Exhibit 10.1
 
 
HELIX WIND, CORP.
1848 Commercial Street
San Diego, California 92113

June 24, 2009

Strictly Confidential

Venco Power GmbH
Luisenburgweg 29
Doehlau Germany

 
Re:
Letter of Intent

Gentlemen:

This letter hereby sets forth our binding intent with respect to the proposed
acquisition (the “Transaction”) by a wholly-owned subsidiary of Helix Wind,
Corp., a Nevada corporation (“Helix”), of all the outstanding shares of Venco
Power GmbH, a German company (“Venco”), from the shareholders of Venco listed on
the signature page of this letter of intent (the “Venco Shareholders”) on the
terms and conditions set forth in this letter of intent.

The proposed terms of the Transaction are as follows:

1.           Consideration.  The total purchase price for the shares of Venco
shall be 2,800,000 Euros assuming 1 Euro is equal/above $1.35 and below $1.40.
Payment shall consist of thirty three percent (33%) of the Purchase Price in
cash EUROs and the balance in shares of common stock of Helix. Depending on the
value of 1 EUR versus the US dollar (US$) then the purchase price shall be
adjusted at closing according to “Table N”. The purchase price shall be payable
in to the three Venco Shareholders on a pro rata basis based upon their
respective percentages of share ownership as follows:

(i) 
 (x) Of the Euros to be paid simultaneous with the consummation of the
Transaction (the “Closing”), all debts shall be netted against the 33% of
Purchase Price paid in Euros. The balance, if any, is to be paid by a 2-year
note (the “Note”) which shall be paid as follows: (y) One Half of the balance
due in Euros on the 12-month anniversary of the Closing, and (z) the second one
half of the balance on the 24-month anniversary of the Closing. Matthias Pfalz
and Reinhard Caliebe shall, within the term of the Note, assist as reasonably
necessary in the filing in Germany of the contemplated patents for the 50kw unit
Vertikon 50, also known as D15000. The Note shall be secured by all the assets
of Venco and shall become null and void if Matthias Pfalz, and Reinhard Caliebe
fail to so assist and cooperate in the filing of the foregoing patent
applications after reasonable notice and request.

 
Helix will place in escrow 7.5% of gross sales of VENCO based turbines until the
amount of the 3rd payment, as indicated in 1.(i)(z) above, is reached. The
amount of such gross sales will be held in escrow by the bank and will be paid
out at the end of 24 months following the Closing when the final payment under
the Note is due.  The identity of the escrow agent and the bank for the deposit
of the gross sales shall be reasonably acceptable to the Venco Shareholders.
 

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Venco Power GmbH
Page 2 of 6

The 2 payments due pursuant to the Note shall be adjusted based on the value of
the Euro on the payment date thereof as follows:

”Table N”
if 1 Euro is below $1.19 then the deal value shall be deemed 3.00MM Euro and the
cash payment adjusted accordingly;
if 1 Euro is equal/above $1.20 and below $1.25 then the deal value shall be
deemed 2.95MM Euro;
if 1 Euro is equal/above $1.25 and below $ 1.30 then the deal value shall be
2.90MM Euro;
if 1 Euro is equal/above $1.30 and below $1.35 then the deal value shall
be2.85MM Euro;
if 1 Euro is equal/above $1.35 and below $1.40 then the deal value shall be
2.80MM Euro; and
if 1 Euro is equal/above $1.40 Deal value = 2.75MM EUR.

The 12-month payment shall be reduced by the amount of any unpaid obligation of
Venco existing as of the date of the consummation of the Transaction if certain
representations to be specifically agreed upon in the Definitive Agreement
described below (undisclosed liabilities, legal issues, employee payments, tax
obligations, etc.) are breached, however if there are any liabilities not
scheduled by Venco at closing, such liabilities will reduce the payment
indicated in 1.(i)(y) above, up to a maximum defined at the Final Agreement
after audit of the Venco books. The 24-month payment shall be contingent on (a)
all manufacturing, trade secrets and other intellectual property rights of Venco
being transferred to Helix; (b) the non-financial support and assistance of
Matthias Pfalz and Michael Duwe, to the extent reasonably within their power and
control as consultants to Helix, in establishing a manufacturing facility either
in Germany, Thailand, China or the U.S and by a supplier, in the sole discretion
and at the sole cost of Helix; (c) Reinhard Caliebe and Andreas Görke having
committed no breach or default under the employment agreements as negotiated and
agreed upon which would cause such employment agreements not to be in full force
upon the date such payment is due; and (d) Matthias Pfalz and Michael Duwe
having committed no breach or default under the consulting agreements as
negotiated and agreed upon which would cause such consulting agreements not to
be in full force upon the date such payment is due.

(ii) 
 The number of shares of common stock of Helix (the “Shares”) to be issued to
Venco shall be based on (y) 1,876,000  Euros times the weighted average
conversion rate of the Euro 10 days prior to the date of Closing divided by (z)
$2.00 (US).

The Shares shall be registered in the next registration statement filed by Helix
in August 2009 and shall be subject to a 2-year lock-up - during the first year
no sales or transfers of any Shares and during the second year after Closing can
sell no more than 8.5% of the total number of Shares per month.

The Venco Shareholders shall also be granted a put option to be exercised at any
time within 2 years after Closing to sell the Shares to Helix at $2.00 per
Share, provided, however, that during the 2nd year after Closing if the volume
weighted average for 90 days of the common stock of Helix is $3 or more with no
less than 50,000 shares per day, the put shall expire. If by the end of the 2nd
year the put has not expired, the holder has the option, but not the obligation,
to put the Shares it still holds to Helix for $2 per Share.
 
 

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Venco Power GmbH
Page 3 of 6

 
2.           Definitive Agreement; Closing.  Consummation of the Transaction as
contemplated hereby will be subject to the negotiation and execution of a
mutually satisfactory definitive share purchase agreement (the “Definitive
Agreement”), setting forth the specific terms and conditions of the
Transaction.  If the Definitive Agreement fails to be entered into by the
parties for any reason whatsoever, this letter of intent shall, except for any
provisions which expressly survive the termination of this letter of intent,
become null and void and of no further force or effect upon the exercise by
either of the parties hereto of the termination rights provided for in Section 6
of this letter of intent below.  The execution of the Definitive Agreement by
both parties is subject to approval by all the shareholders of Venco and the
respective board of directors of both companies and the completion by Helix of a
satisfactory review of the legal, financial and business condition and prospects
of Venco.  The parties will use their reasonable best efforts to negotiate in
good faith the Definitive Agreement, which will contain, among other standard
terms and conditions, representations, warranties, covenants, indemnities and
other provisions customary in transactions of this nature, including without
limitation, representations and warranties as to the condition of the title held
to the assets of Venco, the financial information of Venco, the payment of taxes
and contingent liabilities by Venco and arrangements with the existing suppliers
of Venco to manufacture the Venco products in Germany at fixed COGS for at least
12-months after Closing. The fixed COGS shall be as follows, subject to a
maximum 10% variance for each item listed below:

D1: 2,625 EURO including minipole, brake and battery charger
D361: 3,940 EURO including minipole and brake, no inverter
D15000: 120,000 EURO including 35m tower and inverter (subject to modifications.
Final COGS for this platform due July 21). Different pricing options are being
developed for smaller Rated Capacity units.
Crate for D1: 90 EURO (150kg)
Crate for D361: 150 EURO (230 kg including weight of Windy Boy inverter)

The Closing shall occur when, among other conditions to be contained in the
Definitive Agreement, (a) 2 year employment agreements with Reinhard Caliebe and
Andreas Gorke are executed and delivered; (b) consulting agreements with
Matthias Pfalz and Michael Duwe containing non-compete provisions are executed
and delivered; (c) any necessary third-party consents shall be obtained prior to
consummation of the Transaction, including but not limited to any consents
required to be obtained from Venco lenders, creditors and vendors, (d) Helix
shall have consummated its capital raise in the minimum amount of $5,000,000,
(e) Helix shall be reasonably satisfied with the accounting treatment of the
Transaction for accounting and financial statement purposes, including without
limitation, the receipt of audited financial statements of Venco in accordance
with applicable rules of the Securities and Exchange Commission, and (f) the
Venco Shareholders shall be reasonably satisfied with the accounting treatment
of the Transaction for tax accounting purposes. The non-compete provisions which
are included in the employment agreements and the consulting agreements referred
to herein shall terminate and have no further force and effect if Helix either
files or is forced into bankruptcy.

After the Closing, all new obligations and liabilities of the business of Venco
moving forward shall, subject to the approval by Helix, be the responsibility
and obligation of Helix.

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Venco Power GmbH
Page 4 of 6
 

 
3.           Conduct of Business.  Prior to the execution of a Definitive
Agreement and the closing of the Transaction, Venco will conduct its operations
in the ordinary course consistent with past practice and will not issue any
capital stock, warrants, options or other rights or commitments of any character
to subscribe for purchase from Venco, or obligate Venco to issue, any equity
interests of any class or any securities convertible into or exchangeable for
such interests, nor will Venco make any distributions, dividends or other
payments to any affiliate or shareholders.

4.           Public Announcements.  Neither Venco nor its officers, directors,
employees, shareholders, agents, representatives or affiliates will make any
public disclosure concerning the matters set forth in this letter of intent or
the negotiation of the proposed Transaction without the prior written consent of
Helix. Correspondingly, neither Helix nor its officers, directors, employees,
shareholders, agents, representatives or affiliates will make any public
disclosure concerning the matters set forth in this letter of intent or the
negotiation of the proposed Transaction without the prior written consent of the
Venco Shareholders. If and when such either such party desires to make such
public disclosure, after receiving such prior written consent from the
non-dsclosing party hereto, the disclosing party will give the non-disclosing
party an opportunity to review and comment on any such disclosure in advance of
its release.  Notwithstanding the above, to the extent that either party is
advised by counsel that disclosure of the matters set forth in this letter of
intent is required by applicable securities laws or to the extent that such
disclosure is ordered by a court of competent jurisdiction or is otherwise
required by law, then such disclosing party will provide the other party, if
reasonably possible under the circumstances, prior notice of such disclosure as
well as an opportunity to review and comment on such disclosure in advance of
the public release.

5.           Exclusivity.  In consideration hereof and the mutual covenants and
agreements contained herein, until the earlier of the closing of the Transaction
or termination of this letter of intent in accordance with its terms, Venco, its
officers, directors, employees, shareholders and other representatives will not,
and will not permit any of their respective affiliates to, directly or
indirectly, solicit, discuss, accept, approve, respond to or encourage
(including by way of furnishing information) any inquiries or proposals relating
to, or engage in any negotiations with any third party with respect to any
transaction similar to the Transaction or any transaction involving the transfer
of a significant or controlling interest in the assets or capital stock of
Venco, including, but not limited to, a merger, acquisition, strategic
investment or similar transaction (“Acquisition Proposal”). Venco and its
officers or their respective affiliates will immediately notify Helix of the
receipt of any third party inquiry or proposal relating to an Acquisition
Proposal and will provide Helix with copies of any such notice inquiry or
proposal.

6.           Termination.  This letter of intent may be terminated by Helix or
Venco at any time without cost or liability if the Definitive Agreement is not
executed within 90 days after the execution and delivery of this letter for any
reason whatsoever, including any possible delay caused by required compliance
with applicable antitrust provisions.

If there is no Closing, the obligations and rights of the parties pursuant to
the Distribution Agreement currently existing between Helix and Venco shall
remain in full force and effect in accordance with the terms thereof and neither
Helix nor Venco shall manufacture any Venco or Helix products for its own
account or make any use of any technology, trade secrets or other intellectual
property which either such party has gained access to or become aware of as the
result of the Transaction contemplated hereunder.

7.           No Brokers.   Each party represents and warrants to the other that
there are no brokers or finders entitled to any compensation with respect to the
execution of this letter of intent, and each agrees to indemnify and hold the
other harmless from and against any expenses or damages incurred as a result of
a breach of this representation and warranty.
 
 

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Venco Power GmbH
Page 5 of 6

 
8.           Expenses.  Each of the parties will be responsible for its own
expenses in connection with the Transaction, including fees and expenses of
legal, accounting and financial advisors, provided, however, that if Helix
terminates this letter of intent or the Definitive Agreement for any reason
other than the breach or default of the Venco Shareholders, Helix shall be
required to reimburse the Venco Shareholders promptly upon demand for verifiable
itemized expenses incurred by the Venco Shareholders in connection with or
arising from this Transaction, up to a cumulative total of 3,000 Euros, upon
submission of proper invoices by the Venco Shareholders to Helix.  The foregoing
provision shall be deemed to expressly survive the termination of this letter of
intent and  the termination of the Definitive Agreement.

9.           Choice of Law; Mediation.  This letter of intent shall be governed
by and construed in accordance with the internal substantive laws of the United
Kingdom. If there is any dispute between the parties regarding the terms of this
letter of intent which, after attempting in good faith to resolve the issue
between themselves remains unresolved, each party shall select a person and the
two selected persons shall mutually select a third person. Said three persons
shall determine the outcome of the dispute.

10.           Compliance with the Securities Laws.  Venco acknowledges that it
and its officers, directors, shareholders and employees and other
representatives may, in connection with their consideration of the proposed
Transaction, come into possession of material non-public information about
Helix.  Accordingly, Venco will use its best efforts to ensure that none of its
officers, directors, shareholders and employees or other representatives will
trade (or cause or encourage any third party to trade) in any of the securities
of Helix while in possession of any such material, non-public information.

Helix acknowledges that it and its officers, directors, shareholders and
employees and other representatives may, in connection with their consideration
of the proposed Transaction, come into possession of material non-public
information about Venco.  Accordingly, Helix will use its best efforts to ensure
that none of its officers, directors, shareholders and employees or other
representatives will trade (or cause or encourage any third party to trade) in
any of the securities of Venco while in possession of any such material,
non-public information.
 
 

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Venco Power GmbH
Page 6 of 6

 
11.           Counterparts.  This letter of intent may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.  Fax copies of signatures
shall be treated as originals for all purposes.
 

 
Very truly yours,
 
HELIX WIND, CORP.
 
By: /s/ Ian Gardner        
Name: Ian Gardner
Title: CEO

Agreed and Accepted:

Shareholders VENCO Power GmbH

By: /s/ Dr. Matthias Pfalz        
Name: Dr. Matthias Pfalz
Title: CEO
Fiber-Tech Products GmbH, Shareholder

By: /s/ Andreas Görke        
Name: Andreas Görke
Title: CEO
Weser Anlagentechnik Beteiligungs GmbH

By: /s/ Reinhard Caliebe        
Name: Reinhard Caliebe
Title: CEO
CLANA Power Systems GmbH