Document:

Filed by sedaredgar.com - Smart-Tek Solutions Inc. - Exhibit 10.2

THIS DEBT SETTLEMENT AND SUBSCRIPTION AGREEMENT (THE
"AGREEMENT") RELATES TO AN OFFERING OF SECURITIES IN AN OFFSHORE TRANSACTION TO
PERSONS WHO ARE NOT U.S. PERSONS (AS DEFINED HEREIN) PURSUANT TO REGULATION S
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT").

NONE OF THE SECURITIES TO WHICH THIS SUBSCRIPTION AGREEMENT
RELATES HAVE BEEN REGISTERED UNDER THE 1933 ACT, OR ANY U.S. STATE SECURITIES
LAWS, AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED OR SOLD, DIRECTLY OR
INDIRECTLY, IN THE UNITED STATES OR TO U.S. PERSONS (AS DEFINED HEREIN) EXCEPT
IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE 1933 ACT, PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE
STATE SECURITIES AND PROVINCIAL LAWS. IN ADDITION, HEDGING TRANSACTIONS
INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933
ACT.

DEBT SETTLEMENT AND SUBSCRIPTION AGREEMENT

THIS DEBT SETTLEMENT AND SUBSCRIPTION AGREEMENT (the
"Agreement") made as of the 23rd day of June, 2008.

	
      BETWEEN: 
	
      Smart-Tek Solutions Inc. (the "Company") a Nevada
      corporation with an address for business at 3702 South Virginia St. Suite
      G12-401 Reno, NV 89502 

	
       
	
       

	
      AND: 
	
      P5 Holdings Ltd. (the "Subscriber"), having an office at
      1659 W. 60th Ave, Vancouver, BC V6P 2A7 

WHEREAS:

A. The Subscriber made unsecured loans totalling an aggregate
of $271,111.12 to the Company (the “Outstanding Amount”); and

B. The Subscriber has agreed to accept 7,746,032 shares of the
Company’s common stock at a price of $0.035 per share (the “Shares”), as payment
of the Outstanding Amount pursuant to the terms and conditions set forth in this
Agreement.

NOW THEREFORE THIS AGREEMENT witnesses that, for good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

1. Interpretation

1.1 In this Agreement, words importing the singular number only
shall include the plural and vice versa, words importing gender shall include
all genders and words importing persons shall include individuals, corporations,
partnerships, associations, trusts, unincorporated organizations, governmental
bodies and other legal or business entities of any kind whatsoever.

1.2 Any reference to currency is to the currency of the United
States of America unless otherwise indicated.

- 2 -

2. Acknowledgement of Indebtedness

2.1 The Company and the Subscriber acknowledge and agree that
the Company is indebted to the Subscriber in the amount of the Outstanding
Amount.

3. Payment of Indebtedness

3.1 As full and final payment of the Outstanding Amount, the
Company will on the Closing Date (as defined herein) issue to the Subscriber the
Shares, as fully paid and non-assessable, and the Subscriber will accept the
Shares as full and final payment of the Outstanding Amount.

4. Release

4.1 The Subscriber hereby agrees that upon delivery of the
Shares by the Company in accordance with the provisions of this Agreement, the
Outstanding Amount will be fully satisfied and extinguished, and the Subscriber
will remise, release and forever discharge the Company and its respective
directors, officers, employees, successors, solicitors, agents and assigns from
any and all obligations relating to the Outstanding Amount.

5. Documents Required from Subscriber

5.1 The Subscriber must complete, sign and return to the
Company two (2) executed copies of this Agreement.

5.2 The Subscriber shall complete, sign and return to the
Company as soon as possible, on request by the Company, any documents, notices
and undertakings as may be required by regulatory authorities, stock exchanges
and applicable law.

6. Closing

6.1 Closing of the offering of the Shares (the "Closing") shall
occur on or before June 23, 2008, or on such other date as may be determined by
the Company (the "Closing Date").

7. Acknowledgements of Subscriber

7.1 The Subscriber acknowledges and agrees that:

	 	(a) 	
      none of the Shares have been or will be registered under
      the Securities Act of 1933 (the “1933 Act”), or under any state securities
      or "blue sky" laws of any state of the United States, and, unless so
      registered, may not be offered or sold in the United States or, directly
      or indirectly, to U.S. Persons, as that term is defined in Regulation S
      under the 1933 Act ("Regulation S"), except in accordance with the
      provisions of Regulation S, pursuant to an effective registration
      statement under the 1933 Act, or pursuant to an exemption from, or in a
      transaction not subject to, the registration requirements of the 1933 Act
      and in each case only in accordance with applicable securities
  laws;

	 	 	 
	 	(b) 	
      the Company has not undertaken, and will have no
      obligation, to register any of the Shares under the 1933 Act or any other
      applicable securities legislation;

	 	 	 
	 	(c) 	
      the Subscriber has received and carefully read this
      Agreement;

	 	 	 
	 	(d) 	
      the decision to execute this Agreement and acquire the
      Shares hereunder has not been based upon any oral or written
      representation as to fact or otherwise made by or on behalf of the Company
      and such decision is based entirely upon a review of any public
      information which has been filed by the Company with the Securities and
      Exchange Commission ("SEC") in compliance, or intended compliance, with
      applicable securities legislation;

- 3 -

	 	(e) 	
      the Subscriber and the Subscriber’s advisor(s) have had a
      reasonable opportunity to ask questions of and receive answers from the
      Company in connection with the issuance of the Shares hereunder, and to
      obtain additional information, to the extent possessed or obtainable by
      the Company without unreasonable effort or expense;

	 	 	 	 
	 	(f) 	
      the books and records of the Company were available upon
      reasonable notice for inspection, subject to certain confidentiality
      restrictions, by the Subscriber during reasonable business hours at its
      principal place of business and that all documents, records and books in
      connection with the issuance of the Shares hereunder have been made
      available for inspection by the Subscriber and the Subscriber’s attorney
      and/or advisor(s);

	 	 	 	 
	 	(g) 	
      the Subscriber will indemnify and hold harmless the
      Company and, where applicable, its respective directors, officers,
      employees, agents, advisors and shareholders from and against any and all
      loss, liability, claim, damage and expense whatsoever (including, but not
      limited to, any and all fees, costs and expenses whatsoever reasonably
      incurred in investigating, preparing or defending against any claim,
      lawsuit, administrative proceeding or investigation whether commenced or
      threatened) arising out of or based upon any representation or warranty of
      the Subscriber contained herein, or in any document furnished by the
      Subscriber to the Company in connection herewith being untrue in any
      material respect or any breach or failure by the Subscriber to comply with
      any covenant or agreement made by the Subscriber to the Company in
      connection therewith;

	 	 	 	 
	 	(h) 	
      upon the issuance thereof, and until such time as the
      same is no longer required under the applicable securities laws and
      regulations, the certificates representing any of the Shares will bear a
      legend in substantially the following form:

	 	 	 	 
	 		
      THESE SECURITIES WERE ISSUED IN AN OFFSHORE TRANSACTION
      TO PERSONS WHO ARE NOT U.S. PERSONS PURSUANT TO REGULATION S UNDER THE
      UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”).
      ACCORDINGLY, NONE OF THE SECURITIES TO WHICH THIS CERTIFICATE RELATES HAVE
      BEEN REGISTERED UNDER THE 1933 ACT, OR ANY U.S. STATE SECURITIES LAWS,
      AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED OR SOLD IN THE UNITED
      STATES OR, DIRECTLY OR INDIRECTLY, TO U.S. PERSONS EXCEPT PURSUANT TO AN
      EFFECTIVE REGISTRATION STATEMENT OR PURSUANT TO AN EXEMPTION FROM, OR IN A
      TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT
      AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.
      IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE
      CONDUCTED UNLESS IN ACCORDANCE WITH THE 1933 ACT.

	 	 	 	 
	 	(i) 	
      the Subscriber has been advised to consult the
      Subscriber's own legal, tax and other advisors with respect to the merits
      and risks of an investment in the Shares and with respect to applicable
      resale restrictions, and it is solely responsible (and the Company is not
      in any way responsible) for compliance with:

	 	 	 	 
	 	 	(i)	
      any applicable laws of the jurisdiction in which the
      Subscriber is resident in connection with the distribution of any of the
      Shares hereunder, and

	 			 
	 	 	(ii) 	
      applicable resale restrictions;

	 	 	 	 
	 	(j) 	
      none of the Shares are listed on any stock exchange or
      automated dealer quotation system and no representation has been made to
      the Subscriber that any of the Shares will become listed on any stock
      exchange or automated dealer quotation system, except that currently
      certain market makers make market in the shares of common stock of the
      Company on NASDAQ's Over-the-Counter Bulletin
Board;

- 4 -

	 	(k) 	
      the Subscriber is outside the United States when
      receiving and executing this Agreement and is acquiring the Shares as
      principal for its own account, for investment purposes only, and not with
      a view to, or for, resale, distribution or fractionalization thereof, in
      whole or in part, and no other person has a direct or indirect beneficial
      interest in the Shares;

	 	 	 
	 	(l) 	
      none of the Shares may be offered or sold to a U.S.
      Person or for the account or benefit of a U.S. Person (other than a
      distributor) prior to the end of the Distribution Compliance Period (as
      defined herein);

	 	 	 
	 	(m) 	
      neither the SEC nor any other securities commission or
      similar regulatory authority has reviewed or passed on the merits of the
      Shares;

	 	 	 
	 	(n) 	
      no documents in connection with the sale of the Shares
      hereunder have been reviewed by the SEC or any state securities
      administrators;

	 	 	 
	 	(o) 	
      there is no government or other insurance covering any of
      the Shares;

	 	 	 
	 	(p) 	
      the issuance and sale of the Shares to the Subscriber
      will not be completed if it would be unlawful or if, in the discretion of
      the Company acting reasonably, it is not in the best interests of the
      Company;

	 	 	 
	 	(q) 	
      the statutory and regulatory basis for the exemption
      claimed for the offer and issuance of the Shares, although in technical
      compliance with Regulation S, would not be available if the offering is
      part of a plan or scheme to evade the registration provisions of the 1933
      Act; and

	 	 	 
	 	(r) 	
      this Agreement is not enforceable by the Subscriber
      unless it has been accepted by the Company.

8. Representations, Warranties and Covenants of
the Subscriber

8.1 The Subscriber hereby represents and warrants to and
covenants with the Company (which representations, warranties and covenants
shall survive the Closing) that:

	 	(a) 	
      the Subscriber is not a U.S. Person;

	 	 	 
	 	(b) 	
      the Subscriber is not acquiring the Shares for the
      account or benefit of, directly or indirectly, any U.S. Person;

	 	 	 
	 	(c) 	
      the Subscriber is resident in the jurisdiction out on the
      signature page of this Agreement and the issuance of the Shares to the
      Subscriber as contemplated in this Agreement complies with or is exempt
      from the applicable securities legislation of the jurisdiction of
      residence of the Subscriber;

	 	 	 
	 	(d) 	
      the Subscriber is acquiring the Shares as principal for
      investment purposes only and not with a view to resale or distribution
      and, in particular, the Subscriber has no intention to distribute, either
      directly or indirectly, any of the Shares in the United States or to U.S.
      Persons;

	 	 	 
	 	(e) 	
      the Subscriber is outside the United States when
      receiving and executing this Agreement;

	 	 	 
	 	(f) 	
      the Subscriber is aware that an investment in the Company
      is speculative and involves certain risks, including the possible loss of
      the entire investment;

	 	 	 
	 	(g) 	
      the Subscriber has made an independent examination and
      investigation of an investment in the Shares and the Company and has
      depended on the advice of its legal and financial advisors and agrees that
      the Company will not be responsible in any way whatsoever for the
      Subscriber's decision to invest in the Shares and the
  Company;

- 5 -

	 	(h) 	
      the Subscriber (i) has adequate net worth and means of
      providing for its current financial needs and possible personal
      contingencies, (ii) has no need for liquidity in this investment, and
      (iii) is able to bear the economic risks of an investment in the Shares
      for an indefinite period of time;

	 	 	 
	 	(i) 	
      the Subscriber understands and agrees that the Company
      and others will rely upon the truth and accuracy of the acknowledgements,
      representations and agreements contained in this Agreement and agrees that
      if any of such acknowledgements, representations and agreements are no
      longer accurate or have been breached, the Subscriber shall promptly
      notify the Company;

	 	 	 
	 	(j) 	
      the Subscriber has the legal capacity and competence to
      enter into and execute this Agreement and to take all actions required
      pursuant hereto;

	 	 	 
	 	(k) 	
      the Subscriber has duly executed and delivered this
      Agreement and it constitutes a valid and binding agreement of the
      Subscriber enforceable against the Subscriber in accordance with its
      terms;

	 	 	 
	 	(l) 	
      the Subscriber is not an underwriter of, or dealer in,
      the common shares of the Company, nor is the Subscriber participating,
      pursuant to a contractual agreement or otherwise, in the distribution of
      the Shares;

	 	 	 
	 	(m) 	
      the Subscriber understands and agrees that none of the
      Shares have been registered under the 1933 Act, or under any state
      securities or "blue sky" laws of any state of the United States, and,
      unless so registered, may not be offered or sold in the United States or,
      directly or indirectly, to U.S. Persons except in accordance with the
      provisions of Regulation S, pursuant to an effective registration
      statement under the 1933 Act, or pursuant to an exemption from, or in a
      transaction not subject to, the registration requirements of the 1933 Act
      and in each case only in accordance with applicable state and provincial
      securities laws;

	 	 	 
	 	(n) 	
      the Subscriber understands and agrees that offers and
      sales of any of the Shares prior to the expiration of a period of six
      months after the date of original issuance of the Shares (the one year
      period hereinafter referred to as the "Distribution Compliance Period")
      shall only be made in compliance with the safe harbor provisions set forth
      in Regulation S, pursuant to the registration provisions of the 1933 Act
      or an exemption therefrom, and that all offers and sales after the
      Distribution Compliance Period shall be made only in compliance with the
      registration provisions of the 1933 Act or an exemption therefrom and in
      each case only in accordance with applicable state and provincial
      securities laws;

	 	 	 
	 	(o) 	
      the Subscriber understands and agrees not to engage in
      any hedging transactions involving any of the Shares unless such
      transactions are in compliance with the provisions of the 1933 Act and in
      each case only in accordance with applicable state and provincial
      securities laws;

	 	 	 
	 	(p) 	
      the Subscriber understands and agrees that the Company
      will refuse to register any transfer of the Shares not made in accordance
      with the provisions of Regulation S, pursuant to an effective registration
      statement under the 1933 Act or pursuant to an available exemption from
      the registration requirements of the 1933 Act;

	 	 	 
	 	(q) 	
      the Subscriber has the requisite knowledge and experience
      in financial and business matters as to be capable of evaluating the
      merits and risks of the investment in the Shares and the
Company;

	 	 	 
	 	(r) 	
      the Subscriber acknowledges that it has not acquired the
      Shares as a result of, and will not itself engage in, any "directed
      selling efforts" (as defined in Regulation S under the 1933 Act) in the
      United States in respect of any of the Shares which would include any
      activities undertaken for the purpose of, or that could reasonably be
      expected to have the effect of, conditioning the market in the United
      States for the resale of any of the Shares; provided, however, that the
      Subscriber may sell or otherwise dispose of any of the Shares pursuant to
      registration of any of the Shares pursuant

- 6 -

	 		
      to the 1933 Act and any applicable state securities laws
      or under an exemption from such registration requirements and as otherwise
      provided herein;

	 	 	 	 
	 	(s) 	
      the Subscriber is not aware of any advertisement of any
      of the Shares and is not acquiring the Shares as a result of any form of
      general solicitation or general advertising including advertisements,
      articles, notices or other communications published in any newspaper,
      magazine or similar media or broadcast over radio or television, or any
      seminar or meeting whose attendees have been invited by general
      solicitation or general advertising; and

	 	 	 	 
	 	(t) 	
      no person has made to the Subscriber any written or oral
      representations,

	 	 	 	 
	 		(i) 	
      that any person will resell or repurchase any of the
      Shares,

	 	 	 	 
	 		(ii) 	
      that any person will refund the purchase price of any of
      the Shares,

	 	 	 	 
	 		(iii) 	
      as to the future price or value of any of the Shares,
      or

	 	 	 	 
	 		(iv) 	
      that any of the Shares will be listed and posted for
      trading on any stock exchange or automated dealer quotation system or that
      application has been made to list and post any of the Shares of the
      Company on any stock exchange or automated dealer quotation
  system.

8.2 In this Agreement, the term "U.S. Person" shall have the
meaning ascribed thereto in Regulation S.

9. Acknowledgement and Waiver

9.1 The Subscriber has acknowledged that the decision to
acquire the Shares was solely made on the basis of publicly available
information. The Subscriber hereby waives, to the fullest extent permitted by
law, any rights of withdrawal, rescission or compensation for damages to which
the Subscriber might be entitled in connection with the distribution of any of
the Shares.

10. Representations and Warranties will be Relied
Upon by the Company

10.1 The Subscriber acknowledges that the representations and
warranties contained herein and are made by it with the intention that such
representations and warranties may be relied upon by the Company and its legal
counsel in determining the Subscriber's eligibility to acquire the Shares under
applicable securities legislation, or (if applicable) the eligibility of others
on whose behalf it is contracting hereunder to acquire the Shares under
applicable securities legislation. The Subscriber further agrees that by
accepting delivery of the certificates representing the Shares on the Closing
Date, it will be representing and warranting that the representations and
warranties contained herein and are true and correct as at the Closing Date with
the same force and effect as if they had been made by the Subscriber on the
Closing Date and that they will survive the purchase by the Subscriber of Shares
and will continue in full force and effect notwithstanding any subsequent
disposition by the Subscriber of such Shares.

11. Resale Restrictions

11.1 The Subscriber acknowledges that any resale of the
Securities will be subject to resale restrictions contained in the securities
legislation applicable to the Subscriber or proposed transferee. The Subscriber
acknowledges that the Shares have not been registered under the 1933 Act of the
securities laws of any state of the United States. The Shares may not be offered
or sold in the United States unless registered in accordance with United States
federal securities laws and all applicable state and provincial securities laws
or exemptions from such registration requirements are available.

- 7 -

11.2 The Subscriber acknowledges that restrictions on the
transfer, sale or other subsequent disposition of the Shares by the Subscriber
may be imposed by securities laws in addition to any restrictions referred to in
Section 11.1 above, and, in particular, the Subscriber acknowledges and agrees
that none of the Shares may be offered or sold to a U.S. Person or for the
account or benefit of a U.S. Person (other than a distributor) prior to the end
of the Distribution Compliance Period.

12. Legending and Registration of Subject
Shares

12.1 The Subscriber hereby acknowledges that a legend may be
placed on the certificates representing any of the Shares to the effect that the
Shares represented by such certificates are subject to a hold period and may not
be traded until the expiry of such hold period except as permitted by applicable
securities legislation.

12.2 The Subscriber hereby acknowledges and agrees to the
Company making a notation on its records or giving instructions to the registrar
and transfer agent of the Company in order to implement the restrictions on
transfer set forth and described in this Agreement.

13. Collection of Personal Information

13.1 The Subscriber acknowledges and consents to the fact that
the Company is collecting the Subscriber's personal information for the purpose
of fulfilling this Agreement and completing this offering. The Subscriber's
personal information (and, if applicable, the personal information of those on
whose behalf the Subscriber is contracting hereunder) may be disclosed by the
Company to (a) stock exchanges or securities regulatory authorities, (b) the
Company's registrar and transfer agent, and (c) any of the other parties
involved in this offering, including legal counsel, and may be included in
record books in connection with this offering. By executing this Agreement, the
Subscriber is deemed to be consenting to the foregoing collection, use and
disclosure of the Subscriber's personal information (and, if applicable, the
personal information of those on whose behalf the Subscriber is contracting
hereunder) and to the retention of such personal information for as long as
permitted or required by law or business practice. Notwithstanding that the
Subscriber may be purchasing Shares as agent on behalf of an undisclosed
principal, the Subscriber agrees to provide, on request, particulars as to the
identity of such undisclosed principal as may be required by the Company in
order to comply with the foregoing.

14. Costs

14.1 The Subscriber acknowledges and agrees that all costs and
expenses incurred by the Subscriber (including any fees and disbursements of any
special counsel retained by the Subscriber) relating to the acquisition of the
Shares shall be borne by the Subscriber.

15. Governing Law

15.1 This Agreement is governed by the laws of the State of
Nevada.

16. Survival

16.1 This Agreement, including without limitation the
representations, warranties and covenants contained herein, shall survive and
continue in full force and effect and be binding upon the parties hereto
notwithstanding the completion of the purchase of the Shares by the Subscriber
pursuant hereto.

17. Assignment

17.1 This Agreement is not transferable or assignable.

- 8 -

18. Execution

18.1 The Company shall be entitled to rely on delivery by
facsimile machine of an executed copy of this Agreement and acceptance by the
Company of such facsimile copy shall be equally effective to create a valid and
binding agreement between the Subscriber and the Company in accordance with the
terms hereof.

19. Severability

19.1 The invalidity or unenforceability of any particular
provision of this Agreement shall not affect or limit the validity or
enforceability of the remaining provisions of this Agreement.

20. Entire Agreement

20.1 Except as expressly provided in this Agreement and in the
agreements, instruments and other documents contemplated or provided for herein,
this Agreement contains the entire agreement between the parties with respect to
the sale of the Shares and there are no other terms, conditions, representations
or warranties, whether expressed, implied, oral or written, by statute or common
law, by the Company or by anyone else.

21. Notices

21.1 All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to the Subscriber shall be
directed to the address on page 11 and notices to the Company shall be directed
to the Company’s President at 3702 South Virginia Street, Suite G12-401 Reno,
Nevada 89502 USA.

22. Counterparts

22.1 This Agreement may be executed in any number of
counterparts, each of which, when so executed and delivered, shall constitute an
original and all of which together shall constitute one instrument.

IN WITNESS WHEREOF the Subscriber has duly executed this
Agreement as of the date first above mentioned.

DELIVERY INSTRUCTIONS

	1. 	Delivery - please deliver the certificates to:
    
	 	 
	 	 
	  	  
	2. 	Registration - registration of the certificates
      which are to be delivered at closing should be made as follows: 
	 	 
	  	(name) 
	 	 
	  	(address) 

- 9 -

	3. 	
      The undersigned hereby acknowledges that it will deliver
      to the Company all such additional completed forms in respect of the
      Subscriber's purchase of the Shares as may be required for filing with the
      appropriate securities commissions and regulatory
  authorities.

	 	P5
      Holdings Ltd. 
	 	(Name of Subscriber – Please type or print)
  
	 	  
	 	  
	 	/s/
      Perry Law 
	 	(Signature and, if applicable, Office) 
	 	  
	 	  
	 	1659
      W. 60th Ave. 
	 	(Address of Subscriber) 
	 	  
	 	  
	 	Vancouver, BC V6P 2A7 
	 	(City, State or Province, Postal Code of
      Subscriber) 
	 	  
	 	  
	 	Canada
    
	 	(Country of Subscriber) 

A C C E P T A N C E

The above-mentioned Agreement in respect of the Shares is
hereby accepted by SMART-TEK SOLUTIONS INC.

DATED at Vancouver, the 23rd day of June, 2008.

SMART-TEK SOLUTIONS INC.

	Per: 	/s/ Perry Law 	 
	  	Authorized SignatoryExhibit 10.30

 

DIAGNOS
SERVICES AGREEMENT

 

THIS DIAGNOS SERVICES AGREEMENT (this “Agreement”) is executed this 9 June 2008 with an
effective date of January 7, 2008 (the “Effective Date”)
by and:

 

BETWEEN:

 

DIAGNOS Inc., a
corporation duly incorporated under the federal laws of Canada and having its
principal place of business at 7005 Boulevard Taschereau, Suite 340,
Brossard, Quebec J4Z 1A7, Canada

 

(hereafter referred to as “Diagnos”)

 

AND:

 

US Gold Corporation, having its principal place of
business at 165 So. Union Blvd., Suite 565, Lakewood, CO, USA, 80228

 

(hereafter referred to as “USG”)

 

WHEREAS Diagnos is in the
business of providing certain data management, analysis, reporting and
information services to customers; and

 

WHEREAS USG desires to
use the services of Diagnos as set forth herein and in the statement of work
attached hereto (“Statement of Work”).

 

NOW THEREFORE, in
consideration of the terms and conditions expressed below, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:

 

1.                                     Agreement.  In addition to this document, this
Agreement comprises the following documents, which are to be taken as mutually
explanatory of one another, all of which are incorporated into this Agreement
and made a part hereof:

 

Attachment 1 – Statement of Work,

Attachment 2 – Definitions, and

Attachment 3 – General Terms & Conditions.

 

2.                                     Definitions.  In addition to terms defined in this
document, unless the context otherwise requires capitalized terms have the
meanings set forth in Attachment 2 – Definitions.

 

3.                                     Services.  During the term of this Agreement,
Diagnos agrees to provide to USG the services (“Services”)
and deliver the information and Deliverables defined on the Statement of Work.

 

4.                                     Price.  USG will pay Diagnos as full and complete
compensation for performance by Diagnos of all the Services and delivery of the
Deliverables, the following compensation:

 

(a)                                 Lump
Sum Fee.  USG will pay Diagnos
$230,000, payable as follows:

 

(1)         $70,000 non-refundable
upon execution of this Agreement; and

(2)         $160,000 upon delivery by
Diagnos to USG of the final Deliverable described in Section 4 of the
Statement of Work.

 

 

(b)                                Share
Grant.  USG will issue to Diagnos
100,000 Shares upon confirmation of each Economic Discovery, if any.

 

(c)                                 Payment
Upon Acquisition of New Properties.

 

(1)  NSR on  Claims.  USG will grant to Diagnos a 2% net smelter
return royalty (“NSR”), as defined in Attachment 2
hereof, on each new claim or concession area granted to USG by the Mexican
Ministry (Secretariat) of Mining within the Area of Interest but outside the
Property, if any, which property encompasses a target or targets identified by
Diagnos as part of the Services, provided, however, that if any such property
is already encumbered by a net smelter return royalty or other royalty, profits
interest, override royalty or like encumbrance, then USG shall not be obligated
to grant a 2% NSR to Diagnos and may elect to issue 500,000 Shares to Diagnos
in lieu of the 2% NSR.  The NSR is
further defined in Attachment 2.  Upon
the granting of each such concession, USG and Diagnos will agree in good faith
upon the property area and property description of the area subject to the NSR,
and USG will execute and deliver to Diagnos a Royalty Deed evidencing the 2%
NSR granted on the subject concession area.

 

(2)  Share Bonus on Other Properties.  If USG acquires an interest in property
within the Area of Interest but outside the Property by means other than a
direct grant to USG of a concession from the Government of Mexico, such as by
joint venture or corporate transaction such as an acquisition or a merger, and
such property encompasses a target or targets identified by Diagnos as part of
the Services, then USG will issue to Diagnos 500,000 Shares.

 

5.                                     Shares.  The obligation of USG provided under Section 4(b) hereof
is conditional upon the receipt by USG of all necessary regulatory and legal
approvals, and any required shareholder and director approval, which USG will
use its reasonable best efforts to obtain. 
Diagnos represents and warrants to USG that it is an accredited investor
as that term is defined in Regulation D under the U.S. Securities Act of 1933
(the “1933 Act”), it is acquiring
the Shares for its own account, for investment purposes only and not with a
view to the resale or other distribution thereof, in whole or in part, and
agrees that it will not transfer, sell, or otherwise dispose of the Shares in
any manner that will violate the 1933 Act, as amended, or the rules and
regulations of the Securities and Exchange Commission.  Diagnos is aware that the Shares have not
been registered under the 1933 Act and that they shall not be resold or
otherwise disposed of unless they are registered under the 1933 Act or an exemption
from registration is available and that, accordingly, it must bear the economic
risk of investment in the Shares for an indefinite period of time.

 

6.                                     USG’s
Partial Call Right on NSR.  USG
may elect at any time by written notice to Diagnos to purchase for cancellation
from Diagnos one half of each royalty granted pursuant to the Royalty Deed
granted under Section 4(c)(1) hereof, for the price of $1,000,000,
paid not later than thirty (30) days after receipt by Diagnos of the written
notice of the exercise of such right by USG. 
The applicable Royalty Deed shall be amended concurrent with such
payment to reduce the NSR from 2% to 1%.

 

7.                                     Term.  This Agreement shall commence on the
execution hereof, and shall continue in full force and effect for ten (10) years
unless terminated in accordance with this Agreement, except for the obligation
to grant shares according to Section 4(b) hereof and the obligation
to pay a NSR pursuant to Section 4(c) hereof, which will remain in
full force and effect indefinitely, provided, however, that this Agreement
shall terminate as to each property interest covered hereby upon the expiration
or termination of the concession granted by the Government of Mexico (whether
beneficial plant, exploitation or exploration).

 

8.                                     USG’s
Property Rights.  All material,
information, data, or records provided by USG to Diagnos shall be the sole and
exclusive property of USG.  Upon
termination of this Agreement for any reason and

 

2

 

receipt
of written request from USG, Diagnos shall either destroy or return to USG all
copies of any material, information, data, or records of USG provided to
Diagnos by USG.

 

9.                                     Rights to Work Product/Deliverables.  Upon payment in full of the consideration
specified in Section 4(a) (1) and (2), USG shall own all right,
title, and interest in and to the work product and deliverables created by
Diagnos under this Agreement, which shall be works for hire and shall be owned
by USG.  To the extent that such work
product or deliverables cannot be considered works for hire, all right, title
and interest of Diagnos in and to the same (including copyrights) shall be
assigned by Diagnos to USG upon payment in full hereunder.  Notwithstanding anything that may be interpreted
to the contrary herein, Diagnos shall continue to own all right, title and
interest (including copyrights) in and to all Diagnos’ Intellectual Property
and to all work, materials, work product, deliverables or portions thereof,
that preexist the effective date of this Agreement and/or the applicable
Statement of Work and any derivatives, modifications, enhancements or
improvements thereto (“Preexisting Materials”). 
To the extent that any Preexisting Materials are incorporated into any
work product or deliverables, Diagnos hereby grants to USG a nonexclusive
license to use such Preexisting Materials solely as incorporated into the work
product or deliverables; provided that such license grant shall be effective
only upon payment in full of the lump sum fee.

 

This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which taken
together shall constitute one and the same instrument.

 

 

	
  US GOLD CORPORATION

  	
   

  	
  DIAGNOS inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Perry Ing

  	
   

  	
  By:

  	
  /s/ Andre Larente

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Perry Ing

  	
   

  	
  Name:

  	
  Andre Larente

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  CFO

  	
   

  	
  Title:

  	
  Chairman & CEO

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  June 13, 2008

  	
   

  	
  Date:

  	
  June 13, 2008

  
											

 

3

 

ATTACHMENT 1

To

DIAGNOS SERVICES AGREEMENT

 

STATEMENT OF WORK

 

1.                                      Diagnos
will run its Computer Aided Resource Detection System (“CARDS”)
application on the data provided by USG. 
Diagnos will also acquire the available geophysical data on the Area of
Interest from the Mexican government and run the CARDS application on that
data.

 

2.                                      CARDS
is a state of the art computer system that will identify areas with a high
statistical probability of containing a significant mineral deposit.  The backbone of CARDS is the MCubiX-KE
(Knowledge Extraction) data mining engine, developed by Diagnos in conjunction
with researchers at Lyon University in France. 
MCubiX-KE uses pattern recognition algorithms to learn the signatures of
positive and negative data points and create a model that can make predictions
on the positive or negative nature of new data points.  CARDS uses these powerful algorithms to
analyze digitally compiled historical exploration data and identify zones with
a high potential for the discovery of mineral deposits.  CARDS uses MCubiX-KE’s artificial
intelligence and pattern recognition algorithms to learn the “signatures” or “finger
prints” of high-potential resource areas and automatically detects similar
sites across less explored regions.  The
result is a powerful tool that allows exploration companies to concentrate time
and exploration budgets on high-potential areas.

 

3.                                      Process

 

i) Step 1 - Diagnos will run CARDS on the Area of
Interest resulting in a regional signature for two metals: gold and silver.

 

2) Step 2 - Diagnos will then run CARDS on the
Property resulting in a local signature on the Property for two metals: gold
and silver, using 3D modeling.

 

4.                                      Diagnos
will then deliver to USG high mineral potential maps and a detailed anomaly
reports, in MAPINFO or OASIS MONTAJ format, outlining the potential targets for
gold and silver mineralization and discoveries on Area of Interest and the
Property (the “Deliverable(s)”).  The final Deliverable is a map or layer that
indicates the regions where economical resources are likely to be found.  Diagnos will deliver the Deliverable not later
than thirty (30) days after USG delivers or causes to be delivered to Diagnos
the relevant 3D Gocad model from Mira Geoscience who is USG’s 3D modeling
services provider.

 

4

 

ATTACHMENT 2

To

DIAGNOS SERVICES AGREEMENT

 

DEFINITIONS

 

“Area of Interest” means the Magistral District of Mexico
comprising approximately 1,600 square kilometers.

 

 “Affiliate”
means any entity that controls, is controlled by or is under common control
with a party hereto, with control meaning the ownership of more than fifty
percent (50%) of the equity, or the right to direct the management of such
entity, provided however, that USG and its subsidiaries shall not be considered
Affiliates of Diagnos and Diagnos and its subsidiaries shall not be considered
Affiliates of USG.

 

“Confidential Information” means, without limitation,
specifications, drawings, diagrams, information, data, materials, suppliers,
inventions, products, procedures, designs, research and development, business
plans, financial projections, organizations, employees or consultants or any
other similar aspects of or information related to the present or future
business of either party.

 

“Economic Discovery” means a discovery by USG of any mineral
or hydrocarbon on a location on the Property identified by Diagnos in its
performance of the Services, which location was not previously identified by
USG as a prospective exploration target, and the discovery is confirmed by USG’s
receipt of a Positive Feasibility Study on the discovery in compliance with the
Canadian Securities’ National Instrument 43-101 or an equivalent.

 

“Intellectual
Property” means all works protectable by copyright, trademark,
patent and trade secret laws or by any other statutory protection obtained or
obtainable, and any Confidential Information of a party that meets one of the
foregoing criteria, including without limitation, any literary works,
pictorial, graphic and sculptural works, architectural works, works of visual
art, and any other work that may be the subject matter of copyright protection;
advertising and marketing concepts; information; data; formulae; designs;
models; drawings; computer programs, including all documentation, related
listings, design specifications, and flowcharts, trade secrets, and any
inventions including all methods, processes, business or otherwise; machines,
manufactures and compositions of matter and any other invention that may be the
subject matter of patent protection; and all statutory protection obtained or
obtainable thereon.

 

“NSR” means a
royalty on net smelter return calculated as follows:

 

1.                                      When and after a dore or other form of
concentrate is shipped to a refinery and there has been a final settlement by
the refinery with respect to such delivery, the “Net Smelter
Return” shall mean: (i) with respect to gold, the value of gold
(stated in U.S. Dollars per ounce of gold) multiplied by the number of ounces
of gold produced, less Allowable Deductions, and (ii) with respect to all
other minerals, the value of such other minerals (stated in U.S. Dollars), less
Allowable Deductions.

 

The “value of gold” shall be the numerical average of
the closing prices of gold as reported on the COMEX (or, if the COMEX shall
cease reporting gold prices, then the London P.M. fix; or, if that should
cease to be reported, then as reported by another mutually agreed substitute
index) at the conclusion of each day of said month previous to which final
settlement occurred; such average price shall then be used to value all gold
products for which there was final settlement during such month.  The value of all other minerals contained in
such dore or other form of concentrate shall be the numerical average of the
closing prices of such minerals as reported on the London Metals Exchange at the
conclusion of each day of said month; such average price shall then be used to
value all such minerals (other than gold) during such month. In all other
cases, “Net Smelter Return” shall be as defined
in subparagraph 2 below.

 

5

 

2.                                      Except as provided in subparagraph 1, “Net Smelter Return” means:

 

(i)                                    in the case of ores, minerals, or other
products which are sold in the crude state, the amount received by the operator
from the purchaser of the ores, minerals of other products, less Allowable
Deductions,

 

(ii)                                 in the case of ores, minerals, or other
products which are processed by or for the account of the operator to produce
concentrates or other saleable intermediate products to be smelted or otherwise
further processed by or for the account of the operator, an amount equal to the
market value of the concentrates or other saleable intermediate products f.o.b.
the plant producing the concentrates or other saleable intermediate products
(which amount shall be deemed to have been received by the operator), less
Allowable Deductions, and in all other cases, the amount received by the
operator from the purchaser of the ores, minerals, or other products, less
Allowable Deductions.

 

3.                                      “Allowable Deductions”
means, to the extent borne or to be borne by the operator:

 

(i)                                    charges for and taxes on transportation
of mineral product from the mine or plant producing the concentrates or other
saleable products to a smelter or other place of treatment, from the smelter or
other place of treatment to the refinery and from the refinery to the place of
sale,

 

(ii)                                 insurance and security costs and charges,

 

(iii)                              smelting and refining costs, treatment
charges and penalties, including without limitation metal losses and penalties
for impurities,

 

(iv)                             representation, assaying, and umpire
costs and fees, and marketing costs and commissions, and

 

(v)                                production, sales, severance, and other
taxes measured by production or the value of production, provided that where a
cost or expense otherwise constituting an Allowable Deduction is incurred by
the operator in a transaction with a person with whom it is not dealing at arm’s
length (as that term is defined in the Income Tax Act (Canada)), such cost or
expense may be deducted, but only as to the lesser of the actual cost incurred
by the operator or the fair market value thereof, calculated at the time of
such transaction and under all the circumstances thereof.

 

4.                                      Commingling. The operator may commingle ores subject
to the NSR with ores from other properties, either before or after
concentration or beneficiation, so long as all data necessary to determine the
weight and grade, both of the ores subject to the NSR and the ores with which
they are commingled, are obtained and preserved by the operator. The operator
shall then use that weight and grade data to allocate any value received
between the ores subject to the NSR and the other properties from which the
other commingled ores were removed. All such weight, grade and allocation calculations
shall be done in a miner like fashion.

 

5.                                      Payment.  NSR shall be
calculated for each calendar quarter in which NSR are realized, and payment
shall be made within thirty (30) days following the end of each such calendar
quarter.  Smelter settlement sheets, if
any, and a statement setting forth calculations in sufficient detail to show
the payment’s derivation (the “Statement”)
must be submitted with the payment.  All
payments on account of the NSR will be considered final and in full
satisfaction of all obligations of USG with respect thereto, unless Diagnos
delivers to USG a written notice (the “Objection Notice”)
describing and setting forth a specific objection to the calculation thereof
within ninety (90) days after receipt of the Statement by Diagnos.  If Diagnos objects to a particular Statement
as herein provided, Diagnos will, for a period of ninety (90) days after USG’s
receipt of such Objection Notice, have the right to have USG’s accounts and
records 

 

6

 

relating to the
calculation of the payment in question audited by the auditors of Diagnos.  If such audit determines that there has been
a deficiency or an excess in the payment made to Diagnos, such deficiency or excess
will be resolved by adjusting the next quarterly payment due hereunder.  Diagnos will pay all the costs and expenses
of such audit unless a deficiency of five (5%) percent or more of the amount
due is determined to exist, in which case USG will pay such costs.  All books and records used and kept by USG to
calculate the NSR due hereunder will be kept in accordance with United States
generally accepted accounting principles.

 

6.                                      Hedging transactions. 
All profits and losses resulting from USG engaging in any commodity
futures trading, option trading, metals trading, gold loans or any combination
thereof, and any other hedging transactions with respect to any metals, ores,
concentrates, minerals, and mineral resources, including materials deriving
from the foregoing, (collectively, “Hedging Transactions”)
are specifically excluded from calculations of the payments on account of the
NSR (it being the intent of the parties that USG will have the unrestricted
right to market and sell products to third parties in any manner it chooses and
that Diagnos will not have any right to participate in such marketing
activities or share in any profits or losses therefrom).  All Hedging Transactions by USG and all
profits or losses associated therewith, if any, will be solely for USG’s
account.

 

“Positive Feasibility Study”
means a detailed report recommending the development of a mine, or the drilling
of production wells in the case of liquid or gaseous hydrocarbons, within the
Property, for being economically viable and profitable to exploit the relevant
deposit or deposits according to the parameters established in such study,
contemplating the maximum prospective development and operation as is
reasonable and economically viable according to the data available at the time
such study is prepared. The study shall be of the quality and content that is
generally required to produce a bankable feasibility study for lending
institutions in the United States or Canada, with the purpose of determining
the convenience of providing funding for the project, and at least include the
following information:

 

1.                                      An estimate of recoverable reserves and
an estimate of its composition and content, and the proposed procedure for the
development and production of the mine;

 

2.                                      Test results of the minerals that may be
treated or hydrocarbons that may be processed;

 

3.                                      Characteristics and area where the
proposed facilities will be located, which facilities may include treatment
facilities, if the size and location of the resource renders such treatment
facility feasible; in which case, the report shall include a preliminary design
of said treatment facility;

 

4.                                      Total costs, including the budget of
capital costs reasonably required to acquire, build and install the structures,
machinery and equipment required for the proposed facility, including an
estimated timing of such requirements;

 

5.                                      All environmental impact studies and cost
thereof;

 

6.                                      Proposed period in which commercial
production of the mine will start;

 

7.                                      Other data and information that is
reasonably necessary to support the existence of a deposit of sufficient grade
and size to justify the development of the resource, taking into account all
business considerations, taxes and other economic considerations; and

 

8.                                      Working capital requirements for the
first four months of operation, or for a longer period that is reasonably
justified by the circumstances.

 

“Property” means
the Magistral Mine property owned by USG located in the Area of Interest and
comprising approximately 30 square kilometers.

 

“Shares” means the fully paid, non-assessable common stock of
USG.

 

7

 

ATTACHMENT 3

To

DIAGNOS SERVICES AGREEMENT

 

GENERAL TERMS &
CONDITIONS

 

1.0 
SUBCONTRACTORS.  Diagnos
shall not subcontract all or any part of the Services without the express prior
written consent of USG.

 

2.0  INSURANCE.  Diagnos
shall be solely responsible for all insurance that may be required by law for
or related to the Services, including but not limited to motor vehicle
liability insurance for owned and non-owned vehicle, insurance covering loss or
damage to Diagnos’ property owned and hired, health and injury insurance and
workman’s compensation or employment insurance of any kind or nature.

 

3.0  CONFIDENTIALITY

 

3.1   USG and Diagnos
Responsibilities.  All
Confidential Information shall be deemed confidential and proprietary to the
party disclosing such information. Each party may use the Confidential
Information of the other party during the Term only as permitted or required
for the receiving party’s performance hereunder and for no other purpose. The
receiving party shall not disclose or provide any Confidential Information to
any third party and shall take reasonable measures (including, without
limitation, the use of nondisclosure agreements consistent with and not less
restrictive than this Article 3.0) to prevent any unauthorized disclosure
by its employees, agents, contractors or consultants. The foregoing duty shall
survive any termination or expiration of this Agreement for a period of ten (10) years
from the effective date of such termination or expiration. Notwithstanding the
foregoing, with respect to any USG Confidential Information related to the
Property or the Area of Interest, the foregoing duty shall be perpetual.

 

3.2   Exceptions.  Notwithstanding Section 3.1, the
following information shall not be deemed Confidential Information for purposes
of this Article 3:

 

a.               information
required to be disclosed in public under a subpoena, request for documents, or
other validly issued judicial or administrative process, provided that the
party so required promptly notifies the other party of the receipt of process
and permits the other party a reasonable opportunity to respond to such process
(and, if the other party secures a protective order, such information shall
remain Confidential Information to the extent therein specified);

 

b.              information
that is or becomes generally available to the public other than as a result of
any unauthorized disclosure by the receiving party;

 

c.               information
available to the receiving party from a third party who received such
information on a non-confidential basis and without obligation to the
disclosing party;

 

d.              information
already known to the receiving party prior to its disclosure by the other
party;

 

e.               information
independently developed by the receiving party without any use of or reliance
on the disclosing party’s Confidential Information; or

 

f.                 information
that the parties mutually agree in writing can be disclosed publicly.

 

8

 

4.0    WARRANTIES AND
COVENANTS

 

4.1   USG Warrants to
Diagnos.  USG hereby
warrants to Diagnos that: (a) the execution and delivery of this Agreement
by USG has been duly authorized; and (b) this Agreement constitutes a
valid and binding agreement.

 

4.2   Diagnos Warrants
to USG.  Diagnos hereby warrants to USG that: (a) the
execution and delivery of this Agreement by Diagnos has been duly authorized
and performance by Diagnos hereunder shall not result in the breach of any
material term or provision of any charter, bylaw or agreement to which Diagnos
is a party or by which it is bound; (b) this Agreement constitutes a valid
and binding agreement; (c) all Services rendered hereunder shall be
performed in a professional, workmanlike manner in accordance with the
applicable Statement of Work; (d) it owns or possesses the necessary
rights, title, licenses and Intellectual Property rights necessary to perform
its obligations hereunder, and the performance of the Services shall not infringe
the intellectual property rights (including, without limitation, any patents,
copyrights, trademarks or trade secrets) of any third party.

 

4.3   CARDS Services Warranty. At all times, DIAGNOS’ liability for
failure of the Services shall be limited to a second time reprocess of client
data using CARDS software application. DIAGNOS makes no express or implied
warranties whatsoever regarding the capabilities of the CARDS software
application in respect of finding for the distributor or its clients any minerals,
oil, gas or any other substance whatsoever, the output value or quality of any
mineral discovery, the accuracy of any prediction or output results,
merchantability, or fitness for a particular purpose.  DIAGNOS shall not be responsible for
consequential damage or expenses by any client of DIAGNOS services or
consequential loss in value or delays suffered by clients actions based on a
DIAGNOS delivered report or predictions data or map, incidental or punitive
damages, including, but not limited to, loss of profits or damages to business
or business relations.  This warranty is
in lieu of all other warranties.

 

5.0 
INDEMNIFICATION.

 

5.1    Diagnos Indemnities to USG. Diagnos shall indemnify, hold harmless
and defend USG and its Affiliates and their respective directors, officers,
agents and employees from and against any loss, costs (including reasonable
attorney’s fees) damages, injury, liability, claims, demands, or causes of
action arising out of or resulting from the Services for: (a) any material
and uncured breach of Diagnos’ warranties in Section 4.2; (b) any
claim against USG which alleges that any Diagnos’ Intellectual Property
infringes upon, misappropriates or violates any patents, copyrights, trademarks
or trade secret rights or other proprietary or Intellectual Property rights of
persons, firms or entities who are not parties to this Agreement (collectively,
“Third Party Right”); (c) any act
or omission of Diagnos as an employer; or (d) any debt or other duty of
any kind or amount owed to a Diagnos subcontractor, except and to the extent
such loss, cost, damage, injury, liability, claim, demand or action is due to
USG’s gross negligence or misconduct.

 

If the use of any Service delivered or provided by
Diagnos hereunder is found to infringe or misappropriate a Third Party Right,
Diagnos shall, at its own option and expense, replace the infringing or
misappropriated materials or Services with a substitute free of the
infringement or misappropriation, or shall procure for USG’s benefit a license or
other right to use the same; or shall remove the enjoined materials or Services
and reimburse USG for all amounts paid or expenses incurred with respect
thereto.

 

5.2   USG Indemnities to Diagnos. USG shall indemnity and save harmless
Diagnos in respect of all costs, claims, liabilities and expenses arising out
of the activities of USG or any debt or other duty of any kind or amount owed
to a USG subcontractor, except and to the extent such loss, cost, damage,
injury, liability, claim, demand or action is due to Diagnos’ gross negligence
or misconduct.

 

9

 

6.0  TERMINATION

 

6.1   Termination for Cause.  If there is a material breach of any term or
condition of this Agreement, the non-breaching party shall give written notice
thereof to the breaching party.  If the
breaching party does not, within thirty (30) calendar days after receiving such
written notice, either (a) cure the material failure or (b) if the
breach is not one that can reasonably be cured within thirty (30) days, develop
a mutually agreed to plan to cure the failure and diligently proceed according
to the plan until the material failure has been cured, then the non-breaching
party may terminate the Agreement for cause by written notice to the breaching
party.

 

6.2   Termination
through Insolvency.  Either party may immediately terminate this
Agreement upon written notice in the event that: (a) the other party
becomes insolvent, enters into receivership, is the subject of a voluntary or
involuntary bankruptcy proceeding, or makes an assignment for the benefit of
creditors; or (b) a substantial part of the other party’s property is or
becomes subject to any levy, seizure, assignment or sale for or by any creditor
or governmental agency.

 

6.3   Survival. 
Any provision of this Agreement which contemplates performance or
observance after any termination or expiration of this Agreement (in whole or
in part) shall survive any termination or expiration of this Agreement and
continue in full force and effect until performed in full.

 

7.0  LAW AND
DISPUTES

 

7.1   Governing Law. 
The laws of the State of Colorado (without giving effect to its
conflicts of law principles) govern all matters arising out of or relating to
this Agreement, including, without limitation, its validity, interpretation,
construction, performance, and enforcement. 
Any party bringing a legal action or proceeding against any other party
arising out of or relating to this Agreement may bring the legal action or
proceeding in the courts sitting in Denver, Colorado.  Each party waives, to the fullest extent
permitted by law, (a) any objection which it may now or later have to the
laying of venue of any legal action or proceeding arising out of or relating to
this Agreement brought in any sitting court in Denver, Colorado; and (b) any
claim that any action or proceeding brought in any such court has been brought
in an inconvenient forum.

 

7.2   Fair Play.  In entering into this Agreement the parties agree that
it is impracticable to make provisions for every contingency that may arise
during the term of this Agreement and it is their mutual intention that this
Agreement shall operate between them with fairness and without prejudice to the
interest of the other, and that if in the course of the performance of this
Agreement unfairness or prejudice or obvious hardship to any party is expected
or disclosed then the parties will use all reasonable endeavors to agree upon
such action as may be necessary to remove or modify such unfairness or prejudice.

 

7.3   Disputes.  The parties shall endeavor to resolve any
dispute, whether arising during the Term or at any time thereafter which
involves the validity, construction, meaning, performance, termination,
expiration or effect of this Agreement, or the rights or liabilities of the
parties, promptly and in an amicable and professional manner by negotiations
between the parties.

 

7.4   Arbitration.  In
the case where disagreements and disputes cannot be resolved by negotiations,
they shall be resolved by binding arbitration in Denver, Colorado in English in
accordance with the UNICTRAL Arbitration Rules (the “Rules”)
in effect at the time of this Contract. 
For disputes involving amounts of US$2 million dollars or less, the
parties shall attempt, by mutual agreement, to nominate a sole arbitrator
within 30 days from the date of the initiating party’s written notice to the
other party. If the parties cannot agree upon a sole arbitrator within such 30
day period, or in the case of disputes involving amounts of more than US$2
million dollars, the arbitration shall be carried out by a panel of three
arbitrators with one arbitrator being selected by the initiating party, one
arbitrator being selected by the responding party and the third arbitrator
being selected by mutual agreement of such two arbitrators.  The arbitration tribunal shall apply the
substantive law of Ontario, in interpreting this Agreement and the 

 

10

 

rights and obligations of
the parties.  Notwithstanding the
foregoing, the arbitrator or arbitrators, as the case may be, shall be lawyers
with at least ten year’s experience with international mining and exploration
agreements, trained in the common law tradition.  Judgment upon the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction.

 

8.0  LIMITATIONS

 

8.1   Correcting Defects. 
In the event that any Services furnished by Diagnos are incomplete or
materially deficient, or in the event Diagnos temporarily fails to provide the
Services (collectively a “Defect”),
Diagnos may either correct the Defect, without charge to USG, or effect an
equitable reduction of the price paid or payable for the Services to which such
Defect relates, provided that Diagnos has received written notice of the Defect
from USG within 30 days from the date on which USG became aware of, or should
have become aware of, such Defect.

 

8.2   Disclaimer.  Diagnos makes no express or implied warranties
whatsoever regarding the capabilities of the CARDS software application in
respect of finding any Minerals, oil, gas or any other substance whatsoever,
the output value or quality of any Mineral discovery, the accuracy of any
prediction or output results, merchantability, or fitness for a particular
purpose.  This warranty is in lieu of all
other warranties.

 

8.3   Limitation. IN NO EVENT SHALL EITHER PARTY OR ITS
AGENTS, SUPPLIERS, DIRECTORS, EMPLOYEES OR SUBCONTRACTORS BE LIABLE TO THE
OTHER PARTY OR ITS AGENTS, SUPPLIERS, DIRECTORS, EMPLOYEES OR SUBCONTRACTORS
FOR ANY LOST PROFITS OR OTHER CONSEQUENTIAL OR PUNITIVE DAMAGES ARISING OUT OF
OR IN RELATION TO THIS AGREEMENT, OTHER THAN AS MAY BE INDEMNIFIED AGAINST
BY THE INDEMNITY PROVISIONS HEREOF, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.

 

9.0  GENERAL

 

9.1   Independent
Contractors.  The parties are independent contractors and
not partners or joint venturers.   Under
no circumstances will the employees of one party be deemed the employees of the
other for any purpose.  This Agreement
does not grant authority for either party to act for the other in an agency or
other capacity, or to make commitments of any kind for the account of or on the
behalf of the other.

 

9.2   Assignment. 
Neither party may assign its rights or delegate its obligations under
this Agreement without the prior written consent of the other party.  Any attempt to assign or delegate in
violation of the preceding sentence shall be void.  Notwithstanding the foregoing, either party
may assign this Agreement and its rights and obligations hereunder: (a) in
connection with the transfer or sale of all or substantially all of its assets;
(b) to a wholly owned subsidiary; or (c) in the event of its merger
or consolidation with another company at any time during the term of this
Agreement. This Agreement be binding upon the parties’ respective successors
and permitted assigns.

 

9.3   Integration;
Amendment. This
Agreement constitutes the entire agreement between the parties, and supersedes
all other prior or contemporaneous communications between the parties (whether
written or oral) relating to the subject matter of this Agreement.  This Agreement may be modified or amended
solely in a writing signed by both parties executed by an authorized officer
thereof.

 

9.4   Severability.  The provisions of this Agreement shall be
deemed severable, and the unenforceability of any one or more provisions shall
not affect the enforceability of any other provisions.  In addition, if any provision of this
Agreement, for any reason, is declared to be unenforceable, the parties shall
substitute an enforceable provision that, to the maximum extent possible in
accordance with applicable law, preserves the original intentions and economic
positions of the parties.

 

11

 

9.5   Notice.  Any notice, direction or other instrument
required or permitted to be given under this Agreement shall be in writing and
may be given the delivery of the same or by sending the same by
telecommunication, facsimile or other form of communication, in each case
addressed as follows:

 

(a)                                 if
to Diagnos at:

 

DIAGNOS Inc.

7005, boulevard
Taschereau

Bureau 340

Brossard,
Quebec  J45Z 1A7 CANADA

 

Attention: André
Larente

Facsimile No: (450)
678-8119

 

(b)                                if to USG at :

 

US Gold Corporation

99 George St.

3rd Floor

Toronto ON CANADA
M5A 2N4

 

Attention :
Perry Ing

Facsimile No : (647)
258-0408

 

9.6   Manner
of Payment.  All
references to monies hereunder shall be in lawful currency of Canada. All
payments to be made to any party hereunder may be made by cheque or draft
mailed or delivered to such party at its address for notice purposes as
provided herein, or deposited for the account of such party at such bank or
banks as such party may designate from time to time by written notice. Said
bank or banks shall be deemed the agent of the designation party for the
purpose of receiving, collecting and receipting such payment.

 

12

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