helix_ex1002.htm

 

    
      

    


    Exhibit
10.2
 

    
      	
              $780,000.00

            	
              January
      27, 2010

            


    

    


    HELIX WIND, CORP.

    Convertible
Secured Promissory Note

     

    FOR VALUE RECEIVED, Helix
Wind, Corp., a Nevada corporation (the “Borrower”),
hereby promises to pay to St. George Investments, LLC, an Illinois limited
liability company, its successor or assigns (the “Lender,”
and together with the Borrower, the “Parties”),
the principal sum of $780,000.00 together with all accrued and unpaid interest
thereon, fees incurred or other amounts owing hereunder, all as set forth below
in this Convertible Secured Promissory Note (this “Note”).
This Note is issued pursuant to that certain Note and Warrant Purchase Agreement
of even date herewith, entered into by and between the Borrower and the Lender
(the “Note
and Warrant Purchase
Agreement”).

     

    1.           Principal and Interest
Payments. Interest on the unpaid principal balance of this Note shall not
accrue unless a Trigger Event (as defined in Section 12 below) occurs. Upon the
occurrence of a Trigger Event, the Outstanding Balance (as defined below) of
this Note shall accrue simple interest at the rate of 18.00% per annum from and
after the date of the occurrence of the Trigger Event, whether before or after
judgment. Notwithstanding any provision to the contrary herein, in no event
shall the applicable interest rate at any time exceed the maximum interest rate
allowed under applicable law.  If not sooner converted as provided
below, the entire unpaid principal balance and all accrued and unpaid interest,
if any, shall be due and payable upon the earlier of (a) the date that is six
months from the date of this Note, or (b) the date on which the Company has
raised in excess of $5,000,000 from investors or lenders since the date of this
Note (the “Maturity
Date”). All payments owing hereunder shall be in lawful money of the
United States of America delivered to the Lender at the address furnished to the
Borrower for that purpose. All payments shall be applied first to costs of
collection, if any, then to accrued and unpaid interest, and thereafter to
principal. For purposes hereof, the term “Outstanding
Balance” means the sum of the outstanding principal balance of this Note,
the Origination Fee (defined below), and any accrued but unpaid interest,
collection and enforcement costs, and any other fees incurred under this
Note.

     

    2.           Origination
Fee.  The Company acknowledges that the initial principal
balance of this Note and the value of the Warrant (as defined below) exceeds the
Note and Warrant Purchase Price (as defined in the Note and Warrant Purchase
Agreement) and that such excess is an origination fee (the “Origination
Fee”) which shall be fully earned and charged to the Company upon the
execution of this Note, and shall be paid to the Lender as part of the
outstanding principal balance as set forth in this Note; provided, however, that in
the event of a failure of the Second Closing (as defined in the Note and Warrant
Purchase Agreement), then the principal balance of this Note shall be reduced
according to the terms of the Note and Warrant Purchase
Agreement.   

     

    3.           Collateral. This Note shall be
secured by the Collateral, as defined in the Pledge Agreement (defined below)
substantially in the form attached hereto as Exhibit
A, all the terms and conditions of which are incorporated
herein.

     


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    


     

    4.           Conversion.

     

     

    (a)           Optional
Conversion. At any time or from time
to time after the date that is six months from the date of this Note and prior
to payment in full of the entire outstanding principal balance of this Note,
plus accrued interest and fees hereunder (collectively, the “Outstanding
Amount”), the Lender shall have the right, at the Lender’s option, to
convert the Outstanding Amount, in whole or in part (the “Conversion
Amount”), into common stock (the “Common
Stock”) of the Borrower.  The number of shares of Common Stock
to be issued upon such conversion shall be determined by dividing (a) the
Conversion Amount by (b) the lower of (i) the average volume-weighted average
price (the “VWAP”) for
the three (3) trading days with the lowest average VWAP of the twenty trading
days immediately preceding the date set forth on the Conversion Notice (defined
below), or (ii) 50% of the VWAP over the five (5) trading days immediately
preceding the date set forth in the Conversion Notice (the lower of the
foregoing (i) and (ii), the “Conversion
Price”).  The trading data used to compute the VWAP shall be as
reported by Bloomberg, LP, or if such information is not then being reported by
Bloomberg, LP, then as reported by such other data information source as may be
selected by the Lender.

     

    (b)           Conversion Mechanics.
In order to convert this Note into Common Stock, the Lender shall give written
notice to the Borrower at its principal corporate office or the notice address
provided in the Note and Warrant Purchase Agreement (which notice,
notwithstanding anything herein to the contrary, may be given via facsimile,
email, or other means in the discretion of the Lender) pursuant to the form
attached hereto as Exhibit
B (the “Conversion
Notice”) of the election to convert the same pursuant to this
Section.  Such Conversion Notice shall state the Conversion Amount,
the number of shares of Common Stock to which Lender is entitled pursuant to the
Conversion Notice (the “Conversion
Shares”), and the account in which the shares of Common Stock are to be
deposited (the “Lender
Account”).  The Borrower shall immediately, but in no event
later than three days after receipt of a Conversion Notice, deliver the
Conversion Shares to the Lender Account.  Notwithstanding anything
herein to the contrary, all such deliveries of Conversion Shares shall be
electronic, via DWAC or DTC.  In the event the Borrower fails to
deliver the Conversion Shares within three days of receipt of the Conversion
Notice, in addition to all other remedies available to the Lender hereunder and
at law or in equity, a penalty equal to 1.5% of the Conversion Amount shall be
added to the balance of this Note per day.  The conversion shall be
deemed to have been made immediately prior to the close of business on the date
of the Conversion Notice, and the person or entity 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.

     

    (c)           No Fractional Shares.
Conversion calculations pursuant to Section 4(a) shall be rounded up to the
nearest whole share, and no fractional shares shall be issuable by the Borrower
upon conversion of this Note. All shares issuable upon a conversion of this Note
(including fractions thereof) shall be aggregated for purposes of determining
whether such conversion would result in the issuance of a fractional
share.

     

    (d)           No
Impairment.  The Borrower will not, by amendment of its
Articles of Incorporation or through any reorganization, recapitalization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed hereunder by the
Borrower, but will at all times in good faith assist in the carrying out of all
the provisions of this Section 4 and in the taking of all such action as may be
necessary or appropriate in order to protect the conversion rights of the Lender
against impairment.

     


    
      
         


      

      
        2

        
          

        

      

      
         


      

    


    


     

    5.           Prepayment by the Borrower.
The Borrower may, in its sole and absolute discretion, pay all or any portion of
the outstanding principal balance along with any accrued but unpaid interest on
this Note at any time prior to the Maturity Date without penalty or
premium.

     

    6.            Certain Adjustments. The
number and class or series of shares into which this Note may be converted under
Section 4 shall be subject to adjustment in accordance with the following
provisions:

     

    (a)           Computation of Adjusted
Conversion Price.   Except as hereinafter provided, in case the
Borrower shall at any time after the date hereof issue or sell any (i) shares of
Common Stock or preferred shares convertible into Common Stock, or (ii) debt,
warrants, options or other instruments or securities which are convertible into
or exercisable for shares of Common Stock (together herein referred to as “Equity
Securities”), in each case for consideration (or with a conversion price)
per common share less than the Conversion Price in effect immediately prior to
the issuance or sale of such securities or instruments, or without
consideration, other than Excepted Issuances (as defined below) then forthwith
upon such issuance or sale, the Conversion Price shall (until another such
issuance or sale) be reduced to the price (calculated to the nearest full cent)
equal to the price (or conversion price) of any such securities or instruments;
provided, however, that
in no event shall the Conversion Price be adjusted pursuant to this computation
to an amount in excess of the Conversion Price in effect immediately prior to
such computation. For the purposes of this Section 6, the term Conversion Price
shall mean the Conversion Price per share set forth in Section 4(a) hereof, as
adjusted from time to time pursuant to the provisions of this
Section.

     

    “Excepted
Issuances” shall mean (i) the Borrower’s issuance of securities in
connection with strategic license agreements and other partnering arrangements
so long as such issuances are not for the purpose of raising capital and which
holders of such securities or debt are not at any time granted registration
rights, (ii) the Borrower’s issuance of Common Stock or the issuances or grants
of options to purchase Common Stock to employees, directors, and consultants,
pursuant to plans which are constituted on the date of this Note, and (iii) the
warrants being issued to the Lender in connection with this Note (collectively,
the foregoing (i) through (iii) are “Excepted
Issuances”).

     

    For purposes of any computation to be
made in accordance with this Section 6, the following provisions shall be
applicable:

     

    (i)           In
case of the issuance or sale of any shares of Equity Securities for a
consideration part or all of which shall be cash, the amount of the cash
consideration shall be deemed to be the amount of cash received by the Borrower
for such shares (or, if shares of stock are offered by the Borrower for
subscription, the subscription price, or, if either of such securities shall be
sold to underwriters or dealers for public offering without a subscription
price, the public offering price, before deducting therefrom any compensation
paid or discount allowed in the sale, underwriting or purchase thereof by
underwriters or dealers or other persons or entities performing similar
services), or any expenses incurred in connection therewith and less any amounts
payable to security holders or any affiliate thereof, including, without
limitation, any employment agreement, royalty, consulting agreement, covenant
not to compete, earnout or contingent payment right or similar arrangement,
agreement or understanding, whether oral or written; all such amounts shall be
valued at the aggregate amount payable thereunder whether such payments are
absolute or contingent and irrespective of the period or uncertainty of payment,
the rate of interest, if any, or the contingent nature thereof.

     


    
      
         


      

      
        3

        
          

        

      

      
         


      

    


    (ii)           In
case of the issuance or sale (otherwise than as a dividend or other distribution
on any stock of the Borrower) of shares of Equity Securities for a consideration
part or all of which shall be other than cash, the amount of the consideration
therefore other than cash shall be deemed to be the value of such consideration
as determined in good faith by the Board of Directors of the
Borrower.

     

    (iii)           Shares
of Equity Securities issuable by way of dividend or other distribution on any
capital stock of the Borrower shall be deemed to have been issued immediately
after the opening of business on the day following the record date for the
determination of stockholders entitled to receive such dividend or other
distribution and shall be deemed to have been issued without
consideration.

     

    (iv)           The
reclassification of securities of the Borrower other than shares of Equity
Securities into securities including shares of Equity Securities shall be deemed
to involve the issuance of such shares of Equity Securities for consideration
other than cash immediately prior to the close of business on the date fixed for
the determination of security holders entitled to receive such shares, and the
value of the consideration allocable to such shares of stock shall be determined
as provided in this Section 6.

     

    (v)           The
number of shares of Equity Securities at any one time outstanding shall include
the aggregate number of shares issued or issuable (subject to readjustment upon
the actual issuance thereof) upon the exercise of then outstanding options,
rights, warrants, and convertible and exchangeable securities.

     

    (b)            Adjustment for
Reorganization or Recapitalization. If, while this Note remains
outstanding and has not been converted, there shall be a reorganization or
recapitalization of the Borrower (other than a combination, reclassification,
exchange or subdivision of shares otherwise provided for herein), all necessary
or appropriate lawful provisions shall be made so that the Lender shall
thereafter be entitled to receive upon conversion of this Note, the greatest
number of shares of stock or other securities or property that a holder of the
class of securities deliverable upon conversion of this Note would have been
entitled to receive in such reorganization or recapitalization if this Note had
been converted immediately prior to such reorganization or recapitalization, all
subject to further adjustment as provided in this Section 6. If the per share
consideration payable to the Lender for such class of securities in connection
with any such transaction is in a form other than cash or marketable securities,
then the value of such consideration shall be determined in good faith by the
Borrower’s Board of Directors. The foregoing provisions of this paragraph shall
similarly apply to successive reorganizations or recapitalizations and to the
stock or securities of any other corporation that are at the time receivable
upon the conversion of this
Note. In all events, appropriate adjustment shall be made in the application of
the provisions of this Note (including adjustment of the conversion price and
number of shares into which this Note is then convertible pursuant to the terms
and conditions of this Note) with respect to the rights and interests of the
Lender after the transaction, to the end that the provisions of this Note shall
be applicable after that event, as near as reasonably may be, in relation to any
shares or other property deliverable or issuable after such reorganization or
recapitalization upon conversion of this Note.

     


    
      
         


      

      
        4

        
          

        

      

      
         


      

    


    (c)            Adjustments for Split
Subdivision or Combination of Shares.     If the
Borrower at any time while this Note remains outstanding and unconverted, shall
split or subdivide any class of securities into which this Note may be converted
into a different number of securities of the same class, the number of shares of
such class issuable upon conversion of this Note immediately prior to such split
or subdivision shall be proportionately increased and the conversion price for
such class of securities shall be proportionately decreased. If the Borrower at
any time while this Note, or any portion hereof, remains outstanding and
unconverted shall combine any class of securities into which this Note may be
converted, into a different number of securities of the same class, the number
of shares of such class issuable upon conversion of this Note immediately prior
to such combination shall be proportionately decreased and the conversion price
for such class of securities shall be proportionately increased.

     

    (d)            Adjustments for Dividends in
Stock or Other Securities or Property. If, while this Note remains
outstanding and unconverted, the holders of any class of securities as to which
conversion rights under this Note exist at the time shall have received, or, on
or after the record date fixed for the determination of eligible stockholders,
shall have become entitled to receive, without payment therefor, other or
additional stock or other securities or property (other than cash) of the
Borrower by way of dividend, then and in each case, this Note shall represent
the right to acquire, in addition to the number of shares of such class of
security receivable upon conversion of this Note, and without payment of any
additional consideration therefor, the amount of such other or additional stock
or other securities or property (other than cash) of the Borrower that such
holder would hold on the date of such conversion had it been the holder of
record of the class of security receivable upon conversion of this Note on the
date hereof and had thereafter, during the period from the date hereof to and
including the date of such conversion, retained such shares and/or all other
additional stock available by it as aforesaid during said period, giving effect
to all adjustments called for during such period by the provisions of this
Section 6.

     

    (e)            No Change Necessary.
The form of this Note need not be changed because of any adjustment in the
number of shares of Common Stock issuable upon its conversion.

     

    7.           Further Adjustments. In case at any time or,
from time to time, the Borrower shall take any action that affects the class of
securities into which this Note may be converted under Section 4, other than an
action described herein, then, unless such action will not have a material
adverse effect upon the rights of the Lender, the number of shares of such class
of securities (or other securities) into which this Note is convertible shall be
adjusted in such a manner and at such time as shall be equitable under the
circumstances.

     


    
      
         


      

      
        5

        
          

        

      

      
         


      

    


    8.           Certificate as to Adjustments.
Upon the occurrence of each adjustment or readjustment pursuant to Section 6 or
Section 7, the Borrower at its sole expense shall promptly compute such
adjustment or readjustment in accordance with the terms hereof and furnish to
the Lender a certificate setting forth such adjustment or readjustment and
showing in detail the facts upon which such adjustment or readjustment is based.
The Borrower shall, upon the written request at any time of the Lender, furnish
or cause to be furnished to the Lender a like certificate setting forth (i) such
adjustments and readjustments, and (ii) the number and class of securities and
the amount, if any, of other property which at the time would be received upon
the conversion of this Note under Section 4.

     

    9.           Change of Control. In the
event of (i) any transaction or series of related transactions (including any
reorganization, merger or consolidation) that results in the transfer of 50% or
more of the outstanding voting power of the Borrower, or (ii) a sale of all or
substantially all of the assets of the Borrower to another person or entity,
this Note shall be automatically due and payable. The Borrower will give the
Lender not less than ten (10) business days prior written notice of the
occurrence of any events referred to in this Section 9.

     

    10.           Representations and Warranties of the
Borrower.  In addition to the representations and warranties
set forth in the Note and Warrant Purchase Agreement, which are incorporated
herein, the Borrower hereby represents and warrants to the Lender
that:

     

    (a)           The
Borrower understands and acknowledges that the number of Conversion Shares
issuable upon conversion of this Note will increase in certain circumstances.
The Borrower further acknowledges that its obligation to issue Conversion Shares
upon conversion of this Note in accordance with its terms is absolute and
unconditional regardless of the dilutive effect that such issuance may have on
the ownership interests of other stockholders of the Borrower;

     

    (b)           The
Conversion Shares are enforceable against the Borrower and that the Borrower
presently has no claims or defenses of any nature whatsoever with respect to the
Conversion Shares;

     

    (c)           The
Borrower’s Common Stock is registered under Section 12(g) of the Securities
Exchange Act of 1934 (the “Exchange
Act”);

     

    (d)           The
Company is subject to the reporting requirements of section 13 or 15(d) of the
Exchange Act and has filed all required reports under section 13 or 15(d) of the
Exchange Act during the 12 months prior to the date hereof (or for such shorter
period that the issuer was required to file such reports); and

     

    (e)           The
issuance of this Note is duly authorized. Upon conversion in accordance with the
terms of this Note, the Conversion Shares, when issued, will be validly issued,
fully paid and non-assessable, free from all taxes, liens, claims, pledges,
mortgages, restrictions, obligations, security interests and encumbrances of any
kind, nature and description. The Company has reserved from its duly authorized
capital stock the appropriate number of shares of Common Stock for issuance upon
conversion of this Note as required by the terms of this Note.

     


    
      
         


      

      
        6

        
          

        

      

      
         


      

    


    11.           Affirmative and Negative
Covenants. In addition to the covenants set forth in the Note and Warrant
Purchase Agreement, the Borrower covenants and agrees that, while any amounts
under this Note are outstanding, it shall:

     

    (a)           Do
all things necessary to preserve and keep in full force and effect its corporate
existence, including, without limitation, all licenses or similar qualifications
required by it to engage in its business in all jurisdictions in which it is at
the time so engaged; and continue to engage in business of the same general type
as conducted as of the date hereof; and (ii) continue to conduct its business
substantially as now conducted or as otherwise permitted hereunder;

     

    (b)           Pay
and discharge promptly when due all taxes, assessments and governmental charges
or levies imposed upon it or upon its income or profits or in respect of its
property before the same shall become delinquent or in default, which, if
unpaid, might reasonably be expected to give rise to liens or charges upon such
properties or any part thereof, unless, in each case, the validity or amount
thereof is being contested in good faith by appropriate proceedings and the
Borrower has maintained adequate reserves with respect thereto in accordance
with GAAP;

     

    (c)           Comply
in all material respects with all federal, state and local laws and regulations,
orders, judgments, decrees, injunctions, rules, regulations, permits, licenses,
authorizations and requirements applicable to it (collectively, “Requirements”)
of all governmental bodies, departments, commissions, boards, companies or
associations insuring the premises, courts, authorities, officials or officers
which are applicable to the Borrower or any of its properties, except where the
failure to so comply would not have a material adverse effect on the Borrower or
any of its properties; provided, however, that nothing
provided herein shall prevent the Borrower from contesting the validity or the
application of any Requirements;

     

    (d)           Keep
proper records and books of account with respect to its business activities, in
which proper entries, reflecting all of their financial transactions, are made
in accordance with GAAP;

     

    (e)           From
the date hereof until all the Conversion Shares either have been sold by the
Lender, or may permanently be sold by the Lender without any restrictions
pursuant to Rule 144, (the “Registration
Period”) the Borrower shall file with the Securities and Exchange
Commission (the “SEC”) in a
timely manner all required reports under section 13 or 15(d) of the Exchange
Act, as amended, and such reports shall conform to the requirement of the
Exchange Act and the SEC for filing thereunder;

     

    (f)           The
Borrower shall furnish to the Lender so long as the Lender owns Common Stock,
promptly upon request, (i) a written statement by the Borrower that it has
complied with the reporting requirements of Rule 144, (ii) a copy of the most
recent annual or quarterly report of the Borrower and such other reports and
documents so filed by the Borrower, and (iii) such other information as may be
reasonably requested to permit the Lender to sell such securities pursuant to
Rule 144 without registration;

     


    
      
         


      

      
        7

        
          

        

      

      
         


      

    


    (g)           During
the Registration Period, the Borrower shall not terminate its status as an
issuer required to file reports under the Exchange Act even if the Exchange Act
or the rules and regulations thereunder would otherwise permit such
termination;

     

    (h)           On
the date hereof, the Borrower shall reserve for issuance to the Lender 2,300,000
shares for issuance upon conversions of the Note and/or exercise of the Warrant
(the “Share
Reserve”). The Company represents that it has sufficient authorized and
unissued shares of Common Stock available to create the Share Reserve after
considering all other commitments that may require the issuance of Common Stock.
The Company shall take all action reasonably necessary to at all times have
authorized, and reserved for the purpose of issuance, such number of shares of
Common Stock as shall be necessary to effect the full conversion of the Note and
exercise of the Warrant. If at any time the Share Reserve is insufficient to
effect the full conversion of the Note and exercise of the Warrant, the Company
shall increase the Share Reserve accordingly. If the Company does not have
sufficient authorized and unissued shares of Common Stock available to increase
the Share Reserve, the Company shall call and hold a special meeting of the
shareholders within thirty (30) days of such occurrence, for the sole purpose of
increasing the number of shares authorized. The Company’s management shall
recommend to the shareholders to vote in favor of increasing the number of
shares of Common Stock authorized. Management shall also vote all of its shares
in favor of increasing the number of authorized shares of Common
Stock;

     

    (i)       
    The Borrower’s Common Stock shall be listed or quoted
for trading on any of (a) the American Stock Exchange, (b) New York Stock
Exchange, (c) the Nasdaq Global Market, (d) the Nasdaq Capital Market, or (e)
the Nasdaq OTC Bulletin Board (each, a “Primary
Market”). The Borrower shall promptly secure the listing of all of the
Securities upon each national securities exchange and automated quotation
system, if any, upon which the Common Stock is then listed (subject to official
notice of issuance) and shall maintain such listing of all securities from time
to time issuable under the terms of the Transaction Documents;

     

    (j)       
    Notify the Lender in writing, promptly upon learning
thereof, of any litigation or administrative proceeding commenced or threatened
against the Borrower involving a claim in excess of $100,000;

     

    (k)           Use
the proceeds from this Note for working capital and general corporate purposes;
and

     

    (l)        
   To not issue any instructions to Island Stock Transfer or any
other transfer agent contrary to the instructions set forth in the Irrevocable
Instructions to Transfer Agent of even date herewith given by the Borrower and
Ian Gardner to Island Stock Transfer.

     

    12.           Trigger Events. Upon each
occurrence of any of the following events (each, a “Trigger
Event”), (a) the Outstanding Amount shall immediately increase to 125% of
the Outstanding Amount immediately prior to the occurrence of the Trigger Event,
and (b) this Note shall accrue interest at the rate of 18% per annum (the “Trigger
Effects”); provided, however, that in no
event shall the Trigger Effects be applied more than two times:

     


    
      
         


      

      
        8

        
          

        

      

      
         


      

    


    (a)           Decline in
VWAP.  A decline in the VWAP for the Common Stock for five (5)
consecutive trading days to a per share price of less than $1.50.

     

    (b)           Decline in Volume. A
decline in the five-day average daily dollar volume of the Common Stock in its
Primary Market to less than $100,000.00 of volume per day.

     

    (c)           Decline in Collateral
Value. A decline in the total value of all shares of Common Stock pledged
to secure this Note pursuant to that certain Stock Pledge Agreement of even date
herewith between the Lender and Ian Gardner, an individual (the “Pledge
Agreement”), to a value that is less than five (5) times the Outstanding
Balance.

     

    (d)           Failure to Deliver Warrant
Shares. The Borrower’s failure to deliver the Warrant Shares to the
Lender as such term is defined in that certain Warrant to Purchase Shares of
Common Stock issued to the Lender pursuant to the Note and Warrant Purchase
Agreement (the “Warrant”).

     

    (e)           Events of Default.
The occurrence of any Event of Default hereunder.

     

    (f)     
      Insufficient Authorized
Shares. The Borrower’s failure to maintain sufficient authorized but
unissued common shares to honor the conversion of this Note.

     

    13.           Default. If any of the events
specified below shall occur (each, an “Event of
Default”) the Lender may (i) declare the unpaid principal balance
together with all accrued and unpaid interest thereon due and payable, by notice
in writing to the Borrower, and (ii) exercise its rights and remedies under the
Pledge Agreement including, without limitation, its right to sell the Collateral
(as defined in the Pledge Agreement) in satisfaction or partial satisfaction of
Borrower’s obligations under this Note:

     

    (a)           Failure to Pay. The
Borrower’s failure to make any payment when due and payable under the terms of
this Note including, without limitation, any payment of costs, fees, interest,
principal or other amount due hereunder.

     

    (b)           Failure to Deliver
Shares.  The Borrower’s failure to deliver the Conversion
Shares as provided under Section 4(b) of this Note.

     

    (c)           Collateral Value. The
market value of the Collateral (as defined in the Pledge Agreement) at any time
prior to the repayment in full of this Note does not equal or exceed five
hundred percent (500%) of the Outstanding Amount of this Note.

     

    (d)           Trigger Event. The
occurrence of any Trigger Event hereunder that remains uncured for three (3)
days.

     

    (e)           Breaches of
Covenants. The Borrower or its subsidiaries, if any, shall fail to
observe or perform any other covenant, obligation, condition or agreement
contained in this Note or the other Transaction Documents (as defined in the
Note and Warrant Purchase Agreement).

     


    
      
         


      

      
        9

        
          

        

      

      
         


      

    


    


     

    (f)           Representations and
Warranties. Any representation, warranty, certificate, or other statement
(financial or otherwise) made or furnished by or on behalf of the Borrower to
the Lender in writing included in this Note or in connection with any of the
Transaction Documents, or as an inducement to the Lender to enter into this Note
or any of the Transaction Documents, shall be false, incorrect, incomplete or
misleading in any material respect when made or furnished or becomes false
thereafter.

     

    (g)           Failure to Pay Debts;
Voluntary Bankruptcy. If any of the Borrower’s assets are assigned to its
creditors, if the Borrower fails to pay its debts generally as they become due,
or if the Borrower files any petition, proceeding, case or action for relief
under any bankruptcy, reorganization, insolvency or moratorium law, rule,
regulation, statute or ordinance (collectively, “Laws and
Rules”), or any other Law and Rule for the relief of, or related to,
debtors.

     

    (h)           Involuntary
Bankruptcy. If any involuntary petition is filed under any bankruptcy or
similar Law or Rule against the Borrower, or a receiver, trustee, liquidator,
assignee, custodian, sequestrator or other similar official is appointed to take
possession of any of the assets or properties of the Borrower or any
guarantor.

     

    (i)           Governmental Action.
If any governmental or regulatory authority takes or institutes any action that
will materially affect the Borrower’s financial condition, operations or ability
to pay or perform the Borrower’s obligations under this Note.

     

    14.           Ownership Limitation.
Notwithstanding the provisions of this Note, in no event shall the this Note be
convertible to the extent that the issuance of Common Stock upon the conversion
thereof, after taking into account the Common Stock then owned by the Lender and
its affiliates, would result in the beneficial ownership by the Lender and its
affiliates of more than 9.99% of the outstanding Common Stock of the
Borrower.  For purposes of this paragraph, beneficial ownership shall
be determined in accordance with Section 13(d) of the Exchange Act.

     

    15.           No Rights or Liabilities as
Shareholder. This Note does not by itself entitle the Lender to any
voting rights or other rights as a shareholder of the Borrower. In the absence
of conversion of this Note, no provisions of this Note, and no enumeration
herein of the rights or privileges of the Lender, shall cause the Lender to be a
shareholder of the Borrower for any purpose.

     

    16.           Binding Effect. This Note
shall be binding on the Parties and their respective heirs, successors, and
assigns; provided,
however, that the Borrower shall not assign its rights hereunder in whole
or in part without the express written consent of the Lender.

     

    17.           Governing Law; Venue. The
terms of this Note shall be construed in accordance with the laws of the State
of Illinois as applied to contracts entered into by Illinois residents within
the State of Illinois which contracts are to be performed entirely within the
State of Illinois.  With respect to any disputes arising out of or
related to this Note, the parties consent to the exclusive jurisdiction of, and
venue in, the state courts in Illinois (or in the event of federal jurisdiction,
the United States District Court Northern District of Illinois).

     


    
      
         


      

      
        10

        
          

        

      

      
         


      

    


    18.           Severability. If any part of
this Note is construed to be in violation of any law, such part shall be
modified to achieve the objective of the parties to the fullest extent permitted
by law and the balance of this Note shall remain in full force and
effect.

     

    19.            Attorneys’ Fees. If any
action at law or in equity is necessary to enforce this Note or to collect
payment under this Note, the Lender shall be entitled to recover reasonable
attorneys’ fees directly related to such enforcement or collection
actions.

     

    20.            Amendments and Waivers;
Remedies. No failure or delay on the part of a party hereto in exercising
any right, power or remedy hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right, power or remedy preclude
any other or further exercise thereof or the exercise of any other right, power
or remedy. The remedies provided for herein are cumulative and are not exclusive
of any remedies that may be available to a party hereto at law, in equity or
otherwise. Any amendment, supplement or modification of or to any provision of
this Note, any waiver of any provision of this Note, and any consent to any
departure by either Party from the terms of any provision of this Note, shall be
effective (i) only if it is made or given in writing and signed by the Borrower
and the Lender and (ii) only in the specific instance and for the specific
purpose for which made or given.

     

    21.           Notices. All notices,
requests, demands, claims and other communications hereunder shall be in
writing.  Any notice, request, demand, claim or other communication
hereunder shall be deemed duly given if it is sent by registered or certified
mail, return receipt requested, postage prepaid, and addressed to the intended
recipient, as set forth in the Note and Warrant Purchase Agreement. Any party
may send any notice, request, demand, claim or other communication hereunder to
the intended recipient at the address set forth in the Note and Warrant Purchase
Agreement using any other means (including personal delivery, expedited courier,
messenger service, facsimile, ordinary mail, or electronic mail), but no such
notice, request, demand, claim or other communication shall be deemed to have
been duly given unless and until it actually is received by the intended
recipient or receipt is confirmed electronically or by return
mail.  Any party may change the address to which notices, requests,
demands, claims and other communications hereunder are to be delivered by giving
the other party notice in any manner herein set forth.

     

    22.           
Final Note. This Note,
together with the Transaction Documents, contains the complete understanding and
agreement of the Borrower and Lender and supersedes all prior representations,
warranties, agreements, arrangements, understandings, and negotiations. THIS
NOTE REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF ANY ALLEGED PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.

     

    [Remainder
of page intentionally left blank]


    
      
         


      

      
        11

        
          

        

      

      
         


      

    


    


    IN WITNESS WHEREOF, the
Borrower has executed this Note as of the date set forth above.

    


    Exhibits

    Exhibit A
– Pledge Agreement

    Exhibit B
– Conversion Notice

    


    


    
      	 
      	
              HELIX
      WIND, CORP.

            
	 
      	 
      
	 
      	 
      
	 
      	
              By: 
      /s/
      Ian
      Gardner                                       
      

            
	 
      	
              Name:
      Ian
      Gardner

            
	 
      	
              Title:   CEO

            
	 
      	 
      


    

    


     

    


     

    ACKNOWLEDGED,
ACCEPTED AND AGREED:

     

    


    ST.
GEORGE INVESTMENTS, LLC

     

    


    


    By:   /s/ John M. Fife,
Manager                        


    John M.
Fife, Manager

     
 

     

    [Signature page to Converttible Promissory Note]


    
      
         


      

      
        12