ASSET PURCHASE AGREEMENT
EXHIBIT 10.12
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 0000 Xxxx Xxxxxx Xxxxx, Xxxxxx, XX 00000 and SII is a corporation organized and existing
under the laws of the State of California, with its principal business office
located at 000 Xxxxx
Xxxxx Xxx, Xxxxxx, XX 00000, 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”:
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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.
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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.
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International Aerospace
Enterprises, Inc.:
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Sunshine Industries USA,
Inc.:
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Dated:
December 11, 2008
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Dated:
December 11, 2008
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| By: s/s Xxxx X. Xxxx | By: s/s Xxxxxx Xxxx | |||
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