the Borrower shall, as soon as practicable, return such unconverted Note to the
Holder or, if the Note has not been surrendered, adjust its records to reflect
that such portion of this Note has not been converted.  In all cases,
the Holder shall retain all of its rights and remedies for the Borrower’s
failure to convert this Note.

     

     

    ARTICLE
II.EVENTS OF DEFAULT

     

    If any of
the following events of default (each, an “Event of Default”) shall
occur:

     

    2.1 Failure
to Pay Principal or Interest.  The Borrower
fails to pay the principal hereof or interest thereon when due on this Note,
whether at maturity, upon acceleration or otherwise;

     

    2.2 Receiver
or Trustee.  The Borrower or
any subsidiary of the Borrower shall make an assignment for the benefit of
creditors, or apply for or consent to the appointment of a receiver or trustee
for it or for a substantial part of its property or business, or such a receiver
or trustee shall otherwise be appointed;

     

    2.3 Bankruptcy.  Bankruptcy,
insolvency, reorganization or liquidation proceedings or other proceedings for
relief under any bankruptcy law or any law for the relief of debtors shall be
instituted by or against the Borrower or any subsidiary of the Borrower;
or

     

    then,
upon the occurrence and during the continuation of any such Event of Default the
Holder may, upon ten (10) days written notice to the Borrower, declare the
principal amount of this Note at the time outstanding, together with accrued
unpaid interest thereon, and all other amounts payable under this Note to be
forthwith due and payable, whereupon such principal, interest and all such
amounts shall become and be forthwith due and payable.

     

    
      
        
        

      

      
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    ARTICLE
III.MISCELLANEOUS

     

    3.1 Failure
or Indulgence Not Waiver.  No failure or
delay on the part of the Holder in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privileges.  All
rights and remedies existing hereunder are cumulative to, and not exclusive of,
any rights or remedies otherwise available.

     

    3.2 Notices.  Any notice herein
required or permitted to be given shall be in writing and may be personally
served or delivered by courier or sent by United States mail and shall be deemed
to have been given upon receipt if personally served (which shall include
telephone line facsimile transmission) or sent by courier or three (3) days
after being deposited in the United States mail, certified, with postage
pre-paid and properly addressed, if sent by mail.  For the purposes
hereof, the address of the Holder shall be as shown on the records of the
Borrower; and the address of the Borrower shall be 65 Palatine Apt 352, Irvine,
California 92612. Both the Holder and the Borrower may change the address for
service by service of written notice to the other as herein
provided.

     

    3.3 Amendments.  This Note and any
provision hereof may only be amended by an instrument in writing signed by the
Borrower and the Holder.  The term “Note” and all reference thereto,
as used throughout this instrument, shall mean this instrument as originally
executed, or if later amended or supplemented, then as so amended or
supplemented.

     

    3.4 Assignability.  This Note shall
be binding upon the Borrower and its successors and assigns, and shall inure to
be the benefit of the Holder and its successors and assigns.  Each
transferee of this Note must be an “accredited investor” (as defined in Rule
501(a) of the 1933 Act).

     

    3.5 Cost of
Collection.  If default is
made in the payment of this Note, the Borrower shall pay the Holder hereof costs
of collection, including reasonable attorneys’ fees.

     

    3.6 Governing
Law.  THIS NOTE SHALL
BE ENFORCED, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN
SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS.  THE
BORROWER HEREBY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES
FEDERAL COURTS LOCATED IN LOS ANGELES, CALIFORNIA WITH RESPECT TO ANY DISPUTE
ARISING UNDER THIS NOTE, THE AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. BOTH PARTIES IRREVOCABLY WAIVE
THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH SUIT OR
PROCEEDING.  BOTH PARTIES FURTHER AGREE THAT SERVICE OF PROCESS UPON A
PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE
SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
PROCEEDING.  NOTHING HEREIN SHALL AFFECT EITHER PARTY’S RIGHT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.  BOTH PARTIES AGREE THAT
A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT
OR IN ANY OTHER LAWFUL MANNER.  THE PARTY WHICH DOES NOT PREVAIL IN
ANY DISPUTE ARISING UNDER THIS NOTE SHALL BE RESPONSIBLE FOR ALL FEES AND
EXPENSES, INCLUDING ATTORNEYS’ FEES, INCURRED BY THE PREVAILING PARTY IN
CONNECTION WITH SUCH DISPUTE.

     

    
      
        
        

      

      
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    3.7 Certain
Amounts.  Whenever pursuant
to this Note the Borrower is required to pay an amount in excess of the
outstanding principal amount (or the portion thereof required to be paid at that
time) plus accrued and unpaid interest on such interest, the Borrower and the
Holder agree that the actual damages to the Holder from the receipt of cash
payment on this Note may be difficult to determine and the amount to be so paid
by the Borrower represents stipulated damages and not a penalty and is intended
to compensate the Holder in part for loss of the opportunity to convert this
Note and to earn a return from the sale of shares of Common Stock acquired upon
conversion of this Note at a price in excess of the price paid for such shares
pursuant to this Note.  The Borrower and the Holder hereby agree that
such amount of stipulated damages is not plainly disproportionate to the
possible loss to the Holder from the receipt of a cash payment without the
opportunity to convert this Note into shares of Common Stock.

     

    3.8 Remedies.  The Borrower
acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to the Holder, by vitiating the intent and purpose of the
transaction contemplated hereby.  Accordingly, the Borrower
acknowledges that the remedy at law for a breach of its obligations under this
Note will be inadequate and agrees, in the event of a breach or threatened
breach by the Borrower of the provisions of this Note, that the Holder shall be
entitled, in addition to all other available remedies at law or in equity, and
in addition to the penalties assessable herein, to an injunction or injunctions
restraining, preventing or curing any breach of this Note and to enforce
specifically the terms and provisions thereof, without the necessity of showing
economic loss and without any bond or other security being
required.

     

    


     

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    IN WITNESS WHEREOF, Borrower
has caused this Note to be signed in its name by its duly authorized officer
this 24th day of
October, 2007.

     

     

     

    
      
        	 	BEVERLY HOLDINGS,
      INC.	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ 	 
	 	 	Name: 	 
	 	 	Title:	 
	 	 	 	 


      



     

     

     

    
      
         


      

      
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    EXHIBIT
A

     

    NOTICE
OF CONVERSION

     

    (To be
Executed by the Holder in order to Convert the Note)

     

    The
undersigned hereby irrevocably elects to convert $__________ principal amount of
the Note (defined below) into shares of common stock, par value $0.001 per share
(“Common Stock”), of
Beverly Holdings, Inc., a Nevada corporation (the “Borrower”) according to the
conditions of the Convertible Note of the Borrower dated as of October __, 2007
(the “Note”), as of the
date written below.  If securities are to be issued in the name of a
person other than the undersigned, the undersigned will pay all transfer taxes
payable with respect thereto and is delivering herewith such
certificates.  No fee will be charged to the Holder for any
conversion, except for transfer taxes, if any.  A copy of each Note is
attached hereto (or evidence of loss, theft or destruction
thereof).

     

    The
Borrower shall electronically transmit the Common Stock issuable pursuant to
this Notice of Conversion to the account of the undersigned or its nominee with
DTC through its Deposit Withdrawal Agent Commission system (“DWAC
Transfer”).

     

    Name of
DTC Prime
Broker:                                                                                                                     

    Account
Number:                                                                                                                     

     

    In lieu
of receiving shares of Common Stock issuable pursuant to this Notice of
Conversion by way of a DWAC Transfer, the undersigned hereby requests that the
Borrower issue a certificate or certificates for the number of shares of Common
Stock set forth below (which numbers are based on the Holder’s calculation
attached hereto) in the name(s) specified immediately below or, if additional
space is necessary, on an attachment hereto:

     

    Name:                                                                                                                     

    Address:                                                                                                                     

     

    The
undersigned represents and warrants that all offers and sales by the undersigned
of the securities issuable to the undersigned upon conversion of the Note shall
be made pursuant to registration of the securities under the Securities Act of
1933, as amended (the “Act”), or pursuant to an
exemption from registration under the Act.

     

    Date of
Conversion:___________________________

    Applicable
Conversion Price:____________________

    Number of
Shares of Common Stock to be Issued Pursuant to

    Conversion
of the Note:______________

    Signature:___________________________________

    Name:______________________________________

    Address:____________________________________

     

    The
Borrower shall issue and deliver shares of Common Stock to an overnight courier
not later than three business days following receipt of the original Note(s) to
be converted, and shall make payments pursuant to the Note for the number of
business days such issuance and delivery is late.

     

    
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