Exhibit 10.1

THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
 
Original Issue Date: August 13, 2010
 
$_______________

8% DEBENTURE
DUE August 13, 2013

THIS DEBENTURE is one of a series of duly authorized and validly issued 8%
Debentures of American Antiquities Incorporated , an Illinois corporation, (the
“Company”), having its principal place of business at 777 E. Atlantic Ave,
#C2-264, Delray Beach, FL 33483, designated as its 8% Debenture due August 13,
2013 (this debenture, the “Debenture” and, collectively with the other
debentures of such series, the “Debentures”).

FOR VALUE RECEIVED, the Company promises to pay to [ ________________________ ]
or its registered assigns (the “Holder”), or shall have paid pursuant to the
terms hereunder, the principal sum of $__________ on  August 13, 2013 (the
“Maturity Date”) or such earlier date as this Debenture is required or permitted
to be repaid as provided hereunder, and to pay interest to the Holder on the
aggregate unconverted and then outstanding principal amount of this Debenture in
accordance with the provisions hereof.

  This Debenture is subject to the following additional provisions:

Section 1.      Definitions.  For the purposes hereof, in addition to the terms
defined elsewhere in this Debenture, (a) capitalized terms not otherwise defined
herein shall have the meanings set forth in the Purchase Agreement and (b) the
following terms shall have the following meanings:

 
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 “Bankruptcy Event” means any of the following events: (a) the Company or
any  subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X)
thereof commences a case or other proceeding under any bankruptcy,
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction relating to the
Company or any  subsidiary thereof; (b) there is commenced against the Company
or any  subsidiary thereof any such case or proceeding that is not dismissed
within 60 days after commencement; (c) the Company or any  subsidiary thereof is
adjudicated insolvent or bankrupt or any order of relief or other order
approving any such case or proceeding is entered; (d) the Company or
any  subsidiary thereof suffers any appointment of any custodian or the like for
it or any substantial part of its property that is not discharged or stayed
within 60 calendar days after such appointment; (e) the Company or
any  subsidiary thereof makes a general assignment for the benefit of creditors;
(f) the Company or any  subsidiary thereof calls a meeting of its creditors with
a view to arranging a composition, adjustment or restructuring of its debts; or
(g) the Company or any  subsidiary thereof, by any act or failure to act,
expressly indicates its consent to, approval of or acquiescence in any of the
foregoing or takes any corporate or other action for the purpose of effecting
any of the foregoing.

“Business Day” means any day except Saturday, Sunday, any day which shall be a
federal legal holiday in the United States or any day on which banking
institutions in the State of New York are authorized or required by law or other
governmental action to close.

“Change of Control Transaction” means the occurrence after the date hereof of
any of (i) an acquisition after the date hereof by an individual or legal entity
or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act)
of effective control (whether through legal or beneficial ownership of capital
stock of the Company, by contract or otherwise) of in excess of 50% of the
voting securities of the Company (other than by means of conversion or exercise
of the Debentures and the Securities issued together with the Debentures), or
(ii) the Company merges into or consolidates with any other Person, or any
Person merges into or consolidates with the Company and, after giving effect to
such transaction, the stockholders of the Company immediately prior to such
transaction own less than 50% of the aggregate voting power of the Company or
the successor entity of such transaction, or (iii) the Company sells or
transfers all or substantially all of its assets to another Person and the
stockholders of the Company immediately prior to such transaction own less than
50% of the aggregate voting power of the acquiring entity immediately after the
transaction, or (iv) a replacement at one time or within a one year period of
more than one-half of the members of the Company’s board of directors which is
not approved by a majority of those individuals who are members of the board of
directors on the date hereof (or by those individuals who are serving as members
of the board of directors on any date whose nomination to the board of directors
was approved by a majority of the members of the board of directors who are
members on the date hereof), or (v) the execution by the Company of an agreement
to which the Company  is a party or by which it is bound, providing for any of
the events set forth in clauses (i) through (iv) above.

“Debenture Register” has the meaning set forth in Section 3(b).

“Event of Default” has the meaning set forth in Section 7.

 
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“Exchange Act” means the Securities Exchange Act of 1934.

“Interest Notice Period” has the meaning set forth in Section 3(a).

“Interest Payment Date” has the meaning set forth in Section 3(a).

“Late Fees” has the meaning set forth in Section 3(c).

 “Optional Redemption” has the meaning set forth in Section 6(a).

“Optional Redemption Amount” has the meaning set forth in Section 5(a).

“Optional Redemption Date” has the meaning set forth in Section 5(a).

“Optional Redemption Notice” has the meaning set forth in Section 5(a).

“Optional Redemption Notice Date” has the meaning set forth in Section 5(a).

“Original Issue Date” means the date of the first issuance of the Debentures,
regardless of any transfers of any Debenture and regardless of the number of
instruments which may be issued to evidence such Debentures.

“Permitted Indebtedness” means (a) the Indebtedness existing on the Original
Issue Date, (b) lease obligations and purchase money indebtedness incurred in
connection with the acquisition of capital assets and lease obligations with
respect to newly acquired or leased assets (c) indebtedness that (i) is
expressly subordinate to the Debentures pursuant to a written subordination
agreement and (ii) matures at a date later than the Maturity Date and (d)
indebtedness in an amount not to exceed the principal sum of U.S. $500,000
incurred in the ordinary course of business.

“Permitted Lien” means the individual and collective reference to the following:
(a) Liens for taxes, assessments and other governmental charges or levies not
yet due or Liens for taxes, assessments and other governmental charges or levies
being contested in good faith and by appropriate proceedings for which adequate
reserves (in the good faith judgment of the management of the Company) have been
established in accordance with GAAP; (b) Liens imposed by law which were
incurred in the ordinary course of the Company’s business, such as carriers’,
warehousemen’s and mechanics’ Liens, statutory landlords’ Liens, and other
similar Liens arising in the ordinary course of the Company’s business, and
which (x) do not individually or in the aggregate materially detract from the
value of such property or assets or materially impair the use thereof in the
operation of the business of the Company and its consolidated Subsidiaries or
(y) are being contested in good faith by appropriate proceedings, which
proceedings have the effect of preventing for the foreseeable future the
forfeiture or sale of the property or asset subject to such Lien; and (c) Liens
incurred in connection with Permitted Indebtedness.

 
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“Purchase Agreement” means the Subscription Agreement, dated as of August 13,
2010, among the Company and the original Holders, as amended, modified or
supplemented from time to time in accordance with its terms.

“Securities Act” means the Securities Act of 1933.

“Trading Day” means a day on which the principal Trading Market is open for
business.

“Trading Market” means the following markets or exchanges on which the Common
Stock is listed or quoted for trading on the date in question: the American
Stock Exchange, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq
Global Select Market, the New York Stock Exchange or the OTC Bulletin Board.

“Transaction Documents” means the Purchase Agreement and any other agreements
entered into in connection therewith.

Section 2.  Payments

a)           Principal Payments.  The principal amount of this Debenture shall
be payable on the Maturity Date.

b)           US Dollars.  All payments of principal and Interest shall be made
in United States dollars, without right of setoff.

c)           Payment of Interest   The Company shall pay interest to the Holder
on the aggregate unconverted and then outstanding principal amount of this
Debenture at the rate of 8% per annum, payable quarterly on January 1, April 1,
July 1 and October 1, beginning on the first January 1 after the Original Issue
Date, and on the Maturity Date (each such date, an “Interest Payment Date”) (if
any Interest Payment Date is not a Business Day, then the applicable payment
shall be due on the next succeeding Business Day), in cash or, at the Company’s
election, in common stock of the Company.  For purposes of the payment of
interest in shares of the Company’s common stock, such shares shall be valued at
$0.50 per share (adjusted to reflect subsequent stock dividends, stock splits,
combinations or recapitalizations).

d)           Interest Calculations. Interest shall be calculated on the basis of
a 365-day year, and shall accrue daily commencing on the Original Issue Date
until payment in full of the outstanding principal, together with all accrued
and unpaid interest, and other amounts which may become due hereunder, has been
made.    Interest hereunder will be paid to the Person in whose name this
Debenture is registered on the records of the Company regarding registration and
transfers of this Debenture (the “Debenture Register”).

 
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e)           Late Fee.  All overdue accrued and unpaid interest to be paid
hereunder shall entail a late fee at an interest rate equal to the lesser of 14%
per annum or the maximum rate permitted by applicable law (“Late Fees”) which
shall accrue daily from the date such interest is due hereunder through and
including the date of payment in full.

f)           Prepayment.  The Company may not prepay all or any portion of the
principal amount of this Debenture at any time prior to the Maturity Date
without the prior consent of the Holder as set forth in Section 5 of this
Debenture.

g)           Payment for Taxes.  Any and all payments by the Company for
interest to or for the account of the Holder under this Debenture shall be made
free and clear of and without deduction for any U.S. taxes, except as required
by applicable law.  If the Company shall be required by any applicable law to
deduct any Taxes from or in respect of any interest payable under this Debenture
to the Holder, (i)  the Company shall make such deductions, (ii) the Company
shall pay the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law, and (iii) as promptly as
practicable after the date of such payment, the Company shall furnish to the
Holder the original or a certified copy of a receipt evidencing payment thereof.

Section 3.            Conversion.
 
a)           Conversion at the Option of Holder.  All or a portion of the
outstanding principal amount of and all accrued unpaid interest under this
Debenture shall be convertible at the option of the Holder into that number of
shares of the Company’s common stock as is determined by dividing such principal
amount and accrued and unpaid interest by $.50 per share (as adjusted to reflect
subsequent stock dividends, stock splits, combinations or recapitalizations, the
“Conversion Price”).  Before Holder shall be entitled to convert this Debenture
into shares of common stock under this Section 3(a), it shall surrender this
Debenture, duly endorsed, at the office of the Company and shall give written
notice to the Company at its principal corporate office, of the election to
convert the same pursuant to this Section, and shall state therein the amount of
the unpaid principal amount of this Debenture to be converted and the name or
names in which the certificate or certificates for shares of Common Stock are to
be issued.  The Company shall, as soon as practicable thereafter, issue and
deliver at such office to Holder a certificate or certificates for the number of
shares of common stock to which Holder shall be entitled upon conversion
(bearing such legends as are required by  applicable state and federal
securities laws in the opinion of counsel to the Company), together with a
replacement Debenture (if any principal amount is not converted) and any other
securities and property to which Holder is entitled upon such conversion under
the terms of this Debenture.  The conversion shall be deemed to have been made
immediately prior to the close of business on the date of the surrender of this
Debenture, and the Person or Persons entitled to receive the shares of Common
Stock upon such conversion shall be treated for all purposes as the record
Holder or Holders of such shares of Common Stock as of such date.  This
Debenture does not by itself entitle the Holder to any voting rights or other
rights as a shareholder of the Company. In the absence of conversion of this
Debenture, no provisions of this Debenture, and no enumeration herein of the
rights or privileges of the Holder, shall cause the Holder to be a shareholder
of the Company for any purpose.

 
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b)           Fractional Shares; Interest; Effect of Conversion. No fractional
shares shall be issued upon conversion of this Debenture.  In lieu of the
Company issuing any fractional shares to Holder upon the conversion of this
Debenture, the Company shall pay to Holder an amount equal to the product
obtained by multiplying the conversion price by the fraction of a share not
issued pursuant to the previous sentence.  Upon conversion of this Debenture in
full and the payment of any amounts specified in this Section 3(b), the Company
shall be forever released from all its obligations and liabilities under this
Debenture.
 
c)           Adjustment Provisions. The number and character of shares of common
stock issuable upon conversion of this Debenture (or any shares of stock or
other securities or property at the time receivable or issuable upon conversion
of this Debenture) and the Conversion price therefore, are subject to adjustment
upon occurrence of the following events between the date this Debenture is
issued and the date it is converted:

i)      Adjustment for Stock Splits, Stock Dividends, Recapitalizations, etc.
If the conversion is made under Section 3(a) above, the Conversion Price of this
Debenture and the number of shares of stock issuable upon conversion of this
Debenture (or any shares of stock or other securities at the time issuable upon
conversion of this Debenture) shall each be proportionally adjusted to reflect
any stock dividend, stock split, reverse stock split, reclassification,
recapitalization or other similar event affecting the number of outstanding
shares of Common Stock (or such other stock or securities).

    ii)           Adjustment for Other Dividends and Distributions.  In case the
Company shall make or issue, or shall fix a record date for the determination of
eligible holders entitled to receive, a dividend or other distribution payable
with respect to the capital stock that is payable in (a) securities of the
Company (other than issuances with respect to which adjustment is made under
Section 3(c)(i), or (b) assets (other than cash dividends paid or payable solely
out of retained earnings), then, and in each such case, the Holder, upon
conversion of this Debenture at any time after the consummation, effective date
or record date of such event, shall receive, in addition to the shares of Common
Stock issuable upon such exercise prior to such date, the securities or such
other assets of the Company to which the Holder would have been entitled upon
such date if the Holder had converted this Debenture immediately prior thereto
(all subject to further adjustment as provided in this Debenture)

 
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    iii)           Conversion of Stock.  In case all the authorized Common Stock
of the Company is converted, pursuant to the Company’s Certificate of
Incorporation, into other securities or property or the Common Stock otherwise
ceases to exist, then, in such case, the Holder, upon conversion of this
Debenture at any time after the date on which the Common Stock is so converted
or ceases to exist (the “Termination Date”), shall receive, in lieu of the
number of shares of Common Stock that would have been issuable upon such
exercise immediately prior to the Termination Date (the “Former Number of Shares
of Common Stock”), the stock and other securities and property which the Holder
would have been entitled to receive upon the Termination Date if the Holder had
converted this Debenture with respect to the Former Number of Shares of Common
Stock immediately prior to the Termination Date (all subject to further
adjustment as provided in this Debenture).

    iv)           Notice of Adjustments. The Company shall promptly give written
notice of each adjustment or readjustment of the Conversion Price or the number
of shares of Common Stock or other securities issuable upon conversion of this
Debenture. The notice shall describe the adjustment or readjustment and show in
reasonable detail the facts on which the adjustment or readjustment is based

    v)            No Change Necessary. The form of this Debenture need not be
changed because of any adjustment in the Conversion Price or in the number of
shares of Common Stock issuable upon its conversion

d)        Reservation of Stock. If at any time the number of shares of Common
Stock or other securities issuable upon conversion of this Debenture shall not
be sufficient to effect the conversion of this Debenture, the Company will take
such corporate action as may, in the opinion of its counsel, be necessary to
increase its authorized but unissued shares of Common Stock or other securities
issuable upon conversion of this Debenture as shall be sufficient for such
purpose

Section 4.             Registration of Transfers and Exchanges.

a)           Different Denominations. This Debenture is exchangeable for an
equal aggregate principal amount of Debentures of different authorized
denominations, as requested by the Holder surrendering the same.  A service
charge may be payable for such registration of exchange.

b)           Investment Representations. This Debenture has been issued subject
to certain investment representations of the original Holder set forth in the
Purchase Agreement and may be transferred or exchanged only in compliance with
the Purchase Agreement and applicable federal and state securities laws and
regulations.

 
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c)           Reliance on Debenture Register. Prior to due presentment for
transfer to the Company of this Debenture, the Company and any agent of the
Company may treat the Person in whose name this Debenture is duly registered on
the Debenture Register as the owner hereof for the purpose of receiving payment
as herein provided and for all other purposes, whether or not this Debenture is
overdue, and neither the Company nor any such agent shall be affected by notice
to the contrary.

Section 5.           Company Right To Prepay.  Holders’ Right to Demand
Prepayment.

a)           Optional Prepayment at Election of Company.  Subject to the
provisions of Section 2(f), at any time after the Original Issuer Date, the
Company may deliver a notice to the Holder (an “Optional Redemption Notice” and
the date such notice is deemed delivered hereunder, the “Optional Redemption
Notice Date”) of its election to prepay all, or less than all (such amount the
“Optional Redemption Amount”), of the then outstanding principal amount of this
Debenture for cash in an amount equal to the Optional Redemption Amount on the
5thth Trading Day following the Optional Redemption Notice Date (such date, the
“Optional Redemption Date” and such redemption, the “Optional Redemption”).  The
Optional Redemption Amount is payable in full on the Optional Redemption Date.
 
b)           Prepayment Procedure.  The payment of cash pursuant to an Optional
Redemption shall be payable on the Optional Redemption Date.  If any portion of
the payment pursuant to an Optional Redemption shall not be paid by the Company
by the applicable due date, interest shall accrue thereon at an interest rate
equal to the lesser of 8% per annum or the maximum rate permitted by applicable
law until such amount is paid in full.
 
c)      Holder’s Right to Demand Prepayment. Pursuant to the rights granted to
Holder upon the occurrence of an Event of Default as set forth under Section 7
below, Holder has the right to require that the Company pay all principal and
accrued interest on the Debentures.
 
Section 6.           Negative Covenants. As long as any portion of this
Debenture remains outstanding, unless the holders of at least 66% in principal
amount of the then outstanding Debentures shall have otherwise given prior
written consent, the Company shall not and shall not permit any of its
subsidiaries (whether or not a subsidiary on the Original Issue Date and whether
or not any subsidiary is wholly owned or only majority owned) to, directly or
indirectly:

a)           other than Permitted Indebtedness, enter into, create, incur,
assume, guarantee or suffer to exist any indebtedness for borrowed money of any
kind, including but not limited to, a guarantee, on or with respect to any of
its property or assets now owned or hereafter acquired or any interest therein
or any income or profits therefrom;
 
 
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b)         other than Permitted Liens, enter into, create, incur, assume or
suffer to exist any Liens of any kind, on or with respect to any of its property
or assets now owned or hereafter acquired or any interest therein or any income
or profits therefrom;

c)         amend its charter documents, including, without limitation, its
certificate of incorporation and bylaws, in any manner that materially and
adversely affects any rights of the Holder;

d)         repay, repurchase or offer to repay, repurchase or otherwise acquire
more than a de minimis number of shares of its Common Stock or Common Stock
Equivalents other than as to (a) repurchases of Common Stock or Common Stock
Equivalents of departing officers and directors of the Company, provided that
such repurchases shall not exceed an aggregate of $500,000 for all officers and
directors during the term of this Debenture; or

e)          pay cash dividends or distributions of any kind on any equity
securities of the Company, whether such securities are outstanding on the date
hereof or issued at any time that the principal an interest on this Debenture
remains unpaid;

f)           enter into any transaction with any Affiliate of the Company which
would be required to be disclosed in any public filing with the Commission,
unless such transaction is made on an arm’s-length basis and expressly approved
by a majority of the disinterested directors of the Company (even if less than a
quorum otherwise required for board approval); or

g)          enter into any agreement with respect to any of the foregoing.

Section 7.            Events of Default.

a)     “Event of Default” means, wherever used herein, any of the following
events (whatever the reason for such event and whether such event shall be
voluntary or involuntary or effected by operation of law or pursuant to any
judgment, decree or order of any court, or any order, rule or regulation of any
administrative or governmental body):
 
 i.           any default in the payment of the principal amount or interest on
any Debenture, as and when the same shall become due and payable, which default
is not cured within 3 Trading Days;

 
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ii.        the Company shall fail to observe or perform any other covenant or
agreement contained in the Debentures or the Purchase Agreement which failure is
not cured, if possible to cure, within 10 Trading Days after notice of such
failure sent by the Holder;
 
iii.       the Company shall be subject to a Bankruptcy Event; or
 
iv.       the Company shall be a party to any Change of Control Transaction.
 
 b)                      Remedies Upon Event of Default.
 
   (i)                    If any Event of Default occurs, subject to Section
7(b)(ii), the outstanding principal amount of this Debenture, plus accrued but
unpaid interest, shall become, at the Holder’s election, immediately due and
payable in cash.  Upon the payment in full of the outstanding principal amount
of this Debenture, plus accrued but unpaid interest, the Holder shall promptly
surrender this Debenture to or as directed by the Company.  In connection with
such acceleration described herein, the Holder need not provide, and the Company
hereby waives, any presentment, demand, protest or other notice of any kind, and
the Holder may immediately and without expiration of any grace period enforce
any and all of its rights and remedies hereunder and all other remedies
available to it under applicable law.  Such acceleration may be rescinded and
annulled by Holder at any time prior to payment hereunder and the Holder shall
have all rights as a holder of the Debenture until such time, if any, as the
Holder receives full payment pursuant to this Section 7(b).  No such rescission
or annulment shall affect any subsequent Event of Default or impair any right
consequent thereon.

   (ii)    The Holders, of 66% of the outstanding principal amount of
Debentures, shall have the right to waive any Event of Default, except for the
obligation to pay principal or interest.

 
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Section 8.            Miscellaneous.

a)           Notices.  Any and all notices or other communications or deliveries
to be provided by the Holder hereunder, including, without limitation, any
notice of transfer by the Holder, shall be in writing and delivered personally,
by facsimile, or sent by a nationally recognized overnight courier service,
addressed to the Company, at the address set forth on the signature page to this
Debenture, or such other facsimile number or address as the Company may specify
for such purpose by notice to the Holder delivered in accordance with this
Section 8.  Any and all notices or other communications or deliveries to be
provided by the Company hereunder shall be in writing and delivered personally,
by facsimile, or sent by a nationally recognized overnight courier service
addressed to each Holder at the facsimile number or address of such Holder
appearing on the books of the Company, or if no such facsimile number or address
appears, at the principal place of business of the Holder.  Any notice or other
communication or deliveries hereunder shall be deemed given and effective on the
earliest of (i) the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile number specified in this Section 8
prior to 5:30 p.m. (New York City time), (ii) the date immediately following the
date of transmission, if such notice or communication is delivered via facsimile
at the facsimile number specified in this Section 8 between 5:30 p.m. (New York
City time) and 11:59 p.m. (New York City time) on any date, (iii) the second
Business Day following the date of mailing, if sent by nationally recognized
overnight courier service, or (iv) upon actual receipt by the party to whom such
notice is required to be given.

b)           Absolute Obligation. Except as expressly provided herein, no
provision of this Debenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of, and accrued
interest, as applicable, on this Debenture at the time, place, and rate, and in
the coin or currency, herein prescribed.  This Debenture is a direct debt
obligation of the Company.  This Debenture ranks pari passu with all other
Debentures now or hereafter issued under the terms set forth herein.

c)           Lost or Mutilated Debenture.  If this Debenture shall be mutilated,
lost, stolen or destroyed, the Company shall execute and deliver, in exchange
and substitution for and upon cancellation of a mutilated Debenture, or in lieu
of or in substitution for a lost, stolen or destroyed Debenture, a new Debenture
for the principal amount of this Debenture so mutilated, lost, stolen or
destroyed, but only upon receipt of evidence of such loss, theft or destruction
of such Debenture, and of the ownership hereof, reasonably satisfactory to the
Company.

d)           Governing Law; Arbitration.  All questions concerning the
construction, validity, enforcement and interpretation of this Debenture shall
be governed by and construed and enforced in accordance with the internal laws
of the State of New York, without regard to the principles of conflict of laws
thereof.  Each party agrees that all legal proceedings in equity or at law
concerning the interpretation, enforcement and defense of the transactions
contemplated by any of the Transaction Documents (whether brought against a
party hereto or its respective Affiliates, directors, officers, shareholders,
employees or agents) shall be held in the City of New York, Borough of
Manhattan, United States of America in arbitration before the International
Chamber of Commerce and shall be determined by three arbitrators, and otherwise
held in accordance with its rules.  Each party shall choose one arbitrator and
the two arbitrators shall choose the third.  The third arbitrator so chosen
shall have a background in either corporate finance, banking or law. The
arbitration shall be conducted in the English language and the arbitration award
shall include the allocation of costs and expenses among the parties. The
arbitration ruling shall be final and binding

 
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e)           Waiver.  Any waiver by the Company or the Holder of a breach of any
provision of this Debenture shall not operate as or be construed to be a waiver
of any other breach of such provision or of any breach of any other provision of
this Debenture.  The failure of the Company or the Holder to insist upon strict
adherence to any term of this Debenture on one or more occasions shall not be
considered a waiver or deprive that party of the right thereafter to insist upon
strict adherence to that term or any other term of this Debenture.  Any waiver
by the Company or the Holder must be in writing.

f)           Severability.  If any provision of this Debenture is invalid,
illegal or unenforceable, the balance of this Debenture shall remain in effect,
and if any provision is inapplicable to any Person or circumstance, it shall
nevertheless remain applicable to all other Persons and circumstances.  If it
shall be found that any interest or other amount deemed interest due hereunder
violates the applicable law governing usury, the applicable rate of interest due
hereunder shall automatically be lowered to equal the maximum rate of interest
permitted under applicable law.

g)          Next Business Day.  Whenever any payment or other obligation
hereunder shall be due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day.

h)          Headings.  The headings contained herein are for convenience only,
do not constitute a part of this Debenture and shall not be deemed to limit or
affect any of the provisions hereof.

i)           Assumption.  Any successor to the Company or any surviving entity
in a Change of Control Transaction shall (i) assume, prior to such transaction,
all of the obligations of the Company under this Debenture and the other
Transaction Documents pursuant to written agreements in form and substance
satisfactory to the Holder (such approval not to be unreasonably withheld or
delayed) and (ii) if the successor or surviving entity is a legal entity other
than that of the Company, issue to the Holder a new debenture of such successor
entity evidenced by a written instrument substantially similar in form and
substance to this Debenture, including, without limitation, having a principal
amount and interest rate equal to the principal amount and the interest rate of
this Debenture and having similar ranking to this Debenture, which shall be
satisfactory to the Holder (any such approval not to be unreasonably withheld or
delayed).  The provisions of this Section 8(i) shall apply similarly and equally
to successive Change of Control Transactions and shall be applied without regard
to any limitations of this Debenture.

*********************

 
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IN WITNESS WHEREOF, the Company has caused this Debenture to be duly executed by
a duly authorized officer as of the date first above indicated.
 
American Antiquities Incorporated
 
By: 
   
Name: Dan Wiesel
 
Title: CEO and President
Address for delivery of Notices:
Pet Airways, Inc.
777 E. Atlantic Ave, #C2-264
Delray Beach, FL 33483

 
 
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NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION
OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE
REASONABLY ACCEPTABLE TO THE COMPANY.  THIS SECURITY AND THE SECURITIES ISSUABLE
UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE
MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
 
COMMON STOCK PURCHASE WARRANT

AMERICAN ANTIQUITIES INCORPORATED

Warrant Shares: [_______]
Issue Date: August 13, 2010

 
THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value
received, _____________ (the “Holder”) is entitled, upon the terms and subject
to the limitations on exercise and the conditions hereinafter set forth, at any
time on or after [the date hereof (the “Initial Exercise Date”) and on or prior
to the close of business on the fifth year anniversary of the Initial Exercise
Date (the “Termination Date”) but not thereafter, to subscribe for and purchase
from American Antiquities Incorporated, an Illinois corporation (the “Company”),
up to ______ shares (the “Warrant Shares”) of Common Stock.  The purchase price
of one share of Common Stock under this Warrant shall be equal to the Exercise
Price, as defined in Section 2(b).
 
Section 1.    Definitions.  Capitalized terms used and not otherwise defined
herein shall have the meanings set forth in that certain Subscription Agreement
(the “Purchase Agreement”), dated August 13, 2010, among the Company and the
purchasers signatory thereto.
 
Section 2.    Exercise.
 
a)          Exercise of Warrant.  Exercise of the purchase rights represented by
this Warrant may be made, in whole or in part, at any time or times on or after
the Initial Exercise Date and on or before 5:00 p.m. New York time on the
Termination Date by delivery to the Company of a duly executed facsimile copy of
the Notice of Exercise Form annexed hereto (or such other office or agency of
the Company as it may designate by notice in writing to the registered Holder at
the address of such Holder appearing on the books of the Company); and the
Company shall have received  payment of the aggregate Exercise Price of the
shares thereby purchased by wire transfer or cashier’s check drawn on a United
States bank.  Notwithstanding anything herein to the contrary, the Holder shall
not be required to physically surrender this Warrant to the Company until the
Holder has purchased all of the Warrant Shares available hereunder and the
Warrant has been exercised in full, in which case, the Holder shall surrender
this Warrant to the Company for cancellation on the date the final Notice of
Exercise is delivered to the Company.  Partial exercises of this Warrant
resulting in purchases of a portion of the total number of Warrant Shares
available hereunder shall have the effect of lowering the outstanding number of
Warrant Shares purchasable hereunder in an amount equal to the applicable number
of Warrant Shares purchased.  The Holder and the Company shall maintain records
showing the number of Warrant Shares purchased and the date of such
purchases.  After any exercise, the Holder and the Company shall confirm with
each other the total amount of Warrants remaining to be exercised.  The Company
shall deliver any objection to any Notice of Exercise Form as soon as
practicable following receipt of such notice.  The Holder and any assignee, by
acceptance of this Warrant, acknowledge and agree that, by reason of the
provisions of this paragraph, following the purchase of a portion of the Warrant
Shares hereunder, the number of Warrant Shares available for purchase hereunder
at any given time may be less than the amount stated on the face hereof.

 
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b)           Exercise Price.  The exercise price per share of the Common Stock
under this Warrant shall be $1.00, subject to adjustment hereunder (the
“Exercise Price”).
 
c)           Mechanics of Exercise.
 
i.      Delivery of Certificates Upon Exercise.  Certificates for shares
purchased hereunder shall be transmitted by the Company to the Holder by
physical delivery to the address specified by the Holder in the Notice of
Exercise within 5 business days from the delivery to the Company of the Notice
of Exercise Form, surrender of this Warrant and payment of the aggregate
Exercise Price as set forth above (“Warrant Share Delivery Date”).  This Warrant
shall be deemed to have been exercised on the date the Exercise Price is
received by the Company.  The Warrant Shares shall be deemed to have been
issued, and Holder or any other person so designated to be named therein shall
be deemed to have become a holder of record of such shares for all purposes, as
of the date the Warrant has been exercised by payment to the Company of the
Exercise Price and all taxes required to be paid by the Holder, if any, prior to
the issuance of such shares, have been paid.
 
ii.     Delivery of New Warrants Upon Exercise.  If this Warrant shall have been
exercised in part, the Company shall, at the request of a Holder and upon
surrender of this Warrant certificate, at the time of delivery of the
certificate or certificates representing Warrant Shares, deliver to Holder a new
Warrant evidencing the rights of Holder to purchase the unpurchased Warrant
Shares called for by this Warrant, which new Warrant shall in all other respects
be identical with this Warrant.
 
iii.    No Fractional Shares or Scrip.  No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant.  As to any fraction of a share which Holder would otherwise be entitled
to purchase upon such exercise, the Company shall at its election, either pay a
cash adjustment in respect of such final fraction in an amount equal to such
fraction multiplied by the Exercise Price or round up to the next whole share.

 
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iv.    Charges, Taxes and Expenses.  In the event certificates for Warrant
Shares are to be issued in a name other than the name of the Holder, this
Warrant when surrendered for exercise shall be accompanied by the Assignment
Form attached hereto duly executed by the Holder; and the Company may require,
as a condition thereto, the payment of a sum sufficient to reimburse it for any
transfer tax incidental thereto.
 
Section 3.     Certain Adjustments.
 
a)           Stock Dividends and Splits. If the Company, at any time while this
Warrant is outstanding: (A) pays a stock dividend or otherwise make a
distribution or distributions on shares of its Common Stock or any other equity
or equity equivalent securities payable in shares of Common Stock (which, for
avoidance of doubt, shall not include any shares of Common Stock issued by the
Company upon exercise of this Warrant), (B) subdivides outstanding shares of
Common Stock into a larger number of shares, (C) combines (including by way of
reverse stock split) outstanding shares of Common Stock into a smaller number of
shares, or (D) issues by reclassification of shares of the Common Stock any
shares of capital stock of the Company, then in each case the Exercise Price
shall be multiplied by a fraction of which the numerator shall be the number of
shares of Common Stock (excluding treasury shares, if any) outstanding
immediately before such event and of which the denominator shall be the number
of shares of Common Stock outstanding immediately after such event and the
number of shares issuable upon exercise of this Warrant shall be proportionately
adjusted such that the aggregate Exercise Price of this Warrant shall remain
unchanged.  Any adjustment made pursuant to this Section 3(a) shall become
effective immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution and shall become
effective immediately after the effective date in the case of a subdivision,
combination or re-classification.
 
b)           Fundamental Transaction. If, at any time while this Warrant is
outstanding, (A) the Company effects any merger or consolidation of the Company
with or into another Person, (B) the Company effects any sale of all or
substantially all of its assets in one or a series of related transactions, (C)
any tender offer or exchange offer (whether by the Company or another Person) is
completed pursuant to which holders of Common Stock are permitted to tender or
exchange their shares for other securities, cash or property, or (D) the Company
effects any reclassification of the Common Stock or any compulsory share
exchange pursuant to which the Common Stock is effectively converted into or
exchanged for other securities, cash or property (each “Fundamental
Transaction”), then, upon any subsequent exercise of this Warrant, the Holder
shall have the right to receive, for each Warrant Share that would have been
issuable upon such exercise immediately prior to the occurrence of such
Fundamental Transaction, the number of shares of Common Stock of the successor
or acquiring corporation or of the Company, if it is the surviving corporation,
and any additional consideration (the “Alternate Consideration”) receivable as a
result of such merger, consolidation or disposition of assets by a holder of the
number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event. For purposes of any such exercise, the
determination of the Exercise Price shall be appropriately adjusted to apply to
such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one share of Common Stock in such Fundamental
Transaction, and the Company shall apportion the Exercise Price among the
Alternate Consideration in a reasonable manner reflecting the relative value of
any different components of the Alternate Consideration.  If holders of Common
Stock are given any choice as to the securities, cash or property to be received
in a Fundamental Transaction, then the Holder shall be given the same choice as
to the Alternate Consideration it receives upon any exercise of this Warrant
following such Fundamental Transaction.  To the extent necessary to effectuate
the foregoing provisions, any successor to the Company or surviving entity in
such Fundamental Transaction shall issue to the Holder a new warrant consistent
with the foregoing provisions and evidencing the Holder’s right to exercise such
warrant into Alternate Consideration. 

 
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c)           Calculations. All calculations under this Section 3 shall be made
to the nearest cent or the nearest 1/100th of a share, as the case may be. For
purposes of this Section 3, the number of shares of Common Stock deemed to be
issued and outstanding as of a given date shall be the sum of the number of
shares of Common Stock (excluding treasury shares, if any) issued and
outstanding.
 
d)           Notice to Holder.  Whenever the Exercise Price is adjusted pursuant
to any provision of this Section 3, the Company shall promptly mail to the
Holder a notice setting forth the Exercise Price after such adjustment and
setting forth a brief statement of the facts requiring such adjustment.
 
Section 4.     Transfer of Warrant.
 
a)           Transferability.  Subject to compliance with any applicable
securities laws and the conditions set forth in Section 4(d) hereof, this
Warrant and all rights hereunder are transferable, in whole or in part, upon
surrender of this Warrant at the principal office of the Company or its
designated agent, together with a written assignment of this Warrant
substantially in the form attached hereto duly executed by the Holder or its
agent or attorney and funds sufficient to pay any transfer taxes payable upon
the making of such transfer.  Upon such surrender and, if required, such
payment, the Company shall execute and deliver a new Warrant or Warrants in the
name of the assignee or assignees and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a
new Warrant evidencing the portion of this Warrant not so assigned, and this
Warrant shall promptly be cancelled.  A Warrant, if properly assigned, may be
exercised by a new holder for the purchase of Warrant Shares without having a
new Warrant issued.
 
b)           New Warrants. This Warrant may be divided or combined with other
Warrants upon presentation hereof at the aforesaid office of the Company,
together with a written notice specifying the names and denominations in which
new Warrants are to be issued, signed by the Holder or its agent or
attorney.  Subject to compliance with Section 4(a), as to any transfer which may
be involved in such division or combination, the Company shall execute and
deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be
divided or combined in accordance with such notice. All Warrants issued on
transfers or exchanges shall be dated the original Issue Date and shall be
identical with this Warrant except as to the number of Warrant Shares issuable
pursuant thereto.

 
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c)           Warrant Register. The Company shall register this Warrant, upon
records to be maintained by the Company for that purpose (the “Warrant
Register”), in the name of the record Holder hereof from time to time.  The
Company may deem and treat the registered Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, absent actual notice to the contrary.
 
d)           Transfer Restrictions. If, at the time of the surrender of this
Warrant in connection with any transfer of this Warrant, the transfer of this
Warrant shall not be registered pursuant to an effective registration statement
under the Securities Act and under applicable state securities or blue sky laws,
the Company may require, as a condition of allowing such transfer, that the
Holder or transferee of this Warrant, as the case may be, comply with the
provisions of Section 3(h) and (k) of the Purchase Agreement.
 
Section 5.     Miscellaneous.
 
a)           No Rights as Shareholder Until Exercise.  This Warrant does not
entitle the Holder to any voting rights or other rights as a shareholder of the
Company prior to the exercise hereof as set forth in Section 2.
 
b)           Loss, Theft, Destruction or Mutilation of Warrant. The Company
covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any stock
certificate relating to the Warrant Shares, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it (which, in
the case of the Warrant, shall not include the posting of any bond), and upon
surrender and cancellation of such Warrant or stock certificate, if mutilated,
the Company will make and deliver a new Warrant or stock certificate of like
tenor and dated as of such cancellation, in lieu of such Warrant or stock
certificate.
 
c)           Saturdays, Sundays, Holidays, etc.  If the last or appointed day
for the taking of any action or the expiration of any right required or granted
herein shall not be a business day, then such action may be taken or such right
may be exercised on the next succeeding business day.
 
d)           Authorized Shares.  The Company covenants that during the period
the Warrant is outstanding, it will reserve from its authorized and unissued
Common Stock a sufficient number of shares to provide for the issuance of the
Warrant Shares upon the exercise of any purchase rights under this Warrant.  The
Company further covenants that its issuance of this Warrant shall constitute
full authority to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for the Warrant
Shares upon the exercise of the purchase rights under this Warrant.  The Company
will take all such reasonable action as may be necessary to assure that such
Warrant Shares may be issued as provided herein without violation of any
applicable law or regulation.

 
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e)           Jurisdiction; Governing Law. All questions concerning the
construction, validity, enforcement and interpretation of this Warrant shall be
determined in accordance with the provisions of the Purchase Agreement.
 
f)           Restrictions.  The Holder acknowledges that the Warrant Shares
acquired upon the exercise of this Warrant, if not registered, will have
restrictions upon resale imposed by state and federal securities laws.
 
g)           Nonwaiver and Expenses.  No course of dealing or any delay or
failure to exercise any right hereunder on the part of Holder shall operate as a
waiver of such right or otherwise prejudice Holder’s rights, powers or remedies,
notwithstanding the fact that all rights hereunder terminate on the Termination
Date.
 
h)           Notices.  Any notice, request or other document required or
permitted to be given or delivered to the Holder by the Company shall be
delivered in accordance with the notice provisions of the Purchase Agreement.
 
i)            Limitation of Liability.  No provision hereof, in the absence of
any affirmative action by Holder to exercise this Warrant to purchase Warrant
Shares, and no enumeration herein of the rights or privileges of Holder, shall
give rise to any liability of Holder for the purchase price of any Common Stock
or as a stockholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.
 
j)           Successors and Assigns.  Subject to applicable securities laws,
this Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors of the Company and the successors
and permitted assigns of Holder.  The provisions of this Warrant are intended to
be for the benefit of all Holders from time to time of this Warrant and shall be
enforceable by any such Holder or holder of Warrant Shares.
 
k)           Amendment.  This Warrant may be modified or amended or the
provisions hereof waived with the written consent of the Company and the Holder.
 
l)            Severability.  Wherever possible, each provision of this Warrant
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provisions or the remaining provisions of this Warrant.
 
m)          Headings.  The headings used in this Warrant are for the convenience
of reference only and shall not, for any purpose, be deemed a part of this
Warrant.
 
********************
 
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized as of the date first above indicated.
 
AMERICAN ANTIQUITIES INCORPORATED
 
By: 
   
Name: Dan Wiesel
 
Title:  CEO and President

 
 
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NOTICE OF EXERCISE

TO: AMERICAN ANTIQUITIES INCORPORATED

(1)  The undersigned hereby elects to purchase ________ Warrant Shares of the
Company pursuant to the terms of the attached Warrant (only if exercised in
full), and tenders herewith payment of the exercise price in full, together with
all applicable transfer taxes, if any.
 
(2)  Payment shall take the form of lawful money of the United States.
 
(3)  Please issue a certificate or certificates representing said Warrant Shares
in the name of the undersigned or in such other name as is specified below:
 
_______________________________

The Warrant Shares shall be delivered by physical delivery of a certificate to:
 
_______________________________

_______________________________

_______________________________

(4)  Accredited Investor.  The undersigned is an “accredited investor” as
defined in Regulation D promulgated under the Securities Act of 1933, as
amended.

[SIGNATURE OF HOLDER]

Name of Investing Entity:
________________________________________________________________________
Signature of Authorized Signatory of Investing Entity:
_________________________________________________
Name of Authorized Signatory:
___________________________________________________________________
Title of Authorized Signatory:
____________________________________________________________________
Date:
________________________________________________________________________________________
 
 
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ASSIGNMENT FORM

(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to exercise the warrant.)
  
FOR VALUE RECEIVED, [____] all of or [_______] shares of the foregoing Warrant
and all rights evidenced thereby are hereby assigned to
 
_______________________________________________ whose address is

_______________________________________________________________.
 
_______________________________________________________________

Dated:  ______________, _______
 
Holder’s Signature:    
       
Holder’s Address:    
             

Signature Guaranteed:  ___________________________________________

NOTE:  The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company.  Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.

 
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