Golden Queen Mining Co. Ltd.: Exhibit 10.5 - Filed by newsfilecorp.com






EXECUTION VERSION 

AMENDED AND RESTATED OPTION AGREEMENT 

AMENDED AND RESTATED OPTION AGREEMENT made as of June 8, 2015
(this “Option Agreement”), by and among GAUSS LLC (“Gauss”), GAUSS
HOLDINGS LLC (“LUK Holdco”), AUVERGNE, LLC (“Auvergne”), THE
LANDON T. CLAY 2009 IRREVOCABLE TRUST DATED MARCH 6, 2009 (“LTC Lender”),
EHT, LLC (“EHT Lender”), HARRIS CLAY, an individual (“HC
Lender”), THE CLAY FAMILY 2009 IRREVOCABLE TRUST DATED APRIL 14, 2009
(together with LTC Lender, EHT Lender and HC Lender, the “Lenders”),
GOLDEN QUEEN MINING CANADA LTD. (“BC Subco”) and GOLDEN QUEEN MINING HOLDINGS,
INC. (“GQ Holdco”). 

WHEREAS, Gauss, LUK Holdco and Auvergne are parties to that
certain Amended and Restated Limited Liability Company Agreement of Gauss, dated
as of September 15, 2014 (the “LLC Agreement”) (capitalized terms used
but not otherwise defined herein shall have the meanings ascribed to such terms
in the LLC Agreement); 

WHEREAS, Gauss is a party to that certain Amended and Restated
Limited Liability Company Agreement of Golden Queen Mining Company, LLC, dated
as of September 15, 2014 (the “JV LLC Agreement”); 

WHEREAS, Gauss, LUK Holdco, Auvergne, LTC Lender, EHT Lender
(as assignee in interest of HC Lender) and GQ Holdco are parties to that certain
Option Agreement, dated as of December 31, 2014 (the “Existing Option
Agreement”), which was entered into in connection with that certain Term
Loan Agreement, dated as of December 31, 2014, as amended, among Golden Queen
Mining Co. Ltd. (“Golden Queen”), LTC Lender and EHT Lender (as assignee
in interest of HC Lender), pursuant to which LTC Lender and EHT Lender (as
assignee in interest of HC Lender) made a term loan of USD 12,500,000 to Golden
Queen (the “Existing Term Loan Agreement”); 

WHEREAS, on the date hereof, Golden Queen and the Lenders are
amending and restating the Existing Term Loan Agreement by entering into an
Amended and Restated Term Loan Agreement (the “Term Loan Agreement”)
pursuant to which (i) the outstanding term loan to Golden Queen will be
increased to USD 37,500,000, (ii) BC Subco and GQ Holdco (together, the
“Guarantors”) will guaranty the obligations of Golden Queen in respect of such
term loan and (iii) as security for such guaranty, GQ Holdco will pledge the
units representing its limited liability company interests in the Joint Venture,
and BC Subco will pledge its shares in GQ Holdco (collectively, the “Pledged
Units”) to the Lenders (the “Pledge”) on the terms and conditions set
forth in an Amended and Restated Pledge Agreement of even date herewith (the
“Pledge Agreement”); 

WHEREAS, in connection with the execution of the Pledge
Agreement, Gauss and GQ Holdco, as the members of the Joint Venture, are
consenting to the Pledge and to the Lenders exercising their rights and remedies
under the Pledge Agreement (the “Consent”); and 

WHEREAS, in consideration of the Consent, the Lenders wish to
grant Gauss an option (the “Option”) to purchase the Pledged Units that
are Transferred (or proposed to be Transferred) upon foreclosure, forfeit, court
order, or otherwise pursuant to exercise of remedies under the Pledge Agreement
in connection with an Event of Default (as defined in the Term Loan Agreement)
(an “Involuntary Transfer”). 

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NOW, THEREFORE, for good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto agree
that the Existing Option Agreement is hereby amended and restated in its
entirety as follows: 

1.     Option.

(a)     The Lenders hereby agree that, in
connection with any Involuntary Transfer, Gauss shall have the right and option
(the “Option”) to purchase all (but not less than all) the Pledged Units
that are the subject of such Involuntary Transfer (the “Foreclosed
Units”), and, if Gauss elects to exercise such right and option, the Lenders
agree to sell or otherwise cause the Transfer of the Foreclosed Units to Gauss,
in exchange for the payment in cash by Gauss of a total price equal to the value
at which the Foreclosed Units are Transferred (or proposed to be Transferred)
pursuant to the Involuntary Transfer (the “Foreclosure Price”).

(b)     The Lenders and the Guarantors
shall (and the Guarantors shall cause Golden Queen to) notify Gauss and LUK
Holdco of the occurrence of an Event of Default (as defined in the Term Loan
Agreement) at the same time notice thereof is given to the other parties to the
Term Loan Agreement, but in any event no later than five (5) calendar days after
such Event of Default (whether or not notice thereof is given to the other
parties to the Term Loan Agreement). In addition, the Lenders shall notify Gauss
and LUK Holdco at least ten (10) Business Days before the date of any
Involuntary Transfer (the “Foreclosure Notice”), which notice shall
include the number of Foreclosed Units, the Foreclosure Price and any other
information as may be reasonably requested by Gauss. The Option shall be
exercisable by notice in writing (the “Option Exercise Notice”)
given by Gauss to the Lenders, copying Auvergne and LUK Holdco, within five (5)
Business Days after receipt by Gauss and LUK Holdco of the Foreclosure Notice.


(c)     The closing of the purchase by
Gauss of the Foreclosed Units (the “Option Transfer”) shall take
place on the date of the Involuntary Transfer. At such closing, (i) Gauss shall
pay the Lenders the aggregate Foreclosure Price by wire transfer of immediately
available funds, and (ii) the Lenders shall Transfer the Foreclosed Units, or
cause the Foreclosed Units to be Transferred, to Gauss free and clear of any
lien or encumbrance, with any documentation reasonably requested by Gauss to
evidence such Transfer. 

(d)     Each of the Guarantors hereby
agrees, in connection with any exercise by Gauss of the Option and the Transfer
of Foreclosed Units, to use its commercially reasonable efforts to take, or
cause to be taken, all actions necessary or appropriate to consummate such
Transfer. 

2.     Purchase of New Units.
Notwithstanding anything to the contrary in Section 3.6 of the LLC Agreement,
Auvergne and LUK Holdco hereby agree that (i) in the issuance of New Units by
Gauss in connection with, and in order to fund the Purchase Price for, the
Option Transfer, each Original Group shall be entitled to purchase, at the price
and on the other terms and conditions specified in the Issuance Notice, a number
of the New Units such that the Aggregate Percentage Interest of each Original
Group immediately following such issuance of New Units shall be equal to the
Aggregate Percentage Interest of such Original Group immediately prior to such
issuance, (ii) each of Auvergne and LUK Holdco shall notify Gauss within 3 (three) calendar days of delivery of the Option
Exercise Notice (which shall serve as the Issuance Notice) whether it elects to
purchase New Units in such issuance, (iii) if either of Auvergne or LUK Holdco
does not elect to purchase all of the New Units it is entitled to purchase or
does not fund the purchase price in respect thereof, then the final sentence of
Section 3.6(b) of the LLC Agreement shall apply, and (iv) each Original Group
electing to purchase New Units in such issuance shall fund the subscription
price for such New Units no later than on the date of the Involuntary Transfer.
For the avoidance of doubt, Auvergne and LUK Holdco acknowledge and agree that
no consent of any Member shall be required pursuant to Section 6.6 of the LLC
Agreement in connection with any of the transactions contemplated by this Option
Agreement. 

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3.     No Amendment. Except as
otherwise expressly amended or modified hereby, all of the terms and conditions
of the LLC Agreement and the JV LLC Agreement shall continue in full force and
effect. 

4.     General. 

(a)     The parties hereto agree that, if
any of the provisions of this Option Agreement were not performed in accordance
with their specific terms or were otherwise breached, irreparable damage would
occur, no adequate remedy at law would exist and damages would be difficult to
determine, and, therefore, it is agreed that the parties shall be entitled to
specific performance of the terms hereof, in addition to any other remedy at law
or in equity. 

(b)     This Option Agreement may be
amended or supplemented only by written agreement of all the parties to this
Option Agreement. Neither this Option Agreement nor any of the rights, interests
or obligations hereunder shall be assigned, in whole or in part, by operation of
law or otherwise, by any of the parties without the prior written consent of the
other parties. Subject to the preceding sentence, this Option Agreement shall be
binding upon, inure to the benefit of, and be enforceable by, the parties and
their respective successors and assigns.

(c)     This Option Agreement, the LLC
Agreement, the JV LLC Agreement and the Consent constitute the entire agreement,
and supersede all other prior agreements and understandings, both written and
oral, among the parties, or any of them, with respect to the subject matter
hereof. Nothing in this Option Agreement, express or implied, is intended to or
shall confer upon any person other than the parties (and their respective
successors and permitted assigns) any right or remedy of any nature whatsoever
under or by reason of this Option Agreement. 

(d)     This Option Agreement shall for all
purposes be construed in accordance with and governed by the laws of the State
of Delaware without reference to its conflict or choice of laws principles that
would lead the laws of any other State to apply. To the extent not prohibited by
any provisions of applicable law that cannot be waived, each of the parties
hereby waives and covenants that he or it will not assert (whether as plaintiff,
defendant or otherwise) any right to trial by jury in any forum in respect of
any issue, claim, demand, action or cause of action arising out of or based upon
this Option Agreement or the subject matter hereof, whether now existing or
hereafter arising and whether sounding in tort or contract or otherwise. 

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(e)     All notices, requests and other
communications to any party hereunder shall be in writing and shall be deemed
given if delivered personally, telecopy faxed (which is confirmed) or sent by
overnight courier (providing proof of delivery) to the parties at the following
addresses: 

	 	If to Auvergne or the Lenders, to: 
	 	  
	 	c/o East Hill Management Company 
	 	10 Memorial Drive 
	 	Suite 902 
	 	Providence, RI 02903 
	 	Fax: (401) 490-0749 
	 	  
	 	with a copy (which shall not constitute notice) to: 
	 	  
	 	Sullivan & Worcester LLP 
	 	One Post Office Square 
	 	Boston, MA 02109 
	 	Attention: William A. Levine, Esq. 
	 	Fax: (617) 338-2880 
	 	  
	 	If to Gauss or LUK Holdco, to: 
	 	  
	 	c/o Leucadia National Corporation 
	 	520 Madison Avenue 
	 	New York, NY 10022 
	 	Attention: H. Jimmy Hallac 
	 	Email: jhallac@leucadia.com 
	 	Fax: 212-598-4869 
	 	  
	 	with a copy (which shall not constitute notice) to: 
	 	  
	 	Weil, Gotshal & Manges LLP 
	 	767 Fifth Avenue 
	 	New York, NY 10153 
	 	Attention: Andrea A. Bernstein, Esq. and Matthew Gilroy,
      Esq. 
	 	Fax: (212) 310-8007 
	 	  
	 	If to the Guarantors, to: 
	 	  
	 	Golden Queen Mining Holdings, Inc. 
	 	15772 K Street 
	 	Mojave, CA 93501 
	 	Attention: H. Lutz Klingmann 


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or such other address or telecopy fax number as such party may
hereafter specify by like notice to the other parties. All such notices,
requests and other communications shall be deemed received on the date of
receipt by the recipient thereof if received prior to 5 P.M. in the place of receipt and such day is a business day in the place of receipt.
Otherwise, any such notice, request or communication shall be deemed not to have
been received until the next succeeding business day in the place of receipt.


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IN WITNESS WHEREOF, the parties have caused this Option
Agreement to be duly executed and delivered as of the date first above written.


	GAUSS LLC 	THE LANDON T. CLAY 2009 IRREVOCABLE 
	 	TRUST DATED MARCH 6, 2009 
	 	  
	 	  
	By:     /s/ H. Jimmy
      Hallac                                        
      	By:     /s/
      Thomas M.
      Clay                                               
      
	Name: H. Jimmy Hallac 	                    Thomas
      M. Clay, Trustee 
	Title: President 	  
	 	  
	 	  
	GAUSS HOLDINGS LLC 	HARRIS CLAY 
	 	  
	 	  
	By:     /s/ H. Jimmy
      Hallac                                         
      	     /s/ Harris
      Clay                                                              
      
	Name: H. Jimmy Hallac 	  
	Title: President 	  
	 	  
	AUVERGNE, LLC 	GOLDEN QUEEN MINING HOLDINGS, INC. 
	 	  
	 	  
	By:     /s/ Thomas M.
      Clay                                        
      	By:     /s/ H. Lutz
      Klingmann                                            
      
	Thomas M. Clay, Manager 	Name: H. Lutz Klingmann 
	 	Title: President 
	 	  
	EHT, LLC 	THE CLAY FAMILY 2009 IRREVOCABLE 
	 	TRUST DATED APRIL 14, 2009 
	 	  
	 	  
	By:     /s/ Jonathan C.
      Clay                                        
      	By:     /s/
      Thomas M.
      Clay                                                
      
	Jonathan C. Clay, Manager 	         Thomas M.
      Clay, Trustee 


[Amended and Restated Option Agreement] 




GOLDEN QUEEN MINING CANADA LTD. 

By:     /s/ H. Lutz
Klingmann                                        


[Amended and Restated Option Agreement]