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”:

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.

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.

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.

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 c