Golden Queen Mining Co. Ltd.: Exhibit 10.6 - Filed by newsfilecorp.com






 

June 8, 2015 

Clay Family Holders 
c/o East Hill Management Company 
10
Memorial Boulevard, Suite 902 
Providence, Rhode Island 02903 
Attention:
Mr. Thomas M. Clay

	 	Re: 	Indemnity Agreement Between Golden Queen
      Mining Co. Ltd. and the Clay Family Holders



Ladies and Gentlemen: 

Reference is made to that certain Amended and Restated Term
Loan Agreement, dated as of June 8, 2015, among Golden Queen Mining Co. Ltd., a
British Columbia corporation (the “Company”), The Landon T. Clay 2009
Irrevocable Trust dated March 6, 2009, EHT, LLC, Harris Clay, and The Clay
Family 2009 Irrevocable Trust dated April 14, 2009 (as amended from time to
time, the “Term Loan Agreement”). Capitalized terms used in this letter
agreement (this “Letter Agreement”) without definition shall have the
meanings given thereto in the Term Loan Agreement. 

WHEREAS, each of the persons set forth on Schedule A
hereto (collective, the “Clay Family Holders”), as such schedule
may be amended from time to time, may beneficially own, within the meaning of
Rule 13d-3 under the Securities Exchange Act of 1934 (the “Exchange
Act”), or may be an affiliate of a Clay Family Holder that may
beneficially own, equity securities of the Company (“Company
Securities”); 

WHEREAS, from time to time, certain Clay Family Holders have
made, and in the future each Clay Family Holder may be required to make, by
virtue of his, her or its beneficial ownership of Company Securities, certain
filings with the Securities and Exchange Commission under Section 16(a) of the
Exchange Act with respect to Company Securities (the “Section 16
Filings”); 

WHEREAS, from time to time, certain Clay Family Holders have
been, and in the future each Clay Family Holder may be, by virtue of his, her or
its beneficial ownership of Company Securities and the making or failure to make
Section 16 Filings, subject to Proceedings (as defined herein); 

WHEREAS, the Clay Family Holders may incur Expenses (as defined
herein) in connection with the Section 16 Filings and the Proceedings; and 




WHEREAS, the Company desires to provide the Clay Family Holders
with specific contractual assurance of the Clay Family Holders’s rights to full
indemnification against Expenses. 

NOW, THEREFORE, in order to induce those Clay Family Holders
who are Lenders to enter into the Term Loan Agreement and to make the loans
contemplated thereby, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Company hereby covenants
and agrees with and for the benefit of the Clay Family Holders as follows: 

1.     Definitions. 

(a)     “Beneficial Owner” shall
mean, with respect to any Company Securities, any Clay Family Holder who would
be considered a beneficial owner of such Company Securities for purposes of Rule
13d-3 under the Exchange Act. The terms “Beneficial Ownership,” “Beneficially
Owns” and “Beneficially Owned” shall have the correlative meanings. 

(b)     “Covered Transactions” shall
mean one or more transactions with respect to Company Securities, subject to
Section 16 of the Exchange Act, occurring prior to June 8, 2017.

(c)     “Expenses” shall mean all
fees, costs and expenses incurred by the Clay Family Holders in connection with
any Proceeding, including, without limitation, attorneys’ fees, disbursements
and retainers, fees and disbursements of expert witnesses, private investigators
and professional advisors (including, without limitation, accountants and
investment bankers), court costs, transcript costs, fees of experts, travel
expenses, duplicating, printing and binding costs, telephone and fax
transmission charges, postage, delivery services, secretarial services, and
other disbursements and expenses. 

(d)     “Indemnifiable Expenses” is
defined in Section 2 below. 

(e)     “Proceeding” shall mean any
threatened, pending or completed claim, action, cause of action, demand,
lawsuit, arbitration, mediation, inquiry, inspection, audit, notice of
violation, litigation, citation, summons, subpoena, investigation or proceeding
of any nature, civil, criminal, administrative, regulatory or otherwise, whether
at law or in equity, whenever initiated or asserted, based upon, arising out of,
with respect to, or by reason of any of the following that occur, or are alleged
to occur, prior to June 8, 2017: (i) the making or the failure or alleged
failure to make a Section 16 Filing, (ii) the Beneficial Ownership of Company
Securities or (iii) a Covered Transaction. 

2.     Agreement to Indemnify. The
Company shall indemnify each Clay Family Holder to the fullest extent permitted
by applicable law against all Expenses, in an aggregate amount not to exceed
US$350,000, incurred or paid by such Clay Family Holder in connection with any
Proceeding (referred to herein as “Indemnifiable Expenses”).

3.     Procedure for Payment of
Indemnifiable Expenses. Any Clay Family Holder shall submit to the Company a
written request specifying the Indemnifiable Expenses for which such Clay Family Holder seeks payment under Section 2 of
this Letter Agreement and the basis for the claim as soon as reasonably
practicable following the receipt by such Clay Family Holder of notice of a
Proceeding or the incurrence of Indemnifiable Expenses. The Company shall pay
such Indemnifiable Expenses to such Clay Family Holder within ten (10) calendar
days of receipt of the request. At the request of the Company, such Clay Family
Holder shall furnish such documentation and information as are reasonably
available to such Clay Family Holder and necessary to establish that such Clay
Family Holder is entitled to indemnification hereunder. 




4.     Agreement to Advance Expenses;
Undertaking. The Company shall advance all Expenses expected to be incurred
by or on behalf of any Clay Family Holder in connection with any Proceeding in
which such Clay Family Holder is involved within ten (10) calendar days after
the receipt by the Company of a written statement from such Clay Family Holder
requesting such advance or advances from time to time, whether prior to or after
final disposition of such Proceeding. 

5.     Remedies of Clay Family
Holders. 

(a)     Right to Petition Court. In
the event that any Clay Family Holder makes a request for payment of
Indemnifiable Expenses under Sections 2 or 3 above or a request
for an advancement of Indemnifiable Expenses under Section 4 above and
the Company fails to make such payment or advancement in a timely manner
pursuant to the terms of this Letter Agreement, such Clay Family Holder may
petition any court listed in Section 13(b) or any other court of competent
jurisdiction to enforce the Company’s obligations under this Letter Agreement.


(b)     Burden of Proof. In any
judicial proceeding brought under Section 5(a) above, the Company shall
have the burden of proving that the applicable Clay Family Holder is not
entitled to payment of Indemnifiable Expenses hereunder. 

(c)     Expenses. The Company agrees
to reimburse any Clay Family Holder in full for any Expenses incurred by such
Clay Family Holder in connection with investigating, preparing for, litigating,
defending or settling any action brought by such Clay Family Holder under
Section 5(a) above, or in connection with any claim or counterclaim
brought by the Company in connection therewith. 

(d)     Failure to Act Not a
Defense. The failure of the Company (including its Board of Directors or any
committee thereof, independent legal counsel, or members) to make a
determination concerning the permissibility of the payment or advancement of
Indemnifiable Expenses under this Letter Agreement shall not be a defense in any
action brought under Section 5(a) above, and shall not create a
presumption that such payment or advancement is not permissible. 

6.     Representations and Warranties of
the Company. The Company hereby represents and warrants to the Clay Family
Holders as follows: 

(a)     Authority. The Company has
all necessary power and authority to enter into, and be bound by the terms of,
this Letter Agreement, and the execution, delivery and performance of the undertakings contemplated by this Letter
Agreement have been duly authorized by the Company. 




(b)     Enforceability. This Letter
Agreement, when executed and delivered by the Company in accordance with the
provisions hereof, shall be a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
moratorium, reorganization or similar laws affecting the enforcement of
creditors’ rights generally. 

7.     Contract Rights Not
Exclusive. The rights to payment and advancement of Indemnifiable Expenses
provided by this Letter Agreement shall be in addition to, but not exclusive of,
any other rights which any Clay Family Holder may have at any time under
applicable law, any organizational document of the Company (“Organizational
Document”), any other agreement or otherwise. 

8.     Successors. This Letter
Agreement shall be (a) binding upon all successors and assigns of the Company
(including any transferee of all or a substantial portion of the business,
Company Securities and/or assets of the Company and any direct or indirect
successor by merger or consolidation or otherwise by operation of law) and (b)
binding on and shall inure to the benefit of the heirs, personal
representatives, executors and administrators of each Clay Family Holder. This
Letter Agreement shall continue for the benefit of each Clay Family Holder and
such heirs, personal representatives, executors and administrators after such
Clay Family Holder has ceased to Beneficially Own Company Securities. 

9.     Change in Law. To the extent
that a change in applicable law (whether by statute or judicial decision) shall
permit broader indemnification or advancement of expenses than is provided under
the terms of any Organizational Document or this Letter Agreement, the Clay
Family Holders shall be entitled to such broader indemnification and
advancements, and this Letter Agreement shall be deemed to be amended to such
extent. 

10.     Severability. Whenever
possible, each provision of this Letter Agreement shall be interpreted in such a
manner as to be effective and valid under applicable law, but if any provision
of this Letter Agreement, or any clause thereof, shall be determined by a court
of competent jurisdiction to be illegal, invalid or unenforceable, in whole or
in part, such provision or clause shall be limited or modified in its
application to the minimum extent necessary to make such provision or clause
valid, legal and enforceable, and the remaining provisions and clauses of this
Letter Agreement shall remain fully enforceable and binding on the parties. 

11.     Modifications and Waiver.
Except as provided in Section 9 above with respect to changes in
applicable law which broaden the right of the Clay Family Holders to be
indemnified by the Company, no supplement, modification or amendment of this
Letter Agreement shall be binding unless executed in writing by each of the
parties hereto. No waiver of any of the provisions of this Letter Agreement
shall be deemed or shall constitute a waiver of any other provisions of this
Letter Agreement (whether or not similar), nor shall such waiver constitute a
continuing waiver. 




12.     Notices. 

(a)     Notices Generally. Subject
to Section 12.1(c), all notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile or .pdf), and, unless otherwise expressly provided herein, shall be
deemed to have been duly given or made (a) when delivered by hand, (b) when
transmitted via facsimile to the number set out herein, (c) when delivered by
electronic mail, when delivered, or (d) the second Business Day following the
day on which the same has been delivered prepaid to a reputable national express
air courier service, addressed as follows in the case of the Company and the
Clay Family Holders, or to such other address as may be hereafter notified by
the respective parties hereto: 


	If to the Company: 	Golden Queen Mining Co. Ltd. 
	  	2300 – 1066 West Hastings Street
  
	  	Vancouver, British Columbia, Canada
      V6E3X2 
	  	Attention: 	H. Lutz Klingmann (President 
	  	  	and Andrée St-Germain (Chief Financial 
	  	  	Officer) 
	  	Email: 	lklingmann@goldenqueen.com and 
	  	  	astgermain@goldenqueen.com 
	  	  	  
	with copies to: 	Morton Law LLP 
	  	1200 - 750 West Pender Street 
	  	Vancouver, British Columbia 
	  	Canada, V6C 2T8 
	  	Attention: 	Edward L. Mayerhofer, Esq. 
	  	Email: 	elm@mortonlaw.ca 
	  	Fax: 	(604) 681-9652 
	  	  	  
	  	and 	  
	  	  	  
	  	Dorsey & Whitney LLP 
	  	1400 Wewatta Street, Suite 400 
	  	Denver, CO 80202 
	  	Attention: 	Kenneth Sam, Esq. 
	  	Email: 	sam.kenneth@dorsey.com 
	  	Fax: 	(303) 629-3450 
	  	Facsimile: 	(212) 755-7306 
	  	  	  
	If to the Clay Family Holders: 	c/o East Hill Management Company
  
	  	10 Memorial Boulevard 
	  	Suite 902 
	  	Providence, RI 02903 
	  	Email: 	thomas.clay@easthillmgt.com 
	  	Fax: 	(401) 490-0749 
	  	  	  
	with a copy to: 	Sullivan & Worcester LLP 
	  	One Post Office Square

	 	Boston, MA 02109 
	 	Attention: 	William A. Levine, Esq. 
	 	Telephone: 	(617) 338-2921 
	 	Facsimile: 	(617) 338-2880 
	 	E-mail: 	wlevine@sandw.com 





(b)     Reliance by the Clay Family
  Holders. The Clay Family Holders shall be entitled to rely and act upon any
  notices purportedly given by or on behalf of the Company even if (i) such
  notices were not made in a manner specified herein, were incomplete or were not
  preceded or followed by any other form of notice specified herein, or (ii) the
  terms thereof, as understood by the recipient, varied from any confirmation
  thereof. The Company shall indemnify each Clay Family Holder from all losses,
  costs, expenses and liabilities resulting from the reliance by a Clay Family
  Holder on each notice purportedly given by or on behalf of the Company,
  provided that such indemnity shall not be available to the extent that
  such losses, costs, expenses and liabilities have been determined in a final
  non-appealable judgment of a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of such Clay Family Holder. 

(c)     Telephone, Facsimile and E-mail
Notices. Each Clay Family Holder is authorized to rely on and to act on any
telephone, any facsimile-transmitted, or any e-mail transmitted instructions
concerning the transactions contemplated by the Agreement which a Clay Family
Holder believes without any need to inquire or investigate as to, or verify, the
genuineness or authenticity of the instructions, to be from the Company, and no
Clay Family Holder shall be liable to the Company or any third party for so
acting or refraining from acting, except in the case of gross negligence or
willful misconduct of such Clay Family Holder. No Clay Family Holder shall
further be under any duty to make any inquiry or investigation with respect to,
or verification of, the telephone, facsimile-transmitted or e-mail transmitted
instructions, except to confirm that its records show that the person purporting
to be issuing the instructions on behalf of the Company has authority to do so.
No Clay Family Holder shall be under any duty or obligation to accept any
telephone, facsimile, or e-mail instructions from the Company, and each Clay
Family Holder may refuse to accept any such instructions in its sole and
absolute discretion. The Company shall at all times indemnify, defend and hold
each Clay Family Holder, and its officers, directors, employees, attorneys,
agents, and Affiliates, harmless from all actions or claims arising in
connection with any action or failure to act with respect to telephone,
facsimile-transmitted, or e-mail transmitted instructions, except in the case of
gross negligence or willful misconduct of such Persons 

13.     Governing Law; Consent to
Jurisdiction; Service of Process.

(a)     This Letter Agreement is a contract
under the laws of the State of New York and shall for all purposes be construed
in accordance with and governed by the laws of said State without reference to
its conflict or choice of laws principles (other than Sections 5-1401 and 5-1402
of the New York General Obligations Law, which shall apply to this Letter
Agreement). 

(b)     The Company hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court for the Southern District of New
York, and any appellate court from any thereof, in any action
or proceeding arising out of or relating to this Letter Agreement, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State or,
to the extent permitted by law, in such Federal court. Each of the parties
hereto agrees that a final, non-appealed judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Letter Agreement shall affect any right that the Company or the Clay Family
Holders may otherwise have to bring any action or proceeding relating to this
Letter Agreement against any other party hereto or their properties in the
courts of any jurisdiction. 




(c)     The Company hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Letter
Agreement in any court referred to in paragraph (b) of this Section
13. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court. 

 (d)     Each party to this Letter
Agreement irrevocably consents to service of process in the manner provided for
notices in Section 12. Nothing in this Letter Agreement will affect the
right of any party to this Letter Agreement to serve process in any other manner
permitted by law. The Company hereby appoints Golden Queen Mining Holdings,
Inc., a California corporation (“Holdings”), as its authorized agent
solely to receive for and on its behalf service of summons or other legal
process in any action, suit or proceeding in any court specified in this
Section. 

(e)     By its execution hereof, the
Company irrevocably designates and appoints Holdings as its agent for service of
process as its authorized to receive, accept, and forward on its behalf service
of process in any such proceeding; and by its execution of an acknowledgment
hereto, Holdings accepts such appointment. Service of process, writ, judgment,
or other notice of legal process upon Holdings shall be deemed and held in every
respect to be effective personal service upon the Company. The Company shall
maintain such appointment (or that of a successor satisfactory to the Clay
Family Holders) continuously in effect at all times while the Company is
obligated hereunder. Nothing herein shall affect the Clay Family Holders’s right
to serve process in any other manner permitted by applicable law shall be
governed by and construed in accordance with the laws of the State of New York
without regard to its rules of conflict of laws. 






	Very truly yours, 
	  
	Golden Queen Mining Co. Ltd. 
	  
	  
	  
	By:     /s/ H. Lutz
      Klingmann                                                                           
      
	         Name: H. Lutz Klingmann
    
	         Title: President
  







Acknowledged and agreed 
for purposes of Section 13: 

Golden Queen Mining Holdings, Inc. 


	By:   /s/ H Lutz
      Klingmann                                               
       
	         Name: H. Lutz Klingmann
    
	         Title: President
  





	Accepted on behalf of the 
	Clay Family Holders: 
	  
	By:      /s/ Thomas M.
      Clay                                                
      
	Thomas M. Clay 







Schedule A 

	Clay Family Holders: 
	  
	The Landon T. Clay 2009 Irrevocable Trust dated March 6,
      2009, 
	Harris Clay 
	The Clay Family 2009 Irrevocable Trust dated April 14, 2009
    
	Cassius M.C. Clay 
	James Clay 
	Jonathan Clay 
	Landon H. Clay 
	Landon T. Clay 
	Richard T. Clay 
	Thomas M. Clay 
	933 Milledge LLC 
	Arctic Coast Petroleums, Ltd. 
	Landon T. Clay 2013-4 Annuity Trust u/a dated June 17, 2013
    
	LTC Corporation 
	LTC Corp. Pension and Profit Sharing Plan 
	The Monadnock Charitable Annuity Lead Trust dated May 31,
      1996 
	The Skadutakee Charitable Annuity Lead Trust dated June 28,
      1993