Golden Queen Mining Co. Ltd. - Exhibit 10.1 - Filed by newsfilecorp.com






Exhibit 10.1

STRICTLY CONFIDENTIAL 

	 
	TRANSACTION AGREEMENT 
	 
	Dated as of June 8, 2014 
	 
	among 
	 
	GAUSS HOLDINGS LLC 
	 
	AUVERGNE, LLC 
	 
	GAUSS LLC 
	 
	GOLDEN QUEEN MINING COMPANY, INC. 
	 
	and 
	 
	GOLDEN QUEEN MINING CO. LTD. 
	 






TABLE OF CONTENTS 

				Page
  
				  
	 	 	ARTICLE
      I - ISSUANCE OF INTERESTS; CLOSING 	2
      
	 	1.1
      	 Issuance
      of Interests and Payments at Closing 	2
      
		1.2
      	 Closing
      	3
      
		1.3
      	 Closing
      Deliverables by Golden Queen and GQ California 	3
      
		1.4
      	 Closing
      Deliverables by LUK Holdco 	4
      
		1.5
      	 Closing
      Deliverables by Auvergne 	4
      
		1.6
      	 Closing
      Deliverables by Gauss 	4
      
		1.7
      	 Tax
      Treatment of the Issuance of Newly Issued Interests 	5
      
			ARTICLE
      II - REPRESENTATIONS AND WARRANTIES OF GOLDEN QUEEN 	5
      
	 	2.1
      	 Organization,
      Standing and Corporate Power 	5
      
	 	2.2
      	 Capitalization
      	6
      
	 	2.3
      	 Authority
      	7
      
	 	2.4
      	 Non-contravention
      	7
      
	 	2.5
      	 Governmental
      Approvals 	7
      
	 	2.6
      	 Brokers
      	7
      
	 	2.7
      	 SEC
      Documents; Financial Statements; Undisclosed Liabilities 	8
      
	 	2.8
      	 Absence
      of Certain Changes 	10
      
	 	2.9
      	 Legal
      Proceedings 	10
      
	 	2.10
      	 Compliance
      With Laws; Permits 	10
      
	 	2.11
      	 Contracts
      	11
      
	 	2.12
      	 Tax
      Matters 	12
      
	 	2.13
      	 Employee
      Benefits and Labor Matters 	14
      
	 	2.14
      	 Environmental
      Matters 	14
      
	 	2.15
      	 Intellectual
      Property 	15
      
	 	2.16
      	 Title
      to Property 	16
      
	 	2.17
      	 Related
      Party Transactions 	18
      
	 	2.18
      	 Certain
      Payments 	18
      
	 	2.19
      	 Sufficiency
      of Assets 	18
      
	 	2.20
      	 Tangible
      Personal Property 	18
      
	 	2.21
      	 Information
      Supplied 	19
      
	 	2.22
      	 Mining
      Claims 	19
      
			ARTICLE
      III - REPRESENTATIONS AND WARRANTIES OF THE PARTIES 	20
      
	 	3.1
      	 Organization
      	20
      
		3.2
      	 Authority
      	20
      
	 	3.3
      	 Non-contravention
      	20
      
	 	3.4
      	 Governmental
      Approvals 	21
      
	 	3.5
      	 Brokers
      	21
      
	 	3.6
      	 Investment
      	21
      
	 		ARTICLE
      IV - ADDITIONAL COVENANTS AND AGREEMENTS 	21
      
	 	4.1
      	 Stockholders
      Meeting; Preparation of the Proxy Statement 	21
      
	 	4.2
      	 Takeover
      Proposals 	23
      


i 




TABLE OF CONTENTS 
(Continued) 

				Page
				  
	 	4.3 	 Commercially
      Reasonable Efforts 	26 
	 	4.4 	 Conduct of Business 	27

	 	4.5 	 Public Announcements
      	29 
	 	4.6 	 Access
      to Information; Confidentiality 	29

	 	4.7 	 Notification of
      Certain Matters 	30 
	 	4.8 	 Restructuring 	30

	 	4.9 	 Termination of Related
      Party Transactions 	30 
	 	4.10 	 Tax
      Matters 	30

	 	4.11 	 Post-Closing Covenants
      	31 
	 	4.12 	 Rights
      Offering 	32

	 	4.13 	 Distribution at
      Closing 	32 
	 	4.14 	 Further Assurances 	32

	 	  	ARTICLE V - CONDITIONS
      PRECEDENT 	33 
	 	5.1 	 Conditions to Each Party’s Obligations to Effect the
      Transactions 	33

	 	5.2 	Additional Conditions to Obligations of
      LUK Holdco and Auvergne to Consummate the Transactions 	33
	 	5.3	 Additional Conditions to Obligations of
      Golden Queen and GQ California to Consummate the Transactions 	34

	 	  	ARTICLE VI - TERMINATION
    	34 
	 	6.1 	 Termination 	34

	 	6.2 	 Effect of Termination
      	36 
	 	6.3 	 Fees
      and Expenses 	36

	 	  	ARTICLE VII - MISCELLANEOUS
      	38 
	 	7.1 	 Amendments; Waivers; Etc 	38

	 	7.2 	 Assignment 	38 
	 	7.3 	 Entire
      Agreement 	38

	 	7.4 	 No Third-Party
      Beneficiaries 	39 
	 	7.5 	 Governing Law 	39

	 	7.6 	 Arbitration 	39 
	 	7.7 	 Specific Enforcement 	41

	 	7.8 	 Severability 	41 
	 	7.9 	 Notices 	41

	 	7.10 	 Definitions 	43 
	 	7.11 	 Interpretation 	50

	 	7.12 	 Counterparts 	51





	Exhibits: 	  
	 	 
	Exhibit A 	JV Operating Agreement 
	 	 
	Exhibit B 	Gauss
      Operating Agreement 
	 	 
	Exhibit C 	Expense Reimbursement Letter
    
	 	 
	Exhibit D 	Knowledge 
	 	 
	Exhibit E 	Rights Offering Term Sheet
  



ii 




TRANSACTION AGREEMENT 

          This
TRANSACTION AGREEMENT, dated as of June 8, 2014 (this “Agreement”), is by
and among Gauss Holdings LLC, a Delaware limited liability company (“LUK
Holdco”), Gauss LLC, a Delaware limited liability company (“Gauss”),
Auvergne, LLC, a Delaware limited liability company (“Auvergne”), Golden
Queen Mining Co. Ltd., a British Columbia corporation (“Golden Queen”)
and Golden Queen Mining Company, Inc., a California corporation and wholly owned
subsidiary of Golden Queen (“GQ California” and together with LUK Holdco,
Auvergne, Gauss and Golden Queen, the “Parties” and each a
“Party”). Certain terms used in this Agreement are used as defined in
Section 7.10. 

          WHEREAS,
LUK Holdco, Auvergne, Gauss, GQ California and Golden Queen desire to enter into
a joint venture arrangement (the “Joint Venture”) pursuant to and in
accordance with the terms and conditions set forth in the Amended and Restated
LLC Agreement of GQ California, by and among Gauss, Golden Queen, GQ Holdco
(defined below) and GQ California, attached hereto as Exhibit A (the
“JV Operating Agreement”); 

          WHEREAS,
in connection with and in furtherance of such Joint Venture, LUK Holdco has
formed Gauss which, as of the Closing Date, shall have admitted Auvergne as a
new member and shall be owned and operated pursuant to and in accordance with
the terms and conditions set forth in the Amended and Restated Limited Liability
Company Agreement of Gauss, by and among LUK Holdco, Auvergne and Gauss,
attached hereto as Exhibit B (the “Gauss Operating Agreement”);


          WHEREAS,
in connection with and in furtherance of such Joint Venture, prior to the
Closing Date, Golden Queen will form a California corporation as a wholly owned
Subsidiary of Golden Queen (such newly formed entity, “GQ Holdco”) and
will contribute all of the outstanding capital stock of GQ California to GQ
Holdco and convert GQ California into a California limited liability company in
accordance with and subject to the terms and conditions contained herein; 

          WHEREAS,
concurrently with the execution of the JV Operating Agreement and the Gauss
Operating Agreement on the Closing Date, GQ California shall issue to Gauss
membership interests of GQ California (the “Interests”) equal to fifty
percent (50%) of the total Interests to be issued and outstanding after giving
effect to such issuance (the “Newly Issued Interests”) in exchange
for the payment by Gauss of the Purchase Price and in consideration of the
covenants and undertakings set forth in the JV Operating Agreement, including
the obligations related to the Mandatory Top Up Contribution and the Mandatory
Alternative Contribution (each as defined in the JV Operating Agreement); 

          WHEREAS,
concurrently with the execution of this Agreement, Leucadia National
Corporation, a New York corporation and parent of LUK Holdco (“LUK”), LUK
Holdco and Gauss, on the one hand, and Auvergne and Gauss, on the other hand,
entered into letter agreements pursuant to which LUK and Auvergne, respectively,
have committed to provide to Gauss, subject solely to the terms and conditions
contained therein, equity financing in the amounts set forth therein, which
aggregate amounts, when funded to Gauss, will be sufficient for Gauss to
purchase the Newly Issued Interests at Closing; 




          WHEREAS,
it is contemplated that on or about the Closing Date, Golden Queen will commence
the Rights Offering (as defined and in accordance with the terms set forth in
Section 4.12) to raise gross proceeds of up to US$45,000,000, and in
connection with the Rights Offering (a) LUK Holdco and Auvergne have agreed to
purchase any common shares of Golden Queen not purchased by holders of the
Rights issued in the Rights Offering and (b) Golden Queen has agreed to pay LUK
Holdco and Auvergne a non-refundable commitment fee at Closing in an aggregate
amount of US$2,250,000 (the “Commitment Fee”), in each case, on the terms
and subject to the conditions set forth in that certain Rights Offering
Commitment Agreement executed by LUK Holdco, Auvergne and Golden Queen
concurrently with the execution of this Agreement (the “Rights Offering
Commitment Agreement”); 

          WHEREAS,
the representations, warranties and covenants made in this Agreement by each
Party are a material inducement to each of the other Parties to enter into this
Agreement and the Transactions; and 

          WHEREAS,
the respective Boards of Directors (or similar managing body) of the Parties
have approved this Agreement, the Transactions and the Rights Offering
Transactions on the terms and subject to the conditions provided for in this
Agreement. 

          NOW,
THEREFORE, in consideration of the representations, warranties, covenants and
agreements contained in this Agreement, and intending to be legally bound
hereby, LUK Holdco, Auvergne, Gauss, GQ California and Golden Queen hereby agree
as follows: 

ARTICLE I - ISSUANCE OF INTERESTS; CLOSING 

     1.1     Issuance
of Interests and Payments at Closing.

          (a)     Upon
the terms and subject to the conditions contained herein, at the Closing on the
Closing Date, GQ California shall issue to Gauss, free and clear of any and all
Liens, the Newly Issued Interests, and Gauss shall pay an amount in cash equal
to One Hundred Ten Million U.S. Dollars (US$110,000,000) (the “Purchase
Price”) for such Newly Issued Interests by wire transfer of immediately
available funds to an account designated by GQ California at least two (2)
Business Days prior to the Closing Date.

          (b)     At
the Closing on the Closing Date, GQ California shall pay an amount of two
million U.S. Dollars (US$2,000,000.00) to LUK Holdco by wire transfer of
immediately available funds to an account designated by LUK Holdco at least two
(2) Business Days prior to the Closing Date. 

          (c)     At
the Closing on the Closing Date, GQ California shall pay an amount of two
hundred seventy five thousand U.S. Dollars (US$275,000.00) to Auvergne by wire
transfer of immediately available funds to an account designated by Auvergne at
least two (2) Business Days prior to the Closing Date. 

          (d)     At
the Closing on the Closing Date, Golden Queen shall pay, in respect of the
Commitment Fee, (i) an amount of one million five hundred eighteen thousand
seven hundred and fifty U.S. Dollars (US$1,518,750.00) to LUK Holdco by wire
transfer of immediately available funds to an account designated by LUK
Holdco at least two (2) Business Days prior to the Closing Date, and (ii) an
amount of seven hundred thirty one thousand two hundred and fifty U.S. Dollars
(US$731,250.00) to Auvergne by wire transfer of immediately available funds to
an account designated by Auvergne at least two (2) Business Days prior to the
Closing Date.

2 




          (e)     At
the Closing on the Closing Date, GQ California shall repay the Interim Advances
and any other amounts or obligations outstanding under the Interim Advances.


     1.2     Closing.
The closing of the Transactions (the “Closing”) shall take place at the
offices of Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New York, New York
10153 at 10:00 a.m. (New York City time) on a date to be specified by the
Parties, which date shall be no later than the third Business Day after
satisfaction or (to the extent permitted by Law) waiver of the conditions set
forth in Article V (other than those conditions that by their nature are to be
satisfied at the Closing, but subject to the satisfaction or waiver of those
conditions at such time), or at such other place, date and/or time as may be
agreed to in writing by the Parties. The date on which the Closing actually
occurs is referred to in this Agreement as the “Closing Date.” 

     1.3     Closing
Deliverables by Golden Queen and GQ California. At the Closing, Golden Queen
and GQ California shall deliver to LUK Holdco, Gauss and Auvergne: 

          (a)     a
copy of the JV Operating Agreement duly executed by each of Golden Queen, GQ
Holdco and GQ California; 

          (b)     a
copy of the Expense Reimbursement Letter duly executed by each of Golden Queen
and GQ California; 

          (c)     the
officer’s certificates required to be delivered pursuant to Section
5.2(d); 

          (d)     certified
copies of the resolutions duly adopted by the Board of Directors (or similar
managing body) of each of Golden Queen, GQ Holdco and GQ California authorizing
the execution, delivery and performance of this Agreement and the other
agreements contemplated hereby, and the consummation of the Transactions; 

          (e)     certified
copies of the resolutions duly adopted by the shareholders of Golden Queen
authorizing the execution, delivery and performance of this Agreement and the
other agreements contemplated hereby, and the consummation of the Transactions;


          (f)     certified
copies of the resolutions of the managers or the sole member of GQ California,
in a form reasonably satisfactory to Gauss, evidencing the valid issuance of the
Newly Issued Interests free and clear of all Liens; 

          (g)     a
certification of non-foreign status stating that GQ Holdco is not a foreign
person in form and substance required under Treasury Regulations issued pursuant
to Section 1445 of the Code; 

3 




          (h)     such
resolutions, certificates or other documents as LUK Holdco, Gauss or Auvergne
may reasonably request in connection with the consummation of the Transactions;


          (i)     copies
of such circulars, listing qualifications, effectiveness orders, resolutions,
certificates or other documents, as applicable, as LUK Holdco, Gauss or Auvergne
may reasonably request in connection with the Transactions; and 

          (j)     a
certificate of good standing for GQ California from the State of California,
dated no more than three (3) Business Days prior to the Closing Date. 

     1.4     Closing
Deliverables by LUK Holdco. At the Closing, LUK Holdco shall deliver to
Golden Queen, GQ California and Auvergne: 

          (a)     a
copy of the Gauss Operating Agreement duly executed by LUK Holdco; 

          (b)     the
officer’s certificates required to be delivered pursuant to Section
5.3(c); 

          (c)     certified
copies of the resolutions duly adopted by the sole member of LUK Holdco
authorizing the execution, delivery and performance of this Agreement and the
other agreements contemplated hereby, and the consummation of the Transactions
to which LUK Holdco is a party; and 

          (d)     such
resolutions, certificates or other documents as Golden Queen or GQ California
may reasonably request in connection with the consummation of the Transactions
to which LUK Holdco is a party. 

     1.5     Closing
Deliverables by Auvergne. At the Closing, Auvergne shall deliver to Golden
Queen, GQ California and LUK Holdco: 

          (a)     a
copy of the Gauss Operating Agreement duly executed by Auvergne; 

          (b)     the
officer’s certificates required to be delivered pursuant to Section
5.3(c); 

          (c)     certified
copies of the resolutions duly adopted by the Board of Managers of Auvergne
authorizing the execution, delivery and performance of this Agreement and the
other agreements contemplated hereby, and the consummation of the Transactions
to which Auvergne is a party; and 

          (d)     such
resolutions, certificates or other documents as Golden Queen or GQ California
may reasonably request in connection with the consummation of the Transactions
to which Auvergne is a party. 

     1.6 Closing Deliverables by
Gauss. At the Closing, Gauss shall deliver to Golden Queen, GQ California,
LUK Holdco and Auvergne: 

          (a)     the
Purchase Price;

4 




          (b)     a
copy of the JV Operating Agreement duly executed by Gauss; 

          (c)     the
officer’s certificates required to be delivered pursuant to Section
5.3(c); 

          (d)     certified
copies of the resolutions duly adopted by the Board of Managers of Gauss
authorizing the execution, delivery and performance of this Agreement and the
other agreements contemplated hereby, and the consummation of the Transactions
to which Gauss is a party; and 

          (e)     such
resolutions, certificates or other documents as Golden Queen or GQ California
may reasonably request in connection with the consummation of the Transactions
to which Gauss is a party. 

     1.7 Tax Treatment of the
Issuance of Newly Issued Interests. The parties intend and agree that, in
accordance with Rev. Rul. 99-5, 1999-1 C.B. 434, for federal income tax
purposes, the issuance of the Newly Issued Interests to Gauss pursuant to this
Agreement shall be treated as (i) the contribution of an amount of cash equal to
the Purchase Price by Gauss to a partnership in exchange for an interest in such
partnership, and (ii) the contribution by GQ Holdco of all the assets of GQ
California to the partnership in exchange for an interest in such partnership.
The parties further agree that the tax treatment described in this paragraph
shall apply for any applicable state, county or local tax purposes. 

ARTICLE II - REPRESENTATIONS AND WARRANTIES OF GOLDEN
QUEEN 

          Except
as disclosed in the definitive disclosure schedule letter delivered by Golden
Queen to LUK Holdco, Gauss and Auvergne prior to the execution of this Agreement
(the “GQ Disclosure Schedule”), Golden Queen hereby represents and
warrants to LUK Holdco, Gauss and Auvergne as follows: 

     2.1     Organization,
Standing and Corporate Power. 

          (a)     GQ
California is as of the date hereof a corporation, and will be, as of the
Closing Date, a limited liability company, duly organized, validly existing and
in good standing under the Laws of the State of California and has all corporate
or other requisite power and authority necessary to own or lease all of its
properties and assets and to carry on its business as presently conducted and
contemplated to be conducted.

          (b)     GQ
California is duly licensed or qualified to do business and is in good standing
(with respect to jurisdictions that have the concept of good standing) in each
jurisdiction where the ownership, leasing or operation of its properties or
other assets or the nature its business requires such licensing or
qualification, except for failures to be so licensed, qualified or in good
standing that, individually and in the aggregate, would not reasonably be
expected to have a Material Adverse Effect. 

          (c)     GQ
California has made available to LUK Holdco, Gauss and Auvergne correct and
complete copies of the Organizational Documents of GQ California, as amended to
the date of this Agreement and will make available to LUK Holdco, Gauss and
Auvergne correct and complete copies of the Organizational Documents of GQ
California immediately following its conversion into a limited liability
company.

5 




     2.2     Capitalization.


          (a)     Section
2.2 of the GQ Disclosure Schedule accurately sets forth the ownership structure
and capitalization of GQ California as of the date hereof and the ownership
structure and capitalization of GQ Holdco and GQ California as of the Closing
Date. 

          (b)     There
are no loans from the holders of Equity Interests to GQ California, or other
indebtedness due to the holders of Equity Interests from GQ California, and no
bonds, debentures, notes or other instruments or evidence of indebtedness having
the right to vote (or convertible into, or exercisable or exchangeable for,
securities having the right to vote) on any matters on which the holders of
Equity Interests may vote are issued or outstanding, in each case, except as
otherwise provided in Section 2.2 of the GQ Disclosure Schedule. 

          (c)     All
outstanding Equity Interests have been duly authorized and validly issued, and
are fully paid and non-assessable, and were not issued in violation of any
preemptive or other similar rights. Except as otherwise provided in Section 2.2
of the GQ Disclosure Schedule, there: 

               (i)     are
no ownership interests or other voting or equity securities of GQ California,
issued or outstanding, or other contractual or other rights entitling any Person
to any form of equity, ownership, participation or beneficial interest in GQ
California; 

               (ii)     are
no securities of GQ California convertible into, or exchangeable or exercisable
for, ownership interests of GQ California or other voting or equity securities
of GQ California; 

               (iii)     are
no voting trusts or similar agreements to which Golden Queen, GQ Holdco or GQ
California is a party with respect to the voting of equity interests in GQ
California; 

               (iv)     is
no option, warrant, call, preemptive right, subscription or other right,
agreement, arrangement, understanding or commitment of any character, relating
to the issued or unissued ownership interests of GQ California obligating GQ
California to issue, transfer or sell or cause to be issued, transferred or sold
any ownership interests or other equity interest in GQ California, or securities
convertible into or exchangeable for the interests, or obligating GQ California
to grant, extend or enter into any option, warrant, call, subscription or other
right, commitment, arrangement or agreement; and 

               (v)     is
no contractual obligation of GQ California to repurchase, redeem or otherwise
acquire any ownership interests of GQ California or other equity interests in GQ
California or Affiliate of GQ California or to provide funds to make any
investment (in the form of a loan, capital contribution or otherwise) in any
Person. 

          (d)     Other
than GQ California and GQ Holdco, all of the outstanding shares of Equity
Interests or capital stock of which are, or will be prior to the Closing Date,
owned directly or indirectly by Golden Queen, Golden Queen does not own,
directly or indirectly any shares of capital stock of, or other equity interests
in, any partnership, limited liability company, corporation or other entity and
GQ California does not own, directly or indirectly, as of the date of this
Agreement, any shares of capital stock of, or other equity interests in, any
partnership, limited liability company, corporation or other entity. Since the
date of its incorporation, other than holding the Equity Interests, GQ Holdco
has no other assets or liabilities and has not conducted any business of any
kind whatsoever.

6 




     2.3     Authority.
GQ California has all necessary corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder and to
consummate the Transactions. The execution, delivery and performance by GQ
California of this Agreement, and the consummation by it of the Transactions,
have been duly authorized and approved by its Board of Directors and no other
corporate action on the part of GQ California is necessary to authorize the
execution, delivery and performance by GQ California of this Agreement and the
consummation by it of the Transactions. This Agreement has been duly executed
and delivered by GQ California and, assuming due authorization, execution and
delivery hereof by the other Parties, constitutes a legal, valid and binding
obligation of GQ California, enforceable against GQ California in accordance
with its terms, except that such enforceability (i) may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
other similar laws of general application affecting or relating to the
enforcement of creditors’ rights generally and (ii) is subject to general
principles of equity, whether considered in a proceeding at law or in equity
(the “Bankruptcy and Equity Exception”). 

     2.4     Non-contravention.
Neither the execution and delivery of this Agreement by GQ California nor the
consummation by GQ California of the Transactions, nor compliance by GQ
California with any of the terms or provisions hereof, will (a) violate or
conflict with any provision of the Organizational Documents of GQ California or
(b) assuming that the authorizations, consents and approvals referred to in
Section 2.5 are obtained and the filings referred to in Section
2.5 are made, (i) violate any Law, injunction, order, judgment, ruling or
decree of any Governmental Entity applicable to GQ California or (ii) violate,
conflict with, constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default), or give rise to a right of
termination or cancellation, an acceleration of performance required, a loss of
benefits, or the creation of any Lien upon any of the properties or assets of GQ
California, under, any of the terms, conditions or provisions of any Contract or
Permit to which GQ California is a party, except, in the case of clause
(ii), for such violations, conflicts, defaults, terminations, cancellations,
accelerations, losses and Liens as, individually and in the aggregate, would not
reasonably be expected to have a Material Adverse Effect or prevent or
materially delay the consummation of the Transactions. 

     2.5     Governmental
Approvals. Except for filings with Governmental Authorities required under,
and compliance with applicable requirements of, the Laws listed on Section 2.5
of the GQ Disclosure Schedule, no consents or approvals of, or filings,
declarations or registrations with, any Governmental Entity are necessary for
the execution and delivery of this Agreement by GQ California and the
consummation by GQ California of the Transactions.

     2.6     Brokers.
Except for a financial advisory fee payable by Golden Queen to Maxit Capital LP,
no broker, investment banker, financial advisor or other Person is entitled to
any broker’s, finder’s, financial advisor’s or other similar fee or
commission, or the reimbursement of expenses, in connection with the
Transactions based upon arrangements made by or on behalf of GQ California.

7 




     2.7     SEC
Documents; Financial Statements; Undisclosed Liabilities. 

          (a)     Golden
Queen has filed with or furnished to the SEC, on a timely basis including any
filing made within the extended filing period permitted pursuant to Rule 12b-25
under the Exchange Act, all documents required to be so filed or furnished by
Golden Queen, under the Exchange Act, including registration statements,
certifications, proxy statements and reports with the SEC since January 1, 2010
(such documents collectively, and together with all documents filed during such
period on a voluntary basis on Form 8-K, and in each case including all exhibits
and schedules thereto and documents incorporated by reference therein, the
“Golden Queen SEC Documents”). As of their respective effective
dates (in the case of Golden Queen SEC Documents that are registration
statements filed pursuant to the requirements of the Securities Act) and as of
their respective SEC filing dates (in the case of all other Golden Queen SEC
Documents), the Golden Queen SEC Documents complied in all material respects
with the requirements of the Securities Act, the Exchange Act, and the
Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), as the case may
be, applicable to such Golden Queen SEC Documents, and none of the Golden Queen
SEC Documents as of such respective dates (or, if amended prior to the date of
this Agreement, the date of the filing of such amendment) contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. As of the date of
this Agreement, there are no outstanding or unresolved comments received from
the SEC staff with respect to the Golden Queen SEC Documents. GQ California is
not (or has ever been at any time since January 1, 2010) subject to the
reporting requirements of Section 13(a) or 15(d) of the Exchange Act. 

          (b)     Since
January 1, 2010, each of the consolidated financial statements of Golden Queen
included (or incorporated by reference) in the Golden Queen SEC Documents
complied as to form, as of their respective dates of filing with the SEC, in all
material respects with all applicable accounting requirements and with the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with GAAP (except, in the case of un-audited statements,
as permitted by the rules and regulations of the SEC) applied on a consistent
basis during the periods involved (except as may be indicated in the notes
thereto) and fairly present in all material respects the consolidated financial
position of Golden Queen and GQ California as of the dates thereof and the
consolidated results of their operations and cash flows for the periods shown
(subject, in the case of un-audited statements, to normal recurring year-end
audit adjustments). 

          (c)     Golden
Queen has filed with the securities commissions in each of the Provinces of
Canada, on a timely basis, all required financial statements, annual information
forms, proxy solicitation materials, material change reports and other documents
required by Canadian securities laws and all such documents complied in all
material respects with the requirements of Canadian securities laws and none of
such documents contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to make the statements therein, in light of
the circumstance under which they were made, not misleading.

8 




          (d)     Golden
Queen has delivered to LUK Holdco, Gauss and Auvergne copies of (i) the audited
consolidated balance sheets of Golden Queen as at December 31, 2013, and the
related audited consolidated statement of income and of cash flows of Golden
Queen for the year then ended and (ii) the unaudited balance sheet of GQ
California as at March 31, 2014 (such audited and unaudited statements,
including the related notes and schedules thereto, are referred to herein as the
“Financial Statements”). Each of the Financial Statements is complete and
correct in all material respects, has been prepared in accordance with GAAP
consistently applied by Golden Queen without modification of the accounting
principles used in the preparation thereof throughout the periods presented and
presents fairly in all material respects the consolidated financial position,
results of operations and cash flows of Golden Queen and/or GQ California, as
applicable, as at the dates and for the periods indicated therein.

          (e)     Other
than as disclosed in the Form 10-K of Golden Queen filed in respect of the
fiscal year ended December 31, 2013, the management of Golden Queen has
completed its assessment of the effectiveness of Golden Queen’s internal control
over financial reporting in compliance with the requirements of Section 404 of
the Sarbanes-Oxley Act for the year ended December 31, 2013, and such assessment
is accurately summarized in the Golden Queen SEC Documents. To the Knowledge of
Golden Queen, there are no facts or circumstances that would prevent Golden
Queen’s principal executive officer and principal financial officer from giving
the certifications and attestations required pursuant to the rules and
regulations adopted pursuant to Section 404 of the Sarbanes-Oxley Act, without
qualification, when next due. The audit committee of the Board of Directors of
Golden Queen has established “whistleblower” procedures that meet the
requirements of Exchange Act Rule 10A-3, and Golden Queen has made available to
LUK Holdco, Gauss and Auvergne, true, complete and correct copies of such
procedures.

          (f)     Neither
Golden Queen nor GQ California has any liabilities or obligations of any nature
(whether absolute, accrued, contingent or otherwise) which would be required to
be reflected or reserved against on a consolidated balance sheet of Golden Queen
prepared in accordance with GAAP or the notes thereto, except liabilities or
obligations (i) reflected or reserved against on the consolidated balance sheet
of Golden Queen as of December 31, 2013 (the “Balance Sheet Date”),
including the notes thereto, or included in the Golden Queen SEC Documents or
the Financial Statements, (ii) incurred after the Balance Sheet Date in the
ordinary course of business, (iii) that individually and in the aggregate would
not reasonably be expected to have a material adverse effect on Golden Queen and
GQ California taken as a whole or (iv) incurred in connection with the
Transactions. 

          (g)     GQ
California has no liabilities or obligations of any nature (whether absolute,
accrued, contingent or otherwise) which would be required to be reflected or
reserved against on a balance sheet of GQ California prepared in accordance with
GAAP or the notes thereto, except liabilities or obligations (i) reflected or
reserved against on the consolidated balance sheet of Golden Queen as of March
31, 2014, (ii) incurred after such date in the ordinary course of business,
(iii) that individually and in the aggregate would not reasonably be expected to have a material adverse effect on GQ California or (iv)
incurred in connection with the Transactions.


9 




     2.8     Absence
of Certain Changes. Since June 30, 2013, except as disclosed in a Golden
Queen SEC Documents: 

          (a)     the
business of GQ California has been carried on and conducted in all material
respects in the ordinary course of business consistent with past practice; 

          (b)     there
has not been any change, development, occurrence, event or state of facts that,
individually or in the aggregate, has had or would reasonably be expected to
have a Material Adverse Effect on GQ California, and 

          (c)     none
of Golden Queen, GQ Holdco or GQ California has taken any action with respect to
GQ California that, if taken after the date of this Agreement without the
consent of LUK Holdco, Gauss and Auvergne, would constitute a breach of any of
the covenants set forth in Section 4.4. 

     2.9     Legal
Proceedings. Except as otherwise disclosed in the Golden Queen SEC Documents
or in Section 2.9 of the GQ Disclosure Schedule, there is no pending or, to the
Knowledge of Golden Queen or GQ California, threatened, legal, administrative or
arbitral proceeding, claim, suit or action against, or governmental or
regulatory investigation of, or injunction order, judgment, ruling or decree
imposed upon, GQ California or any of its properties or assets, in each case, by
or before any Governmental Entity or Person. 

     2.10     Compliance
With Laws; Permits.

          (a)     GQ
California is and since January 1, 2010 has been in compliance with all material
Laws applicable to GQ California and its properties and assets. Neither Golden
Queen nor GQ California has received any notice of or been charged with the
violation of any Laws by GQ California. To the Knowledge of Golden Queen,
neither Golden Queen nor GQ California is under investigation with respect to
the violation of any Laws by GQ California and there are no facts or
circumstances which could form the basis for any such violation. 

          (b)     Except
as set forth in Section 2.10 of the GQ Disclosure Schedule, GQ California (x)
holds all material Permits necessary for the lawful conduct of its business and
the exploration, mining, development and operation of the Soledad Mountain
Project and (y) is in material compliance with the terms of all such Permits.
Section 2.10 of the GQ Disclosure Schedule contains a list of all Permits which
are required for the operation of the business of GQ California as presently
conducted and as contemplated to be conducted pursuant to the JV Operating
Agreement, including the exploration and development of the Soledad Mountain
Project (“GQ Permits”), other than those the failure of which to possess
is immaterial. Except as set forth in Section 2.10 of the GQ Disclosure
Schedule, GQ California currently has all the GQ Permits, other than those the
failure of which to possess is immaterial, and GQ California is not in default
or violation, and no event has occurred which, with notice or the lapse of time
or both, would constitute a default or violation, in any material respect of any
term, condition or provision of any GQ Permit, and to the Knowledge of Golden
Queen, there are no facts or circumstances which could form the basis for any
such default or violation. There are no Legal Proceedings pending or, to the Knowledge of Golden Queen,
threatened, relating to the suspension, revocation or modification of any GQ
Permit. None of the GQ Permits will be impaired or in any way affected by the
consummation of the transactions contemplated by this Agreement.

10 




     2.11     Contracts.
Section 2.11 of the GQ Disclosure Schedule sets forth a list of each GQ Material
Contract. For purposes of this Agreement, “GQ Material Contract” shall mean each
Contract to which Golden Queen or GQ California is a party or by which Golden
Queen or GQ California or any of their respective properties or assets is bound
that: 

               (i)     purports
to restrict the ability of GQ California or Affiliates to compete in any
geographic area or line of business or limit the Persons to whom GQ California
or Affiliates may sell products or deliver services; 

               (ii)     is
a joint venture, partnership, strategic alliance, management or similar or
related agreement; 

               (iii)     involves
the acquisition from another Person or disposition to another Person, directly
or indirectly (by merger or otherwise), of capital stock or other equity
interests of another Person, or assets, that (A) was for aggregate consideration
under such Contract (or series of related Contracts) in excess of US$500,000.00
(other than acquisitions or dispositions of inventory in the ordinary course of
business) or (B) contain obligations (including indemnification, “earn-out” or
other contingent obligations) that are still in effect and could result in
material payments by GQ California; 

               (iv)     is
a loan or credit agreement, indenture, note or other Contract or instrument
evidencing indebtedness for borrowed money by GQ California or Contract or
instrument pursuant to which indebtedness for borrowed money may be incurred or
is guaranteed by GQ California, except those involving an amount less than
US$500,000.00 in the aggregate; 

               (v)     is
a mortgage, pledge, security agreement or other Contract granting a Lien on the
Equity Interests, GQ California or any material property or asset of GQ
California; 

               (vi)     prohibits
or requires the payment of dividends or distributions in respect of the capital
stock or equity interests of GQ California, prohibits the pledging of the
capital stock or equity interests of GQ California, or prohibits the issuance of
guarantees by GQ California; 

               (vii)     is
reasonably likely to involve the payment, in one transaction or a series of
related transactions, to, by, or in respect of GQ California of more than
US$500,000.00 in any 12-month period; 

               (viii)     is
a license agreement pursuant to which Golden Queen or GQ California is a named
party and licenses in material Intellectual Property, or licenses out material
Intellectual Property owned by Golden Queen or GQ California, other than (A)
non-exclusive licenses entered into in the ordinary course of business and (B)
license agreements for commercially available software or information technology
services on customary or standard terms;

11 




               (ix)     is
a collective bargaining agreement; 

               (x)     is
an employment, management or consulting services agreement providing annual
compensation in excess of US$100,000.00 and which are not cancelable by GQ
California (A) on notice of ninety (90) days or less and (B) without liability
or penalty; 

               (xi)     purports
to subject Golden Queen or GQ California to a “standstill” or similar
restriction; 

               (xii)     is
a Contract with any Related Person; or (xiii) is a voting agreement or
registration rights agreement. 

          Golden
Queen has made available to LUK Holdco, Gauss and Auvergne correct and complete
copies of each GQ Material Contract, together with any and all amendments and
supplements thereto. Each GQ Material Contract is valid and binding on, and in
full force and effect and enforceable in accordance with its terms, by Golden
Queen or GQ California and, to the Knowledge of Golden Queen, each other party
thereto, in each case, subject to the Bankruptcy and Equity Exception. Neither
Golden Queen nor GQ California nor, to the Knowledge of Golden Queen, any other
party to a GQ Material Contract, is in default under any GQ Material Contract
(nor does any condition exist that, with notice or lapse of time or both, would
constitute a material default thereunder by Golden Queen or GQ California or, to
the Knowledge of Golden Queen, any other party thereto). No party to any GQ
Material Contract has given Golden Queen or GQ California notice of its
intention to cancel, terminate, change the scope of rights under, or not renew,
any GQ Material Contract. 

     2.12     Tax
Matters. 

          Except
as set forth in Section 2.12 of the GQ Disclosure Schedule: 

          (a)     (i)
All income and other material Tax Returns filed or required to be filed by or on
behalf of GQ California have been duly and timely filed with the appropriate
Taxing Authority in all jurisdictions in which such Tax Returns are required to
be filed (after giving effect to any valid extensions of time in which to make
such filings), and all such Tax Returns are true, complete and correct in all
material respects; and (ii) all material amounts of Taxes due and owing by or on
behalf of GQ California (whether or not shown due on such Tax Returns), or for
which GQ California could be liable, have been fully and timely paid. GQ
California is not currently the beneficiary of any extension of time within
which to file any Tax Return. With respect to any period for which Tax Returns
have not yet been filed or for which Taxes are not yet due or owing, GQ
California has made sufficient accruals for such Taxes in the Financial
Statements and its books and records. GQ California has complied in all material
respects with all applicable Laws relating to the payment and withholding of
Taxes and has duly and timely withheld and paid over all material amounts
required to be so withheld and paid over under applicable laws. All material
required estimated Tax payments sufficient to avoid any underpayment penalties
or interest have been made by or on behalf of GQ California. 

12 




          (b)     (i)
No claim has been made in writing, or, to the Knowledge of GQ California,
otherwise, by a Taxing Authority in a jurisdiction where GQ California does not
file Tax Returns that it is or may be subject to taxation by that jurisdiction;
and (ii) there are no Liens as a result of any unpaid Taxes upon any of the
assets of GQ California other than Permitted Liens. 

          (c)     All
deficiencies asserted or assessments made as a result of any examinations by any
Taxing Authority of GQ California have been fully paid, there are no actions,
audits, investigations or other administrative or court proceedings presently
pending with respect to GQ California, and GQ California has not received any
notice from any Taxing Authority that such Taxing Authority intends to conduct
an audit or investigation with respect to GQ California. 

          (d)     Neither
GQ California nor any other Person acting on its behalf has (i) (A) agreed to or
is required to make any adjustments pursuant to Section 481(a) of the Code or
any similar provision of Law, (B) any Knowledge that any Taxing Authority has
proposed any such adjustment or (C) any application pending with any Taxing
Authority requesting permission for any changes in accounting methods, (ii)
executed or entered into a closing agreement pursuant to Section 7121 of the
Code or any similar provision of Law, (iii) waived any statute of limitations in
respect of Taxes or granted any extension for the assessment or collection of
Taxes, which Taxes have not since been paid, or (iv) granted to any Person any
power of attorney that is currently in force with respect to any Tax matter.


          (e)     GQ
California (i) is not a party to any Tax sharing, allocation, indemnity or
similar agreement or arrangement (whether or not written), (ii) is not subject
to any private letter ruling of the IRS or comparable rulings of any Taxing
Authority, (iii) is not and has never been a member of any affiliated group nor
has any liability for the Taxes of any other Person under Treasury Regulation
Section 1.1502 -6 (or any similar provision of Law), as a transferee or
successor under applicable Law or by Contract or otherwise, (iv) has not
constituted either a "distributing corporation" or a "controlled corporation"
(within the meaning of Section 355(a)(1)(A) of the Code) in a distribution of
stock intended to qualify for tax-free treatment under Section 355 of the Code,
and (v) has not and has never had a permanent establishment in any country other
than the country of its organization or been subject to Tax in a jurisdiction
outside the country of its organization. 

          (f)     GQ
California shall not be required to include any item of income in, or exclude
any item of deduction from, taxable income for any taxable period (or portion
thereof) ending after the Closing Date as a result of any (i) installment sale
or open transaction disposition made on or prior to the Closing Date or (ii)
prepaid amount received on or prior to the Closing Date. 

          (g)     None
of GQ California or any member of any consolidated tax group in which GQ
California has been included has (i) engaged in any “reportable transactions” as
defined in Treasury Regulation Section 1.6011 -4(b) or (ii) failed to disclose
on its U.S. federal Tax Returns all positions taken therein that could give rise
to substantial understatement of U.S. federal income tax within the meaning of
Section 6662 of the Code. 

13 




     2.13     Employee
Benefits and Labor Matters. Section 2.13 of the GQ Disclosure Schedule
contains a complete and accurate list of the following for each employee of GQ
California, including each employee on leave of absence or layoff status: name,
job title, date of hire or engagement, primary work location, current annual
salary or hourly rate of pay, bonus compensation paid in the last twelve months,
and active/inactive status. Except as set forth on Section 2.13 of the GQ
Disclosure Schedule, GQ California is in material compliance with all applicable
Laws respecting labor, employment, terms and conditions of employment,
classification of employees and independent contractors, workers’ compensation,
occupational safety and health, and wages and hours. Except as set forth on
Section 2.13 of the GQ Disclosure Schedule, GQ California does not sponsor,
maintain, contribute to or have an obligation to contribute to, nor has any
liability in respect of, and has never sponsored, maintained, contributed to or
had an obligation to contribute to or has had any liability in respect of, any
GQ Benefit Plans. All GQ Benefit Plans have been established, operated and
maintained in all material respects in accordance with their respective terms
and with applicable Laws. For purposes of this Agreement, “GQ Benefit
Plans” shall mean, collectively, (A) all “employee benefit plans” (as
defined in Section 3(3) of ERISA, whether or not subject to ERISA) and any other
material bonus, pension, profit sharing, retirement, deferred compensation,
incentive compensation, equity or equity-based compensation, severance,
retention, change in control, disability, vacation, death benefit,
hospitalization, medical or other material benefit plans, programs, agreements
or arrangements providing, or designed to provide, material benefits to any
current or former directors, officers, employees or consultants of GQ California
or the beneficiaries or dependents of any such Person or as to which GQ
California sponsors, maintains, contributes or is obligated to contribute, or
under which GQ California has any liability and (B) all employment, consulting,
severance, retention, change of control, tax gross-up or termination agreements
between GQ California and any current or former directors, officers, employees
or consultants of GQ California. 

     2.14     Environmental
Matters. Except as set forth on Section 2.14 of the GQ Disclosure Schedule:


          (a)     the
operations of GQ California are and have been in compliance with all applicable
material Environmental Laws, which compliance includes obtaining, maintaining in
good standing and complying with all Environmental Permits and no action or
proceeding is pending or, to the Knowledge of Golden Queen, threatened to
revoke, modify or terminate any such Environmental Permit, and, to the Knowledge
of Golden Queen, no facts, circumstances or conditions currently exist that
could reasonably be expected to adversely affect such continued compliance with
Environmental Laws and Environmental Permits or require currently unbudgeted
capital expenditures to achieve or maintain such continued compliance with
Environmental Laws and Environmental Permits; 

          (b)     neither
Golden Queen nor GQ California is the subject of any outstanding written Order
or Contract with any Governmental Entity or Person with respect to (i)
Environmental Laws, (ii) Remedial Action or (iii) any Release or threatened
Release of a Hazardous Material; 

          (c)     no
claim has been made or is pending, or to the Knowledge of Golden Queen,
threatened against Golden Queen or GQ California alleging either or both that GQ California may be in violation of any Environmental Law or
Environmental Permit, or may have any liability under any Environmental Law;


14 




          (d)     to
the Knowledge of Golden Queen, no facts, circumstances or conditions exist with
respect to Golden Queen or GQ California or any property currently or formerly
owned, operated or leased by Golden Queen or GQ California or any property to
which the Golden Queen or GQ California arranged for the disposal or treatment
of Hazardous Materials that could reasonably be expected to result in GQ
California incurring unbudgeted environmental costs and liabilities; 

          (e)     there
are no investigations of the business, operations, or currently or, to the
Knowledge of Golden Queen, previously owned, operated or leased property of
Golden Queen or GQ California pending or, to the Knowledge of Golden Queen,
threatened which could lead to the imposition on GQ California of any
environmental costs and liabilities or Liens under Environmental Law; 

          (f)     the
Transactions do not require the consent of or filings with any Governmental
Entity with jurisdiction over Golden Queen or GQ California with respect to
environmental matters; 

          (g)     Golden
Queen has made available to LUK Holdco, Gauss and Auvergne copies of all
environmentally related audits, studies, reports, analyses, permit applications,
material correspondence and results of investigations that have been performed
with respect to the currently or previously owned, leased or operated properties
of Golden Queen or GQ California. 

     2.15     Intellectual
Property. 

          (a)     Section
2.15(a) of the GQ Disclosure Schedule sets forth (i) a true and complete
schedule of each item of Owned Intellectual Property and any applications for
Owned Intellectual Property, (ii) Licensed Intellectual Property that is
material to GQ California (collectively, with the Owned Intellectual Property,
the “GQ Intellectual Property”); provided, however, that GQ
California’s confidential and proprietary trade secrets, product specifications
and formulations owned or utilized by GQ California are not disclosed in Section
2.15(a) of the GQ Disclosure Schedule, and (iii) all Contracts under which GQ
California has received a license or sublicense with respect to any of the
Licensed Intellectual Property pursuant to which it is obligated to pay a
royalty, license fee or similar payment in an amount in excess of $100,000 per
annum (other than non-exclusive end-user licenses for commercially available
prepackaged computer software generally available to the public) (the
“Intellectual Property Licenses”).

          (b)     GQ
California owns all right, title, and interest in and to, or has a valid and
enforceable license to use, all GQ Intellectual Property as the same is used in
the business of GQ California. The Owned Intellectual Property is valid,
enforceable and subsisting and is not subject to any Liens (other than Permitted
Liens). GQ California does not use any Intellectual Property in connection with
the conduct of its business other than the GQ Intellectual Property. 

          (c)     To
the Knowledge of Golden Queen, no other Person is infringing, misappropriating
or otherwise violating any of the GQ Intellectual Property. Neither Golden Queen nor GQ California has interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any other Person’s
Intellectual Property rights, and neither Golden Queen nor GQ California has
received a written notice alleging any such interference, infringement,
misappropriation, or violation (including any claim that Golden Queen or GQ
California must license or refrain from using any other Person’s Intellectual
Property rights). No claim by any other Person contesting the validity of any GQ
Intellectual Property has been made, is currently outstanding or, to the
Knowledge of Golden Queen, is threatened.

15 




     2.16     Title
to Property.

          (a)     Section
2.16(a) of the GQ Disclosure Schedule sets forth a complete list of (i) all real
property and interests in real property, including improvements thereon and
easements appurtenant thereto owned in fee by Golden Queen or GQ California in
connection with the conduct of GQ California’s business and lying within the
Approved Project Boundary (individually, an “Owned Property” and
collectively, the “Owned Properties”), (ii) all real property, including
Mineral Interests and Water Rights and interests in real property leased by
Golden Queen or GQ California in connection with the conduct of GQ California’s
business and lying within the Approved Project Boundary (individually, a “Real
Property Lease” and collectively, the “Real Property Leases”) as lessee
or lessor, including a description of each such Real Property Lease (including
the name of the third party lessor or lessee and the date of the lease or
sublease and all amendments thereto), (iii) all unpatented mining claims and
millsites held by Golden Queen or GQ California in connection with the conduct
of GQ California’s business and lying within the Approved Project Boundary
(individually, a “Mining Claim” and collectively, the “Mining
Claims”), and (iv) all real property and interests in real property owned,
leased or held by Golden Queen or GQ California and lying outside the Approved
Project Boundary (individually, an “Additional Property” and,
collectively, the “Additional Properties” and, together with the
Mining Claims, Owned Properties and Real Property Leases, being referred to
herein individually as a “GQ Property” and, collectively, as the
“GQ Properties”). Golden Queen or GQ California have good and
marketable fee title to all Owned Property, free and clear of all Liens of any
nature whatsoever, except (A) those Liens set forth on Section 2.16(a) of the GQ
Disclosure Schedule and (B) Permitted Liens. The GQ Properties constitute all
interests in real property currently used, occupied or currently held for use in
connection with the business of GQ California and which are necessary for the
continued operation of the business of GQ California as the business is
currently conducted and contemplated to be conducted. All of the GQ Properties
and buildings, fixtures and improvements thereon (i) are in good operating
condition without material structural defects, and all mechanical and other
systems located thereon are in good operating condition, and no condition exists
requiring material repairs, alterations or corrections and (ii) are suitable,
sufficient and appropriate in all material respects for their current and
contemplated uses. None of the improvements located on the GQ Properties require
any special dispensation, variance or special permit under any Laws, other than
those already obtained. Golden Queen has made available to LUK Holdco, Gauss and
Auvergne true, correct and complete copies of (i) all deeds, title reports and
surveys for the Owned Properties and (ii) the Real Property Leases, together
with all amendments, modifications or supplements, if any, thereto. To the
Knowledge of Golden Queen, the GQ Properties are not subject to any leases,
rights of first refusal, options to purchase or rights of occupancy, except the
Real Property Leases set forth on Appendix C to Section 2.16(a) of the GQ
Disclosure Schedule. 

16 




          (b)     Except
as set forth on Appendix C to Section 2.16(a) of the GQ Disclosure Schedule,
each of Golden Queen and GQ California, as applicable, has a valid, binding and
enforceable leasehold interest under each of the Real Property Leases under
which it is a lessee, free and clear of all Liens other than Permitted Liens,
and each of the Real Property Leases is in full force and effect. Neither Golden
Queen nor GQ California is in material default under any Real Property Lease,
and to the Knowledge of Golden Queen no event has occurred and no circumstance
exists which, if not remedied, and whether with or without notice or the passage
of time or both, would result in such a default. Neither Golden Queen nor GQ
California has received or given any notice of any default or event that with
notice or lapse of time, or both, would constitute a default by Golden Queen or
GQ California under any of the Real Property Leases and, to the Knowledge of
Golden Queen, no other party is in material default thereof, and no party to any
Real Property Lease has exercised any termination rights with respect thereto.
Except as set forth on Appendix C to Section 2.16(a) of the GQ Disclosure
Schedule, there are no Real Property Leases that are scheduled to expire by
their terms in the twenty four (24) months following the date of this Agreement.


          (c)     Golden
Queen and GQ California have all material Permits from any Governmental Entity
that are necessary for the current use and operation of each GQ Property, and
Golden Queen and GQ California have fully complied with all material conditions
of the Permits applicable to them. No material default or violation, or event
that with the lapse of time or giving of notice or both would become a material
default or violation, has occurred in the due observance of any Permit. 

          (d)     There
does not exist any actual or, to the Knowledge of Golden Queen, threatened or
contemplated condemnation or eminent domain proceedings that affect any GQ
Property or any part thereof, and neither Golden Queen nor GQ California has
received any notice, oral or written, of the intention of any Governmental
Entity or other Person to take or use all or any part thereof. 

          (e)     Except
as set forth on Section 2.16(e) of the GQ Disclosure Schedule, GQ California
does not own, hold, have any obligation under, or is not a party to, any option,
right of first refusal or other contractual right to purchase, acquire, sell,
assign or dispose of any real estate or any portion thereof or interest therein.


          (f)     Except
as set forth on Section 2.16(f) of the GQ Disclosure Schedule, (i) Golden Queen
and GQ California have good and marketable title to the Water Rights within the
Fremont Valley Groundwater Basin which entitle them to withdraw ground water;
(ii) as of the date of this Agreement, no Liens exist that may relate to or
otherwise affect the Water Rights; (iii) to the Knowledge of Golden Queen, none
of the Water Rights has been lost by nonuse, passage of time, failure to comply
with any Laws or by any sale or transfer thereof, or are subject to claims or
actions for abandonment or forfeiture due to failure to put all or part of the
water represented by the Water Rights to beneficial use; (iv) Golden Queen and
GQ California have the right to withdraw ground water as a landowner or lessee,
which right is not encumbered by material competing water uses or limited by
mitigation requirements under Environmental Permits; (v) to the Knowledge of
Golden Queen, the Water Rights comprise all water rights, well rights, water
shares, contract rights, water allotments and Property necessary to withdraw
ground water, required to operate the business of GQ California as presently
conducted and as contemplated to be conducted under the JV Operating Agreement,
including the development and operation of the Soledad Mountain Project; and (v)
all charges, filings, registrations and assessments related thereto have been
made and are current.

17 




     2.17     Related
Party Transactions. Except as set forth in Section 2.17 of the GQ Disclosure
Schedule and the Transactions provided for hereunder, no employee,
officer, director, stockholder, partner or member of Golden Queen or GQ
California, any member of his or her immediate family or any of their respective
Affiliates (“Related Persons”) (i) owes any amount to or in respect of GQ
California nor does GQ California owe any amount to, or has GQ California
committed to make any loan or extend or guarantee credit to or for the benefit
of, any Related Person, (ii) is involved in any business arrangement or other
relationship with or in respect of GQ California (whether written or oral),
(iii) owns any property or right, tangible or intangible, that is used by GQ
California (iv) has any claim or cause of action against or in respect of GQ
California or (v) owns any direct or indirect interest of any kind in, or
controls or is a director, officer, employee or partner of, or consultant to, or
lender to or borrower from or has the right to participate in the profits of,
any Person which is a competitor, supplier, customer, landlord, tenant, creditor
or debtor of the GQ California.

     2.18     Certain
Payments. Neither Golden Queen nor GQ California or, to the Knowledge of
Golden Queen, any director, officer, employee, or other Person associated with
or acting on behalf of any of them, has directly or indirectly (a) made any
contribution, gift, bribe, rebate, payoff, influence payment, kickback, or other
payment to any Person, private or public, regardless of form, whether in money,
property, or services (i) to obtain favorable treatment in securing business for
or on behalf of GQ California, (ii) to pay for favorable treatment for business
secured by or on behalf of GQ California, (iii) to obtain special concessions or
for special concessions already obtained, for or in respect of or on behalf of
GQ California, or (iv) in violation of any Law, or (b) established or maintained
any fund or asset with respect to Golden Queen or GQ California that has not be
recorded in the books and records of GQ California. 

     2.19     Sufficiency
of Assets. Except as set forth in Section 2.19 of the GQ Disclosure
Schedule, GQ California owns and has good title to each of the material assets
held by it, free and clear of all Liens other than Permitted Liens. Such assets
constitute all of the properties used in or held for use in the business of GQ
California and are sufficient for GQ California to conduct its business from and
after the Closing Date without interruption and in the ordinary course of
business, as it has been conducted prior to the Closing Date and as contemplated
to be conducted after the Closing Date. 

     2.20     Tangible
Personal Property.

          (a)     GQ
California has good and marketable title to all of the items of tangible
personal property used in the business of GQ California, free and clear of any
and all Liens, other than Permitted Liens. All such items of tangible personal
property which, individually or in the aggregate, are material to the operation
of the business of GQ California are in good condition and in a state of good
maintenance and repair (ordinary wear and tear excepted) and are suitable for
the purposes used. 

          (b)     Section
2.20 of the GQ Disclosure Schedule sets forth all leases of personal property
(“Personal Property Leases”) involving annual payments in excess of US$500,000.00 relating to personal property used by GQ
California in the business of GQ California or to which GQ California is a party
or by which the properties or assets of GQ California is bound. All of the items
of personal property under the Personal Property Leases are in good condition
and repair (ordinary wear and tear excepted) and are suitable for the purposes
used, and such property is in all material respects in the condition required of
such property by the terms of the lease applicable thereto during the term of
the lease. Golden Queen has delivered or made available to LUK Holdco, Gauss and
Auvergne true, correct and complete copies of the Personal Property Leases,
together with all amendments, modifications or supplements thereto.

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          (c)     GQ
California has a valid, binding and enforceable leasehold interest under each of
the Personal Property Leases under which it is a lessee. Each of the Personal
Property Leases is in full force and effect and neither Golden Queen nor GQ
California has received or given any notice of any default or event that with
notice or lapse of time, or both, would constitute a default by Golden Queen or
GQ California under any of the Personal Property Leases and, to the Knowledge of
Golden Queen, no other party is in default thereof, and no party to the Personal
Property Leases has exercised any termination rights with respect thereto. 

     2.21     Information
Supplied. None of the information supplied or to be supplied by or with
respect to Golden Queen, GQ Holdco or GQ California, and the Transactions, in
each case, specifically for inclusion or incorporation by reference in the Proxy
Statement will, at the date it (and any amendment or supplement thereto) is
first mailed to the stockholders of Golden Queen or at the time of the GQ
Stockholders Meeting contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading; provided, that no representation or warranty is
made by Golden Queen with respect to information supplied by or on behalf of LUK
Holdco, Gauss or Auvergne for inclusion or incorporation by reference in any of
the foregoing. 

     2.22     Mining
Claims. 

          (a)     With
respect to Mining Claims located by GQ California that are included within the
GQ Properties, subject to the paramount title of the United States, Mining
Claims not located by GQ California, but conveyed to them by deed, to the best
of GQ California’s Knowledge: (i) the Mining Claims were properly located, laid
out and monumented in all material respects in accordance with applicable Law;
(ii) all required location and validation work was properly performed in all
material respects; (iii) location notices and certificates were properly
recorded and filed with appropriate governmental agencies in all material
respects; (iv) all assessment work required to hold the Mining Claims has been
performed and all location fees, mining claim rental fees, mining claim
maintenance payments and similar payments required by Law to locate and hold
unpatented mining claims (the “Governmental Fees”) have been paid or will
be paid in a manner consistent with prudent mine management practices and to
maintain such items in material compliance with all applicable Laws through the
assessment year ending September 1, 2013; (v) all affidavits of assessment work,
evidence of payment of Governmental Fees, and other filings required to maintain
the Mining Claims in good standing have been properly and timely recorded or
filed with appropriate governmental agencies in all material respects; (vi) the
Mining Claims are free and clear of Liens, other than Permitted Liens and immaterial defects in title; and (vii) Golden Queen has no
Knowledge of conflicting Mining Claims. Nothing in this Section 2.22,
however, shall be deemed to be a representation or a warranty that any of the
Mining Claims contains a valuable mineral deposit.

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          (b)     With
respect to Mining Claims not located by GQ California but which are leased by GQ
California and included within the GQ Properties, subject to the paramount title
of the United States: (i) all assessment work required to hold the Mining Claims
has been performed in all material respects, and all Governmental Fees have been
paid or will be paid in a manner consistent with prudent mine management
practices and to maintain such items in material compliance with all applicable
Laws through the assessment year ending September 1, 2013; (ii) all affidavits
of assessment work, evidence of payment of Governmental Fees, and other filings
required to maintain the Mining Claims in good standing have been properly and
timely recorded or filed with appropriate governmental agencies in all material
respects; (iii) the Mining Claims are free and clear of Liens, other than
Permitted Liens and immaterial defects in title; and (iv) Golden Queen has no
Knowledge of conflicting Mining Claims. Nothing in this Section 2.22,
however, shall be deemed to be a representation or a warranty that any of the
Mining Claims contains a valuable discovery of minerals. 

ARTICLE III - REPRESENTATIONS AND WARRANTIES OF THE
PARTIES 

          Each
of the Parties (other than GQ California) hereby severally, and not jointly,
represents and warrants, with respect to itself only, to each of the other
Parties (other than GQ California) as follows, except in respect of Section
3.6, which each of LUK Holdco, Gauss and Auvergne hereby severally, and not
jointly, represents and warrants, with respect to itself only, to Golden Queen:


     3.1     Organization.
Such Party is an entity duly organized, validly existing and in good standing
under the Laws of the jurisdiction of such Party’s organization. 

     3.2     Authority.
Such Party has all necessary corporate or other entity power and authority to
execute and deliver this Agreement and to perform their respective obligations
hereunder and to consummate the Transactions. The execution, delivery and
performance by such Party of this Agreement, and the consummation by such Party
of the Transactions, have been duly authorized and approved by their respective
board of directors or managers and subject to the GQ Stockholder Approval in the
case of Golden Queen, no other corporate or other entity action on the part of
such Party is necessary to authorize the execution, delivery and performance by
such Party of this Agreement and the consummation by such Party of the
Transactions. This Agreement has been duly executed and delivered by such Party
and, assuming due authorization, execution and delivery hereof by the other
Parties, constitutes a legal, valid and binding obligation of such Party,
enforceable against such Party in accordance with its terms, subject to the
Bankruptcy and Equity Exception. 

     3.3     Non-contravention.
Neither the execution and delivery of this Agreement by such Party nor the
consummation by such Party of the Transactions, nor compliance by such Party
with any of the terms or provisions hereof, will (a) violate or conflict with
any provision of the Organizational Documents of such Party or (b) assuming that
the authorizations, consents and approvals referred to in Section 3.4 are
obtained and the filings referred to in Section 3.4 are made and assuming
the GQ Stockholder Approval is obtained in the case of Golden Queen, (i) violate any Law, injunction, order, judgment, ruling or
decree of any Governmental Entity applicable to such Party or (ii) violate,
conflict with, constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default), or give rise to a right of
termination or cancellation, an acceleration of performance required, a loss of
benefits, or the creation of any Lien upon any of the respective properties or
assets of such Party under, any of the terms, conditions or provisions of any
Contract or Permit to which such Party is a party, except, in the case of
clause (ii), for such violations, conflicts, defaults, terminations,
cancellations, accelerations, losses and Liens as, individually and in the
aggregate, would not reasonably be expected to prevent or materially delay the
consummation of the Transactions.

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     3.4     Governmental
Approvals. Except for (a) filings required under, and compliance with other
applicable requirements of, the Exchange Act, and the rules of applicable stock
exchanges and (b) filings with Governmental Authorities required under, and in
compliance with other applicable requirements of, the Laws listed on Section 3.4
of the GQ Disclosure Schedule, no consents or approvals of, or filings,
declarations or registrations with, any Governmental Entity are necessary for
the execution and delivery of this Agreement by such Party and the consummation
by such Party of the Transactions, except for such other consents, approvals,
filings, declarations or registrations that, if not obtained, made or given,
would not reasonably be expected, individually and in the aggregate, to prevent
or materially delay the consummation of the Transactions. 

     3.5     Brokers.
Except for a finder fee payable by LUK to Apogee Global Advisors, Inc., no
broker, investment banker, financial advisor or other Person is entitled to any
broker’s, finder’s, financial advisor’s or other similar fee or commission, or
the reimbursement of expenses, in connection with the Transactions based upon
arrangements made by or on behalf of such Party. 

     3.6     Investment.
Gauss is acquiring the membership interests of GQ California for its own account
as an investment without the present intent to sell, transfer or otherwise
distribute the same to any other Person. Gauss acknowledges that the membership
interests are not registered pursuant to the Securities Act and that none of the
membership interests may be transferred, except pursuant to an effective
registration statement under, or an applicable exception from registration
under, the Securities Act. Gauss is an “accredited investor” as defined under
Rule 501(a) promulgated under Regulation D of the Securities Act. 

ARTICLE IV - ADDITIONAL COVENANTS AND AGREEMENTS 

     4.1     Stockholders
Meeting; Preparation of the Proxy Statement. 

          (a)     Golden
Queen shall, as soon as practicable after the proxy or information statement of
Golden Queen containing information required by Regulation 14A under the
Exchange Act (collectively with all amendments and supplements thereto, the
“Proxy Statement”) is cleared by the SEC for mailing to the
stockholders of Golden Queen, establish a record date for, duly call, give
notice of, convene and hold a special meeting of stockholders of Golden Queen
(including any adjournment or postponement thereof, the “GQ Stockholders
Meeting”) for the purpose of obtaining the GQ Stockholder Approval.
Golden Queen’s obligations pursuant to this Section 4.1(a) shall not be
diminished or otherwise affected by (i) the receipt, disclosure or commencement
of any Takeover Proposal (whether or not a Superior Proposal) or (ii) any proposed or actual change, qualification,
withdrawal or modification of the GQ Board Recommendation, unless this Agreement
is terminated in accordance with Section 6.1.

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          (b)     Golden
Queen shall, through the Board of Directors of Golden Queen, but subject to the
right to make a GQ Adverse Recommendation Change in accordance with Section
4.2, (i) recommend to the stockholders of Golden Queen that such
stockholders give the GQ Stockholder Approval (the “GQ Board
Recommendation”) and (ii) include the GQ Board Recommendation in the Proxy
Statement; and Golden Queen shall use commercially reasonable efforts to solicit
the GQ Stockholder Approval unless this Agreement is terminated in accordance
with Section 6.1. 

          (c)     As
soon as practicable following the date of this Agreement, Golden Queen shall
(using its commercially reasonable efforts) prepare, and file with the SEC, a
preliminary Proxy Statement, which shall comply as to form in all material
respects with applicable requirements of the Exchange Act and with
Canadian securities laws. Golden Queen shall use its commercially reasonable
efforts to respond to any comments of the SEC or its staff and cause the Proxy
Statement to be mailed to the stockholders of Golden Queen as soon as
practicable after the Proxy Statement has been cleared by the SEC for mailing to
the stockholders of Golden Queen. Except as otherwise prohibited by applicable
law, Golden Queen shall notify LUK Holdco, Gauss and Auvergne promptly of the
receipt of any comments from the SEC or its staff and of any request by the SEC
or its staff for amendments or supplements to the Proxy Statement or for
additional information and will supply LUK Holdco, Gauss and Auvergne with
copies of all correspondence between Golden Queen or any of Golden Queen’s
Representatives (as defined in Section 4.2), on the one hand, and the SEC
or its staff, on the other hand, with respect to the Proxy Statement or the
Transactions (and, to the extent practicable, Golden Queen and its counsel shall
permit LUK Holdco, Gauss and Auvergne, and their respective counsel, to
participate in all communications with the SEC and its staff (including all
meetings and telephone conferences) with respect to the Proxy Statement or the
Transactions). If at any time prior to the GQ Stockholders Meeting any event
shall occur, or fact or information shall be discovered, that should be set
forth in an amendment or supplement to the Proxy Statement so that such document
would not include any misstatement of a material fact or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading, the Party that
discovers such information shall promptly notify the other Parties and Golden
Queen shall prepare and file with the SEC and the Canadian securities commission
such amendment or supplement as promptly as practicable and, to the extent
required by Law, cause such amendment or supplement to be disseminated to the
stockholders of Golden Queen. LUK Holdco, Gauss and Auvergne shall cooperate
with Golden Queen in the preparation of the Proxy Statement or any amendment or
supplement thereto. Notwithstanding anything to the contrary stated above, prior
to filing or mailing the Proxy Statement (or any amendment or supplement
thereto) or responding to any comments of the SEC or its staff with respect
thereto, Golden Queen shall provide LUK Holdco, Gauss and Auvergne, and their
respective counsel, with a reasonable opportunity to review and comment on such
document or response and shall include in such document or response all comments
reasonably proposed by LUK Holdco, Gauss and Auvergne, and their respective
counsel, as the case may be. 

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          (d)     Each
of LUK Holdco, Gauss and Auvergne, severally and not jointly, represent and
warrant that none of the information supplied or to be supplied by or with
respect to LUK Holdco, Gauss and Auvergne, respectively, and the Transactions,
in each case, specifically for inclusion or incorporation by reference in the
Proxy Statement will, at the date it (and any amendment or supplement thereto)
is first mailed to the stockholders of Golden Queen or at the time of the GQ
Stockholders Meeting, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading; provided, that no representation or warranty is
made by LUK Holdco, Gauss and Auvergne with respect to information supplied by
or on behalf of Golden Queen for inclusion or incorporation by reference in any
of the foregoing. 

     4.2     Takeover
Proposals. 

          (a)     Except
as otherwise permitted by this Section 4.2, Golden Queen shall not, and
shall cause GQ California and any of Golden Queen’s Affiliates not to, and shall
not authorize or permit its and its Affiliates’ respective officers, directors,
employees, financial advisors and investment bankers, agents and representatives
(collectively, “Representatives”) to, directly or indirectly, (i)
solicit, facilitate or encourage, including by way of furnishing non-public
information, the making of, or any inquiries regarding, or the making of any
proposal that could reasonably be expected to lead to, a Takeover Proposal or
(ii) engage in, continue or otherwise participate in any discussions or
negotiations with any third party regarding a Takeover Proposal; provided,
however, that if Golden Queen, GQ California or their respective Representatives
receives, after the date of this Agreement and prior to receipt of the GQ
Stockholder Approval, a written Takeover Proposal which was unsolicited and not
involving a breach of this Agreement and that the Board of Directors of Golden
Queen (or any authorized committee thereof) reasonably determines in good faith,
after consultation with outside legal counsel and Maxit Capital LP or another
outside financial advisor of national reputation, constitutes or could
reasonably be expected to lead to a Superior Proposal, and the Board of
Directors of Golden Queen reasonably determines in good faith, after
consultation with outside legal counsel, that the failure to take such action
would constitute a breach of Golden Queen’s directors’ fiduciary duties to
Golden Queen or the stockholders of Golden Queen under applicable Law, then
Golden Queen and GQ California and their respective Representatives may, prior
to receipt of the GQ Stockholder Approval and after providing LUK Holdco and
Gauss not less than 24 hours written notice of its intention to take such
action, and subject to compliance with Golden Queen’s and GQ California’s
obligations under this Section 4.2, (A) furnish, pursuant to an
Acceptable Confidentiality Agreement (as defined below), any information with
respect to Golden Queen and GQ California to the Person (or group of Persons)
making such Takeover Proposal (provided that Golden Queen shall concurrently
provide to Auvergne, LUK Holdco and Gauss all information concerning Golden
Queen or GQ California that is provided to any Person given such access which
was not previously provided to LUK Holdco, Gauss or their respective
Representatives) and (B) engage and participate in discussions and negotiations
with such Person (or group of Persons) regarding such Takeover Proposal. Golden
Queen shall provide Auvergne, LUK Holdco and Gauss with a correct and complete
copy of each confidentiality agreement entered into pursuant to this Section
4.2 within twenty four (24) hours of the execution thereof. Golden Queen
shall not enter into any confidentiality agreement with any Person which
prohibits Golden Queen from complying with its obligations to Auvergne, LUK Holdco and Gauss under this Section 4.2. Without
limiting any of the foregoing, it is understood that any violation of this
Section 4.2 by Golden Queen’s Subsidiaries or Representatives shall be
deemed to be a breach of this Section 4.2 by Golden Queen.

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          (b)     Except
as permitted by this Section 4.2(b), neither the Board of Directors of
Golden Queen nor any committee thereof shall (i)(1) withdraw, qualify or change,
or publicly propose to withdraw, qualify or change, in a manner adverse to
Gauss, the GQ Board Recommendation or (2) approve or recommend a Takeover
Proposal (any action described in this clause (i) being referred to as a “GQ
Adverse Recommendation Change”) or (ii) authorize or permit Golden Queen or
any of its Subsidiaries to enter into any merger, acquisition, share exchange or
other agreement with respect to any Takeover Proposal (other than a
confidentiality agreement in accordance with this Section 4.2) (each, a
“GQ Acquisition Agreement”). Notwithstanding the foregoing, prior to
receipt of the GQ Stockholder Approval (A) the Board of Directors of Golden
Queen may withdraw, qualify or change, in a manner adverse to Gauss, the GQ
Board Recommendation in response to an Intervening Event (as defined below) if
such Board reasonably determines in good faith, after consultation with outside
legal counsel, that the failure to take such action would constitute a breach of
Golden Queen’s directors’ fiduciary duties to Golden Queen and the shareholders
of Golden Queen under applicable Law, and (B) if the Board of Directors of
Golden Queen receives a Takeover Proposal that the Board of Directors of Golden
Queen reasonably determines in good faith, after consultation with outside legal
counsel and Maxit Capital LP or another outside financial advisor of national
reputation, constitutes a Superior Proposal, Golden Queen may make a GQ Adverse
Recommendation Change with respect to such Superior Proposal and/or Golden Queen
or its Subsidiaries may enter into a GQ Acquisition Agreement with respect to
such Superior Proposal if, in the case of a GQ Acquisition Agreement, Golden
Queen shall have, concurrently with such entry into such GQ Acquisition
Agreement, terminated this Agreement pursuant to Section 6.1(d)(ii) and
paid to LUK Holdco and Auvergne the GQ Termination Fee due under Section
6.3(b); provided, however, that no GQ Adverse Recommendation
Change, entry into any GQ Acquisition Agreement and/or termination of this
Agreement by Golden Queen pursuant to Section 6.1(d)(ii), shall be made
until after the fifth Business Day following Auvergne’s, LUK Holdco’s and
Gauss’s receipt of written notice from Golden Queen (a “4.2 Notice”)
advising Auvergne, LUK Holdco and Gauss that the Board of Directors of Golden
Queen intends to make such GQ Adverse Recommendation Change, enter into such GQ
Acquisition Agreement and/or terminate this Agreement pursuant to Section
6.1(d)(ii) and specifying, as applicable, the Intervening Event, the terms
and conditions of (and the identity of the Person or group of Persons making)
the Superior Proposal, a summary of the value and financial terms that the Board
of Directors of Golden Queen, after consultation with outside legal counsel and
Maxit Capital LP or another outside financial advisor of national reputation,
determined should be ascribed to any non-cash consideration offered under such
Superior Proposal, and including copies of all materials described in Section
4.2(d)(ii) (it being understood and agreed that any amendment to the
financial terms or other material terms or conditions of such Superior Proposal
shall require a new 4.2 Notice and a new five (5) Business Day period); and
during such period, if requested by Auvergne, LUK Holdco and Gauss, Golden Queen
shall engage in good faith negotiations with Auvergne, LUK Holdco and Gauss to
amend this Agreement in a manner such that the failure by the Board of Directors
of Golden Queen to make a GQ Adverse Recommendation Change or to so terminate
this Agreement would not be inconsistent with its fiduciary duties under
applicable Law; and in determining whether to make any such GQ Adverse
Recommendation Change or termination (and whether the relevant Takeover Proposal still
constitutes a Superior Proposal), the Board of Directors of Golden Queen shall
take into account any changes to the terms of this Agreement proposed by
Auvergne, LUK Holdco and Gauss.

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          (c)     In
addition to the other obligations of Golden Queen set forth in this Section
4.2: 

               (i)     Except
as otherwise previously agreed to in writing by Golden Queen and LUK Holdco,
Golden Queen shall, and shall cause GQ California and Representatives to, cease
immediately and cause to be terminated any and all existing discussions or
negotiations with any third party or its representatives or financing sources
conducted prior to the date of this Agreement with respect to any Takeover
Proposal, and Golden Queen shall promptly require that each Person (other than
LUK Holdco) that has executed a confidentiality agreement within the 12-month
period prior to the date of this Agreement in connection with consideration of
any potential Takeover Proposal, to the extent required by such confidentiality
agreement, to return to Golden Queen or destroy all confidential information
heretofore furnished to such Person by or on behalf of Golden Queen or GQ
California and all analyses and other materials prepared by or on behalf of such
Person that contains, reflects or analyzes that information; and 

               (ii)     Golden
Queen shall promptly advise Auvergne, LUK Holdco and Gauss in writing, and in no
event later than twenty four (24) hours after receipt, if any proposal, offer or
inquiry is received by, any information is requested from, or any discussions or
negotiations are sought to be initiated or continued with, Golden Queen, GQ
California or Representatives in respect of a Takeover Proposal, and shall, in
such notice to LUK Holdco and Gauss, indicate the identity of the Person or
group of Persons making such proposal, offer, inquiry or request and the terms
and conditions of such proposal or offer and the nature of such inquiry or
request (and shall include with such notice copies of any draft agreements,
financing commitment letters and other written materials and correspondence
received from or on behalf of such Person or group of Persons relating to such
proposal, offer, inquiry or request), and thereafter shall promptly keep
Auvergne, LUK Holdco and Gauss fully informed of all material developments
affecting the status and terms and conditions of such proposal, offer, inquiry
or request (and Golden Queen shall provide Auvergne, LUK Holdco and Gauss with
copies of any additional drafts of agreements, financing commitment letters and
other written materials and correspondence received that relate thereto) and of
the status of discussions or negotiations. 

          (d)     As
used in this Agreement: 

               (i)     “Acceptable
Confidentiality Agreement” shall mean any confidentiality agreement entered
into after the date of this Agreement that contains provisions that are no less
favorable in the aggregate to Golden Queen (and no less restrictive in any
material respect with respect to the conduct of the Person to whom information
is disclosed) than those contained in the Confidentiality Agreement, dated as of
October 18, 2013, by and between LUK Holdco and Golden Queen. 

               (ii)     “Intervening
Event” shall mean a material event or development with respect to Golden
Queen that was not known to the Board of Directors of Golden Queen on the date
of this Agreement (or if known, the material consequences of which are not known
to or reasonably foreseeable by such Board of Directors as of the
date of this Agreement), which event or development (or any material
consequences thereof) becomes known to the Board of Directors of Golden Queen
prior to receipt of the GQ Stockholder Approval; provided, however, that in no
event shall (A) the receipt, existence or terms of a Takeover Proposal or (B)
any announcements, approvals, issuances, or regulations of any Governmental
Entity constitute an Intervening Event.

25 




               (iii)     “Superior
Proposal” shall mean any bona fide written offer made by a third-party to
Golden Queen or any of its Subsidiaries after the date of this Agreement and not
involving a breach of this Agreement, to (A) acquire, directly or indirectly,
all or substantially all of the equity securities of Golden Queen or its
Subsidiaries or all or substantially all of the assets of Golden Queen and its
Subsidiaries on a consolidated basis, or (B) enter into any joint venture,
property acquisition, equity investment, or other transaction resulting in the
disposal by Golden Queen of at least fifty percent (50%) of the Soledad Mountain
Project, the assets of Golden Queen or the assets of GQ California, in each
case, which offer (i) is not subject to a financing or due diligence contingency
and (ii) is otherwise on terms and conditions which the Board of Directors of
Golden Queen reasonably determines in good faith, after consultation with
outside legal counsel and an outside financial advisor of national reputation,
to be more favorable from a financial point of view to the holders of capital
stock of Golden Queen than the Transactions, taking into account all the terms
and conditions of such proposal (including the likelihood and timing of
consummation thereof based upon, among other things, the availability of
financing and the expectation of obtaining required approvals) and this
Agreement (including any changes to the terms of this Agreement committed to by
the Parties in writing). 

               (iv)     “Takeover
Proposal” shall mean any inquiry, proposal or offer from any Person (other
than LUK Holdco, Gauss or Auvergne) or group of Persons relating to, in a single
transaction or series of related transactions, any (A) acquisition of assets of
Golden Queen or GQ California (including securities of GQ California, but
excluding sales of assets in the ordinary course of business) equal to twenty
percent (20%) or more of Golden Queen’s consolidated assets or to which twenty
percent (20%) or more of Golden Queen’s revenues or earnings on a consolidated
basis are attributable, (B) acquisition of beneficial ownership (within the
meaning of Section 13 under the Exchange Act) of twenty percent (20%) or more of
the outstanding capital stock of Golden Queen or GQ California, (C) tender offer
or exchange offer that if consummated would result in any Person (or “group,” as
defined under Section 13 of the Exchange Act) beneficially owning twenty percent
(20%) or more of the outstanding capital stock of Golden Queen or GQ California,
(D) merger, consolidation, share exchange, plan of arrangement, business
combination, recapitalization, liquidation, dissolution or similar transaction
involving Golden Queen or GQ California, or (E) any joint venture, property
acquisition, option, equity investment in, or other transaction related to an
acquisition of the Soledad Mountain Project or other assets of Golden Queen or
GQ California; in each case, other than the Transactions. 

     4.3     Commercially
Reasonable Efforts. 

          (a)     Subject
to the terms and conditions of this Agreement, each of the Parties shall
cooperate with the other Parties and use (and shall cause their respective
Subsidiaries to use) its respective commercially reasonable efforts to promptly
obtain all approvals, consents, registrations, permits, authorizations and other confirmations
required with respect to such Party from Persons in connection with the
Transactions (provided, however, that no Party shall be obligated to pay
any consideration (or grant any financial accommodation) to any Person from whom
any such approval, consent or other confirmation is requested).

26 




          (b)     In
furtherance and not in limitation of the foregoing, Golden Queen shall file with
the Toronto Stock Exchange (“TSX”) a notice in the form required by TSX
rules to request acceptance of the Transactions as promptly as practicable and
in any event within ten (10) Business Days of the date of this Agreement, and
the other Parties shall provide as promptly as practicable such assistance as
Golden Queen reasonably requests for the purposes of such filing, and after such
filing each of the Parties shall supply as promptly as practicable any
additional information and documentary material that Golden Queen may reasonably
request and use its commercially reasonable efforts to take, or cause to be
taken, all other actions Golden Queen may reasonably request consistent with
this Section 4.3 necessary to obtain such approval. 

          (c)     Each
of the Parties shall use its commercially reasonable efforts to (i) cooperate in
all respects with each other in connection with any filing or submission by a
Party with a Governmental Entity in connection with the Transactions and in
connection with any investigation or other inquiry by or before a Governmental
Entity relating to the Transactions, including any proceeding initiated by a
private party, and (ii) keep the other Parties informed in all material respects
and on a reasonably timely basis of any material communication received by such
Party from, or given by such Party to, such Governmental Entity and of any
material communication received or given in connection with any proceeding by a
private party, in each case regarding any of the Transactions. Subject to
applicable Laws relating to the exchange of information, each of the Parties
shall (1) have the right to review in advance, and to the extent practicable
each shall consult the other on, all the information relating to the
Transactions or the other Parties that appears in any filing made by a Party
with, or written materials submitted to, any third party and/or any Governmental
Entity in connection with the Transactions and the Rights Offering Transactions,
and (2) to the extent allowed by the applicable Governmental Entity, consult
with the other Parties hereto in advance of any meeting or conference with, the
Federal Trade Commission, the Antitrust Division of the Department of Justice or
such Governmental Entity relating to the Transactions and give the other Parties
the opportunity to attend and participate in such meetings. 

     4.4     Conduct
of Business. 

          (a)     Except
as expressly permitted or required by this Agreement or as required by
applicable Law, during the period from the date of this Agreement until the
Closing Date, unless LUK Holdco, Gauss and Auvergne otherwise consents in
writing (which consent shall not be unreasonably withheld, delayed or
conditioned), (1) Golden Queen and GQ California shall, and shall cause GQ
Holdco to, conduct GQ California’s business in all material respects in the
ordinary course consistent with past practice and, to the extent consistent with
the foregoing, to use reasonable efforts to maintain existing relationships with
customers, suppliers, licensors, licensees, employees, consultants and other
Persons with whom Golden Queen or GQ California have material business
relationships. 

27 




          (b)     Without
limiting the generality of the foregoing, without the prior written consent of
LUK Holdco and Auvergne, GQ California shall not, and Golden Queen shall not
permit GQ California to, and Golden Queen shall not permit GQ Holdco to permit
GQ California to: 

               (i)     issue,
sell or grant any shares of GQ California’s capital stock or equity interests,
or any securities or rights convertible into, exchangeable or exercisable for,
or evidencing the right to subscribe for, any shares of its capital stock or
equity interests, or any warrants, options or right to purchase or acquire any
shares of its capital stock or equity interests or any securities or rights
convertible into, exchangeable or exercisable for, or evidencing the right to
subscribe for, any shares of its capital stock or equity interests; 

               (ii)     redeem,
purchase or otherwise acquire any of GQ California’s outstanding shares of
capital stock or equity interests, or any rights, warrants or options to acquire
any shares of its capital stock or equity interests; 

               (iii)     declare,
set aside for payment or pay any dividend on, or make any other distribution
(whether in cash, stock or property) in respect of, any shares of GQ
California’s capital stock or equity interests or otherwise make any payments to
its stockholders or other equity-holders in their capacity as such; 

               (iv)     split,
combine, subdivide or reclassify any shares of GQ California’s capital stock;


               (v)     amend,
modify, make, change or revoke any material Tax election; enter into any Tax
sharing, Tax indemnity or closing agreement pursuant to Section 7121 of the Code
(or any similar provision of Law), settle or compromise any material Tax Claim,
notice, audit report or assessment; file any material amended Tax Returns;
materially amend, modify or make any change to (or make a request to change) its
Tax accounting or reporting principles, periods, methods or practices; surrender
any claim for a refund of Taxes; file any Tax Return other than one prepared in
the ordinary course of business; or consent to any extension or waiver of the
limitation period applicable to any Tax Return, Tax Claim or assessment; 

               (vi)     incur
or assume any indebtedness for borrowed money, issue or sell any debt
securities, or guarantee any indebtedness (or enter into any “keep well” or
other Contract to maintain any financial statement condition) of another Person;
provided, however, that GQ California may incur indebtedness for
borrowed money to fund interim capital and administrative expenses prior to
Closing if such indebtedness is incurred on commercially reasonable terms with
the prior written consent of Gauss (“Interim Advances”); 

               (vii)     make
any loans or advances to any Person, except travel and similar advances to its
employees, and advances to customers, in each case, made in the ordinary course
of business consistent with past practice; 

               (viii)     except
(x) to the extent required under any GQ Benefit Plan as in effect on the date
hereof or (y) as required by applicable Law: (A) enter into any collective
bargaining agreement, or (B) adopt, amend or terminate any GQ Benefit Plan (or
any plan, program, agreement or arrangement that would be a GQ Benefit
Plan if in effect on the date hereof);

28 




               (ix)     sell,
dispose of or otherwise transfer (by merger or otherwise), lease out or license
out, or pledge, mortgage or otherwise encumber, any of its material properties
or assets, except Permitted Liens; 

               (x)     directly
or indirectly acquire (A) by merging or consolidating with, or by purchasing all
or any substantial amount of the capital stock or equity interest in, any Person
(or a division or business of any Person), or (B) except in the ordinary course
of business consistent with past practice, any assets for consideration in
excess of US$1,000,000.00 in the aggregate; 

               (xi)     adopt
a plan or agreement of complete or partial liquidation or dissolution; or 

               (xii)     agree
to take any of the foregoing actions or any action which would reasonably be
expected to prevent, or materially delay or impede, the satisfaction of any of
the conditions set forth in Article V. 

     4.5     Public
Announcements. The initial press release with respect to the execution of
this Agreement shall be a joint press release to be reasonably agreed upon by
the Parties. Thereafter, no Party shall issue or cause the publication of any
press release or other public announcement (to the extent not previously issued
or made in accordance with this Agreement) with respect to this Agreement or the
Transactions without the prior consent of the other Parties (which consent shall
not be unreasonably withheld or delayed), except as may be required by Law or by
any applicable listing agreement with a national securities exchange as
determined in the good faith judgment of the Party proposing to make such
release (in which case such Party shall not issue or cause the publication of
such press release or other public announcement without prior consultation with
the other Parties) or subject to compliance with this Agreement, in connection
with the Proxy Statement. 

     4.6     Access
to Information; Confidentiality. 

          (a)     Golden
Queen and GQ California shall afford to LUK Holdco, Gauss and Auvergne and their
respective representatives reasonable access to Golden Queen’s and GQ
California’s properties, Contracts, books and records, correspondence,
personnel, representatives, accountants and advisors, and furnish promptly to
LUK Holdco, Gauss and Auvergne such other information concerning Golden Queen’s
and GQ California’s businesses and properties as LUK Holdco, Gauss or Auvergne
may reasonably request; provided, that LUK Holdco, Auvergne and their
respective representatives shall conduct such activities in such a manner as not
to interfere unreasonably with the operations of Golden Queen and GQ California.


          (b)     No
investigation, or information received, pursuant to this Section 4.6 or
otherwise will (i) modify any of the representations and warranties of the
Parties or cure any breach of, or non-compliance with, any other provision of
this Agreement or (ii) affect the remedies available to, or the conditions in
Article V to the obligations of, the Party receiving such information.


29 




          (c)     The
Confidentiality Agreement by and between LUK Holdco and Golden Queen dated
October 18, 2013, shall remain in full effect. 

     4.7     Notification
of Certain Matters. Each Party shall give prompt notice to the other Parties
of (a) any notice or other communication received by such Party from any
Governmental Entity in connection with the Transactions, (b) any notice or other
communication received by such Party from any Person alleging that the consent
of such Person is or may be required in connection with the Transactions, if the
subject matter of such communication or the failure of such Party to obtain such
consent would reasonably be expected to be material to the Parties, (c) any
actions, suits, claims, investigations or proceedings commenced or, to the
knowledge of such Party, threatened against, relating to or involving or
otherwise affecting such Party or any of its Subsidiaries which relate to the
Transactions, and (d) the discovery of any fact, circumstance or failure to
perform, or the occurrence or non-occurrence of any event, which, individually
or in the aggregate, if the same were occurring or continuing as of the Closing
Date, would give rise to the failure to be satisfied of a condition set forth in
Sections 5.2(a), 5.2(b), 5.2(c), 5.3(a) or
5.3(b), as applicable. 

     4.8     Restructuring.
Golden Queen shall, after the date hereof but prior to the Closing Date,
incorporate GQ Holdco and contribute all of the Equity Interests of GQ
California into GQ Holdco. Golden Queen shall cause GQ Holdco to take all
necessary and advisable steps to (a) convert GQ California into a California
limited liability company and continue its existence and conduct of business as
presently conducted and contemplated to be conducted, (b) assume the GQ
California Inter-corporate Debt in exchange for limited liability company units
of GQ California following its conversion into a limited liability company on or
before the Closing Date and (c) adopt the JV Operating Agreement on and as of
the Closing Date. 

     4.9     Termination
of Related Party Transactions. On or prior to the Closing Date, GQ
California shall (i) terminate all Contracts with GQ Holdco, Golden Queen or
their respective Affiliates, including those Contracts set forth in Section 2.17
of the GQ Disclosure Schedule, and (ii) deliver releases executed by, as
applicable, GQ Holdco, Golden Queen or their respective Affiliates with whom GQ
California has terminated such Contracts pursuant to this Section 4.9,
providing that no further payments are due, or may become due, under or in
respect of any such terminated Contracts; provided, that in no event
shall GQ California pay any fee or otherwise incur any expense or financial
exposure with respect to any such termination or release; provided,
further, that this Section 4.9 shall not require the termination
of any employment-related agreement with any employee of GQ California. 

     4.10     Tax
Matters. 

          (a)     Filing
of Tax Returns; Payment of Taxes. Golden Queen shall prepare, or cause to be
prepared, and file or cause to be filed, all Tax Returns of GQ California due on
or prior to the Closing Date, and Golden Queen shall pay or cause to be paid all
Taxes owing in respect thereof. All such Tax Returns shall be prepared in a
manner consistent with past practice, except as otherwise required by Law.
Golden Queen shall provide, or cause to be provided, copies of completed drafts
of such Tax Returns to LUK Holdco, Gauss and Auvergne at least twenty (20) days
prior to the due date for filing thereof, along with supporting work papers, for review and comment by LUK Holdco, Gauss and
Auvergne. Golden Queen shall consider, in good faith, any such comments.

30 




          (b)     Tax
Allocation. In any case in which a Tax is assessed with respect to a taxable
period (or portion thereof) ending on or prior to the Closing Date
(“Pre-Closing Tax Period”), the amount of such Taxes, if any,
shall be allocated (directly or indirectly) to GQ Holdco for the period up to
and including the Closing Date. Any allocation of Taxes (other than property and
ad valorem Taxes) attributable to a Pre-Closing Tax Period shall be made by
means of a closing of the books and records of GQ California and GQ Holdco, as
applicable, as of the Closing Date; provided, however, that exemptions,
allowances or deductions that are calculated on an annual basis (including
depreciation and amortization deductions) shall be allocated between the
Pre-Closing Tax Period and the taxable period beginning on the day following the
Closing Date (“Post-Closing Tax Period”) in proportion to the number of
days in each such period. With respect to any property or ad valorem Tax, such
Tax shall be allocated between the Pre-Closing Tax Period and the Post-Closing
Tax Period in proportion to the number of days in such period. GQ Holdco shall
pay or cause to be paid to the relevant Taxing Authority the amount of Taxes
owed by GQ Holdco (directly or indirectly) pursuant to this Section
4.10(b) on or before the due date for the payment of Taxes on any Tax
Returns due after the Closing. 

          (c)     Transfer
Taxes. All sales, use, stamp, documentary, filing, recording, transfer or
similar fees or Taxes or governmental charges as levied by any Governmental
Entity (including any interest and penalties) in connection with the
transactions contemplated by this Agreement (collectively, the “Transfer
Taxes”) will be paid fifty percent (50%) by Golden Queen and fifty percent
(50%) by Gauss when due. 

     4.11     Post-Closing
Covenants. Golden Queen agrees that, in the event that LUK Holdco purchases
any capital stock of Golden Queen pursuant the Rights Offering Backstop, Golden
Queen shall provide to LUK Holdco, and shall cause each Subsidiary to provide to
LUK Holdco, all information available to Golden Queen with respect to Golden
Queen and each Subsidiary which is reasonably requested by LUK Holdco to enable
LUK Holdco (or its direct or indirect owners) to comply with its (or their)
United States federal income tax reporting obligations, including but not
limited to rules relating to controlled foreign corporations and passive foreign
investment companies (“PFICs”). Such assistance shall include providing
information available to Golden Queen which is reasonably requested by LUK
Holdco to enable LUK Holdco (or its direct or indirect owners) to comply with
its obligations under Code Sections 1248, 1298(f), 6038, 6038B, 6038D, 6046 and
6046A, including information relating to earnings and profits as computed for
United States federal income tax purposes. After the end of each taxable year,
Golden Queen shall determine with respect to such taxable year if it is a
controlled foreign corporation or a PFIC or if any of its Subsidiaries that is a
foreign corporation for United States federal income tax purposes is a
controlled foreign corporation or a PFIC, and if Golden Queen determines that
Golden Queen is a PFIC for such taxable year, Golden Queen shall permit and
cause each such Subsidiary which is determined to be a PFIC to permit LUK Holdco
to make a qualified electing fund election with respect to its direct or
indirect interest in such corporation pursuant to Section 1295 of the Code, and
Golden Queen shall furnish or cause each such Subsidiary to furnish to LUK
Holdco no later than sixty (60) days following the date such determination is
made the relevant PFIC annual information statement pursuant to Treasury
Regulation Section 1.1295 -1(g). 

31 




     4.12     Rights
Offering. Subject to the terms and conditions of this Agreement and receipt
of the approvals required from Governmental Entities and the TSX, and unless
otherwise agreed in writing by Gauss, Golden Queen shall, no later than 30 days
following the Closing Date, commence a rights offering by filing a registration
statement with the SEC and a preliminary prospectus with certain of the
securities commissions in Canada in relation thereto to provide gross proceeds
to Golden Queen in an amount of up to forty-five million U.S. Dollars
(US$45,000,000.00) providing shareholders with the opportunity to purchase
additional capital stock in Golden Queen at a price determined by Golden Queen,
in accordance with the terms set forth in the Rights Offering Term Sheet (the
“Rights Offering”). LUK Holdco and Auvergne have agreed to purchase any
capital stock of Golden Queen not acquired by the Golden Queen shareholders in
such Rights Offering (the “Rights Offering Backstop”) on the terms and
subject to the conditions set forth in the Rights Offering Commitment Agreement.
Payment of the Commitment Fee is conditioned on Closing occurring, the
Commitment Fee shall be due and payable at Closing, and the Commitment Fee shall
be non-refundable when paid (regardless of the aggregate offering amount and
whether or not the Rights Offering is consummated). Notwithstanding the
foregoing, Golden Queen may, at its option, close the Rights Offering at any
time within nine (9) months after the Closing Date (subject to extension as set
forth in the JV Operating Agreement), but in no event earlier than September 30,
2014. 

     4.13     Distribution
at Closing. Golden Queen, GQ California, Auvergne, LUK Holdco and Gauss
agree that, substantially concurrently with the Closing on the Closing Date,
Gauss and GQ Holdco shall cause GQ California to, and GQ California shall, make
a distribution in an aggregate amount of ten million U.S. Dollars
(US$10,000,000.00) to GQ Holdco and Gauss in accordance with the distribution
preferences set forth in the JV Operating Agreement. In addition, Golden Queen
(for itself and on behalf of GQ Holdco), directs GQ California to withhold an
amount equal to the Commitment Fee from the proceeds that would otherwise be
distributed to GQ Holdco, and to pay such amount to LUK Holdco and Auvergne in
accordance with Section 1.1(d). Golden Queen (for itself and on behalf of
GQ Holdco) acknowledges and agrees that the direction referenced in the
preceding sentence is for administrative convenience only, and that the
distribution described in this Section 4.13 shall, regardless of the
foregoing direction, be deemed to have been received in full by GQ Holdco. 

     4.14     Further
Assurances. Subject to the terms and conditions of this Agreement, each
Party shall (at its own cost and expense, except as provided in Section
6.3) at any time and from time to time, upon reasonable request, (a) do,
execute, acknowledge and deliver, and cause to be done, executed, acknowledged
and delivered, all such further acts, transfers or assignments as may be
reasonably required to consummate the Transactions in accordance with the terms
hereof and to cause to be fulfilled the closing conditions set forth in
Article V, and (b) take such other actions as may be reasonably required
in order to carry out the intent of or otherwise implement or give effect to
this Agreement; provided, that in no event shall any Party be required to
take any action which (i) increases in any way the liability or obligations of
such Party, (ii) in the opinion of its counsel, is unlawful or would or could
constitute a violation of any applicable Law or require the approval of any
Governmental Entity or (iii) could reasonably be expected to prevent or
materially impede, interfere with or delay the Transactions. 

32 




ARTICLE V - CONDITIONS PRECEDENT 

     5.1     Conditions
to Each Party’s Obligations to Effect the Transactions. The respective
obligations of each Party to consummate the Transactions shall be subject to the
satisfaction (or, to the extent permitted under Law, waiver by the Parties) on
or prior to the Closing Date of the following conditions: (a) GQ Stockholder
Approval. The GQ Stockholder Approval shall have been received. 

          (b)     Regulatory
Approvals. All consents, approvals, and other authorizations required from a
Governmental Entity and the TSX for the consummation of the Transactions shall
have been obtained. 

          (c)     No
Restraints. No Law, injunction, order, judgment, ruling or decree enacted,
promulgated, issued, entered, amended or enforced by any Governmental Entity
(collectively, “Restraints”) of competent jurisdiction located in the
United States, Canada or any other jurisdiction in which the Parties or any of
their respective Subsidiaries engages in material business activities, shall be
in effect enjoining, restraining, preventing or prohibiting consummation of the
Transactions or making the consummation of the Transactions illegal. 

     5.2     Additional
Conditions to Obligations of LUK Holdco and Auvergne to Consummate the
Transactions. The obligations of LUK Holdco, Gauss and Auvergne to effect
the Transactions are further subject to the satisfaction (or, to the extent
permitted under Law, waiver by LUK Holdco, Gauss and Auvergne) on or prior to
the Closing Date of the following conditions: 

          (a)     Representations
and Warranties. (i) The representations and warranties of Golden Queen
contained in Sections 2.1, 2.2, 2.3, 2.4,
2.6, 2.16(a) and 2.16(b) shall have been true and correct
as of the date of this Agreement and shall be true and correct on and as of the
Closing Date as if made on and as of the Closing Date; and (ii) all other
representations and warranties of Golden Queen contained in this Agreement,
disregarding all qualifications and exceptions contained therein relating to
materiality or Material Adverse Effect, shall have been true and correct as of
the date of this Agreement and shall be true and correct on and as of the
Closing Date as if made on and as of the Closing Date (or, to the extent given
as of a specific date, as of such date), except (in the case of this clause
(ii)) for such failures to be true and correct that, individually and in the
aggregate, would not reasonably be expected to have a Material Adverse Effect.


          (b)     Performance
of Obligations of Golden Queen and GQ California. Each of Golden Queen and
GQ California shall have performed in all material respects all obligations
required to be performed by it under this Agreement at or prior to the Closing
Date. 

          (c)     No
MAE. Since the date of this Agreement, there shall not have been a Material
Adverse Effect with respect to GQ California. 

          (d)     Certificate.
LUK Holdco and Auvergne shall have received a certificate of an executive
officer of each of Golden Queen and GQ California, dated the Closing Date, certifying on behalf of Golden Queen and GQ California that the
conditions specified in Section 5.2(a), Section 5.2(b) and
Section 5.2(c) have been satisfied.

33 




          (e)     Closing
Deliverables. The deliverables set forth in Section 1.3 shall have been
delivered. 

          (f)     Conversion.
GQ California shall have been converted into a California limited liability
company in accordance with Section 4.8. 

     5.3     Additional
Conditions to Obligations of Golden Queen and GQ California to Consummate
the Transactions. The obligation of Golden Queen and GQ California to
consummate the Transactions is further subject to the satisfaction (or, to the
extent permitted under Law, waiver by Golden Queen and GQ California) on or
prior to the Closing Date of the following conditions: 

          (a)     Representations
and Warranties. The representations and warranties of LUK Holdco, Gauss and
Auvergne, respectively, contained in Sections 3.1, 3.2,
3.3, 3.4 and 3.5 with respect to each such Party shall have
been true and correct as of the date of this Agreement and shall be true and
correct on and as of the Closing Date as if made on and as of the Closing Date;
and all other representations and warranties of LUK Holdco, Gauss and Auvergne
contained in this Agreement, disregarding all qualifications and exceptions
contained therein relating to materiality or Material Adverse Effect, shall have
been true and correct as of the date of this Agreement and shall be true and
correct on and as of the Closing Date as if made on and as of the Closing Date
(or, to the extent given as of a specific date, as of such date), except for
such failures to be true and correct that, individually and in the aggregate, do
not prevent LUK Holdco, Gauss or Auvergne from consummating the Transactions.


          (b)     Performance
of Obligations of LUK Holdco, Gauss and Auvergne. Each of LUK Holdco, Gauss
and Auvergne shall have performed in all material respects all obligations
required to be performed by them under this Agreement at or prior to the Closing
Date. 

          (c)     Certificate.
Golden Queen shall have received a certificate of an executive officer of each
of LUK Holdco, Gauss and Auvergne, dated the Closing Date, certifying on behalf
of each such Party that the conditions specified in Section 5.3(a) and
Section 5.3(b) have been satisfied. 

          (d)     Closing
Deliverables. The deliverables set forth in Section 1.4, 1.5
and 1.6 shall have been delivered. 

ARTICLE VI - TERMINATION 

     6.1     Termination.
This Agreement may be terminated and the Transactions abandoned at any time
prior to the Closing Date, whether before or after receipt of the GQ Stockholder
Approval: 

          (a)     by
the unanimous written consent of the Parties; or 

34 




          (b)     by
any of the Parties, if: 

               (i)     the
Transactions shall not have been consummated on or before December 31, 2014 (the
“Outside Date”); provided, however, that the right
to terminate this Agreement pursuant to this Section 6.1(b)(i) shall not
be available to any Party whose material breach of this Agreement has been the
principal cause of the failure of the Transactions to be consummated on or
before the Outside Date; or (ii) any Restraint having the effect set forth in
Section 5.1(c) shall be in effect and shall have become final and
non-appealable; provided, however, that the right to terminate
this Agreement pursuant to this Section 6.1(b)(ii) shall not be available
to any Party whose material breach of this Agreement has been the principal
cause of the issuance of such final, non-appealable Restraint; or (iii) the GQ
Stockholder Approval shall not have been obtained at the GQ Stockholders Meeting
duly convened therefor or at any adjournment or postponement thereof;
provided, however, that the right to terminate this Agreement
pursuant to this Section 6.1(b)(iii) shall not be available to
Golden Queen if it has failed to comply in all material respects with its
obligations under Sections 4.1 and 4.2; or (c) by LUK Holdco, if:
(i) (A) a material failure to perform or breach of any of Golden Queen’s or any
of its Subsidiaries’ covenants or agreements set forth in Section 4.1 or
Section 4.2 of this Agreement shall have occurred or (B) a failure to
perform or breach of any of the Golden Queen’s or GQ California’s
representations, warranties, covenants or agreements set forth in this Agreement
shall have occurred, which breach or failure to perform (1) would (if it
occurred or was continuing as of the Closing Date) give rise to the failure to
be satisfied of a condition set forth in Sections 5.2(a), 5.2(b)
or 5.2(e) and (2) cannot be cured by the Golden Queen or GQ California by
the Outside Date or, if capable of being cured by Golden Queen or GQ California
by the Outside Date, shall not have been cured within twenty (20) calendar days
following receipt of written notice from LUK Holdco of such its intention to
terminate this Agreement pursuant to this Section 6.1(c)(i) and the basis
for such termination; or 

               (ii)     (A)
a GQ Adverse Recommendation Change shall have occurred; (B) Golden Queen shall
have failed to include the GQ Board Recommendation in the Proxy Statement; or
(C) the Board of Directors of Golden Queen or an authorized committee thereof
(1) shall not have rejected any publicly disclosed Takeover Proposal within ten
(10) days of the making thereof (including for these purposes by taking no
position with respect to the acceptance by Golden Queen stockholders of a tender
offer or exchange offer which shall constitute a failure to reject such Takeover
Proposal) and (2) shall have failed to publicly reconfirm the GQ Board
Recommendation within five (5) days after receipt of a written request from LUK
Holdco that it do so following the making by any Person of a publicly disclosed
Takeover Proposal; or 

          (d)     by
Golden Queen and GQ California if: 

               (i)     a
failure to perform or breach of any of LUK Holdco’s, Gauss’s or Auvergne’s
representations, warranties, covenants or agreements set forth in this Agreement shall have occurred, which breach or failure to perform (1)
would (if it occurred or was continuing as of the Closing Date) give rise to the
failure to be satisfied of a condition set forth in Sections 5.3(a),
5.3(b) or 5.3(d) and (2) cannot be cured by LUK Holdco, Gauss or
Auvergne by the Outside Date or, if capable of being cured by LUK Holdco, Gauss
or Auvergne by the Outside Date, shall not have been cured within twenty (20)
calendar days following receipt of written notice from Golden Queen stating
Golden Queen’s intention to terminate this Agreement pursuant to this Section
6.1(d)(i) and the basis for such termination; or


35 




               (ii)     prior
to the receipt of the GQ Stockholder Approval, in order to enter into a
transaction that is a Superior Proposal in accordance with Section 4.2,
if concurrently with such termination Golden Queen enters into a definitive GQ
Acquisition Agreement providing for such Superior Proposal and prior to or
concurrently with such termination Golden Queen shall have paid to LUK Holdco
the GQ Termination Fee due under Section 6.3(b). 

     6.2     Effect
of Termination. In the event of the termination of this Agreement as
provided in Sections 6.1(b), 6.1(c) or 6.1(d), written
notice thereof shall be given to the other Parties, specifying the provision
hereof pursuant to which such termination is made, and this Agreement shall
forthwith become null and void (other than the Confidentiality Agreement in
accordance with its terms, this Section 6.2, Section 4.6(b),
Section 6.3 and Article VII, all of which shall survive
termination of this Agreement), and there shall be no liability on the part of
the Parties or their respective directors, officers and Affiliates, except (i)
as provided in Section 6.3, and (ii) nothing shall relieve any Party from
liability for fraud or any willful breach of this Agreement. 

     6.3     Fees
and Expenses. 

          (a)     Except
as otherwise provided below in this Section 6.3, whether or not the
Transactions and the Rights Offering Transactions are consummated, all fees and
expenses incurred in connection with this Agreement, the Transactions and the
Rights Offering Transactions shall be paid by the Party incurring such fees or
expenses. 

          (b)     If
after the date of this Agreement:

               (i)     (1)
a Takeover Proposal shall have been made to Golden Queen (or to Golden Queen’s
stockholders generally), or any Person shall have announced (or otherwise made
known to the Board of Directors of Golden Queen) an intention (whether or not
conditional) to make a Takeover Proposal, and 

          (2)     following
the occurrence of an event described in the preceding clause (1), this Agreement
shall have been terminated (A) by Golden Queen or LUK Holdco pursuant to
Section 6.1(b)(i) or Section 6.1(b)(iii), or (B) by LUK Holdco
pursuant to Section 6.1(c)(i) in a circumstance not covered by Section
6.3(b)(ii)(A), and 

          (3)     within
six (6) months of the date this Agreement is terminated as described in the
preceding clause (2), Golden Queen enters into a definitive GQ Acquisition
Agreement with respect to, or consummates a transaction contemplated by, the
Takeover Proposal referenced in Section 6.3(b)(i)(1) (provided,
that for purposes of this clause (3), the references to “twenty percent (20%)” in
the definition of Takeover Proposal shall be deemed to be references to “fifty
percent (50%)”); or

36 




               (ii)     this
Agreement shall have been terminated by LUK Holdco (A) prior to the GQ
Stockholders Meeting pursuant to Section 6.1(c)(i) and Golden Queen’s
breach or failure triggering such termination shall have been a material breach
of (or failure to comply with) Golden Queen’s obligations under Section
4.1 or Section 4.2, or (B) pursuant to Section 6.1(c)(ii); or


               (iii)     this
Agreement shall have been terminated by Golden Queen pursuant to Section
6.1(d)(ii); then, Golden Queen shall pay, as liquidated damages and not as a
penalty, 67.5% of the GQ Termination Fee to LUK Holdco by wire transfer of
immediately available funds to an account to be designated by LUK Holdco and
32.5% of the GQ Termination Fee to Auvergne by wire transfer of immediately
available funds to an account to be designated by Auvergne (x) in the case of
Section 6.3(b)(i), within two Business Days following the earlier of the
execution of a definitive agreement with respect to, or the consummation of, any
transaction contemplated by a Takeover Proposal as described in Section
6.3(b)(i) (and in any event not later than five (5) Business Days after
delivery to Golden Queen of notice of demand for payment thereunder); (y) in the
case of Section 6.3(b)(ii), promptly following termination of this
Agreement by LUK Holdco or Gauss pursuant to Section 6.1(c)(ii) (or
Section 6.1(c)(i) in the circumstance described in Section
6.3(b)(ii)(A)) (and in any event not later than five Business Days after
delivery to Golden Queen of notice of demand for payment thereunder); and (z) in
the case of Section 6.3(b)(iii), simultaneously with the termination of
this Agreement by Golden Queen. “GQ Termination Fee” shall mean an amount
equal to two million five hundred thousand U.S. Dollars (US$2,500,000.00)
minus any amounts actually paid by Golden Queen pursuant to Section
6.3(c). 

          (c)     If
after the date of this Agreement, this Agreement shall have been terminated
pursuant to Sections 6.1(b)(i), 6.1(b)(ii), 6.1(b)(iii) or
6.1(c), then (A) Golden Queen shall pay (1) an amount of two million U.S.
Dollars (US$2,000,000.00) to LUK Holdco in respect of its Expenses and (2) an
amount of two hundred seventy five thousand U.S. Dollars (US$275,000.00) to
Auvergne in respect of its Expenses, in each case, by wire transfer of
immediately available funds, and (B) neither LUK Holdco nor Auvergne shall have
the right to claim reimbursement for Expenses in excess of the amounts set forth
in the preceding clause (A) if this Agreement shall have been terminated.
Notwithstanding the foregoing, Golden Queen shall remain obligated to pay the GQ
Termination Fee (less the amounts actually paid to LUK Holdco and Auvergne
pursuant to this Section 6.3(c)) if the GQ Termination Fee is payable
pursuant to Section 6.3(b). 

          (d)     Any
payment required to be made in circumstances in which Expenses are payable to
LUK Holdco and Auvergne pursuant to Section 6.3(c), such payment shall be
made to LUK Holdco and Auvergne promptly following termination of this Agreement
(and in any event not later than fifteen (15) days after delivery to Golden
Queen of notice of demand for payment thereunder). 

37 




          (e)     In
the event that Golden Queen shall fail to pay the GQ Termination Fee and/or
Expenses, as applicable, required to be paid pursuant to this Section 6.3
when due, such unpaid GQ Termination Fee and/or Expenses, as the case may be,
shall accrue interest for the period commencing on the date the GQ Termination
Fee and/or Expenses, as the case may be, became past due, at a rate equal to (A)
the prime lending rate as published in The Wall Street Journal in effect
on the date such payment was required to be made plus (B) five percent (5%). In
addition, if Golden Queen shall fail to pay the GQ Termination Fee and/or
Expenses, as the case may be, when due, then Golden Queen shall also pay to the
claimant all of that claimant’s reasonable and documented out-of-pocket
attorneys’ fees and other costs and expenses in connection with efforts to
collect such payments. 

          (f)     Each
of the Parties acknowledges that the covenants and agreements contained in this
Section 6.3 are an integral part of the Transactions. 

ARTICLE VII - MISCELLANEOUS 

     7.1     Amendments;
Waivers; Etc. 

          (a)     At
any time prior to the Closing Date, this Agreement may be amended or
supplemented in any and all respects, whether before or after receipt of the GQ
Stockholder Approval, by written agreement of the Parties; provided, however,
that following approval of the Transactions by the stockholders of Golden
Queen, there shall be no amendment or change to the provisions hereof which by
Law would require further approval by the stockholders of the Golden Queen
without such approval. 

          (b)     At
any time prior to the Effective Time, any Party may, subject to Law, (i) waive
any inaccuracies in the representations and warranties of any other Party
hereto, (ii) extend the time for the performance of any of the obligations or
acts of any other Party hereto, (iii) waive compliance by the other party with
any of the agreements contained herein or (iv) except as otherwise provided
herein, waive any of such Party’s conditions. No failure or delay by the Parties
in exercising any right hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right hereunder. Any agreement on the part
of a Party to any such extension or waiver shall be valid only if set forth in
an instrument in writing signed on behalf of such Party. 

     7.2     Assignment.
Neither this 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 Agreement shall be binding upon, inure to the
benefit of, and be enforceable by, the Parties and their respective successors
and permitted assigns. Any purported assignment not permitted under this
Section 7.2 shall be null and void. 

     7.3     Entire
Agreement. This Agreement, the GQ Disclosure Schedule, the Disclosure
Schedules of the Parties and the Exhibits hereto 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 and thereof. 

38 




     7.4     No
Third-Party Beneficiaries. Nothing in this 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 Agreement. 

     7.5     Governing
Law. This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York, applicable to contracts executed in and to be
performed entirely within that State. 

     7.6     Arbitration.

          (a)     The
Parties hereby irrevocably agree that except as provided in Section 7.7,
any legal action or proceeding arising out of or relating to this Agreement or
the transactions contemplated hereby, shall be resolved by binding arbitration
(“Arbitration”) in accordance with the following procedures: 

          (b)     Initiation
of the Arbitration. The party or parties on one side of the dispute(s)
(collectively the “Claimant”) may initiate the Arbitration by sending to
the Party or Parties on the other side of the dispute(s) (collectively the
“Respondent”) written notice identifying the matter(s) in dispute and
invoking the procedures of this Section 7.6 (the “Demand”). The
Demand shall include a statement setting forth the nature of the dispute(s), the
amount in controversy, if any, and the remedy sought. Within thirty (30) days of
receipt of the Demand, the Respondent shall submit a statement (the
“Answer”), that shall set forth the Respondent’s response(s) to the
Claimant’s claim(s) and any counterclaims asserted by the Respondent, setting
forth the nature and amount of such counterclaim(s), and the remedy sought by
the Respondent. Within ten (10) days following the Answer, the parties shall
meet and confer to try to resolve the dispute(s). 

          (c)     Selection
of the Arbitrators. If, after meeting and conferring, the parties are unable
to resolve the dispute(s), the Claimant shall submit the Demand and Answer,
along with the required fees, to the Judicial Arbitration and Mediation Services
(“JAMS”) resolution center in New York, New York. In accordance with the
Arbitration Rules, JAMS will provide a list of at least five (5) arbitrator
candidates, each of whom shall be a former federal district court judge of a
United States District Court or a former justice of the Chancery Court of the
State of Delaware. If the Parties are unable to agree on an arbitrator from the
list, then, in accordance with the Arbitration Rules, within seven (7) days of
receipt of the list, each Party may strike two (2) names and shall strike the
remaining candidates in order of preference. The remaining arbitrator candidate
with the highest composite ranking shall be appointed as the arbitrator (the
“Arbitrator”). The Parties shall use commercially reasonable efforts to
engage the Arbitrator within fifteen (15) days of filing their dispute with
JAMS. 

          (d)     Rules
of Procedure. Except as modified in this Section 7.6, the Arbitration
proceeding shall be conducted in accordance with the JAMS Comprehensive
Arbitration Rules & Procedures, effective October 1, 2010 (collectively, the
“Arbitration Rules”). 

          (e)     Discovery.
Except as set forth herein, the Arbitration shall proceed consistent with JAMS’
discovery rules. The parties shall have twenty (20) Business Days following the date the Arbitrator is engaged (the
“Arbitrator Engagement Date”) to serve not more than fifteen (15) written
document requests and not more than ten (10) interrogatories (including
subparts). Objections to document requests, and responses to interrogatories,
shall be due thirty (30) Business Days after service on the party(ies) from whom
such discovery is sought. The parties shall complete production of documents not
more than sixty (60) days after service of document requests, provided, however,
that if a party objects to a document request and a motion to compel production
is made, a party shall have fifteen (15) days after the Arbitrator resolves that
motion to compel to produce any additional documents required by the
Arbitrator’s Order. The party(ies) on each side of the dispute shall have the
opportunity to take up to ten (10) depositions, with each deposition limited to
seven hours of testimony. Such depositions shall be completed within six (6)
months of the Arbitrator Engagement Date. Upon good cause shown by the
requesting party(ies), the Arbitrator can modify the scope of discovery
available to the parties and the discovery schedule set forth herein.

39 




          (f)     The
Arbitration Hearing. At a date that is mutually convenient to the Arbitrator
and the parties, but commencing no later than thirty (30) days following the
close of discovery, the Arbitrator shall commence the arbitration hearing (the
“Arbitration Hearing”). The Arbitration Hearing shall take place in New
York, New York, at a location mutually selected by the parties or, absent
agreement, chosen by the Arbitrator. The Arbitration Hearing need not run for
consecutive days but must be completed within sixty (60) days following
commencement of the Arbitration Hearing. At the Arbitration Hearing, the
Arbitrator is bound to follow the substantive laws of Delaware applicable to the
issues in the case, without regard to conflict of law principles. A failure to
follow such law is grounds for a challenge to the award. Upon a showing of good
cause by the requesting party(ies), the Arbitrator, using his or her reasonable
discretion, shall determine the need to modify the time limits set forth in this
Section 7.6. 

          (g)     Form
of Decision. The Arbitrator shall render a reasoned award in writing,
setting forth the decision, the basis therefore, and the relief to be granted to
the party(ies) on each side of the dispute (the “Award”), no later than
thirty (30) days following the last day of the Arbitration Hearing. In no event
shall the Arbitrator award punitive damages to any of the parties involved in
the dispute. The Arbitrator’s decision shall be a final and binding
determination of the dispute. Judgment upon the Award may be entered exclusively
in the United States District Court for the Southern District of New York;
provided, however, that if that court lacks jurisdiction, then the decision may
be entered in the Supreme Court of the State of New York, County of New York.


          (h)     Payment
of Arbitration Expenses. The Claimant(s) and the Respondent(s) shall each
pay fifty percent (50%) of the Arbitrator’s fees and expenses while the
arbitration is pending. 

          (i)     Submission
to Jurisdiction. To the extent any party seeks to challenge or dispute the
scope, jurisdiction, conduct or result of the Arbitration, or requires judicial
intervention in aid or furtherance of the Arbitration, such party(ies) shall
bring such action exclusively in the United States District Court for the
Southern District of New York; provided, however, that, if subject matter
jurisdiction is unavailable in that court, then all such claims shall be
transferred to or otherwise brought, heard and determined exclusively in the
Supreme Court of the State of New York, County of New York (the “Agreed
Court”). With respect to any such action, each party irrevocably submits to the exclusive
jurisdiction of the Agreed Court, and agrees that it shall not attempt to deny
or defeat personal jurisdiction by motion or other request for leave from such
court, shall not argue that such court is an inconvenient forum, and agrees not
to bring any action or proceeding arising out of or relating to this Agreement
or any of the transactions contemplated by this Agreement in any other court.

40 




          (j)     Attorneys’
Fees and Costs. The prevailing party in the Arbitration shall be entitled to
seek payment of its reasonable out-of-pocket costs and expenses (including
reasonable and documented fees and disbursements of counsel and other
professionals). To the extent the Arbitrator awards less than all of the relief
requested, the Arbitrator shall award the reasonable out-of-pocket costs and
expenses of a party in proportion to the extent such party prevailed in the
Arbitration. If a party fails to proceed with the Arbitration, unsuccessfully
challenges the Award, or fails to comply with the Award, the party(ies) on the
other side of the dispute shall be entitled to recover its(their) costs of suit
including reasonable attorneys’ fees for having to compel arbitration or defend
or enforce the Award. 

          (k)     Waiver
of Jury Trial. To the extent not prohibited by applicable law which cannot
be waived, the each of the Parties hereby waives, and covenant that they 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 Agreement or the subject matter hereof,
whether now existing or hereafter arising and whether sounding in tort or
contract or otherwise. 

     7.7     Specific
Enforcement. The Parties agree that irreparable damage would occur and that
the Parties would not have any adequate remedy at law in the event that any of
the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
Parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions of this
Agreement in any Agreed Court, without proof of actual damages (and each Party
hereby waives any requirement for the securing or posting of any bond or other
security in connection therewith); specific performance being in addition to any
other remedy to which the Parties are entitled at law or in equity. 

     7.8     Severability.
If any term or other provision of this Agreement is determined by a court of
competent jurisdiction to be invalid, illegal or incapable of being enforced by
any rule of law or public policy, all other terms, provisions and conditions of
this Agreement shall nevertheless remain in full force and effect. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the Parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the Parties as closely as
possible to the fullest extent permitted by Law in an acceptable manner to the
end that the transactions contemplated hereby are fulfilled to the extent
possible. 

     7.9     Notices.
All notices, requests, demands and other communications to any Party hereunder
shall be in writing and shall be deemed given if delivered personally, telecopy
faxed (which is confirmed), emailed (with proof of transmission) or sent by
overnight courier (providing proof of delivery) to the Parties at the following
addresses: 

41 




If to LUK Holdco or Gauss, to: 

	 	Gauss Holdings LLC 
	 	c/o Leucadia National Corporation 
	 	520 Madison Avenue 
	 	New York, NY 10022 
	 	Attention: 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 Ave 
	 	New York, NY 10153 
	 	Attention: Andrea A. Bernstein and Matthew J.
      Gilroy 
	 	Email: andrea.bernstein@weil.com and
      matthew.gilroy@weil.com 
	 	Fax: 212-310-8007 


If to Golden Queen, to: 

	 	Golden Queen Mining Co. Ltd. 
	 	6411 Imperial Avenue 
	 	West Vancouver, British Columbia, Canada V7W
      2J5 
	 	Attention: H. Lutz Klingmann (President) and
      Andrée St-Germain (Chief Financial Officer) 
	 	Email: lklingmann@goldenqueen.com and
      astgermain@goldenqueen.com 


with copies (which shall not
constitute notice) 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 


42 




If to Auvergne, to it at: 

	 	c/o East Hill Management Company 
	 	10 Memorial Drive 
	 	Suite 902 
	 	Providence, RI 02903 
	 	Email: thomas.clay@easthillmgt.com 
	 	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. 
Email: wlevine@sandw.com
Fax: (617) 338-2880


or such other address, email or telecopy fax number as such
Party may hereafter specify by like notice to the other Parties. All such
notices, requests, demands 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, demand or communication shall be deemed not
to have been received until the next succeeding business day in the place of
receipt. 

     7.10     Definitions.
As used in this Agreement, the following terms have the meanings ascribed
thereto below: 

          “Affiliate”
shall mean, as to any Person, any other Person that, directly or indirectly,
controls, or is controlled by, or is under common control with, such Person. For
this purpose, “control” (including, with its correlative meanings, “controlled
by” and “under common control with”) shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of management or
policies of a Person, whether through the ownership of securities or partnership
or other ownership interests, by contract or otherwise. 

          “Approved
Project Boundary” shall mean the approved permit boundary under the
Conditional Use Permits (CUP Case No. 41 and CUP Case No. 22) issued by the Kern
County Board of Supervisors and the Plan of Operations approved by the US Bureau
of Land Management for the Soledad Mountain Project as depicted in “Figure 2
Land Status Map” on Appendix G-1 to Section 2.16(a) of the GQ Disclosure
Schedule. 

          “Business
Day” shall mean a day except a Saturday, a Sunday or other day on which the
SEC or banks in the City of New York are authorized or required by Law to be
closed. 

          “Code”
shall mean the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder. 

43 




          “Contract”
shall mean any loan or credit agreement, indenture, debenture, note, bond,
mortgage, lease, license or other contract, agreement or instrument, whether
written or oral. 

          “Environmental
Law” shall mean any law, now or hereafter in effect, aimed at or in any way
relating to the protection of human health and safety, the environment or
natural resources, or reclamation or restoration of the GQ Properties, including
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. § 9601 et seq.), the Hazardous Materials Transportation
Act (49 U.S.C. App. § 1801 et seq.), the Resource Conservation and Recovery Act
(42 U.S.C. § 6901 et seq.), the Clean Water Act (33 U.S.C. § 1251 et seq.), the
Clean Air Act (42 U.S.C. § 7401 et seq.) the Toxic Substances Control Act (15
U.S.C. § 2601 et seq.), the Federal Insecticide, Fungicide, and Rodenticide Act
(7 U.S.C. § 136 et seq.), the Emergency Planning and Community Right to Know Act
(42 U.S.C. § 11001 et seq.), the Safe Drinking Water Act (42 U.S.C. § 300 et
seq.), the Pollution Prevention Act (42 U.S.C. § 13101 et seq.), the Federal
Mine Safety and Health Act (30 U.S.C. § 801 et seq.), and the Occupational
Safety and Health Act (29 U.S.C. § 651 et seq.), and all counterpart or other
similar California laws, including, without limitation, Division 20, Chapter 6.5
of the California Health & Safety Code (Hazardous Waste Control, Division
20, Chapter 6.8 of the California Health & Safety Code (the
Carpenter-Presley-Tanner Hazardous Substance Act), Division 20, Chapter 6.6 (the
Safe Drinking Water and Toxic Enforcement Act of 1986), Division 7 of the
California Water Code (the Porter-Cologne Water Quality Control Act) and Chapter
9, Division 2 of the California Public Resources Code (the Surface Mining and
Reclamation Act), as each has been or may be amended, and the regulations
promulgated pursuant thereto, and common law principles, including, without
limitation, nuisance, trespass and negligence. 

          “Environmental
Permit” shall mean any Permit required by Environmental Laws for the
operation of the business of the applicable Person. 

          “Equity
Interests” shall mean, with respect to GQ California, any issued and
outstanding shares of capital stock of GQ California, and upon conversion of GQ
California into a limited liability company, any issued and outstanding limited
liability company membership interests of GQ California. 

          “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder. 

          “Expense
Reimbursement Letter” means that certain letter agreement, by and between
Golden Queen and GQ California, to be dated as of the Closing Date, relating to
the reimbursement by GQ California of certain expenses of Golden Queen,
substantially in the form attached hereto as Exhibit C. 

          “Expenses”
shall mean all out-of-pocket fees and expenses (including fees and expenses of
counsel, accountants, financial advisors and investment bankers) reasonably
incurred by or on behalf of a Party or its Affiliates, as the case may be, in
connection with or related to the authorization, preparation, negotiation,
execution and performance of this Agreement or transactions contemplated by this
Agreement. 

44 




          “GAAP”
shall mean generally accepted accounting principles in the United States. 

          “Governmental
Entity” shall mean any government, court, regulatory or administrative
agency, commission or authority or other governmental instrumentality, federal,
state or local, domestic, foreign or multinational.

          “GQ
California Inter-corporate Debt” shall mean the inter-corporate loans and
guarantees of GQ California as set forth in Section 2.2 of the GQ Disclosure
Schedule. 

          “GQ
Stockholder Approval” shall mean the approval of the shareholders of Golden
Queen of the Transactions by a majority of the votes cast on the Transaction
resolution by the shareholders of Golden Queen present in person or by proxy at
the GQ Shareholders Meeting, excluding those votes in respect of shares of
Golden Queen that are required to be excluded pursuant to the requirements of
the TSX, and otherwise in accordance with applicable Canadian Provincial
securities laws, the requirements of the TSX and the Business Corporation Act
(British Columbia). 

          “Hazardous
Material” shall mean any substance, material or waste that is regulated,
classified, or otherwise characterized under or pursuant to any Environmental
Law as “hazardous,” “toxic,” “pollutant,” “contaminant,” “radioactive,” or words
of similar meaning or effect, including petroleum and its by-products, asbestos,
polychlorinated biphenyls, radon, mold and urea formaldehyde insulation. 

          “Industry”
shall have the meaning set forth in the definition of Material Adverse Effect.


          “Intellectual
Property” shall mean all right, title and interest in or relating to
intellectual property, whether protected, creating or arising under the laws of
the United States or any other jurisdiction, including: (a) all patents, patent
applications, patent disclosures and all related continuations, divisionals,
continuations in part, reissues, reexaminations, utility models, certificates of
invention, industrial designs, and design patents, (b) all registered and
unregistered trademarks, service marks, trade dress, logos, trade names,
together with all goodwill associated with any of the foregoing, and all
registrations and applications therefor including all extensions, modifications,
and renewals of same, (c) all registered and unregistered copyrights in both
published and unpublished works and all moral rights, and applications for
registration thereof, (d) all Internet domain names and registration rights,
uniform resource locators, internet or worldwide web sites or protocol
addresses, and all related content and programming, and (e) trade secrets,
computer software, including source code, know-how, recipes, product
specifications and formulations or any other proprietary information. 

          “IRS”
shall mean the Internal Revenue Service. 

          “Knowledge”
shall mean, the actual knowledge, after due inquiry, of the individuals listed
on Exhibit D. 

          “Law”
shall mean any law, statute, code, rule, regulation or ordinance of a
Governmental Entity. 

45 




     “Legal Proceeding” shall
mean any judicial, administrative or arbitral actions, suits, mediation,
investigation, inquiry, proceedings or claims (including counterclaims) by or
before a Governmental Entity or other Person. 

     “Licensed Intellectual
Property” shall mean any and all Intellectual Property that is licensed to
GQ California. 

     “Liens” shall mean any
pledge, lien, charge, right of first refusal or other option to purchase or
otherwise acquire any interest, easement, security interest or other
encumbrance. 

     “Material Adverse Effect”
shall mean, with respect to any Party, any change, development, occurrence,
event that has, or would reasonably be expected to have, a material adverse
effect on the financial condition, assets, liabilities, business or results of
operations of such Party and its Subsidiaries taken as a whole;
provided, however, that none of the following shall
constitute or be taken into account in determining whether a Material Adverse
Effect has occurred or would be expected to occur: 

          (i)     changes,
developments, occurrences or events generally affecting (A) the economy, or
securities, financial, capital or credit markets, in the United States or
elsewhere in the world, including changes in interest or exchange rates, or (B)
any industry in which such Party or its Subsidiaries operate (such Party’s
“Industry”), and 

          (ii)     (A)
changes in Law or in generally accepted accounting principles or accounting
standards, or changes in general legal, regulatory or political conditions, (B)
acts of war, sabotage or terrorism, or any escalation or worsening of any such
acts of war, sabotage or terrorism threatened or underway as of the date of this
Agreement, (C) any action taken by such Party or its Subsidiaries as required by
this Agreement or with the written consent of the other Parties hereto, (D)
changes arising out of, resulting from or attributable to the negotiation,
execution, announcement or performance of this Agreement or the consummation of
the Transactions, or (E) any decline in the market price, or change in trading
volume, of the capital stock of such Party, or any failure to meet internal or
publicly announced revenue or earnings projections; provided further,
however, that: 

          (x)     changes,
developments, occurrences, events or effects referred to in clauses (i),
(ii)(A), (ii)(B) and (ii)(E) of this definition may constitute (and may be taken
into account in determining the occurrence or expected occurrence of) a Material
Adverse Effect to the extent they adversely affect such Party and its
Subsidiaries in a disproportionate manner relative to other participants in such
Party’s Industry, 

          (y)     clause
(ii)(E) of this definition shall not prevent a determination that the underlying
cause of any decline, change or failure referred to therein is a Material
Adverse Effect. 

          “Mineral
Interests” shall mean all mineral rights, patented mining claims, unpatented
mining claims, millsites, mineral leases and millsite leases within or relating
to the GQ Properties. 

46 




          “Mining
Claims” means unpatented mining claims and millsites. 

          “Order”
means any decree, ruling, order, judgment, writ, award, injunction, stipulation
or consent of or by, or settlement agreement with, a Governmental Entity. 

          “Organizational
Documents” shall mean, with respect to an entity, its certificate of
incorporation, articles of incorporation, by-laws, articles of association,
memorandum of association, certificate of trust, trust agreement, partnership
agreement, limited partnership agreement, certificate of formation, limited
liability company agreement or operating agreement, as applicable. 

          “Owned
Intellectual Property” shall mean any and all Intellectual Property that is
owned or purported to be owned by GQ California. 

          “Permit”
shall mean a permit, license, franchise or authorization from a Governmental
Entity. 

          “Permitted
Liens” shall mean (i) statutory Liens for Taxes, assessments or other
similar charges by Governmental Authorities securing payments not yet due or the
amount or validity of which is being contested in good faith and by appropriate
proceedings and for which proper reserves have been established to the extent
required by GAAP, (ii) mechanics’, materialmen’s, carriers’, workmen’s,
warehouseman’s, repairmen’s, landlords’ and similar Liens which arise in the
ordinary course of business and (iii) such other Liens or imperfections of title
that, individually and in the aggregate, do not, and would not reasonably be
expected to, materially detract from the value of, or materially impair the
existing use of, the property or asset affected by the applicable Lien. 

          “Person”
shall mean an individual, a corporation, a limited liability company, a
partnership, an association, a trust or any other entity, including a
Governmental Entity. 

          “Release”
shall mean any release, spill, emission, leaking, pumping, poring, injection,
deposit, dumping, emptying, disposal, discharge, dispersal, leaching or
migration into the indoor or outdoor environment, or into or out of any
property. 

          “Remedial
Action” shall mean all actions including any capital expenditures undertaken
to (i) clean up, remove, treat or in any other way address any Hazardous
Material; (ii) prevent the Release or threat of Release, or minimize the further
Release of any Hazardous Material so it does not migrate or endanger or threaten
to endanger public health or welfare or the indoor or outdoor environment; (iii)
perform pre-remedial studies and investigations or post-remedial monitoring and
care; or (iv) to correct a condition of noncompliance with Environmental Laws.


          “Rights
Offering Term Sheet” means the term sheet attached hereto as Exhibit
E and setting forth the main terms of the Rights Offering. 

          “Rights
Offering Transactions” refers collectively to the Rights Offering, the
Rights Offering Commitment Agreement, and the transactions contemplated thereby.


47 




          “SEC”
shall mean the U.S. Securities and Exchange Commission. 

          “Securities
Act” shall mean the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder. 

          “Soledad
Mountain Project” shall mean that certain mine exploration, development and
operating project located in Kern County, California and owned and controlled by
GQ California to be developed and operated in accordance with the JV Operating
Agreement. 

          “Subsidiary”
shall mean any corporation, limited liability company, partnership, trust or
other entity of which the applicable entity owns (either alone, directly, or
indirectly through, or together with, one or more of its Subsidiaries) fifty
percent (50%) or more of the equity interests the holder of which is generally
entitled to vote for the election of the board of directors or governing body of
such corporation, limited liability company, partnership, trust or other entity.


          “Tax
Claim” shall mean any Legal Proceeding with respect to Taxes of GQ
California. 

          “Taxes”
shall mean (i) all federal, state, local or foreign taxes, charges, fees,
imposts, levies or other assessments, including all income, gross receipts,
capital, sales, use, ad valorem, value added, transfer, franchise, profits,
inventory, capital stock, license, withholding, payroll, employment, social
security, unemployment, excise, escheat, severance, stamp, occupation, property
and estimated taxes, customs duties, fees, assessments and charges of any kind
whatsoever, (ii) all interest, penalties, fines, additions to tax or additional
amounts imposed by any Taxing Authority in connection with any item described in
clause (i), and (iii) all Liabilities in respect of any items described in
clauses (i) or (ii) payable by reason of Contract, assumption, transferee or
successor Liability, operation of Law, Treasury Regulation Section 1.1502 -6(a)
(or any predecessor or successor thereof or any analogous or similar provision
under Law) or otherwise. 

          “Tax
Return” shall mean any return, report or statement filed or required to be
filed with respect to any Tax (including any elections, declarations, schedules
or attachments thereto, and any amendment thereof) including any information
return, claim for refund, amended return or declaration of estimated Tax, and
including, where permitted or required, combined, consolidated, unitary or
similar returns for any group of entities that includes GQ California or any of
its Affiliates. 

          “Taxing
Authority” shall mean the IRS and any other Governmental Entity responsible
for the administration or collection of any Tax. 

          “Transactions”
refers collectively to this Agreement and the transactions contemplated hereby,
excluding, for the avoidance of doubt, the Rights Offering Transactions. 

          “Water
Rights” shall mean all water rights, well rights, water shares, contract
rights, water allotments, owned and leased property necessary to maintain the
right to withdraw groundwater as a land owner or lessee, and rights to divert
water, including surface or groundwater resources, or place water to use, of any
kind, appurtenant to or relating to the GQ Properties and operation of the business of GQ California as
presently conducted and as contemplated to be conducted under the JV Operating
Agreement, including the development and operation of the Soledad Mountain
Project, including those water rights and right to divert water or place water
to use set forth in Section 2.16(f) and described in Section 2.16(f) of
the GQ Disclosure Schedule.

48 




          The
following terms are defined in the provision of this Agreement set forth
opposite such term below: 

	4.2 Notice 	Section 4.2(b) 
	Acceptable Confidentiality Agreement 	Section 4.2(d)(i) 
	Additional Property 	Section 2.16(a) 
	Additional Properties 	Section 2.16(a) 
	Agreed Court 	Section 7.6(i) 
	Agreement 	Preamble 
	Answer 	Section 7.6(b) 
	Arbitration 	Section 7.6(a) 
	Arbitration Engagement Date 	Section 7.6(e) 
	Arbitration Hearing 	Section 7.6(f) 
	Arbitration Rules 	Section 7.6(d) 
	Arbitrator 	Section 7.6(c) 
	Auvergne 	Preamble 
	Award 	Section 7.6(g) 
	Balance Sheet Date 	Section 2.7(f) 
	Bankruptcy and Equity Exception 	Section 2.3 
	Claimant 	Section 7.6(b) 
	Closing 	Section 1.2 
	Closing Date 	Section 1.2 
	Commitment Fee 	Recitals 
	Demand 	Section 7.6(b) 
	Financial Statements 	Section 2.7(d) 
	Gauss 	Preamble 
	Gauss Operating Agreement 	Recitals 
	Golden Queen 	Preamble 
	Golden Queen SEC Documents 	Section 2.7(a) 
	Governmental Fees 	Section 2.22(a) 
	GQ Acquisition Agreement 	Section 4.2(b) 
	GQ Adverse Recommendation Change 	Section 4.2(b) 
	GQ Benefit Plans 	Section 2.13 
	GQ Board Recommendation 	Section 4.1(b) 
	GQ California 	Preamble 
	GQ Disclosure Schedule 	ARTICLE II 
	GQ Holdco 	Recitals 
	GQ Intellectual Property 	Section 2.15(a) 
	GQ Material Contract 	Section 2.11(a) 
	GQ Permits 	Section 2.10(b) 
	GQ Property 	Section 2.16(a) 


49 





	GQ Properties 	Section 2.16(a) 
	GQ Stockholders Meeting 	Section 4.1(a) 
	GQ Termination Fee 	Section 6.3(b)(iii) 
	Intellectual Property Licenses 	Section 2.15(a) 
	Interests 	Recitals 
	Interim Advances 	Section 4.4(b)(vi) 
	Intervening Event 	Section 4.2(d)(ii) 
	JAMS 	Section 7.6(c) 
	Joint Venture 	Recitals 
	JV Operating Agreement 	Recitals 
	LUK 	Recitals 
	LUK Holdco 	Preamble 
	Mining Claim 	Section 2.16(a) 
	Mining Claims 	Section 2.16(a) 
	Newly Issued Interests 	Recitals 
	Outside Date 	Section 6.1(b)(i) 
	Owned Property 	Section 2.16(a) 
	Owned Properties 	Section 2.16(a) 
	Party 	Preamble 
	Parties 	Preamble 
	Personal Property Leases 	Section 2.20(b) 
	PFICs 	Section 4.11 
	Post-Closing Tax Period 	Section 4.10(b) 
	Pre-Closing Tax Period 	Section 4.10(b) 
	Proxy Statement 	Section 4.1(a) 
	Purchase Price 	Section 1.1 
	Real Property Lease 	Section 2.16(a) 
	Real Property Leases 	Section 2.16(a) 
	Related Persons 	Section 2.17 
	Representatives 	Section 4.2(a) 
	Respondent 	Section 7.6(b) 
	Restraints 	Section 5.1(c) 
	Rights Offering 	Section 4.12 
	Rights Offering Backstop 	Section 4.12 
	Rights Offering Commitment Agreement 	Recitals 
	Sarbanes-Oxley Act 	Section 2.7(a) 
	Superior Proposal 	Section 4.2(d)(iii) 
	Takeover Proposal 	Section 4.2(d)(iv) 
	Transfer Taxes 	Section 4.10(c) 
	TSX 	Section 4.3(b) 


     7.11     Interpretation.


          (a)     When
a reference is made in this Agreement to an Article, a Section, Schedule or
Exhibit, such reference shall be to an Article of, a Section of, or a Schedule
or Exhibit to, this Agreement unless otherwise indicated. The table of contents
and headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement. Whenever the word
“including“ is used in this Agreement, it shall be deemed to be followed by the
words “without limitation”. The words “hereof”, “herein” and “hereunder” and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement. The
word “extent” in the phrase “to the extent” shall mean the degree to which a
subject or other thing extends, and such phrase shall not mean simply “if.” All
terms defined in this Agreement shall have the defined meanings when used in any
Schedule or other document made or delivered pursuant hereto unless otherwise
defined therein. The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such term. Any agreement,
instrument or statute defined or referred to herein or in any agreement or
instrument that is referred to herein means such agreement, instrument or
statute as from time to time amended, modified or supplemented, including (in
the case of agreements or instruments) by waiver or consent and (in the case of
statutes) by succession of comparable successor statutes and references to all
attachments thereto and instruments incorporated therein. References to a Person
are also to its permitted assigns and successors.

50 




          (b)     The
GQ Disclosure Schedule and the Disclosure Schedules of the other Parties shall
identify items of disclosure by reference to a particular section or subsection
of this Agreement; provided that any matter disclosed with respect to one
section or subsection of this Agreement shall be deemed disclosed for purposes
of all other sections or subsections of this Agreement to the extent its
relevance to such other sections or subsections is readily apparent. 

          (c)     The
Parties have participated jointly in the negotiation and drafting of this
Agreement and, in the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as jointly drafted by the Parties and
no presumption or burden of proof shall arise favoring or disfavoring any Party
by virtue of the authorship of any provision of this Agreement. 

     7.12     Counterparts.
This Agreement may be executed in counterparts (each of which shall be deemed to
be an original but all of which taken together shall constitute one and the same
agreement) and shall become effective when one or more counterparts have been
signed by each of the Parties and delivered to the other Parties. 

[signature page follows] 

51 




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


	GAUSS HOLDINGS LLC 
	  	 
	By: 	/s/ Haim Jimmy Hallac
	Name: 	Haim Jimmy Hallac
	Title: 	Vice President
	  	 
	  	 
	GAUSS LLC 
	  	 
	By: 	/s/ Haim Jimmy Hallac
	Name: 	Haim Jimmy Hallac
	Title: 	Vice President
	  	 
	  	 
	AUVERGNE, LLC 
	  	 
	  	 
	By: 	/s/ Thomas M. Clay
	Name: 	Thomas M. Clay
	Title: 	Manager
	  	 
	GOLDEN QUEEN MINING CO. LTD. 
	  	 
	  	 
	By: 	/s/ H. Lutz Klingmann
	Name: 	H. Lutz Klingmann
	Title: 	President and Chief Executive Officer
	  	 
	GOLDEN QUEEN MINING COMPANY, INC. 
	  	 
	  	 
	By: 	/s/ H. Lutz Klingmann
	Name: 	H. Lutz Klingmann
	Title: 	 President 



[Transaction Agreement] 





	Exhibit A 
	 
	JV Operating Agreement 
	 
	(see attached) 







	Exhibit B 
	 
	Gauss Operating Agreement 
	 
	(see attached) 







	Exhibit C 
	 
	Expense Reimbursement Letter 
	 
	(see attached) 












	
Exhibit D
	
	 

	
	
Knowledge
	
	 

	
	
H. Lutz Klingmann
	
	
Thomas M. Clay
	
	
Bryan A. Coates
	
	
Guy Le Bel
	
	
Bernard Guarnera
	
	
Andrée St-Germain
	










	Exhibit E 
	 
	Rights Offering Term Sheet 
	 
	(see attached)