helix_8k-ex1004.htm


    
      

    

    Exhibit
10.4

     

    


    
      	
              $130,000.00

            	
              May
      1, 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 $130,000.00 (the “Principal
Amount”) 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
dated as of March 30, 2010, entered into by and between the Borrower and the
Lender (the “Purchase
Agreement”).

     

    1.           Principal and Interest
Payments. Interest on the unpaid principal balance of this Note shall not
accrue unless a Liquidity Default or an Event of Default (each as defined
hereafter) occurs.  As set forth in hereafter, upon the occurrence of
a Liquidity Default or an Event of Default, the Outstanding Balance (as defined
below) of this Note shall accrue simple interest at the rate of 15.00% per annum
from and after the date of the occurrence of the Liquidity Default or Event of
Default, whether before or after judgment, until paid in full. 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 Borrower has raised in excess of an
aggregate of $1,000,000 from investors or lenders other than the Lender
subsequent to the date of the Purchase Agreement (the “Maturity
Date”). All payments owing hereunder shall be made 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
and any accrued but unpaid interest, collection and enforcement costs, and any
other fees incurred under this Note.

     

    2.           Prepayment by the Borrower.
The Borrower may, in its sole and absolute discretion, pay all or any portion of
the Outstanding Balance at any time prior to the Maturity Date without penalty
or premium.  Notwithstanding anything to the contrary herein, so long
as no Liquidity Default or Event of Default (as defined hereafter) has occurred,
the Borrower may fully repay this Note (the “Prepayment
Right”) at any time prior to the Maturity Date at a price equal to
$100,000.00 plus a multiple of (a) $100,000.00 times (b) three-tenths (0.3)
times (c) a fraction, the numerator of which is the number of days elapsed since
the date of this Note and the denominator of which is one hundred eighty
(180).  For avoidance of doubt, (x) interest hereunder, if applicable,
shall at all times be computed based on the greater of the Principal Amount or
the Outstanding Balance, and (y) if a Liquidity Default or Event of Default has
occurred, the Borrower shall not have the Prepayment Right.

     

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    


    3.           Original Issue
Discount.  The Borrower acknowledges that the Principal Amount
of this Note exceeds the Additional Net Purchase Price (as defined in the Note
Agreement) for this Note and that such excess is an original issue discount and
shall be fully earned and charged to the Borrower 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.   

     

    4.           Conversion.

     

    (a)           Optional
Conversion. At any time or from time
to time after the date of this Note and prior to payment in full of the
Outstanding Balance, the Lender shall have the right, at the Lender’s option, to
convert the Outstanding Balance, 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 (i) the
Conversion Amount by (ii) the lower of (1) 100% of the volume-weighted average
price of the Common Stock (the “VWAP”) for
the three (3) trading days with the lowest VWAP during the twenty (20) trading
days immediately preceding the date set forth on the Notice of Conversion
(defined below), or (2) 50% of the lower of (A) the average VWAP over the five
(5) trading days immediately preceding the date set forth in the Notice of
Conversion or (B) the VWAP on the day immediately preceding the date set forth
in the Notice of Conversion (the lower of the foregoing (1) and (2), the “Conversion
Price”).  The trading data used to compute the VWAP shall be as
reported by Bloomberg, LP (“Bloomberg”),
or if such information is not then being reported by Bloomberg, 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 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
A (the “Notice of
Conversion”) of the election to convert the same pursuant to this
Section.  Such Notice of Conversion shall state the Conversion Amount,
the number of shares of Common Stock to which Lender is entitled pursuant to the
Notice of Conversion (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 (3) days after receipt of a Notice of Conversion (the “Delivery
Date”), 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
on or before the Delivery Date, 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 until such
Conversion Shares are delivered.  The conversion shall be deemed to
have been made immediately prior to the close of business on the date of the
Notice of Conversion, 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.

     


    
      
         


      

      
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    (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.

     

    5.           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.

     

    “Excepted
Issuances” shall mean, collectively, (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 in which holders of such securities or debt are not at any time
granted registration rights, and (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.

     

    For purposes of any computation to be
made in accordance with this Section 5, the following provisions shall be
applicable:

     

    (i)           In
case of the issuance or sale of any shares of Equity Securities for
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.

     


    
      
         


      

      
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    (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 5.

     

    (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 5. 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 subsection 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.

     


    
      
         


      

      
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    (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 5.

     

    (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.

     

    6.           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.

     


    
      
         


      

      
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    7.           Certificate as to Adjustments.
Upon the occurrence of each adjustment or readjustment pursuant to Section 5 or
Section 6, 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.

     

    8.           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 8.

     

    9.           Representations and Warranties of the
Borrower.  In addition to the representations and warranties
set forth in the 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
Borrower’s Common Stock is registered under Section 12(g) of the Securities
Exchange Act of 1934 (the “Exchange
Act”);

     

    (c)           The
Borrower 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

     

    (d)           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 Borrower 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.

     

    10.           Affirmative and Negative
Covenants. In addition to the covenants set forth in the Purchase
Agreement, the Borrower covenants and agrees, while any amounts under this Note
are outstanding, as follows:

     


    
      
         


      

      
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    (a)           The
Borrower shall 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  continue to conduct its business substantially as now conducted
or as otherwise permitted hereunder;

     

    (b)           The
Borrower shall 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)           The
Borrower shall 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)           The
Borrower shall 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 written 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;

     

    (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;

     


    
      
         


      

      
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    (h)           On
the date hereof, the Borrower shall reserve for issuance to the Lender not less
than 850,000 shares for issuance upon conversions of the Note (the “Share
Reserve”). The Borrower 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 Borrower 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. If
at any time the Share Reserve is insufficient to effect the full conversion of
the Note, the Borrower shall increase the Share Reserve accordingly. If the
Borrower does not have sufficient authorized and unissued shares of Common Stock
available to increase the Share Reserve, the Borrower 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
Borrower’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 their 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 shares of
Common Stock representing any or all of the Conversion Shares 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 such securities from time to time issuable under
the terms of the Transaction Documents (as such term is defined in the Purchase
Agreement);

     

    (j)           The
Borrower shall 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)           The
Borrower shall use the proceeds from this Note for general working capital;
and

     

    (l)           The
Borrower will not issue any instructions to Island Stock Transfer or any other
transfer agent of the Company contrary to the instructions set forth in the
Irrevocable Instructions to Transfer Agent dated as of the date of the Purchase
Agreement given by the Borrower and Kenneth O. Morgan to Island Stock
Transfer.

     

    11.           Liquidity
Defaults.  Upon each occurrence of any of the following events
(each, a “Liquidity
Default”), the Outstanding Balance shall be immediately and automatically
increased to 125% of the Outstanding Balance in effect immediately prior to the
occurrence of such Liquidity Default (the “Liquidity Balance
Adjustment”), and upon the first occurrence of a Liquidity Default, (i)
the Outstanding Balance, as adjusted above, shall accrue interest at the rate of
15% per annum until this Note is repaid in full, and (ii) the Lender shall have
the right, at any time thereafter until this Note is repaid in full, to (a)
accelerate the Outstanding Balance, and (b) exercise default remedies under and
according to the terms of the Pledge (as defined hereafter); provided, however, that
notwithstanding anything to the contrary herein, in no event shall the Balance
Adjustments (as defined hereafter) be applied more than three (3)
times:

     


    
      
         


      

      
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    (a)           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.

     

    (b)           Decline in
VWAP.  A decline in the average VWAP for the Common Stock during any
consecutive five (5) day trading period to a per share price of less than eleven
cents ($0.11).

     

    For
avoidance of doubt, so long as no Event of Default shall have occurred, the
Lender shall remain obligated to purchase the Additional Notes and Additional
Warrants according to the terms and subject to the conditions of the Purchase
Agreement:

     

    12.           Default. If any of the events
specified below shall occur (each, an “Event of
Default”), (i) the Lender may declare the unpaid principal balance
together with all accrued and unpaid interest thereon immediately due and
payable, by notice in writing to the Borrower, (ii) the Lender may exercise
default remedies under and according to the terms of the Pledge, (iii) the
Outstanding Balance shall be immediately and automatically increased to 125% of
the Outstanding Balance in effect immediately prior to the occurrence of such
Event of Default (the “Default Balance
Adjustment” and, together with the Liquidity Balance Adjustment, the
“Balance
Adjustments”), and (iv) the Outstanding Balance, as adjusted above, shall
accrue interest at the rate of 15% per annum until this Note is repaid in full;
provided, however, that notwithstanding
anything to the contrary herein, in no event shall  the Balance
Adjustments be applied more than three (3) times:

     

    (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)           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
Purchase Agreement).

     

    (d)           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.

     

    (e)           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.

     


    
      
         


      

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

     

    (g)           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.

     

    (h)           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.

     

    13.           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
(the “9.99%
Cap”); provided
that such restriction shall apply only for so long as the 9.99% Cap would
be exceeded by a conversion hereunder.  For purposes of this Section,
beneficial ownership shall be determined in accordance with Section 13(d) of the
Exchange Act.

     

    14.           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.

     

    15.           Collateral.  This
Note is secured by that certain Stock Pledge Agreement dated as of the date of
the Purchase Agreement executed by Kenneth O. Morgan, a shareholder of the
Borrower, in favor of the Lender encumbering 4,800,000 shares of Common Stock
pledged by Mr. Morgan thereunder, all as more specifically set forth therein
(the “Pledge”).

     

    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 for the Northern District of
Illinois).

     

    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.

     


    
      
         


      

      
        10

        
          

        

      

      
         


      

    


    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 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 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.           
Entire Agreement. This
Note, together with the other 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, TOGETHER WITH THE OTHER TRANSACTION DOCUMENTS,
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.

     

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        11

        
          

        

      

      
         


      

    


     

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

    


    Exhibit

    Exhibit A
– Notice of Conversion

    


     

    
      
        	 	
                HELIX
      WIND, CORP.

              	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Scott
      Weinbrandt	 
	 	 	Name:
      Scott Weinbrandt	 
	 	 	Title:   Chief
      Executive Officer	 
	 	 	 	 


      



    ACKNOWLEDGED,
ACCEPTED AND AGREED:

    


     

    
      
        	
                ST.
      GEORGE INVESTMENTS, LLC

              	 
	 	 	 
	
                By:
      

              	/s/ John
      M. Fife	 
	 	Name:
      John M. Fife 	 
	 	Title:
      Manager 	 
	 	 	 


      



    
       

       

       

      [Signature
page to Convertible Promissory Note]