Document:

Unassociated Document

    SHARES
PURCHASE AGREEMENT

     

    THIS
SHARES PURCHASE AGREEMENT is made and entered into on August 17, 2010, by and
between Preformed Line Products Company, an Ohio corporation (“Purchaser”), and
the trustee under the Irrevocable Trust Agreement Between Barbara P. Ruhlman and
Bernard L. Karr, dated July 29, 2008 (“Seller”).

     

    RECITALS

     

    A.           Purchaser’s
common shares, $2 par value, are traded on the NASDAQ National Market (the
“NASDAQ”) under the symbol “PLPC” and Purchaser is a reporting company under the
Securities Exchange Act of 1934, as amended.  As a result, financial
and other material business information about Purchaser is publicly
available.

    

    B.           Seller
is the trustee of a trust established by a shareholder and director of
Purchaser.  The Business Advisors of the trust are Robert Ruhlman, the
Chief Executive Officer of Purchaser and a shareholder, and Randall Ruhlman, a
shareholder of Purchaser.  The trust is the owner of 997,000 common
shares of Purchaser;

    

    C.           Seller
approached Purchaser regarding Seller’s desire to sell 32,687 of Seller’s common
shares to Purchaser (the “Shares”);

     

    D.           In
response to Seller’s inquiry, Purchaser after due consideration, including the
review and approval of the proposed transaction by (i) the Company’s Audit
Committee of the Board of Directors (appointed as a special committee to review
the proposed transaction), which is comprised solely of independent directors,
and (ii) the Board of Directors, expressed a desire to purchase the Shares,
under the terms and conditions hereinafter set forth:

     

    Accordingly,
for good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereby agree as follows.

     

    AGREEMENT

     

    1.           Purchase and Sale of
Shares.  Upon the execution and delivery of this Agreement,
Seller shall sell, transfer, assign, bargain and convey to Purchaser 32,687
common shares at a purchase price of $32.43 per share.  Simultaneously
with the execution and delivery of this Agreement, Seller shall deliver to
Purchaser the certificate or certificates representing the Shares being sold,
transferred, assigned, bargained and conveyed pursuant hereto, duly endorsed in
blank by Seller or accompanied by a duly executed stock power, and Purchaser
shall pay Seller $1,060,039.41 (the “Purchase
Price”) for the Shares by the delivery of cash by wire transfer to Seller’s bank
account or accounts.  Seller has provided Purchaser with written wire
transfer instructions.  The parties acknowledge and agree that the
Purchase Price was negotiated in good faith between the parties and that, in
connection with such negotiations, references were made by the parties to
Purchaser’s historical trading volume and trading prices on the
NASDAQ.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    2.           Representations and
Warranties of Purchaser.  Purchaser hereby represents and
warrants to Seller as follows:

     

    (a)           Purchaser
has the requisite power and authority to execute, deliver and perform its
obligations under this Agreement.  This Agreement constitutes the
valid and binding obligation of Purchaser enforceable against it in accordance
with its terms, except as such enforceability may be limited by bankruptcy,
moratorium or other laws relating generally to the enforcement of creditors’
rights.

     

    (b)           The
execution, delivery and performance of this Agreement does not and will not (i)
violate any law, regulation, judgment, decree, order or other directive of any
court or governmental agency currently applicable to or binding upon Purchaser,
or (ii) breach or constitute a default under any agreement to which Purchaser is
a party or by which it is bound.

     

    3.           Representations, Warranties
and Covenants of Seller.  Seller hereby represents and warrants
to Purchaser as follows:

    

    (a)           Seller
has the requisite power and authority to execute, deliver and perform his
obligations under this Agreement, having received written authorization to
proceed with the sale from the Business Advisors to the trust.  This
Agreement constitutes the valid and binding obligation of Seller enforceable
against Seller in accordance with its terms.

     

    (b)           The
execution, delivery and performance of this Agreement does not and will not (i)
violate any law, regulation, judgment, decree, order or other directive of any
court or governmental agency applicable to or binding upon Seller, or (ii)
breach or constitute a default under any agreement to which Seller is a party or
by which Seller is bound.

     

                                    (c)           Seller
is the owner of the Shares of the Purchaser being sold, assigned, bargained and
conveyed pursuant hereto, free from any security interest, pledge, option,
equity, claim or other right or interest of any kind.  Upon the sale
to Purchaser, Purchaser will acquire the Shares being transferred, free from any
security interest, pledge, option, equity, claim or other right or interest of
any kind.

     

    (d)           Seller
has received and carefully reviewed Purchaser’s filings with the Securities and
Exchange Commission and Purchaser’s press releases posted on Purchaser’s website
(the filings and press releases, the “Purchaser Disclosure”) and has had full
access to Purchaser’s other directors and executives for purposes of discussion
the Company’s condition, operations and plans.  Seller acknowledges
that no oral representations have been made or information furnished to Seller
or Seller’s representatives that are in any way inconsistent with the Purchaser
Disclosure.  Seller confirms that no representations, warranties, or
other agreements (whether express or implied) have been made by Purchaser with
respect to the transactions contemplated hereby, except for those
representations, warranties, and agreements that are specifically set forth in
this Agreement.

     

    (e)           Seller,
to the extent necessary, shall, without additional consideration, take such
additional or further actions and execute such other or further documents as may
be reasonably requested by Purchaser in order to evidence, confirm or carry out
the transactions contemplated hereby.

     

    
      
         

      

      
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    4.           Miscellaneous.

     

    (a)           Governing
Law.  This Agreement shall be construed in accordance with and
governed by the laws of the State of Ohio.

     

    (b)           Amendment;
Waiver.  No modification, amendment or waiver of any provision
of this Agreement will be effective unless such modification, amendment or
waiver is in writing and signed on behalf of the parties hereto.  The
failure of any party to enforce any of the provisions of this Agreement will in
no way be construed as a waiver of such provisions and will not affect the right
of such party thereafter to enforce each and every provision of this Agreement
in accordance with its terms.

     

    (c)           Construction.  The
descriptive headings of this Agreement are inserted for convenience only and do
not constitute a part of this Agreement. The Recitals are incorporated by
reference and made a part of this Agreement.

     

    (d)           Binding
Agreement.  Except as otherwise provided herein, this Agreement
will bind and inure to the benefit of and be enforceable by Purchaser and Seller
and their respective successors and assigns.

     

    (e)           Counterparts.  This
Agreement may be executed in counterparts, each of which, when executed, will be
an original and all of which taken together will constitute one and the same
agreement.

     

    (f)           Entire
Agreement.  This Agreement embodies the complete agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes or incorporates all prior or contemporaneous
understandings, agreements or representations by or among the parties, written
or oral, which may have related to the subject matter hereof in any
way.

     

    (g)           IN
WITNESS WHEREOF, this Agreement has been executed on behalf of the parties on
the date first written above.

     

    SELLER

    

    /s/ Bernard L. Karr,
Trustee_________________

    Bernard
L. Karr, Trustee, under the Irrevocable

    Trust
Agreement dated July 29, 2008.

    

    PURCHASER

    

    PREFORMED
LINE PRODUCTS COMPANY

    

    By:   /s/ Eric R.
Graef____________________

             Eric
Graef – Vice President – Finance

     

    
      
         

      

      
        -3-Unassociated Document

    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;

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    

    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

                

        

      

    

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    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.

     

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

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    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

                

        

      

    

     

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    
 

    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:
________________________________________________________________________________________

     

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

     

    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.

    
      
         

      

      
        22

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