Document:

Exhibit 10.24

 

CONTENT PROTECTION AGREEMENT

 

This Content Protection Agreement (“Agreement”) is entered into on this 22nd day of May, 2014 (“Effective Date”), by and between Shenzhen Xunlei Networking Technologies Co., Ltd., Shenzhen Xunlei Kankan Information Technologies Co., Ltd., and Xunlei Software (Shenzhen) Co., Ltd. (collectively, “Xunlei”), on the one hand, and the Motion Picture Association of America, Inc. (“MPAA”), Sony Pictures Entertainment Inc. (“SPE”), Twentieth Century Fox Film Corporation (“Fox”), Universal City Studios LLC (“Universal”), Viacom Inc. (“Viacom”), Walt Disney Studios Motion Pictures (“Disney”), and Warner Bros. Entertainment Inc. (“Warner Bros.”)  (such entities collectively referred to herein as, the “Content Owners,” with each individually referred to as a Content Owner), on the other hand.  Xunlei and the Content Owners may be referred to herein as “Parties.”

 

WHEREAS, Xunlei owns and operates a collection of Internet services, known collectively as the “Xunlei System” (defined below), including a set of websites at xunlei.com.

 

WHEREAS, the Parties desire to reach an agreement on content protection to implement procedures designed to prevent any alleged copyright infringement of Content Owner Content Files occurring on the Xunlei websites or within the Xunlei System.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are acknowledged, including the mutual undertakings in this Agreement, the Parties agree and covenant as follows:

 

Definitions, Terms and References

 

1.              In this Agreement, the following terms shall have the following meanings:

 

a.              “Content File” means a file containing a video or audiovisual work.  Hereinafter in this Agreement, references to “video” or “video content” shall include both video content and audiovisual content.  Xunlei shall use reasonable efforts to identify files containing video or audiovisual content, including, without limitation, RAR, ZIP, or comparable archive files that contain video or audiovisual content files.  If Xunlei cannot determine whether a file contains video or audiovisual content, then, for purposes of this Agreement, Xunlei shall treat the file as a Content File.

 

b.              “Content Owner(s)” shall include each of the Content Owners’ respective parents, subsidiaries and affiliates, except that affiliates of Viacom and SPE shall be limited to those entities that they directly or indirectly control.

 

c.               “Copyright Filter” (and reasonable variants, such as “Copyright Filtering”) means a system for blocking or filtering of Content Files using technology that identifies the Content File:

 

(i)             in all instances, through determination of the video and/or audiovisual characteristics represented in the file (collectively, a “fingerprint”) and comparison of that fingerprint against a database of reference fingerprints for specific Content Files; except

 

 

(ii)          to the extent a file is password-protected or encrypted by someone other than Xunlei, then through comparison of certain metadata about the Content File (or other technology that identifies Content Files with at least the same degree of accuracy) against a database of reference metadata (or other identifiers, as applicable) for specific Content Files.  Metadata (or other identifiers, as applicable) used for comparison may include file name, file name extension, file type, file size, running time, title, keywords, hash, and/or other file properties.

 

d.              “Filtering Status” or “Policy Rule” means the Content Owner assigned rule to be applied to files after being subject to the Copyright Filter.  The currently defined Filtering Statuses shall be Block or Allow.  Depending upon arrangements between Xunlei and each Content Owner, other Policy Rules or Filtering Statuses are possible:  for purposes of illustration only, a possible Filtering Status could be “Allow — Subject to Specified Commercial Terms.”  Whether content identified through Copyright Filtering is to be blocked by the filter or allowed to pass through the filter to or from the user is determined on a work-by-work basis in reference to the “Policy Rule” for the work provided by the Content Owner holding the rights to the Content File in question.

 

e.               “Filtering Vendor(s)” means the vendor(s) selected by Xunlei, pursuant to the terms of this Agreement, to implement the Copyright Filtering specified in this Agreement.

 

f.                “KanKan Client,” also known as the “KanKan Media Player,” means end-user software that retrieves and plays video content from publicly available resources on the Internet including server computers and other user or peer computers.  The KanKan Client includes all versions or variants of the KanKan Client, or applications offered by Xunlei that perform comparable functions, that exist or are later developed.

 

g.               “Kuai” means the website at kuai.xunlei.com.

 

h.              “Multi-thread downloading” means downloading a content file from multiple sources identified by the Xunlei Index (or otherwise) as locations offering the identical file or pieces of the identical file.

 

i.                  “Pirate Sites” means websites, FTP sites, or other Internet sources that are predominantly used to provide Unauthorized Content.

 

j.                 “Single-thread downloading” means downloading a content file from an initial source location and no other sources.

 

k.              “Unauthorized Content” means copyrighted Content Files made accessible by Xunlei or through the Xunlei System to users the rights to which are owned by a Content Owner, for which Xunlei has not either: (a) obtained an express written license from the Content Owner to use (or to provide to users or to enable users to access) on or through the Xunlei System in the manner so used, provided or made accessible, or (b) obtained express written confirmation from the Content Owner that the user is authorized to use or otherwise access the Content File(s) through the Xunlei System

 

2

 

in the manner contemplated by Xunlei.  For purposes of this Agreement, all video content for which the rights are held by a Content Owner shall be regarded as “Unauthorized Content” unless Xunlei has obtained such express written license or confirmation directly from the Content Owner that holds the appropriate rights for the particular use(s) made by Xunlei of that Content File.  Xunlei shall not be able to rely on licenses it obtains from third-parties claiming to act as agents, representatives or brokers of a Content Owner, or otherwise claiming to have authority from, or to act on behalf of, a Content Owner, unless Xunlei additionally receives written confirmation directly from the Content Owner that holds the appropriate rights to the Content File confirming the third-party’s authority to license the Content File for the use and in the manner contemplated by Xunlei.  Where the Content Owner has granted such a license, the Content Owner shall, within thirty (30) days of a written request from Xunlei, provide such written confirmation to Xunlei, and the Content Owner’s failure to provide Xunlei with such confirmation in response to Xunlei’s written request, if in fact the Content Owner has given such a license, shall not subject Xunlei to liability to the Content Owner for breach of this Agreement.  To the extent a Content Owner currently has an authorized agent for licensing Internet rights in the China market, the Content Owner will identify such agent to Xunlei within thirty (30) days from the execution of this Agreement.  Each Content Owner shall also provide Xunlei with a point of contact to whom Xunlei may direct inquiries concerning licenses for Content Files owned by the Content Owners.  Upon Xunlei’s written request, and within thirty (30) days thereof, a Content Owner will confirm for Xunlei whether a site has a license to stream Content Files that would extend to Xunlei’s use (or provision of access to users) of the Content Files.

 

l.                  “URL” means information that identifies the Internet location (or other source, e.g., a peer offering the file) of content files represented in the Xunlei Index.

 

m.          A “Xunlei Client” means the Xunlei Downloader, the KanKan Client, and any other or later client applications or software designed to be installed on users’ personal computers or mobile devices, developed or offered by Xunlei, through which Xunlei users can access content in any way.

 

n.              “Xunlei Downloader” means Xunlei’s end-user software that acts as a third-party download tool.  For purposes of this Agreement, reference to the Xunlei Downloader encompasses all Xunlei Downloader versions or variants that currently exist or are later developed, including the Mini Xunlei, the Web Xunlei, the Phone Thunderbolt, the Xunlei Player, and other applications offered by Xunlei that perform comparable functions.

 

o.              “Xunlei Index,” or “Xunlei Digital Media File Index,” means a Xunlei proprietary digital media file index, used in the Xunlei System, comprised of identifiers, miscellaneous metadata, and Internet location information for content files (URLs).

 

p.              “Xunlei Servers” shall refer to any and all servers owned, operated or controlled by Xunlei in connection with the Xunlei System.

 

3

 

q.              “Xunlei Sites” means the set of websites available at xunlei.com, or other websites owned or operated by or for Xunlei, now or in the future, that make content files accessible to users.  The Xunlei Sites include, but are not limited to, Kuai, f.xunlei.com (“Fangzhou”), daquan.xunlei.com, www.kankan.com, vip.kankan.com and vod.xunlei.com.

 

r.                 “Xunlei System” shall be interpreted inclusively in order to capture any aspect of any service or software, operated by or for Xunlei, or over which Xunlei has legal or practical control, whether currently in existence or later developed, which participates in the process of allowing users to locate or gain access to content for downloading, viewing or otherwise, including any client applications, browser plug-ins, media-player software, indexes, search engines, websites, or portals, and further includes any device, software or service that uses any part of the Xunlei System, even if such device, software or service is owned or operated by a third party.  The Xunlei System is comprised of, but is not limited to, the Xunlei Downloader, the KanKan Client, the Xunlei Index, the Xunlei Sites, the Xunlei Theatre, and the Xunlei VIP Cloud Servers.

 

s.                “Xunlei VIP Cloud Servers,” also known as “Xunlei VIP Offline Download Servers,” means servers owned or operated by or for Xunlei that may be used for downloading of content, including offline downloading, for Xunlei subscribers.

 

t.                 As used throughout this Agreement, whether an effort is “reasonable” or “commercially reasonable” shall be determined, inter alia, with due consideration to both (i) the cost, competitive advantage, user experience, and system performance implications for Xunlei; and (ii) the nature and volume of use of the Xunlei System for the unauthorized copying, distribution, performance, display or other use of Content Owner(s)’ Content Files and the resulting collective harm to such Content Owner(s) from such unauthorized use.  As used herein, the term “competitive advantage” shall not include, consider or refer to any company or system, whether or not a potential competitor of Xunlei, that substantially provides for or facilitates users’ access to Content Files without the express authority of the appropriate Content Owner, unless that company or system is already using effective copyright filtering for the use of content at issue.  Without limiting the generality of the foregoing, for purposes of clarification, companies or systems that engage in copyright infringement, or facilitate the copyright infringement of users, as a substantial part of their business, shall not be considered in assessing “competitive advantage.”

 

u.              As used throughout this Agreement, unless expressly stated otherwise, the use of the term “download” (or variants such as “downloaded” or “downloading”) shall also include streaming (or variants) or any other means of accessing a content file, whether now known or later developed.

 

v.              The term “including” means “including without limitation” or “including but not limited to” unless expressly stated otherwise.  As used herein, the singular of a term includes the plural, and vice versa, unless expressly stated otherwise.

 

4

 

Copyright Filtering Generally

 

2.              General.  To prevent access to Unauthorized Content by users through or using any part of the Xunlei System, Xunlei shall adopt and deploy industry-leading Copyright Filters as set forth herein designed to effectively identify and block access to Unauthorized Content.  Xunlei shall adopt and deploy such Copyright Filters at no cost to the Content Owners.

 

a.              Timing of Implementation.  Xunlei shall adopt and deploy the Copyright Filters as quickly as reasonably practicable and on a rolling basis, with the objective of completing implementation of the Copyright Filters within ninety (90) days from the execution of this Agreement; provided, however, that if after ninety (90) days Xunlei requires additional time and can reasonably demonstrate that it used its commercially reasonable efforts to complete implementation of the Copyright Filters in the preceding ninety (90)-day period, then the Content Owners will allow an additional thirty (30) days to complete full implementation of the Copyright Filters.  In no event shall the implementation of the Copyright Filters be completed later than one hundred twenty (120) days from the execution of this Agreement.

 

b.              New Services.  To the extent Xunlei provides video content to users, or allows users access to video content, through means that are different than those in the Xunlei System as of the date of this Agreement, e.g., through real-time “live” streaming, through different client applications, through other websites, or through any means or in any form, that might allow users to gain access to content that has not been subject to the Copyright Filters provided for in this Agreement (“New Services”), Xunlei shall, before deploying such New Services, adopt and deploy industry-leading Copyright Filters to the extent technically feasible and commercially reasonable (and to the extent Copyright Filters are not technically feasible and commercially reasonable for the New Service at issue, additional content protection measures) to block access to Unauthorized Content through those New Services, and shall do so before deploying any such New Service.  For purposes of clarification and not limitation, it is the Parties’ intention that Xunlei’s obligation under this Agreement is to apply commercially reasonable and effective copyright filtering to any part or aspect of the Xunlei System that might otherwise provide users access to Unauthorized Content.  Any question of interpretation of this Agreement shall be decided in a way that best effectuates this express intention of the Parties.  If New Services adversely render Content Files owned by the Content Owners materially more susceptible to infringement, then Xunlei shall, negotiate with the Content Owners in good faith to agree on additional commercially reasonable copyright filtering and/or content protection measures.  For the sake of clarity, New Services shall include services offered by joint ventures or other similar business arrangements between Xunlei and third parties unless Xunlei proves that Xunlei or its principals, officers, directors or affiliates do not own (whether individually or collectively) more than 50% of the entity offering such services.  For any such joint ventures or similar business arrangements that do not meet the definition of New Services, Xunlei will negotiate in good faith with the Content Owners or their representatives about employing content protections in connection with such services or businesses.

 

5

 

c.               Filter Engineering and Implementation.  Xunlei shall use commercially reasonable efforts and resources to cause the timely implementation and maximum effectiveness of the Copyright Filters contemplated by this Agreement for purposes of identifying and blocking access to Unauthorized Content.  In the event that a metadata-based filter is used in the limited circumstances contemplated by paragraph 1.c.ii above, Xunlei shall employ commercially reasonable and generally accepted techniques at least as effective as the techniques employed by Xunlei in processing user searches on the Xunlei Sites and sufficient to handle the variety of actual strings occurring in (a) metadata found by Xunlei’s crawler, (b) file names of files indexed by the Xunlei System, and (c) metadata carried within files indexed by the Xunlei System that improves the accuracy of content identification, including through the use of techniques to account for word variations, ordering, and misspellings; and techniques to normalize strings before matching, such as to remove punctuation and ignore case.

 

d.              Filtering Technology Vendor.  Xunlei shall adopt and deploy industry-leading commercially available video content recognition technology that is provided by a reliable and established vendor that has comprehensive databases of reference fingerprints and metadata (and/or, as appropriate, other identifiers) for copyrighted Content Files owned by the Content Owners, and that permits the Content Owners to supply such reference identifiers at no cost to the Content Owners.

 

i.                   Initial Vendor.  Xunlei has represented that it has initially selected Vobile Inc. (“Vobile”) content recognition technology as the basis of a video and audiovideo-based fingerprinting copyright filter.  Thus, initially, the Filtering Vendor shall be Vobile.

 

ii.                Cooperation with Filtering Vendor.  Upon request by the Filtering Vendor, Xunlei shall promptly provide access to any and all log data reflecting an identifier match of video content by application of Copyright Filters on either the Xunlei Sites or Xunlei Clients and will reasonably cooperate with requests by the Filtering Vendor with regard to trouble-shooting any problems with the Copyright Filters.  Xunlei shall maintain all log data stored on Xunlei servers that reflects all attempted uploads and downloads and an identifier match or non-match by application of Copyright Filters on either the Xunlei Sites or Xunlei Clients, and shall not take any action to modify, disrupt or delete such data or other information for the duration of this Agreement.  Xunlei shall further relieve the Filtering Vendor of any obligations of non-disclosure that would prevent or otherwise limit the Filtering Vendor from disclosing any such data or other information to the Content Owners for purposes of evaluating the implementation of the Copyright Filter.

 

iii.             Changes to Filtering Technology/Vendor.  Xunlei is free to switch to alternative Copyright Filtering technologies and/or Filtering Vendors (including without limitation to a proprietary solution created by Xunlei or its affiliates), provided the new filtering system and/or Filtering Vendor, as applicable, satisfies the terms of paragraph 2(d) above, has fingerprint, metadata and other necessary reference databases for copyrighted Content

 

6

 

Files owned by the Content Owners that are at least as inclusive as Vobile’s, and is at least as effective at identifying Unauthorized Content as the Vobile technology (or the Filtering Vendor’s technology then in use by Xunlei provided it has been adopted in compliance with this paragraph).  Xunlei will notify the Content Owners thirty (30) days in advance if it plans to switch to another Copyright Filtering technology or Filtering Vendor for any part of the Xunlei System; provided, however, that if the new Copyright Filtering technology is to be a proprietary solution created by Xunlei or its affiliates, then Xunlei will provide Content Owners with no less than ninety (90) days advanced notice and a commercially reasonable opportunity to review and inspect the proposed technology before it is implemented in the Xunlei System.

 

e.               Policy Rules.  The Content Owners may establish the Policy Rules to set for Content Files claimed in good faith to be owned by the Content Owners, but such Policy Rules shall be limited to the application of the following designations:  block, allow, or allow subject to any license the Content Owners may have with Xunlei; provided, however, that Xunlei reserves the right to block Content Files owned by the Content Owners as may be required by law or in its reasonable discretion.  Xunlei will faithfully apply the Policy Rule designations.  Absent an alternative instruction on file with the Filtering Vendor or written instructions from the Content Owner to the contrary, Xunlei shall treat all Content Owner Content Files as having a “Block” status and shall block access to video content matching Content Files contained in any reference fingerprint database or, if applicable, metadata database used as part of a Copyright Filter for the Xunlei System.

 

f.                Filter Upgrades.  Xunlei shall reasonably maintain and make commercially reasonable periodic upgrades to the Copyright Filters so that they will continue to be based on industry-leading filtering technologies and techniques.

 

g.               Reference Databases.  Xunlei shall provide the Content Owners with the right and means to provide regular updates to Xunlei and/or its Filtering Vendor, as appropriate, for the fingerprint, metadata and other reference databases, in real-time, as the Content Owners reasonably deem necessary or appropriate.  Xunlei shall contractually require its Filtering Vendors to promptly update their reference databases in real-time with any and all Content Owner updates.

 

h.              Review of Filter Implementation.  The Content Owners shall have a right to review, and Xunlei shall provide, reasonable technical documentation, including any specifications, diagrams and source code reasonably necessary to fully understand and assess the implementation and performance of the Copyright Filter (which source code shall be subject to the terms of this Agreement, including without limitation paragraph 28 and Exhibit B hereto) that shows how Xunlei has initially implemented each of the Copyright Filters provided for in this Agreement.

 

i.                  Changes in Filter Implementation.  To the extent that Xunlei desires to materially change its implementation of the Copyright Filters, Xunlei will negotiate in good

 

7

 

faith with the Content Owners prior to implementing the change to ensure that the new implementation is at least as effective in blocking Unauthorized Content as the implementation of the Copyright Filters then in effect.

 

3.              Rules Applicable to All Filtering Processes.  Xunlei shall use commercially reasonable efforts to prevent users from having access to any Content File through or by using any part of the Xunlei System, or from uploading any Content File to the Xunlei Sites, unless the Content File has gone through the specified filtering processes described in this Agreement; provided, however, that if Xunlei has verified (consistent with paragraph 1(k)) prior to the time of filtering, that it already has a valid and subsisting written license from the appropriate Content Owner for a Content File and for the use to which the Content File is being put in the Xunlei System, then the filtering processes set forth in paragraphs 4-8 shall not apply only in the particular area(s) of the Xunlei System to which the license applies, and the filtering process shall still apply to all other aspects of the Xunlei System that are not covered by the license.  Similarly, notwithstanding the obligation to employ filtering processes throughout the Xunlei System (including without limitation the KanKan client), the filtering processes set forth in paragraphs 4-8 shall not apply to the KanKan client if the KanKan client is used “off system” by a user to access content locally on the user’s own computer or offline storage media.  Xunlei shall at all times implement and maintain the Copyright Filters throughout the Xunlei System in good faith with the objective of seeking to block access to Unauthorized Content through or using the Xunlei System to the greatest extent commercially reasonable, and Xunlei’s compliance with each term shall be determined based on such commercial reasonableness, whether or not expressly stated therein.

 

Copyright Filtering in Xunlei Client Software

 

4.              All Xunlei Client software will incorporate a Copyright Filter, in the form of a software module utilizing the Filtering Vendor’s technology, to determine the Filtering Status of each Content File for which a user initiates a download.

 

a.              The Xunlei Client software will submit each Content File sought to be downloaded using a Xunlei Client, and any available file metadata or other applicable identifiers (e.g., file name and file size), to the Copyright Filter to determine the Filtering Status of the Content File.

 

i.      The Xunlei Client software shall incorporate reasonable means to prevent the user from gaining access to the downloaded or downloading Content File or partial Content File (e.g., by maintaining the file or partial file in encrypted form in a segregated cache for purpose of Copyright Filtering) until such time as the Copyright Filtering process has completed and the file has been assigned a Filtering Status.  The downloaded Content File data will not be placed in any location on the user’s computer or device, including a Downloads, Cache, Temporary Internet Files, or other folder where it is accessible to the user unless and until such time as the Copyright Filtering Process has completed and the file has been assigned a Filtering Status of Allow.  Until such time as the Copyright Filtering process has completed and

 

8

 

the Filtering Status of the Content File is determined to be Allow, all Content File data must at a minimum be:  (a) encrypted so as to be inaccessible to the user, and (b) maintained in a segregated temporary cache that is automatically wiped upon restart of the Xunlei Client software.  The encryption used herein shall be remotely upgradeable, and Xunlei shall maintain and exercise the ability to force upgrades of the Xunlei Client software to ensure, to the extent commercially reasonable, that the encryption is continually upgraded to overcome any known efforts to circumvent or otherwise defeat or disable the encryption.

 

ii.               If the Filtering Status of a Content File is Block, then Xunlei will terminate the download of the Content File and maintain the Content File or partial Content File in encrypted form in the segregated cache (as described above) or, to the extent permitted by applicable law and regulation, irretrievably wipe any portions of the Content File that have been downloaded to any location on the user’s computer or mobile device.

 

iii.            For purposes of clarification, if the Filtering Status of the Content File is Block, then Xunlei shall block and prevent even single-thread downloading through or using any Xunlei Client.

 

iv.           If the Filtering Status of a Content File is Allow, then Xunlei may permit the Content File to download normally.

 

v.              All Xunlei Clients shall treat a file as having a Block Filtering Status if the Xunlei System, including any Xunlei Client, (A) is unable to communicate with the Filtering Vendor’s servers to ascertain the Filtering Status of the file, or (B) is unable to authenticate responses from the Filtering Vendor’s servers.  Xunlei’s obligation under this paragraph shall not apply if Xunlei can establish, by means of a technological implementation that must first be approved by the Content Owners, that the communication failure is not the result of any action or failure on the part of Xunlei, the Xunlei System, or any of its users.

 

b.              If the downloaded Content File contains multiple files, then each component file shall be processed as described in 4(a) above.  For purposes of clarification, any RAR, ZIP, or comparable archive files will be unpacked (that is, processed in the normal way to recover the archived content) and the resulting files fingerprinted and filtered individually.  If the Filtering Status of any component file is Allow, then solely such component file shall be treated as Allow if possible, and if it is not possible to treat solely the component file as Allow, then the status of the entire Content File shall be treated as Block.

 

5.              Xunlei will utilize industry-leading commercial software solutions or their functional equivalents for protection of the Xunlei Clients’ executable files (known as executable

 

9

 

protection or binary protection) so that the software will refuse to function if it determines it has been modified in any way.

 

6.              Xunlei will take all reasonable steps to prevent Xunlei Clients that do not contain a Copyright Filter from communicating with the Xunlei Index.  Such steps include but are not limited to (a) where possible, activating a forced-update mechanism to require users to update their Xunlei Clients to a version including a Copyright Filter, (b) activating any update notification system in Xunlei Clients (upon each launch of the Xunlei Client and repeatedly thereafter, no less than four times daily (spaced in reasonable intervals designed to be viewed by the user), until upgraded) to advise users of the availability of newer versions and (c) implementing a change to the Xunlei Index server communication protocol with the result that the Xunlei Index will not respond to requests from Xunlei Clients unless they adhere to the new protocol.

 

Copyright Filtering on Xunlei Servers Hosting Content Files

 

7.              Copyright Filtering of Uploads of Content Files from Users to Xunlei Servers.

 

a.              All Xunlei Sites or servers that receive uploads of Content Files from users will incorporate a Copyright Filter in the form of a software module utilizing the Filtering Vendor’s technology designed to determine the Filtering Status of each Content File that a user uploads to the site.

 

i.                  Before it makes the Content File available to any user in any way, the Xunlei Site or server will submit the uploaded Content File and any available Content File metadata and other applicable identifiers (e.g., file name and file size) to the Copyright Filter to determine the Filtering Status of the Content File.

 

1.              If the Filtering Status of the Content File is Block, then the Xunlei Site or server will permanently delete the file from the Xunlei Site or server immediately.  The file shall not be copied to any other part of the Xunlei System before the Filtering Status is determined.

 

2.              If the Filtering Status of a Content File is Allow, then the Xunlei Site or server may use the Content File as usual.

 

3.              Xunlei shall treat the Content File as having a “Block” Filtering Status if the Xunlei Site or server (A) is unable to communicate with the Filtering Vendor’s servers to ascertain the Filtering Status of the file, or (B) is unable to authenticate responses from the Filtering Vendor’s servers.  Xunlei’s obligation under this paragraph shall not apply if Xunlei can establish, by means of a technological implementation that must first be approved by the Content Owners, that the communication failure is not the result of any action or failure on the part of Xunlei, the Xunlei System, or any of its users.

 

ii.               If the uploaded Content File contains multiple files, then each component file shall be processed as described in 7(a)(i) above.  For purposes of clarification,

 

10

 

any RAR, ZIP, or comparable archive files will be unpacked (that is, processed in the normal way to recover the archived content) and the resulting files fingerprinted and filtered individually.  If the Filtering Status of any component file is Allow, then solely such component file shall be treated as Allow if possible, and if it is not possible to treat solely the component file as Allow, then the status of the entire Content File shall be treated as Block.

 

8.              Copyright Filtering of Downloads of Files from Xunlei Servers to Users.

 

a.              All Xunlei Sites or servers that enable users to download Content Files will incorporate a Copyright Filter in the form of a software module utilizing the Filtering Vendor’s technology to determine the Filtering Status of each Content File that a user attempts to download from the site or server.

 

i.                  Unless a Content File already has an “Allow” Filtering Status assigned within the prior thirty (30) calendar days, based on the application of the Copyright Filter to the upload of the Content File, which has not been overridden by a subsequent “Block” or takedown notice from a Content Owner, before it distributes to the requesting user any portion of the requested file, the Xunlei Site or server will submit the Content File and any available Content File metadata and other applicable identifiers (e.g., file name and file size) to the Copyright Filter to determine the Filtering Status of the file.  Xunlei shall not begin downloading the file to the user until the Copyright Filter process is completed and the file has been assigned a Filtering Status.

 

1.              If a Content File is being downloaded from a Xunlei server in space not considered to be “leased” by a user under applicable PRC law, and the Filtering Status of the Content File is Block, then the Xunlei Site or server will permanently delete the file from the Xunlei Site or server immediately and not distribute any part of it to the requesting user.  If a Content File is being downloaded from a Xunlei server in space considered to be “leased” by a user under applicable PRC law (i.e., a remote storage locker) and the Filtering Status of the Content File is Block, then the Xunlei Client shall treat the status as “Block,” and shall not allow any access to the file by any user, including the user considered to be “leasing” the server space, but Xunlei shall not be required to delete the file.

 

2.              If the Filtering Status of a Content File is Allow, then the Xunlei Site or server may distribute the Content File to the requesting user.

 

3.              Xunlei will treat the Content File as having a “Block” Filtering Status if the Xunlei Site or server (A) is unable to communicate with the Filtering Vendor’s servers to ascertain the Filtering Status of the file, or (B) is unable to authenticate responses from the Filtering Vendor’s servers.  Xunlei’s obligation under this paragraph shall not apply if Xunlei can establish, by means of a technological implementation that

 

11

 

must first be approved by the Content Owners, that the communication failure is not the result of any action or failure on the part of Xunlei, the Xunlei System, or any of its users.

 

ii.               If the Content File requested for download contains multiple files, then each component file shall be processed as described in 8(a)(i) above.  For purposes of clarification, any RAR, ZIP, or comparable archive files will be unpacked (that is, processed in the normal way to recover the archived content) and the resulting files fingerprinted and filtered individually.  If the Filtering Status of any component file is Allow, then solely such component file shall be treated as Allow if possible, and if it is not possible to treat solely the component file as Allow, then the status of the entire Content File shall be treated as Block.

 

Other Content Protection Measures

 

9.              Takedown Notices.  Xunlei shall remove any hosted video content, or links to video content, within eighteen (18) hours when commercially reasonable but in no event later than twenty-four (24) hours of receipt of a takedown notice (including without limitation takedown notices sent by email) from a Content Owner (or its agents, representatives or vendors).  Six (6) months following the execution of this Agreement, the Parties will discuss in good faith whether there exist commercially reasonable means for Xunlei to remove hosted video content that is subject to a proper takedown notice (including without limitation notices sent by email) within a shorter period of time.

 

10.       Pirate Sites.  Upon reasonable notice provided by a Content Owner that a site is reasonably believed to be a Pirate Site, Xunlei shall assign a “Blocked Domain” or “Blocked Subdomain” status (as designated by the Content Owner) to the Pirate Site and to all current and future Xunlei Index entries associated with the Pirate Site.  The effect of a “Blocked Domain” or “Blocked Subdomain” status shall be as follows:  (i) entries with a Blocked Domain or Blocked Subdomain status in the Index shall not be used for any purpose, including to help accelerate downloading through any Xunlei Client, and shall be assigned a “Block” filtering status and treated accordingly if Xunlei refers to the Index for purposes of any Copyright Filter; and (ii) Xunlei servers hosting Content Files shall not respond to any request in which the URL of the referring site (determined by, e.g., the HTTP Referrer URL) contains a domain or subdomain name that has been assigned Blocked Domain or Blocked Subdomain status.   In the event Xunlei reasonably disagrees that a site or source should be deemed a Pirate Site, however, the Content Owner will, within 30 days of Xunlei’s request therefor, provide Xunlei with reasonable evidence, such as court judgments, administrative decisions, evaluations from reputable, independent third party sources and/or services that monitor and evaluate piracy, or other similar documents to support their position.  Upon receipt of  such evidence from the Content Owner, Xunlei shall immediately block all access to the site in question.  Xunlei may also independently refer to and rely on reputable, independent third party sources or services that monitor and evaluate piracy in determining whether to assign a “Blocked Domain” or “Blocked Subdomain” status as set forth in this paragraph.

 

12

 

11.       User-Uploaded Content.  To the extent that files available on the Xunlei System are uploaded by users (including, without limitation, through Kuai), Xunlei:

 

a.              shall, immediately upon receipt of a takedown notice concerning a given file, remove all user-uploaded, hash-identical files from the Xunlei System and prevent any further uploading of any hash-identical files by users; and

 

b.              shall terminate accounts of users who upload or download Unauthorized Content repeatedly (as determined by Content Owner takedown notices or Filtering Status assigned through the Copyright Filter process) and shall further prevent holders of terminated accounts from rejoining the service using reasonable indicia of identity.  It is expressly understood, however, that “repeatedly” for purposes of users based in the United States, if any, shall mean no more than three separate occasions but that “repeatedly” in other parts of the world may be a greater number and that Xunlei may implement the same counter-notification process set forth in the Digital Millennium Copyright Act, 17 U.S.C. § 512(g), regardless of whether such statute is applicable to Xunlei.  Xunlei shall maintain and preserve records and data revealing instances of users identified as infringers as provided in this paragraph.

 

c.               shall not in any way advertise, promote or market the Xunlei System, in whole or part, based on the availability of, or access to, user-uploaded Unauthorized Content; and

 

d.              shall not offer or pay to account holders or users any funds, credits or other benefits of any kind, in whole or part, based on the nature of the content uploaded/downloaded from the system or any metric of downloads from an account holder’s account, including without limitation (i) the popularity of files, as determined through any metric, (ii) the volume of downloads, or (iii) conversions to paid subscriptions by users drawn to the Xunlei System from links to user uploaded Unauthorized Content.

 

Representations and Warranties

 

12.       This Agreement is premised on the representations and warranties by Xunlei set forth below.  The Content Owners necessarily are relying on the following Xunlei representations in formulating or agreeing to effective content protection measures, and material inaccuracies in any Xunlei representations could negate the effectiveness of the proscribed content protection measures.  Accordingly, Xunlei represents and warrants that the following representations are accurate and complete in all material respects, as of the date of this Agreement:

 

a.              Xunlei System.  As of the date of this Agreement, the Xunlei System is comprised of the Xunlei Downloader, the KanKan Client, the Xunlei Index, the Xunlei Sites, the Xunlei Theatre, and the Xunlei VIP Cloud Servers.

 

13

 

b.              Violation of Law.  To Xunlei’s actual knowledge, no obligation of Xunlei hereunder or any other term of this Agreement would require Xunlei to violate Chinese law or any other applicable law.

 

c.               System Design.  As the Xunlei System is currently designed and intended to be used, if the Copyright Filters perform as described by the Filtering Vendor (provided that the Filtering Vendor is not Xunlei or its affiliate) in material respects, and are deployed as provided for in this Agreement, (A) all files to be downloaded using the Xunlei System would be subject to Copyright Filtering before being accessible to users and (B) the Xunlei Sites would subject all uploads to Copyright Filtering before accepting them onto the sites.

 

d.              System Ownership and Control.  Shenzhen Xunlei Networking Technologies Co., Ltd. and its undersigned subsidiaries have exclusive ownership and control over the Xunlei System. Neither Xunlei Limited nor Giganology (Shenzhen) Ltd. (nor their subsidiaries), nor any other company or entity, owns, operates or controls any aspect of the Xunlei System. Neither Xunlei Limited nor Giganology (Shenzhen) Ltd. (nor their subsidiaries), nor any other company or entity owns, operates or controls any licenses, technologies, systems or services that participate in the process of allowing users to locate or gain access to content for downloading, viewing or otherwise, including any client applications, browser plug-ins, media-player software, indexes, search engines, websites, or portals.

 

13.       If any of the above representations or warranties is materially untrue as of the execution of this Agreement, that shall constitute a material breach of this Agreement by Xunlei.  Without limiting the generality of the foregoing, for purposes of illustration, a misrepresentation shall be deemed material if as a result (i) users can gain access to Content Files through any part of the Xunlei System without an effective Copyright Filter having been applied to that Content File before the user has access to it, or (ii) the Copyright Filters provided for in this Agreement are not highly effective in blocking access to substantially all Unauthorized Content for which a Content Owner has provided relevant fingerprint and metadata reference data to the Filtering Vendor.

 

Obligation To Notify

 

14.       Xunlei shall notify the Content Owners in the event of any material change in the Xunlei System that renders any of the above representations and warranties no longer accurate.  Xunlei shall provide such notice within seven (7) calendar days of its discovery of the change that resulted in the representation and warranty becoming no longer accurate.  Xunlei further shall provide the Content Owners with a reasonable description of the nature of the change and a reasonable opportunity to inspect and conduct due diligence with respect to the change and its implication for Copyright Filtering and other content protection measures.

 

Compliance Due Diligence

 

15.       Within thirty (30) days from the date of execution of this Agreement, and again another thirty (30) and sixty (60) days thereafter, the Parties (or their representatives) shall have a telephone or video conference to review the implementation of the Agreement.

 

14

 

16.       Xunlei shall provide the Content Owners (or their representatives) a right of reasonable due diligence, at reasonably acceptable times to Xunlei, upon two weeks written notice (absent urgent circumstances), on-site at Xunlei’s facilities in the People’s Republic of China, not to exceed once every six months nor twice per calendar year, to assess the implementation and effectiveness of the Copyright Filters and other content protection measures provided for in this Agreement.  The cost of any technical experts that the Content Owners may retain to conduct such due diligence shall be borne by the Content Owners.  The review shall be completed within a reasonable period of time during normal business hours, and shall not be conducted in a manner that unreasonably interferes with the day-to-day operations of Xunlei’s business.  Xunlei shall cooperate with reasonable requests of the Content Owners throughout any due diligence process.  Xunlei’s personnel shall not be required to travel from Xunlei’s facilities in the People’s Republic of China as part of any due diligence review.  Xunlei shall, as reasonably requested, make available for inspection by the Content Owners (or their representatives) technical or other documentation or data, including source code, reasonably necessary to fully understand and assess the implementation and performance of the Copyright Filter (the confidentiality of such materials shall be subject to the terms of paragraph 28 herein and, as to source code, Exhibit B hereto).  If there are due diligence issues that the Content Owners reasonably believe can be assessed without being on-site at Xunlei’s facilities, Xunlei shall provide the Content Owners with access to the requested materials by delivering them to the Content Owners (or their representatives) at locations of the Content Owners’ choosing, including locations in the United States (subject to the confidentiality provisions of paragraph 28 herein and, as to source code, Exhibit B hereto, and any further security provisions related to transportation of the materials that the parties may mutually agree to in good faith).  Any such materials provided to Content Owners shall be returned or destroyed upon final conclusion of the due diligence review.  In the event of a material failure of any of the content protection measures in this Agreement, the parties shall immediately work together in good faith in an effort to identify the cause of the failure and to have Xunlei remedy the failure.  In such exigent circumstances, the limitation of two due diligence reviews per calendar year shall not apply, and Xunlei will use reasonable efforts to provide Content Owners with immediate and continued access to the due diligence materials contemplated by this paragraph so that the parties may constructively work together in good faith to address the filtering failure until such failure is resolved.

 

Ongoing Cooperation

 

17.       If for any reason (other than the failure of the Content Owners to provide the Filtering Vendor with reference identifiers regarding Content Files owned by the Content Owners) the Copyright Filter and other content protection measures provided for in this Agreement do not (or no longer) result in the substantial cessation of the availability of Unauthorized Content on or through the Xunlei System, or by or to Xunlei users, then Xunlei shall negotiate in good faith with the Content Owners for the adoption of additional, commercially reasonable content protection measures, including different or additional Copyright Filters, designed to remedy any existing deficiencies.

 

15

 

18.       Within five (5) business days of execution of this Agreement, each Content Owner shall provide Xunlei with the name and contact information of a person within its company whom Xunlei may contact, in the first instance, with any routine questions or issues related to content protection.

 

Dispute Resolution

 

19.       In the event of any dispute arising out of or in connection with this Agreement, including any question regarding its breach, existence, validity, or termination (“Dispute”), the Parties shall in good faith attempt to resolve such Dispute as soon as practicable after the complaining party provides written notice of such Dispute.  In the event that the Dispute is not resolved between the Parties within ten (10) business days after receipt of such notice, on the request of the Party raising the Dispute, the Dispute shall be referred to and finally resolved by arbitration under the Rules of Arbitration of the International Chamber of Commerce (“ICC”) in effect as of the date of this Agreement (the “Rules”).  Unless the Parties agree otherwise, there shall be three arbitrators, one nominated by the claimant and the second nominated by the respondent in accordance with the Rules; the third, who shall act as the chair of the arbitral tribunal, shall be nominated by the two party-nominated arbitrators within twenty (20) days of the confirmation by the ICC International Court of Arbitration (“ICC Court”) of the nomination of the second arbitrator.  If any arbitrators are not nominated within the applicable time periods, the ICC Court shall make the appointment(s).  The place of arbitration shall be, and the award shall be rendered in, Hong Kong.  The language of the arbitral proceedings shall be English.  The arbitral tribunal shall be guided by the International Bar Association Rules on the Taking of Evidence in International Arbitration (2010).  The arbitrators may award any relief permitted under this Agreement and applicable law, including (whether or not permitted under applicable law) punitive, exemplary or multiple damages.  The award shall be rendered within eight (8) months from the confirmation of the selection of the chair of the arbitral tribunal, unless the Parties agree to extend this time limit or the arbitral tribunal determines that the interest of justice so requires.  The award shall be final and binding upon the Parties as from the date rendered, and shall be the sole and exclusive remedy between the Parties regarding any claims, counterclaims, issues, or accounting presented to the arbitral tribunal (which shall exclude copyright infringement claims as provided in Paragraph 23 below) and may be entered and enforced in any court having jurisdiction over the Party against which enforcement is sought or over any of that Party’s assets.  This Agreement and the rights and obligations of the Parties shall remain in full force and effect pending the award in any arbitration proceeding hereunder unless the Agreement has been otherwise terminated in accordance with its terms.  The Parties agree that any Party to this Agreement shall have the right to have recourse to and shall be bound by the Pre-arbitral Referee Procedure of the ICC in accordance with its Rules for a Pre-Arbitral Referee Procedure.

 

20.       The Parties shall initially split the costs of arbitration evenly.  The prevailing Party in arbitration shall be entitled to recover from the other Party all reasonable and documented out-of-pocket costs, including the costs of arbitration, and reasonable and documented out-of-pocket attorneys’ fees incurred in connection with the arbitration.

 

16

 

 

21.       This Agreement is governed by, and all disputes arising out of or in connection with this Agreement shall be resolved in accordance with, the laws of New York (to the exclusion of any conflict of laws rules), provided that the adoption of New York law as the governing law for purposes of this Agreement shall in no way indicate that any Party has availed itself of the benefit of, or otherwise subjected itself or its business to, the laws of the State of New York or any other law of the United States of America, and no Party shall use this provision to argue otherwise.

 

22.       Specific Performance.  A breach of the material terms of this Agreement may result in irreparable damage to the non-breaching party for which the non-breaching party will not have an adequate remedy at law.  Accordingly, in addition to any other remedies available to the non-breaching party, the Parties acknowledge and agree that the non-breaching party may seek, and the arbitration tribunal shall be empowered to order, specific performance of the breaching party’s obligations hereunder (including, without limitation, Xunlei’s obligations under paragraphs 4 through 8 above) and other injunctive relief, without any requirement to post a bond or other security.

 

a.              Xunlei shall comply with any order by the arbitral tribunal of specific performance within ten (10) days of the date set by the order for such performance (or, if no date for performance is set by the arbitral tribunal’s order, within thirty (30) days after issuance of the arbitral tribunal’s order), without the need for Content Owners to seek enforcement of the arbitral tribunal’s order in national or domestic court.

 

b.              Xunlei hereby waives any objection and consents to the enforcement, by any national or domestic court having jurisdiction over Xunlei, of the arbitral tribunal’s order of specific performance.

 

23.       Nothing in this Agreement shall be deemed a waiver by any Content Owner of any claims it may have against Xunlei for copyright infringement, whether occurring prior to or after the execution of this Agreement.  Content Owner claims of copyright infringement shall not be deemed to arise out of or in connection with this Agreement and shall not be subject to the arbitration, forum selection, or choice of law provisions contained in paragraphs 19 and 21 above.  No party to this Agreement shall use the provision for a Hong Kong forum for arbitration, or the choice of law of New York, in any way to support any argument that any Content Owner’s choice of forum for a copyright infringement action is impermissible or inconvenient.

 

24.       This Agreement also contains and shall also be deemed to be a covenant not to sue in accordance with the following terms:  Each of the Parties agrees never to commence, aid, or participate in (except to the extent required by order or legal process issued by a court or governmental agency of competent jurisdiction) any legal action or other proceeding against Xunlei based in whole or in part upon access to Unauthorized Content on the Xunlei websites or Xunlei System, alleged infringement of Content Files of the Content Owners on the Xunlei websites or Xunlei System or similar or related matters as long as this Agreement remains in effect and Xunlei remains fully compliant 

 

17

 

with its material terms.  For the sake of clarity, this covenant not to sue shall not apply to any other type of claim, including, without limitation, those for breach of any contract (including this Agreement), tort, violation of legal or statutory duty, or on any other basis.  Any breach of this covenant not to sue by the MPAA or any Content Owner shall be deemed a material breach of this Agreement by such Party and shall entitle Xunlei to terminate any obligations under this Agreement as it pertains to the breaching Party.  No Party shall use the provision for a Hong Kong forum for arbitration, or the choice of law of New York, in any way to support any argument in any future copyright infringement or other action (other than for breach of this Agreement as set forth in paragraph 19) that (i) either Hong Kong or the United States is an appropriate forum or (ii) that any other forum for is impermissible or inconvenient.  As an express condition of this covenant not to sue, Xunlei hereby agrees that any statute of limitations, laches, or other requirements regarding the timing of suit that any Content Owner might otherwise have brought are hereby tolled for up to two years from the date of this Agreement.

 

Term

 

25.       This Agreement shall commence upon the date of execution by all Parties (“Effective Date”) and remain in full force and effect until four (4) years from the Effective Date (“Initial Term”), and shall renew automatically for successive one-year renewal terms (each, a “Renewal Term”) unless either Xunlei or the Content Owners provide notice of non-renewal at least one hundred twenty (120) days prior to the expiration of the Initial Term or Renewal Term, as applicable (“Notice of Non-Renewal”), or the Agreement is otherwise terminated pursuant to its terms.  In the event a Notice of Non-Renewal is provided by any Party in accordance with this paragraph, the Parties agree to commence negotiations in good faith regarding renewal of the Agreement; however, following a Notice of Non-Renewal, this Agreement shall be renewed only upon a written agreement executed by all Parties setting forth the terms of such renewal.

 

Miscellaneous

 

26.       In the event that Xunlei has a reasonable belief based on verifiable evidence and can demonstrate to the Filtering Vendor’s reasonable satisfaction (including, but not limited to, by providing verifiable evidence) that the Copyright Filtering provided for herein has improperly caused non-infringing content to be blocked or otherwise filtered, then Xunlei shall raise its concern with the Filtering Vendor.  If the Filtering Vendor confirms that the content should not have received a Block Filtering Status, then the Filtering Status will be appropriately adjusted after the Filtering Vendor has assessed the purported non-infringing content and conferred with the appropriate Content Owner as necessary.

 

27.       Nothing in this Agreement grants, or shall be construed as granting, any license or authority to Xunlei to use in any way any copyrighted Content Files owned or controlled by any Content Owner, other than as allowed by the applicable Policy Rule for any Content Owner’s Content File.

 

28.       This Agreement contemplates and provides that, in various circumstances, Xunlei shall provide the Content Owners with documentation or other information of a business and 

 

18

 

technical nature that Xunlei believes may be proprietary confidential information.  For any documentation or information Xunlei believes should be treated as confidential, and so designates as confidential by reasonably informing the Content Owners, the Content Owners (i) shall maintain such documentation or information as strictly confidential, (ii) shall use such documentation or information only for purposes of this Agreement, and (iii) shall not disclose such documentation or information to any third party except for those third-party professional and technical advisors, including counsel for the MPAA, engaged to assist the Content Owners in connection with this Agreement, providing that such third parties agree to the same confidentiality terms provided for in this paragraph.  Where Xunlei is obligated to provide Content Owners with access to source code, such source code shall be handled in accordance with the terms set forth in Exhibit B hereto.  The provisions of this paragraph shall survive the termination of the Content Protection Agreement.

 

29.       This Agreement contains technical information regarding Xunlei and the Xunlei System that Xunlei asserts is confidential and proprietary.  Such technical information, and the parts of this Agreement that disclose such information, shall not be publicly disclosed in whole or part without the prior written consent of Xunlei, which consent shall not be unreasonably withheld.  This confidentiality provision does not extend to the terms of this Agreement described at a level of generality that does not disclose technical information regarding Xunlei; without limiting the generality of the foregoing, both Parties can disclose in words and in substance statements concerning this Agreement as set forth in Exhibit A, attached hereto.  Xunlei may disclose this Agreement (or any portion thereof) as may be required under law or under other disclosure obligations (e.g., as part of its Initial Public Offering).  To the extent that Xunlei has publicly disclosed certain portions of this Agreement, the Content Owners may similarly disclose such portions.  The provisions of this paragraph shall survive the termination of this Agreement.

 

30.       Nothing herein shall be deemed to require Xunlei or its affiliates to take, or refrain from, any action so as to render Xunlei or its affiliates in violation of any applicable law or governmental or judicial rule or order, including the laws of the People’s Republic of China or the rules or orders of its courts or administrative agencies.  Xunlei hereby represents and warrants that, as of the entry of this Agreement, and after a diligent evaluation, it does not believe that any term, condition or other provision of this Agreement (or Xunlei’s compliance with any terms, condition or provision of this Agreement) requires Xunlei or its affiliates to take, or refrain from, any action so as to render Xunlei or its affiliates in violation of any applicable law or governmental or judicial rule or order, including the laws of the People’s Republic of China or the rules or orders of its courts or administrative agencies.

 

31.       Neither this Agreement nor implementation of the content protections set forth herein shall be construed as an admission by Xunlei, or evidence, of copyright infringement prior to the implementation of this Agreement.

 

32.       This Agreement and the covenants contained herein shall be binding on the Parties and their successors and assigns, whether related to or independent of the Parties; provided, however, that, in the event of a transfer of all or substantially all of the assets of Xunlei 

 

19

 

(rather than a transfer of all or substantially all Xunlei stock), the Agreement shall be binding only on those parts of the transferee’s business that integrate or include the Xunlei System or any component thereof to the extent allowed by law.  Subject to the foregoing, Xunlei shall not sell or transfer a material part of the assets of the Xunlei System to any buyer or transferee until Xunlei has taken all necessary and appropriate steps to ensure that this Agreement will be binding on successors and assigns as provided herein.

 

33.       Any notice to be provided under this Agreement shall be sent as follows:

 

a.              If to Xunlei, to:

 

YU Fei

Shenzhen Xunlei Networking Technologies Co., Ltd.

4th Floor Hnas Innovation Mansion

North Ring Rd. No.9018 Hight-Tech Park

Nanshan District Shenzhen, PRC, 518057

Fax +86 0755-33912909

 

with a copy to:

 

Diana Torres

Kirkland & Ellis LLP

333 S. Hope Street

Los Angeles, California  90071

 

b.              If to the Content Owners, to:

 

Kenneth L. Doroshow

JENNER & BLOCK LLP

1099 New York Avenue, N.W.

Suite 900

Washington, DC  20001

kdoroshow@jenner.com

Facsimile:  (202) 661-4855

 

with a copy to:

 

Motion Picture Association of America

1600 Eye St., NW

Washington, D.C. 20006

ATTN:  General Counsel

Steven_Fabrizio@mpaa.org

 

c.               All notices, other than the notices pursuant to paragraph 9 concerning Takedown Notices, shall be delivered by overnight delivery and electronic mail (and facsimile if a facsimile number is provided).  Notices shall be deemed received the second (2nd) 

 

20

 

business day following the day the notice is sent.  Notices shall be deemed valid if sent to the person indicated above, unless a new notice recipient is designated in writing.

 

34.       This Agreement constitutes and contains the entire agreement and understanding among the Parties regarding the content protection measures provided for herein, and shall supersede, extinguish and replace all prior negotiations, representations, promises, and proposed agreements, whether written or oral, on the subject hereof.  It is understood and agreed that all understandings and agreements heretofore had between the Parties on the subject hereof are merged in this Agreement, which alone fully and completely expresses the Parties’ agreement.  The Parties acknowledge that they are not relying upon any statement, representation, promise, or discussion, whether written or oral, not embodied in this Agreement, made by any other Party.

 

35.       This Agreement may be executed in one or more counterparts, and a signature transmitted by facsimile or electronic mail shall have the same effect as an original signature.

 

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the undersigned Parties, and each individual signing represents and warrants that they are fully authorized to enter into this Agreement on behalf of the companies identified above their signatures.

 

21

 

	
SHENZHEN XUNLEI NETWORKING  TECHNOLOGIES CO., LTD.
    	
 
    
	
 
    	
 
    
	
/s/ Yu Fei
    	
May 23, 2014
    	
 
    
	
(Signature) 
    	
(Date)
    	
 
    
	
 
    	
 
    
	
Yu Fei
    	
 
    
	
(Name)
    	
 
    
	
 
    	
 
    
	
Vice President
    	
 
    
	
(Title)
    	
 
    
	
 
    	
 
    
	
SHENZHEN   XUNLEI KANKAN INFORMATION
    	
 
    
	
TECHNOLOGIES   CO., LTD.
    	
 
    
	
 
    	
 
    
	
/s/ Yu Fei
    	
May 23, 2014
    	
 
    
	
(Signature) 
    	
(Date)
    	
 
    
	
 
    	
 
    
	
Yu Fei
    	
 
    
	
(Name)
    	
 
    
	
 
    	
 
    
	
Vice President
    	
 
    
	
(Title)
    	
 
    
	
 
    	
 
    
	
XUNLEI   SOFTWARE (SHENZHEN) CO., LTD.
    	
 
    
	
 
    	
 
    
	
/s/ Yu Fei
    	
May 23, 2014
    	
 
    
	
(Signature) 
    	
(Date)
    	
 
    
	
 
    	
 
    
	
Yu Fei
    	
 
    
	
(Name)
    	
 
    
	
 
    	
 
    
	
Vice President
    	
 
    
	
(Title)
    	
 
    
	
 
    	
 
    
	
MOTION PICTURE ASSOCIATION OF   AMERICA, INC.
    	
 
    
	
 
    	
 
    
	
/s/ Steven B. Fabrizio
    	
May 22, 2014
    	
 
    
	
(Signature) 
    	
(Date)
    	
 
    
	
 
    	
 
    
	
Steven B. Fabrizio
    	
 
    
	
(Name)
    	
 
    
	
 
    	
 
    
	
SEVP and Global General Counsel
    	
 
    
	
(Title)
    	
 
    

 

22

 

	
UNIVERSAL CITY STUDIOS LLC
    	
 
    	
WARNER BROS. ENTERTAINMENT INC.
    
	
 
    	
 
    	
 
    
	
/s/   Steve Kang 
    	
May 23, 2014
    	
 
    	
/s/ David Kaplan
    	
June 9, 2014
    
	
(Signature)
    	
(Date)
    	
 
    	
(Signature)
    	
(Date)
    
	
 
    	
 
    	
 
    
	
Steve   Kang 
    	
 
    	
David Kaplan
    
	
(Name)
    	
 
    	
(Name)
    
	
 
    	
 
    	
 
    
	
VP   & Sr Counsel, Anti-Piracy
    	
 
    	
SVP and IP Counsel
    
	
(Title)
    	
 
    	
(Title)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
VIACOM INC.
    	
 
    	
SONY PICTURES ENTERTAINMENT INC.
    
	
 
    	
 
    	
 
    
	
/s/   Michael D. Fricuas
    	
 
    	
/s/ Leonard Venger 
    	
May 30, 2014
    
	
(Signature)
    	
(Date)
    	
 
    	
(Signature)
    	
(Date)
    
	
 
    	
 
    	
 
    
	
Michael   D. Fricuas
    	
 
    	
Leonard Venger 
    
	
(Name)
    	
 
    	
(Name)
    
	
 
    	
 
    	
 
    
	
EUP;   gc; secretary
    	
 
    	
Assistant Secretary
    
	
(Title)
    	
 
    	
(Title)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 TWENTIETH CENTURY FOX  FILM CORPORATION.
    	
 
    	
WALT DISNEY STUDIOS MOTION PICTURES
    
	
 
    	
 
    	
 
    
	
/s/   Ronald C. Wheeler
    	
 
    	
/s/ Marsha L. Reed 
    	
May 28, 2014
    
	
(Signature)
    	
(Date)
    	
 
    	
(Signature)
    	
(Date)
    
	
 
    	
 
    	
 
    
	
Ronald   C. Wheeler
    	
 
    	
Marsha L. Reed 
    
	
(Name)
    	
 
    	
(Name)
    
	
 
    	
 
    	
 
    
	
Assistant   Secretary
    	
 
    	
Secretary
    
	
(Title)
    	
 
    	
(Title)
    

 

23

 

EXHIBIT A TO CONTENT PROTECTION AGREEMENT

 

24

 

EXHIBIT B TO CONTENT PROTECTION AGREEMENT

 

25Golden 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.

18 

          (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.

19 

          (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.

20 

     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.

21 

          (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. 

22 

          (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.

23 

          (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.

24 

          (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)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00232-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00232-of-00352.parquet"}]]