Argentex Mining Corporation - Exhibit 4.16 - Filed by newsfilecorp.com






“THIS CONVERTIBLE DEBENTURE IS SUBJECT TO RESTRICTIONS ON
TRANSFER PURSUANT TO AN INVESTMENT AGREEMENT BETWEEN ARGENTEX MINING CORPORATION
AND AUSTRAL GOLD LIMITED ACN 075 860 472 DATED JULY 2, 2013.” 

THE SECURITY REPRESENTED HEREBY AND THE SECURITIES INTO
WHICH THIS SECURITY IS CONVERTIBLE HAVE BEEN OFFERED IN AN OFFSHORE TRANSACTION
TO PERSONS WHO ARE NOT U.S. PERSONS (AS DEFINED HEREIN) PURSUANT TO REGULATION S
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933
ACT”).

NEITHER THE SECURITY REPRESENTED HEREBY NOR THE SECURITIES
INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE BEEN REGISTERED UNDER THE 1933 ACT,
OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY BE
OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO U.S. PERSONS
(AS DEFINED HEREIN) EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S
UNDER THE 1933 ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY
IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. HEDGING TRANSACTIONS
INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933
ACT. “UNITED STATES” AND “U.S. PERSON” ARE AS DEFINED BY REGULATION S UNDER THE
1933 ACT. 

UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF
THIS SECURITY AND THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE SHALL
NOT TRADE SUCH SECURITIES BEFORE NOVEMBER 3, 2013. 

Issue Date: July 2, 2013 

Conversion Price (subject to adjustment as contemplated
herein): U.S.$0.274163 per Conversion Unit 

UNSECURED CONVERTIBLE DEBENTURE 

FOR VALUE RECEIVED, ARGENTEX MINING CORPORATION (the
“Company”) promises to pay to AUSTRAL GOLD ARGENTINA S.A. or its
registered and permitted assigns (the “Holder”), the Principal Amount (as
defined below) of TWO MILLION THREE HUNDRED THOUSAND AND/00 Dollars
($2,300,000) in lawful currency of the United States on or before the
first anniversary of the Issue Date (the “Maturity Date”), subject to the
terms and conditions hereof. This Debenture shall bear no interest. The Company
shall pay the Principal Amount only in accordance with the provisions of this
Debenture. 

This Debenture is subject to the following additional terms and
conditions: 

	1. 	
      Definitions

	 	 	 
	1.1 	
      For the purposes hereof, in addition to the terms defined
      elsewhere in this Debenture: (i) capitalized terms not otherwise defined
      herein have the meanings given to such terms in the Subscription Agreement
      (as defined herein), and (ii) the following terms shall have the following
      meanings:

	 	 	 
		(a) 	
      “Applicable FX Rate” means the seller’s reference
      exchange rate (tipo de cambio vendedor) as quoted by the Banco de
      la Nación Argentina at the close of business on the immediately preceding
      banking day in the Republic of Argentina;

	 	 	 
		(b) 	
      “Argentine Branch” means SCRN Properties Ltd., a
      British Columbia corporation that is the wholly-owned subsidiary of the
      Company, acting by and through its Argentine branch
“SCRN PROPERTIES LTDA, SUCURSAL ARGENTINA, of Av. Santa Fe
  1592, 4° H, (C1060 ABO) Buenos Aires, Argentina”;









	 	(c) 	
      “Business Day” means any day, other than a
      Saturday or Sunday, or bank holiday in Vancouver (Canada) and in New South
      Wales, Australia, and the Jewish holidays of Pesach 1st day, Pesach 2nd
      day, Pesach 7th day, Pesach 8th day, Shavuot, Shavuot (yizcor), Rosh
      Hashanah, Yom Kippur, Sucot, Shemini Atzeret and Simjat Torá, all as shown
      on an annual calendar to be provided by the Holder to the Company on or
      before the beginning of each calendar year during the Term of the
      Debenture;

	 	 	 
	 	(d) 	
      “Common Shares” means common shares in the capital
      of the Company;

	 	 	 
	 	(e) 	
      “Conversion Date” has the meaning set forth in
      Section 5.2 hereof;

	 	 	 
	 	(f) 	
      “Conversion Exchange Rate” means the Applicable FX
      Rate on the Foreign Currency Conversion Date;

	 	 	 
	 	(g) 	
      “Conversion Penalty” means any charge (not
      including those in the nature of a charge for the exchange of one currency
      for another) that would have been assessed by the Government of Argentina
      pursuant to laws, rules or regulations adopted by the Government of
      Argentina after the Issue Date, on any loan or capital contribution that
      should have been sent by the Company (or SCRN Properties Ltd.) in Canadian
      or U.S. dollars to its Argentine Branch to enable it to meet its
      obligations in accordance with the payment schedule included in Section
      3.01 of the Foreign Law Loan Agreement (as if the Foreign Law Loan had not
      been entered into);

	 	 	 
	 	(h) 	
      “Conversion Price” means U.S.$0.274163 per
      Conversion Unit;

	 	 	 
	 	(i) 	
      “Conversion Shares” means the Common Shares
      constituting part of the Conversion Units;

	 	 	 
	 	(j) 	
      “Conversion Unit” means one Common Share and
      one-half (1⁄2) Warrant to be issued upon conversion, from time-to-time, of
      any portion of the Principal Amount;

	 	 	 
	 	(k) 	
      “Debenture” means this unsecured convertible
      debenture and all of the terms and conditions pursuant to which it is
      issued;

	 	 	 
	 	(l) 	
      “Exchange” means the TSX Venture
  Exchange;

	 	 	 
	 	(m) 	
      “Exchange Policy 1.1” means Policy 1.1 –
      Interpretation of the Exchange;

	 	 	 
	 	(n) 	
      “Foreign Borrower” means Sociedad Italiana de
      Socorros Mutuos Proteccion Familia Italiana de Correa, as more
      specifically described in the Foreign Law Loan Agreement;

	 	 	 
	 	(o) 	
      “Foreign Currency” means the lawful currency of
      the Republic of Argentina;

	 	 	 
	 	(p) 	
      “Foreign Currency Conversion Date” means a date
      within two Business Days of any Foreign Law Loan Payment Date;

	 	 	 
	 	(q) 	
      “Foreign Currency Holdings” means, at any point in
      time, the aggregate amount of the Foreign Currency Subscription Amount
      paid by the Holder to the Company less the aggregate amount of Foreign
      Currency funds repaid under the Foreign Law Loan Agreement or the
      Guaranty;

	 	 	 
	 	(r) 	
      “Foreign Currency Subscription Amount” means the
      amount of Foreign Currency funds paid by the Holder to the Company or its
      Argentine Branch, calculated using the Subscription Date Exchange Rate, as
      consideration for the issue of the Debenture to the
  Holder;









	 	(s) 	
      “Foreign Law Loan” means the loan to the Foreign
      Borrower made by the Argentine Branch in Foreign Currency and evidenced by
      the Foreign Law Loan Agreement;

	 	 	 
	 	(t) 	
      “Foreign Law Loan Agreement” means the foreign law
      governed loan agreement pursuant to which the Argentine Branch lends the
      Foreign Currency Subscription Amount to the Foreign Borrower;

	 	 	 
	 	(u) 	
      “Foreign Law Loan Payment” means a payment on
      account of the Foreign Borrower’s obligations under the Foreign Law Loan
      Agreement (including, where applicable, a payment by the Guarantor
      pursuant to the Guaranty);

	 	 	 
	 	(v) 	
      “Foreign Law Loan Payment Date” means the date
      upon which a Foreign Law Loan Payment is received by the Company or the
      Argentine Branch;

	 	 	 
	 	(w) 	
      “Guarantor” means Austral Gold Limited, ACN 075
      860 472, in its capacity as guarantor pursuant to the Guaranty;

	 	 	 
	 	(x) 	
      “Guaranty” means the Guaranty signed on the Issue
      Date by the Guarantor pursuant to which the Guarantor guarantees the
      Foreign Borrower’s repayment of the Foreign Law Loan;

	 	 	 
	 	(y) 	
      “Investment Agreement” means the Investment
      Agreement between the Holder, the Guarantor and the Company dated as of
      even date with this Convertible Debenture;

	 	 	 
	 	(z) 	
      “Issue Date” means July 2, 2013;

	 	 	 
	 	(aa) 	
      “Maturity Date” has the meaning attributed to it
      on the first page of this Convertible Debenture;

	 	 	 
	 	(bb) 	
      “Person” means a corporation, association,
      partnership, organization, business, individual, government or political
      subdivision thereof;

	 	 	 
	 	(cc) 	
      “Principal Amount” means the principal amount as
      may be due and owing by the Company to the Holder from time to time under
      the Debenture;

	 	 	 
	 	(dd) 	
      “Shares” means common shares in the capital of the
      Company;

	 	 	 
	 	(ee) 	
      “Subscription Agreement” means the Subscription
      Offer, dated as of July 2, 2013, made to the Company by the Holder and
      accepted by the Company on July 2, 2013, pursuant to which the Holder has
      agreed to purchase the Debenture;

	 	 	 
	 	(ff) 	
      “Subscription Date Exchange Rate” means the
      Applicable FX Rate on the Issue Date;

	 	 	 
	 	(gg) 	
      “Trading Day” means a day on which the Shares are
      traded on the Exchange or other trading market on which the Shares are
      then listed or quoted, provided that, in the event that the Shares are not
      listed or quoted, then Trading Day shall mean a Business Day;

	 	 	 
	 	(hh) 	
      “U.S. Currency” means the lawful currency of the
      United States of America;

	 	 	 
	 	(ii) 	
      “Warrant” means a warrant entitling the holder to
      purchase one Share at a price of CDN$0.40 per Share for a period of five
      years from the Conversion Date; and

	 	 	 
	 	(jj) 	
      “Warrant Certificate” means the form of
      certificate issued by the Company to the Shareholder containing the terms
      and conditions of the Warrant.












	
1.2 		
Unless otherwise provided, all dollar amounts referred to in the Debenture are in lawful money of the United States of America.

	
	 	 
	
2. 		
Subscription Agreement

	
	 	 
	
2.1 		
This Debenture has been issued pursuant to the Subscription Agreement, is subject in all respects to the terms of the Subscription Agreement, and incorporates the terms of the Subscription Agreement to the extent that they do not
conflict with the terms of the Debenture. To the extent of any such conflict, the terms of the Debenture shall prevail and be paramount. No right, title or interest of the Holder in the Debenture may be transferred or assigned without the prior
written consent of the Company and then only in compliance with the Subscription Agreement and applicable securities laws and regulations.

	
	 	 
	
3. 		
Interest

	
	 	 
	
3.1 		
The Principal Amount shall bear no interest.

	
	 	 
	
4. 		
Payment

	
	 	 
	
4.1 		
The Company shall pay all or any part of the Principal Amount due under the Debenture at any time on or before the Maturity Date, without penalty or prepayment premium, by way of conversions pursuant to Section 5 of this
Debenture.

	
	 	 
	
4.2 		
All payments of all or any part of the Principal Amount due under this Debenture shall be made only by way of conversions in accordance with the provisions of Section 5 hereof.

	
	 	 
	
5. 		
Conversion

	
	 	 
	
5.1 		
At any time and from time-to-time after the Issue Date and until the Maturity Date, and provided that the Debenture is then outstanding, some or all of the Principal Amount outstanding at any time shall be converted into
Conversion Units, in whole or in part, as and to the extent that the Company receives Foreign Law Loan Payments.

	
	 	 
	
5.2 		
The Company, with or without prior notice to or request from the Holder, shall effect conversions within five (5) Business Days after receipt of any Foreign Law Loan Payment and the amount of any shortfall, if applicable, as
contemplated in Section 7.4 of this Debenture, below, and shall provide written notice to the Holder thereof by delivering to the Holder a duly completed and executed notice of conversion in the form attached hereto as Appendix A (each a
“Notice of Conversion”), specifying the amount of the applicable Foreign Law Loan Payment received, the amount of the Principal Amount to be converted into Conversion Units and the date on which such conversion is to be effected
(each a ”Conversion Date”). The Holder shall not be required to physically surrender the Debenture to the Company unless and until the entire Principal Amount has been converted in the manner specified in this Section 5.2.

	
	 	 
	
5.3 		
Any conversions hereunder shall have the effect of reducing the outstanding Principal Amount in an amount equal to the applicable amount of the Principal Amount being converted. The Company shall maintain records showing all
Principal Amounts converted, the date of such conversions and the outstanding balance of the Principal Amount remaining.

	
	 	 
	
5.4 		
The Holder, by acceptance of the Debenture, acknowledges and agrees that, following each conversion of any portion of the Principal Amount, the unpaid and unconverted Principal Amount will be decreased by the dollar amount of the
product of the number of Conversion Units issued upon conversion and the Conversion Price.

	
	 	 
	
5.5 		
The number of Conversion Units issuable upon any conversion shall be equal to the number obtained by dividing (x) by (y) where (x) is equal to the amount of the Principal Amount to be converted and (y)
is the Conversion Price.

	













	
5.6 		
Not later than ten (10) Business Days after any Conversion Date, the Company will deliver to the Holder certificates representing the number of Conversion Shares and Warrants being issued, which certificates shall bear such
restrictive legends and trading restrictions as are required by applicable laws and by the Exchange.

	
	 	 	 
	
5.7 		
If at any time or from time to time while any Principal Amount is still outstanding, the Company shall effect a subdivision or consolidation of the issued and outstanding Shares, the Conversion Price in effect immediately before a
subdivision shall be proportionately decreased, and, conversely, the Conversion Price in effect immediately before a consolidation shall be proportionately increased. Any adjustment under this Section 5.7 shall become effective at the close of
business on the date the subdivision or consolidation becomes effective.

	
	 	 	 
	
5.8 		
If at any time or from time to time while the Debenture is outstanding, the Company issues, or fixes a record date for the determination of holders of Shares entitled to receive, a cash or other dividend or other distribution
payable solely in Shares, the Conversion Price that is then in effect shall be decreased as of the time of such issuance or, in the event such record date is fixed, as of the close of business on such record date, by multiplying the Conversion Price
by a fraction (i) the numerator of which is the total number of Shares issued and outstanding immediately prior to the time of such issuance or the close of business on such record date, and (ii) the denominator of which is the sum of the total
number of Shares issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of Shares issuable in payment of such dividend or distribution; provided, however, that if such
record date is fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed therefor, the Conversion Price shall be recomputed accordingly as of the close of business on such record date and thereafter the
Conversion Price shall be adjusted pursuant to this Section 5.8 to reflect the actual payment of such dividend or distribution.

	
	 	 	 
	
5.9 		
If at any time while the Debenture is outstanding, (i) the Company effects any merger or combination of the Company with or into another entity, (ii) the Company effects any sale of all or substantially all of its assets in one or
more transactions, (iii) any tender offer or exchange offer (whether by the Company or another entity) is completed pursuant to which holders of Shares are permitted to tender or exchange their Shares for other securities, cash or property, or (iv)
the Company effects any reclassification or recapitalization of the Shares or any compulsory share exchange pursuant to which the Shares are effectively converted into or exchanged for other securities, cash or property (other than a subdivision,
consolidation or dividend provided for elsewhere in this Section 5) (in any such case, a “Fundamental Change”), then, upon any subsequent conversion of the Debenture, the Holder shall have the right to receive, for each Conversion
Unit that would have been issuable upon such conversion absent such Fundamental Change, the same kind and amount of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Change if it had been,
immediately prior to such Fundamental Change, the holder of one Conversion Unit (the ”Alternate Consideration”). If holders of Shares are given any choice as to the securities, cash or property to be received in a Fundamental
Change, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any conversion of the Debenture following such Fundamental Change. In the event of a Fundamental Change, the Company or the successor or
purchasing entity, as the case may be, shall execute with the Holder a written agreement providing that:

	
	 	 	 
		
(a) 		
the Debenture shall thereafter entitle the Holder to purchase the Alternate Consideration; and

	
	 	 	 
		
(b) 		
in the case of any such successor or purchasing entity, upon such consolidation, merger, statutory exchange, combination, sale or conveyance, such successor or purchasing entity shall be jointly and severally liable with the
Company for the performance of all of the Company’s obligations under the Debenture and the Subscription Agreement entered into in connection with the issuance of the Debenture.

	













	
5.10 		
If, in the case of any Fundamental Change, the Alternate Consideration includes shares, other securities, other property or assets of an entity other than the Company or any such successor or purchasing entity, as the case may be,
then such written agreement shall also be executed by such other entity and shall contain such additional provisions to protect the interests of the Holder as the board of directors of the Company shall reasonably consider necessary by reason of the
foregoing. At the Holder’s request, any successor to the Company or surviving entity in such Fundamental Change shall issue to the Holder a new debenture consistent with the foregoing provisions and evidencing the Holder’s right to
convert such new debenture into Alternate Consideration. The terms of any agreement pursuant to which a Fundamental Change is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this Section
5 and insuring that the Debenture (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Change.

	
	 	 
	
5.11 		
The Company covenants that it will at all times keep available out of its authorized and unissued Shares, a number of Shares that is sufficient for the purpose of issuance upon conversion of all or any part of the Principal Amount
then outstanding and upon exercise of the Warrants, not less than such number of Shares as shall be issuable upon the conversion of the Principal Amount and upon the exercise of the Warrants. The Company covenants that all Shares that shall be so
issuable shall, upon issue, be duly and validly authorized, issued and fully paid and non-assessable.

	
	 	 
	
5.12 		
No fractional Shares shall be issued upon conversion of all or any part of the Principal Amount under the Debenture. All Shares and Warrants (including fractions thereof) issuable upon conversion of all or any part of the
Principal Amount shall be aggregated for purposes of determining whether the conversion would result in the issuance of any fraction of a Share or Warrant. If, after the aforementioned aggregation, the conversion would result in the issuance of any
fraction of a Share, the Company shall, in lieu of issuing any fraction of a Share, pay cash equal to the product of such fraction multiplied by the fair market value per Share on the date of the conversion (as reported by the Exchange or any other
national securities exchange on which the Shares are then listed for trading, or if none, the most recently reported “over the counter” trade price or if none, as determined in good faith by the board of directors of the Company).

	
	 	 
	
5.13 		
In each case of an adjustment or readjustment of the Conversion Price for the number of Conversion Units issuable upon conversion of all or any part of the Principal Amount then outstanding under the Debenture, the Company, at its
own expense, shall cause its Chief Financial Officer or other officer as directed by the board of directors of the Company to compute such adjustment or readjustment in accordance with the provisions hereof and prepare a certificate showing such
adjustment or readjustment, and shall deliver such certificate to the Holder in accordance with Section 9.1. The certificate shall set forth such adjustment or readjustment, showing in reasonable detail the facts upon which such adjustment or
readjustment is based. No adjustment in the Conversion Price shall be required to be made unless it would result in an increase or decrease of at least one cent, but any adjustments not made because of this sentence shall be carried forward and
taken into account in any subsequent adjustment otherwise required hereunder.

	
	 	 
	
6. 		
Limitations on Conversion

	
	 	 
	
6.1 		
The Company shall not convert any portion of the Principal Amount pursuant to the terms and conditions of the Debenture to the extent that, after giving effect to such conversion, the Holder together with the Holder’s
Affiliates (as defined in Exchange Policy 1.1) and Persons acting jointly or in concert with such Persons (together, the “Joint Actors”) would beneficially own in excess of 19.9% (the “Maximum Percentage”) of
the number of Shares outstanding immediately after giving effect to such conversion on a partially diluted basis, assuming the conversion of all securities of the Joint Actors which are convertible into Shares within sixty days from the proposed
Conversion Date, including without limitation, the Conversion Shares issuable upon conversion of all or any part of the Principal Amount then outstanding but excluding the Shares issuable upon exercise of Warrants if and to the extent that the
Warrants contain a provision limiting exercise where exercise would cause the Holder to beneficially own in excess of the Maximum Percentage.

	









	7. 	
      Foreign Currency Exchange

	 	 	 
	7.1 	
      At the request of the Holder, the Company has agreed that
      the Holder may pay the monetary consideration for the issue of the
      Debenture to the Argentine Branch and with the Foreign Currency
      Subscription Amount, and that the Argentine Branch will thereafter lend
      the Foreign Currency Subscription Amount to the Foreign Borrower pursuant
      to the Foreign Law Loan. In consideration of the Company agreeing to such
      payment, the Holder hereby assumes and shall bear all risk, foreseen or
      unforeseen, that the Company or the Argentine Branch may incur losses by
      accepting such payment in Foreign Currency, including risks associated
      with any failure to repay the Foreign Law Loan and risks associated with
      fluctuations in foreign currency exchange rates and any devaluation of the
      Foreign Currency, and shall indemnify the Company against any losses
      caused by such; provided, however, that the Holder shall be permitted to
      credit, against amounts due pursuant to such indemnity, the amount of any
      Conversion Penalty. Notwithstanding the foregoing, this indemnity shall
      not extend to banking or exchange rate risk loss suffered by the Company
      through its Argentine Branch in respect of all or any portion of a timely
      payment on account of the Foreign Law Loan where the loss is due to a
      change in the foreign exchange rate, a banking failure or a change in the
      applicable laws, rules, or regulation affecting Argentine banks and
      financial institutions that occurs after the date of receipt. For clarity,
      once the Company receives timely payment on account of the Foreign Law
      Loan either from the Borrower or the Guarantor, the Company shall assume
      the risk – but only as to the amount of that payment – that all or any
      part of that payment is subsequently devalued by virtue of foreign
      exchange fluctuations or other banking failure.

	 	 	 
	7.2 	
      Upon receipt, the Argentine Branch will loan the entire
      Foreign Currency Subscription Amount to the Foreign Borrower pursuant to
      the Foreign Law Loan Agreement, which will include provisions permitting
      the Argentine Branch to be repaid in installments on specified Foreign Law
      Loan Payment Dates. Within five (5) Business Days after a Foreign Law Loan
      Payment Date, the Company will effect a conversion pursuant to the terms
      of the Debenture.

	 	 	 
	7.3 	
      Notwithstanding the foregoing, if:

	 	 	 
		(a) 	
      the Foreign Borrower and the Guarantor are unable to
      repay any amounts due under the Foreign Law Loan Agreement, other than due
      to public holiday, computer failure or other work place disruption (unless
      such disruption exists for five Business Days or more) pursuant to the
      terms of the Foreign Law Loan Agreement and the Guaranty, respectively;
      or

	 	 	 
		(b) 	
      there is an Event of Default under the Foreign Law Loan
      Agreement of the type specified in Section VI(a), (d), (f) or (h) of the
      Foreign Law Loan Agreement, or the Foreign Law Loan Agreement is
      unenforceable by the Argentine Branch, and the Guarantor has not paid the
      amounts due thereunder pursuant to the Guaranty within ten (10) Business
      Days after notice (as and to the extent that notice is required under the
      terms of the Guaranty),

	 	 	 
			
      the Company may, at its sole discretion, elect to cause
      the Argentine Branch to assign and transfer, without

	 	 	 
		
      recourse, the Company’s interest in the Foreign Law Loan
      Agreement and the moneys owed to it thereunder to the Holder and such
      assignment and transfer shall constitute full and final repayment of the
      sum of the Principal Amount and any other amounts owed pursuant to this
      Convertible Debenture, and this Convertible Debenture shall thereupon be
      cancelled.

	 	 	 
	7.4 	
      Until such time as the Foreign Currency Holdings equal
      zero, the Holder shall indemnify and hold harmless the Company and the
      Argentine Branch from any losses incurred by them (or either of them) if,
      on any Conversion Date, the Conversion Exchange Rate is less than the
      Subscription Date Exchange Rate and, without limiting the foregoing and as
      a condition precedent to the completion of any conversion hereunder, the
      Holder shall immediately pay such additional amount in Foreign Currency as
      may be necessary to compensate Argentine Branch for the shortfall, such
      amount to be net of any interest received by the Argentine Branch under
      the Foreign Law Loan Agreement and not otherwise applied to any previous
      shortfall and provided further that the Holder shall be permitted to
      credit, against amounts due pursuant to such indemnity, the amount of any
      Conversion Penalty.








	8. 	
      Events of Default

	 	 	 
	8.1 	
      The occurrence of any of the following shall constitute
      an “Event of Default” under the Debenture:

	 	 	 
		(a) 	
      the Company not complying with the payment and conversion
      proceedings and obligations set forth in Sections 4 and 5 of this
      Debenture and/or failing to pay any Principal Amount on the due date
      hereunder and such failure continuing for ten (10) Business Days after
      written notice thereof is delivered to the Company unless the Company
      cannot convert the Principal Amount because of the ownership limitation
      imposed pursuant to Section 6;

	 	 	 
		(b) 	
      the Company failing to observe or perform any other
      covenant or agreement contained in the Debenture or the Subscription
      Agreement which failure is not cured, if possible to cure, within thirty
      (30) calendar days after notice of such default is sent by the Holder to
      the Company;

	 	 	 
		(c) 	
      the Company or the Argentine Branch (i) applying for or
      consenting to the appointment of a receiver, trustee, liquidator or
      custodian of itself or of all or a substantial part of its property, (ii)
      being unable, or admitting in writing its inability, to pay its debts
      generally as they mature or become due, (iii) making a general assignment
      for the benefit of its or any of its creditors or making a proposal or
      otherwise taking advantage of any provisions for relief under the
      Bankruptcy and Insolvency Act (Canada), the Companies Creditors'
      Arrangement Act (Canada) or similar legislation in any jurisdiction,
      (iv) being dissolved or liquidated in full or in part, (v) commencing a
      voluntary case or other proceeding seeking liquidation, reorganization or
      other relief with respect to itself or its debts under any bankruptcy,
      insolvency or other similar law now or hereafter in effect or consenting
      to any such relief or to the appointment of or taking possession of its
      property by any official in an involuntary case or other proceeding
      commenced against it, or (vi) taking any action for the purpose of
      effecting any of the foregoing; and

	 	 	 
		(d) 	
      proceedings for the appointment of a receiver, manager or
      receiver-manager, trustee, liquidator or custodian of the Company and/or
      the Argentine Branch or of all or a substantial part of the property
      thereof, or an involuntary case or other proceedings seeking liquidation,
      reorganization or other relief with respect to the Company and/or the
      Argentine Branch or the debts thereof under any bankruptcy, insolvency or
      other similar law now or hereafter in effect being commenced and an order
      for relief entered or such proceeding is not dismissed or discharged
      within thirty (30) days of commencement.

	 	 	 
	8.2 	
      Upon the occurrence or existence of any Event of Default
      and following the expiry of any applicable grace periods and at any time
      thereafter during the continuance of such Event of Default, the Holder
      may, by written notice to the Company, declare all outstanding amounts
      payable by the Company hereunder to be immediately due and payable without
      presentment, demand, protest or any other notice of any kind, all of which
      are hereby expressly waived, anything contained herein to the contrary
      notwithstanding. Upon the occurrence or existence of any Event of Default
      described in subsection 8.1(c) hereof, immediately and without notice, all
      outstanding amounts payable by the Company hereunder shall automatically
      become immediately due and payable, without presentment, demand, protest,
      notice of dishonour or any other notice of any kind, all of which are
      hereby expressly waived, anything contained herein to the contrary
      notwithstanding. The Company hereby waives: (a) marshaling of assets and
      liabilities; (b) sale in inverse order of alienation; (c) notice of
      acceptance; and (d) all rights the Company may have under any applicable
      suretyship law. In addition to the foregoing remedies, upon the occurrence
      or existence of any Event of Default, the Holder may exercise any other
      right, power or remedy permitted to it by law, either by suit in equity or
      by action at law, or both.

	 	 	 
	9. 	
      Notices

	 	 	 
	9.1 	
      Any notice required or permitted to be given to the
      Company or the Holder will be in writing and may be delivered by courier,
      by hand or given by electronic facsimile transmission or other means of
      electronic communication capable of producing a printed copy to the
      address of the party set forth below or such other address as such party
      may specify by notice in writing to the other party, and any such notice
      will be deemed to have been given and received
by the party to whom it was addressed if by facsimile or other electronic
communication, on the date sent, or, if delivered, on delivery: 








To the Company: 

Argentex Mining Corporation
Suite
835, 1100 Melville Street 
Vancouver, British Columbia V6E 4A6 


Attention: President 
Facsimile:
604.568.1540 
Email: mike@argentexmining.com 


with a copy, which shall not
constitute notice, to: 

Clark Wilson LLP 
900 – 885 West
Georgia Street 
Vancouver, British Columbia V6C 3H1 


Attention: Ethan Minsky
Facsimile:
604.687.6314 
Email: epm@cwilson.com 


To the Holder: 

Austral Argentina S.A., in care of
Austral Gold Limited 
Level 2, 80 William Street, 
Sydney, New South Wales
2011, 
Australia 
Attn: Catherine Lloyd 
Email:
info@australgold.com.au 
Fax: +61 2 9380 7972 


with a copy to: 

Zang, Bergel & Viñes Abogados

Florida 537, 18th Floor, 
(C1005AAK), Ciudad Autónoma de Buenos Aires,

Argentina,
Att: Pablo Vergara del Carril 
Email: p.vergara@zbv.com.ar

Fax:(+5411) 5166-7070 


	10. 	
      Exchange or Replacement of Debenture

	 	 
	10.1 	
      The Holder may, at its option, in person or by duly
      authorized attorney-in-fact, surrender the Debenture for exchange at the
      principal business office of the Company and receive in exchange therefor
      a new Debenture in the same principal amount as the unpaid Principal
      Amount of the Debenture, each such new Debenture to be dated as of the
      date of the Debenture and to be in such Principal Amount as remains unpaid
      and payable to such Holder.

	 	 
	10.2 	
      Upon receipt by the Company of evidence satisfactory to
      it of the loss, theft, destruction, or mutilation of the Debenture and (in
      the case of loss, theft or destruction) of an indemnity reasonably
      satisfactory to it, and upon surrender and cancellation of the Debenture,
  if mutilated, the Company will deliver a new Debenture of like tenor in lieu of the Debenture. Any Debenture delivered in accordance with the provisions of this Section 10.2 shall be dated as of the date of the Debenture.













	
11. 		
Governing Law
	
	 	 
	
11.1 		
All questions concerning the construction, validity, enforcement and interpretation of the Debenture shall be governed by and construed and enforced in accordance with the laws of the province of British Columbia and the federal
laws of Canada applicable therein, without regard to the principles of conflicts of law thereof.
	
	 	 
	
12. 		
Waivers
	
	 	 
	
12.1 		
The Company hereby waives presentment, demand for payment, notice of dishonour, notice of protest and all other notices or demands in connection with the delivery, acceptance, performance or default of the Debenture. No delay by
the Holder in exercising any power or right hereunder shall operate as a waiver of any power or right, nor shall any single or partial exercise of any power or right preclude other or further exercise thereof, or the exercise thereof, or the
exercise of any other power or right hereunder or otherwise; and no waiver whatsoever or modification of the terms hereof shall be valid unless set forth in writing by the Holder and then only to the extent set forth therein.
	
	 	 
	
13. 		
Amendments
	
	 	 
	
13.1 		
Subject to the provisions of the Subscription Agreement, the Debenture may not be amended without the express written consent of both the Company and the Holder.
	
	 	 
	
14. 		
Severability
	
	 	 
	
14.1 		
If any provision of the Debenture is invalid, illegal or unenforceable, the balance of the Debenture shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain
applicable to all other Persons and circumstances.
	
	 	 
	
15. 		
Next Business Day
	
	 	 
	
15.1 		
Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.
	
	 	 
	
16. 		
Time of the Essence
	
	 	 
	
16.1 		
Time will be of the essence of the Debenture.
	








IN WITNESS WHEREOF, the Company has caused the Debenture to be
duly executed by a duly authorized officer as of the date first above indicated.


ARGENTEX MINING CORPORATION 

 

	Per:   /s/Mike Brown 
	          Authorized
      Signatory 






APPENDIX A 

NOTICE OF CONVERSION 

ARGENTEX MINING CORPORATION, a company incorporated
pursuant to the laws of the province of British Columbia, (the “Company”)
hereby irrevocably elects to convert principal due under the Debenture issued by
the Company on July 2, 2013, into Conversion Units according to the terms and
conditions of the Debenture, as of the date written below. Capitalized terms
used herein and not otherwise defined shall have the meanings set out in the
Debenture. 

	Amount of Foreign Law Loan Payment 	  
	Received: 	  
	  	  
	Conversion Date: 	  
	  	  
	  	  
	Conversion Price: 	U.S.$0.274163 
	  	  
	Aggregate amount of Principal Amount to be 	  
	converted: 	  
	  	U.S.$ 
	  	  
	Conversion Exchange Rate: 	  
	  	  
	Shortfall, if any, in Foreign Law Loan 	  
	Payment Amount: 	  
	  	  
	Number of Conversion Units 	  
	to be issued: 	  
	  	  
	Balance of Principal Amount unconverted: 	  
	  	U.S.$ 
	  	  
	The Conversion Units will be registered to: 	  
	Austral Gold Argentina S.A., 	  
	in c/o Austral Gold Limited 	  
	Level 2, 80 William Street, 	  
	Sydney, New South Wales 2011, 	  
	Australia 	  
	  	  
	  	  
	 	 
	  	  
	 	 
	Signature of the Company: