Exhibit 10.1
 
 
 
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES
MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF
(A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS OR (B) AN OPINION
OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR (II) UNLESS SOLD PURSUANT
TO RULE 144 UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY THE SECURITIES.  ANY TRANSFEREE OF THIS NOTE SHOULD
CAREFULLY REVIEW THE TERMS OF THIS NOTE.  THE PRINCIPAL AMOUNT REPRESENTED BY
THIS NOTE MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF.
 
SAGEBRUSH GOLD LTD
 
6% PROMISSORY NOTE
 
$2,000,000 July 18, 2011
 
FOR VALUE RECEIVED Sagebrush Gold Ltd., a Nevada corporation (the “Company”),
promises to pay to Continental Resources Group, Inc. (the “Holder”), the
principal amount of Two Million Dollars ($2,000,000), or such lesser amount as
shall equal the outstanding principal amount hereof, together with simple
interest from the date of this Note on the unpaid principal balance at a rate
equal to six percent (6%) per annum, computed on the basis of the actual number
of days elapsed and a year of 365 days. All unpaid principal, together with any
then accrued but unpaid interest and any other amounts payable hereunder, shall
be due and payable on six months from the original date of issuance (the
“Maturity Date”).
 
The following is a statement of the rights of the Holder of this Note and the
conditions to which this Note is subject, and to which the Holder, by the
acceptance of this Note, agrees:
 
1.           Event of Default.
 
(a)           For purposes of this Note, an “Event of Default” means:
 
(i)           the Company shall default in the payment of interest and/or
principal on this Note; or
 
(ii)           the Company shall fail to materially perform any covenant, term,
provision, condition, agreement or obligation of the Company under this Note
(other than for non-payment) and such failure shall continue uncured for a
period of ten (10) business days after notice from the Holder of such failure;
or
 
(iii)           the Company shall (1) become insolvent; (2) admit in writing its
inability to pay its debts generally as they mature; (3) make an assignment for
the benefit of creditors or commence proceedings for its dissolution; or (4)
apply for or consent to the appointment of a trustee, liquidator or receiver for
it or for a substantial part of its property or business; or
 
 
 
 
 
 

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(iv)           a trustee, liquidator or receiver shall be appointed for the
Company or for a substantial part of its property or business without its
consent and shall not be discharged within thirty (30) days after such
appointment; or
 
(v)           any governmental agency or any court of competent jurisdiction at
the insistence of any governmental agency shall assume custody or control of the
whole or any substantial portion of the properties or assets of the Company and
shall not be dismissed within thirty (30) days thereafter; or
 
(vi)           the Company shall sell or otherwise transfer all or substantially
all of its assets; or
 
(vii)           bankruptcy, reorganization, insolvency or liquidation
proceedings or other proceedings, or relief under any bankruptcy law or any law
for the relief of debt shall be instituted by or against the Company and, if
instituted against the Company shall not be dismissed within thirty (30) days
after such institution, or the Company shall by any action or answer approve of,
consent to, or acquiesce in any such proceedings or admit to any material
allegations of, or default in answering a petition filed in any such proceeding;
or
 
(viii)           the Company shall be in material default of any of its
indebtedness that gives the holder thereof the right to accelerate such
indebtedness.
 
(b)           Upon the occurrence of an Event of Default, the entire
indebtedness with accrued interest thereon due under this Note shall, at the
option of the Holder, be immediately due and payable without notice. Failure to
exercise such option shall not constitute a waiver of the right to exercise the
same in the event of any subsequent Event of Default.
 
(c)           Upon the occurrence of an Event of Default, this Note shall
retroactively bear interest at the rate of twelve percent (12%) per annum from
the issue date of the Note. Furthermore, upon the occurrence of an Event of
Default and on each 30-day anniversary thereof the Company shall pay to the
Holder $20,000 in cash  to pay down sums owed on this Note.
 
2.           Reserved.
 
3.           Reserved.
 
4.           Reserved.
 
5.           Prepayment.  The Company may prepay this Note at any time, in whole
or in part, provided any such prepayment will be applied first to the payment of
expenses due under this Note, second to interest accrued on this Note and third,
if the amount of prepayment exceeds the amount of all such expenses and accrued
interest, to the payment of principal of this Note.
 
 
 
 
 
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6.           Reserved.
 
7.           Miscellaneous.
 
(a)           Loss, Theft, Destruction or Mutilation of Note.  Upon receipt of
evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of this Note and, in the case of loss, theft or destruction,
delivery of an indemnity agreement reasonably satisfactory in form and substance
to the Company or, in the case of mutilation, on surrender and cancellation of
this Note, the Company shall execute and deliver, in lieu of this Note, a new
note executed in the same manner as this Note, in the same principal amount as
the unpaid principal amount of this Note and dated the date to which interest
shall have been paid on this Note or, if no interest shall have yet been so
paid, dated the date of this Note.
 
(b)           Payment.  All payments under this Note shall be made in lawful
tender of the United States.
 
(c)           Waivers.  The Company hereby waives notice of default, presentment
or demand for payment, protest or notice of nonpayment or dishonor and all other
notices or demands relative to this instrument.
 
(d)           Usury.  In the event that any interest paid on this Note is deemed
to be in excess of the then legal maximum rate, then that portion of the
interest payment representing an amount in excess of the then legal maximum rate
shall be deemed a payment of principal and applied against the principal of this
Note.
 
(e)           Waiver and Amendment.  Any provision of this Note may be amended,
waived or modified only by an instrument in writing signed by the party against
which enforcement of the same is sought.
 
(f)           Notices.  Any notice or other communication required or permitted
to be given hereunder shall be in writing sent by mail, facsimile with printed
confirmation, nationally recognized overnight carrier or personal delivery and
shall be effective upon actual receipt of such notice, to the following
addresses until notice is received that any such address or contact information
has been changed:
 
To the Company:
 
Sagebrush Gold Ltd.
110 Greene Street, Suite 403
New York, New York 10012
Attn: Chief Executive Officer
 
To Holder:
 
Continental Resources Group, Inc.
3266  W. Galveston Drive
Apache Junction, AZ 85120
 
 
 
 
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(g)           Expenses; Attorneys’ Fees.  If action is instituted to enforce or
collect this Note, the Company promises to pay all reasonable costs and
expenses, including, without limitation, reasonable attorneys’ fees and costs,
incurred by the Holder in connection with such action.
 
(h)           Successors and Assigns.  This Note may not be assigned or
transferred by the Holder without the prior written consent of the
Company.  Subject to the preceding sentence, the rights and obligations of the
Company and the Holder of this Note shall be binding upon and benefit the
successors, permitted assigns, heirs, administrators and permitted transferees
of the parties.
 
(i)           Governing Law; Jurisdiction.  THIS NOTE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO PRINCIPLES OF CONFLICTS OF LAWS. EACH PARTY HERETO HEREBY
IRREVOCABLY SUBMITS TO THE EXCLUSIVE PERSONAL AND SUBJECT MATTER JURISDICTION OF
THE SUPREME COURT OF THE STATE OF NEW YORK LOCATED IN THE BOROUGH OF MANHATTAN
OVER ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
NOTE.  EACH PARTY HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY
LAW, (A) ANY OBJECTION THAT THEY MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY
SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT; AND (B) ANY CLAIM
THAT ANY SUCH SUIT, ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM. FINAL JUDGMENT IN ANY SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT SHALL BE CONCLUSIVE AND BINDING UPON EACH PARTY DULY SERVED WITH PROCESS
THEREIN AND MAY BE ENFORCED IN THE COURTS OF THE JURISDICTION OF WHICH EITHER
PARTY OR ANY OF THEIR PROPERTY IS SUBJECT, BY A SUIT UPON SUCH JUDGMENT.  This
Note shall be deemed an unconditional obligation of the Company for the payment
of money and, without limitation to any other remedies of the Holder, may be
enforced against the Company by summary proceeding pursuant to New York Civil
Procedure Law and Rules Section 3213 or any similar rule or statute in the
jurisdiction where enforcement is sought.  For purposes of such rule or statute,
any other document or agreement to which the Holder and the Company are parties
or which the Company delivered to the Holder, which may be convenient or
necessary to determine the Holder’s rights hereunder or the Company’s
obligations to the Holder are deemed a part of this Note, whether or not such
other document or agreement was delivered together herewith or was executed
apart from this Note.
 
[SIGNATURE PAGE FOLLOWS]
 
 
 
 
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IN WITNESS WHEREOF, the Company has caused this Note to be executed as of the
date first above written by its duly authorized officer.
 
 

  SAGEBRUSH GOLD LTD.          
 
By:
        Name:       Title:          

 
 
 
 
 
 

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