f8k0801_x1013-riic.htm


    THIS
      8.00% CONVERTIBLE PROMISSORY NOTE (THE “NOTE) AND THE COMMON STOCK ISSUABLE UPON
      CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
      AS
      AMENDED (THE "ACT"), NOR UNDER ANY STATE SECURITIES LAW, AND MAY NOT BE PLEDGED,
      SOLD, ASSIGNED, HYPOTHECATED OR OTHERWISE TRANSFERRED UNTIL (1) A REGISTRATION
      STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE ACT AND ANY APPLICABLE
      STATE SECURITIES LAW OR (2) THE COMPANY RECEIVES AN OPINION OF COUNSEL, EITHER
      FROM COUNSEL TO THE COMPANY OR COUNSEL TO THE HOLDER HEREOF WHO IS REASONABLY
      SATISFACTORY TO THE COMPANY, THAT SUCH NOTE, COMMON STOCK MAY BE PLEDGED, SOLD,
      ASSIGNED, HYPOTHECATED OR TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
      STATEMENT UNDER THE ACT OR APPLICABLE STATE SECURITIES LAWS.

     

    ROYAL
      INVEST INTERNATIONAL CORP.

    8.00%
      Convertible Promissory Note

    Due
      December 31, 2010

     

    €3.500.000                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                No.
      10001

     

    December
      21, 2007

     

    Royal
      Invest International Corp., a corporation incorporated under the laws of the
      State of Delaware (the “Company” or the “Maker”), for value received, hereby
      promises to pay to Muermans Vast Goed Roermond B.V. or its registered assigns
      (the "Payee" or the "Holder"), at Oude Borgstraat 12, 6049 CT Herten, upon
      due
      presentation and surrender of this 8.00% Convertible Promissory Note (this
      “Note”) on December 31, 2010 (the “Maturity Date”), the principal amount of
      Three Million Five Hundred Thousand Euros (€ 3.500.000,00) and accrued interest
      thereon as hereinafter provided.

     

    This
      Note
      is one of a duly authorized issue of notes of the Company designated as its
      8.00% Convertible Promissory Notes.

     

    ARTICLE
      I

     

    PAYMENT
      OF PRINCIPAL AND
      INTEREST; METHOD OF PAYMENT

     

    1.1 Payment
      of Principal and
      Interest.  Payment of the principal and accrued interest on
      this Note shall be made in such coin or currency of the European Union as at
      the
      time of payment shall be legal tender for the payment of public and private
      debts.  Interest (computed on the basis of a 360-day year for the
      number of days elapsed) on the unpaid portion of said principal amount from
      time
      to time outstanding shall be paid by the Company at the rate of eight percent
      (8.00%) per annum, in like coin and currency, on the Maturity
      Date.  Interest shall accrue from the date set forth above (the
“Issuance Date”).  Both principal hereof and interest thereon are
      payable at the Holder's address above or such other address as the Holder shall
      designate from time to time by written notice to the Company.  The
      Company will pay or cause to be paid all sums becoming due hereon for principal
      and interest by check, sent to the Holder's above

     

    
      
        
           

        

         

      

      
        1

        
          

        

      

      
         

      

    


    address
      or to such other address as the Holder may designate for such purpose from
      time
      to time by written notice to the Company, without any requirement for the
      presentation of this Note or making any notation thereon, except that the Holder
      hereof agrees that payment of the final amount due shall be made only upon
      surrender of this Note to the Company for cancellation.

     

    Prior
      to
      any sale or other disposition of this instrument, the Holder hereof agrees
      to
      endorse hereon the amount of principal paid hereon and the last date to which
      interest has been paid hereon and to notify the Company of the name and address
      of the transferee in accordance with the terms of Section 2.3 of this
      Note.

     

    1.2 Extension
      of Payment
      Date.  If this Note becomes due and payable on a Saturday,
      Sunday or other day on which banks in the United States are authorized to remain
      closed, the due date hereof shall be extended to the next succeeding full
      Business Day.  “Business Day” shall mean a day other than a Saturday,
      Sunday or other day on which banks in the United States are authorized by law
      to
      remain closed.  All payments received by the Holder shall be applied
      first to the payment of all accrued interest payable hereunder.

     

    ARTICLE
      II

     

    CONVERSION

     

    2.1 Conversion
      into Common Stock
      at Option of Holder.  At any time and from time to time until
      the Maturity Date, this Note is convertible in whole or in part at the Holder's
      option into shares of the Company’s common stock (the “Common Stock”), upon
      surrender of this Note, at the office of the Company, accompanied by a written
      notice of conversion in the form of Attachment I hereto (a “Conversion Notice”),
      or otherwise in form reasonably satisfactory to the Company, duly executed
      by
      the registered Holder or his, her or its duly authorized
      attorney.  The conversion price of this Note (the "Conversion Price")
      shall be $1.60 unless the price of the Common Stock on the date of the
      Conversion Notice is $1.60 or less, then the Conversion Price shall be the
      average price of the Common Stock for 90 days prior to the Conversion Notice
      date reduced by 25% (subject to adjustment as hereinafter
      provided).  Interest shall accrue to and through the day prior to the
      date of conversion (which shall be the date that this Note and the duly executed
      Conversion Notice is deemed to be delivered hereunder).  The number of
      shares of Common Stock issuable upon conversion hereunder shall be determined
      by
      dividing (X) sum of (a) the outstanding principal of this Note being converted
      plus (b) the accrued and unpaid interest payable with respect to the principal
      amount of this Note being converted by (Y) the Conversion Price then in
      effect.  No fractional shares or scrip representing fractional shares
      will be issued upon any conversion, but an adjustment in cash will be made,
      in
      respect of any fraction of a share (which will be valued based upon the
      Conversion Price then in effect) which would otherwise be issuable upon the
      surrender of this Note for conversion.  As soon as practicable
      following conversion and upon the Holder's compliance with the conversion
      procedure described in Section 2.2 hereof, the Company shall deliver a
      certificate for the number of full shares of Common Stock issuable upon
      conversion and a check for any fractional share and, in the event the Note
      is
      converted in part, a new Note of like tenor in the principal amount equal to
      the
      remaining principal balance of this Note after giving effect to such partial
      conversion.

     

    
      
        
           

        

         

      

      
        2

        
          

        

      

      
         

      

    


    2.2 Transfer
      of Note; Conversion
      Procedure.  This Note is not divisible.  This Note
      and all rights hereunder may be sold, transferred or otherwise assigned to
      any
      person in accordance with and subject to the provisions of the Securities Act
      of
      1933, as amended (the "Securities Act"), and the rules and regulations
      promulgated thereunder.  Upon the transfer of this Note through the
      use of the assignment form attached hereto as Attachment II, and in accordance
      with applicable law or regulation and the payment by the Holder of funds
      sufficient to pay any transfer tax, the Company shall issue and register this
      Note in the name of the new holder.

     

    The
      Company shall convert this Note upon surrender thereof for conversion properly
      endorsed and accompanied by a properly completed and executed Conversion Notice
      attached hereto as Attachment I and any documentation deemed necessary by the
      Company showing the availability of an exemption under applicable state and
      federal securities laws.  Subject to the terms of this Note, upon
      surrender of this Note and the delivery of the Conversion Notice, the Company
      shall issue and deliver with all reasonable dispatch to or upon the written
      order of the Holder of such Note and in such name or names as such Holder may
      designate, a certificate or certificates for the number of full shares of Common
      Stock due to such Holder upon the conversion of this Note.  The person
      or persons to whom such certificate or certificates are issued by the Company
      shall be deemed to have become the holder of record of such shares of Common
      Stock as of the date of the surrender of this Note.  Upon conversion,
      the Holder will be required to execute and deliver any documentation deemed
      necessary by the Company showing the availability of an exemption under
      applicable state and federal securities laws.

     

    2.3 Covenants.

     

    (a) Issuance
      and Shares of
      Common Stock upon Conversion.  The Company covenants that it
      will at all times reserve and keep available, free from preemptive rights,
      out
      of its authorized Common Stock, solely for the purpose of issuance upon
      conversion of this Note, such number of shares of Common Stock as shall equal
      the aggregate number of shares of Common Stock that would be issued under this
      Note if fully converted.  The Company also covenants that all of the
      shares of Common Stock that shall be issuable upon conversion of this Note
      shall, at the time of delivery, be duly and validly issued, fully paid,
      nonassessable and free from all taxes, liens and charges with respect to the
      issue thereof (other than those which the Company shall promptly pay or
      discharge).

     

    (b) Restrictive
      Legend.  Each certificate evidencing shares of Common Stock
      issued to the Holder following the conversion of this Note shall bear the
      following restrictive legend until such time as the transfer of such security
      is
      not restricted under the federal securities laws:

     

    
      
        
           

        

         

      

      
        3

        
          

        

      

      
         

      

    


    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAWS,
      AND MAY NOT BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
      OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (I) AN EFFECTIVE REGISTRATION
      STATEMENT UNDER THE ACT, (II) TO THE EXTENT APPLICABLE, RULE 144 UNDER
      THE ACT (OR ANY SIMILAR RULE UNDER SUCH ACT RELATING TO THE DISPOSITION OF
      SECURITIES), OR (III) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE
      REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN EXEMPTION FROM
      REGISTRATION UNDER SUCH ACT IS AVAILABLE.

     

    2.4 Adjustment
      of Conversion
      Price and Number of Underlying Shares.  The number of shares of
      Common Stock issuable upon the conversion of this Note and the Conversion Price
      shall be subject to adjustment from time to time as follows:

     

    (a) Dividends;
      Reclassifications, etc.  In the event that the Company shall,
      at any time prior to the earlier to occur of (i) the complete conversion of
      this
      Note, and (ii) the Maturity Date:  (A) declare or pay to the holders
      of the Common Stock a dividend payable in any kind of shares of capital stock
      of
      the Company; (B) change or divide or otherwise reclassify its Common Stock
      into
      the same or a different number of shares with or without par value, or in shares
      of any class or classes; (C) transfer its property as an entirety or
      substantially as an entirety to any other company or entity; or (D) make any
      distribution of its assets to holders of its Common Stock as a liquidation
      or
      partial liquidation dividend or by way of return of capital; then, upon the
      subsequent conversion of this Note, the Holder shall receive, in addition to
      or
      in substitution for the shares of Common Stock to which he, she or it would
      otherwise be entitled upon such exercise, such additional shares of stock or
      scrip of the Company, or such reclassified shares of stock of the Company,
      or
      such shares of the securities or property of the Company resulting from
      transfer, or such assets of the Company, which he, she or it would have been
      entitled to receive had he, she or it converted this Note into shares of Common
      Stock prior to the happening of any of the foregoing events.

     

    (b) Reorganization
      of the
      Company.  If the Company is a party to a merger or other
      transaction which reclassifies or changes its outstanding Common Stock, upon
      consummation of such transaction, this Note shall automatically become
      convertible into the kind and amount of securities, cash or other assets which
      the Holder would have owned immediately after such transaction if the Holder
      had
      converted this Note into shares of Common Stock at the Conversion Price in
      effect immediately before the effective date of the
      transaction.  Concurrently with the consummation of such transaction,
      the person obligated to issue securities or deliver cash or other assets upon
      exercise of this Note shall execute and deliver to the Holder a new Note so
      providing and further providing for adjustments which shall be as nearly
      equivalent as may be practical to the adjustments provided in this Section
      2.5(b).  The successor company also shall mail to the Holder a notice
      describing the new Notes.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    ARTICLE
      III

     

    MISCELLANEOUS

     

    3.1 Default.  If
      one or more of the following described events (each of which being an “Event of
      Default” hereunder) shall occur and shall be continuing,

     

    (a) the
      Company shall breach, fail to
      perform, or fail to observe in any material respect any material covenant,
      term,
      provision, condition, agreement or obligation of the Company under this Note
      ,
      and such breach or failure to perform shall not be cured within thirty (30)
      days
      after written notice to the Company; or

     

    (b) bankruptcy,
      reorganization, insolvency
      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
      Company and, if instituted against the Company, Company shall by any action
      or
      answer approve of, consent to or acquiesce in any such proceedings or admit
      the
      material allegations of, or default in answering a petition filed in any such
      proceeding or such proceedings shall not be dismissed within forty-five (45)
      calendar days thereafter; or

     

    (c) the
      Company shall have failed to pay
      the principal amount and accrued and unpaid interest hereunder when
      due;

     

    then,
      or
      at any time thereafter, and in each and every such case, unless such Event
      of
      Default shall have been waived in writing by the Holder (which waiver shall
      not
      be deemed to be a waiver of any subsequent default) or cured as provided herein,
      at the option of the Holder, and in the Holder’s sole discretion, the Holder may
      consider the entire principal amount of this Note (and all interest through
      such
      date) immediately due and payable in cash, without presentment, demand protest
      or notice of any kind, all of which are hereby expressly waived, anything herein
      or in any note or other instruments contained to the contrary notwithstanding,
      and Holder may immediately enforce any and all of the Holder’s rights and
      remedies provided herein or any other rights or remedies afforded by
      law.  It is agreed that in the event of such action, the Holder shall
      be entitled to receive all reasonable fees, costs and expenses incurred,
      including without limitation such reasonable fees and expenses of
      attorneys.

     

    3.2 Collection
      Costs.  In the event that this Note shall be placed in the
      hands of an attorney for collection by reason of any Event of Default hereunder,
      the undersigned agrees to pay reasonable attorney’s fees and disbursements and
      other reasonable expenses incurred by the Holder in connection with the
      collection of this Note.

     

    3.3 Prepayment.  The
      principal amount of this Note and any accrued and unpaid interest thereon may
      be
      prepaid, in whole or in part, at any time without penalty or premium, at the
      discretion of the Company.

     

    3.4 Rights
      Cumulative.  The rights, powers and remedies given to the
      Holder under this Note shall be in addition to all rights, powers and remedies
      given to it by virtue of any document or instrument executed in connection
      therewith, or any statute or rule of law.

     

    
      
        
           

        

         

      

      
        5

        
          

        

      

      
         

      

    

     

    3.5 No
      Waivers.  Any forbearance, failure or delay by the Payee in
      exercising any right, power or remedy under this Note, any documents or
      instruments executed in connection therewith or otherwise available to the
      Holder shall not be deemed to be a waiver of such right, power or remedy, nor
      shall any single or partial exercise of any right, power or remedy preclude
      the
      further exercise thereof.

     

    3.6 Amendments
      in
      Writing.  No modification or waiver of any provision of this
      Note, or any documents or instruments executed in connection therewith shall
      be
      effective unless it shall be in writing and signed by the Holder, and any such
      modification or waiver shall apply only in the specific instance for which
      given.

     

    3.7 Governing
      Law.  This Note and the rights and obligations of the parties
      hereto, shall be governed, construed and interpreted according to the laws
      of
      the State of Connecticut in the United States.

     

    3.8 Successors.  The
      term “Payee” and “Holder” as used herein shall be deemed to include the Payee
      and its successors, endorsees and assigns.

     

    3.9 Stamp
      or Transfer
      Tax.  The Company will pay any documentary stamp or transfer
      taxes attributable to the initial issuance of the Common Stock issuable upon
      the
      conversion of this Note; provided, however,
      that the
      Company shall not be required to pay any tax or taxes which may be payable
      in
      respect of any transfer involved in the issuance or delivery of any certificates
      for the Common Stock in a name other than that of the Holder in respect of
      which
      such Common Stock is issued, and in such case the Company shall not be required
      to issue or deliver any certificate for the Common Stock until the person
      requesting the same has paid to the Company the amount of such tax or has
      established to the Company’s satisfaction that such tax has been
      paid.

     

    3.10 Mutilated,
      Lost, Stolen or
      Destroyed Note.  In case this Note shall be mutilated, lost,
      stolen or destroyed, the Company shall issue and deliver in exchange and
      substitution for and upon cancellation of the mutilated Note, or in lieu of
      and
      substitution for the Note, mutilated, lost, stolen or destroyed, a new Note
      of
      like tenor and representing an equivalent right or interest, but only upon
      receipt of evidence reasonably satisfactory to the Company of such loss, theft
      or destruction and an indemnity, if requested, also reasonably satisfactory
      to
      it.

     

    3.11 No
      Rights as
      Shareholder.  Nothing contained in this Note shall be construed
      as conferring upon the Holder the right to vote or to receive dividends (except
      as provided in Section 2.5 of this Note) or to consent or to receive notice
      as a
      shareholder in respect of any meeting of shareholders for the election of
      directors of the Company or of any other matter, or any rights whatsoever as
      shareholders of the Company.

     

    3.12 Notices.  Any
      and all notices or other communications or deliveries to be provided by the
      Holder hereunder, including, without limitation, any Conversion Notice shall
      be
      in writing and delivered personally, sent by a nationally recognized overnight
      courier service or sent by certified or registered mail, postage prepaid,
      addressed to the Company c/o SEC ATTORNEYS, LLC, 980 Post Road East, Westport,
      CT 06880, attention: Jerry Gruenbaum,

     

    
      
        
           

        

         

      

      
        6

        
          

        

      

      
         

      

    


    Esq,
      or
      such other address as the Company may specify for such purpose by notice to
      the
      Holder delivered in accordance with this Section.  Any and all notices
      or other communications or deliveries to be provided by the Company hereunder
      shall be in writing and delivered personally or sent by a nationally recognized
      overnight courier service or sent by certified or registered mail, postage
      prepaid, addressed to the Holder, at the address appearing on the books of
      the
      Company, or if no such address appears, at the principal place of business
      of
      Holder.  Any notice or other communication or deliveries hereunder
      shall be deemed given and effective on the earlier of (i) four days after
      deposit in the United States mail, (ii) the business day following the date
      of
      mailing, if sent by nationally recognized overnight courier service, or (iii)
      upon actual receipt by the party to whom such notice is required to be
      given.

     

    IN
      WITNESS WHEREOF, Royal Invest International Corp. has caused this Note to be
      duly executed and delivered as of the date first above written.

     

    ROYAL
      INVEST INTERNATIONAL CORP.

     

    By:                                                                    
      

                                                                                                              
      Name: Jerry Gruenbaum

                                                                                                             
      Title: President

     

    
      
        
           

        

         

      

      
        7

        
          

        

      

      
         

      

    


    ATTACHMENT
      I

     

    CONVERSION
      NOTICE

     

    TO:  ROYAL
      INVEST INTERNATIONAL
      CORP.

     

    The
      undersigned holder of this Note hereby irrevocably exercises the option to
      convert $________ principal amount of such Note (which may be less than the
      stated principal amount thereof) and $_____ of accrued and unpaid interest
      (which may be less than the aggregate amount of accrued and unpaid interest
      into
      shares of Common Stock of Royal Invest International Corp., in accordance with
      the terms of such Note, and directs that the shares of Common Stock issuable
      and
      deliverable upon such conversion, together with a check (if applicable) in
      payment for any fractional shares as provided in such Note, be issued and
      delivered to the undersigned unless a different name has been indicated
      below.  If shares of Common Stock are to be issued in the name of a
      person other than the undersigned holder of such Note, the undersigned will
      pay
      all transfer taxes payable with respect thereto.

     

    
      	
              Address
                of Holder

            	 
	 	 
	 	 
	 	 
	 	
              Print
                Name of Holder

              
              

            
	 	 
	 	
              Signature
                of Holder

              
              

            


    

    Principal
      amount of Note to be converted $________

     

    If
      shares
      are to be issued otherwise then to the holder:

     

    
      	
              
              

              Address
                of Transferee

            	 
	 	 
	 	 
	 	 
	 	
              Print
                Name of Transferee

              
              

            
	 	 
	 	
              Social
                Security or Employer Identification Number of Transferee

              
              

            


    


    
      
        
          


        

         

      

      
         

        
          

        

      

      
         

      

    


    ATTACHMENT
      II

     

    Assignment

     

    For
      value
      received, the undersigned hereby assigns to _____________, $___________
      principal amount of 8.00% Convertible Promissory Note due December 31, 2010
      evidenced hereby and hereby irrevocably appoints __________________ attorney
      to
      transfer the Note on the books of the within named corporation with full power
      of substitution in the premises.

     

    Dated:

     

    In
      the
      presence of:

     

    


    Print
      Name

     

    


    Signature