Document:

DC5870.pdf -- Converted by SEC Publisher 4.2, created by BCL Technologies Inc., for SEC Filing

	
Exhibit 10.1

	
English Summary of Italian Language

FINANCING AGREEMENT

	
General

     The Financing Agreement (the “Agreement”), dated December 22, 2008 (the “Agreement
Date”), is among M.T.M. S.r.l., a company organized under the laws of Italy (the “Borrower”), Banca IMI S.p.A., a bank organized under the laws
of Italy, as lead arranger (“IMI Bank” or the “Lead Arranger”), and Intesa Sanpaolo S.p.A., a bank organized
under the laws of Italy as lender and agent bank (the “Agent Bank” or “Intesa Sanpaolo”).

     As of the Agreement Date, the Borrower is a wholly-owned subsidiary of BRC S.r.l., a company organized under the laws of Italy (“BRC”), which in turn, is a wholly-owned subsidiary of Fuel Systems Solutions, Inc., a Delaware corporation (“FSYS”).

	
Loan and Maturity

     The Intesa Sanpaolo and its successors and assigns (the “Lenders”) agree to lend to the Borrower an amount not to exceed
€15,000,000 (the “Loan”) for the following purposes:

	
·  
		
 		
€10,000,000 used to (i) finance part of the acquisition price of Distribuidora Shopping 
	
	
 
		
 		
S.A. an Argentine company (“Distribuidora Shopping”), (ii) repay existing
indebtedness 
	
	
 
		
 		
of Distribuidora Shopping and (iii) finance the expenses relating to the acquisition of 
	
	
 
		
 		
Distribuidora Shopping; and 
	
	
 
	
	
·  
		
 		
€5,000,000 to be used for investments in our subsidiaries and certain research and 
	
	
 
		
 		
development capital expenditures. 
	

     The Loan matures six months from the Agreement Date (the “Original Maturity Date”). The Borrower has an option to extend (the
“Extension Option”) the maturity date for an additional five years and six months from the Agreement Date (the “Extended Maturity
Date)” provided that the Borrower gives notice of such extension to the Agent Bank between the 45th and 15th day prior to the Original Maturity Date and so long as no Significant Event, Material Adverse Event (each
as defined below), breach of the Borrower’s covenants or breach of the Borrower’s representations and warranties has occurred.

	
Loan Disbursements

     The Loan will be funded in one or more borrowings from the Agreement Date until the earlier of (i) the Original Maturity Date and (ii) June 30, 2009. Each borrowing is subject to the following
conditions precedent: (i) the Borrower has delivered various documents to the Agent Bank, including organizational documents and financial statements, (ii) no Material Adverse Event, Significant Event, breach of the Borrower’s covenants or
breach of the Borrower’s representations and warranties has occurred and (iii) the Agent Bank has received a disbursement request two business days prior to the date of disbursement. 

	
Repayment

     Provided that the Borrower has not exercised the Extension Option, the entire Loan will be repaid on the Original Maturity Date. If the Borrower has exercised its Extension Option, the Borrower will
repay the borrowings in ten semi-annual installments beginning one year from the Agreement Date and ending on the Extended Maturity Date.

	
Voluntary Prepayment

     The Borrower may prepay the Loan, in whole or in part, without penalty other than customary breakage costs upon 10 days’ prior written notice to the Lenders. Such prepayments must be in a minimum
amount of €500,000 or multiples thereof.

     If Lenders representing 66% of the total amount of the Loan notify the Agent Bank that their funding costs for the Interest Period exceed the EURIBOR rate, the Agent Bank must notify the Borrower,
which may repay without penalty the entire Loan upon thirty days’ notice to the Agent Bank.

	
Mandatory Prepayment

     Independently of any voluntary repayment, the Borrower must prepay any amount received within ten business days of any amounts received from the following sources:

	
·  
		
 		
any sale or transfer of assets exceeding €1,000,000 per transaction or €4,000,000 per 
	
	
 
		
 		
year; 
	
	
 
	
	
·  
		
 		
any capital investments in Borrower, except amounts to be released by BRC in order to 
	
	
 
		
 		
allow payment of the $22,000,000 to be paid by the Borrower for the Distribuidora 
	
	
 
		
 		
Shopping acquisition (limited to the amounts not financed under the Agreement); 
	
	
 
	
	
·  
		
 		
as a result of any financing transactions outside of the ordinary course of business 
	
	
 
		
 		
including, but not limited to, securitizations and the issuance of debt securities (including 
	
	
 
		
 		
those convertible into equity); and 
	
	
 
	
	
·  
		
 		
any damages received as part of guarantee and indemnity provisions of the Distribuidora 
	
	
 
		
 		
Shopping acquisition documentation. 
	

	
Interest

     Borrowings bear an annual interest rate of EURIBOR plus 1.50%. The Borrower must pay interest on June 30 and December 31 of each year (each such 6-month period, an
“Interest Period”) beginning on June 30, 2009. Interest
rates are calculated on the second business day before (i) the date requested by the Borrower for any disbursement of Loan proceeds or (ii) the starting date of a new Interest Period (the “Interest
Calculation Date”). The interest rate is increased by 3.5% for late payments.

2

	
Security

     The Borrower pledges 100% of its ownership interests in Distribuidora Shopping and assigns any receivables under the Distribuidora Shopping acquisition agreement (the “Security”). The details of the Security are included in a separate agreement (the “Security Agreement”).

Representations and Warranties of the Borrower

     The Agreement contains customary representations and warranties of the Borrower relating to, among other things:

	
·  
		
 		
the organization and valid existence of the Borrower and the entities controlled by the 
	
	
 
		
 		
Borrower (including Distribuidora Shopping) (the “Borrower Group”); 
	
	
·  
		
 		
the absence of any conflicts or violations of the governing documents and third-party 
	
	
 
		
 		
agreements of the Borrower and each member of the Borrower Group; 
	
	
·  
		
 		
the Borrower’s authorization, license or other approvals necessary to perform the 
	
	
 
		
 		
Agreement and related agreements; 
	
	
·  
		
 		
the books and other records of the Borrower and Distribuidora Shopping; 
	
	
·  
		
 		
the absence of Significant Events and Material Adverse Events; 
	
	
·  
		
 		
the absence of pending or threatened litigation involving the Borrower Group; 
	
	
·  
		
 		
the performance of legal and contractual obligations and adherence to accounting rules by 
	
	
 
		
 		
the Borrower, BRC and the Borrower Group; 
	
	
·  
		
 		
payment of taxes by the Borrower and the Borrower Group; 
	
	
·  
		
 		
the absence of encumbrances on the assets of the Borrower and the Borrower’s 
	
	
 
		
 		
ownership interests in Distribuidora Shopping; 
	
	
·  
		
 		
the absence of obligations of the Borrower senior to its obligations under the Agreement 
	
	
 
		
 		
and the Loan Documents; 
	
	
·  
		
 		
the solvency of the Borrower, BRC and each member of the Borrower Group; 
	
	
·  
		
 		
the completeness and accuracy of information provided by the Borrower and each 
	
	
 
		
 		
member of the Borrower Group to the Agent Bank and Lenders; 
	
	
·  
		
 		
the insurance coverage of the Borrower and each member of the Borrower Group; 
	
	
·  
		
 		
the absence of debt obligations of the Borrower and the Borrower Group that are not fully 
	
	
 
		
 		
subordinated to the Loan; 
	

3

	
·  
		
 		
transactions between the Borrower, BRC, and each member of the Borrower Group are 
	
	
 
		
 		
on arm’s-length terms; and 
	
	
 
	
	
·  
		
 		
the absence of indebtedness of the Borrower and Distribuidora Shopping not consented to 
	
	
 
		
 		
under the Agreement. 
	

	
Covenants of the Borrower

Financial Covenants

     On each June 30 and December 31 beginning on December 31, 2008, the Borrower must be in compliance with the following: 

	
·  
		
 		
Financial debt less cash and marketable securities (“Net Indebtedness”) may not 
	
	
 
		
 		
exceed EBITDA by 2.5 times; 
	
	
 
	
	
·  
		
 		
Net Indebtedness may not exceed equity (i.e., total shareholder funds including 
	
	
 
		
 		
subordinated shareholder loans) by 1.0 times; and 
	
	
 
	
	
·  
		
 		
EBITDA may not be less than 5.0 times net interest expense. 
	

The financial covenants are based on the semiannual financial reports and the consolidated balance sheet of BRC, and calculated on a rolling basis for the twelve months preceding the report.

	
Reporting Covenants

     The Borrower must provide to the Agent Bank (i) the balance sheet of the Borrower within 180 days of the end of the business year, (ii) the semiannual report of the Borrower within 90 days of the end
of the end of the six-month period covered in the report, (iii) the consolidated balance sheet of BRC within 180 days of the end of the business year, and (iv) the consolidated semiannual report of the Borrower within 90 days of the end of the
six-month period covered in the report.

     The Borrower must notify the Agent Bank of the occurrence of a Significant Event or any event that could lead to a Material Adverse Event. The Borrower must provide the Agent Bank with copies of
certain documents relating to the governance of the Borrower and to provide information relating to legal proceedings and its inability to perform its obligations under the Agreement.

	
Affirmative Covenants

	 	
The Borrower will:

	
·  
		
 		
preserve its legal status and that of each of the members of the Borrower Group so as 
	
	
 
		
 		
to (i) obtain and maintain valid all authorizations and approvals required by law to 
	
	
 
		
 		
carry out the business of the Borrower and each member of the Borrower Group and 
	
	
 
		
 		
(ii) conserve the validity of the rights necessary to carry out the business of the 
	

4

	
 
		
 		
Borrower and each member of the Borrower group, to maintain the validity of the 
	
	
 
		
 		
Loan Documents and to fulfill the obligations therein; 
	
	
 
	
	
·  
		
 		
observe, and cause each member of the Borrower Group to observe all applicable 
	
	
 
		
 		
laws, the violation of which would prejudice the Borrower’s ability to perform its 
	
	
 
		
 		
obligations under the Agreement; 
	
	
 
	
	
·  
		
 		
pay, and cause each member of the Borrower Group to pay all applicable taxes and 
	
	
 
		
 		
similar payments; 
	
	
 
	
	
·  
		
 		
maintain, and cause each member of the Borrower Group to maintain insurance 
	
	
 
		
 		
policies; 
	
	
 
	
	
·  
		
 		
cause the payment obligations under the Agreement and the Loan Documents to have 
	
	
 
		
 		
at least at the same rights as all other unsecured, unsubordinated creditors of the 
	
	
 
		
 		
Borrower; 
	
	
 
	
	
·  
		
 		
cause the subordination of any future shareholder loans to the Borrower or 
	
	
 
		
 		
Distribuidora Shopping; 
	
	
 
	
	
·  
		
 		
cause all contracts between the Borrower, BRC and the Borrower Group to have 
	
	
 
		
 		
terms not less favorable than those of an arm’s length agreement; 
	
	
 
	
	
·  
		
 		
maintain, and cause BRC and the Borrower Group to maintain accounting practices in 
	
	
 
		
 		
accordance to law and the International Accounting Standard Committee or 
	
	
 
		
 		
International Accounting Standards Board; 
	
	
 
	
	
·  
		
 		
maintain the Guaranties and refrain from activities that could significantly prejudice 
	
	
 
		
 		
the Guaranties and the rights of the Lenders under the Loan Documents; 
	
	
 
	
	
·  
		
 		
timely pay the amounts owed to the sellers under the Distribuidora Shopping 
	
	
 
		
 		
acquisition agreement; 
	
	
 
	
	
·  
		
 		
maintain the Borrower account for purposes of making payments under the 
	
	
 
		
 		
Agreement and Loan Documents; 
	
	
 
	
	
·  
		
 		
cause the Distribuidora Shopping indebtedness to be repaid within three months of 
	
	
 
		
 		
the Agreement Date; and 
	
	
 
	
	
·  
		
 		
should the Borrower decide to enter contracts for derivative financial instruments, the 
	
	
 
		
 		
Borrower will give preference to Agent Bank, subject to certain conditions. 
	

	
Negative Covenants

	 	
The Borrower will not:

	
·  
		
 		
except as specifically permitted by the Agreement, cease or change or cause the 
	
	
 
		
 		
Borrower Group to cease or change the nature of its business as conducted on the 
	

5

	
 
		
 		
Agreement Date and not change, without the consent of the Lenders its charter 
	
	
 
		
 		
documents; 
	
	
 
	
	
·  
		
 		
permit or cause BRC or the Borrower Group to permit any encumbrance on the 
	
	
 
		
 		
Borrower, Distribuidora Shopping, the assets of the Borrower and/or each member of 
	
	
 
		
 		
the Borrower Group, except for (i) encumbrances incurred under the Agreement or 
	
	
 
		
 		
the Loan Documents, (ii) encumbrances incurred by operation of law and (iii) 
	
	
 
		
 		
encumbrances incurred with the prior consent of the Lenders; 
	
	
 
	
	
·  
		
 		
Borrower will not without the Agent Bank’s consent complete acquisitions exceeding 
	
	
 
		
 		
€20,000,000 on an enterprise value basis (i.e., equity value plus net financial debt 
	
	
 
		
 		
assumed) during any twelve month period; 
	
	
 
	
	
·  
		
 		
dispose or cause any member of the Borrower Group to dispose of goods, except for 
	
	
 
		
 		
the disposition in a total amount over €2,000,000 for each twelve month period; 
	
	
 
	
	
·  
		
 		
declare or pay dividends or distribute reserves if a Significant Event has occurred; 
	
	
 
	
	
·  
		
 		
incur additional indebtedness in excess of €20,000,000; 
	
	
 
	
	
·  
		
 		
will not engage in derivative transactions of a speculative nature; or 
	
	
 
	
	
·  
		
 		
make loans or guaranties or cause any member of the Borrower Group to make loans 
	
	
 
		
 		
or guaranties in amounts greater than €2,000,000 total during any twelve month 
	
	
 
		
 		
period. 
	

	
Event of Default

	 	
The following constitute an Event of Default:

	
·  
		
 		
a substantial difference in the legal, financial, organizational, or economic situation of 
	
	
 
		
 		
the Borrower and/or Distribuidora Shopping compared to that reflected in the 
	
	
 
		
 		
documents delivered by the Borrower to the Agent Bank; 
	
	
 
	
	
·  
		
 		
the commencement of bankruptcy or similar proceeding relating to the Borrower, 
	
	
 
		
 		
BRC or another member of the Borrower Group; 
	
	
 
	
	
·  
		
 		
the voluntary or judicial liquidation, dissolution or assignment of assets for the 
	
	
 
		
 		
benefit of creditors by the Borrower, BRC or Distribuidora Shopping; 
	
	
 
	
	
·  
		
 		
the initiation of enforcement proceedings or the execution of attachments in an 
	
	
 
		
 		
aggregate amount at any time of more than €500,000 on assets of the Borrower, BRC 
	
	
 
		
 		
or any other member of the Borrower Group unless contested in good faith according 
	
	
 
		
 		
to the reasonable judgment of the Agent Bank or the order of attachment is revoked 
	
	
 
		
 		
within 20 business days of its issuance; 
	
	
 
	
	
·  
		
 		
the execution of confiscation orders on assets of the Borrower, BRC or another 
	
	
 
		
 		
member of the Borrower Group; 
	

6

	
·  
		
 		
a judgment is entered against the Borrower or Distribuidora Shopping in an aggregate 
	
	
 
		
 		
amount at any time of more than €500,000, provided that such judgment renders the 
	
	
 
		
 		
Borrower incapable of fulfilling its obligations under the Agreement; 
	
	
 
	
	
·  
		
 		
a significant reduction in the value of the Guaranties without the Borrower providing 
	
	
 
		
 		
a substitute and/or a new guaranty to the satisfaction of the Agent Bank; or 
	
	
 
	
	
·  
		
 		
the insolvency of the Borrower, BRC or Distribuidora Shopping or their seeking 
	
	
 
		
 		
bankruptcy or other protection from creditors. 
	

     Upon the occurrence of an Event of Default, the Lenders may provide notice of default to the Borrower, which default becomes effective on the fifth day following receipt by the Borrower. Once the
default is effective, the Borrower must repay the Lenders the Loan amounts not already repaid along with any accrued interest and any other amount owing under the Loan Documents.

	
Event of Termination

     The Agreement will terminate at the discretion of the Lenders upon the occurrence of any of the following (each, an “Event of Termination”):

	
·  
		
 		
failure to make timely payment under the Agreement or Loan Documents; 
	
	
 
	
	
·  
		
 		
the Borrower uses the Loan proceeds for a purpose other than those indicated in the 
	
	
 
		
 		
Agreement; 
	
	
 
	
	
·  
		
 		
the Borrower breaches its reporting, affirmative or negative covenants under the 
	
	
 
		
 		
Agreement and, if curable, such breach remains uncured for five business days from 
	
	
 
		
 		
the date the Lenders provide notice of such breach; 
	
	
 
	
	
·  
		
 		
at any time the Borrower breaches its financial covenants; or 
	
	
 
	
	
·  
		
 		
the Borrower breaches its obligations under the Loan Documents and Guaranty and, 
	
	
 
		
 		
if curable, such breach remains uncured for ten business days from the date the 
	
	
 
		
 		
Lenders provide notice of such breach. 
	

     Upon the occurrence of an Event of Termination, the Lenders may provide notice of termination to the Borrower, which termination becomes effective on the fifth day following receipt by the Borrower.
Five days after the notice of termination becomes effective, the Borrower must repay the Lenders the Loan amounts not already repaid along with any accrued interest and any other amount owing under the Loan Documents.

	
Event of Withdrawal

     The Lenders may withdraw from the Agreement upon the occurrence of any of the following circumstances (each, an “Event of Withdrawal”):

7

	
·  
		
 		
the auditor issues an adverse opinion report or inability to state an opinion with 
	
	
 
		
 		
respect of the Borrower, BRC or Distribuidora Shopping; 
	
	
 
	
	
·  
		
 		
a Change of Control occurs, which is defined as any of the following: 
	

	
(i)      		
the Costamagna family ceases to hold, directly or indirectly, 10% of the authorized capital stock of FSYS, unless the reduction in ownership interests of the Costamagna family is attributed (a) to one or more issuances of FSYS
capital stock or (b) a merger, division or other fundamental corporate transaction which causes a variation in the authorized capital;	
	 
	
(ii)      		
FSYS ceases to hold 50.1% of the voting stock of BRC;	
	 
	
(iii)      		
BRC ceases to hold 50.1% of the voting stock of the Borrower; or	
	 
	
(iv)      		
with regard to Distribuidora Shopping, the Borrower, directly or through BRC Argentina SA, ceases to hold 100% of the shares with voting stock of Distribuidora Shopping.	
	 

	
·  
		
 		
a judicial or similar proceeding is commenced or threatened against the Borrower or 
	
	
 
		
 		
any member of the Borrower Group which could prevent the Borrower from fulfilling 
	
	
 
		
 		
its obligations under the Agreement; 
	
	
 
	
	
·  
		
 		
any indebtedness of the Borrower and/or BRC and/or any member of the Borrower 
	
	
 
		
 		
Group, in an aggregate amount in excess of €2,000,000 during any twelve month 
	
	
 
		
 		
period during the life of the Loan, becomes due and payable due to a breach or 
	
	
 
		
 		
similar event; 
	
	
 
	
	
·  
		
 		
the business of the Borrower is substantially modified; 
	
	
 
	
	
·  
		
 		
any Loan Document becomes void or voidable; 
	
	
 
	
	
·  
		
 		
any representation and warranty is not true and correct in every substantial respect; 
	
	
 
	
	
·  
		
 		
performance of any part of the Distribuidora Shopping acquisition agreement is or 
	
	
 
		
 		
becomes illegal; 
	
	
 
	
	
·  
		
 		
any obligation in the Distribuidora Shopping acquisition documents is not or ceases to 
	
	
 
		
 		
be legal, valid, binding or executable; 
	
	
 
	
	
·  
		
 		
any of the Distribuidora Shopping acquisition agreements is nullified, subject to 
	
	
 
		
 		
nullification, declared ineffective or terminated, or any party withdraws or is 
	
	
 
		
 		
otherwise disposed to dissolve any of the Distribuidora Shopping acquisition 
	
	
 
		
 		
agreements ; 
	
	
 
	
	
·  
		
 		
a criminal conviction is issued against the administrators of the Borrower and/or 
	
	
 
		
 		
Distribuidora Shopping related to the operation of the business, such as 
	
	
 
		
 		
misrepresentations, misrepresentations injuring the company, its members or its 
	

8

	
 
		
 		
creditors, respectively disciplined by Articles 2621 and 2622 of the Civil Code of 
	
	
 
		
 		
Italy or equivalent law applicable to the jurisdiction; 
	
	
 
	
	
·  
		
 		
revocation of the authorizations, permission or license of the Borrower and/or 
	
	
 
		
 		
Distribuidora Shopping necessary to carry out the business and, if curable, such 
	
	
 
		
 		
circumstances remain uncured for 20 business days after its occurrence; and 
	
	
 
	
	
·  
		
 		
the occurrence of a Material Adverse Event. 
	

     Upon the occurrence of an Event of Withdrawal, the Lenders may provide notice of withdrawal to the Borrower, which withdrawal becomes effective on the fifth day following receipt by the Borrower. Five
days after the notice of withdrawal becomes effective, the Borrower must repay the Lenders the Loan amounts not already repaid along with any accrued interest and any other amount owing under the Loan Documents.

	
Assignment

     Any Lender may assign its rights and obligations under the Agreement to other banks or financial institutions upon notice to the Borrower (whose consent may not be unreasonably withheld) and the Agent
Bank. The consent of the Borrower will be deemed to have been given unless contrary communication is made to the Agent Bank and the assigning Lender within ten business days of the receipt of the assigning Lender’s notice of assignment. Such an
assignment will automatically result in the assignment of the Security Agreement.

     Each assignee bank may assign in whole or part its share in the Loan and its rights and obligations by providing prior written notice to the Borrower (which may withhold consent only for reasonable
grounds related to the identity of the assignee) and the Lenders. 

     In the case of the assignment in whole or part of the role of Agent Bank by Intesa Sanpaolo to banks belonging to its same group, the consent of the Borrower is not required.

     The Agent Bank may at any time renounce its mandate and be substituted by another Lender, it being understood there will be no resulting increase in the obligations, responsibility or costs to the
Borrower. The Borrower agrees to make any declaration and carry out any act necessary to affect such change. The Agent Bank will continue to carry out its functions until another a successor (with regard to which the Borrower has communicated its
satisfaction to the Agent Bank) has accepted the position. The approval of the Borrower (which cannot be unreasonably withheld), will be deemed granted unless the Borrower notifies the Agent Bank to the contrary within 10 business days of the Agent
Bank’s notice of assignment.

     The Borrower may not assign its rights and obligations under the Agreement without the prior consent of the Agent Bank. The obligations of the Agreement are binding upon the successors of the
Borrower.

	
Amendments

     The Agreement may be modified only in writing by the Borrower and the Agent Bank acting on behalf of all of the Lenders pursuant to an interbank agreement. The Borrower may be

9

required to pay an amendment fee, to be agreed upon by the parties, for amendments initiated by the Borrower.

	
Indemnification

     The Borrower agrees to indemnify the Lenders and the Agent Bank against losses, damages and costs caused by the Borrower’s breach of its obligations under the Agreement or caused by a false or
inexact statement in the Borrower’s representations and warranties.

	
Miscellaneous

     The Agreement is governed by the laws of Italy and any disputes thereunder are subject to the exclusive jurisdiction of the courts of Torino, Italy.

	
Certain Defined Terms

     “EURIBOR” means the annual percentage rate quoted at 11:00 a.m. (Brussels time) on
the Interest Calculation Date on the EURIBOR01 page of the Reuters circular that posts the rate of the European Banking Federation of the European Union for the Euro.

     “Loan Documents” means, collectively, the Agreement, the Guaranty, the commission letters, and related documents.

     “Material Adverse Event” means an event that (i) has, in the reasonable judgment of the Agent Bank, a significant negative
influence, either currently or prospectively, on the financial, economic or property conditions of the Borrower or (ii) prejudices the validity and/or efficacy of any of the Loan Documents.

     “Significant Event” means an Event of Default, an Event of Termination and/or an Event of Withdrawal.

10ex10-12.htm

    
      

    

    EXHIBIT 10.12

    
      ASSET PURCHASE
AGREEMENT

      

      This Asset Purchase Agreement (the
“Agreement”) is being entered into by and between
International Aerospace Enterprises, Inc., a Nevada corporation (“IAE”) and Sunshine
Industries USA Inc. (“SII”), a California Corporation. This Agreement shall become effective as
of the latter date written in conjunction with the signatures affixed hereto
(the “Effective
Date”).

      

      WHEREAS, IAE is a corporation organized
and existing under the laws of the State of Nevada, with its principal business
office located at 7407 East Tanque Verde, Tucson, AZ 85715 and SII is a corporation organized and existing
under the laws of the State of California, with its principal business office
located at 530 South
Grand Ave, Covina, CA 91724, such location hereinafter referred to
as “Grand”. IAE and SII are collectively referred to herein as
the “Constituent
Corporations”;
and

      

      WHEREAS, SII is the sole owner of certain and specific
military airplane parts located at Grand hereinafter the “Military Assets”;
and

      

      WHEREAS, pursuant to the terms of this Agreement,
IAE will purchase the Military Assets from SII.  IAE will agree to pay to
SII an amount of One Million Dollars ($1,000,000.00) on or before Eighteen (18)
months, without interest, in a promissory note, hereinafter the “Note”; and

      

      WHEREAS, SII will immediately transfer to IAE all of
its military and commercial
aircraft parts, as well as all universal and common hardware, which has assessed value of approximately
Eleven Million US Dollars ($11,000,000.00), hereinafter the “Military Assets”;
and

      

      WHEREAS, IAE will issue to SII Eleven Million shares of IAE, issued at a value
of One Dollar US ($1.00) per share, hereinafter the “Shares”, for ownership
of  the
Military Assets.

      

      WHEREAS, an Escrow Account will be set
up wherein the Shares of IAE will be held for a period of up to eighteen months
(the “Escrow”).  There shall be a simultaneous exchange in payment of
the Note and the return of the Shares to
IAE.                                                                                                      

      

      NOW, THEREFORE, in consideration of the
promises and mutual agreements, provisions and covenants herein contained, the
receipt and sufficiency of which is hereby acknowledged and agreed, the parties
agree as follows:

      

      On December 11, 2008, or on such other date that the
parties shall agree, hereinafter the “Closing”:

      

      
        
          
          

        

        
          Page 1 of
7

          
            

          

        

        
          
          

        

         

      

      ARTICLE I

      PURCHASE OF THE MILITARY
ASSETS

      

      IAE hereby agrees to purchase all of the
Military Assets located at Grand from SII.  SII agrees to transfer to IAE all of the
Military Assets
immediately upon execution
of this Agreement for the issuance to SII of the Shares.  IAE agrees to
pay SII one million dollars.  IAE agrees that the term of
the Note shall be eighteen (18) months, with the understanding that IAE can pay
the Note at any time during the eighteen (18) month period.  Upon
payment of the Note, SII shall return to IAE the Shares which
shall be held in escrow.  It is understood and agreed that after the
Effective Date, IAE shall
own 100% of the Military Assets and shall have full
right and title to those Military Assets, and shall have the exclusive right to
market and sell all of the Military Assets as IAE deems necessary and/or
appropriate.

      

      ARTICLE II

      MILITARY ASSETS

      

      The Military Assets will, until such
time as the Note is paid in full, be maintained at Grand.  The maintenance of the
Military Assets at Grand shall not limit, under any
circumstance, IAE’s ability to sell, transfer or hypothecate the Military
Assets.  It is understood and agreed that one means of satisfying the
Note shall be through the sale of the Military Assets.  IAE recognizes
that utilizing the Grand location will permit IAE to sell the
Military Assets in the most expeditious manner following the Effective
Date.  It is, however, understood that IAE will be executing a lease
agreement with SII for the use of the Grand location. It is also understood and agreed that
the current condition of the Grand location shall not change before or
during the lease agreement through the actions of SII.

      

      ARTICLE III

      

      MAINTENANCE OF THE MILITARY ASSETS BY
SII

      

      Prior to the Effective Date,
SII shall conduct its business in relation
to its ownership of the Military Assets in its usual and ordinary manner, and
shall not enter into any other transaction of any kind related to the Military
Assets.  SII shall not, except as otherwise
consented to in writing by IAE or as otherwise provided in this
Agreement:

      

      1.           Undertake or incur any obligations or
liabilities in connection with the Military Assets except current obligations or
liabilities in the ordinary course of business;

      

      2.           Mortgage, pledge, subject to lien or
otherwise encumber any of the Military Assets; and

      

      3.           Sell, assign or otherwise transfer any
of the Military Assets.

      

      
        
          
          

        

        
          Page 2 of
7

          
            

          

        

        
          
          

        

      

       

      ARTICLE IV

      

      WARRANTIES OF THE CONSTITUENT
CORPORATIONS

      

      
        1.         
Representations and Warranties of
IAE.

      

      
             
IAE covenants, represents and warrants to SII that:

      

      a.           It is, on the date of this Agreement and
will be up to and including the Closing: (i) a corporation duly organized and
existing and in good standing under the laws of the jurisdiction of the State of
Nevada; and (ii) duly authorized under its articles, and under applicable laws,
to engage in the business carried on by it;

      

      b.           Its Board of Directors has, and where
necessary, its shareholders have, authorized and approved the execution and
delivery of this Agreement, and the performance of the Transaction contemplated
by this Agreement;

      

      c.           To the best of IAE’s knowledge, it has complied with, and is
not in violation of any applicable Federal, State, or local statutes, laws, and
regulations affecting its properties or the operation of its
business;

      

      d.           IAE is not involved as a defendant or
plaintiff in any suit, action, arbitration, or legal, administrative or other
proceeding, which to its best knowledge, would affect the company or its
business, assets, or financial condition in a negative manner; or, governmental
investigation which is pending; to the best of its knowledge, threatened against
or affecting the company or its business assets or financial condition; and is
not in default with respect to any order, writ, injunction or decree of any
Federal, State, local/foreign court, department, agency, or instrumentality
applicable to it;

      

      e.           The execution and delivery of this
Agreement and its performance in the time and manner contemplated will not
cause, constitute, or conflict with, or result in: (i) a breach or violation of
any provisions of or constitute a default under any license, mortgage, article
of incorporation, bylaw, other similar agreement to which the company is a
party, or by which it may be bound, nor will any consents or authorizations of
any party other than those required; (ii) any event that would permit any party
to any agreement or instrument to terminate it or to accelerate the maturity of
any indebtedness or other obligation of the company; or, (iii) an event that
would result in the creation or imposition of any lien, charge, encumbrance on
any asset;

       

      
        2.         
Representations and Warranties of
SII.

         

      

                   SII covenants, represents and warrants to
IAE that:

      

      a.           It is on the date of this Agreement, and
will be on Closing Date: (i) a corporation duly organized and existing and in
good standing under the laws of the jurisdiction of the State of California; and
(ii) duly authorized under its articles, and under applicable laws, to engage in
the business carried on by it;

      

      
        
          
          

        

        
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      b.           Its Board of Directors has authorized
and approved the execution and delivery of this Agreement, and the performance
of the Transaction contemplated by this Agreement;

      

      c.           It has complied with, and is not in
violation of any applicable Federal, State, or local statutes, laws, and
regulations affecting its properties or the operation of its
business;

      

      d.           The execution and delivery of this
Agreement and its performance in the time and manner contemplated will not
cause, constitute, or conflict with, or result in any of the following: (1) a
breach or violation of any provisions of or constitute a default under any
license, indenture, mortgage instrument, article of incorporation, bylaw, other
agreement or instrument to which the company is a party, or by which it may be
bound, nor will any consents or authorizations of any party other than those
required, (2) any event that would permit any party to any agreement or
instrument to terminate it or to accelerate the maturity of any indebtedness or
other obligation of the company, or, (3) an event that would result in the
creation or imposition of any lien, charge, encumbrance on any
asset;

      

      e.           SII has full right, title and ownership
interest in the Military Assets and the Military Assets are
unencumbered.  Further, SII assures IAE that SII has not sold, transferred or
hypothecated any of the Military Assets in the last six (6)
months.

      

      ARTICLE V

      EXPENSES OF THE CONTEMPLATED
TRANSACTION

      

      If the contemplated transaction is
completed, all expenses incurred in consummating the transaction shall, except
as otherwise agreed in writing between the Constituent Corporations, be borne by
the party incurring the expense.

      

      ARTICLE VI

      INDEMNIFICATION

      

      IAE shall, to the maximum extent
permitted by applicable law, indemnify and hold SII (and its officers, agents, and
employees) harmless from and against any losses, claims, damages or liabilities,
joint or several, to which SII may become subject under the federal
securities law, the various state securities acts, or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon (i) any breach of this agreement by IAE, (ii) any
untrue statement of any material fact contained in any of the materials prepared
by IAE for the business proposed by this Agreement hereunder, and (iii) any
omission to state in such materials a material fact required to be stated
therein or necessary to make the statements therein not misleading, or
(iv) any other violation by IAE or any federal or state securities laws,
rules, or regulations; and the Company shall reimburse SII for any legal or other expenses
reasonably incurred in connection with investigating or defending any such loss,
claim, damage, liability or action.

      

      The indemnification rights shall survive
the termination of this agreement for a period of five (5) years following such
termination.

      

      
        
          
          

        

        
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      ARTICLE VII

       MISCELLANEOUS

      

      1.           Rights Cumulative;
Waivers.

      

      The rights of each of the parties under
this Agreement are cumulative.  The rights of each of the parties
hereunder shall not be capable of being waived or varied other than by an
express waiver or variation in writing.  Any failure to exercise or
any delay in exercising any of such rights shall not operate as a waiver or
variation of that or any other such right.  Any defective or partial
exercise of any of such rights shall not preclude any other or further exercise
of that or any other such right.  No act or course of conduct or
negotiation on the part of any party shall in any way preclude such party from
exercising any such right or constitute a suspension or any variation of any
such right.

      

      2.           Benefit; Successors
Bound.

      

      This Agreement and the terms, covenants,
conditions, provisions, obligations, undertakings, rights, and benefits hereof,
shall be binding upon, and shall inure to the benefit of, the undersigned
parties and their heirs, executors, administrators, representatives, successors,
and permitted assigns.

      

      3.           Entire Agreement.

      

      This Agreement contains the entire
agreement between the parties with respect to the subject matter
hereof.  There are no promises, agreements, conditions, undertakings,
understandings, warranties, covenants or representa­tions, oral or written,
express or implied, between them with respect to this Agreement or the matters
described in this Agreement, except as set forth in this
Agreement.  Any such negotiations, promises, or understandings shall
not be used to interpret or constitute this Agreement.

      

      4.           Assignment.

      

      Either party to this Agreement shall
have the right to assign or transfer to another party, the rights created by
this Agreement, either in whole or in part, without the written consent of the
other party.

      

      5.           Amendment.

      

      This Agreement may be amended only by an
instrument in writing executed by all the parties hereto.

      

      
        
          
          

        

        
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      6.           Severability.

      

      Each part of this Agreement is intended
to be severable.  In the event that any provision of this Agreement is
found by any court or other authority of competent jurisdiction to be illegal or
unenforceable, such provision shall be severed or modified to the extent
necessary to render it enforceable and as so severed or modified, this Agreement
shall continue in full force and effect.

      

      7.           Section Headings.

      

      The Section headings in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

      

      8.           Construction.

      

      Unless the context otherwise requires,
when used herein, the singular shall be deemed to include the plural, the plural
shall be deemed to include each of the singular, and pronouns of one or no
gender shall be deemed to include the equivalent pronoun of the other or no
gender.

      

      9.           Further Assurances.

      

      In addition to the instruments and
documents to be made, executed and delivered pursuant to this Agreement, the
parties hereto agree to make, execute and deliver or cause to be made, executed
and delivered, to the requesting party such other instruments and to take such
other actions as the requesting party may reasonably require to carry out the
terms of this Agreement and the transactions contemplated
hereby.

      

      10.           Notices.

      

      Any notice which is required or desired
under this Agreement shall be given in writing and may be sent by personal
delivery or by mail by either the United States mail, postage prepaid, or by
Federal Express or similar generally recognized overnight carrier to the
Constituent Corporations at their respective addresses set forth in the recitals
to this Agreement.

      

      11.           Arbitration,
Venue, Governing
Law.

      

      This agreement shall be deemed to be
made, governed by, interpreted under and construed in all respects in accordance
with the commercial rules of Judicial Arbitration and Mediation Service
(“JAMS”). This chosen jurisdiction is irrespective of the country or place of
domicile or residence of either party.  In the event of controversy
arising out of the interpretation, construction, performance or breach of this
agreement, the parties hereby consent to adjudication under the commercial rules
of JAMS.  Said venue of the arbitration shall be in Orange County, California.  Judgment on the
award rendered by the arbitrator may be
entered in any federal or state court in Orange County, California. The Laws of the State of Nevada shall govern all disputes regarding
this matter.  Any provision herein which is later determined to be in
violation of any such laws shall be eliminated from the terms of this Agreement,
and the remainder of this Agreement shall continue in full force and
effect.

      

      
        
          
          

        

        
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      12.           Consents.

      

      The person signing this Agreement on
behalf of each party hereby represents and warrants that he has the necessary
power, consent and authority to execute and deliver this Agreement on behalf of
such party.

      

      13.           Execution in
Counterparts.

      

      This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original and all of
which together shall constitute one and the same agreement.

      

      IN WITNESS WHEREOF, the parties have
caused this Agreement to be executed and delivered as of the date first above
written.

       

      
         

        
          
            	
                    
                      International Aerospace
      Enterprises, Inc.:

                    

                  	 	 	
                    
                      Sunshine Industries USA,
      Inc.:

                    

                  	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
                    Dated:
      December 11, 2008

                  	 	 	
                          
                      Dated:
      December 11, 2008

                    

                  	 
	 	 	 	 	 
	By:
      s/s John M. Peck	 	 	By:
      s/s Saffet Usle	 
	
                     

                  	 	 	
                     

                  	 

          

      

      Page 7 of
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