Exhibit 10.2

PROMISSORY NOTE SECURED BY DEED OF TRUST

JOYCE LIVESTOCK COMPANY LIMITED PARNTERSHIP

to

SILVER FALCON MINING, INC.

$225,000.00

Murphy, Idaho

January 1, 2010

FOR VALUE RECEIVED, THE UNDERSIGNED SILVER FALCON MINING, INC., a Delaware
corporation, with an address of 14877 Silver City Rd., Murphy, ID 83650 (the
“Borrower”), promise to pay to the order of JOYCE LIVESTOCK COMPANY LIMITED
PARTNERSHIP, with an address of 14568 Joyce Ranch Rd., Murphy, Idaho 83650 (the
“Lender”) the principal sum of Two Hundred Twenty Five Thousand Dollars and
no/100s ($225,000.00), (“Principal Amount”).

1.

No Interest:

There shall be no interest accrued on this note (“Note”).

2.

Payment Provision:  The amount of this Note is Two Hundred Twenty Five Thousand
Dollars and no/100s ($225,000.00).  The Note shall be due and payable in Ten
(10) annual payments.  The first annual payment is due on January 1, 2010, and
continuing on the first of January each year thereafter (“Annual Payment”).
 Each Annual Payment is to be in the sum of Twenty Two Thousand Five Hundred
Dollars and no/100 ($22,500.00).

Any prepayments Borrower may have paid on this Note or may make prior to January
1, 2010, shall be applied to the Principal Amount.  All Annual Payments and any
partial payments Borrower makes on this Note during the term of this Note shall
be applied to the Principal Amount.

3.

Maturity Date:     The unpaid principal balance of this Note shall be due and
payable in full on January 1, 2020 (“Maturity Date”).

4.

Late Payment Charge.  The holder of this Note may collect a late payment charge,
prior to the acceleration of this Note, in an amount equal to five percent (5%)
of the full Annual Payment that is not paid on the due date, for the purpose of
covering the extra expenses involved in handling delinquent Annual Payments.
 Any full Annual Payment that is correctly addressed, bears adequate first class
postage and is postmarked by the United States Postal Service on or before the
due date shall not be considered delinquent and a late payment charge shall not
be assessed.

5.

Prepayment.

a.

Except as explicitly provided otherwise in this Note, Borrower shall have the
right to prepay the obligation evidenced by this Note.  

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b.

In the event the Maturity Date of the indebtedness evidenced by this Note is
accelerated by Lender at any time due to a default by Borrower in the payment of
the Principal Amount due under this Note or in the performance of the terms,
covenants or conditions contained in this Note, the Deed of Trust or any of the
other Loan Documents (as hereinafter defined), then a tender of payment in an
amount necessary to satisfy the entire outstanding Principal Amount of this Note
shall be made upon Borrower, or by anyone on behalf of Borrower.

6.

Additional Conditions.

a.

This Note is secured by a Deed of Trust (“Deed of Trust”) of even date herewith
encumbering that certain real property located in the County of Owyhee, State of
Idaho and more particularly described in the Deed of Trust (referred to as the
“Real Property”).  The Deed of Trust contains terms and provisions for
acceleration of the indebtedness evidenced by this Note together with additional
remedies in the event of default.  Failure on the part of Lender to exercise any
right granted herein or in the Deed of Trust shall not constitute a waiver of
such right or preclude the subsequent exercise and enforcement thereof.  This
Note and the Deed of Trust and all other documents and instruments executed as
further evidence of, as additional security for, or executed in connection with
the indebtedness evidenced by this Note are collectively referred to as the
“Loan Documents.”

b.

Except as herein otherwise provided, all parties to this Note, jointly and
severally waive presentment for payment, demand, protest, notice of protest,
notice of demand and of nonpayment or dishonor and of protest, and any and all
other notices and demands whatsoever, and agree to remain bound hereby until the
Principal Amount of this Note is paid in full.

c.

If the obligations evidenced by this Note, or any part hereof, are placed in the
hands of an attorney for collection, whether by suit or otherwise, at any time,
or from time to time, Borrower shall be liable to Lender, in each instance, for
all costs and expenses incurred in connection therewith, including, without
limitation, Reasonable Attorneys’ Fees (as hereinafter defined).

7.

Default.

a.

If default shall be made in the payment of the Principal Amount of this Note or
in the payment of any other sums due hereunder or under any of the other Loan
Documents, or should any default be made in the performance of any of the terms,
covenants and conditions contained herein or in any of the other Loan Documents,
then, at the option of Lender, the entire outstanding Principal Amount of this
Note and all other sums advanced by Lender on behalf of Borrower shall become
and be immediately due and payable then or thereafter as Lender may elect,
regardless of the Maturity Date.  The Principal Amount shall not bear any
interest.  Any other payments due to Borrower shall be charged interest until
paid in full (based on a 365-day year and charged on the basis of actual days
elapsed) at a rate equal to what is allowed by the State of Idaho.  Any and all
default interest collected on this Note shall be calculated, collected and held
in long term escrow by Pioneer Title Company for the benefit of the Lender
pursuant to the terms of that certain Long Term Escrow Agreement dated November
___, 2009 by and among Silver Falcon Mining, Inc., Joyce Livestock Company
Limited Partnership and Pioneer Title Company.

b.

During the existence of any default, Lender may apply any sums received,
>including but not limited to, insurance proceeds or condemnation awards, to any
amount then due and owing hereunder or under the terms of any of the other Loan
Documents as Lender may determine.  Neither the right nor the exercise of the
right herein granted unto Lender to apply such proceeds as aforesaid shall serve
to cure the default or preclude Lender from exercising its option to cause the
entire indebtedness evidenced by this Note to become immediately due and payable
by reason of Borrower’s default under the terms of this Note or any of the other
Loan Documents.

 

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c.

Notwithstanding any provisions herein to the contrary, Lender’s right, power and
privilege to accelerate the maturity of the indebtedness evidenced hereby shall
be conditioned upon, (i) with respect to any monetary default Lender giving
Borrower written notice of the monetary default and five (5) days after the date
of such notice, within which to cure the monetary default and (ii) with respect
to any non-monetary default Lender giving Borrower written notice of the
non-monetary default and thirty (30) day period, after the date of such notice,
within which to cure such non-monetary default, unless such non-monetary default
cannot reasonably be cured within said thirty (30) day time period, in which
event Borrower shall have an extended period of time to complete cure, provided
that action to cure such non-monetary default has commenced within said thirty
(30) day period and Borrower is, in Lender’s sole judgment, not diminishing or
impairing the value of the Property, and is diligently pursuing a cure to
completion.

d.

Notwithstanding any provision of this Note to the contrary, during any period of
default and regardless of any cure period applicable to such default, in each
instance under this Note, the Deed of Trust, or any of the other Loan Documents
in which either (i) Borrower is permitted to take an action without Lender’s
prior written consent or (ii) Lender’s consent is to be exercised reasonably,
Lender’s consent shall be required and shall be granted or withheld in Lender’s
sole and absolute discretion.

8.

Exculpation.

a.

The liability of Borrower with respect to the payment of the Principal Amount
shall be “non-recourse” and, accordingly, Lender’s source of satisfaction of
said indebtedness and Borrower’s other obligations hereunder and under the other
Loan Documents shall be limited to the Real Property.  Lender shall not seek to
procure payment out of any other assets of Borrower, or any person or entity
comprising Borrower, or to seek judgment (except as hereinafter provided) for
any sums which are or may be payable under this Note or under any of the other
Loan Documents, as well as any claim or judgment (except as hereafter provided)
for any deficiency remaining after foreclosure of the Deed of Trust.
 Notwithstanding the foregoing, nothing herein contained shall be deemed to be a
release or impairment of the indebtedness evidenced by this Note or the security
therefor intended by the other Loan Documents or to preclude Lender from
exercising its rights to foreclose the Deed of Trust or to enforce any of its
other rights or remedies under the Loan Documents.

b.

Notwithstanding the foregoing, it is expressly understood and agreed that the
aforesaid limitation on liability shall in no way affect or apply to Borrower’s
continued personal liability for all sums due to:

i.

fraud or material misrepresentation made in or in connection with this Note or
any of the other Loan Documents;

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ii.

failure to pay taxes and assessments prior to delinquency, or to pay charges for
labor, materials or other charges which may create liens on any portion of the
Property;

iii.

the misapplication of proceeds of insurance covering any portion of the
Property; or proceeds of the sale or condemnation of any portion of the
Property;

iv.

causing or permitting waste to occur in, on or about the Property and failure to
maintain the Property, excepting ordinary wear and tear;

v.

the return to Lender of all unearned advance rentals and security deposits, if
any, that have been paid by tenants of the Property to the extent that such fees
have not been refunded to or forfeited by such tenants;

vi.

the return to Lender of any and all fees paid to Borrower by any tenant of the
Property which fees permit the tenant to terminate its lease;

vii.

loss by fire or any other casualty to the extent not compensated by insurance
proceeds collected by Lender;

viii.

the return of, or reimbursement for, all Fixtures and Personal Property (as
defined in the Deed of Trust) owned by Borrower taken from the Property by or on
behalf of Borrower, out of the ordinary course of business, and not replaced by
items of equal or greater value than the original value of the Fixtures and
Personal Property so removed;

ix.

all court costs and Reasonable Attorneys’ Fees (as hereinafter defined) actually
incurred which are provided for in this Note or in any of the other Loan
Documents;

x.

(i) the removal of any chemical, material or substance in excess of legal
limits, excluding any hazardous material occurring as a result of milling
operations to which exposure is prohibited, limited, or regulated by any
federal, state, county, or local authority which may or could pose a hazard to
the health and safety of the occupants of the Property, regardless of the source
of origination; (ii) the restoration of the Property to comply with all
governmental regulations pertaining to hazardous waste found in, on or under the
Property, regardless of the source of origination; and (iii) any indemnity or
other agreement to hold Lender harmless from and against any and all losses,
liabilities, damages, injuries, costs and expenses of any and every kind arising
as a result of the existence and/or removal of Hazardous Materials (as defined
in the Deed of Trust) and from the violation of Hazardous Waste Laws (as defined
in the Deed of Trust).  Borrower shall not be liable hereunder if the Property
becomes contaminated subsequent to Lender’s acquisition of the Property by
foreclosure or acceptance of a deed in lieu thereof or subsequent to any
transfer of ownership of the Property which was approved or authorized by Lender
pursuant to the Deed of Trust, provided that such transferee assumes in writing
all obligations of Borrower under the Loan Documents pertaining to Hazardous
Materials.  Liability under this subparagraph shall extend beyond repayment of
this Note and compliance with the terms of the Deed of Trust unless Borrower at
such time provides Lender with an environmental assessment report acceptable to
Lender, in its sole discretion, showing the Property to be free of Hazardous
Materials and not in violation of Hazardous Waste Laws.  The burden of proof
under this subparagraph with regard to establishing the date upon which such
Hazardous Materials were placed or appeared in, on or under the Property shall
be upon Borrower.

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xi.

amounts under any letter of credit and any renewals and/or replacements thereof
supplied by Borrower to Lender in connection with this Note or the loan
evidenced and secured by the Loan Documents in the event that the bank issuing
such letter of credit becomes insolvent, files or has filed against it any
bankruptcy or similar proceeding or is closed (either temporarily or
permanently), or placed in receivership, conservatorship or liquidation by the
Federal Deposit Insurance Corporation, Resolution Trust Corporation or any other
local, state or federal government agency or otherwise fails or refuses to honor
such letter of credit; and

xii.

all amounts payable for all state documentary stamp taxes and intangible
personal property taxes, if any, which may be levied or assessed against this
Note, the Deed of Trust or any of the other Loan Documents, together with all
interest thereon and penalties or charges in connection therewith.

xiii.

The obligations of Borrower in subparagraphs 8a through 8bxiii above, except as
specifically provided in subparagraphs 8xi and 8xii, shall survive the repayment
of this Note, and satisfaction of the Deed of Trust.

9.

Full Recourse.  Notwithstanding any provisions in this Note to the contrary
including, without limitation, the provisions set forth in the section captioned
“Exculpation” above, Borrower shall be personally liable for the entire
indebtedness evidenced by this Note if Borrower violates the covenant
restricting transfers of interest in the Property or transfers of ownership
interests in Borrower as set forth in the Deed of Trust.

10.

Time Of The Essence:  Time is of the essence with respect to every provision
hereof.

11.

Inconsistencies:  In the event of any inconsistencies between the terms of this
Note and the terms of any other Loan Document, the terms of this Note shall
prevail.

12.

Waiver of Right By Trial:  BORROWER AND LENDER HEREBY EXPRESSLY WAIVE ANY RIGHT
TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION  OR CAUSE OF ACTION (a) ARISING
UNDER THIS NOTE OR ANY OTHER LOAN DOCUMENT, INCLUDING, WITHOUT LIMITATIONS, ANY
PRESENT OR FUTURE MODIFICATION HEREOF OR THEREOF OR (b) IN ANY WAY CONNECTED
WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF BORROWER AND LENDER OR ANY OF
THEM WITH RESPECT TO THIS NOTE OR ANY OTHER LOAN DOCUMENT (AS NOW OR HEREAFTER
MODIFIED) OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH
CASE WHETHER SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION IS NOT EXISTING OR
HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND
BORROWER HEREBY AGREES AND CONSENTS THAT LENDER MAY FILE AN ORIGINAL COUNTERPART
OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF
BORROWER TO THE WAIVER OF ANY RIGHT BORROWER MIGHT OTHERWISE HAVE TO TRIAL BY
JURY.

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13.

Captions.

13.1

The captions set forth at the beginning of the various paragraphs of this Note
are for convenience only and shall not be used to interpret or construe the
provisions of this Note.

13.2

As used herein, the phrase “Reasonable Attorneys’ Fees” shall mean fees charged
by attorneys selected by Lender based upon such attorneys’ then prevailing
hourly rates as opposed to any statutory presumption specified by any statute
then in effect in the State of Idaho.

THE PROVISIONS of this Note shall be governed by and construed in accordance
with the laws of the State of Idaho and if controlling, by the laws of the
United States and shall be binding upon Borrower, its heirs, personal
representatives, successors and assigns and shall inure to the benefit of
Lender, its successors and assigns.

IN WITNESS WHEREOF, Borrower has executed this Note as of the day and year first
above written.

BORROWER:

SILVER FALCON MINING, INC., a Delaware

corporation

By:______________________________________

 

Pierre Quilliam, President

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