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<table CELLSPACING="0" BORDER="0" WIDTH="732">
  <tr>
    <td WIDTH="704" VALIGN="TOP" colspan="2">&nbsp;&nbsp; </td>
  </tr>
  <tr>
    <td WIDTH="704" VALIGN="TOP" colspan="2"><font SIZE="5"><b><p ALIGN="CENTER">UNITED STATES</b></font></td>
  </tr>
  <tr>
    <td WIDTH="704" VALIGN="TOP" colspan="2"><font SIZE="5"><b><p ALIGN="CENTER">SECURITIES
    AND EXCHANGE COMMISSION</b></font></td>
  </tr>
  <tr>
    <td WIDTH="704" VALIGN="TOP" colspan="2">&nbsp; </td>
  </tr>
  <tr>
    <td WIDTH="704" VALIGN="TOP" colspan="2"><font SIZE="5"><b><p ALIGN="CENTER">Washington,
    DC 20549</b></font></td>
  </tr>
  <tr>
    <td WIDTH="704" VALIGN="TOP" colspan="2">&nbsp;&nbsp; </td>
  </tr>
  <tr>
    <td WIDTH="704" VALIGN="TOP" colspan="2">&nbsp; </td>
  </tr>
  <tr>
    <td WIDTH="704" VALIGN="TOP" colspan="2"><p ALIGN="CENTER">REGISTARTION STATEMENT</td>
  </tr>
  <tr>
    <td WIDTH="704" VALIGN="TOP" colspan="2"><p ALIGN="CENTER">ON FORM S-8</td>
  </tr>
  <tr>
    <td WIDTH="704" VALIGN="TOP" colspan="2"><p ALIGN="CENTER">UNDER THE SECURITIES ACT OF
    1933</td>
  </tr>
  <tr>
    <td WIDTH="704" VALIGN="TOP" colspan="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </td>
  </tr>
  <tr>
    <td WIDTH="704" VALIGN="TOP" colspan="2"><u><font SIZE="2"><p ALIGN="CENTER"></font><strong><font
    size="3">Royal Finance, Inc.</font></strong></u></td>
  </tr>
  <tr>
    <td WIDTH="704" VALIGN="TOP" colspan="2"><font SIZE="2"><p ALIGN="CENTER">(Exact name of
    Registrant as specified in its charter)</font></td>
  </tr>
  <tr>
    <td WIDTH="704" VALIGN="TOP" colspan="2"><font SIZE="2">&nbsp; </font></td>
  </tr>
  <tr>
    <td WIDTH="704" VALIGN="TOP" colspan="2"><font SIZE="2">&nbsp; </font></td>
  </tr>
  <tr>
    <td WIDTH="358" VALIGN="TOP"></td>
    <td WIDTH="346" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="358" VALIGN="TOP"><u><font SIZE="2"><p ALIGN="CENTER"></font><font size="3">Florida</font></u></td>
    <td WIDTH="346" VALIGN="TOP"><u><font SIZE="2"><p ALIGN="CENTER"></font><font size="3">65-1032012</font></u></td>
  </tr>
  <tr>
    <td WIDTH="358" VALIGN="TOP"><font SIZE="2"><p ALIGN="CENTER">(State of Incorporation)</font></td>
    <td WIDTH="346" VALIGN="TOP"><font SIZE="2"><p ALIGN="CENTER">(IRS Employer Identification
    Number)</font></td>
  </tr>
  <tr>
    <td WIDTH="358" VALIGN="TOP">&nbsp; </td>
    <td WIDTH="346" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="358" VALIGN="TOP">&nbsp; </td>
    <td WIDTH="346" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="358" VALIGN="TOP"><font SIZE="2"><p ALIGN="CENTER"></font><font size="3"><u>1481
    South Military Trail, Suite 14, West Palm Beach, FL</u></font></td>
    <td WIDTH="346" VALIGN="TOP"><u><font SIZE="2"><p ALIGN="CENTER"></font><font size="3">33415</font></u></td>
  </tr>
  <tr>
    <td WIDTH="358" VALIGN="TOP"><font SIZE="2"><p ALIGN="CENTER">(Address of Principal
    Executive Offices</font></td>
    <td WIDTH="346" VALIGN="TOP"><font SIZE="2"><p ALIGN="CENTER">(Zip Code)</font></td>
  </tr>
  <tr>
    <td WIDTH="704" VALIGN="TOP" colspan="2">&nbsp;&nbsp; </td>
  </tr>
  <tr>
    <td WIDTH="704" VALIGN="TOP" colspan="2">&nbsp;&nbsp; </td>
  </tr>
  <tr>
    <td WIDTH="704" VALIGN="TOP" colspan="2"><u><font SIZE="2"><p ALIGN="CENTER"></font><font
    size="3">561-649-3901</font></u></td>
  </tr>
  <tr>
    <td WIDTH="704" VALIGN="TOP" colspan="2"><font SIZE="2"><p ALIGN="CENTER">(Issuer's
    Telephone Number)</font></td>
  </tr>
  <tr>
    <td WIDTH="704" VALIGN="TOP" colspan="2"><font SIZE="2"><p ALIGN="CENTER">&nbsp; </font></td>
  </tr>
  <tr>
    <td WIDTH="704" VALIGN="TOP" colspan="2"><font SIZE="2"><u><p ALIGN="CENTER">Approximate
    Date of Commencement of Proposed Sales under the Plan:</u></font></td>
  </tr>
  <tr>
    <td WIDTH="704" VALIGN="TOP" colspan="2"><font SIZE="2"><p ALIGN="CENTER">As soon as
    practicable after this Registration Statement becomes effective</font></td>
  </tr>
  <tr>
    <td WIDTH="704" VALIGN="TOP" colspan="2"><font SIZE="2">&nbsp; </font></td>
  </tr>
  <tr>
    <td WIDTH="704" VALIGN="TOP" colspan="2"><font SIZE="2">&nbsp; </font></td>
  </tr>
  <tr>
    <td WIDTH="704" VALIGN="TOP" colspan="2"><font SIZE="2">&nbsp; </font></td>
  </tr>
  <tr>
    <td WIDTH="704" VALIGN="TOP" colspan="2"><font SIZE="2">Total Number of Pages: 23</font></td>
  </tr>
  <tr>
    <td WIDTH="704" VALIGN="TOP" colspan="2"><font SIZE="2">Exhibit Index begins on
    sequentially numbered page: 4</font></td>
  </tr>
</TABLE>
<font SIZE="2">

<p>&nbsp;</p>
</font>

<p>&nbsp;</p>

<p>&nbsp;</p>

<p>&nbsp;</p>

<p>&nbsp;</p>

<p ALIGN="CENTER"><font SIZE="2">CALCULATION OF REGISTRATION FEE</font></p>

<table BORDER="0" CELLSPACING="0" WIDTH="733" height="38"
style="border-left: 1px solid rgb(0,0,0); border-right: medium none rgb(0,0,0); border-top: 1px solid rgb(0,0,0); border-bottom: medium none rgb(0,0,0)">
  <tr>
    <td WIDTH="170" VALIGN="top" height="15" bordercolor="#000000"><font SIZE="2">Title of
    Securities to be Registered</font></td>
    <td WIDTH="119" VALIGN="top" align="center" height="15" bordercolor="#000000"
    style="border-left: 1px solid rgb(0,0,0); border-bottom: 1px solid rgb(0,0,0)"><font
    SIZE="2">Amount to be Registered</font></td>
    <td WIDTH="207" VALIGN="top" align="center" height="15" bordercolor="#000000"
    style="border-left: 1px solid rgb(0,0,0); border-bottom: 1px solid rgb(0,0,0)"><font
    SIZE="2">Proposed Maximum Offering Price per Share</font></td>
    <td WIDTH="231" VALIGN="top" align="center" height="15" bordercolor="#000000"
    style="border-left: 1px solid rgb(0,0,0); border-right: 1px solid rgb(0,0,0); border-bottom: 1px solid rgb(0,0,0)"><font
    SIZE="2">Proposed Maximum Aggregate Offering Price</font></td>
    <td WIDTH="234" VALIGN="top" align="center" height="15" bordercolor="#000000"
    style="border-right: 1px solid rgb(0,0,0)"><font SIZE="2">Amount of Registration Fee</font></td>
  </tr>
  <tr>
    <td WIDTH="170" VALIGN="top" height="15" bordercolor="#000000"
    style="border-top: 1px solid rgb(0,0,0); border-bottom: 1px solid rgb(0,0,0)"><font
    face="Times New Roman" size="2">Common Stock par value $.01</font></td>
    <td WIDTH="119" VALIGN="top" align="center" height="15" bordercolor="#000000"
    style="border-left: 1px solid rgb(0,0,0); border-bottom: 1px solid rgb(0,0,0)"><font
    face="Times New Roman" size="2">150,000(1)</font></td>
    <td WIDTH="207" VALIGN="top" align="center" height="15" bordercolor="#000000"
    style="border-left: 1px solid rgb(0,0,0); border-bottom: 1px solid rgb(0,0,0)"><p
    ALIGN="CENTER"><font face="Times New Roman" size="2">$1.00(2)</font></td>
    <td WIDTH="231" VALIGN="top" align="center" height="15" bordercolor="#000000"
    style="border-left: 1px solid rgb(0,0,0); border-right: 1px solid rgb(0,0,0); border-bottom: 1px solid rgb(0,0,0)"><p
    ALIGN="CENTER"><font face="Times New Roman" size="2">$100,000</font></td>
    <td WIDTH="234" VALIGN="top" align="center" height="15" bordercolor="#000000"
    style="border-right: 1px solid rgb(0,0,0); border-top: 1px solid rgb(0,0,0); border-bottom: 1px solid rgb(0,0,0)"><h2><font
    face="Times New Roman" size="2">$25.00</font></h2>
    </td>
  </tr>
</TABLE>
<font SIZE="2">

<p ALIGN="JUSTIFY">(1) The amount being registered includes an indeterminate number of
shares of Common Stock, which may be issuable as a result of stock splits, stock dividends
and anti-dilution provisions and other terms, in accordance with Rule 416(a) under the
Securities Act of 1933, as amended.</p>

<p ALIGN="JUSTIFY">(2) Estimated solely for the purpose of calculating the registration
fee. Such estimate has been computed in accordance with Rule 457(h)(1) based upon the
option exercise price of $.50 per share for the initial 100,000 shares and $1.00 per share
for the additional 50,000 shares. The shares being registered hereunder are being issued
pursuant to the Registrant&#146;s 2001 Employee Stock Option Plan (the &quot;Plan&quot;),
which provides for the issuance of up to 1 million shares. This Registration Statement
provides for the registration of 150,000 shares under the Plan.</p>
</font>

<p ALIGN="JUSTIFY">&nbsp;</p>

<p ALIGN="CENTER"><strong><a NAME="node2"></a>PART I</strong></p>

<p ALIGN="CENTER">INFORMATION REQUIRED IN THE PROSPECTUS</p>

<p ALIGN="JUSTIFY">As permitted by Rule 428 under the Securities Act of 1933, as amended
(the &quot;Act&quot;), this Registration Statement omits the information specified in Part
I of Form S-8. The documents containing the information specified in Part I will be
delivered to the participants in the plan covered by this Registration Statement as
required by Rule 428(b). Such documents are not being filed with the Securities and
Exchange Commission (the &quot;Commission&quot;) as part of this Registration Statement or
as prospectuses or prospectus supplements pursuant to Rule 424 under the Securities Act.</p>

<p><a NAME="node3"></a></p>

<p ALIGN="CENTER"><strong>PART II</strong></p>

<p ALIGN="CENTER">INFORMATION REQUIRED IN THE REGISTRATION STATEMENT</p>

<p><a NAME="node4"></a>ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.</p>

<p ALIGN="JUSTIFY">By this reference, the following documents filed by Royal Finance, Inc.
(the &quot;Registrant&quot;) with the Securities and Exchange Commission (the
&quot;Commission&quot;) are incorporated into and made a part of this Registration<a
NAME="node5"></a> Statement:</p>

<table BORDER="0" CELLSPACING="0" WIDTH="581">
  <tr>
    <td WIDTH="20" VALIGN="TOP"><font SIZE="2">1.</font></td>
    <td WIDTH="525" VALIGN="TOP"><font SIZE="2"><p ALIGN="JUSTIFY">The Registrant's Quarterly
    Report on Form 10-QSB for the quarter ended September 30, 2000, as filed with the
    Commission on November 17, 2000.</font></td>
  </tr>
  <tr>
    <td WIDTH="20" VALIGN="TOP"><font SIZE="2">2.</font></td>
    <td WIDTH="525" VALIGN="TOP"><font SIZE="2"><p ALIGN="JUSTIFY">The Registrant's Quarterly
    Report on Form 10-QSB for the quarter ended June 30, 2000, as filed with the Commission on
    July 31, 2000.</font></td>
  </tr>
  <tr>
    <td WIDTH="20" VALIGN="TOP"><font SIZE="2">3.</font></td>
    <td WIDTH="525" VALIGN="TOP"><font SIZE="2"><p ALIGN="JUSTIFY">The Registrant's Quarterly
    Report on Form 10-QSB for the quarter ended March 31, 2000, as filed with the Commission
    on May 15, 2000.</font></td>
  </tr>
  <tr>
    <td WIDTH="20" VALIGN="TOP"><font SIZE="2">4.</font></td>
    <td WIDTH="525" VALIGN="TOP"><font SIZE="2"><p ALIGN="JUSTIFY">The Registrant's Annual
    Report on Form 10-KSB for the fiscal year ended December 31, 1999, as filed with the
    Commission on April 26, 2000.</font></td>
  </tr>
  <tr>
    <td WIDTH="20" VALIGN="TOP"></td>
    <td WIDTH="525" VALIGN="TOP"><font SIZE="2"><p ALIGN="JUSTIFY">The description of the
    Registrant's Common Stock set forth on pages 17 and 18 of Item 8 Part I of the
    Registrant's Registration Statement on Form 10-SB/12g dated October 10, 1999, as filed
    with the Commission under the Securities Exchange Act of 1934, as amended (File No.
    0-26307).</font></td>
  </tr>
</TABLE>

<p ALIGN="JUSTIFY">All documents filed by the Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended (the &quot;Exchange
Act&quot;), subsequent to the date of this Registration Statement and prior to the filing
of a post-effective amendment to this Registration Statement which indicates that all
securities offered hereby have been sold or which deregisters all securities remaining
unsold, shall be deemed to be incorporated by reference in this Registration Statement and
to be a part hereof from the date of filing of such documents. Any statement contained in
a document incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Registration Statement to the extent
that a statement contained herein or in any other subsequently filed document which also
is or is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Registration Statement.</p>

<p ALIGN="JUSTIFY"><a NAME="node6"></a>ITEM 4. DESCRIPTION OF SECURITIES.</p>

<p ALIGN="JUSTIFY">The Registrant's Common Stock is registered under Section 12(g) of the
Exchange Act.</p>

<p ALIGN="JUSTIFY"><a NAME="node7"></a>ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL</p>

<p ALIGN="JUSTIFY">The validity of the shares of Common Stock issuable by the Registrant
under its Plan will be passed upon for the Registrant by Thomas J. Craft, Jr., P.A., West
Palm Beach, Florida. Thomas J. Craft, Jr., P.A. does not own any shares of the
Registrant's outstanding Common Stock. However, Mr. Craft is a principal officer, director
and shareholder of CR Capital Services, Inc., a Florida corporation, which entity was
issued shares for services to the Registrant prior to the date of this Registration
Statement. The fair market value of the shares which may be deemed beneficially owned by
Mr. Craft through CR Capital Services Inc. is less than $50,000 under Item 509 of
Regulation S-K promulgated under the Act.</p>

<p ALIGN="JUSTIFY"><a NAME="node8"></a>ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS</p>

<p ALIGN="JUSTIFY">The Florida Business Corporation Act, as amended (the &quot;Florida
Act&quot;), provides that, in general, a business corporation may indemnify any person who
is or was a party to any proceeding (other than an action by, or in the right of, the
corporation) by reason of the fact that he or she is or was a director or officer of the
corporation, against liability incurred in connection with such proceeding, including any
appeal thereof, provided certain standards are met, including that such officer or
director acted in good faith and in a manner he or she reasonably believed to be in, or
not opposed to, the best interests of the corporation, and provided further that, with
respect to any criminal action or proceeding, the officer or director had no reasonable
cause to believe his or her conduct was unlawful. In the case of proceedings by or in the
right of the corporation, the Florida Act provides that, in general, a corporation may
indemnify any person who was or is a party to any such proceeding by reason of the fact
that he or she is or was a director or officer of the corporation against expenses and
amounts paid in settlement actually and reasonably incurred in connection with the defense
or settlement of such proceeding, including any appeal thereof, provided that such person
acted in good faith and in a manner he or she reasonably believed to be in, or not opposed
to, the best interests of the corporation, except that no indemnification shall be made in
respect of any claim as to which such person is adjudged liable unless a court of
competent jurisdiction determines upon application that such person is fairly and
reasonably entitled to indemnity. To the extent that any officers or directors are
successful on the merits or otherwise in the defense of any of the proceedings described
above, the Florida Act provides that the corporation is required to indemnify such
officers or directors against expenses actually and reasonably incurred in connection
therewith. However, the Florida Act further provides that, in general, indemnification or
advancement of expenses shall not be made to or on behalf of any officer or director if a
judgment or other final adjudication establishes that his or her actions, or omissions to
act, were material to the cause of action so adjudicated and constitute: (i) a violation
of the criminal law, unless the director or officer had reasonable cause to believe his or
her conduct was lawful or had no reasonable cause to believe it was unlawful; (ii) a
transaction from which the director or officer derived an improper personal benefit; (iii)
in the case of a director, a circumstance under which the director has voted for or
assented to a distribution made in violation of the Florida Act or the corporation's
articles of incorporation; or (iv) willful misconduct or a conscious disregard for the
best interests of the corporation in a proceeding by or in the right of the corporation to
procure a judgment in its favor or in a proceeding by or in the right of a shareholder.</p>

<p ALIGN="JUSTIFY">The Registrant's By-Laws include the following provisions:</p>

<p ALIGN="CENTER">ARTICLE IX. CORPORATE INDEMNIFICATION PLAN</p>

<p ALIGN="JUSTIFY">The Company shall indemnify any person:</p>

<p ALIGN="JUSTIFY">(1) Who was or is a party, or is threatened to be made a party, to any
threatened, pending, or completed action, suit, or proceeding, whether civil, criminal,
administrative, or investigative (other than an action by, or in the right of, the above
named corporation) by reason of the fact that he is or was a director, officer, employee,
or agent of the above named corporation or is or was serving at the request of the above
named corporation as a director, officer, employee, or agent of another corporation,
partnership, joint venture, trust, or other enterprise against such costs and expenses,
and to the extent and in the manner provided under Florida Law. </p>

<p ALIGN="JUSTIFY">(2) Who was or is a party, or is threatened to be made a party, to any
threatened, pending, or completed action or suit by or in the right of the above named
corporation to procure a judgment in its favor by reason of the fact that he is or was a
director, officer, employee, or agent of the above named corporation or is or was serving
at the request of the above named corporation as a director, officer, employee, or agent
of another corporation, partnership, joint venture, trust, or other enterprise against
such costs and expenses, and to the extent and in the manner provided under Florida Law.</p>

<p ALIGN="JUSTIFY">The extent, amount, and eligibility for the indemnification provided
herein will be made by the Board of Directors. Said determinations will be made by a
majority vote to a quorum consisting of directors who were not parties to such action,
suit, or proceeding or by the shareholders by a majority vote of a quorum consisting of
shareholders who were not parties to such action, suit, or proceeding.</p>

<p ALIGN="JUSTIFY">The Company will have the power to make further indemnification as
provided under Florida Law except to indemnify any person against gross negligence or
willful misconduct.</p>

<p ALIGN="JUSTIFY">The Company is further authorized to purchase and maintain insurance
for indemnification of any person at provided herein and to the extent provided under
Florida Law.</p>

<p ALIGN="JUSTIFY">Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of the
Company, the Company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or paid by a
director, officer or controlling person of the Company in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company undertakes, unless in the
opinion of its counsel the matter has been settled by controlling precedent, to submit to
a court of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and agrees to be governed by the final
adjudication of such issue.</p>

<p><a NAME="node9"></a>ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED</p>

<p>Not applicable.</p>

<p><a NAME="node10"></a>ITEM 8. EXHIBITS</p>

<table BORDER="1" CELLSPACING="0" WIDTH="577" bordercolor="#FFFFFF">
  <tr>
    <td WIDTH="89" VALIGN="TOP"><font SIZE="2">EXHIBIT NO</font></td>
    <td WIDTH="452" VALIGN="TOP"><font SIZE="2">DESCRIPTION OF EXHIBITS</font></td>
  </tr>
  <tr>
    <td WIDTH="89" VALIGN="TOP"><font SIZE="2">4.1</font></td>
    <td WIDTH="452" VALIGN="TOP"><font SIZE="2">Royal Finance, Inc., Employee Stock Option
    Plan 2001 filed herewith.</font></td>
  </tr>
  <tr>
    <td WIDTH="89" VALIGN="TOP"><font SIZE="2">4.2(2)</font></td>
    <td WIDTH="452" VALIGN="TOP"><font SIZE="2">Articles of Incorporation of the Company
    incorporated by reference and included in the Company&#146;s Registration Statement on
    Form 10-SB/12g filed on June 9, 1999, File No. 0-26307.</font></td>
  </tr>
  <tr>
    <td WIDTH="89" VALIGN="TOP"><font SIZE="2">4.2(3)</font></td>
    <td WIDTH="452" VALIGN="TOP"><font SIZE="2">By-Laws of the Company incorporated by
    reference and included in the Company&#146;s Registration Statement on Form 10-SB/12g
    filed on June 9, 1999, File No. 0-26307.</font></td>
  </tr>
  <tr>
    <td WIDTH="89" VALIGN="TOP"><font SIZE="2">5</font></td>
    <td WIDTH="452" VALIGN="TOP"><font SIZE="2">Opinion of Thomas J. Craft, Jr., P.A.,
    regarding legality of the securities filed herewith.</font></td>
  </tr>
  <tr>
    <td WIDTH="89" VALIGN="TOP"><font SIZE="2">23.1</font></td>
    <td WIDTH="452" VALIGN="TOP"><font SIZE="2">Consent of Thomas J. Craft, Jr., P.A.,
    contained in Exhibit 5 filed herewith.</font></td>
  </tr>
  <tr>
    <td WIDTH="89" VALIGN="TOP"><font SIZE="2">23.2</font></td>
    <td WIDTH="452" VALIGN="TOP"><font SIZE="2">Consent of Mark Escoffery, P.A., Public
    Independent Accountant.</font></td>
  </tr>
  <tr>
    <td WIDTH="89" VALIGN="TOP">&nbsp;</td>
    <td WIDTH="452" VALIGN="TOP">&nbsp;</td>
  </tr>
</TABLE>

<p ALIGN="JUSTIFY"><a NAME="node11"></a></p>

<p ALIGN="JUSTIFY">ITEM 9. UNDERTAKINGS</p>

<p ALIGN="JUSTIFY">(a) The undersigned registrant hereby undertakes:</p>

<p ALIGN="JUSTIFY">(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:</p>

<p ALIGN="JUSTIFY">(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;</p>

<p ALIGN="JUSTIFY">(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change in the
information set forth in the registration statement; and </p>

<p ALIGN="JUSTIFY">(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any material change
to such information in the registration statement; provided, however, that paragraphs
(1)(i) and (1)(ii) do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports filed with
or furnished to the Securities and Exchange Commission by the registrant pursuant to
section 13 or section 15(d) of the Exchange Act that are incorporated by reference in the
registration statement.</p>

<p ALIGN="JUSTIFY">(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide offering thereof.</p>

<p ALIGN="JUSTIFY">(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of the
offering.</p>

<p ALIGN="JUSTIFY">(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the registrant's annual
report pursuant to section 13(a) or section 15(d) of the Exchange Act that is incorporated
by reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.</p>

<p ALIGN="JUSTIFY">(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person against
the registrant in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.</p>

<p ALIGN="CENTER">SIGNATURES</p>

<p ALIGN="JUSTIFY">THE REGISTRANT. Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of
West Palm Beach, State of Florida, on this March 6, 2001.</p>

<p ALIGN="JUSTIFY">Royal Finance, Inc.</p>

<p ALIGN="JUSTIFY">(Registrant)</p>

<p>/s/ Martin P. Bolodian</p>

<p>Martin P. Bolodian, President</p>

<p ALIGN="CENTER">Exhibit 4.1 </p>
<u><b>

<p ALIGN="CENTER">ROYAL FINANCE, INC. </p>

<p ALIGN="CENTER">2001 STOCK OPTION PLAN</p>
</b></u>

<p ALIGN="CENTER">ARTICLE ONE</p>

<p ALIGN="JUSTIFY">GENERAL PROVISIONS</p>

<p>I.&nbsp;&nbsp;&nbsp; PURPOSE OF THE PLAN</p>

<p ALIGN="JUSTIFY">This 2001 Stock Option Plan is intended to promote the interests of
Royal Finance, Inc., a Florida corporation (the &quot;Company&quot;), by providing
eligible persons in the Company's employ or service, or that of any Parent or Subsidiary
of the Company, with the opportunity to acquire a proprietary interest, or otherwise
increase their proprietary interest, in the Company as an incentive for them to continue
in such employ or service.</p>

<p ALIGN="JUSTIFY">Capitalized terms shall have the meanings assigned to such terms in the
attached Appendix.</p>

<p ALIGN="JUSTIFY">II.&nbsp;&nbsp;&nbsp; STRUCTURE OF THE PLAN</p>

<p ALIGN="JUSTIFY">A.&nbsp;&nbsp;&nbsp; The Plan shall be divided into two (2) separate
equity programs:</p>

<p ALIGN="JUSTIFY">(i) the Option Grant Program under which eligible persons may, at the
discretion of the Plan Administrator, be granted options to purchase shares of Common
Stock; and</p>

<p ALIGN="JUSTIFY">(ii) the Stock Issuance Program under which eligible persons may, at
the discretion of the Plan Administrator, be issued shares of Common Stock directly,
either through the immediate purchase of such shares or as a bonus for services rendered
the Company (or any Parent or Subsidiary).</p>

<p ALIGN="JUSTIFY">B. The provisions of Articles One and Four shall apply to both equity
programs under the Plan and shall accordingly govern the interests of all persons under
the Plan.</p>

<p ALIGN="JUSTIFY">III. ADMINISTRATION OF THE PLAN</p>

<p ALIGN="JUSTIFY">A. The Plan shall be administered by the Board. However, any or all
administrative functions otherwise exercisable by the Board may be delegated to a
Committee appointed by the Board, if any. The Committee shall serve for such period of
time as the Board may determine and shall be subject to removal by the Board at any time.
The Board may also at any time terminate the functions of the Committee and reassume all
powers and authority previously delegated to the Committee.</p>

<p ALIGN="JUSTIFY">B. The Plan Administrator, as defined below, shall have full power and
authority (subject to the provisions of the Plan) to establish such rules and regulations
as it may deem appropriate for proper administration of the Plan and to make such
determinations under, and issue such interpretations of, the Plan and any outstanding
options or stock issuances thereunder as it may<font FACE="Arial"> </font>deem necessary
or advisable. Decisions of the Plan Administrator shall be final and binding on all
parties who have an interest in the Plan or any option or stock issuance thereunder.</p>

<p>IV.&nbsp;&nbsp;&nbsp; ELIGIBILITY</p>

<p ALIGN="JUSTIFY">A. The persons eligible to participate in the Plan are as follows:</p>

<p ALIGN="JUSTIFY">(i)&nbsp;&nbsp; Employees,</p>

<p ALIGN="JUSTIFY">(ii) non-employee members of the Board or the non-employee members of
the board of directors of any Parent or Subsidiary, and</p>

<p ALIGN="JUSTIFY">(iii) consultants and other independent advisors who provide bona fide
services to the Company (or any Parent or Subsidiary) in connection with its or their
respective business(es) other than in connection with the offer and sale of securities in
a capital raising transaction, not as a stock promoter nor engaged in maintaining a market
in the Company&#146;s securities.</p>

<p ALIGN="JUSTIFY">B. The Plan Administrator shall have full authority to determine, (i)
with respect to the grants made under the Option Grant Program, which eligible persons are
to receive the option grants, the time or times when those grants are to be made, the
number of shares to be covered by each such grant, the status of the granted option as
either an Incentive Option or a Non-Statutory Option, the time or times when each option
is to become exercisable, the vesting schedule (if any) applicable to the option shares
and the maximum term for which the option is to remain outstanding and (ii) with respect
to stock issuances made under the Stock Issuance Program, which eligible persons are to
receive stock issuances, the time or times when those issuances are to be made, the number
of shares to be issued to each Participant, the vesting schedule (if any) applicable to
the issued shares and the consideration to be paid by the Participant for such shares.</p>

<p ALIGN="JUSTIFY">C. The Plan Administrator shall have the absolute discretion either to
grant options in accordance with the Option Grant Program or to effect stock issuances in
accordance with the Stock Issuance Program.</p>

<p ALIGN="JUSTIFY">V. STOCK SUBJECT TO THE PLAN</p>

<p ALIGN="JUSTIFY">A. The stock issuable under the Plan shall be shares of authorized but
unissued or reacquired shares of the Company&#146;s Common Stock, par value $.01. The
maximum number of shares of Common Stock, which may be issued over the term of the Plan
shall not exceed 1,000,000 shares.</p>

<p ALIGN="JUSTIFY">B. Shares of Common Stock subject to outstanding options shall be
available for subsequent issuance under the Plan to the extent that: </p>

<p ALIGN="JUSTIFY">(i) the options expire or terminate for any reason prior to exercise in
full; or </p>

<p ALIGN="JUSTIFY">(ii) the options are canceled in accordance with the cancellation
provisions of the Plan or any grant thereunder.</p>

<p ALIGN="JUSTIFY">C. Unvested shares issued under the Plan and subsequently repurchased
by the Company, at the option exercise or direct issue price paid per share, pursuant to
the Company's repurchase rights under the Plan shall be added back to the number of shares
of Common Stock reserved for issuance under the Plan and shall accordingly be available
for reissuance through one or more subsequent option grants or direct stock issuances
under the Plan.</p>

<p ALIGN="JUSTIFY">D. Should any change be made to the Common Stock by reason of any stock
split, stock dividend, recapitalization, combination of shares, exchange of shares or
other change affecting the outstanding Common Stock as a class without the Company's
receipt of consideration, appropriate adjustments shall be made to: (i) the maximum number
and/or class of securities issuable under the Plan; and (ii) the number and/or class of
securities and the exercise price per share in effect under each outstanding option in
order to prevent the dilution or enlargement of benefits thereunder. The adjustments
determined by the Plan Administrator shall be final, binding and conclusive. In no event
shall any such adjustments be made in connection with the conversion of one or more
outstanding shares of the Company's preferred stock into shares of Common Stock.</p>

<p ALIGN="CENTER">ARTICLE TWO</p>
<u>

<p ALIGN="CENTER">OPTION GRANT PROGRAM</p>
</u>

<p ALIGN="JUSTIFY">I. OPTION TERMS</p>

<p ALIGN="JUSTIFY">Each option shall be evidenced by one or more documents in the form
approved by the Plan Administrator; <u>provided</u> however, that each such document shall
comply with the terms specified below. Each document evidencing an Incentive Option shall,
in addition, be subject to the provisions of the Plan applicable to such options.</p>

<p ALIGN="JUSTIFY">A.Exercise Price.</p>

<p ALIGN="JUSTIFY">1. The exercise price per share shall be fixed by the Plan
Administrator and may be less than, equal to or greater than the Fair Market Value per
share of Common Stock on the option grant date,</p>

<p ALIGN="JUSTIFY">2. The exercise price shall become immediately due upon exercise of the
option and shall, subject to the provisions of Section I of Article Four and the documents
evidencing the option, be payable in cash or check made payable to the Company. Should the
Common Stock continue to be registered under Section 12(g) of the Securities Exchange Act
of 1934 (the &quot;Exchange Act&quot;) at the time the option is exercised, then the
exercise price may also be paid as follows:</p>

<p ALIGN="JUSTIFY">(i) in shares of Common Stock held for the requisite period necessary
to avoid a charge to the Company's earnings for financial reporting purposes and valued at
Fair Market Value on the Exercise Date, or</p>

<p ALIGN="JUSTIFY">(ii) to the extent the option is exercised for vested shares, through a
special sale and remittance procedure pursuant to which the Optionee shall concurrently
provide irrevocable instructions (a) to a Company designated brokerage firm to effect the
immediate sale of the purchased shares and remit to the Company, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate exercise price
payable for the purchased shares plus all applicable Federal, state and local income and
employment taxes required to be withheld by the Company by reason of such exercise and (b)
to the Company to deliver the certificates for the purchased shares directly to such
brokerage firm in order to complete the sale.</p>

<p ALIGN="JUSTIFY">Except to the extent such sale and remittance procedure is utilized,
payment of the exercise price for the purchased shares must be made on the Exercise Date.</p>

<p ALIGN="JUSTIFY">B. <u>Exercise and Term of Options</u>. Each option shall be
exercisable at such time or times, during such period and for such number of shares as
shall be determined by the Plan Administrator and set forth in the documents evidencing
the option grant. However, no option shall have a term in excess of ten (10) years
measured from the option grant date.</p>

<p ALIGN="JUSTIFY">C.Effect of Termination of Service.</p>

<p ALIGN="JUSTIFY">1. The following provisions shall govern the exercise of any options
held by the Optionee at the time of cessation of Service or death:</p>

<p ALIGN="JUSTIFY">(i) Should the Optionee cease to remain in Service for any reason other
than death, Permanent Disability or Misconduct, then the Options granted shall terminate. </p>

<p ALIGN="JUSTIFY">(ii) Should Optionee's Service terminate by reason of Permanent
Disability, then the Optionee shall have a period of three (3) months following the date
of such cessation of Service during which to exercise each outstanding option held by such
Optionee.</p>

<p ALIGN="JUSTIFY">(iii)<font FACE="Arial"> </font>If the Optionee dies while holding an
outstanding option, then the personal representative of his or her estate or the person or
persons to whom the option is transferred pursuant to the Optionee's will or the laws of
inheritance shall have a three (3) month period following the date of the Optionee's death
to exercise such option.</p>

<p ALIGN="JUSTIFY">(iv)&nbsp;&nbsp;&nbsp; Under no circumstances, however, shall any such
option be exercisable after the specified expiration of the option term.</p>

<p ALIGN="JUSTIFY">(v) During the applicable post-Service exercise period, if any, the
option may not be exercised in the aggregate for more than the number of vested shares for
which the option is exercisable on the date of the Optionee's cessation of Service. Upon
the expiration of the applicable exercise period or (if earlier) upon the expiration of
the option term, the option shall terminate and cease to be outstanding for any vested
shares for which the option has not been exercised. However, the option shall, immediately
upon the Optionee's cessation of Service, terminate and cease to be outstanding with
respect to any and all option shares for which the option is not otherwise at the time
exercisable or in which the Optionee is not otherwise at that time vested.</p>

<p ALIGN="JUSTIFY">(vi) Should Optionee's Service be terminated for Misconduct, then all
outstanding options held by the Optionee shall terminate immediately and cease to remain
outstanding.</p>

<p ALIGN="JUSTIFY">2. The Plan Administrator shall have the discretion, exercisable either
at the time an option is granted or at any time while the option remains outstanding, to:</p>

<p ALIGN="JUSTIFY">(i)<font FACE="Arial"> </font>extend the period of time for which the
option is to remain exercisable following the Optionee's cessation of Service or death
from the limited period otherwise in effect for that option to such greater period of time
as the Plan Administrator shall deem appropriate, but in no event, beyond the expiration
of the option. Term; and/or</p>

<p ALIGN="JUSTIFY">(ii) permit the option to be exercised, during the applicable
post-Service exercise period, not only with respect to the number of vested shares of
Common Stock for which such option is exercisable at the time of the Optionee's cessation
of Service but also with respect to one or more additional installments in which the
Optionee would have vested under the option had the Optionee continued in Service.</p>

<p ALIGN="JUSTIFY">D. <u>Stockholder Rights</u>. The holder of an option shall have no
stockholder rights with respect to the shares subject to the option until such person
shall have exercised the option, paid the exercise price and become the recordholder of
the purchased shares.</p>

<p ALIGN="JUSTIFY">E. <u>Repurchase Rights</u>. The Plan Administrator shall have the
discretion to grant options, which are exercisable for unvested shares of Common Stock.
Should the Optionee cease Service while holding such unvested shares, the Company shall
have the right to repurchase, at the exercise price paid per share, any or all of those
unvested shares. The terms upon which such repurchase right shall be exercisable
(including the period and procedure for exercise and the appropriate vesting schedule for
the purchased shares) shall be established by the Plan Administrator and set forth in the
document evidencing such repurchase right.</p>

<p ALIGN="JUSTIFY">F. <u>Limited Transferability of Options.</u> During the lifetime of
the Optionee, Incentive Options shall be exercisable only by the Optionee and shall not be
assignable or transferable other than by will or by the laws of descent and distribution
following the Optionee's death. Non-Statutory Options shall be subject to the same
restrictions, except that a Non-Statutory Option may, to the extent permitted by the Plan
Administrator, be assigned in whole or in part during the Optionee's lifetime as follows:</p>

<p ALIGN="JUSTIFY">(i) as a gift to one or more members of the Optionee's immediate
family, to a trust in which Optionee and/or one or more such family members hold more than
fifty percent (50%) of the beneficial interest or to an entity in which more than fifty
percent (50%) of the voting interests are owned by one or more such family members; or </p>

<p ALIGN="JUSTIFY">(ii) pursuant to a domestic relations order. The terms applicable to
the assigned portion shall be the same as those in effect for the option immediately prior
to such assignment and shall be set forth in such documents issued to the assignee as the
Plan Administrator may deem appropriate.</p>

<p ALIGN="JUSTIFY">G. <u>Withholding.</u> The Company's obligation to deliver shares of
Common Stock upon the exercise of any options granted under the Plan shall be subject to
the satisfaction of all applicable Federal, state and local income and employment tax
withholding requirements.</p>

<p ALIGN="JUSTIFY">II. INCENTIVE OPTIONS</p>

<p ALIGN="JUSTIFY">The terms specified below shall be applicable to all Incentive Options.
Except as modified by the provisions of this Section II, all the provisions of Articles
One, Two and Four shall be applicable to Incentive Options. Options, which are
specifically designated as Non-Statutory Options shall <u>not</u> be subject to the terms
of this Section II.</p>

<p ALIGN="JUSTIFY">A. <u>Eligibility.</u> Incentive Options may only be granted to
Employees.</p>

<p ALIGN="JUSTIFY">B. <u>Exercise Price.</u> The exercise price per share shall not be
less than one hundred percent (100%) of the Fair Market Value per share of Common Stock on
the option grant date.</p>

<p ALIGN="JUSTIFY">C. <u>Dollar Limitation.</u> The aggregate Fair Market Value of the
shares of Common Stock (determined as of the respective date or dates of grant) for which
one or more options granted to any Employee under the Plan (or any other option plan of
the Company or any Parent or Subsidiary) may for the first time become exercisable as
Incentive Options during any one (1) calendar year shall not exceed the sum of One Hundred
Thousand Dollars ($100,000). To the extent the Employee holds two (2) or more such
options, which become exercisable for the first time in the same calendar year, the
foregoing limitation on the exercisability of such options as Incentive Options shall be
applied on the basis of the order in which such options are granted.</p>

<p ALIGN="JUSTIFY">D. <u>10% Stockholder.</u> If any Employee to whom an Incentive Option
is granted is a 10% Stockholder, then the exercise price per share shall not be less than
one hundred ten percent (110%) of the Fair Market Value per share of Common Stock on the
option grant date and the option term shall not exceed five (5) years measured from the
option grant date.</p>

<p ALIGN="JUSTIFY">III. CORPORATE TRANSACTION</p>

<p ALIGN="JUSTIFY">A. The shares subject to each option outstanding under the Plan at the
time of a Corporate Transaction shall automatically vest in full so that each such option
shall, immediately prior to the effective date of the Corporate Transaction, become fully
exercisable for all of the shares of Common Stock at the time subject to that option and
may be exercised for any or all of those shares as fully vested shares of Common Stock.
However, the shares subject to an outstanding option shall not vest on such an accelerated
basis if and to the extent: </p>

<p ALIGN="JUSTIFY">(i) such option is assumed by the successor Company (or parent thereof)
in the Corporate Transaction and the Company's repurchase rights with respect to the
unvested option shares are concurrently assigned to such successor Company (or parent
thereof); or </p>

<p ALIGN="JUSTIFY">(ii) such option is to be replaced with a cash incentive program of the
successor Company which preserves the spread existing on the unvested option shares at the
time of the Corporate Transaction and provides for subsequent payout in accordance with
the same vesting schedule applicable to those unvested option shares; or </p>

<p ALIGN="JUSTIFY">(iii) the acceleration of such option is subject to other limitations
imposed by the Plan Administrator at the time of the option grant.</p>

<p ALIGN="JUSTIFY">B. All outstanding repurchase rights shall also terminate
automatically, and the shares of Common Stock subject to those terminated rights shall
immediately vest in full, in the event of any Corporate Transaction, except to the extent:
</p>

<p ALIGN="JUSTIFY">(i) those repurchase rights are<font FACE="Arial"> </font>assigned to
the successor Company (or parent thereof) in connection with such Corporate Transaction;
or </p>

<p ALIGN="JUSTIFY">(ii)<font FACE="Arial"> </font>such accelerated vesting is precluded by
other limitations imposed by the Plan Administrator at the time the repurchase right is
issued.</p>

<p ALIGN="JUSTIFY">C. Immediately following the consummation of the Corporate Transaction,
all outstanding options shall terminate and cease to be outstanding, except to the extent
assumed by the successor Company (or parent thereof).</p>

<p ALIGN="JUSTIFY">D. Each option which is assumed in connection with a Corporate
Transaction shall be appropriately adjusted, immediately after such Corporate Transaction,
to apply to the number and class of securities which would have been issuable to the
Optionee in consummation of such Corporate Transaction, had the option been exercised
immediately prior to such Corporate Transaction. Appropriate adjustments shall also be
made to: </p>

<p ALIGN="JUSTIFY">(i) the number and class of securities available for issuance under the
Plan following the consummation of such Corporate Transaction; and </p>

<p ALIGN="JUSTIFY">(ii) the exercise price payable per share under each outstanding
option, <u>provided</u> the aggregate exercise price payable for such securities shall
remain the same.</p>

<p ALIGN="JUSTIFY">E. The Plan Administrator shall have the discretion, exercisable either
at the time the option is granted or at any time while the option remains outstanding, to
provide for the automatic acceleration (in whole or in part) of one or more outstanding
options (and the immediate termination of the Company's repurchase rights with respect to
the shares subject to those options) upon the occurrence of a Corporate Transaction,
whether or not those options are to be assumed in the Corporate Transaction.</p>

<p ALIGN="JUSTIFY">F. The Plan Administrator shall also have full power and authority,
exercisable either at the time the option is granted or at any time while the option
remains outstanding, to structure such option so that the shares subject to that option
will automatically vest on an accelerated basis should the Optionee's Service terminate by
reason of an Involuntary Termination within a designated period (not to exceed eighteen
(18) months) following the effective date of any Corporate Transaction in which the option
is assumed and the repurchase rights applicable to those shares do not otherwise
terminate, Any option so accelerated shall remain exercisable for the fully vested option
shares until the earlier of: </p>

<p ALIGN="JUSTIFY">(i) the expiration of the option term; or </p>

<p ALIGN="JUSTIFY">(ii) the expiration of the one (l) year period measured from the
effective date of the Involuntary Termination. In addition, the Plan Administrator may
provide that one or more of the Company's outstanding repurchase rights with respect to
shares held by the Optionee at the time of such Involuntary Termination shall immediately
terminate on an accelerated basis, and the shares subject to those terminated rights shall
accordingly vest at that time.</p>

<p ALIGN="JUSTIFY">G. The portion of any Incentive Option accelerated in connection with a
Corporate Transaction shall remain exercisable as an Incentive Option only to the extent
the applicable One Hundred Thousand ($100,000) Dollar limitation is not exceeded. To the
extent such dollar limitation is exceeded, the accelerated portion of such option shall be
exercisable as a Non-Statutory Option under the Federal tax laws.</p>

<p ALIGN="JUSTIFY">H. The grant of options under the Plan shall in no way affect the right
of the Company to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all
or any part<font FACE="Arial"> </font>of its business or assets.</p>

<p ALIGN="JUSTIFY">IV. CANCELLATION AND REGRANT OF OPTIONS</p>

<p ALIGN="JUSTIFY">The Plan Administrator shall have the authority to effect, at any time
and from time to time, with the consent of the affected option holders, the cancellation
of any or all outstanding options under the Option Grant Program and to grant in
substitution new options covering the same or different number of shares of Common Stock
but with an exercise price per share based on the Fair Market Value per share of Common
Stock on the new grant date.</p>

<p ALIGN="CENTER">ARTICLE THREE</p>
<u>

<p ALIGN="CENTER">STOCK ISSUANCE PROGRAM</p>
</u>

<p ALIGN="JUSTIFY">I. STOCK ISSUANCE TERMS</p>

<p ALIGN="JUSTIFY">Shares of Common Stock may be issued under the Stock Issuance Program
through direct and immediate issuances without any intervening option grants. Each such
stock issuance shall be evidenced by a Stock Issuance Agreement, which complies with the
terms specified below.</p>

<p ALIGN="JUSTIFY">A.Purchase Price.</p>

<p ALIGN="JUSTIFY">1. The purchase price per share shall be fixed by the Plan
Administrator and may be less than, equal to or greater than the Fair Market Value per
share of Common Stock on the issue date.</p>

<p ALIGN="JUSTIFY">2. Subject to the provisions of Section I of Article Four, shares of
Common Stock may be issued under the Stock Issuance Program for any of the following items
of consideration which the Plan Administrator may deem appropriate in each individual
instance:</p>

<p ALIGN="JUSTIFY">(i)<font FACE="Arial"> </font>cash, check or certified check payable to
the Company, in the Company&#146;s discretion; or</p>

<p ALIGN="JUSTIFY">(ii) past services rendered to the Company (or any Parent or
Subsidiary).</p>

<p ALIGN="JUSTIFY">B.Vesting Provisions</p>

<p ALIGN="JUSTIFY">1. Shares of Common Stock issued under the Stock Issuance Program may,
in the discretion of the Plan Administrator, be fully and immediately vested upon issuance
or may vest in one or more installments over the Participant's period of Service or upon
attainment of specified performance objectives.</p>

<p ALIGN="JUSTIFY">2. Any new, substituted or additional securities or other property
(including money paid other than as a regular cash dividend) which the Participant may
have the right to receive with respect to the Participant's unvested shares of Common
Stock by reason of any stock dividend, stock split, recapitalization, combination of
shares, exchange of shares or other change affecting the outstanding Common Stock as a
class without the Company's receipt of consideration shall be issued subject to:</p>

<p ALIGN="JUSTIFY">(i) the same vesting requirements applicable to the Participant's
unvested shares of Common Stock; and </p>

<p ALIGN="JUSTIFY">(ii) such escrow arrangements as the Plan Administrator shall deem
appropriate.</p>

<p ALIGN="JUSTIFY">3. The Participant shall have full stockholder rights with respect to
any shares of Common Stock issued to the Participant under the Stock Issuance Program,
whether or not the Participant's interest in those shares is vested. Accordingly, the
Participant shall have the right to vote such shares and to receive any regular cash
dividends paid on such shares.</p>

<p ALIGN="JUSTIFY">4. Should the Participant cease to remain in Service while holding one
or more unvested shares of Common Stock issued under the Stock Issuance Program or should
the performance objectives not be attained with respect to one or more such unvested
shares of Common Stock, then those shares shall be immediately surrendered to the Company
for cancellation, and the Participant shall have no further stockholder rights with
respect to those shares. To the extent the surrendered shares were previously issued to
the Participant for consideration paid in cash or cash equivalent (including the
Participant's purchase-money indebtedness), the Company shall repay to the Participant the
cash consideration paid for the surrendered shares and shall cancel the unpaid principal
balance of any outstanding purchase money note of the Participant attributable to the
surrendered shares.</p>

<p ALIGN="JUSTIFY">5. The Plan Administrator may in its discretion waive the surrender and
cancellation of one or more unvested shares of Common Stock (or other assets attributable
thereto) which would otherwise occur upon the non-completion of the vesting schedule
applicable to such shares. Such waiver shall result in the immediate vesting of the
Participant's interest in the shares of Common Stock as to which the waiver applies. Such
waiver may be effected at any time, whether before or after the Participant's cessation of
Service or the attainment or non-attainment of the applicable performance objectives.</p>

<p ALIGN="JUSTIFY">II. CORPORATE TRANSACTION</p>

<p ALIGN="JUSTIFY">A. All of the outstanding repurchase rights under the Stock Issuance
Program shall terminate automatically, and all the shares of Common Stock subject to those
terminated rights shall immediately vest in fall, in the event of any Corporate
Transaction, except to the extent: </p>

<p ALIGN="JUSTIFY">(i) those repurchase rights are assigned, to the successor Company (or
parent thereof) in connection with such Corporate Transaction; or </p>

<p ALIGN="JUSTIFY">(ii) such accelerated vesting is precluded by other limitations imposed
by the Plan Administrator at the time the repurchase right is issued.</p>

<p ALIGN="JUSTIFY">B. The Plan Administrator shall have the discretionary authority,
exercisable either at the time the unvested shares are issued or any time while the
Company's repurchase rights with respect to those shares remain outstanding, to provide
that those rights shall automatically terminate on an accelerated basis, and the shares of
Common Stock subject to those terminated rights shall immediately vest, in the event the
Participant's Service should subsequently terminate by reason of an Involuntary
Termination within a designated period (not to exceed eighteen (18) months) following the
effective date of any Corporate Transaction in which those repurchase rights are assigned
to the successor Company (or parent thereof).</p>

<p ALIGN="JUSTIFY">III. SHARE ESCROW/LEGENDS</p>

<p ALIGN="JUSTIFY">Unvested shares may, in the Plan Administrator's discretion, be held in
escrow by the Company until the Participant's interest in such shares vests or may be
issued directly to the Participant with restrictive legends on the certificates evidencing
those unvested shares.</p>

<p ALIGN="CENTER">ARTICLE FOUR</p>
<u>

<p ALIGN="CENTER">MISCELLANEOUS</p>
</u>

<p ALIGN="JUSTIFY">I.&nbsp;&nbsp;&nbsp;&nbsp; FINANCING</p>

<p ALIGN="JUSTIFY">The Plan Administrator may permit any Optionee or Participant to pay
the option exercise price under the Option Grant Program or the purchase price for shares
issued under the Stock Issuance program by delivering a full recourse, interest bearing
promissory note payable in one or more installments and secured by the purchased shares.
The terms of any such promissory note (including the interest rate and the terms of
repayment) shall be established by the Plan Administrator in its sole discretion. In no
event shall the maximum credit available to the Optionee or Participant exceed the sum of:
</p>

<p ALIGN="JUSTIFY">(i) the aggregate option exercise price or purchase price payable for
the purchased shares; plus</p>

<p ALIGN="JUSTIFY">(ii)<font FACE="Arial"> </font>any Federal, state and local income and
employment tax liability incurred by the Optionee or the Participant in connection with
the option exercise or share purchase.</p>

<p ALIGN="JUSTIFY">II. EFFECTIVE DATE AND TERM OF THE PLAN</p>

<p ALIGN="JUSTIFY">A. The Plan shall become effective when adopted by the Board. Subject
to such limitation, the Plan Administrator may grant options and issue shares under the
Plan at any time after the effective date of the Plan and before the date fixed herein for
termination of the Plan.</p>

<p ALIGN="JUSTIFY">B. The Plan shall terminate upon the earliest of: </p>

<p ALIGN="JUSTIFY">(i) the expiration of the ten (10) year period measured from the date
the Plan is adopted by the Board; </p>

<p ALIGN="JUSTIFY">(ii) the date on which all shares available for issuance under the Plan
shall have been issued as fully-vested shares; or </p>

<p ALIGN="JUSTIFY">(iii) the termination of all outstanding options in connection with an
Corporate Transaction. All options and unvested stock issuances outstanding at the time of
a clause (i) termination event shall continue to have full force and effect in accordance
with the provisions of the documents evidencing such options or issuances.</p>

<p ALIGN="JUSTIFY">III. AMENDMENT OF THE PLAN</p>

<p ALIGN="JUSTIFY">A. The Board shall have complete and exclusive power and authority to
amend or modify the Plan in any or all respects. However, no such amendment or
modification shall adversely affect any rights and obligations with respect to options or
unvested stock issuances at the time outstanding under the Plan, unless the Optionee or
the Participant consents to such amendment or modification. In addition, certain
amendments may require stockholder approval pursuant to applicable laws or regulations.</p>

<p ALIGN="JUSTIFY">B. Options to purchase shares of Common Stock may be granted under the
Option Grant Program and shares of Common Stock may be issued under the Stock Issuance<font
FACE="Arial"> </font>Program which are in each instance in excess of the number of shares
then available for issuance under the Plan, provided any excess shares actually issued
under those programs shall be held in escrow until there is obtained stockholder approval
of the Plan. If such stockholder approval is not obtained within twelve (12) months after
the date the first such excess grants or issuances are made, then: (i)<font FACE="Arial"> </font>any
unexercised options granted on the basis of such excess shares shall terminate and cease
to be outstanding; and </p>

<p ALIGN="JUSTIFY">(ii) the Company shall promptly refund to the Optionees and the
Participants the exercise or purchase price paid for any excess shares issued under the
Plan and held in escrow, together with interest (at the applicable Treasury Bill Rate) for
the period the shares were held in escrow, and such shares shall thereupon be
automatically canceled and cease to be outstanding.</p>

<p ALIGN="JUSTIFY">IV. USE OF PROCEEDS</p>

<p ALIGN="JUSTIFY">Any cash proceeds received by the Company from the sale of shares of
Common Stock under the Plan shall be used for general corporate purposes.</p>

<p ALIGN="JUSTIFY">V. WITHHOLDING</p>

<p ALIGN="JUSTIFY">The Company's obligation to deliver shares of Common Stock upon the
exercise of any options or upon the issuance or vesting of any shares issued under the
Plan shall be subject to the satisfaction of all applicable Federal, state and local
income and employment tax withholding requirements.</p>

<p ALIGN="JUSTIFY">VI. REGULATORY APPROVALS</p>

<p ALIGN="JUSTIFY">The implementation of the Plan, the granting of any option under the
Plan and the issuance of any shares of Common Stock either:</p>

<p ALIGN="JUSTIFY">(i) upon the exercise of any option; or </p>

<p ALIGN="JUSTIFY">(ii) under the Stock Issuance Program; </p>

<p ALIGN="JUSTIFY">shall be subject to the Company's procurement of all approvals and
permits required by regulatory authorities having jurisdiction over the Plan, the options
granted under it and the shares of Common Stock issued pursuant to it.</p>

<p ALIGN="JUSTIFY">VII. NO EMPLOYMENT OR SERVICE RIGHTS</p>

<p ALIGN="JUSTIFY">Nothing in the Plan shall confer upon the Optionee or the Participant
any right to continue in Service for any period of specific duration or interfere with or
otherwise restrict in any way the rights of the Company (or any Parent or Subsidiary
employing or retaining such person) or of the Optionee or the Participant, which rights
are hereby expressly reserved by each, to terminate such person's Service at any time for
any reason, with or without cause.</p>
<u>

<p ALIGN="CENTER"></u>&nbsp;</p>

<p ALIGN="CENTER"><u>APPENDIX</u></p>

<p ALIGN="JUSTIFY">The following definitions shall be in effect under the Plan:</p>

<p ALIGN="JUSTIFY">A. <u>Board</u> shall mean the Company's Board of Directors.</p>

<p ALIGN="JUSTIFY">B. <u>Code</u> shall mean the Internal Revenue Code of 1986, as
amended.</p>

<p ALIGN="JUSTIFY">C. <u>Committee</u> shall mean a committee of one (1) or more Board
members appointed by the Board to exercise one or more administrative functions under the
Plan.</p>

<p ALIGN="JUSTIFY">D. <u>Common Stock</u> shall mean the Company's common stock.</p>

<p ALIGN="JUSTIFY">E. <u>Corporate Transaction</u> shall mean either of the following
stockholder approved transactions to which the Company is a party:</p>

<p ALIGN="JUSTIFY">(i)<font FACE="Arial"> </font>a merger or consolidation in which
securities possessing more than fifty percent (50%) of the total combined voting power of
the Company's outstanding securities are transferred to a person or persons different from
the persons holding those securities immediately prior to such transaction; or</p>

<p ALIGN="JUSTIFY">(ii) the sale, transfer or other disposition of all or substantially
all of the Company's assets in complete liquidation or dissolution of the Company.</p>

<p ALIGN="JUSTIFY">F.&nbsp;&nbsp;&nbsp; <u>Company</u> shall mean Royal Finance, Inc., a
Florida corporation, and any successor Company which shall by appropriate action adopt the
Plan.</p>

<p ALIGN="JUSTIFY">G.&nbsp;&nbsp;&nbsp; <u>Employee</u> shall mean an individual who is in
the employ of the Company (or any Parent or Subsidiary), subject to the control and
direction of the employer entity as to both the work to be performed and the manner and
method of performance.</p>

<p ALIGN="JUSTIFY">H. <u>Exercise Date</u> shall mean the date on which the Company shall
have received written notice of the option exercise.</p>

<p ALIGN="JUSTIFY">I. <u>Fair Market Value</u> per share of Common Stock on any relevant
date shall be determined in accordance with the following provisions:</p>

<p ALIGN="JUSTIFY">(i)<font FACE="Arial"> </font>If the Common Stock is at the time traded
on the NASDAQ National Market, then the Fair Market Value shall be the closing bid price
per share of Common Stock on the date in question, as such price is reported by the
National Association of Securities Dealers on the NASDAQ National Market. If there is no
closing bid price for the Common Stock on the date in question, then the Fair Market Value
shall be the closing selling price on the last preceding date for which such quotation
exists;</p>

<p ALIGN="JUSTIFY">(ii) If the Common Stock is at the time listed on any Stock Exchange,
then the Fair Market Value shall be the closing price per share of Common Stock on the
date in question on the Stock Exchange determined by the Plan Administrator to be the
primary market for the Common Stock, as such price is officially quoted in the composite
tape of transactions on such exchange. If there is no closing selling price for the Common
Stock on the date in question, then the Fair Market Value shall be the closing price on
the last preceding date for which such quotation exists; and </p>

<p ALIGN="JUSTIFY">(iii)&nbsp;&nbsp;&nbsp; If the Common Stock is at the time neither
listed on any Stock Exchange nor traded on the NASDAQ National Market, then the Fair
Market Value shall be determined by the Plan Administrator after taking into account such
factors as the Plan Administrator shall deem appropriate including any quotations and
closing bid price with respect to the shares on the OTC: Bulletin Board or the &quot;Pink
Sheets&quot; if applicable or such other.</p>

<p ALIGN="JUSTIFY">J. <u>Incentive Option</u> shall mean an option which satisfies the
requirements Code Section 422 of the Code.</p>

<p ALIGN="JUSTIFY">K. <u>Involuntary Termination</u> shall mean the termination of the
Service of any individual which occurs by reason of:</p>

<p ALIGN="JUSTIFY">(i)<font FACE="Arial"> </font>such individual's involuntary dismissal
or discharge by the Company for reasons other than Misconduct, or</p>

<p ALIGN="JUSTIFY">(ii) such individual's voluntary resignation following: (a) a change in
his or her position with the Company which materially reduces his or her duties and
responsibilities or the level of management to which he or she reports; (b) a reduction in
his or her level of compensation (including base salary, fringe benefits and target
bonuses under any corporate-performance based bonus or incentive programs) by more than
fifteen percent (15%); or (c) a relocation of such individual's place of employment by
more than fifty (50) miles, provided and only if such change, reduction or relocation. is
effected without the individual's consent.</p>

<p ALIGN="JUSTIFY">L.&nbsp;&nbsp;&nbsp; <u>Misconduct</u> shall mean the commission of any
act of fraud, embezzlement or dishonesty by the Optionee or Participant, any unauthorized
use or disclosure by such person of confidential information or trade secrets of the
Company (or any Parent or Subsidiary), or any other intentional misconduct by such person
adversely affecting the business or affairs of the Company (or any Parent or Subsidiary)
in a material manner. The foregoing definition shall not be deemed to be inclusive of all
the acts or omissions which the Company (or any Parent or Subsidiary) may consider as
grounds for the dismissal or discharge of any Optionee, Participant or other person in the
Service of the Company (or any Parent or Subsidiary).</p>

<p ALIGN="JUSTIFY">M. <u>Exchange Act</u> shall mean the Securities Exchange Act of 1934.</p>

<p ALIGN="JUSTIFY">N. <u>Non-Statutory Option</u> shall mean an option not intended to
satisfy the requirements of Code Section 422.</p>

<p ALIGN="JUSTIFY">O. <u>Option Grant Program</u> shall mean the option grant program in
effect under the Plan.</p>

<p ALIGN="JUSTIFY">P. <u>Optionee</u> shall mean any person to whom an option is granted
under the Plan.</p>

<p ALIGN="JUSTIFY">Q.&nbsp;&nbsp;&nbsp; <u>Parent</u> shall mean any Company (other than
the Company) in an unbroken chain of companies ending with the Company, provided each:
Company in the unbroken chain (other than the Company) owns, at the time of the
determination, stock possessing fifty percent (50%) or more of the total combined voting
power of all classes of stock in one of the other companies in such chain.</p>

<p ALIGN="JUSTIFY">R. <u>Participant</u> shall mean any person who is issued shares of
Common Stock under the Stock Issuance Program.</p>

<p ALIGN="JUSTIFY">S.&nbsp;&nbsp;&nbsp; <u>Permanent Disability</u> shall mean the
inability of the Optionee or the Participant to engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment which is expected to
result in such person's death or to continue for a period of twelve (12) consecutive
months or more.</p>

<p ALIGN="JUSTIFY">T. <u>Plan</u> shall mean the Company's 2001 Stock Option Plan, as set
forth in this document.</p>

<p ALIGN="JUSTIFY">U. <u>Plan Administrator</u> shall mean either the Board or the,
Committee acting in its capacity as administrator of the Plan.</p>

<p ALIGN="JUSTIFY">V. <u>Service</u> shall mean the provision of services to the Company
(or any Parent or Subsidiary) by a person in the capacity of an Employee, a non-employee
member of the board of directors or a consultant or independent advisor, except to the
extent otherwise specifically provided in the documents evidencing the option grant or
stock issuance.</p>

<p ALIGN="JUSTIFY">W. <u>Stock Exchange</u> shall mean either the American Stock Exchange
or the New York Stock Exchange.</p>

<p ALIGN="JUSTIFY">X. <u>Stock Issuance Agreement</u> shall mean the agreement entered
into by the Company and the Participant at the time of issuance of shares of Common Stock
under the Stock Issuance Program.</p>

<p ALIGN="JUSTIFY">Y. <u>Stock Issuance Program</u> shall mean the stock issuance program
in effect under the Plan.</p>

<p ALIGN="JUSTIFY">Z. <u>Subsidiary</u> shall mean any Company (other than the Company) in
an unbroken chain of companies beginning with the Company, provided each Company (other
than the last Company) in the unbroken chain owns, at the time of the determination, stock
possessing fifty percent (50%) or more of the total combined voting power of all classes
of stock in one of the other companies in such chain.</p>

<p ALIGN="JUSTIFY">AA. <u>10% Stockholder</u> shall mean the owner of stock (as determined
under Code Section 424(d)) possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company (or any Parent or Subsidiary).</p>

<p>&nbsp;</p>

<p>Exhibit 5</p>

<table CELLSPACING="0" BORDER="0" CELLPADDING="1" WIDTH="579">
  <tr>
    <td VALIGN="TOP" width="577"><b><p ALIGN="CENTER">Thomas J. Craft, Jr., P.A.</b></td>
  </tr>
  <tr>
    <td VALIGN="TOP" width="577"><font SIZE="2"><p ALIGN="CENTER">301 Clematis Street, Suite
    3000</font></td>
  </tr>
  <tr>
    <td VALIGN="TOP" width="577"><font SIZE="2"><p ALIGN="CENTER">The Galleria Building</font></td>
  </tr>
  <tr>
    <td VALIGN="TOP" width="577"><font SIZE="2"><p ALIGN="CENTER">West Palm Beach, FL 33401</font></td>
  </tr>
  <tr>
    <td VALIGN="TOP" width="577"><font SIZE="1"><p ALIGN="CENTER">Phone: (561) 651-7336 Fax:
    (561) 655-3202</font></td>
  </tr>
</TABLE>
<font SIZE="1">

<p ALIGN="CENTER">&nbsp;</p>
</font>

<table CELLSPACING="0" BORDER="0" CELLPADDING="1" WIDTH="579">
  <tr>
    <td VALIGN="TOP" HEIGHT="17" width="577"><font SIZE="2"><p ALIGN="RIGHT">March 6, 2001</font></td>
  </tr>
  <tr>
    <td VALIGN="TOP" HEIGHT="17" width="577"><font SIZE="2"><p ALIGN="CENTER">U.S. Securities
    and Exchange Commission</font></td>
  </tr>
  <tr>
    <td VALIGN="TOP" HEIGHT="17" width="577"><font SIZE="2"><p ALIGN="CENTER">Washington, DC
    20549</font></td>
  </tr>
  <tr>
    <td VALIGN="TOP" HEIGHT="17" width="577"><font SIZE="2"><p ALIGN="CENTER">450 Fifth
    Street, NW</font></td>
  </tr>
</TABLE>

<table CELLSPACING="0" BORDER="0" CELLPADDING="1" WIDTH="579">
  <tr>
    <td WIDTH="174" VALIGN="TOP"><font SIZE="2"><p ALIGN="RIGHT">Re: </font></td>
    <td WIDTH="401" VALIGN="TOP"><font SIZE="2">Royal Finance Inc.</font></td>
  </tr>
  <tr>
    <td WIDTH="174" VALIGN="TOP"></td>
    <td WIDTH="401" VALIGN="TOP"><font SIZE="2">Commission File No. 0-26307</font></td>
  </tr>
  <tr>
    <td WIDTH="174" VALIGN="TOP"></td>
    <td WIDTH="401" VALIGN="TOP"><font SIZE="2">Registration Statement on Form S-8</font></td>
  </tr>
</TABLE>
<font SIZE="2">

<p>Gentlemen:</p>

<p ALIGN="JUSTIFY">I have been requested by Royal Finance Inc. (the
&quot;Registrant&quot;) to furnish an opinion as to matters hereinafter set forth in
connection with this registration statement on Form S-8 under the Securities Act of 1933,
as amended (the &quot;Act&quot;), covering a total of 150,000 shares of common stock,
which shares are being issued in connection with the Company&#146;s 2001 Employment Stock
Option Plan (the &quot;Plan&quot;).</p>

<p ALIGN="JUSTIFY">In connection with this opinion, I have reviewed the filings of the
Registrant incorporated by reference in this registration statement, and have determined
that the Registrant is current in its reporting requirements under the Securities Exchange
Act of 1934. I have also reviewed the minutes of the board of directors&#146; special
meeting dated March 1, 2001, which authorizes and directs the preparation and filing of
this registration statement. I have further determined that the shares have been legally
issued, fully paid and non-assessable. Further, the Registrant has duly authorized the
issuance of the shares and the filing of this registration statement on Form S-8 under the
Act.</p>

<p>I hereby consent to the inclusion of this opinion in the registration statement on Form
S-8 being duly filed with the Securities and Exchange Commission.</p>

<p>Very truly yours,</p>

<p>Thomas J. Craft, Jr., P.A.</p>
<u>

<p>/s/ Thomas J. Craft, Jr., P.A. </p>
</u>

<p>&nbsp;</p>
<b>

<p ALIGN="CENTER">EXHIBIT 23.1</p>
</b>

<p ALIGN="CENTER">(Contained in Opinion-Exhibit)</p>
<b>

<p ALIGN="CENTER">EXHIBIT 23.2</p>
</b>

<p ALIGN="JUSTIFY">CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS</p>

<p ALIGN="JUSTIFY">I previously issued my report, accompanying the financial statements of
the Registrant for the year ended December 31, 1999, dated April 3, 2000, filed with the
Registrant&#146;s Form 10-KSB. I hereby consent to the incorporation by reference of said
report in the Registration Statement on Form S-8 filed with the SEC by the Registrant. </p>

<p ALIGN="JUSTIFY">MARK ESCOFFERY, P.A.</p>

<p ALIGN="JUSTIFY">/s/ Mark Escoffery</p>

<p ALIGN="JUSTIFY">Palm Beach Gardens, Florida</p>

<p ALIGN="JUSTIFY">March 6, 2001</p>
</font>
</body>
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{"company-data": {"conformed-name": "ROYAL FINANCE INC", "cik": "0001084883", "assigned-sic": "7389", "irs-number": "650873448", "state-of-incorporation": "FL", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-56666", "film-number": "1562963"}, "business-address": {"street1": "1481 S. MILLING TRAIL", "street2": "SUITE 14", "city": "WEST PALM BEACH", "state": "FL", "zip": "33415", "phone": "5616493901"}, "mail-address": {"street1": "1481 S. MILLING TRAIL", "street2": "SUITE 14", "city": "WEST PALM BEACH", "state": "FL", "zip": "33415"}, "former-company": [{"former-conformed-name": "GONETGEN COM INC", "date-changed": "20000711"}, {"former-conformed-name": "NETGEN 2000 INC", "date-changed": "19990602"}]}
file:///c:/FrontPage Web/Royal Finance/roya-s8.html
UNITED STATES
SECURITIES
    AND EXCHANGE COMMISSION
Washington,
    DC 20549
REGISTARTION STATEMENT
ON FORM S-8
UNDER THE SECURITIES ACT OF
    1933
Royal Finance, Inc.
(Exact name of
    Registrant as specified in its charter)
Florida
65-1032012
(State of Incorporation)
(IRS Employer Identification
    Number)
1481
    South Military Trail, Suite 14, West Palm Beach, FL
33415
(Address of Principal
    Executive Offices
(Zip Code)
561-649-3901
(Issuer's
    Telephone Number)
Approximate
    Date of Commencement of Proposed Sales under the Plan:
As soon as
    practicable after this Registration Statement becomes effective
Total Number of Pages: 23
Exhibit Index begins on
    sequentially numbered page: 4
CALCULATION OF REGISTRATION FEE
Title of
    Securities to be Registered
Amount to be Registered
Proposed Maximum Offering Price per Share
Proposed Maximum Aggregate Offering Price
Amount of Registration Fee
Common Stock par value $.01
150,000(1)
$1.00(2)
$100,000
$25.00
(1) The amount being registered includes an indeterminate number of
shares of Common Stock, which may be issuable as a result of stock splits, stock dividends
and anti-dilution provisions and other terms, in accordance with Rule 416(a) under the
Securities Act of 1933, as amended.
(2) Estimated solely for the purpose of calculating the registration
fee. Such estimate has been computed in accordance with Rule 457(h)(1) based upon the
option exercise price of $.50 per share for the initial 100,000 shares and $1.00 per share
for the additional 50,000 shares. The shares being registered hereunder are being issued
pursuant to the Registrant's 2001 Employee Stock Option Plan (the "Plan"),
which provides for the issuance of up to 1 million shares. This Registration Statement
provides for the registration of 150,000 shares under the Plan.
PART I
INFORMATION REQUIRED IN THE PROSPECTUS
As permitted by Rule 428 under the Securities Act of 1933, as amended
(the "Act"), this Registration Statement omits the information specified in Part
I of Form S-8. The documents containing the information specified in Part I will be
delivered to the participants in the plan covered by this Registration Statement as
required by Rule 428(b). Such documents are not being filed with the Securities and
Exchange Commission (the "Commission") as part of this Registration Statement or
as prospectuses or prospectus supplements pursuant to Rule 424 under the Securities Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
By this reference, the following documents filed by Royal Finance, Inc.
(the "Registrant") with the Securities and Exchange Commission (the
"Commission") are incorporated into and made a part of this Registration
Statement:
1.
The Registrant's Quarterly
    Report on Form 10-QSB for the quarter ended September 30, 2000, as filed with the
    Commission on November 17, 2000.
2.
The Registrant's Quarterly
    Report on Form 10-QSB for the quarter ended June 30, 2000, as filed with the Commission on
    July 31, 2000.
3.
The Registrant's Quarterly
    Report on Form 10-QSB for the quarter ended March 31, 2000, as filed with the Commission
    on May 15, 2000.
4.
The Registrant's Annual
    Report on Form 10-KSB for the fiscal year ended December 31, 1999, as filed with the
    Commission on April 26, 2000.
The description of the
    Registrant's Common Stock set forth on pages 17 and 18 of Item 8 Part I of the
    Registrant's Registration Statement on Form 10-SB/12g dated October 10, 1999, as filed
    with the Commission under the Securities Exchange Act of 1934, as amended (File No.
    0-26307).
All documents filed by the Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), subsequent to the date of this Registration Statement and prior to the filing
of a post-effective amendment to this Registration Statement which indicates that all
securities offered hereby have been sold or which deregisters all securities remaining
unsold, shall be deemed to be incorporated by reference in this Registration Statement and
to be a part hereof from the date of filing of such documents. Any statement contained in
a document incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Registration Statement to the extent
that a statement contained herein or in any other subsequently filed document which also
is or is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
The Registrant's Common Stock is registered under Section 12(g) of the
Exchange Act.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
The validity of the shares of Common Stock issuable by the Registrant
under its Plan will be passed upon for the Registrant by Thomas J. Craft, Jr., P.A., West
Palm Beach, Florida. Thomas J. Craft, Jr., P.A. does not own any shares of the
Registrant's outstanding Common Stock. However, Mr. Craft is a principal officer, director
and shareholder of CR Capital Services, Inc., a Florida corporation, which entity was
issued shares for services to the Registrant prior to the date of this Registration
Statement. The fair market value of the shares which may be deemed beneficially owned by
Mr. Craft through CR Capital Services Inc. is less than $50,000 under Item 509 of
Regulation S-K promulgated under the Act.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Florida Business Corporation Act, as amended (the "Florida
Act"), provides that, in general, a business corporation may indemnify any person who
is or was a party to any proceeding (other than an action by, or in the right of, the
corporation) by reason of the fact that he or she is or was a director or officer of the
corporation, against liability incurred in connection with such proceeding, including any
appeal thereof, provided certain standards are met, including that such officer or
director acted in good faith and in a manner he or she reasonably believed to be in, or
not opposed to, the best interests of the corporation, and provided further that, with
respect to any criminal action or proceeding, the officer or director had no reasonable
cause to believe his or her conduct was unlawful. In the case of proceedings by or in the
right of the corporation, the Florida Act provides that, in general, a corporation may
indemnify any person who was or is a party to any such proceeding by reason of the fact
that he or she is or was a director or officer of the corporation against expenses and
amounts paid in settlement actually and reasonably incurred in connection with the defense
or settlement of such proceeding, including any appeal thereof, provided that such person
acted in good faith and in a manner he or she reasonably believed to be in, or not opposed
to, the best interests of the corporation, except that no indemnification shall be made in
respect of any claim as to which such person is adjudged liable unless a court of
competent jurisdiction determines upon application that such person is fairly and
reasonably entitled to indemnity. To the extent that any officers or directors are
successful on the merits or otherwise in the defense of any of the proceedings described
above, the Florida Act provides that the corporation is required to indemnify such
officers or directors against expenses actually and reasonably incurred in connection
therewith. However, the Florida Act further provides that, in general, indemnification or
advancement of expenses shall not be made to or on behalf of any officer or director if a
judgment or other final adjudication establishes that his or her actions, or omissions to
act, were material to the cause of action so adjudicated and constitute: (i) a violation
of the criminal law, unless the director or officer had reasonable cause to believe his or
her conduct was lawful or had no reasonable cause to believe it was unlawful; (ii) a
transaction from which the director or officer derived an improper personal benefit; (iii)
in the case of a director, a circumstance under which the director has voted for or
assented to a distribution made in violation of the Florida Act or the corporation's
articles of incorporation; or (iv) willful misconduct or a conscious disregard for the
best interests of the corporation in a proceeding by or in the right of the corporation to
procure a judgment in its favor or in a proceeding by or in the right of a shareholder.
The Registrant's By-Laws include the following provisions:
ARTICLE IX. CORPORATE INDEMNIFICATION PLAN
The Company shall indemnify any person:
(1) Who was or is a party, or is threatened to be made a party, to any
threatened, pending, or completed action, suit, or proceeding, whether civil, criminal,
administrative, or investigative (other than an action by, or in the right of, the above
named corporation) by reason of the fact that he is or was a director, officer, employee,
or agent of the above named corporation or is or was serving at the request of the above
named corporation as a director, officer, employee, or agent of another corporation,
partnership, joint venture, trust, or other enterprise against such costs and expenses,
and to the extent and in the manner provided under Florida Law.
(2) Who was or is a party, or is threatened to be made a party, to any
threatened, pending, or completed action or suit by or in the right of the above named
corporation to procure a judgment in its favor by reason of the fact that he is or was a
director, officer, employee, or agent of the above named corporation or is or was serving
at the request of the above named corporation as a director, officer, employee, or agent
of another corporation, partnership, joint venture, trust, or other enterprise against
such costs and expenses, and to the extent and in the manner provided under Florida Law.
The extent, amount, and eligibility for the indemnification provided
herein will be made by the Board of Directors. Said determinations will be made by a
majority vote to a quorum consisting of directors who were not parties to such action,
suit, or proceeding or by the shareholders by a majority vote of a quorum consisting of
shareholders who were not parties to such action, suit, or proceeding.
The Company will have the power to make further indemnification as
provided under Florida Law except to indemnify any person against gross negligence or
willful misconduct.
The Company is further authorized to purchase and maintain insurance
for indemnification of any person at provided herein and to the extent provided under
Florida Law.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of the
Company, the Company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or paid by a
director, officer or controlling person of the Company in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company undertakes, unless in the
opinion of its counsel the matter has been settled by controlling precedent, to submit to
a court of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and agrees to be governed by the final
adjudication of such issue.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
EXHIBIT NO
DESCRIPTION OF EXHIBITS
4.1
Royal Finance, Inc., Employee Stock Option
    Plan 2001 filed herewith.
4.2(2)
Articles of Incorporation of the Company
    incorporated by reference and included in the Company's Registration Statement on
    Form 10-SB/12g filed on June 9, 1999, File No. 0-26307.
4.2(3)
By-Laws of the Company incorporated by
    reference and included in the Company's Registration Statement on Form 10-SB/12g
    filed on June 9, 1999, File No. 0-26307.
5
Opinion of Thomas J. Craft, Jr., P.A.,
    regarding legality of the securities filed herewith.
23.1
Consent of Thomas J. Craft, Jr., P.A.,
    contained in Exhibit 5 filed herewith.
23.2
Consent of Mark Escoffery, P.A., Public
    Independent Accountant.
ITEM 9. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change in the
information set forth in the registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any material change
to such information in the registration statement; provided, however, that paragraphs
(1)(i) and (1)(ii) do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports filed with
or furnished to the Securities and Exchange Commission by the registrant pursuant to
section 13 or section 15(d) of the Exchange Act that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of the
offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the registrant's annual
report pursuant to section 13(a) or section 15(d) of the Exchange Act that is incorporated
by reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person against
the registrant in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
SIGNATURES
THE REGISTRANT. Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of
West Palm Beach, State of Florida, on this March 6, 2001.
Royal Finance, Inc.
(Registrant)
/s/ Martin P. Bolodian
Martin P. Bolodian, President
Exhibit 4.1
ROYAL FINANCE, INC.
2001 STOCK OPTION PLAN
ARTICLE ONE
GENERAL PROVISIONS
I.    PURPOSE OF THE PLAN
This 2001 Stock Option Plan is intended to promote the interests of
Royal Finance, Inc., a Florida corporation (the "Company"), by providing
eligible persons in the Company's employ or service, or that of any Parent or Subsidiary
of the Company, with the opportunity to acquire a proprietary interest, or otherwise
increase their proprietary interest, in the Company as an incentive for them to continue
in such employ or service.
Capitalized terms shall have the meanings assigned to such terms in the
attached Appendix.
II.    STRUCTURE OF THE PLAN
A.    The Plan shall be divided into two (2) separate
equity programs:
(i) the Option Grant Program under which eligible persons may, at the
discretion of the Plan Administrator, be granted options to purchase shares of Common
Stock; and
(ii) the Stock Issuance Program under which eligible persons may, at
the discretion of the Plan Administrator, be issued shares of Common Stock directly,
either through the immediate purchase of such shares or as a bonus for services rendered
the Company (or any Parent or Subsidiary).
B. The provisions of Articles One and Four shall apply to both equity
programs under the Plan and shall accordingly govern the interests of all persons under
the Plan.
III. ADMINISTRATION OF THE PLAN
A. The Plan shall be administered by the Board. However, any or all
administrative functions otherwise exercisable by the Board may be delegated to a
Committee appointed by the Board, if any. The Committee shall serve for such period of
time as the Board may determine and shall be subject to removal by the Board at any time.
The Board may also at any time terminate the functions of the Committee and reassume all
powers and authority previously delegated to the Committee.
B. The Plan Administrator, as defined below, shall have full power and
authority (subject to the provisions of the Plan) to establish such rules and regulations
as it may deem appropriate for proper administration of the Plan and to make such
determinations under, and issue such interpretations of, the Plan and any outstanding
options or stock issuances thereunder as it may
deem necessary
or advisable. Decisions of the Plan Administrator shall be final and binding on all
parties who have an interest in the Plan or any option or stock issuance thereunder.
IV.    ELIGIBILITY
A. The persons eligible to participate in the Plan are as follows:
(i)   Employees,
(ii) non-employee members of the Board or the non-employee members of
the board of directors of any Parent or Subsidiary, and
(iii) consultants and other independent advisors who provide bona fide
services to the Company (or any Parent or Subsidiary) in connection with its or their
respective business(es) other than in connection with the offer and sale of securities in
a capital raising transaction, not as a stock promoter nor engaged in maintaining a market
in the Company's securities.
B. The Plan Administrator shall have full authority to determine, (i)
with respect to the grants made under the Option Grant Program, which eligible persons are
to receive the option grants, the time or times when those grants are to be made, the
number of shares to be covered by each such grant, the status of the granted option as
either an Incentive Option or a Non-Statutory Option, the time or times when each option
is to become exercisable, the vesting schedule (if any) applicable to the option shares
and the maximum term for which the option is to remain outstanding and (ii) with respect
to stock issuances made under the Stock Issuance Program, which eligible persons are to
receive stock issuances, the time or times when those issuances are to be made, the number
of shares to be issued to each Participant, the vesting schedule (if any) applicable to
the issued shares and the consideration to be paid by the Participant for such shares.
C. The Plan Administrator shall have the absolute discretion either to
grant options in accordance with the Option Grant Program or to effect stock issuances in
accordance with the Stock Issuance Program.
V. STOCK SUBJECT TO THE PLAN
A. The stock issuable under the Plan shall be shares of authorized but
unissued or reacquired shares of the Company's Common Stock, par value $.01. The
maximum number of shares of Common Stock, which may be issued over the term of the Plan
shall not exceed 1,000,000 shares.
B. Shares of Common Stock subject to outstanding options shall be
available for subsequent issuance under the Plan to the extent that:
(i) the options expire or terminate for any reason prior to exercise in
full; or
(ii) the options are canceled in accordance with the cancellation
provisions of the Plan or any grant thereunder.
C. Unvested shares issued under the Plan and subsequently repurchased
by the Company, at the option exercise or direct issue price paid per share, pursuant to
the Company's repurchase rights under the Plan shall be added back to the number of shares
of Common Stock reserved for issuance under the Plan and shall accordingly be available
for reissuance through one or more subsequent option grants or direct stock issuances
under the Plan.
D. Should any change be made to the Common Stock by reason of any stock
split, stock dividend, recapitalization, combination of shares, exchange of shares or
other change affecting the outstanding Common Stock as a class without the Company's
receipt of consideration, appropriate adjustments shall be made to: (i) the maximum number
and/or class of securities issuable under the Plan; and (ii) the number and/or class of
securities and the exercise price per share in effect under each outstanding option in
order to prevent the dilution or enlargement of benefits thereunder. The adjustments
determined by the Plan Administrator shall be final, binding and conclusive. In no event
shall any such adjustments be made in connection with the conversion of one or more
outstanding shares of the Company's preferred stock into shares of Common Stock.
ARTICLE TWO
OPTION GRANT PROGRAM
I. OPTION TERMS
Each option shall be evidenced by one or more documents in the form
approved by the Plan Administrator;
provided
however, that each such document shall
comply with the terms specified below. Each document evidencing an Incentive Option shall,
in addition, be subject to the provisions of the Plan applicable to such options.
A.Exercise Price.
1. The exercise price per share shall be fixed by the Plan
Administrator and may be less than, equal to or greater than the Fair Market Value per
share of Common Stock on the option grant date,
2. The exercise price shall become immediately due upon exercise of the
option and shall, subject to the provisions of Section I of Article Four and the documents
evidencing the option, be payable in cash or check made payable to the Company. Should the
Common Stock continue to be registered under Section 12(g) of the Securities Exchange Act
of 1934 (the "Exchange Act") at the time the option is exercised, then the
exercise price may also be paid as follows:
(i) in shares of Common Stock held for the requisite period necessary
to avoid a charge to the Company's earnings for financial reporting purposes and valued at
Fair Market Value on the Exercise Date, or
(ii) to the extent the option is exercised for vested shares, through a
special sale and remittance procedure pursuant to which the Optionee shall concurrently
provide irrevocable instructions (a) to a Company designated brokerage firm to effect the
immediate sale of the purchased shares and remit to the Company, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate exercise price
payable for the purchased shares plus all applicable Federal, state and local income and
employment taxes required to be withheld by the Company by reason of such exercise and (b)
to the Company to deliver the certificates for the purchased shares directly to such
brokerage firm in order to complete the sale.
Except to the extent such sale and remittance procedure is utilized,
payment of the exercise price for the purchased shares must be made on the Exercise Date.
B.
Exercise and Term of Options
. Each option shall be
exercisable at such time or times, during such period and for such number of shares as
shall be determined by the Plan Administrator and set forth in the documents evidencing
the option grant. However, no option shall have a term in excess of ten (10) years
measured from the option grant date.
C.Effect of Termination of Service.
1. The following provisions shall govern the exercise of any options
held by the Optionee at the time of cessation of Service or death:
(i) Should the Optionee cease to remain in Service for any reason other
than death, Permanent Disability or Misconduct, then the Options granted shall terminate.
(ii) Should Optionee's Service terminate by reason of Permanent
Disability, then the Optionee shall have a period of three (3) months following the date
of such cessation of Service during which to exercise each outstanding option held by such
Optionee.
(iii)
If the Optionee dies while holding an
outstanding option, then the personal representative of his or her estate or the person or
persons to whom the option is transferred pursuant to the Optionee's will or the laws of
inheritance shall have a three (3) month period following the date of the Optionee's death
to exercise such option.
(iv)    Under no circumstances, however, shall any such
option be exercisable after the specified expiration of the option term.
(v) During the applicable post-Service exercise period, if any, the
option may not be exercised in the aggregate for more than the number of vested shares for
which the option is exercisable on the date of the Optionee's cessation of Service. Upon
the expiration of the applicable exercise period or (if earlier) upon the expiration of
the option term, the option shall terminate and cease to be outstanding for any vested
shares for which the option has not been exercised. However, the option shall, immediately
upon the Optionee's cessation of Service, terminate and cease to be outstanding with
respect to any and all option shares for which the option is not otherwise at the time
exercisable or in which the Optionee is not otherwise at that time vested.
(vi) Should Optionee's Service be terminated for Misconduct, then all
outstanding options held by the Optionee shall terminate immediately and cease to remain
outstanding.
2. The Plan Administrator shall have the discretion, exercisable either
at the time an option is granted or at any time while the option remains outstanding, to:
(i)
extend the period of time for which the
option is to remain exercisable following the Optionee's cessation of Service or death
from the limited period otherwise in effect for that option to such greater period of time
as the Plan Administrator shall deem appropriate, but in no event, beyond the expiration
of the option. Term; and/or
(ii) permit the option to be exercised, during the applicable
post-Service exercise period, not only with respect to the number of vested shares of
Common Stock for which such option is exercisable at the time of the Optionee's cessation
of Service but also with respect to one or more additional installments in which the
Optionee would have vested under the option had the Optionee continued in Service.
D.
Stockholder Rights
. The holder of an option shall have no
stockholder rights with respect to the shares subject to the option until such person
shall have exercised the option, paid the exercise price and become the recordholder of
the purchased shares.
E.
Repurchase Rights
. The Plan Administrator shall have the
discretion to grant options, which are exercisable for unvested shares of Common Stock.
Should the Optionee cease Service while holding such unvested shares, the Company shall
have the right to repurchase, at the exercise price paid per share, any or all of those
unvested shares. The terms upon which such repurchase right shall be exercisable
(including the period and procedure for exercise and the appropriate vesting schedule for
the purchased shares) shall be established by the Plan Administrator and set forth in the
document evidencing such repurchase right.
F.
Limited Transferability of Options.
During the lifetime of
the Optionee, Incentive Options shall be exercisable only by the Optionee and shall not be
assignable or transferable other than by will or by the laws of descent and distribution
following the Optionee's death. Non-Statutory Options shall be subject to the same
restrictions, except that a Non-Statutory Option may, to the extent permitted by the Plan
Administrator, be assigned in whole or in part during the Optionee's lifetime as follows:
(i) as a gift to one or more members of the Optionee's immediate
family, to a trust in which Optionee and/or one or more such family members hold more than
fifty percent (50%) of the beneficial interest or to an entity in which more than fifty
percent (50%) of the voting interests are owned by one or more such family members; or
(ii) pursuant to a domestic relations order. The terms applicable to
the assigned portion shall be the same as those in effect for the option immediately prior
to such assignment and shall be set forth in such documents issued to the assignee as the
Plan Administrator may deem appropriate.
G.
Withholding.
The Company's obligation to deliver shares of
Common Stock upon the exercise of any options granted under the Plan shall be subject to
the satisfaction of all applicable Federal, state and local income and employment tax
withholding requirements.
II. INCENTIVE OPTIONS
The terms specified below shall be applicable to all Incentive Options.
Except as modified by the provisions of this Section II, all the provisions of Articles
One, Two and Four shall be applicable to Incentive Options. Options, which are
specifically designated as Non-Statutory Options shall
not
be subject to the terms
of this Section II.
A.
Eligibility.
Incentive Options may only be granted to
Employees.
B.
Exercise Price.
The exercise price per share shall not be
less than one hundred percent (100%) of the Fair Market Value per share of Common Stock on
the option grant date.
C.
Dollar Limitation.
The aggregate Fair Market Value of the
shares of Common Stock (determined as of the respective date or dates of grant) for which
one or more options granted to any Employee under the Plan (or any other option plan of
the Company or any Parent or Subsidiary) may for the first time become exercisable as
Incentive Options during any one (1) calendar year shall not exceed the sum of One Hundred
Thousand Dollars ($100,000). To the extent the Employee holds two (2) or more such
options, which become exercisable for the first time in the same calendar year, the
foregoing limitation on the exercisability of such options as Incentive Options shall be
applied on the basis of the order in which such options are granted.
D.
10% Stockholder.
If any Employee to whom an Incentive Option
is granted is a 10% Stockholder, then the exercise price per share shall not be less than
one hundred ten percent (110%) of the Fair Market Value per share of Common Stock on the
option grant date and the option term shall not exceed five (5) years measured from the
option grant date.
III. CORPORATE TRANSACTION
A. The shares subject to each option outstanding under the Plan at the
time of a Corporate Transaction shall automatically vest in full so that each such option
shall, immediately prior to the effective date of the Corporate Transaction, become fully
exercisable for all of the shares of Common Stock at the time subject to that option and
may be exercised for any or all of those shares as fully vested shares of Common Stock.
However, the shares subject to an outstanding option shall not vest on such an accelerated
basis if and to the extent:
(i) such option is assumed by the successor Company (or parent thereof)
in the Corporate Transaction and the Company's repurchase rights with respect to the
unvested option shares are concurrently assigned to such successor Company (or parent
thereof); or
(ii) such option is to be replaced with a cash incentive program of the
successor Company which preserves the spread existing on the unvested option shares at the
time of the Corporate Transaction and provides for subsequent payout in accordance with
the same vesting schedule applicable to those unvested option shares; or
(iii) the acceleration of such option is subject to other limitations
imposed by the Plan Administrator at the time of the option grant.
B. All outstanding repurchase rights shall also terminate
automatically, and the shares of Common Stock subject to those terminated rights shall
immediately vest in full, in the event of any Corporate Transaction, except to the extent:
(i) those repurchase rights are
assigned to
the successor Company (or parent thereof) in connection with such Corporate Transaction;
or
(ii)
such accelerated vesting is precluded by
other limitations imposed by the Plan Administrator at the time the repurchase right is
issued.
C. Immediately following the consummation of the Corporate Transaction,
all outstanding options shall terminate and cease to be outstanding, except to the extent
assumed by the successor Company (or parent thereof).
D. Each option which is assumed in connection with a Corporate
Transaction shall be appropriately adjusted, immediately after such Corporate Transaction,
to apply to the number and class of securities which would have been issuable to the
Optionee in consummation of such Corporate Transaction, had the option been exercised
immediately prior to such Corporate Transaction. Appropriate adjustments shall also be
made to:
(i) the number and class of securities available for issuance under the
Plan following the consummation of such Corporate Transaction; and
(ii) the exercise price payable per share under each outstanding
option,
provided
the aggregate exercise price payable for such securities shall
remain the same.
E. The Plan Administrator shall have the discretion, exercisable either
at the time the option is granted or at any time while the option remains outstanding, to
provide for the automatic acceleration (in whole or in part) of one or more outstanding
options (and the immediate termination of the Company's repurchase rights with respect to
the shares subject to those options) upon the occurrence of a Corporate Transaction,
whether or not those options are to be assumed in the Corporate Transaction.
F. The Plan Administrator shall also have full power and authority,
exercisable either at the time the option is granted or at any time while the option
remains outstanding, to structure such option so that the shares subject to that option
will automatically vest on an accelerated basis should the Optionee's Service terminate by
reason of an Involuntary Termination within a designated period (not to exceed eighteen
(18) months) following the effective date of any Corporate Transaction in which the option
is assumed and the repurchase rights applicable to those shares do not otherwise
terminate, Any option so accelerated shall remain exercisable for the fully vested option
shares until the earlier of:
(i) the expiration of the option term; or
(ii) the expiration of the one (l) year period measured from the
effective date of the Involuntary Termination. In addition, the Plan Administrator may
provide that one or more of the Company's outstanding repurchase rights with respect to
shares held by the Optionee at the time of such Involuntary Termination shall immediately
terminate on an accelerated basis, and the shares subject to those terminated rights shall
accordingly vest at that time.
G. The portion of any Incentive Option accelerated in connection with a
Corporate Transaction shall remain exercisable as an Incentive Option only to the extent
the applicable One Hundred Thousand ($100,000) Dollar limitation is not exceeded. To the
extent such dollar limitation is exceeded, the accelerated portion of such option shall be
exercisable as a Non-Statutory Option under the Federal tax laws.
H. The grant of options under the Plan shall in no way affect the right
of the Company to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all
or any part
of its business or assets.
IV. CANCELLATION AND REGRANT OF OPTIONS
The Plan Administrator shall have the authority to effect, at any time
and from time to time, with the consent of the affected option holders, the cancellation
of any or all outstanding options under the Option Grant Program and to grant in
substitution new options covering the same or different number of shares of Common Stock
but with an exercise price per share based on the Fair Market Value per share of Common
Stock on the new grant date.
ARTICLE THREE
STOCK ISSUANCE PROGRAM
I. STOCK ISSUANCE TERMS
Shares of Common Stock may be issued under the Stock Issuance Program
through direct and immediate issuances without any intervening option grants. Each such
stock issuance shall be evidenced by a Stock Issuance Agreement, which complies with the
terms specified below.
A.Purchase Price.
1. The purchase price per share shall be fixed by the Plan
Administrator and may be less than, equal to or greater than the Fair Market Value per
share of Common Stock on the issue date.
2. Subject to the provisions of Section I of Article Four, shares of
Common Stock may be issued under the Stock Issuance Program for any of the following items
of consideration which the Plan Administrator may deem appropriate in each individual
instance:
(i)
cash, check or certified check payable to
the Company, in the Company's discretion; or
(ii) past services rendered to the Company (or any Parent or
Subsidiary).
B.Vesting Provisions
1. Shares of Common Stock issued under the Stock Issuance Program may,
in the discretion of the Plan Administrator, be fully and immediately vested upon issuance
or may vest in one or more installments over the Participant's period of Service or upon
attainment of specified performance objectives.
2. Any new, substituted or additional securities or other property
(including money paid other than as a regular cash dividend) which the Participant may
have the right to receive with respect to the Participant's unvested shares of Common
Stock by reason of any stock dividend, stock split, recapitalization, combination of
shares, exchange of shares or other change affecting the outstanding Common Stock as a
class without the Company's receipt of consideration shall be issued subject to:
(i) the same vesting requirements applicable to the Participant's
unvested shares of Common Stock; and
(ii) such escrow arrangements as the Plan Administrator shall deem
appropriate.
3. The Participant shall have full stockholder rights with respect to
any shares of Common Stock issued to the Participant under the Stock Issuance Program,
whether or not the Participant's interest in those shares is vested. Accordingly, the
Participant shall have the right to vote such shares and to receive any regular cash
dividends paid on such shares.
4. Should the Participant cease to remain in Service while holding one
or more unvested shares of Common Stock issued under the Stock Issuance Program or should
the performance objectives not be attained with respect to one or more such unvested
shares of Common Stock, then those shares shall be immediately surrendered to the Company
for cancellation, and the Participant shall have no further stockholder rights with
respect to those shares. To the extent the surrendered shares were previously issued to
the Participant for consideration paid in cash or cash equivalent (including the
Participant's purchase-money indebtedness), the Company shall repay to the Participant the
cash consideration paid for the surrendered shares and shall cancel the unpaid principal
balance of any outstanding purchase money note of the Participant attributable to the
surrendered shares.
5. The Plan Administrator may in its discretion waive the surrender and
cancellation of one or more unvested shares of Common Stock (or other assets attributable
thereto) which would otherwise occur upon the non-completion of the vesting schedule
applicable to such shares. Such waiver shall result in the immediate vesting of the
Participant's interest in the shares of Common Stock as to which the waiver applies. Such
waiver may be effected at any time, whether before or after the Participant's cessation of
Service or the attainment or non-attainment of the applicable performance objectives.
II. CORPORATE TRANSACTION
A. All of the outstanding repurchase rights under the Stock Issuance
Program shall terminate automatically, and all the shares of Common Stock subject to those
terminated rights shall immediately vest in fall, in the event of any Corporate
Transaction, except to the extent:
(i) those repurchase rights are assigned, to the successor Company (or
parent thereof) in connection with such Corporate Transaction; or
(ii) such accelerated vesting is precluded by other limitations imposed
by the Plan Administrator at the time the repurchase right is issued.
B. The Plan Administrator shall have the discretionary authority,
exercisable either at the time the unvested shares are issued or any time while the
Company's repurchase rights with respect to those shares remain outstanding, to provide
that those rights shall automatically terminate on an accelerated basis, and the shares of
Common Stock subject to those terminated rights shall immediately vest, in the event the
Participant's Service should subsequently terminate by reason of an Involuntary
Termination within a designated period (not to exceed eighteen (18) months) following the
effective date of any Corporate Transaction in which those repurchase rights are assigned
to the successor Company (or parent thereof).
III. SHARE ESCROW/LEGENDS
Unvested shares may, in the Plan Administrator's discretion, be held in
escrow by the Company until the Participant's interest in such shares vests or may be
issued directly to the Participant with restrictive legends on the certificates evidencing
those unvested shares.
ARTICLE FOUR
MISCELLANEOUS
I.     FINANCING
The Plan Administrator may permit any Optionee or Participant to pay
the option exercise price under the Option Grant Program or the purchase price for shares
issued under the Stock Issuance program by delivering a full recourse, interest bearing
promissory note payable in one or more installments and secured by the purchased shares.
The terms of any such promissory note (including the interest rate and the terms of
repayment) shall be established by the Plan Administrator in its sole discretion. In no
event shall the maximum credit available to the Optionee or Participant exceed the sum of:
(i) the aggregate option exercise price or purchase price payable for
the purchased shares; plus
(ii)
any Federal, state and local income and
employment tax liability incurred by the Optionee or the Participant in connection with
the option exercise or share purchase.
II. EFFECTIVE DATE AND TERM OF THE PLAN
A. The Plan shall become effective when adopted by the Board. Subject
to such limitation, the Plan Administrator may grant options and issue shares under the
Plan at any time after the effective date of the Plan and before the date fixed herein for
termination of the Plan.
B. The Plan shall terminate upon the earliest of:
(i) the expiration of the ten (10) year period measured from the date
the Plan is adopted by the Board;
(ii) the date on which all shares available for issuance under the Plan
shall have been issued as fully-vested shares; or
(iii) the termination of all outstanding options in connection with an
Corporate Transaction. All options and unvested stock issuances outstanding at the time of
a clause (i) termination event shall continue to have full force and effect in accordance
with the provisions of the documents evidencing such options or issuances.
III. AMENDMENT OF THE PLAN
A. The Board shall have complete and exclusive power and authority to
amend or modify the Plan in any or all respects. However, no such amendment or
modification shall adversely affect any rights and obligations with respect to options or
unvested stock issuances at the time outstanding under the Plan, unless the Optionee or
the Participant consents to such amendment or modification. In addition, certain
amendments may require stockholder approval pursuant to applicable laws or regulations.
B. Options to purchase shares of Common Stock may be granted under the
Option Grant Program and shares of Common Stock may be issued under the Stock Issuance
Program which are in each instance in excess of the number of shares
then available for issuance under the Plan, provided any excess shares actually issued
under those programs shall be held in escrow until there is obtained stockholder approval
of the Plan. If such stockholder approval is not obtained within twelve (12) months after
the date the first such excess grants or issuances are made, then: (i)
any
unexercised options granted on the basis of such excess shares shall terminate and cease
to be outstanding; and
(ii) the Company shall promptly refund to the Optionees and the
Participants the exercise or purchase price paid for any excess shares issued under the
Plan and held in escrow, together with interest (at the applicable Treasury Bill Rate) for
the period the shares were held in escrow, and such shares shall thereupon be
automatically canceled and cease to be outstanding.
IV. USE OF PROCEEDS
Any cash proceeds received by the Company from the sale of shares of
Common Stock under the Plan shall be used for general corporate purposes.
V. WITHHOLDING
The Company's obligation to deliver shares of Common Stock upon the
exercise of any options or upon the issuance or vesting of any shares issued under the
Plan shall be subject to the satisfaction of all applicable Federal, state and local
income and employment tax withholding requirements.
VI. REGULATORY APPROVALS
The implementation of the Plan, the granting of any option under the
Plan and the issuance of any shares of Common Stock either:
(i) upon the exercise of any option; or
(ii) under the Stock Issuance Program;
shall be subject to the Company's procurement of all approvals and
permits required by regulatory authorities having jurisdiction over the Plan, the options
granted under it and the shares of Common Stock issued pursuant to it.
VII. NO EMPLOYMENT OR SERVICE RIGHTS
Nothing in the Plan shall confer upon the Optionee or the Participant
any right to continue in Service for any period of specific duration or interfere with or
otherwise restrict in any way the rights of the Company (or any Parent or Subsidiary
employing or retaining such person) or of the Optionee or the Participant, which rights
are hereby expressly reserved by each, to terminate such person's Service at any time for
any reason, with or without cause.
APPENDIX
The following definitions shall be in effect under the Plan:
A.
Board
shall mean the Company's Board of Directors.
B.
Code
shall mean the Internal Revenue Code of 1986, as
amended.
C.
Committee
shall mean a committee of one (1) or more Board
members appointed by the Board to exercise one or more administrative functions under the
Plan.
D.
Common Stock
shall mean the Company's common stock.
E.
Corporate Transaction
shall mean either of the following
stockholder approved transactions to which the Company is a party:
(i)
a merger or consolidation in which
securities possessing more than fifty percent (50%) of the total combined voting power of
the Company's outstanding securities are transferred to a person or persons different from
the persons holding those securities immediately prior to such transaction; or
(ii) the sale, transfer or other disposition of all or substantially
all of the Company's assets in complete liquidation or dissolution of the Company.
F.
Company
shall mean Royal Finance, Inc., a
Florida corporation, and any successor Company which shall by appropriate action adopt the
Plan.
G.
Employee
shall mean an individual who is in
the employ of the Company (or any Parent or Subsidiary), subject to the control and
direction of the employer entity as to both the work to be performed and the manner and
method of performance.
H.
Exercise Date
shall mean the date on which the Company shall
have received written notice of the option exercise.
I.
Fair Market Value
per share of Common Stock on any relevant
date shall be determined in accordance with the following provisions:
(i)
If the Common Stock is at the time traded
on the NASDAQ National Market, then the Fair Market Value shall be the closing bid price
per share of Common Stock on the date in question, as such price is reported by the
National Association of Securities Dealers on the NASDAQ National Market. If there is no
closing bid price for the Common Stock on the date in question, then the Fair Market Value
shall be the closing selling price on the last preceding date for which such quotation
exists;
(ii) If the Common Stock is at the time listed on any Stock Exchange,
then the Fair Market Value shall be the closing price per share of Common Stock on the
date in question on the Stock Exchange determined by the Plan Administrator to be the
primary market for the Common Stock, as such price is officially quoted in the composite
tape of transactions on such exchange. If there is no closing selling price for the Common
Stock on the date in question, then the Fair Market Value shall be the closing price on
the last preceding date for which such quotation exists; and
(iii)    If the Common Stock is at the time neither
listed on any Stock Exchange nor traded on the NASDAQ National Market, then the Fair
Market Value shall be determined by the Plan Administrator after taking into account such
factors as the Plan Administrator shall deem appropriate including any quotations and
closing bid price with respect to the shares on the OTC: Bulletin Board or the "Pink
Sheets" if applicable or such other.
J.
Incentive Option
shall mean an option which satisfies the
requirements Code Section 422 of the Code.
K.
Involuntary Termination
shall mean the termination of the
Service of any individual which occurs by reason of:
(i)
such individual's involuntary dismissal
or discharge by the Company for reasons other than Misconduct, or
(ii) such individual's voluntary resignation following: (a) a change in
his or her position with the Company which materially reduces his or her duties and
responsibilities or the level of management to which he or she reports; (b) a reduction in
his or her level of compensation (including base salary, fringe benefits and target
bonuses under any corporate-performance based bonus or incentive programs) by more than
fifteen percent (15%); or (c) a relocation of such individual's place of employment by
more than fifty (50) miles, provided and only if such change, reduction or relocation. is
effected without the individual's consent.
L.
Misconduct
shall mean the commission of any
act of fraud, embezzlement or dishonesty by the Optionee or Participant, any unauthorized
use or disclosure by such person of confidential information or trade secrets of the
Company (or any Parent or Subsidiary), or any other intentional misconduct by such person
adversely affecting the business or affairs of the Company (or any Parent or Subsidiary)
in a material manner. The foregoing definition shall not be deemed to be inclusive of all
the acts or omissions which the Company (or any Parent or Subsidiary) may consider as
grounds for the dismissal or discharge of any Optionee, Participant or other person in the
Service of the Company (or any Parent or Subsidiary).
M.
Exchange Act
shall mean the Securities Exchange Act of 1934.
N.
Non-Statutory Option
shall mean an option not intended to
satisfy the requirements of Code Section 422.
O.
Option Grant Program
shall mean the option grant program in
effect under the Plan.
P.
Optionee
shall mean any person to whom an option is granted
under the Plan.
Q.
Parent
shall mean any Company (other than
the Company) in an unbroken chain of companies ending with the Company, provided each:
Company in the unbroken chain (other than the Company) owns, at the time of the
determination, stock possessing fifty percent (50%) or more of the total combined voting
power of all classes of stock in one of the other companies in such chain.
R.
Participant
shall mean any person who is issued shares of
Common Stock under the Stock Issuance Program.
S.
Permanent Disability
shall mean the
inability of the Optionee or the Participant to engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment which is expected to
result in such person's death or to continue for a period of twelve (12) consecutive
months or more.
T.
Plan
shall mean the Company's 2001 Stock Option Plan, as set
forth in this document.
U.
Plan Administrator
shall mean either the Board or the,
Committee acting in its capacity as administrator of the Plan.
V.
Service
shall mean the provision of services to the Company
(or any Parent or Subsidiary) by a person in the capacity of an Employee, a non-employee
member of the board of directors or a consultant or independent advisor, except to the
extent otherwise specifically provided in the documents evidencing the option grant or
stock issuance.
W.
Stock Exchange
shall mean either the American Stock Exchange
or the New York Stock Exchange.
X.
Stock Issuance Agreement
shall mean the agreement entered
into by the Company and the Participant at the time of issuance of shares of Common Stock
under the Stock Issuance Program.
Y.
Stock Issuance Program
shall mean the stock issuance program
in effect under the Plan.
Z.
Subsidiary
shall mean any Company (other than the Company) in
an unbroken chain of companies beginning with the Company, provided each Company (other
than the last Company) in the unbroken chain owns, at the time of the determination, stock
possessing fifty percent (50%) or more of the total combined voting power of all classes
of stock in one of the other companies in such chain.
AA.
10% Stockholder
shall mean the owner of stock (as determined
under Code Section 424(d)) possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company (or any Parent or Subsidiary).
Exhibit 5
Thomas J. Craft, Jr., P.A.
301 Clematis Street, Suite
    3000
The Galleria Building
West Palm Beach, FL 33401
Phone: (561) 651-7336 Fax:
    (561) 655-3202
March 6, 2001
U.S. Securities
    and Exchange Commission
Washington, DC
    20549
450 Fifth
    Street, NW
Re:
Royal Finance Inc.
Commission File No. 0-26307
Registration Statement on Form S-8
Gentlemen:
I have been requested by Royal Finance Inc. (the
"Registrant") to furnish an opinion as to matters hereinafter set forth in
connection with this registration statement on Form S-8 under the Securities Act of 1933,
as amended (the "Act"), covering a total of 150,000 shares of common stock,
which shares are being issued in connection with the Company's 2001 Employment Stock
Option Plan (the "Plan").
In connection with this opinion, I have reviewed the filings of the
Registrant incorporated by reference in this registration statement, and have determined
that the Registrant is current in its reporting requirements under the Securities Exchange
Act of 1934. I have also reviewed the minutes of the board of directors' special
meeting dated March 1, 2001, which authorizes and directs the preparation and filing of
this registration statement. I have further determined that the shares have been legally
issued, fully paid and non-assessable. Further, the Registrant has duly authorized the
issuance of the shares and the filing of this registration statement on Form S-8 under the
Act.
I hereby consent to the inclusion of this opinion in the registration statement on Form
S-8 being duly filed with the Securities and Exchange Commission.
Very truly yours,
Thomas J. Craft, Jr., P.A.
/s/ Thomas J. Craft, Jr., P.A.
EXHIBIT 23.1
(Contained in Opinion-Exhibit)
EXHIBIT 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
I previously issued my report, accompanying the financial statements of
the Registrant for the year ended December 31, 1999, dated April 3, 2000, filed with the
Registrant's Form 10-KSB. I hereby consent to the incorporation by reference of said
report in the Registration Statement on Form S-8 filed with the SEC by the Registrant.
MARK ESCOFFERY, P.A.
/s/ Mark Escoffery
Palm Beach Gardens, Florida
March 6, 2001