Exhibit 10.1


 





STANDBY GUARANTEE AGREEMENT


 


THIS AGREEMENT made as of the 10th
day of November, 2017.


 


BETWEEN:


 


GOLDEN QUEEN MINING CO.
LTD., a company existing under the laws of the Province of British Columbia


(the
“Company”)


 


AND:


 


Landon
T. Clay 2009 Irrevocable Trust DATED MARCH 6, 2009


 


(the
“Clay 2009 Trust”)


 


AND:


 


THE MASTERS 1, LLC


(the
“Masters 1”)


 


(Masters
1 together with the Clay 2009 Trust are the “Standby Guarantors”)


 


WHEREAS:


 


		A.	The Company intends to carry out an offering of Rights
to the holders of record of its Common Shares in the Qualifying Jurisdictions pursuant to a Prospectus; and



 


		B.	The Standby Guarantors have agreed to act as guarantors
in connection with the Rights Offering on the terms and conditions set forth in this Agreement;



 


NOW THEREFORE, in consideration
of the mutual covenants contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties agree as follows:


 


ARTICLE 1


DEFINITIONS


 


		1.1	Defined Terms



 


In this Agreement, including the
Recitals hereto:


 


Additional Subscription
Privilege has the meaning given in Section 2.2;


 


Basic Subscription Privilege
has the meaning given in Section 2.1;


 


Business Day means
any day, other than a Saturday or a Sunday, upon which banks are open for business in the City of Vancouver, British Columbia;


 


Closing has the meaning
given in Section 8.1;


 






     


    	 	2	 



    

 


Closing Date means
that day which falls two (2) Business Days following the Rights Expiry Date or such earlier date after the Rights Expiry Date as
is practicable and as agreed between the Company and the Standby Guarantors;


 


Closing Time has the meaning
given in Section 8.1 of this Agreement;


 


Commissions means the
provincial and territorial securities commissions or other regulatory authorities in the Filing Jurisdictions;


 


Common Shares means
the common shares in the capital of the Company;


 


Disclosure Record means
all prospectuses, information circulars, annual information forms, financial statements, management's discussion and analysis,
material change reports and other public documents filed by or with respect to the Company with applicable Commissions;


 


EDGAR means the Electronic
Data Gathering, Analysis and Retrieval system (EDGAR);


 


Effective Date has the meaning
given in Section 2.1;


 


Exchange means the Toronto
Stock Exchange;


 


Filing Jurisdictions means
the provinces of British Columbia, Alberta and Ontario (with respect to the filing of the Prospectus) and the United States (with
respect to the filing of a Registration Statement with the SEC);


 


Final Prospectus means
the final short form prospectus to be filed by the Company with the Commissions to qualify the distribution of the Rights, the
Rights Shares and the Standby Shares pursuant to the Rights Offering, as amended by any Prospectus Amendment to the Final Prospectus;


 


Financial Statements means
the Company’s audited consolidated financial statements, the notes thereto and the auditor's report thereon for the years
ended December 31, 2016 and 2015 with the notes thereto;


 


Governmental Entity means
any:


 


		(a)	multinational, federal, provincial, state, territorial, municipal, local
or other governmental or public department, central bank, court, commission, board, bureau, agency or instrumentality, domestic
or foreign;



 


		(b)	any subdivision or authority of any of the foregoing; or



 


		(c)	any quasi-governmental or private body exercising a regulatory, expropriation
or taxing authority under or for the account of any of the above;



 


Indemnified Party has the
meaning given in section 10.2(a) of this Agreement;


 


Indemnifying Party has the
meaning given in section 10.2(a) of this Agreement;


 






     


    	 	3	 



    

 


Laws means any and
all applicable laws including all statutes, codes, ordinances, decrees, rules, regulations, municipal by-laws, judicial or arbitral
or administrative or ministerial or departmental or regulatory judgments, orders, decisions, rulings or awards, instruments, policies,
guidelines, and general principles of common law and equity, binding on or affecting the Person referred to;


 


Material Adverse Change
means any change, development, event or occurrence with respect to the business, condition (financial or otherwise), properties,
assets, liabilities (contingent or otherwise), capital, cash flow, operations, or results of operations of the Company and its
subsidiaries on a consolidated basis, that is, or would reasonably be expected to be, material and adverse to the Company and its
subsidiaries on a consolidated basis;


 


Material Change has the
meaning given in the Securities Act;


 


Misrepresentation means:


 


		(a)	a “misrepresentation” as defined in Section 1(1) of the Securities Act; or



 


		(b)	as to any document, any untrue statement of a material fact or omission to
state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;



 


NI 41-101 means National
Instrument 41-101 – General Prospectus Requirements of the Canadian Securities Administrators;


 


Non-Qualifying Jurisdiction
means any jurisdiction other than the Qualifying Jurisdictions;


 


Offering Date has the meaning
given in Section 2.1;


 


Order means any award,
decision, injunction, judgment, order, ruling, subpoena, or verdict entered, issued, made, or rendered by any court, administrative
agency, or other Governmental Entity or by any arbitrator;


 


Person means an individual,
corporation, partnership, limited partnership, limited liability partnership, limited liability company, association, trust, estate,
custodian, trustee, executor, administrator, nominee or other entity or organization, including (without limitation) a Governmental
Entity or political subdivision or an agency or instrumentality thereof;


 


Preliminary Prospectus
means the preliminary short form prospectus to be filed with the Commissions to qualify the distribution of the Rights, the Rights
Shares and the Standby Shares issuable upon exercise of the Rights pursuant to the Rights Offering;


 


Prospectus means, collectively,
the Preliminary Prospectus, the Final Prospectus and any Prospectus Amendment;


 


Prospectus Amendment means
any amendment to the Preliminary Prospectus or the Final Prospectus;


 






     


    	 	4	 



    

 


Qualifying Jurisdictions means the Filing Jurisdictions,
except for the States of Arizona, Arkansas, California, Minnesota, Ohio and Wisconsin and such other jurisdictions outside Canada
and the United States where it is lawful to mail the Final Prospectus and Registration Statement, as applicable, and the certificates
representing the Rights to Shareholders resident therein;


 


Record Date means the
record date for the purpose of the Rights Offering that will be established by the Company in accordance with Securities Laws and
set out in the Final Prospectus;


 


Regulatory Authorities means
the Commissions, the SEC and the Exchange;


 


Registration Rights Agreement
has the meaning given in Section 3.4 of this Agreement;


 


Registration Statement means
a registration statement of the Company on Form S-3 or such other form as may be available to the Company at the time of filing
to cover the issuance of Common Shares upon exercise of the Rights under the U.S. Securities Act;


 


Rights means the transferable
rights that will be distributed to each Shareholder on the Record Date to subscribe for Rights Shares at the Subscription Price
under the Rights Offering;


 


Rights Expiry Date has the
meaning given in section 2.1 of this Agreement;


 


Rights Expiry Time means
5:00 p.m. (Vancouver time) on the Rights Expiry Date;


 


Rights Offering means the offering by the Company
of the Rights undertaken in accordance with Article 2;


 


Rights Shares means the
Common Shares which may be issued on exercise of the Rights;


 


SEC means the United
States Securities and Exchange Commission or any successor agency thereto;


 


Securities means the
Rights, the Rights Shares, and the Standby Shares;


 


Securities Act means
the Securities Act (British Columbia);


 


Securities Laws means
all applicable securities Laws of each of the Qualifying Jurisdictions, the U.S. Securities Act and the applicable rules of the
Exchange;


 


SEDAR means the System
for Electronic Document Analysis and Retrieval (SEDAR) as further described in National Instrument 13-101 – System for
Electronic Document Analysis and Retrieval (SEDAR) of the Canadian Securities Administrators;


 


Shareholder means a
holder of record of Common Shares of the Company;


 


Standby Guarantee has
the meaning given in Section 3.1 of this Agreement;


 


Standby Guarantors has
the meaning given on the cover page of this Agreement;


 






     


    	 	5	 



    

 


Standby Purchaser Fee has
the meaning given in Section 3.5 of this Agreement;


 


Standby Shares means
100% of the Rights Shares which remain unsubscribed for by holders of Rights on the Rights Expiry Date under the Rights Offering;


 


Subscription Price has the
meaning given in Section 2.1;


 


U.S. Securities Act means
the United States Securities Act of 1933, as amended; and


 


United States means the
United States of America, its territories and possessions, each State of the United States and the District of Columbia.


 


		1.2	Headings, etc.



 


The division of this Agreement
into articles, sections, paragraphs and clauses and the provision of headings are for the convenience of reference only and will
not affect the construction or interpretation of this Agreement. The terms “this Agreement”, “hereunder”
and similar expressions refer to this Agreement as a whole and not to any particular article, section, paragraph, clause or other
portion of this Agreement and include any agreement or instrument supplemental or ancillary to this Agreement. Unless something
in the subject matter or context is inconsistent therewith, references in this Agreement to articles, sections, paragraphs or clauses
are to articles, sections, paragraphs or clauses of this Agreement.


 


		1.3	Plurality and Gender



 


Words importing the singular
number only will include the plural and vice versa, words importing any gender will include all genders.


 


		1.4	Currency



 


Unless otherwise specifically
stated, all references to dollars and cents in this Agreement are to the lawful currency of the United States.


 


		1.5	Governing Law



 


This Agreement will be governed
by, interpreted and enforced in accordance with the laws of the Province of British Columbia and the federal laws of Canada applicable
therein. Each party hereby unconditionally and irrevocably submits to the nonexclusive jurisdiction of the courts of the Province
of British Columbia in respect of all matters arising out of this Agreement.


 


		1.6	Severability



 


If any provision of this Agreement
is determined to be invalid or unenforceable in whole or in part, such invalidity or unenforceability will attach only to such
provision or part thereof and the remaining part of such provision and all other provisions of this Agreement will continue in
full force and effect. The parties to this Agreement agree to negotiate in good faith a substitute provision which will be as close
as possible to the intention of any invalid or unenforceable provision as may be valid or enforceable. The invalidity or unenforceability
of any provision in any particular jurisdiction will not affect its validity or enforceability in any other jurisdiction where
it is valid or enforceable.


 






     


    	 	6	 



    

 


		1.7	Statutes



 


Any reference to a statute,
act or law will include and will be deemed to be a reference to such statute, act or law and to the regulations, instruments and
policies made pursuant thereto, with all amendments made thereto and in force from time to time, and to any statute, act or law
that may be passed which has the effect of supplementing or superseding such statute, act or law so referred to.


 


ARTICLE 2


CONDUCT OF THE
RIGHTS OFFERING


 


		2.1	Terms of Rights Offering



 


Pursuant to the Rights Offering,
the Company will issue on a pro rata basis at no charge, Rights to each Shareholder resident in the Qualifying Jurisdictions as
of the Record Date on the basis of one (1) Right for each Common Share held. One (1) Right will entitle the holder to purchase,
at the election of such holder, that number of Common Shares equal to the quotient of the Rights Shares divided by 111,148,683
(the “Basic Subscription Privilege”) at a price per Rights Share equal to 75% of the market price of the Common
Shares determined in accordance with Exchange rules (the “Subscription Price”). The Rights Offering will remain
open for a period of 30 calendar days following the date that the SEC declares the Registration Statement effective under the U.S.
Securities Act (the “Effective Date”), subject to a maximum exercise period of 90 days from the issuance date
of the Rights (the “Rights Expiry Date”), provided that if the Effective Date does not occur at least 21 days
prior to 90 days from the issuance date of the Rights, then the Rights Expiry Date will be the Effective Date. Each such Right
will be non-transferable and non-exchangeable, and may not be exercised to acquire Rights Shares, prior to and including the Effective
Date, and will thereafter be transferable, exchangeable and exercisable to acquire Rights Shares up to and including the Rights
Expiry Date.


 


		2.2	Additional Subscription Privilege



 


Pursuant to Securities
Laws, each holder of Rights who has exercised in full the Basic Subscription Privilege attaching to such holder’s Rights,
will be entitled, on a pro rata basis (based on the number of Rights which it exercised under the Basic Subscription Privilege
as a proportion of all Rights exercised under the Basic Subscription Privilege), to subscribe for additional Rights Shares at the
Subscription Price, to the extent that other holders of Rights do not exercise all of their Rights under the Basic Subscription
Privilege (the “Additional Subscription Privilege”)


 


		2.3	Closing



 


The completion of the purchase
of Rights Shares pursuant to the Basic Subscription Privilege and the Additional Subscription Privilege by each Rights holder will
occur at the time, and in the manner set forth in the Final Prospectus, and in the event of any conflict between the provisions
of this Agreement and the provisions of the Final Prospectus, the provisions of the Final Prospectus will prevail.


 






     


    	 	7	 



    

  


ARTICLE 3


STANDBY GUARANTEE


 


		3.1	Standby Guarantee



 


In
order to guarantee that at least US$25,000,000 worth of Rights are exercised on the Closing Date, each of the Standby Guarantors
will purchase, at the Subscription Price, the proportionate share of the Standby Shares up to the maximum amounts set forth below
within two Business Days after the Rights Expiry Date (the “Standby Guarantee”):


 


	
        Standby

        Guarantor
	Dollar Value	Proportionate %
	Clay 2009 Trust	US$18,750,000	75%
	Masters 1	US$6,250,000	25%
	Total:	US$25,000,000	100%


 


The obligations
of the Standby Guarantors pursuant to this Section 3.1 will be several (as distinguished from joint and joint and several) obligations
of each Standby Guarantor, and will terminate upon the termination of this Agreement for any reason. In the event that a Standby
Guarantor either defaults on its obligation pursuant to this Section 3.1 or terminates its obligations under this Agreement pursuant
to Section 9.2, the Company cannot obligate the other Standby Guarantors to exercise the Standby Guarantee of the defaulting or
terminating Standby Guarantor and no Standby Guarantor will be liable to the Company with respect to a default by another Standby
Guarantor. If one or more of the Standby Guarantors fails to purchase its or their proportionate share of the Standby Shares at
the Closing Time the other Standby Guarantor(s) will have the right, but will not be obligated, to purchase on a pro-rata basis
(or in such other proportion as the remaining Standby Guarantors may mutually agree) all, but not less than all, of the Standby
Shares not purchased by the defaulting Standby Guarantor(s).


 


		3.2	Payment for Standby Shares



 


Subject to and in accordance
with the terms of this Agreement, on the Closing Date, each of the Standby Guarantors will pay in immediately available funds by
wire transfer to an account designated by the Company, or by certified cheque payable to the Company or its counsel, the aggregate
Subscription Price that is payable for the Standby Shares to be purchased by such Standby Guarantor hereunder, and the Company
will issue the Standby Shares to such Standby Guarantor and deliver the certificate(s) representing the Standby Shares as soon
as practicable thereafter, but in any event within two Business Days following the Closing Date.


 


		3.3	Evidence of Financial Ability



 


Each of the Standby Guarantors
will provide to the Company such evidence as may be required by the applicable Regulatory Authorities that the Guarantor has the
financial ability to carry out the “stand-by commitment” (as defined under NI 41-101) constituted by this Agreement,
as required under Part 8A of NI 41-101.


 






     


    	 	8	 



    

 


		3.4	Restrictions on Sale



 


Subject to the terms of the
Amended and Restated Registration Rights Agreement dated June 8, 2015 between the 2009 Trust, EHT, LLC, Harris Clay, The Clay Family
2009 Irrevocable Trust Dated April 14, 2009 and the Company (as may be subsequently amended, modified or supplemented, the “Registration
Rights Agreement”), each of the Standby Guarantors agrees to sell the Standby Shares only in accordance with all applicable
Securities Laws, and not to sell or distribute, directly or indirectly, the Standby Shares in such a manner as to:


 


		(a)	require registration by the Company of the Standby Shares or the filing
by the Company of a prospectus or any similar document in any jurisdiction other than as contemplated herein; or



 


		(b)	result in the Company becoming subject to reporting or disclosure obligations
to which it is not subject as at the date of this Agreement.



 


		3.5	Standby Purchaser Fee



 


In consideration for the
Standby Guarantee, the Company has agreed to pay at the Closing to the Standby Guarantors, in immediately available funds by wire
transfer to one or more accounts designated by the Standby Guarantors, a fee (the “Standby Purchaser Fee”) equal
to 3.0% of the aggregate Subscription Price for the maximum number of Rights Shares that would be issued pursuant to the Rights
Offering if all of the Rights were exercised, less that number of Rights which are issued in respect of Common Shares: (a) owned
by the Standby Guarantors; and (b) directly or indirectly owned or over which investment control is exercised by Thomas M. Clay
or Jonathan C. Clay (the shareholders thereof being collectively referred to as the “Excluded Shareholders”).


 


The Stand-by Fee will be
paid to each of the Standby Guarantors in the same proportion as the percentage of the Standby Guarantee for which each is responsible,
as set forth in Section 3.1


 


		3.6	Registration Rights



 


The Company agrees to amend
the Registration Rights Agreement on or before the Closing Time to cover (i) the warrants (and the securities issuable thereunder)
issued pursuant to the Second Amended and Restated Term Loan Agreement dated as of November 21, 2016, by and among the Company
and the other parties thereto, and (ii) the Rights Shares acquired in the Rights Offering by the Standby Guarantors and their affiliates,
and (iii) the Standby Shares acquired in this Rights Offering by the Standby Guarantors and their affiliates.


 


		3.7	Exercise of Rights



 


The
Standby Guarantors each represent and warrant that they intend (but are not legally obligated) to exercise in full their Rights
prior to the Rights Expiry Time.


 






     


    	 	9	 



    

 


ARTICLE 4


COVENANTS


 


		4.1	Covenants of the Company



 


Subject to and in accordance with the terms of
this Agreement, the Company agrees with the Standby Guarantors that:


 


		(a)	Preliminary Prospectus. The Company will use commercially reasonable
efforts to prepare and file the Preliminary Prospectus with the applicable Regulatory Authorities as soon as reasonably practicable
following the date of this Agreement.



 


		(b)	Final Prospectus and Qualification. The Company will use commercially
reasonable efforts prepare and file the Final Prospectus with the applicable Regulatory Authorities, and take all other steps and
proceedings that may be necessary in order to qualify the distribution of the Rights, the Rights Shares issuable upon exercise
of the Rights in each of the Qualifying Jurisdictions in which the Final Prospectus has been filed.



 


		(c)	Registration Statement. The Company will use commercially reasonable
efforts to prepare and file the Registration Statement with the SEC to register the distribution of the Rights Shares upon exercise
of the Rights under the U.S. Securities Act.



 


		(d)	Standby Shares Exemption. The Company will use commercially reasonable
efforts to take all steps and proceedings that may be necessary in order to exempt the distribution of the Standby Shares in the
applicable U.S. jurisdictions where such Standby Shares will be distributed.



 


		(e)	Receipts. The Company will use commercially reasonable efforts to
obtain a receipt (or analogous decision document) as soon as possible following the filing of each of the Preliminary Prospectus
and Final Prospectus with the Commissions.



 


		(f)	Supplementary Material. If required by Securities Laws, the Company
will prepare any Prospectus Amendment or any other document required to be filed by it under the Securities Laws. The Company will
also promptly, and in any event within any applicable time limitation, comply with all applicable filing and other requirements
under the Securities Laws as a result of any Material Change.



 


		(g)	Changes to Terms. The Company will not amend the terms of the Rights
Offering, including for greater certainty any change to the Subscription Price, without the written consent of the Standby Guarantors,
which consent will not be unreasonably withheld or delayed.



 


		(h)	Consents and Approvals. The Company will use its best efforts to obtain
all necessary consents, approvals or exemptions in the Qualifying Jurisdictions for the creation, offering and issuance of the
Securities, and the entering into and performance by it of this Agreement.



 


		(i)	Cease Trade Order or Other Investigation. From the date of this Agreement
to the earlier of: (i) the Closing Date; and (ii) the termination of this Agreement, the Company will immediately notify the Standby
Guarantors in writing of any written demand, request or inquiry (formal or informal) by any Commission, the Exchange or other Governmental
Entity that concerns any matter relating to the Company's affairs that may affect the Rights Offering or the transactions contemplated
in this Agreement, or that relates to the issuance, or threatened issuance, by any such authority of any cease trading or similar
order or ruling relating to any of the Company's securities. Any notice delivered to the Standby Guarantors as aforesaid will contain
reasonable details of the demand, request, inquiry, order or ruling in question. The Company will use its best efforts to prevent
the issuance of any orders contemplated by this Section 4.1(i) and, if issued, to obtain their prompt withdrawal.



 






     


    	 	10	 



    

 


		(j)	Exchange Acceptance. The Company will take all action as may be necessary
and appropriate to obtain conditional acceptance by the Exchange of the issuance of the Rights, the Rights Shares, the Standby
Shares, the Standby Guarantee and the Standby Purchase Fee, subject to receipt of customary final documentation.



 


		(k)	Securities Laws. The Company will take all action as may be necessary
and appropriate so that the Rights Offering and the transactions contemplated in this Agreement will be effected in accordance
with Securities Laws. The Company will not file the Preliminary Prospectus, the Final Prospectus, the Registration Statement or
any Prospectus Amendment without first providing a copy of such documents to the Standby Guarantors and their advisors who will
have a reasonable period of time to review and comment on such documents.



 


		(l)	Obtaining of Report. The Company will cause Computershare Investor
Services Inc. to deliver to the Standby Guarantors, as soon as is practicable following the Rights Expiry Time, details concerning
the total number of Rights Shares duly subscribed and paid for by holders of Rights under the Rights Offering, including (without
limitation) those subscribed and paid for pursuant to the Additional Subscription Privilege.



 


		(m)	No Issuance of Securities. Other than pursuant to the Rights Offering
and the grant and exercise of stock options, during the period from the date hereof until the Closing Date, the Company will not
issue any Common Shares or securities convertible or exchangeable or exercisable into Common Shares.



 


		(n)	Mailing of Materials. The Company will complete the mailing of commercial
copies of the Final Prospectus to each of the Shareholders as of the Record Date in the Qualifying Jurisdictions as soon as possible
following the Record Date. With respect to Shareholders not residents of the Qualifying Jurisdictions, the Company may mail commercial
copies of the Final Prospectus to such Shareholders so long as such Shareholders satisfy to the Company that such receipt of the
Final Prospectus is lawful and in compliance with the Securities Laws and other laws applicable in the Qualifying Jurisdictions
and the jurisdiction where such Shareholder is resident.



 


		(o)	Exercise of the Rights. The Company will use such commercially reasonable
efforts as the Standby Guarantors may reasonably request to enforce payment in respect of, or to otherwise ensure the valid exercise
of, all Rights purported to be exercised either under the Basic Subscription Privilege or the Additional Subscription Privilege.



 






     


    	 	11	 



    

 


ARTICLE 5


MATERIAL CHANGES


 


		5.1	Material Changes During Distribution



 


		(a)	During the period from the date of this Agreement to the Closing Date, the
Company will promptly notify the Standby Guarantors in writing of any Material Change (actual, anticipated, contemplated or threatened,
financial or otherwise) in the business, affairs, operations, assets, liabilities (contingent or otherwise) or capital of the Company
and its subsidiaries taken as a whole.



 


		(b)	During the period from the date of this Agreement to the Closing Date, the
Company will promptly notify the Standby Guarantors in writing of:



 


		(i)	any material fact that has arisen or been discovered and that would be required
to be disclosed in the Prospectus or Registration Statement filed on such date; and



 


		(ii)	any change in any material fact contained in the Prospectus or Registration
Statement, including (without limitation) all documents incorporated by reference, which fact or change is, or may be, of such
a nature as to result in a Misrepresentation in the Prospectus or Registration Statement or that would result in the Prospectus
or Registration Statement not complying with applicable Securities Laws.



 


		(c)	The Company will promptly, and in any event within any applicable time limitation,
comply, to the satisfaction of the Standby Guarantors, acting reasonably, with all applicable filings and other requirements under
the Securities Laws as a result of such material fact or Material Change. The Company will in good faith discuss with the Standby
Guarantors any fact or change in circumstances (actual, anticipated, contemplated or threatened, financial or otherwise) that is
of such a nature that there is reasonable doubt whether written notice need be given under this Section 5.1



 


		5.2	Change in Securities Laws



 


If, prior to the Rights Expiry
Date, there is any change in the Securities Laws that, in the opinion of the Standby Guarantors, acting reasonably, requires the
filing of a Prospectus Amendment, the Company will, to the satisfaction of the Standby Guarantors, acting reasonably, promptly
prepare and file such Prospectus Amendment with the applicable Regulatory Authorities.


 






     


    	 	12	 



    

 


		5.3	Change in Closing Date



 


If a Material Change occurs
after the date of filing of the Final Prospectus with the applicable Regulatory Authorities and prior to the Closing Date, then,
subject to Article 8, the Closing Date will be, unless the Company and the Standby Guarantors otherwise agree in writing, the later
of the previously scheduled Closing Date and the sixth Business Day following the date on which all applicable filings or other
requirements of the Securities Laws with respect to such Material Change have been complied with in all Qualifying Jurisdictions
and any appropriate documents obtained for such filings and notice of such filings from the Company or the Company's counsel have
been received by the Guarantors. For greater certainty, under no circumstances will the exercise period for the Rights Offering
exceed ninety (90) days.


 


ARTICLE 6


WARRANTIES AND
REPRESENTATIONS OF THE COMPANY


 


		6.1	Representations



 


The Company warrants and represents
to each of the Standby Guarantors that:


 


		(a)	it and its subsidiaries have been duly incorporated and organized and are
validly existing and in good standing under the Laws of their respective corporate jurisdictions;



 


		(b)	it has not commenced, participated or agreed to commence or participate in
any bankruptcy, involuntary liquidation, dissolution, winding up, insolvency or similar proceeding and no such proceedings have
been threatened by any other party;



 


		(c)	it has all requisite corporate power to enter into and perform this Agreement,
to own or lease its property and to carry on the part of the business as now being conducted by it;



 


		(d)	no order ceasing or suspending the trading of the Common Shares has been
issued to or is outstanding against the Company;



 


		(e)	the Rights will, when issued, be duly authorized and validly issued securities
of the Company, enforceable against the Company in accordance with their terms;



 


		(f)	the Rights Shares issuable upon the exercise of the Rights will, when issued,
be duly authorized, validly issued, fully paid and non-assessable Common Shares in the capital of the Company;



 


		(g)	the Standby Shares will, when issued, be duly authorized, validly issued,
fully paid and non-assessable Common Shares in the capital of the Company;



 


		(h)	prior to such time as they are issued, all necessary documents will have
been filed and other necessary steps taken to permit the distribution of the Rights and the Common Shares issuable upon the exercise
of the Rights under the securities laws of each province of Canada, and to register the Common Shares issuable upon the exercise
of the Rights under the U.S. Securities Act;



 






     


    	 	13	 



    

 


		(i)	the authorized capital of the Company consists of an unlimited number of
Common Shares, of which 111,148,680 Common Shares have been duly issued and are outstanding as fully paid and non-assessable as
of the date hereof. No Person has any agreement or option or any right or privilege (whether by law, preemptive or contractual)
capable of becoming an agreement or option for the purchase from the Company of any Common Shares or other securities of the Company,
other than pursuant to the Standby Guarantee or stock options (outstanding and which may be granted under the Company’s incentive
stock option plan);



 


		(j)	the execution, delivery and performance by the Company of this Agreement:



 


		(i)	has been duly authorized by all necessary corporate action on its part;



 


		(ii)	does not and will not, with the giving of notice, the lapse of time or the happening of any other
event or condition:



 


		(A)	violate or conflict with any of the terms, conditions or provisions of the
Company’s constating documents or resolutions of the Shareholders, directors or any committee of directors of the Company
or any of its subsidiaries;



 


		(B)	except for the required filings, acceptances or approvals of the Exchange
or as required by Securities Laws with respect to the filing of the Prospectus in respect of the transactions contemplated hereby,
require any authorization, consent, approval, exemption or other action by, or notice to, any stock exchange, governmental agency,
authority, regulatory body or court;



 


		(C)	violate or conflict with, or constitute a default under any material indenture,
mortgage, agreement, contract or other material instrument to which the Company or any of its subsidiaries is a party or by which
any of them or any of their assets or properties may be bound or affected;



 


		(D)	trigger any change of control or similar provision in any material indenture,
mortgage, agreement, contract or other material instrument to which the Company or any of its subsidiaries is a party or by which
any of them or any of their assets or properties may be bound or affected;



 


		(E)	result in the termination of, or any additional payment under, or the change
in any terms of, or accelerate the performance of any obligation required by (or give rise to a right of any party thereto, exercisable
on notice or otherwise, to terminate, to require that any additional payment be made under, to change any terms of, or to accelerate
the performance of any obligation under) any material indenture, mortgage, agreement, contract or other material instrument to
which the Company or any of its subsidiaries is a party or by which any of them or any of their assets or properties may be bound
or affected, except as disclosed in the Disclosure Record;



 






     


    	 	14	 



    

 


		(F)	result in the creation of any encumbrance upon any of the property or assets
of the Company or any of its subsidiaries; or



 


		(G)	violate or conflict with any material license, permit, approval, consent,
certificate, registration or authorization held by the Company or any of its subsidiaries and necessary to carry on the Company’s
business or to own or lease any of the material property of or assets utilized by the Company and its subsidiaries;



 


		(iii)	does not and will not result in the violation of any applicable Laws or any
judgment, decree, order or award of any court, governmental body or arbitrator having jurisdiction over the Company or any of its
subsidiaries;



 


		(k)	this Agreement has been duly executed and delivered by the Company and constitutes
a legal, valid and binding obligation of the Company, enforceable against it in accordance with its terms;



 


		(l)	the Company is a reporting issuer in British Columbia, Alberta, Ontario
and Quebec and is in compliance in all material respects with all applicable, and is not in default of any, requirements of applicable
Securities Laws. Since January 1, 2017, the Company has not received any correspondence or notice from a Commission, the Exchange
or similar Regulatory Authority concerning a review of its Disclosure Record. The Company has not filed any material change report
with any Commission or similar Regulatory Authority on a confidential basis. The Common Shares are listed on the Exchange and the
Company is in compliance in all material respects with all applicable rules of the Exchange. Since January 1, 2017, all documents
required to be filed under applicable Securities Laws have been filed and conform in all material respects to the requirements
of the applicable Securities Laws. Such documents at the time of filing thereof: (a) were true and correct in all material respects;
and (b) did not contain any Misrepresentations. There has been no material change as defined in the Securities Act to the matters
set forth in the Disclosure Record that has not been publicly disclosed;



 


		(m)	the Financial Statements:



 


		(i)	comply in all material respects with applicable Securities Laws;



 


		(ii)	have been prepared in accordance with accounting principles generally accepted
in the United States as in effect from time to time, consistently applied (except as may be indicated in the notes thereto); and



 


		(iii)	fairly present, in all material respects, the consolidated financial position
of the Company and its subsidiaries as at the respective dates thereof and the consolidated results of operations and cash flows
for the periods indicated;



 






     


    	 	15	 



    

 


		(n)	other than as set forth in the Financial Statements, the Company has no
material debt or liability of any kind whatsoever (whether accrued, contingent, absolute or otherwise) except for debt or liabilities
incurred in the ordinary course of business;



 


		(o)	since January 1, 2017, there has not been any reportable event (within the
meaning of National Instrument 51-102 - Continuous Disclosure Obligations) with the present or any former auditor of the
Company;



 


		(p)	each of the Company and its subsidiaries is, in all material respects, conducting
its business in compliance with all applicable Laws of each jurisdiction in which its respective business is carried on and each
is licensed, registered or qualified in all jurisdictions in which it owns, leases or operates its property or carries on business
to enable its business to be carried on as now conducted and its property and assets to be owned, leased and operated and all such
licences, registrations and qualifications are valid, subsisting and in good standing and it has not received a notice of non-compliance,
nor does it have knowledge of any facts that could give rise to a notice of material non-compliance with any such laws, rules,
regulations, licences, registrations or qualifications;



 


		(q)	there is no court, administrative, regulatory or similar proceeding (whether
civil, quasi-criminal or criminal); arbitration or other dispute settlement procedure; investigation or inquiry by any governmental
authority; or any similar matter or proceeding (collectively “proceedings”) pending or, to the knowledge of
the Company, threatened against or involving the Company or any of its subsidiaries (whether in progress or, to the Company’s
knowledge, threatened) which, if determined adversely to the Company, would have a material adverse effect on the Company and its
subsidiaries, taken as a whole, or the Company’s business or would prevent or significantly impede the issue of the Rights
and the Rights Shares issued upon the exercise thereof. The Company has received no notice of, and has no knowledge of, any event
that has occurred which might give rise to any proceedings except as disclosed in the Disclosure Record and there is no judgment,
decree, injunction, ruling, award or order of any Governmental Entity to which the Company or any of its subsidiaries is subject;



 


		(r)	the Company and its subsidiaries are the legal and beneficial owners of the
properties and assets or the interests in properties and assets referred to as owned by them in the Disclosure Record and are free
and clear of all encumbrances, other than as disclosed in the Disclosure Record. All agreements under which the Company (or the
applicable subsidiary) holds an interest in a property or asset are in good standing in all material respects;



 


		(s)	other than as disclosed in the Disclosure Record:



 


		(i)	there has not been any Material Change in the assets, liabilities, obligations
(absolute, accrued, contingent or otherwise), business, condition (financial or otherwise) or results of operations of the Company
and its subsidiaries, on a consolidated basis;



 






     


    	 	16	 



    

 


		(ii)	the Company and its subsidiaries have carried on their respective businesses
in the ordinary course; and



 


		(iii)	no Material Adverse Change has occurred;



 


		(t)	neither the Company nor any of its subsidiaries has received any notice of
or is in default or violation of any Order of any Governmental Entity or any applicable Laws which would reasonably be expected
to have a Material Adverse Effect on the Company;



 


		(u)	there are no outstanding Orders against the Company or its subsidiaries
or to which the Company or its subsidiaries are subject or by which their assets are bound and, other than proceedings described
in all material respects in the Disclosure Record which have been publicly filed by the Issuer on SEDAR or EDGAR as of the date
hereof, there are no claims, proceedings, actions or lawsuits in existence, or to Company’s knowledge, threatened or asserted
against the Company or its subsidiaries or with respect to any of the assets of the Company or its subsidiaries or the interests
of the Company or its subsidiaries therein which would reasonably be expected to have a Material Adverse Effect on the Company
or to have material and adverse effect on the Rights Offering or the other transactions contemplated herein;



 


		(v)	there are no contracts which are material to the business and affairs of
Company or its subsidiaries other than as disclosed in the Disclosure Record which have been publicly filed by the Company on SEDAR
or EDGAR as of the date hereof or which have been entered into in the ordinary course of business, and, other than disclosed in
the Disclosure Record which have been publicly filed by the Company on SEDAR or EDGAR as of the date hereof, all such contracts
are in full force and effect. All such contracts are valid, binding and subsisting and have not been amended or modified and the
terms thereof have not been waived, amended or modified except as disclosed in the Disclosure Record which have been publicly filed
by the Company on SEDAR or EDGAR as the date hereof or except in the ordinary course of business. To the knowledge of the Company,
neither it nor any of its subsidiaries is, nor is alleged to be (with or without the lapse of time or the giving of notice, or
both), in breach or default in any material respect of any such contract, and, to the knowledge of the Company, no other party
to any such contract is (with or without the lapse of time or the giving of notice or both) in breach or default in any material
respect thereunder;



 


		(w)	the Company has not conducted any “general solicitation” or “general
advertising” (as such terms are defined in Regulation D under the U.S. Securities Act) in connection with the offer and sale
of the Standby Shares, including, without limitation, advertisements, articles, notices or other communications published on the
internet or in any newspaper, magazine or similar media, or broadcast over radio, television or the internet, or any seminar or
meeting whose attendees have been invited by general solicitation or general advertising or has made or will make offers and sales
of the Standby Shares in the United States in any manner involving a public offering within the meaning of Section 4(a)(2) of the
U.S. Securities Act;



 






     


    	 	17	 



    

 


		(x)	the Company has not taken and will not take any action that would cause the
exemption from registration provided by Section 4(a)(2) of the U.S. Securities Act to be unavailable with respect to offers and
sales of the Standby Shares pursuant to this Agreement; and



 


		(y)	the Company has not sold, offered for sale or solicited any offer to buy,
and will not sell, offer for sale or solicit any offer to buy, any of its securities in the United States in a manner that would
be integrated with the offer and sale of the Standby Shares and would cause the exemption from registration in Section 4(a)(2)
of the U.S. Securities Act to become unavailable with respect to offers and sales of the Standby Shares contemplated in this Agreement.



 


		6.2	Survival



 


All representations and warranties
of the Company contained in this Agreement will survive the completion of the purchase of Standby Shares by the Standby Guarantors
and will continue in full force and effect for a period of two years despite any investigation, inquiry or other steps which may
be taken by or on behalf of the Standby Guarantors.


 


		6.3	Notification



 


The Company will notify the
Standby Guarantors forthwith if it becomes aware of a fact or circumstance which has caused or would be reasonably likely to cause
a representation or warranty set out in this Article 6 to become untrue, inaccurate or misleading at any time (by reference to
circumstances subsisting at that time) before the Closing Date. Within two Business Days following the date that the SEC declares
the Registration Statement effective under the U.S. Securities Act, the Company will notify the Standby Guarantors of such effectiveness.


 


ARTICLE 7


REPRESENTATIONS,
WARRANTIES AND COVENANTS OF THE STANDBY GUARANTORS


 


		7.1	Representations



 


Each of the Standby Guarantors
severally, and not jointly (or jointly and severally), represents and warrants to the Company that:


 


		(a)	the execution, delivery and performance by the Standby Guarantor of this Agreement will not result
in the violation of, or constitute a default under or conflict with or cause the acceleration of any obligation of such Standby
Guarantor under:



 


		(i)	any provision of the constating documents or by-laws or resolutions of the governing body of such
Standby Guarantor, as applicable; or



 


		(ii)	any judgment, decree, order or award of any court, governmental body or arbitrator having jurisdiction
over and binding on such Standby Guarantor;



 






     


    	 	18	 



    

 


		(b)	this Agreement has been duly executed and delivered by it and constitutes
a legal, valid and binding obligation of it, enforceable against it in accordance with its terms (except in any case as enforcement
hereof may be limited by bankruptcy, insolvency, reorganization, moratorium and other laws relating to or affecting the rights
of creditors generally and except as limited by equitable principles);



 


		(c)	it is an “accredited investor” as such term is defined in National
Instrument 45-106 – Prospectus and Registration Exemptions of the Canadian Securities Administrators and U.S. Securities
Laws;



 


		(d)	it has, and on the Closing Date will have (regardless of the number of Rights
that are exercised by the holders of Rights prior to the Rights Expiry Time), the financial ability and sufficient funds to make
and complete the payment for the Standby Shares that it has committed to purchase pursuant to the Standby Guarantee, and the availability
of such funds is not and will not be subject to the consent, approval or authorization of any other Person. Each of the Standby
Guarantors acknowledges and covenants that they will, in connection with Section 8A.1(b) of NI 41-101, deliver to the Company satisfactory
evidence of the foregoing for delivery to the Commissions at or prior to the time of filing of the Final Prospectus with the Commissions;



 


		(e)	it is purchasing the Standby Shares for its own account for investment purposes
only and not with a view to resale or distribution and, in particular, it has no intention to distribute either directly or indirectly
any of the Standby Shares in the United States or to or for the account or benefit of a person in the United States; provided,
however, that this paragraph shall not restrict the Standby Guarantor from selling or otherwise disposing of any of the Standby
Shares pursuant to registration thereof pursuant to the U.S. Securities Act and any applicable state securities laws or under an
exemption from such registration requirements, or in circumstances where such registration requirements do not apply;



 


		(f)	it understands that the Standby Shares it purchases pursuant to the Standby
Guarantee have not been and will not be registered under the U.S. Securities Act or any applicable state securities laws (other
than as contemplated herein) and that the sale contemplated hereby will be made in reliance on an exemption from such registration
requirements;



 


		(g)	it understands and acknowledges that the Standby Shares will be “restricted
securities” within the meaning of Rule 144 under the U.S. Securities Act and if in the future it decides to offer, resell,
pledge or otherwise transfer any of the Standby Shares, such Standby Shares may be offered, sold, pledged or otherwise transferred
only (a) to the Company; (b) pursuant to an effective registration statement covering the sale of such Standby Shares under the
U.S. Securities Act; (c) in the United States in accordance with Rule 144 or Rule 144A under the U.S. Securities Act, if available,
and in compliance with any applicable state securities laws; or (d) in another transaction that does not require registration under
the U.S. Securities Act or any applicable state securities laws of the United States;



 






     


    	 	19	 



    

 


		(h)	it acknowledges that it is not purchasing the Standby Shares as a result
of any “general solicitation” or “general advertising” (as such terms are defined in Regulation D under
the U.S. Securities Act), including, without limitation, advertisements, articles, notices or other communications published on
the internet or in any newspaper, magazine or similar media, or broadcast over radio, television or the internet, or any seminar
or meeting whose attendees have been invited by general solicitation or general advertising;



 


		(i)	it is an “accredited investor” as defined in Rule 501(a) of
Regulation D under the U.S. Securities Act by virtue of satisfying one or more of the categories set forth under such definition;



 


		(j)	it understands that upon the issuance thereof, and until such time as the
same is no longer required under the applicable requirements of the U.S. Securities Act or applicable state laws and regulations,
the certificates representing the Standby Shares, and all certificates issued in exchange therefor or in substitution thereof,
will bear a legend restricting the transfer of the Standby Shares under the U.S. Securities Act;



 


		(k)	it consents to the Company making a notation on its records or giving instruction
to the registrar and transfer agent of the Company in order to implement the restrictions on transfer with respect to the Standby
Shares set forth and described herein;



 


		(l)	it understands and acknowledges that, other than as contemplated herein
and as contemplated by the Registration Rights Agreement, the Company has no obligation or present intention of filing with the
United States Securities and Exchange Commission or with any state securities administrator any registration statement in respect
of resales of the Standby Shares in the United States;



 


		(m)	it understands and agrees that there may be material tax consequences to
it of an acquisition or disposition of the Standby Shares, the Company gives no opinion and makes no representation with respect
to the tax status of the Company or the consequences to the Standby Guarantor under United States, state, local or foreign tax
law of its acquisition or disposition of the Standby Shares, including whether the Company will at any given time be deemed a “passive
foreign investment company” within the meaning of Section 1297 of the United States Internal Revenue Code;



 


		(n)	it acknowledges that there are risks associated with the purchase of and
investment in the Standby Shares and it alone, or with the assistance of its professional advisers, is knowledgeable and or experienced
in business and financial matters and is capable of evaluating the merits and risks of an investment in such securities and fully
understands the restrictions on resale of such securities and is capable of bearing the economic risk of the investment, including
the loss of its entire investment and it has prior experience in investing in securities of foreign issuers where no trading market
exists in the United States; and



 






     


    	 	20	 



    

 


		(o)	it has such knowledge and experience in financial and business matters as
to be capable of evaluating the merits and risks of an investment in the Standby Shares and is able to bear the economic risks
of such investment.



 


		7.2	Covenants and Agreements



 


If required under applicable
Laws or Securities Laws or under the rules and policies of the Exchange, each Standby Guarantor will use commercially reasonable
efforts to assist the Company to execute, deliver and file such required reports and such other required documents with respect
to the issue of the Rights, the Rights Shares and the Standby Shares, provided that the Company acknowledges and agrees that it
has not engaged the Standby Guarantors to act as underwriters (as defined under applicable Securities Laws) and none of the Standby
Guarantors will be required to sign a certificate in the Prospectus in that capacity or any other capacity.


 


		7.3	Survival



 


All representations and warranties
of each party contained in this Agreement or contained in any document delivered pursuant to this Agreement or in connection with
the Rights Offering contemplated in this Agreement will survive the completion of the purchase of Securities by the Standby Guarantors
and will continue in full force and effect for a period of two years despite any investigation, inquiry or other steps which may
be taken by or on any party’s behalf.


 


		7.4	Notification



 


The Standby Guarantors will
notify the Company forthwith if it becomes aware of a fact or circumstance which has caused or would be reasonably likely to cause
a representation or warranty set out in this Article 7 to become untrue, inaccurate or misleading at any time (by reference to
circumstances subsisting at that time) before the Closing Date.


 


ARTICLE 8


CLOSING AND CONDITIONS


 


		8.1	Closing



 


The closing of the purchase
by the Standby Guarantors and sale by the Company of the Standby Shares to be purchased by the Standby Guarantors hereunder (the
“Closing”) will be completed at the office of Morton Law LLP at 4:00 p.m. (Vancouver time) (the “Closing
Time”) on the Closing Date or at such other time and/or on such other date and/or at such other place as the Company
and each of the Standby Guarantors may agree upon in writing. On such date, and upon payment being made by the Standby Guarantors
for the Standby Shares in accordance with Section 3.3, the Company will issue, and thereafter deliver as soon as practicable, to
the Standby Guarantors certificates representing the Standby Shares, registered in the name of the Standby Guarantor or one or
more designee of the Standby Guarantor, as applicable.


 






     


    	 	21	 



    

 


		8.2	Guarantors Conditions



 


The obligation of the Standby
Guarantors to complete the transactions set out in this Agreement is subject to the following conditions being satisfied in full,
to the satisfaction of each of the Standby Guarantors acting separately:


 


		(a)	the absence of any Material Adverse Change between the date hereof and Closing;



 


		(b)	the Exchange will have conditionally accepted the issuance of the Rights,
the Rights Shares, the Standby Shares and the Standby Purchaser Fee, subject to receipt of customary final documentation;



 


		(c)	the Company will have made and/or obtained all necessary filings, approvals,
orders, rulings and consents of all relevant Regulatory Authorities and other governmental and regulatory bodies required in connection
with the Rights Offering and the purchase of the Standby Shares by the Standby Guarantors as contemplated by this Agreement;



 


		(d)	the Company will have performed or complied with, in all material respects,
each of its terms, conditions and covenants contained in this Agreement and each of its representations and warranties will be
true and correct as of the Closing Time with the same force and effect as if made at and as of such time;



 


		(e)	the terms and timing of the Rights Offering will not have been changed without
the approval in writing of each of the Standby Guarantors; and



 


		(f)	the completion of the Rights Offering and other transactions contemplated
hereby will have been conducted in accordance with applicable Laws, the Prospectus and this Agreement.



 


		8.3	Mutual Conditions



 


The obligation of the Standby
Guarantors and the Company to complete the transactions set out in this Agreement is subject to the following conditions being
satisfied in full, to the satisfaction of each of the Standby Guarantors and the Company acting separately (each of which may only
be waived by mutual consent):


 


		(a)	there will be no inquiry, investigation (whether formal or informal) or
other proceeding commenced by a Governmental Entity pursuant to applicable Laws in relation to the Company or any of its subsidiaries
or in relation to any of the directors and officers of the Company or any of its subsidiaries or in relation to the Standby Guarantors,
any of which suspends or ceases trading (which suspension or cessation of trading is continuing) in the Rights or Rights Shares
or operates to prevent or restrict the lawful distribution of the Rights, Rights Shares or Standby Shares (which prevention or
restriction is continuing);



 


		(b)	there will be no Order issued by a Governmental Entity pursuant to applicable
Laws and no change of Law, either of which suspends or ceases trading in the Rights or Rights Shares (which suspension or cessation
of trading is continuing) or operates to prevent or restrict the lawful distribution of the Rights, Rights Shares or Standby Shares
(which prevention or restriction is continuing); and



 






     


    	 	22	 



    

 


		(c)	there will not be any claims, litigation, investigations or proceedings,
including appeals and applications for review, in progress, pending, commenced or threatened by any Person, in respect of the Rights
Offering, that is reasonably likely to result in a Material Adverse Change.



 


		8.4	Performance by the Company



 


The Company agrees that the
conditions contained in Section 8.2 and 8.3 will be complied with so far as such conditions relate to acts to be performed or to
be caused to be performed by the Company and that it will use its commercially reasonable efforts to cause such conditions to be
complied with.


 


		8.5	Company Conditions



 


Provided that the Company
has used commercially reasonable efforts to comply with (or cause to be complied with) such conditions, the Company's obligation
to complete the transactions set out in this Agreement is subject to the condition being satisfied in full that each of the Standby
Guarantors will have performed or complied with, in all material respects, each of its terms, conditions and covenants contained
in this Agreement and each of its representations and warranties will be true and correct as of the Closing Time with the same
force and effect as if made at and as of such time.


 


ARTICLE 9


TERMINATION


 


		9.1	Termination by the Company



 


The Company will be entitled,
at any time and in its sole discretion, to elect to terminate this Agreement by giving written notice of such election to the Standby
Guarantors, if:


 


		(a)	any of the Standby Guarantors is in material default of its obligations hereunder
and fails to remedy such breach on or before the date that is five days following the date upon which the Company has provided
written notice of such breach;



 


		(b)	the Company determines in its sole discretion to terminate the Rights Offering
prior to the issuance of any Rights; or



 


		(c)	if any of the conditions set out in Section 8.3 or 8.5 are not satisfied
as at the Closing Time.



 


		9.2	Termination by the Standby Guarantors



 


Any of the Standby Guarantors
will be entitled, by giving written notice to the Company at any time prior to the Rights Expiry Time, to terminate and cancel,
without any liability on its part, its obligations under this Agreement independently of the other Standby Guarantors, if:


 






     


    	 	23	 



    

 


		(a)	there is any Material Adverse Change between the date hereof and Closing;



 


		(b)	any representation or warranty of the Company made in this Agreement is
determined not to have been true and correct when made or ceases to be true and correct, or if any covenant of the Company made
in this Agreement is not complied with;



 


		(c)	the Company is in material default of its obligations hereunder and fails
to remedy such breach on or before the date that is five days following the date upon which the Company has been provided written
notice of such breach;



 


		(d)	if any of the conditions set out in Section 8.2 or 8.3 are not satisfied
on or before the Closing Time;



 


		(e)	the Common Shares or the Rights (to the extent they are listed) are de-listed
or suspended or halted from trading for a period greater than five Business Days for any reason by the Exchange at any time prior
to the closing of the Rights Offering;



 


		(f)	the Effective Date does not occur at least 21 days prior to 90 days from
the issuance date of the Rights; or



 


		(g)	if the Rights Offering is terminated or cancelled.



 


 


		9.3	Termination Due to Effective Date Delay



 


This Agreement will Terminate
without further action of the Parties if the Effective Date does not occur at least 21 days prior to 90 days from the issuance
date of the Rights, in which event the Standby Guarantor will not be entitled to acquire the Standby Shares. Notwithstanding the
foregoing, the Parties may agree to extend the 90 day period in order to provide for an Expiry Date of at least 21 days from the
Effective Date, subject to the Company obtaining any required approvals from the Commissions and the Exchange to such extension,
in which event the Agreement will not terminate pursuant to this Section 9.3.


 


		9.4	Survival of Terms



 


Despite any other provision
of this Agreement, if the Company or any of the Standby Guarantors validly terminate(s) its obligations under this Agreement in
accordance with this Article 9 the obligations of both the Company and the terminating Standby Guarantor under this Agreement will
terminate, and there will be no further liability on the part of either of the terminating Standby Guarantor to the Company or
on the Company's part to the terminating Standby Guarantor hereunder (except for any liability of any party that exists at such
time or that may arise thereafter pursuant to Section 12.1).


 






     


    	 	24	 



    

 


ARTICLE 10


INDEMNIFICATION


 


		10.1	Indemnification by the Company



 


The Company covenants and agrees
to protect, indemnify and hold harmless the Standby Guarantors for and on behalf of itself and for and on behalf of and in trust
for each of its directors, officers, employees, agents and shareholders from and against any and all losses claims, damages, liabilities,
costs or expense caused or incurred:


 


		(a)	by reason of or in any way arising, directly or indirectly, out of any Misrepresentation
or alleged Misrepresentation in the Prospectus or Registration Statement other than any Misrepresentation or alleged Misrepresentation
relating to any information in the Prospectus or Registration Statement relating to the Standby Guarantors approved in writing
by the Standby Guarantors for inclusion in the Prospectus or Registration Statement, as applicable;



 


		(b)	by reason of or in any way arising, directly or indirectly, out of any Order
made or inquiry, investigation or proceeding commenced or threatened by any Commission, or any other competent authority in Canada
or the United States or before or by any Governmental Entity, based upon or relating to the Rights Offering or the other transactions
contemplated in this Agreement including, without limitation, any actions taken or statements made by or on behalf of the Company
in connection with the Rights Offering or the other transactions contemplated in this Agreement or any Misrepresentation or alleged
Misrepresentation relating to any information in the Prospectus relating to the Standby Guarantors and provided by the Standby
Guarantors;



 


		(c)	the non-compliance or alleged non-compliance by the Company with any requirement
of the Securities Laws or any other applicable Laws in connection with the Rights Offering or the other transactions contemplated
in this Agreement, including the Company’s non-compliance with any statutory requirement to make any document available for
inspection; and/or



 


		(d)	by reason of, or in any way arising, directly or indirectly, out of any material
breach or default of or under any representation, warranty, covenant or agreement of the Company contained herein.



 


		10.2	Indemnification Process



 


		(a)	In the event that any claim, action, suit or proceeding, including, without
limitation, any inquiry or investigation (whether formal or informal), is brought or instituted against any of the Persons in respect
of which indemnification is or might reasonably be considered to be provided for herein, such Person (an “Indemnified
Party”) will promptly notify the Person from whom indemnification is being sought under Section 10.1 (the “Indemnifying
Party”), and the Indemnifying Party will promptly retain counsel who will be reasonably satisfactory to the Indemnified
Party to represent the Indemnified Party in such claim, action, suit or proceeding, and the Indemnifying Party will pay all of
the reasonable fees and disbursements of such counsel relating to such claim, action, suit or proceeding.



 






     


    	 	25	 



    

 


		(b)	In any such claim, action, suit or proceeding, the Indemnified Party will
have the right to retain other counsel to act on his, her or its behalf, provided that the fees and disbursement of such other
counsel will be paid by the Indemnified Party unless:



 


		(i)	the Indemnifying Party and the Indemnified Party will have mutually agreed
to the retention of such other counsel; or



 


		(ii)	the named parties to any such claim, action, suit or proceeding (including
any added, third or interpleaded parties) include both the Indemnifying Party and the Indemnified Party and representation of both
parties by the same counsel would be inappropriate due to actual or potential differing interests between them (such as the availability
of different defenses).



 


		(c)	Subject to Section 10.2(b), it is understood and agreed that the Indemnifying
Party will not, in connection with any such claim, action, suit or proceeding in the same jurisdiction, be liable for the reasonable
fees and expense of more than one separate legal firm for all Persons in respect of which indemnification is or might reasonably
be considered to be provided for herein and such firm will be designated in writing by the Indemnified Party (on behalf of itself
and its directors, officers, employees, agents and shareholders).



 


		(d)	Notwithstanding anything herein contained, no Indemnified Party will agree
to any settlement of any such claim, action, suit, proceeding, inquiry or investigation in respect of which indemnification is
or might reasonably be considered to be provided for herein, unless the Indemnifying Party has consented in writing thereto, and
the Indemnifying Party will not be liable for any settlement of any such claim, action, suit, proceeding, inquiry or investigation
unless it has consented in writing thereto.



 


		(e)	If the indemnification provided for in this Article 10 is held by a court
of competent jurisdiction to be unavailable to an Indemnified Party with respect to any losses, claims, damages or liabilities
referred to herein, the Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder, will to the extent permitted
by applicable Law contribute to the amount paid or payable by such Indemnified Party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and of the
Indemnified Party on the other in connection with the act or omission that resulted in such loss, claim, damage or liability, as
well as any other relevant equitable considerations. The relative fault of the Indemnifying Party and of the Indemnified Party
will be determined by a court of law by reference to, among other things, whether the untrue or alleged untrue statement of material
fact or the omission to state a material fact relates to information supplied by the Indemnifying Party or by the Indemnified Party
and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or
omission provided, however, that no person guilty of fraudulent misrepresentation will be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.



 






     


    	 	26	 



    

 


		(f)	The obligations of the Company under this Article 10 will survive completion
of the Rights Offering and the termination of this Agreement. No Indemnifying Party, in the defence of any such claim or litigation,
will, except with the consent of the Indemnified Party, consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect to such claim or litigation.



 


ARTICLE 11


NOTICE


 


		11.1	Notice



 


Any notice under this Agreement
will be given in writing and must be delivered, sent by email, or overnight courier and addressed to the party to which notice
is to be given at the following address, or at another address designated by such party in writing:


 


		(a)	if to the Company:



 


Golden Queen Mining Co. Ltd.


2300 - 1066 West Hastings Street


Vancouver, British Columbia


V6E 3X2 Canada


Attn: Guy Le Bel – Chief Financial Officer


Email: glebel@goldenqueen.com


 


with a copy to:


 


Morton Law LLP


Suite 1200 – 750 West Pender St. Vancouver
BC


V6C 2T8


Attn: Edward Mayerhofer


Email: elm@mortonlaw.ca


 


		(b)	if to the Standby Guarantors:



 


c/o East Hill Management Company


70 Main Street


Suite 300


Petersborough, NH 03458


Attention: Thomas Clay


Email:thomas.clay@easthillmgt.com


 


with a copy to:


 


Sullivan & Worcester LLP


One Post Office Square


Boston, MA 02109


Attention:        William
A. Levine, Esq. and Benjamin J. Armour, Esq.


Telephone:       (617)
338-2921


E-mail:              wlevine@sandw.com


             barmour@sandw.com


 



     


    	 	27	 



    

 


If notice is sent by email
or is delivered, it will be deemed to have been given at the time of transmission or delivery. If notice is mailed, it will be
deemed to have been received three (3) business days following the date of mailing of the notice. If there is an interruption in
normal mail service due to strike, labour unrest or other cause at or prior to the time a notice is mailed the notice will be sent
by facsimile or will be delivered.


 


ARTICLE 12


GENERAL


 


		12.1	Expenses



 


Whether or not the transactions
herein contemplated will be completed, all expenses of or incidental to the Rights Offering and the transactions contemplated herein
or in the Prospectus including, without limitation: all reasonable fees and disbursements of counsel, including counsel to the
Standby Guarantors (to a maximum of US$75,000 for the Standby Guarantors’ legal expenses), transfer agents, outside consultants
and experts (including appraisers, engineers and credit reports), filing fees, printing costs, the preparation and holding of information
meetings, the reasonable out-of-pocket costs related to information meetings and travel, and the Standby Guarantors’ reasonable
out-of-pocket expenses including the Standby Guarantors’ reasonable travel expenses in connection with due diligence (including
hotel accommodations and meals) together with all applicable taxes thereon, will be borne by and be for the account of the Company.


 


		12.2	Further Assurances



 


From time to time after the
date of this Agreement, the parties to this Agreement will execute, acknowledge and deliver to the other parties such other instruments,
documents and certificates and will take such other actions as the other parties may reasonably request in order to consummate
the transactions contemplated by this Agreement.


 


		12.3	Assignment



 


This Agreement may not be
assigned by any party to this Agreement, by operation of law or otherwise, without the prior written consent of each of the other
parties to this Agreement.


 


		12.4	Enurement



 


This Agreement will enure
to the benefit of and be binding upon the parties to this Agreement and their respective heirs, executors, successors and permitted
assigns.


 






     


    	 	28	 



    

 


		12.5	Waiver



 


Failure by any party to this
Agreement to insist in any one or more instances upon the strict performance of any one of the covenants or rights contained in
this Agreement will not be construed as a waiver or relinquishment of such covenant or right. No waiver by either party to this
Agreement of any such covenant or right will be deemed to have been made unless expressed in writing and signed by the waiving
party.


 


		12.6	Amendments



 


No term or provision of this
Agreement may be amended, discharged or terminated except by an instrument in writing signed by the party against which the enforcement
of the amendment, discharge or termination is sought.


 


		12.7	Counterparts



 


This Agreement may be executed
in several counterparts and delivered by email or other electronic means, each of which when so executed will be deemed to be an
original and such counterparts and electronic copies together will constitute one and the same instrument and despite their date
of execution they will be deemed to be dated as of the date of this Agreement. This Agreement will be deemed to have been entered
into and to have become effective at the location at which the Guarantors will have signed an original, counterpart or electronic
version thereof, without regard to the place at which the Company will have signed this Agreement.


 


		12.8	Time



 


Time is of the essence of this
Agreement.


 


		12.9	Entire Agreement



 


This Agreement and any other
agreements and other documents referred to in this Agreement and delivered in connection with this Agreement, constitutes the entire
agreement between the parties to this Agreement pertaining to the subject matter of this Agreement and supersedes all prior agreements,
understandings, negotiations and discussions, whether oral or written, between the parties with respect to the subject matter of
this Agreement.


 


[Remainder of page intentionally left blank.
Signature page follows.]


 






     


    	 	29	 



    

 


IN WITNESS WHEREOF the
parties hereto have executed this Agreement as of the date first above written.


 


 





	GOLDEN QUEEN MINING CO. LTD.
	 	 	 
	 	 	 
	Per:	/s/ Brenda Dayton
	 	Name: 	Brenda Dayton
	 	Title:	Corporate Secretary
	 	 	 
	 	 	 
	LANDON T. CLAY 2009 IRREVOCABLE TRUST
	 	 	 
	 	 	 
	Per:	/s/ Thomas M. Clay
	 	Name: 	Thomas M. Clay
	 	Title:	Trustee
	 	 	 
	THE MASTERS 1, LLC
	 	 	 
	 	 	 
	Per:	/s/ Jonathan C. Clay
	 	Name: 	Jonathan C. Clay
	 	Title:	Managing Member